Innovation: Decentralized & Internally Networked

How do you structure an organization to optimize innovation?  What are the most effective innovation pathways and processes?  Who is responsible for innovation?

Does any of that matter???

I recently participated in a conference on driving corporate innovation, and all of those business considerations - and a few more - were presented and discussed and analyzed.  I think they miss the point.

Innovative organizations today no longer try to structure and schedule innovation.  Instead, they respect the emergence of the individual within the organization, and they create a culture and environment that supports individual actions.  According to Gartner, the "Managed Anarchy Model" yields significantly more great ideas over time than does the Conventional Model; natural selection rather than management selection.

Individual behavior and corporate culture are facing increasing dissonance.  Gen Y has become famous for not following the established corporate rules, for being tethered to technology, for lack of loyalty to corporate employers.  But Gen Yers are also actively involved in social issues; they want to follow their instincts and passions and creatively change the world.  Aren't those great innovation characteristics?  Corporations need to tap into that individual drive.

With the prevalence of social technologies outside the corporate walls, individuals have learned to find like-minded people outside the usual channels.  They share ideas, pull information and insight from diverse groups, and create new partnerships as needed.

Individuals want to bring these characteristics into the workplace.  They want to self-select ideas and communities for collaboration within corporate walls.  Internal social platforms enable them to do so.  They help organizations become social businesses, from the inside out. 


Internal social technologies allow companies to decentralize innovation.  Social technologies facilitate innovation.  They drill holes in the silos.  They enable fresh conversations and exchanges of ideas.  And they are fluid.
 
IBM is at the forefront of using internal social technologies to drive innovation.  Conversations and ideas are sparked by over 17,000 internal blogs, 1 million daily page views of internal wikis and internal information storing websites, employee profiles on IBM Connections, and 15,000,000 downloads of employee-generated videos/podcasts.

50 IBM innovation jams have occurred over the past 10 years.  Back in 2006, IBM brought folks together in a jam to discuss more than 50 research projects in the company.  Projects voted into the top 10 became incubator businesses funded with $100M.

IBM Smarter Planet sprang from grass-roots, community discussions.

Smaller organizations with more limited technologies can benefit as well.  I worked with a medium-sized retail establishment that wanted to add social media to its marketing.  We started, however, by implementing a simple, free internal social platform and creating a cross-functional, cross-department core social media team.  Over the past 6 months, the cross-talk and new perspectives have dramatically accelerated innovation - from tactical improvements to the creation of an organization-wide "green" effort.

Internal social technology helps define innovation as a cultural norm and drive innovation into everyone's job. Employees behaving like individuals are the primary source of  innovation.  Let's not box them in.

Has internal social technology changed innovation for you?

Related posts of interest:
The Objective of Social Media is Lifestyle
Social Media and Innovation in IBM
IBM's Social Business Transformation

The Inside Story - Show and Tell

Once upon a time (about a year ago), a client declared that their new focus would be improving the consumer experience.  One executive wanted to know how to use social media to achieve this goal, although they sold through a global distributor network and did not deal directly with the consumer.

So we scoured discussion forums and blogs and other social media sites to learn what consumers liked, didn't like and wanted.  Then we asked the distributors what they thought.  How could the manufacturer better support them so that they could better support the consumer?  Consumers, we discovered, wanted shorter repair time; they wanted repairs done right the first time, and they wanted leading edge information about the newest features and upgrades.  Delivering those benefits correlated with higher consumer satisfaction and lower churn.  Dealers wanted help.

We created a social media strategy and a new operating model that promised to give the dealers the tools to fuel their passion and to provide the experience the consumer wanted.

But the systems in place weren't "broken."  Why "fix" them?  How could we convince the majority of the executive team that the best approach was using social media platforms rather than call centers or road shows?  We developed a business case.

We told stories.

With clip art and enthusiasm, we wrote and illustrated a series of vignettes.  Carey and Caroline Consumer went through each stage of the customer lifecycle -- from becoming interested in the product through to purchasing, warranty repair issues, and ultimately deciding whether to upgrade, stay with the status quo, or move to a competitor.  At each point in the customer lifecycle, we illustrated how the proposed social media would affect the process; how it helped to shape the consumer experience, and how it influenced measurable outcomes.

We presented the stories to the C-suite.  No power point decks with bulleted lists, we used one-act plays and dramatic readings.  We employed imagination plus some prototypes and mock-ups.  It was fun; it was often times funny, and it drove home the value of the proposed social media strategy.

We hear a good deal about telling stories in social media.  But the stories are usually about how other companies are succeeding, not visionary tales about the impact of social media inside our own organization.  

Be creative.  Show and tell.  The inside story can be powerful.

What stories have you told?    

Forget the 4 Ps of Marketing; Think the 3 Cs of Social Business

How can a traditional marketing culture cope in the new social world of business?  It can't.

Classical marketing, still taught at most business schools, misses the point.  The 4 Ps that have defined marketing activity for so long - Product, Price, Place, Promotion - work when companies and customers participate in binary communications: company to customers, customer to company.  But in a multi-channel world, inbound and outbound conversations exist for everyone, at any time, to anyone.

The 3 Cs of Social Business: Content, Customer, Channel

Social media is about engagement and relationships, two inherently unmanageable activities.  Product, price, place and promotion might drive short-term results, but long-term relationships evolve from communities of interest, from respectful discussions, and from connections that cross and take unexpected paths.  Those relationships create self-regenerating marketing engines, whether the core business is B2B, B2C or B2B2C.  The basic building blocks are no longer the 4 Ps of marketing, but the 3 Cs of social business.

Content - is both the message and the words, pictures, sounds and context that convey your message.  In a social relationship, content is the driver of engagement and often involves multiple messages, messages that get passed along (remember the old game of telephone?), and messages that are either much shorter or much longer than the traditional marketing message.  Your content imparts not only information, but also the culture of your organization.  As in any relationship, the customer needs to like you, or at least respect you, before engaging.  Consistency in messaging over time and across business units and corporate silos is critical and impossible to manage.  Content creation expands way beyond the old world Marketing Department. 

Customer - Who is your target customer???  The holy grail of marketing used to be to identify your target customer segments, then align the 4 Ps around them.  But customers have become peripatetic; they roam from one community of interest to another - both personal and professional; they surf blogs and tweets and Facebook posts and YouTube; they share what they find interesting with individuals outside your target segments.  And then one of these people you hadn't targeted is suddenly a fan and pushing you into segments even further afield from your "target."  In The Domino Project (see http://bit.ly/pEu1ta), Seth Godin suggests that publishers stop publishing books with a target audience in mind, "...the glory days of publishing to fill a niche are gone...The new frontier is to publish books that spread."  Today, Marketing needs to let customers declare themselves first, then service those customers as effectively as possible.

Channel - Social media channels present a spaghetti web of connections.  While advanced analytics are enabling more personalization, serving up ads for instance only to individuals who meet certain criteria, social media can also make it more difficult to engage.  In the old B2B world, for example, personal knowledge of customers was a sales role, not a marketing perspective.   Yet, effective use of social media channels requires knowing your customers.  Where do they hang out on-line?  In what social media communities?  What Twitter hashtags do they follow?  How do you humanize your organization to become part of the customer's personal network?  Does your culture mesh with your customer's personal and professional cultures?  Where you socialize is itself a message and a determinant of the customers likely to find you.  Who within your organization can comfortably participate in these communities?

The 3 Cs of Social Media reflect the basic change demanded of Marketing and the role of Marketing in your organization.

How is your Marketing Department changing?  Does it still exist? 

How Social Networks Redefine Distributor-Manufacturer Relationships

The old distributor, supply-chain model is dead – or at least dying rapidly.  Which is not to say that distributors are no longer needed.  But the relationship among manufacturers, distributors, and consumers is changing radically. 

Many years ago, P&G brought consumers into the conversation through the use of coupons.  Then Intel, a high-tech engineering company, pushed this idea further and created a consumer image.  Intel didn’t sell directly to consumers, but it created consumer loyalty and demand for its products.  From far down the traditional supply chain, Intel reached around to the other end – the consumer.

Social media networks are now redefining the manufacturer-distributor-retailer-consumer chain from a series of sequential links to a circle of collaboration.  Distributors are still critical; they still provide primary sales and support to consumers.  Manufacturers, however, can use social networks to provide a great deal more assistance to distributors while creating stronger recognition and greater customer loyalty for their brands.

The top 5 opportunities are business-based, not channel- or tool-based.  New apps and new channels can slide into execution plans to help meet business goals.  And that is critical, because you don’t need a Facebook strategy; you need a business strategy.  So how can social networks help manufacturers who rely on distributors?

v Locate parts and products – When customers contact a distributor for a part, they often need it now (or an hour ago).  Few distributors, however, keep a full-line of parts in stock, and manufacturers might be OOS as well, particularly for older models.  Of the several ways that manufacturers can address this issue, two stand out for me.

o   Manufacturer-hosted forums for distributors provide a central location and parts exchange opportunity.  Especially when distributors are geographically dispersed, they welcome the opportunity to reach out on a one-to-many rather than one-to-one basis.  It’s more efficient; it creates new distributor-to-distributor relationships and greater engagement, and it solves problems.

o   Pro-active notifications help avoid crisis situations.  Wholesale Pallet Rack Products acquired some Prest Lock 1 frames and beams after Excel Storage Products went out of business.  Joshua Smith, director of sales and operations at Wholesale Pallet’s sister company AK Material Handling Systems, tweeted to WPRP’s dealers that they had the Prest Rack beams.  As Smith tells it, “it turns out one of our dealers had a customer that had recently damaged its uprights with a forklift.  We were able to provide the dealer with the product in less than 48 hours.”  Happy dealer.  Happy customer.  Sale made.  (For more, see www.themhedajournal.org)

v Provide point-of-purchase customer assistance – Social media is mobile, which means that consumers can – and do – access information at the time of purchase.  Flurry Analytics recently reported that people spend more time on mobile applications than on the web each day, 81 minutes vs. 74 minutes.  According to LightSpeed Research (http://bit.ly/bizreport) almost 2/3 of consumers put heavy emphasis on product reviews, and over 2/3 say that 2 negative reviews would deter them from purchasing.  Jordan Winery is taking advantage of these trends.  The winery has built custom videos for digital wine menus, most prevalent at high-end restaurants.  In about 2-minutes, Jordan’s winemaker describes his wine’s profile just when a customer is preparing to choose a bottle to order.  Chicago Cut Steakhouse uses iPad menus loaded with a Jordan video, and Jordan reports that “within 45 days, our sales at the restaurant increased 17 percent.”

Dry Creek Vineyard is putting QR codes on its wine bottles, enabling customers in the wine aisle of a grocery to scan the code and be brought to a Dry Creek Vineyard webpage.  (For more on wine industry social innovations, http://bit.ly/pressdemocrat)

Just-in-time information can be used in many situations – from car dealerships to electronics purchases.  The information gives consumers confidence, gives the manufacturer a competitive edge, and makes it easier for dealers to close a sale.

v Spotlight the experts – You don’t have to know everything, but being the go-to location for expertise keeps customers and dealers engaged, and ultimately buying and selling.  Manufacturer-hosted forums and blogs provide a unique opportunity to create communities that actively involve a range of stakeholders. 

o   In-house experts – Your engineers and back-office experts provide humanity and a face for your organization.  Allowing them to have individual blogs on the corporate website also helps the employees establish their professional brands.

o   Hobbyists and enthusiasts – Bring the most knowledgeable of these folks onto your site.  Let them share their knowledge, answer questions, and raise ideas.  Raise their profile and your own. 

o    Dealers – Front-line dealers have tremendous vision into the market, competitors, and product.  Give them a voice.  As smaller businesses, dealers often lack the time or resources to set up their own digital and social networks, but they welcome the venue that manufacturers can offer.

element14 (www.element14.com), built for electronic design engineers, brings together all of these various stakeholders.  One of my favorite aspects is the use of YouTube, allowing people to showcase skills and techniques.  The Ben Heck Show (http://bit.ly/e14benheck) is part of the element 14 community, yet it’s unique and fun and often fascinating.  Take a look at Ben Heck’s Remote Expedition Camera Trailer (http://www.youtube.com/watch?v=coMZY5FNado).  It’s the type of exchange that simply wouldn’t happen without element14 and social media. 

v  Improve dealer “help desk” functions – Forums that allow questions and answers to be easily searched, that put internal experts in touch with dealers, and that enable dealers to help one another drive down call center costs and improve the information flow.  I addressed this in a previous post, http://bit.ly/welcomingdistributorsontonetworks .

Establishing vibrant social networks creates greater engagement between manufacturer and dealer, helps dealers close sales, and forges greater bonds among the dealer, consumer, and manufacturer.  B2B companies have been edging into social media reluctantly but steadily.  The opportunity exists NOW to realize significant competitive advantage by establishing a social dealer network.  It’s not the old supply chain any more.

Business Model Innovation at the Abbey - Monks Embrace Social Media

Social media both demands and creates the opportunity for Business Model Innovation.  The Monks at Portsmouth Abbey understand this. 

The monks are not known for seeking outside attention, nor has their fundamental purpose changed over the years.  But the world around them has changed, as has their ability to recruit and influence.  Like many socially conscious non-profits, Portsmouth Abbey has a higher calling, but they still need to “hire,” reach “customers,” and drive revenue to achieve their objectives. 

With the number of monks dwindling from a high of 24 to 12 today, one objective of Portsmouth Abbey is to “promote vocations to this monastery.”  Word of mouth and the simple physical presence of the monastery generated interest and “recruits” for the first 50 years or so.  Established in 1919, the monastic business model relied on being an integral part of the community.

Today, the abbey is simply making itself part of the modern community through social media.   

The underlying business and mission of the monastery hasn’t changed, but the business model is changing.  By adapting how the monastery interacts with its stakeholders, the monastery is creating a new infrastructure to support well defined objectives and a constant mission.   

• They are making themselves more accessible 
• They are engaging and listening   
• They are humanizing the abbey.

Portsmouth Abbey set up a website and began blogging in March, 2011.  They also established a YouTube channel and a Facebook page.  With some publicity from the mainstream media (CBS News, New York Times…), the impact of the social media effort was evident early on.  On the Portsmouth Abbey blog, David Moran commented:

“We have heard from 25,000 persons around the world; have nearly 100 sign-ups for our newsletter; our facebook visits are up 2000%;” and, perhaps most importantly, “we have a score of visit requests needing to be qualified.” 

The new business model seems to be having a positive impact on the business – more visits to the monastery.

Social media enables old-fashioned relationships.  It creates a way for organizations to become a community participant again, to become a collection of people rather than an impenetrable four 4 walls.  As we hear in one of the Portsmouth Abbey YouTube videos, “monks are human.”

So the old is new again...

And if you like Gregorian chants, you might want to download the ring tone from Portsmouth Abbey.