Viewing entries tagged
strategy

Three Types of Insights That Will Help Shape Your Strategy

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Three Types of Insights That Will Help Shape Your Strategy

Ideas without insights - especially coming from a group of people who usually are very far removed from the audience - are akin to throwing darts in the dark. Even the best ideas, without direction, won’t hit their mark. These brain dumps are a waste of everybody’s valuable time. You need to start with research.

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Research is 75% of Strategy

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Research is 75% of Strategy

When most people think of marketing, they think of the ads and promotions - the visible stuff. But for the great campaigns, the real magic happens long before those ads and promotions are even dreamt up. The real magic happens in the research and insights.

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No, Social Media Doesn't Drive Sales...but that's not the point

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No, Social Media Doesn't Drive Sales...but that's not the point

socialmedia_notwhatitmeans
socialmedia_notwhatitmeans

Okay, maybe I'm overstating it. Some sales are driven through social media channels. I know I've bought books and songs and contributed to Kickstarter campaigns many times because a friend shared a link and I thought, "Hey! That's awesome! I should buy that!" I've even tipped a bigger purchase in favor of a friendly recommendation on a social network. But I can count on one hand the number of times  I've bought something pushed to me by a brand I follow on Twitter/Facebook or the like.

But that's not the point.

The point is that social media is a teeny tiny reflection of what happens in day-to-day life. In Jonah Berger's Contagious, he makes the salient point that only 7% of word of mouth happens online (other studies say 5%). I'm not sure if all of that even belongs to social media channels, either. I'd guess a bunch of it happens over email and private chat.

There are hundreds of ways that your customer will find you (or not find you) online and offline. However, when it comes to spreading a message, word of mouth has always been the most effective way of marketing messages spreading. But these messages become ineffective when they aren't authentic. But the most salient point here is:

You cannot force word of mouth.

It doesn't matter the media or the amount you spend on it...some stuff just doesn't spread. And though marketing impressions make a brand awareness difference - whether it's a billboard or a paid tweet - it's never guaranteed to work.

So I'm continually bowled over when I hear people complain about how their social media marketing doesn't work. Usually a few questions helps me realize what's really going on:

socialmediastrategyinfographic
socialmediastrategyinfographic

What's really going on here is that companies think that paying for marketing is some sort of silver bullet. It's not. It never was and it never will be. Hell, some super bowl ads go unnoticed - and that audience is one of the biggest captive audiences in the universe!

You are probably asking yourself, "Okay then, why would anybody in their right mind pay for marketing?"

Good question. I sometimes wonder myself because not everyone is ready for it...and sometimes they are too late for it.

But why pay for marketing when the results aren't guaranteed? Because, like I said before, there are hundreds of ways your future customers will find you (or not find you) and it's better to be findable than not. And good marketing means that you will be more findable AND have more credibility (if the branding is done right) when people do find you. And all of that helps with what you want: sales.

There are all sorts of wonderful things built into social media marketing that you won't have built into traditional one-way channels. There are:

  1. analytics - you can't really tell who paid attention to that television ad, but you can tell who watched your YouTube ad all the way through...and who liked it...and who shared it...etc etc. The data available on how people interact with your content is AMAZING.
  2. feedback - it's right there in the comments. It's also there on Twitter. Oh...and you can find out what people are saying on Reddit and their blogs and in forums and...well...that is invaluable. Read it. Report it back to your team. Improve your product with it. Respond to it with thanks. Hell, you pay hundreds of thousands of dollars to get this feedback from focus groups each year and here it is for you for free. Completely raw.
  3. relationships - you aren't going to strike up a conversation through the TV or radio. But that two-way conversation is built into social media platforms. It's really awesome. You can find out so much about your customers and start to really build a bond.

What really baffles me is the demands that brands make of social media marketing when they pay a fraction of the price to use it. They'll hire interns and junior staff to run it, they'll lowball agencies and consultants ("I pay you whatfor a couple of FB posts?! I can get my kid to do that!"), they get impatient and want instant results without being willing to invest the thought needed or take risks, they'll tack on a social media strategy (which has no strategy) to a made-for-television and magazine ad campaign thinking that it's yet another direct marketing channel (which is a limited medium, too).

All of this and the brands ask for stellar results. They look past the amazing insights and feedback and potential for relationships that no other traditional marketing medium every had and they say, "Meh. Social media doesn't work for me."

And completely miss the point.

You want to know the ROI of social media?

Number one. It's the ability to listen. It's priceless. Not with some damned tool that measures sentiment or finds influencers, either. Really listen.

Number two. Serendipity. It's opening yourself up to constant and amazing opportunities to participate and by participating, you will find numerous opportunities to lead the conversation and make a great impression. Oreo's dunk in the dark tweet is a great example of this. They are doing a really great job of being a relevant brand again by seizing opportunities like that. Do they do it every single day? Nope. But when they do, they nail it.

Number three. Community instead of merely customers. The difference is incredible. If you have patience and build a community instead of just a customer database, you will have finally tapped into that magical word of mouth network you wanted to buy a few months ago. But this time, it's real and authentic and it spreads.

(and there are dozens more...but you get the point, right?)

So PLEASE FOR THE LOVE OF DOG stop thinking of social media as a direct marketing tool or some sort of silver bullet that will drive sales through the roof. Stop reading those case studies where Facebook...no...Pinterest...no...Polyvore...no Snapchat drove millions of dollars in sales from a viral campaign.

That's not the point.

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Switching Costs: A Person's #1 Reason for Not Trying Your Service

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Switching Costs: A Person's #1 Reason for Not Trying Your Service

Shutterstock photo
Shutterstock photo

People get comfortable with routines...even if they aren't the most efficient. Sticking with a familiar inefficiency is often less daunting than switching to an unknown.

Many companies try to sell their products and services as an 'easier' or 'time saving' or 'better' way to do something, but even if your potential customers will save time and effort in the long-run, there are often huge switching costs that prevent them from making the leap.

Here is a personal example:

I was banking with an institution I had been unsatisfied with for years. Their fees were high, their customer service was awful and their practices were not very friendly. I was constantly complaining about them, but it took me forever to switch. Why? Because my whole life was tied to that bank. Even though I was miserable and there were much better banks for my needs, I was avoiding the time and pain it would take to switch my bills, PayPal account, credit cards and day-to-day routine. Besides, what if I took the time to switch and things didn't improve? I felt like I'd be happier being unhappy with what I already know.

I finally switched when things got unbearable and another bank gave me the tools (and sat with me) to switch everything over effortlessly, but even then, it was a bit of a pain. I'm happier now, but it took a few years and being acutely dissatisfied for me to switch and I'm just an individual.

If you are selling to larger businesses, the switching costs are even higher. New processes, even if they are simpler, take new training. And for a large organization, this takes a big swath of time and money. People get used to the irritating workarounds for their inefficient systems. They learn shortcuts and tricks to beating the odds that become part of a daily routine.

Just the other day, I encountered a business that used Photoshop for their invoicing because they understood the tool and didn't want to learn a new one! I even demonstrated how simple it was to use something like Freshbooks (I have no affiliation, but I use it and love it), but the business owner explained that this worked just fine and switching would mean he'd have to relearn and do a bunch of work to transfer all of his clients to the new platform. Even if this only took a few days, he didn't see the advantage over the switching costs.

Sure, you may offer webinars, instructional videos and a support network that help with the training, but that could make switching seem even more complicated for your potential clients. Don't fret, though, there ARE better approaches to helping people get over their fear of switching. Here are a few:

  1. Figure out a way to reduce or eliminate switching time automagically. Wordpress does this incredibly well. In most cases, you can just point it at your old blog or upload a file and it will 'suck in' your posts, tags, comments, etc. so that you are up and running in no time.
  2. Acknowledge the switching costs up front. Don't just say, "We'll save you time". That's too vague. Your homepage is for new arrivals with doubts, so alleviate those doubts. Know the pain points of your potential customers and speak to them. Give time estimates.
  3. Give them an incentive. I've seen banks offer iPads to open a new account, but it doesn't have to be that drastic. Free trials work, too. However, many people don't get the chance to really try your product unless they switch completely (and many won't switch until they try it - catch 22!), so give them test content or offer a one-on-one demo with their data.
  4. If you can't eliminate time to switch, give clear, simple instructions step by step through the sign up process. Use screenshots and clear, short instructions to help your customers through the process so they aren't left hanging at any point. It's not talking down to them, it's doing the legwork for them.
  5. Create a switching officer program...for free. Many people will give up privacy for convenience. Offer the ability to switch for them. "We'll set you up so you are ready to go!" The upfront cost will pay off in the long run.

Of course, this only eliminates a few of the switching costs involved. Some more switching costs are:

  1. legacy systems (you can make sure your product is backwards compatible)
  2. training of staff (offering free training or creating a product that has incredibly intuitive UX helps)
  3. trust (this one is very complicated in today's world of false-promises - it takes time and perseverance)
  4. costs (in the Photoshop invoice case, the business owner didn't want to pay a monthly fee to merely invoice - you need to show how your cost can make your clients money)
  5. competition (when faced with the paradox of choice, a customer won't switch at all. The choice should be crystal clear.)

But whether a potential customer needs to switch from something they hacked together or a competitor, you need to recognize that "we're better" or "we save you time and/or money" isn't enough to get over the ultimate barrier of switching. Recognizing this will help you see things from your customer's point of view more clearly so you can help them faster.

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Marketing's REAL Beef with Facebook

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Marketing's REAL Beef with Facebook

EDGERANK CONCEPT handwritten with chalk  on a blackboard
EDGERANK CONCEPT handwritten with chalk on a blackboard

Yet another article has come out yesterday on how Facebook is a waste of time for marketers because posts only show up for 8-16% of their followers. As someone who has been in marketing for over 15 years (online marketing for 14 of those), these posts irk me. To me, they show a low understanding of how human beings engage with media and demonstrate that old perceptions of customer ownership persist, even through the Social Era.

General Facebook Stats

First off, here are some basic statistics on how people use Facebook. The average Facebook user has 229 friends and likes 40 brands. They spend an average of 1.5 hours/week on Facebook, accessing it from 7,000 different devices. 58% of Facebook users return daily. And 65% of people who like brands on Facebook do so for the coupons/savings they can access. (source + Facebook Insights 2012) There are 50 million Facebook pages that post 36 times per month - 2.5 million of those that are promoted through Facebook ads. (source) And 40% of people's time spent on Facebook is on their newsfeed, while only 12% of their time is spent on profile and brand pages. (source)

image from PhotoDune
image from PhotoDune

If you haven't figured it out mathematically, Facebook is NOISY for most users. I'm a super user (outlier), so I'm not the best example, but I have 3,233 friends (I try to weed them out to only people I've met from time to time, but it keeps growing), like 898 pages (don't know when THAT happened, oy), am part of 49 Facebook groups (some are SUPER active) and have a public page where I've grown 64,864 followers (who can comment, like and otherwise engage with my profile unless I limit visibility on a post). Facebook's Edgerank helps me a great deal. Sure, I don't see everything and I'm sure I'm missing all sorts of uber important life events and sales and launches, but it makes my experience on Facebook a little more sane.

My Mom, who defines herself as a luddite, has 174 friends on Facebook, 6 likes and is part of 1 group. She doesn't have a public profile, so doesn't have 'followers'. She still finds the amount of posts and news on Facebook to be overwhelming at times, so she created her favorites so she would always see what's happening with her family as we post items. She has created a filter ON TOP OF the Edgerank that Facebook provides to help her manage the posts from all of her friends.

I can understand that a brand who thinks that every like is an undivided attention endorsement would think that 8-16% of their followers seeing their posts means that Facebook is ripping them off. But anyone who thinks a little bit and understands how this works should get that Edgerank IS FOR THE USERS not for the marketers.

How Edgerank Works

edgerankformula
edgerankformula

Edgerank isn't some plot against brands who don't pay for advertising on Facebook. All it does is favor posts that are popular and relevant, whether it is a personal profile post or a brand page post. It also understands what users have engaged with previously, so if you spend a lot of time liking and commenting on certain friends' posts, those friends (and brands) will show up more often.

Here is a frequently passed around definition of how Edgerank works:

"EdgeRank is an algorithm used by Facebook to determine where and what posts appear on each individual user’s news feed in order to give users relevant and wanted content.

The three variables that make up this algorithm are:

  • Affinity Score - Facebook calculates affinity score by looking at explicit actions that users take, and factoring in, the strength of the action,  how close the person who took the action was to you, and how long ago they took the action.
  • Edge Weight - Facebook changes the edge weights to reflect which type of stories they think user will find most engaging.
  • Time Decay – The determines the time passed, if they’re old they probably don’t appear."

(source)

And, yes, a brand page can use advertising to improve their Edgerank. That's how advertising works. You pay for the ability to cheat the system. As the saying goes, "Advertising is the price you pay for having an unremarkable product," but I would also add that advertising is the price you pay for an unfair advantage. It's the way of balancing the universe. You can pay to be at the center of it. ;)

Why Marketers Really Hate Edgerank

There are several reasons why marketers* hate Edgerank:

  1. There is no instant gratification - even if you are a content maestro, it takes time to build an audience without advertising. For my clients, I use advertising to underscore great content instead of in place of it.
  2. Retro TV Commercial
  3. They think a 'Like' means the Facebook user is endorsing undivided attention - the truth is, there are all sorts of reasons why people like brands on Facebook and, since the average user likes 40 brands and has 229 friends, there is no such thing as undivided attention (or if there is, it's rare...and a bit odd). The reason your posts aren't showing up on their newsfeeds is because they aren't engaging with them.
  4. Marketing people aren't generally content people and vice versa - I sat down with a journalist friend of mine who has been hired by a big fashion retailer to do their content. She's really brilliant at it, but had very little knowledge as to how to use the tools and how to promote the great content she was producing. They wanted her to do both content AND marketing and didn't understand that those two talents are very different and usually require two roles. People conflate them all too often and though you may find the rare individual that can do both well, it's best that you split the role for maximum oomph.
  5. Most marketers are still stuck in the old one-way paradigm - helloooo! It's the social era! This means that even old one-way mediums (billboards, television, radio, magazines, etc) need to get more multi-way in order to survive. So stop treating the social tools as bullhorns. Seriously. This is why you are failing at them. Facebook should be 50% listening, 25% responding and 25% talking (more or less).
  6. Campaigns should be part of content, not the other way around - content done in brief spurts and ebbs and flows just doesn't work (see #1). It takes time to build an audience, engage them enough to keep them coming back and delight them to the point of wanting to share to their own friends (they have their own audiences and goals). I've talked about how content bursts with long silences between hurt your audience on YouTube, but it works the same way in many social mediums and Facebook's Edgerank is one of them.

Marketers have to learn to work with content people (photographers, videographers, writers, journalists, graphic designers, artists, etc) on their strategy. Creativity and strategy are intertwined. In fact, the strategic process should look something like this:

Screen Shot 2013-06-02 at 3.28.26 PM
Screen Shot 2013-06-02 at 3.28.26 PM

...and you should enter this loop at learning. (note: I usually remove the launching/promoting part until a few cycles of learning, planning, implementing, learning, planning, implementing...)

The beauty of Facebook is that it is inexpensive and content rich and sky is the limit when it comes to creating engaging content AND everybody is there, hanging out, looking for great distractions. In addition, I don't believe there are many brands that do it right, so you have every opportunity in the world to raise the bar. Don't blame the tool, especially when it's implemented features that benefit the users you are trying to reach. Take a closer look at your own content. Are you engaging? Are you creating content your fans would be excited to share? Are you creating value? Improving knowledge? Lives? Are you making your customers' lives simpler, less confusing, less alienating, more efficient, more meaningful and just plain better? Or are you just adding to the noise?

Abandoning Facebook would be like cutting off your nose to spite your face. It's a great tool if you understand that it isn't a billboard. And remember, it's much less expensive and gives you all sorts of ways to hear from your audience and understand who you are hearing from (which is very difficult with a billboard).

So stop writing 'woe is me' posts and start respecting the medium and your audience. Trust me, you'll change your tune.

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* I really shouldn't lump all of us in the same boat. I love Edgerank and think it's a beautiful and user-centric feature for Facebook. It just makes me work harder to create engaging content and I love a good challenge. I know there are great marketers out there who get this, too.

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Let Me Wave my Magical Content Wand

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Let Me Wave my Magical Content Wand

15387919_m
15387919_m

It usually starts something like this:

Hey! Everyone I know is on Instagram! We should start an Instagram for the company!

The suggestion in itself isn't wrong per se, it's just not made with much of an understanding of how these social platforms work. It takes less than 5 minutes to set up an Instagram account (if you have an iPhone or an Android). That's the simple part. But then the real work begins.

Screen Shot 2013-01-10 at 8.43.16 PM
Screen Shot 2013-01-10 at 8.43.16 PM

People who rarely use social networks love platforms…even when they, themselves, admit to not having enough time to use them. That's pretty much what they see: platforms and the numbers. "Why aren't we on Pinterest/Foursquare/Tumblr/Google+/You Tube/Instagram/etc?" they'll ask. They'll tell you about all sorts of other companies who have set up multiple accounts on multiple platforms and how they read about it on Mashable. They'll hint at being concerned about your expertise or ability to execute because you haven't created accounts everywhere. They may even say, "It takes 5 minutes to set it up!"

But what people who don't use social networks much fail to understand is that picking a platform means that you need to create ongoing content for that platform. Content requires a strategy and ongoing production of said content. And monitoring, measuring and tweaking of that content (and strategy). And community management of the inbound reactions to that content, especially if, heaven willing, you do a great job of the content and your account on said platform gets very popular. And all of these things take a lot of time and deep understanding of your audience, your competitors, your product, the overall trends, current events, knowledge of the industry (and surrounding industries), analytics, what are best/worst practices, gathering of ideas, photoshop skills, camera skills, editing skills, a good eye for a shot skills, writing skills, translation skills, people skills and technical skills.

Screen Shot 2013-01-10 at 8.16.05 PM
Screen Shot 2013-01-10 at 8.16.05 PM

Creating content for a brand (company, organization or individual) is like running a news room...but even more complicated because it needs to be interactive. You need to plan out a certain amount of content (ideally daily for weeks in advance) for each platform like you would for each segment, then you also need to be on top of current events and issues to be able to switch it out on the fly to seize opportunities in the moment. You need to keep people entertained and continue to grow with your audience. You need to be relevant and entertaining, but create enough deep engagement that you are building a solid loyalty base.

In addition to this, you need to achieve your own goals through the content. If you are selling something, it's number of sales leads. If you need sign ups to your app, you need to drive people to your site (off of whichever social network) to sign up. If you are raising money for a cause, you need to compel your followers to go and give money. There are several things you need to balance: building an audience and driving people to your goal (often off-site) and the two are mutually dependent. If your content isn't entertaining, you'll lose your audience, and have nobody to build loyalty and long term sales with, but if you only entertain and never convert them to buyers, you are wasting your time. And the balance is tricky.

Screen Shot 2013-01-10 at 8.57.50 PM
Screen Shot 2013-01-10 at 8.57.50 PM

And I haven't even started to talk about how each platform needs to be approached from a different angle with unique content strategies. Cross-posting content between platforms rarely works. There are different rules (Twitter, for instance, is limited to 140 characters, while blog articles can go more in depth to make a point). There are different tones (Tumblr is fun and casual with a hipster flair for design, while Google+ takes a more information sharing and analytical tone). There are different audiences (Pinterest is dominated by women, while Reddit is male-heavy). There are different functions (Foursquare is great if you have physical locations to promote, while Quora is a fantastic way to show your expertise in an area). Different platforms work better with different media (YouTube is all videos, while Instagram is all images). And some platforms are richer than others (Sure Twitter allows for posting images and video, but the real time rapidity means you should focus on the text, while Facebook posts thrive with images and other 'sharables' and text falls flat).

Screen Shot 2013-01-10 at 9.01.22 PM
Screen Shot 2013-01-10 at 9.01.22 PM

All of this is to say: content doesn't just appear magically out of thin air with a wave of a magic social fairy wand. And there have been many of my colleagues beating this drumfor years, but their message is more and more prescient over time as every brand is expected to be on practically every platform, but have no idea what that means.

Why they hire interns or outsource to people to create this crucial content that is SUCH a crucial part of their marketing and customer relationships is beyond me. But part of it is education and part of it is the plethora of 'gurus/ninjas/polkaroos' who know the buzzwords and how to copycat content, but not how to create relationships. People, you get what you pay for. But why should I be surprised? Companies spent decades outsourcing their customer service - the point of the best opportunity to create a lifelong loyal customer and evangelist - and have focused on new customer acquisition over the more lucrative current customer retention and growth opportunities for as long as I've been on this earth.

/rant

Screen Shot 2013-01-10 at 9.16.10 PM
Screen Shot 2013-01-10 at 9.16.10 PM

What I mean to say is: CONTENT IS IMPORTANT. And there is a specific skill and finesse to doing content well that may seem like magic to most people. It requires left/right brained people with sharp critical thinking skills. The type of people who have big libraries of books (that they actually read) and are constantly checking their mobile phones for the latest news and world events. This person consumes more content in a day than most people consume in a year. S/he has so much knowledge in her/his head from so many different industries and disciplines that s/he will connect dots you would NEVER think to connect and sometimes the connection is only clear in her/his head (but it is usually innovative). This person studies people and networks and gets giddy when the data uncovers counter-intuitive evidence. Her/his instincts are sharp even though s/he can't fully explain where her/his idea comes from. This is not a full or completely accurate description of this person. But it's a start. And that person should really be internal to your organization.

The thing is, it IS magic, but in the Arthur C. Clarke way ("Any sufficiently advanced technology is indistinguishable from magic."). It rarely takes years of school to hone this skill. It's not brain surgery or rocket science. But it does take years of life* (and some severe ADHD). And most of all, it takes a huge amount of respect...for the customers, the importance of content, the brand and the media.

There is a magic content wand, but most of the world are Muggles, and those of you with the magic should understand that it's not so simple to describe magic to a Muggle. (so if you circulate this post, remove this last bit)

* I, by no means mean years as in one has to be older to be good at this. I know lots of 20-somethings that have 'the knack'.

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There's No Shame in That

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There's No Shame in That

shame_flickr_5562502580.jpg

Shame Flag on Flickr I was describing my startup experience to a woman I admire the other day, when out of the blue, she asked:

"Was it worth it?"

I hardly hesitated at all and said:

"The only thing I'd change if I could go back is that I'd integrate the incredible lessons I've learned during this time."

And it's true. I couldn't have learned any of what I've learned in a book or a seminar. I feel like I've taken the ultimate MBA. But it took her asking the question for me to realize that. Before she asked the question, I was feeling lots of shame. Why? Because I was focusing on what I didn't accomplish instead of seeing what I DID accomplish.

The reason we struggle with insecurity is because we compare our behind-the-scenes with everyone else's highlight reel. - Steven Furtick

The truth is that we (my Buyosphere team and I) did things that the vast majority of people never even attempt:

  • We raised venture capital (even if it wasn't enough)
  • We built a social web application from scratch - multiple times - and for those who haven't built a social web application, here is something to know: building a website is a challenge, building a social website (that people interact with) is another level of challenge and building a social web application (that people interact with and it changes with that social interaction) is a WHOLE 'NOTHER level of challenge. There are so many moving parts behind the scenes. I have mad respect for anyone that builds web applications now.
  • We stuck to it through thick and thin, through lots of questions and uncertainty and through not knowing how we were going to make payroll in a few days time.
  • We learned to work together - fighting like cats and dogs at times, but having uber respect for one another while disagreeing.
  • We hired and fired people - learning the importance of hiring talented people who could teach us a thing or ten.
  • We budgeted, planned and balanced a very small amount of cash to make it stretch as far as it possibly could.
  • We took that leap that lots of people talk about, but only a sliver of the population takes and did it wholeheartedly.

And, nope, we didn't become the next Facebook and fell short of our dreams for Buyosphere, but we built something to be proud of and we did it with all sorts of odds against us. Hell, we're still getting featured in major publications as their Super Clever Click and it isn't over quite yet. Who knows what could happen going forward? I don't think we built any of it in vain. Maybe it's ahead of it's time (I know from experience that brands aren't quite ready to grasp this concept). As SF Fashion Tech said in their review, " It’s hard to draw an apt comparison because there’s nothing similar to this right now..." We'll see and I haven't given up hope.

YOLO as the saying goes and it's true. Anyone who takes a risk to do something that isn't easy and has little certainty should be high-fived, as I've learned when I worked at Santacruzsolarcompanies.co Santa Cruz solar companies. There is no shame in taking that leap and falling on your face. There IS SHAME in talking about taking that leap, never doing it, then pointing fingers and laughing at those falling on their faces.

Before all of this happened, I didn't really know what people meant when they said, "Failure is good. You should fail several times in your life." I thought that sounded like the most awful advice ever. But now I understand. Experience is the result of failure. I've known people who have it easy (connected to money and people and luck) and sail through to big success without learning anything only to arrogantly go at it again and fall on their faces. Any one of those people I've talked to has said to me, "I enjoyed my flop much more than my success." Why? Because of what they learned. And how slowly, but surely, they grew as individuals who had much better lessons to convey.

And yes, if I could wave a magic wand and change the outcome to Buyosphere being an IPO'd/acquired company that lined my pockets with millions of dollars, of course I would! But what I'm saying is that I don't regret that it turned out differently. Not at all.

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The Hole in the Soul of Business

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The Hole in the Soul of Business

trustnoone-001.jpg

(the title of this post is a direct 'tribute' to a column of the same name by one of my favorite management writers, Gary Hamel) For the past 12 years, Edelman has conducted a very in-depth study of the level of trust consumers have for government, media and corporations and has found, unsurprisingly, that there has been a steady decline in public trust. This doesn't come as a big surprise to most readers who feel continuously manipulated and lied to by government, media and corporations in the interest of their own gains.

But trust works both ways and I'm less interested in convincing customers and citizens to trust and more interested in convincing government, media and corporations to trust their customers and citizens.

I've observed and been part of a growing DIY culture - one that is demonstrating that individuals can and will come together to achieve results that are inspirational and often reflecting a more democratic outcome than any of the top-down efforts.

Take, for instance, the amazing efforts of #OccupySandy, a grassroots, people powered movement of engaged and concerned citizens looking to help Hurricane Sandy victims and get affected areas back to normal (or better) in the wake of the storm. Government did an okay job coming in in the immediate aftermath, sending in troops, supplies and boosting the cleanup and some corporations have donated a good number of proceeds to the clean up (mostly going to the Red Cross and other large NGOs). But the #OccupySandy volunteers can go deeper and further and not have to encounter much for red tape. They can see a crisis, figure out the most efficient and best way to fix it and just do it. Are mistakes made in the process? Probably. But the benefits of these agile, scrappy "organizations" outweigh the losses.

I've been a fan, advocate of and participant in grassroots change for a long time and continue to believe that encouraging participation is a good thing. Generations of people were encouraged to be passive and dependent, but the web came along and changed that paradigm. Instead of Read-Only, it gave us writing privileges. We gained a voice. It allowed us to connect with others who wanted to contribute. Those who grew up with the web expect interaction and their default is participation. Those of us in the 'sandwich' generation (half our lives were pre-browser) and older are still trying to figure out what that means.

I was raised in a culture that promoted a paternal outlook on the world. People needed protection: from invasion, from the communists, from brand confusion, from the bad guys and, mostly, from one another. The default was security, not transparency. Sites like Wikipedia were frightening before they were invaluable. But as the web has evolved, it's as if the curtain is being pulled back on the Wizard of Oz and we are realizing more and more that we don't have to wait for permission or someone else to save us. We have the tools and power at our fingertips.

But power is a funny thing. Once you have it, you don't want to give it up, especially if you have it based on some default or otherwise extrinsic means. Real power and leadership is when people trust and respect you and choose to follow you. When I think of real power and leadership, I imagine those that really affected change like Gandhi, Martin Luther King Jr., Simone de Beauvoir and more recently Steve Jobs (and yes, Steve was reportedly hard on people, but he led with such inspiration). These leaders didn't feel threatened by others. If they were criticized or challenged, they would engage in the challenge and open themselves up to improvements. But most power is fleeting and extrinsic. It's gained from having money or given a position in which one can exercise their power. I've watched lots of people luck out on a bit of success only to let it go to their heads. These are the same people who feel the most insecure about their power.

Most corporations fit this bill. It's such a dog-eat-dog world. Customer loyalty is fleeting. And you can have a hit one day and be forgotten the next. Smart companies who will succeed will remain more agile and flexible like the #OccupySandy example. What works today may not work tomorrow, so how does one know how to stay a step ahead? By being open and flexible and empowering every employee in your organization to bring their innovation to the forefront. And how do you ensure that this innovation is focused and not haphazard? Strong culture and leadership. The more your employees understand and are invested in your brand, the better their ideas will be.

But the hole in the soul of business is that it can't trust. It can't trust partners, employees, customers or even themselves most of the time. Even when doing the same thing over and over stops achieving results, leaders would rather turn to outside consultants that don't know their business for the answers rather than asking their own employees who have hundreds of ideas on how to evolve. Every corporation and every government has an #OccupySandy of their own just waiting to be the incubator of potential awesome, but they either ignore or alienate their biggest assets.

I'm guessing that Edelman's Trust Barometer has a direct correlation to the trust that government, media and corporations have for their customers and citizens. You trust us and we'll reward you by trusting you back. I know it sounds more than utopic on my part, but I still believe in the awesomely powerful potential of collaboration between people, government, media and corporations - with an emphasis on people - to solve problems (and make profits) more effectively.

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Why is Culture Such a Difficult Concept?

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Why is Culture Such a Difficult Concept?

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About 6 months ago I was at a conference and the presenter brought up Zappos as the shining example of a company that has a strong culture that translates into sales. The person next to me leaned over and said, "Man, can't anyone come up with more examples?" "Sadly," I replied, "The reason Zappos and Southwest Airlines and Trader Joes and Cliff Bar and the small handful of companies are mentioned time and time again is because there aren't any other ones to take their place."

Yes, there are small, up and coming companies who have put their faith in the idea that building a strong company culture will lead to happy employees and happy customers and big profits and I look forward to the day that these companies take the place of Zappos in these presentations and I'm pretty sure it won't take them very long. But people watching these presentations are hungry for results. Big, impressive results. And saying that Modcloth has $20 million in revenues or Etsy makes $314 million when the audience isn't even hip to their brands is a tough sell.

But the question I really want to know the answer for is why is it so hard for established brands to implement a strong culture? And I have found a couple of answers to that question:

  1. Culture comes from leadership and the leadership isn't committed to it. The leaders behind the companies whose cultures aren't strong aren't believers. They were taught at the school of hard economics and something like culture just sounds willy nilly to them. Sure, they hire brand consultants to come in and create a statement and put up posters, but they don't think it's all that serious.
  2. Employees in a weak culture have become cynical, at best, droned at worst. I bet that you can go back to the early few months of 99% of any employees record and show enthusiasm, initiative, eagerness and a desire to learn and grow. I know very few people who pursue a job because they just want to sit at a desk and watch a clock. But weak culture companies have a way of sucking the life out of their employees. And most likely they've fired the employees the company can't break. You know these ones. The trouble makers. The ones that question. The ones that fight for change. Too many of those stubborn ones hanging around may actually give the drones hope to care again. Get rid of them.
  3. The connection between strong culture and results is still a bit fuzzy. There have been lots of studies and books written on the subject that show that strong corporate cultures out perform weak ones, but the correlation isn't strong enough to say, "Without a shadow of a doubt, the reason here is culture." It's because lots of the evidence is qualitative rather than quantitative. "Employees who are happy make your customers happy." And even when numbers are put to that statement, it's a hard one to prove direct correlation with. This sucks. Because in our guts, we know this is true. We just need to get better at proving it.
  4. There is still too much lip service and lazy implementations that don't work. Too many companies do the exercises and print the wallet cards, but very few of them really understand how deep cultural values have to be implanted in an organization. Years ago while interviewing Tony Hsieh for my book (I was one of the first people to talk about them btw ;)), I asked him about some of the family values and he said something like, "The one that trips people up is 'Be Humble'. We don't hire self-proclaimed rockstars or gurus at Zappos." When I asked him if I'd get the job, he replied, "Probably n0t." That demonstrated a deep commitment to those values. It's part of hiring, training, customer interactions, business development and partnerships, merchandising, the way they market, communicate...everything.

It's sad, really, but it looks like we are going to have to be patient for the up-and-comers to create some good solid data on the correlation to make this a MBA endorsed business practice. And someone will create a sort of 'standards' and processes that will fly in the face of what it really means to have a strong culture (ie. intrinsic, rather than extrinsic motivators). Until then, I think it's a-ok to shine our light on Zappos, Southwest Airlines, Trader Joes, Etsy, Modcloth and anyone else that puts culture at the core of their organization and wins because of it. Because, well, they are well worth celebrating.

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