TRANSFORMING COMPETITIVE

ADVANTAGE WITH SOCIAL MEDIA

PREPARED FOR THE CIO YEAR AHEAD SUMMIT

– PALM SPRINGS, NOV 8TH, 2010

@FGOSSIEAUX@FGOSSIEAUX

OVERVIEW

UNDERSTANDING THE TRUE DRIVERS OF SOCIAL MEDIA

HOW DO HYPER SOCIAL ORGANIZATIONS THINK ABOUT THEIR BUSINESS?HOW DO HYPER‐SOCIAL ORGANIZATIONS THINK ABOUT THEIR BUSINESS?WHAT DO HYPER‐SOCIAL ORGANIZATIONS DO DIFFERENTLY, AND WHY?5 WAYS TO THINK DIFFERENTLY ABOUT IT

LET’S START OFF WITH A LITTLE EXAMPLE

HUMAN 1.0 VS. WEB 2.0THE SAP DEVELOPER COMMUNITY

The SAP Developer NetworkStats:Stats:

1.4 M users

400K+ business experts

Content‐richContent‐rich

Original Incentive System:

Point system leading to personal rewardspersonal rewards

The Results:

Bullying behavior in the community

New Incentive System:

Point system leading to donation to good cause

The Results:

No more bullying in the community

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Web 2.0 or Human 1.0?

A look at some NIH + Duke Research

Experiment #1:

People play Atari style

Experiment #2:

People play Atari stylePeople play Atari-style video game which allows them to earn or lose money for themselves

People play Atari-style video game which allows them to earn or lose money for a charity

MRI scans shows that the pleasure side of the brain lights up – that same part

MRI scans shows that the altruism side of the brain lights up – that same partlights up – that same part

that gets addicted to drugslights up – that same part that is responsible for social interactions

So to understand how to do business in a 2.0 world…

You do not need to understand theYou are better off understanding 

You do not need to understand the Web 2.0 technologies

Human 1.0 – not as individuals, but as hyper‐social creatures

LET’S GET A LEVEL DEEPER ON THE HUMAN 1.0…

Why are social beings helping one another?

Reciprocity = a Reflex

Why are people going out of their way to punish others?

Humans have an innate sense of fairness = keeps reciprocal society working

How do we make decisions?

Social Framework Market Framework

Why do people like to look like others?

Because humans have mirror neurons

Why do we lie to market researchers?

Because we lie to ourselves and others and weBecause we lie to ourselves and others, and we tell people what we think they want to hear

Why is status so important (and why do we hoard it)?

Because it used to get us a better mate –Because it used to get us a better mate proceed with caution: status works both ways!

We are a herding species – self herding even

What are the important Human 1.0 Hyper‐Social Traits

• Reciprocity – it’s a reflex that allows us to be the only super‐social species without all being brothers and sisters

• The role of fairness in assessing situationsg

• Social framework of evaluating things vs. market framework

So to the extent that we can basically be human with what we know, and share it as freely as we framework

• The importance of looking cool and mimicking others

ypossibly can, I think we’ll go a long way towards gaining a higher or 

stronger level of trust with the consumers

• Herding and self‐herding(early research shows that social behavior does not change when it scales)

the consumers.

Barry Judge, CMO Best Buy

http://www.cmotwo.com

SUCCESSFUL HYPER‐SOCIAL ORGANIZATIONS

HOW THEY THINK DIFFERENTLY ABOUT THEIR BUSINESS

Informed by Tribalization of Business Study:2008‐2010 – 1,000+ companies took the survey 

Hyper‐Social companies think differently

• Think tribe – not market segment– We need to find groups of people who have 

something in common based on their behavior, not their market characteristicsnot their market characteristics

• Think knowledge network – not information channel– The most important conversations in 

communities happen in networks of people not“…affinity groups will quickly becomecommunities happen in networks of people, not 

between the company and the community.• Think human‐centricity – not company‐centricity

– The human has to be at the center of everything

will quickly become the dominant social 

force in the emerging world 

economy, changing The human has to be at the center of everything you do, not the company

• Think emergent messiness – not hierarchical fixed processes

how we think about markets, fads, social movements, and, ultimately, power” 

– People will want to see responses to their suggestions, even if it does not fit your community goals – FAST

‐ Tom Hayes, Jump Point: How Network 

Culture is Revolutionizing Business – 2008

HYPER‐SOCIAL ORGANIZATIONS

WHAT IS IT THAT THEY DO DIFFERENTLY?

Hyper‐Social Orgs – Leveraging Social Business Processes

• Successful Hyper‐Social organizations turn their business processes into “social” processes

– Why?

• Scale

• Increased quality

• Increased passionIncreased passion

• Increased WOM

Turning a business process into a social process

• IS NOT:– Running traditional programs using social 

media platforms – PR by blogging press releases lead gen by spamming communityreleases, lead gen by spamming community members, recruiting through spray and pray over Twitter, etc.

• BUT IS:– Running programs based on human reciprocity 

and social contracts to get others, whose job it g jisn’t to do so, to help you do your job –customer support with the help of all employees and customers, product innovation with customers and detractors etcwith customers and detractors, etc.

– TAPPING INTO PASSION, AND HUMAN 1.0 TRAITS

Process Before After Benefits Case Studies

Sales One‐to‐one  Many‐to‐many Sales is social networking

Tibco, Zapposnetworking

Product Innovation Constraint to a department

Includes all employees, 

customers, prospectsand detractors

Reduce product failure rates (now at 80%)

Cisco, Netflix

Lead generation Interrupt‐driven Become findable, be generally helpful in public conversation

Leads that actually want to buy something

EMC, Dell

Customer Service Conducted by employees

Conducted by employees and other

Customers service as a revenue source

SAP, Zapposemployees employees and other 

customersrevenue source 

instead of cost center

Knowledge Management

Top down process Federated and user‐driven process

KM that works, changes in work habits

IBM

Customer  Mostly between  Primarily among  Reduced cost and  Best Buy, DassaultCommunications

ycompanies and customers

y gcustomers, detractors 

and prospectsincreased 

effectiveness

y,Systemes, Fiskars

Talent Acquisition and Development

Board, interrupt‐driven and based on weak ties WOM

Endorsed by the tribes people belong to

Social context provides better 

matches

Monster.com

weak ties WOM matches

Employee Communications

Mostly within silos Cross enterprise Increased serendipity,increased support

IBM, FedEx, Cisco

Market research Based on small groups and financial 

Based on tribes and social contract

Much more accurate market data and 

Eli Lilly, Pfizer, IBM, Fiskars

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incentives increased success

PR & Thought leadership

Rolodex based and focused on traditional 

media

Community/tribebased and focused on 

social media

Much more amplification of the 

messages

Microsoft, Intuit

5 WAYS TO THINK DIFFERENTLY ABOUT IT…IN A HYPER‐SOCIAL WORLD

1) BRING DOWN THAT WALL)

Do like IBM – get rid of the firewall while protecting IPG

CIO’s

Green Enthusiasts

Business model tweak

PRIP

PR

CustomerIP

Customer supportIP

Product Idea

…increase knowledge flows…and competitiveness

2) DON’T BUILD NEW WALLS)

Don’t put a wall between company and people

Don’t put a wall between company and people

Embrace what people want

…and give them access…it will increase passion & productivity!

3) TEAR DOWN SILOS

…AND GET PEOPLE COMMITMENT

)

Business objectives of communities

70%

Q: Of the following business objectives which best represent yourcommunity? (select all that apply)

40%

50%

60%

10%

20%

30%

0%

Department managing community

60%

Q: Which department manages your community  (even if outsourced)?

40%

50%

20%

30%

0%

10%

# of people managing community

Q: How many people from your company manage this community as their full‐time job?

2%5%

3%

23%

None: part time job

One

5‐Feb

51% 10‐Jun

More than 10

Other

16%

Establish Center for Excellence

Marketing

Budgets

SMSalesHR

Center for Excellence

SupportDevelopment

4) DON’T BUILD WHAT YOU BUILT BEFORE

…OR DON’T LET HISTORY REPEAT ITSELF

)

Move with caution – it’s not easy!

We need l

We need Social graphs

Social CRM

The funnel is dead

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Source: McKinsey Quarterly http://www.mckinseyquarterly.com/The_consumer_decision_journey_2373 

Today’s buying cycle: a social‐powered continuous loop process

Tribes & Networks

Many more sources of information Can still 

become part of consideration 

set

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Based on source: McKinsey Quarterly http://www.mckinseyquarterly.com/The_consumer_decision_journey_2373 

CRM – the makings of a social process

• Leave company centricity behind:

– Prospects, lead nurturing, sales funnel, etc.

• Put the customer at the center:

– What does she need?

– Will it work for her?

• Increase knowledge flows and think tribes• Increase knowledge flows, and think tribes

– Who can help her internally?

– Who can help her externally?

• Embrace a messier process

– Allow people to jump in and help

5) BE COUNTER‐INTUITIVEOR THINK OUT OF THE BOX

)

CIO = CHIEF INFORMATION OFFICER?

OR….

CIO = CULTURAL INSPIRATION OFFICER“WE FIND OURSELVES IN THE ODDEST POSITION –WHICH IS TO TELL THE BUSINESS UNITS THAT THIS IS NOT

A TECHNOLOGY ISSUE BUT A PEOPLE AND PROCESSA TECHNOLOGY ISSUE BUT A PEOPLE AND PROCESS

ISSUE.” – CIO AT A MAJOR PHARMACEUTICAL COMPANY

The benefits of a Cultural Inspiration Officer

• Better knowledge flows = Social Knowledge Management Platform

• Customer/employee centricity = leveraging more passion

• Leveraging passion = increasing productivity exponentially

• More passion = increased WOM 

= the creation of more customers with a higher lifetime value

“The purpose of a business is to create a customer.”-- Peter Drucker

Any questions?

Francois GossieauxPresident, Human 1.0f i @he. francois@human1.com

w. http://www.human1.comb. http://www.emergencemarketing.comc. http://www.marketingtwo.netp // gp. http://www.cmotwo.comt. http://twitter.com/fgossieaux

Our new book: The Hyper‐Social Organizationhttp://www.facebook.com/hypersocialorg

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