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Interview: Nilofer Merchant, Author of 11 Rules for Creating Value in the #SocialEra

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Interview: Nilofer Merchant, Author of 11 Rules for Creating Value in the #SocialEra

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I've known Nilofer Merchant since 2009 when I met her at the TED conference in Long Beach, California. I knew of  her before then, but little did I know how amazingly warm and friendly she would be. I knew her as this mogul of an agency founder who worked with the big time. Turns out, she is not only smart and accomplished, but she is also one of the warmest people I've met. Over the years, we've grown to be good friends and Nilofer has been my mentor and advisor on both professional and personal issues. I'm particularly excited about her new book, 11 Rules for Creating Value in the #SocialEra, where she applies many years of experience teaching the 600 lb gorillas to be much more social and agile. I highly recommend picking up the book - it's a fun, easy read and packed full of great insights - but I'm also honored that Nilofer agreed to answer a few extra questions I had.

1. Give a little of your background just in case my readers don't know how rich it is.

I've worked for major companies like Apple, and ran a big division Autodesk, and startups in the early days of the Web (Golive/ later bought by Adobe).As a high-tech executive who hated internal corporate politics, I ended up starting my own consulting practice, which quickly grew up to be the strategy team of choice for  Logitech, Symantec, HP, Yahoo, VMWare, and many others. We helped them do new product strategies, enter new markets, defend against competitors, and optimize revenues. And, I'm probably one of 5 people on the planet who can say they’ve fought a competitive battle against Microsoft and won,which I did for  Symantec’s Anti-Virus $2.1B annual business. I've has personally launched more than 100 products, netting $18B in sales, mostly in Europe and US markets.  Today I serve on corporate boards for both public and private companies.

I think that makes me a business grown-up.

2. How did you decide to write #socialera?

I'm looking at joining a few more corporate boards, and so I've been sitting in board meeting and realizing that social is viewed as this thing you do with marketing rather than a way to think about organizational design. All these companies are struggling to be fast / fluid / flexible and yet they keep doing things that are slow / bureaucratic / and self-serving. As I studied the companies and situations, what I realized was that these are not bad people but they've only been taught the stuff of Porter's Value Chains and then they're trying to fit in newer ideas into that existing framework. They are trying to tweak their way into the future. And so one day I was doing a follow-up note on a topic and wanted to share this perspective by linking to a few known thinkers... but none of them had written something about how Social could be the backbone of the business. So I did first as a 5-part series on Harvard Business Review's blog and now this ebook. There's too much at risk in all these organizations if we don't reimagine our organizations.

3. I loved the obituary for old school marketing. Do you really think it's deceased or does it merely require a heart transplant? ;)

The obituary was meant to be provocative. To point out 5 specific beliefs that are firmly held as true, when they don't apply as broadly anymore. So no. I don't think it's deceased. But I do think we need to learn to adapt. I wrote about this in the book. That we need to learn to think and learn and unlearn what doesn't work:

"Adaptability is central to how organizations and people thrive in the social era. In psychological language, the key to adaptability and personal growth is resilience. In biology, the equivalent term for adaptive skills is plasticity. In financial language, the term we might have used in the industrial era was liquidity, because it could measure how an organization was able to withstand the unexpected. In the Social Era, the term to use is flexibility. Our goal is to learn our way into the future. Instead of viewing strategy as a set end point, it becomes a horizon to aim for. Instead of asking employees to each simply man their own oar, we must encourage their capacity to navigate, to tack and adapt as conditions shift. Instead of perfection and getting it right the first time, innovation can be continuous, and core rather than episodic."

 4. You have something many social marketing consultants don't have: experience with the 'gorilla' sized companies for many years. What are the core lessons from #socialera aimed at these giants who, as we know, aren't inherently social?

There are 3:

One is that scale shifts from "big" to "with".  You can create value through openness. Here’s an example from technology. Most organizations used to do their own development. Within the last ten years, open source software went from being a programming lark that organizations like Oracle or Microsoft made fun of to one that is the default choice for corporations from IBM to Google. Even Microsoft has found a way to open its Xbox Kinect controller so it can be a platform for artists and roboticists. As a result, the platform contributions have far surpassed what Microsoft could have created alone. And let's be clear: Openness is more than “open source” – it is a way to engage ideas. The value created by platforms that enable many people to contribute ideas can surpass the value created by organizations trying to control each piece. What is created by individuals (without pre-approval, or vetting, or even by defining the exact outcome) can both surprise and delight. Instead of companies trying to achieve scale by all by themselves, scale can be achieved through and  with community.

Second, consumers can be a source of value creation. Fifteen years ago, The Cluetrain Manifesto  was prescient when it taught us that markets are conversations, and that was a great starting point. “Conversations” can go deeper if an organization allows them to become central to how you work, rather than leaving them on the perimeter. And Tara, your own book gave us many solid examples of companies doing just that. But how many companies have figured out how to shift from old-school “supply chain management” to the more modern idea of capturing insights and integrating them directly into product design, distribution, and delivery? Because that’s the point. Instead of a buyer at the end of a value chain, more and more companies are embracing consumers as “co-creation” partners in their innovation practices. This collaborative model fundamentally shares power, improves speed, and shifts the value equation.

Third, Purpose can become an alignment system. When companies think of social media, they hope to get consumers to “like” them or “fan” them, as if that increased connection is meaningful. Again, that captures the marketing aspect, but completely misses the strategic point. The social object that unites people isn’t a company or a product; the social object that most unites people is a shared value or purpose. When consumers “love” Apple, they are saying they love great design and the shared idea that “thinking differently” is valuable. By “loving” Firefox, the Web community is saying that it believes an open Web browser is valuable to the world. By loving TEDx, a volunteer army of people is saying it believes that smart ideas that get people to think more about their world is a cause worth putting energy into.Purpose aligns and scales in a way that "command and control" telling people to do certain does not.

5. When you look around you and apply the #socialera lens, what is your favorite example of a company that gets it? And why?

I have a ton of examples throughout the book of companies that get it and companies that don't. There is no one company I could find that is doing Social as a backbone -- across all parts of their business, so i got a chance to highlight the "best of" across industries. But let me share one example of an idea that is changing lives and embodies the #SocialEra.

A website called PatientsLikeMe was cofounded about ten years ago by three MIT engineers. The brother of one and friend of the others had been diagnosed with ALS (Lou Gehrig’s disease) at the age of twenty-nine. As they began searching worldwide for ideas that would extend and improve the person’s life, they built a health data-sharing platform that allowed patients to manage their own conditions, change the way industry conducts research, and improved care. Unlike most health-care policies that worry about privacy, PatientsLikeMe focuses on openness. They believed that sharing experiences and outcomes is good. Why? Because when patients share real-world data, collaboration on a global scale becomes possible. New treatments become possible. Most importantly, change becomes possible. And ultimately this leads to the greater purpose: speeding up the pace of research and fixing a broken health-care system.

In this way, PatientsLikeMe shows us another lesson about the SocialEra. When you collaborate, you can make something better for everyone. And, the real key is that an open approach can get to new and better ideas—and a lot more of them—faster, as a system opens up. #socialera is about allowing anyone, anywhere to contribute. Not the people you think “can” or even the people that you think “should,” but from the abundance and diversity of many people’s experiences. As each person stands in a place only she sees, she can bring her onlyness to solve whatever problem she sees closest to her.

This is the hallmark of the #socialera: it strengthens not just the direct act, but the indirect acts of community, of speed to create new solutions, and certainly of new solutions to old problems. Those add up to the reasons why I think this is important -- for organizations of all sizes.

6. Speaking of companies who get it, I've been floored by the rise of Oreo in the social space. They are now the #3 most loved brand online - even after their controversial support of the LGBT community with their Gay Pride Oreo. Applying #socialera to their success, could you give your assessment of this brazen food brand?

I love that as a marketing example They are building real relationships, not just transactions. They are allowing customers to co-create. And in being real and vulnerable, they are getting commitment in the process. Most marketing language talks about "winning the customer" as if it's a win-lose proposition but Oreo is showing that like any relationship, co-creation is a different level of commitment for both the product and the brand.

7. You and I are both fans of fashion and, more recently, I've seen these gorillas making bold moves into the Social Era. What are some of the examples of your favorite fashion gorillas that have 'gone gazelle'? 

Oh, by far, Burberry is doing amazing things. A few seasons ago, they invented the category of tweet walk, where consumers (not just the fashionistas and editorial powerhouses of Fashion Week) to give immediate feedback on the line. This week, they opened up a digitally integrated store in London that uses the combined power of online and instore experiences. And today, customers can customize products so that the killer jacket you want is one that very few people will have. Which, as you know, Tara is worth something. We all want to exercise our own style muscle. And a brand that can do that with you is going to use technology and social behavior to feed its bottom line.

8. Of all of the rules, which ones are your favorites and why?

Oh, you ask such hard questions! Well, the people who have read this book keep highlighting this one sentence: "Not everyone will, but anyone can". And I think that's the central idea. The foundational element of all value creation starts with celebrating each human and, more specifically, something I’ve termed onlyness. Onlyness is that thing that only one particular person can bring to a situation. It includes the skills, passions, and purpose of each human. Onlyness is fundamentally about honoring each person, first as we view ourselves and second as we are valued. Each of us is standing in a spot that no one else occupies. That unique point of view is born of our accumulated experience, perspective, and vision. Some of those experiences are not as “perfect” as we might want, but even those experiences are a source of ideas and creativity. Without this tenet of celebrating onlyness, we allow ourselves to be simply cogs in a machine—dispensable and undervalued.The organizations that know how to take advantage of that will thrive. And so will humans.

 9. Anything else to add?

Well, one thing. I could just as easily called the book "the unrules". While I've drawn plenty of distinctions to give language to the working notions of the Social Era rules, the key is to figure out how to create value in a demanding, ever-changing market. Don’t assume any set of rules is fully baked. Accept that each of our jobs is to stay alert to what happens next to figure out what assumptions need to be tuned. Listen, learn, adapt.These are the skills we must all own.

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Is It Book Writing Season Again?

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Is It Book Writing Season Again?

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[cake from my TWF Launch Party at Nilofer's]

In November 2007 I received the news that I had a generous offer from a MEGA publisher to write a book. A bloody book. ME! A blogger and frequent user of words like crap, frack and awesome. They were going to sign ME to write a book that would sit on shelves in grown-up bookstores. I was completely flabbergasted. At the time, I may have used the term STOKED.

So over the next year, I wrote and re-wrote (there were a few edits...surprise!) that book and submitted the final draft, signed and sealed in November of 2008...during the election of Obama and the economic crisis hitting the news at 100 stories per second. The official launch date of my book was April 21, 2009 - amidst the big bailouts and general public mayhem.

I thought to myself, "Well, at least I got a healthy advance. Nobody is going to buy this bloody book now."

Unfortunately, my publishers had the same thought.

We had talked about all sorts of cool things for launch -launch parties in various cities, a NYTimes.com community campaign, an Amazon.com feature, bookends in stores, fliers, posters, etc.- they were positioning the book to be the 'breakout bestseller' of 2009. The time was right. Social networking In H+ Magazinewas hot. And mine was one of the first books that talked about the theory and practice behind it for everyone from a musician to a Fortune 500 company. But all of that disappeared with the sound of the US economy going down the drain.

I was heart broken. I felt like a huge failure. I worked really hard on getting the word out myself, but everyone was hurting and it felt like an uphill battle. I had amazing support from friends (like my mentor, Nilofer Merchant, who had that amazing cake in the header made for a Bay Area launch party and my wonderful friends at Office Nomads in Seattle who did a Seattle launch party for me) and even came up with the concept of a karaoke road trip to tour my book (dropped the book bit and just went karaoke because I lost heart).

My publishers couldn't even look me in the eye. I'm sure they felt as heartbroken as me, but what could they do? They are running a business and pushing a book during a national crisis is not good business.

Raleigh-Durham International AirportSo I stopped caring and ignored everything after a point. I stopped looking at my ranking on Amazon (it was dismal) and tried not to sob openly when a year and a half later, a very similar book to mine, Trust Agents by Chris Brogan and Julien Smith (I should note that it was a VERY good book. Well written and very worthy of it's acclaim.) launched and was an overnight New York Times Best Seller. When I noticed my book was in the 'Business Autobiography' section of a major bookseller, I decided I didn't care enough to change it (misclassifications can be murder on sales - this one was particularly bad). One commenter on my book page on Amazon in 2011 wrote, "Whatever happened to Tara Hunt?" Indeed. I really disappeared. I wanted to live under a rock.

(side note, as the awesome Sean Coon replied to the commenter, I was actually working very hard on my startup at that point, but whatever...I actually abandoned that book as completely as my publisher did.)

When asked about my next book, I would grimace and reply, "Nothing in the works!" Truth be told, I wanted to reply, "I'd rather have my tongue removed with a fish hook," but I refrained. I was bitter. Jaded. Completely turned off by publishing. I lost my love of writing completely. Subsequently, I had a 3 year writers block.

Until a few weeks ago.

You know that Elizabeth Tara & Whuffie!Gilbert TED talk where she tells the story of poet Ruth Stone hearing the rumbling of an idea coming over the hills and she needs to run like mad to get to a pen and paper to capture it before it goes away? I had that. I experienced that paranormal experience of an idea flying at me that needed to be captured. And I wrote it down in a frenzy on this blog. And in the minute I hit  publish, I knew it was my next book.

So like a mother who said after her first childbirth that she would never experience that pain again, I contacted my literary agent and started putting together a new proposal. All of my memories of that awful labor and pain and agony went away with this new idea.

And one of the best parts of this story is that, upon receiving my excited email, my awesome literary agent said, "Really? It's going to be a tough sell. Your first book didn't do very well." And though I didn't want to look, I did. And guess what?

My first book actually did QUITE well! The Whuffie Factor wasn't a huge flop after all! I checked the numbers internationally and -much to my surprise as well as my agent's- my sales told a different story than we thought it would. I'm not going to give exact numbers, but the average U.S. book sells less than 250 copies per year and less than 3,000 copies over its lifetime. Only the top 1% sell over 25,000...and wow...TWF made it well into that top 1%!

Take THAT economic downturn. Take THAT no publicity. Take THAT Tara of little faith. I'm no Malcolm Gladwell or Trust Agents, but I sat and looked at my numbers and had a good weep of joy.

This will be a very different book. It will NOT a book on social media. It's more of a psycho-social-marketing book. It's going to be a well-researched with real science and data marketing book about the consumer mind. The main focus is on understanding consumer desires, but as with everything I do, there will be a world-changing undertone to it. I want people to understand their own drives as well, if not better than the marketers themselves. This isn't data that marketers alone should be privy to. And it won't be easy to find. It's going to take serious focus to do it. As I say in my book proposal, I plan to combine extensive research including behavioral psychology, sociology, anthropology and neuroscience alongside real-world examples and strategies that work. Sort of a Dan Gilbert meets Paco Underhill approach.

If nothing else, I'm going to enjoy the hell out of researching this one. I've learnt a LOT in the past 5 years. Patience being the key learning. And I hope that those elves that live in the corner of my office are good to me for the duration.

Thanks for buying my first book. I'm still proud of the fact I wrote it. Thanks for keeping the faith for me even when I lost it.

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