Enterprise 2.0 – The Business Value of Social Software

I just returned from the Enterprise 2.0 conference in Boston. In 2006, Harvard Business School professor Andrew McAfee coined “Enterprise 2.0” to describe how organizations could streamline business processes by improving collaboration between suppliers, customers and employees. And the social media applications created in the last 5 years have helped drive McAfee’s vision of exchanging business information with less friction.

What are Social Media applications?

Officially, social media and Web 2.0 are umbrella terms that describe the activities that integrate information technology, human interaction, with the intersection of words, numbers, videos and audio. It’s a fancy way to describe how business processes should be structured to best align stakeholders in a supply chain. To break it down even further; social software creates efficiencies whenever humans interact with a business process.

Enterprise 2.0 has become Business 101.

Last year McKinsey published “Ten Tech-enabled Business Trends to Watch.” McKinsey predicts that social media (i.e., “Big Data”), co-creation of content and cloud computing will have a profound impact on information technology strategies over the next 3 years. As they say, be there or be gone.

The value debate for social media is now behind us. Collaborative technologies (read: “social” or participatory applications) are delivering measurable competitive advantage in established firms as well as creating a whole new generation of less siloed, “fast companies.”

For those of us who are product managers, we’re simply giddy about the development possibilities that social software offers. The ability to embed lightweight apps in place of manual activities means we can sprinkle value like fairy dust to ANY segment of the value chain.

Case-in-point. As we’ve all been involved in a fender bender, well now take heart… because “there’s an app for that.” Have a look at Nationwide’s iphone app. On-the-scene claim filing from your phone. The value to policy holders is self-evident. And the value for Nationwide? A significant decrease in processing effort for claims submitted via this lightweight application. The ROI is off the charts.

June’s IEEE Spectrum timelined that the second era of the Web was launched by search (read: Google). And now comes the third: the era of the Social Web. The stage is set for a battle of, well, epic proportions. The wizards at the Googleplex in Mountain View, Calif and their Palo Alto neighbors are working at a dizzying pace to create social networking apps that deliver capabilities at lower costs.

Social Media powers Enterprise 2.0.

Recently, I visited Microsoft’s Research Fuse Lab in Cambridge. I saw firsthand how social media was being embedded within an engineering CAD/CAM application to connect communities of engineers.

Here’s how it worked: A designer experienced a problem with a hydraulic valve in a CAD/CAM design. An embedded social networking component in the workflow allowed the designer to ask a question (as well as visually display problem) to other engineers throughout the world. The engineers collaborated as if they were in the room and solved the problem in minutes. Without this social media capability the issue could have delayed the project for hours or even days. The social app embedded inside the CAD/CAM enterprise workflow allowed the designer to use extensive social connections – either inside and outside the firm – to solve problems and be more efficient. The ROI? Yep, you got it… off the charts.

Saba, the talent management company, recently won an award for their social collaboration suite. This 3-minute video illustrates how social media can be used for resource management. Have a look.

Social Media for Employee Engagement.

While social media is being deployed primarily in ways that impact direct business operations, it’s also used for softer employee engagement activities, replacing dated phone directories and manually maintained hierarchical organizational charts. Research has shown that when staff connect though social applications across organizational and geographic boundaries, they can find resources, get questions answered and discover their colleagues’ expertise more easily. What’s more, communications between staff can be systematically scored, ranked and woven into the information fabric that can be referenced and used across the firm.

Connecting employees via social apps is becoming so prevalent that many companies are developing plans to eliminate email as a communication platform inside the firm. The ROI? (Do I need to say it?)

French consulting and services company, Atos Origin, has similar designs for a social media transformation. Chairman and CEO Thierry Breton wants to eliminate internal e-mail from the company within three years, replacing it with social platforms, he announced in February. “E-mail is on the way out as the best way to run a company and do business.”

Social is now.

The competitive advantage that social media deployments are having have prompted companies to move quickly toward adoption. Quicker than any application segment that I have witnessed in my career. According to McKinsey, the Web 2.0 / social media wave could have a greater impact than the large technology adoptions of the 1990’s such as enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management applications

Oracle is even bolder. Oracle predicts that firms who don’t move toward Enterprise 2.0 will become obsolete. “Competitive advantage today is not achieved through command, control and operations. It is realized through collaboration, communications and management excellence.”

Time to Business.

Product Managers, you know what to do. As the product sage Seth Godin reminds us… polish those resumes and then go make something happen. It’s time to go supersonic.

Are You Generating Creative Tension?

Lately I’ve reading about leaders… people who find the best in themselves and in turn inspire, engage and mobilize others under demanding circumstances.

Three weeks ago while on a flight to a west coast conference I was confronted with 6 hours to catch-up on reading. I had recently started Ronald Heifetz’s Leadership without Easy Answers. Heifetz, a senior lecturer at Harvard’s Kennedy School of Government and the co-founder of the Center for Public Leadership is an expert on leadership. A colleague had warned that Heifertz’s book is “quite dense” and requires extra effort to draw parallels to today’s business environment. And so I asked a flight attendant for coffee.

Fully caffeinated I settled in for 6 hours of tough work… but then recalled that I had packed November’s Harvard Business Review which highlighted lessons on leadership from the military. I decided to flip through the issue before getting back to Heifertz’s book. Two hours later I was still reading the HBR.

It’s good thing that I did.

November’s HBR showed how specific leadership strategies can directly impact success. And Robert Simon’s article “Stress-test your Strategy” provides 7 key measures that leaders should use to gauge the health of their business strategy. And one of these measures is always in a product manager’s bag.

Creative Tension
Simons maintains that a primary role of business leaders is to make sure that outside market pressures are felt inside the business. He contends that unless competitive pressures are made palpable to the staff, motivation to create solutions that win is unlikely to occur. Product development staff can sometimes feel insulated from external pressures and leaders need to create a sense of urgency to rouse staff from their “comfortable ruts.”

During the conference I used Twitter to extend my eyes and ears back to the team in Boston. I discovered that several competitors were moving faster in the mobile computing space and several had recently launched applications that offered customers more convenient ways to stay connected while “on the go.”

So, what did I do?

I opened my bag and reached for a well worn product management tool… I generated creative tension. I simply posted an image on Twitter of a competitor’s recently launched iPad / iPhone member services application. I didn’t say the words. I didn’t need to. But the message was clear; “we are behind in mobile computing.”


Innovation is a business imperative and there is unmistakable correlation between financial success and product innovation. And generating creative tension is one technique that will spur innovation.

Leaders know to introduce creative tension in slow drips. Time is needed to weigh costs and benefits within an overarching strategy.

Drip, drip, drip.

It really works. If you’re impatient, it might feel like a waste of your time. You may even be tempted to give up. But stick it out

As a product manager, make sure that you are generating creative tension inside your firm. Then channel that energy and make something happen.

So… who’s really your customer?

One of this year’s “hottest” ad campaigns is for Procter & Gamble’s 72-year-old Old Spice brand.   During February’s Super Bowl, P&G launched a 30-second spot featuring the strapping actor Isaiah Mustafa, a former NFL wide receiver, as pitch man for P&G’s fledgling men’s shower gel which was running a distant third to Axe.

The spot, produced by Wieden + Kennedy in Portland, Ore., went viral within days and has drawn more than 16 million views on YouTube alone.   CBS News aired a report on the campaign in advance of a second ad launched during the World Cup… again featuring manly Isaiah.

So… what can product managers learn from an advertising sensation?

Before I answer, take 30-seconds and have a look at the spot.

The most striking thing – aside from Isaiah’s abs – is that the pitch is aimed directly at woman… or should I say, “Ladies?”    Why would P&G speak to women about a man’s personal hygiene product?

The answer is simple.

Market research indicated that as much as 70 percent of men’s shower products are purchased by females who live in the same household.    In market research, 70 percent is a very significant pull.    Since women make the majority share of buying decisions… they are the real customers for men’s shower gel.    Men only apply it.

Similar distinctions were discovered decades ago in the retail paint industry.    Market research indicated that gender also played a role in the selection of residential paint.    It turns out that women choose interior paint more often that men do and base their selection criteria on colors available within a brand.    Men, on the other hand, make the purchasing decisions on exterior paint… and make selections based on durability and price.

An interesting aspect of this research was that painters had no role in the selection process even though they understood the chemistry and attribute differences of the brands and were best suited to select a paint brand for any particular need.

Painters, it turns out – like men in the shower – only apply the product.

So here’s today’s lesson; understanding stakeholder role distinctions is invaluable to a product’s design and subsequent marketing.    And remember… it’s not always obvious who’s REALLY your customer.    Good product managers understand this.

Why I’m a Cow on Twitter

57226892Last week a colleague relayed a story about a friend of his who was applying for a job. On the application was a box to attach a photo. Apparently my colleague’s friend wasn’t aware that she needed to bring a photo. Therefore in an honest attempt to return a complete application she sketched her likeness in the box under the heading “image of applicant.” She didn’t draw a stick figure… she had real artistic talent and sketched a high-quality image. It wasn’t a photo-realistic image of her face, but was an image of who she intended to be on the job. (In listening to his story I got the impression that the sketch included either a cape or mask.)

She didn’t get the job. And she never found out if the rejection was due to her sketched “picture.” If creativity was a skill required, however, I suspect her application ranked high among the other candidates.

Self-portraits are always instructive; they paint the artist both as he sees himself and as he wishes to be seen. Self-portraits can at once expose and obscure, clarify and distort. They offer opportunities for both self-expression and self-seeking. And, to product managers, the fact that people self-describe is one of the most valuable aspects of social media.

On the internet, everyone knows you’re a ______. (fill in blank)

Today self-portraits are crafted from pixels rather than paint. On social networking websites like Facebook and Twitter, self-portraits feature background music, carefully manipulated photographs, stream-of-consciousness musings, and lists of our hobbies and friends. They are interactive and invite viewers not only to look, but also to respond. These “portraits” can hold a wealth of information… more than a photo-realistic image.

One of the most popular courses at Stanford last spring was “The Psychology of Facebook.” The course was so admired that a book will be published summarizing the research findings of the class. One of the interesting aspects of the course was to explore the concept of self description… “when a person uploads a profile picture…or lists attributes about him or herself… what persuasive goals drive the selection?”

Social Media = finding your tribe

The idea behind Twitter can be hard to grasp. Facebook is easier… upload pictures of Mr. Sprinkles or the weekend snapshots of the kids and a newsfeed alerts your friends to look and comment. While Facebook is simple to use and understand, Twitter has far more value for product managers.

Twitter is a SMS-based service that allows you to micro-blog using 140 character communication fragments in near real time. People “follow” you on Twitter. That is, they opt-in / opt-out of your Tweets (read: comments) without introducing themselves or asking permission. Followers merely hook on to read your haiku-length thoughts as you travel through the day.

I think Twitter is best illustrated by a scene from the 2003 film Bruce Almighty. Bruce Nolan, played by Jim Carrey, freaks out on live TV, is fired and then offered a new job by an unknown person. At the interview Bruce meets God, played by Morgan Freeman, and is given god-like powers. Later, Bruce starts to hear the voices of people praying (read: “tweeting”). All the voices of people praying were available for Bruce to hear should he decide to listen (read: “following”). Simply put, that’s Twitter… people saying whatever comes to mind and other people choosing to listen.

Companies are playing God, too…

Companies like Zappos are using Twitter to actively pay attention to their customers. When someone mentions in a Tweet that they may be shopping for, say, new a handbag… magically, a tweet back containing a URL to Zappos.com for a discount coupon for Kate Spade handbags appears. Zappos might not be playing God but they sure are listening to their flock.

I do this myself… I’ll type in a keyword like “Red Sox” on Tweetdeck… and anytime someone mentions “Red Sox” I get an alert and can opt to join the conversation or merely observe. All in real time.

Criticism has been heaped on Twitter recently. In the Boston Globe, Tom Davenport, who holds the President’s Chair in Information Technology at Babson College remarked that Twitter is a fad similar to CB radios. Davenport’s main thesis is that you can’t say anything meaningful in 140 characters.

Forrester Research analyst Josh Bernoff and co-author of Groundswell, a book on social media, disagrees; “I still hear a lot of skepticism about Twitter, but not from marketers.”

Precisely right, Josh.

Amid the ordinary tweets of “I just ate a mango…” are many genuine comments that provide unedited insight on a vast array of topics. There are now services that track in real time keyword topics ….twitter icon

Social media’s value to product management is based on the psychological reality that people are inclined to self-describe and tend to naturally cluster into communities based on common interests.

Social scientists coined the term “ambient awareness” to describe a sense of emotional closeness to people who are physically distant but share digital connections. The glue for pre-digital communities was physical proximity. In the digital world it is common interests that create and sustains communities. Physical proximity is becoming less important.

Okay, so why is my Twitter avatar a cow?

It’s a reference to Seth Godin’s book Purple Cow which is required reading for product managers. In a digital world where most of my followers may never meet me in real life a photo of my face has less value than a “portrait” that describes some important attribute. So you all have homework… and the answer can be found in the Purple Cow.

Everyone has an opinion… which is precisely the problem.

Successful product innovation is always based on the voice of the customer. Of course, the trick is to make sure that product managers hear the Right customer voices. With participatory requirement gathering techniques, it’s never obvious which of your current customer’s product needs should drive future product direction.

Think about the creation of the automobile…

If Henry Ford’s product decisions had been directed via a customer focus group on transportation, he would have never created the automobile. He would have merely bred a more reliable horse.

Social media technologies are providing product managers with the opportunity for more authentic conversations with product consumers – methods that allow greater collaboration.

However, these less structured, “opt-in” approaches to customer collaboration don’t come without issues. Research at McKinsey has suggested that Web 2.0 technologies may actually give less meaningful results unless managed.

There are countless product innovation attempts where companies have tried to generate new product ideas by tapping suggestions from visitors to corporate websites. Many companies concluded that participants didn’t have the background, the skill nor the knowledge to contribute to meaningful product innovation ideas… and so the quality and yield of new product ideas proved to be very low.

Recently, I had a similar experience when I wanted to purchase new headphones for my iPod. To help select the best product for my needs, I thought it would be smart to research consumer reviews for the new Apple in-ear product. (After all, these are people who opted-in… a Tribe for Apple ear buds! )

The first customer review from Toronto was entitled, “Awesome headphones Apple!” The second review from “JB” is Brooklyn headlined… “A shocking miss for Apple.”

And the product reviews continued in a similar fashion… ping-ponging back and forth between joyous raves to complete trashing. I walked away wondering if these people were actually using the same product! What I realized was that the variability in the reviews wasn’t due to product… it was that the consumers weren’t using the same set of criteria as measurement. So it was impossible to get an effective read of how well the product actually performed against a set of quality metrics.

I think that social media companies like Communispace [Go HERE to their website] have the right approach to data collection for product innovation. Their approach is to create private communities where users are selected based on pre-established criteria and then invited to join the community. And like any community, people are allowed to opt-in and participate whenever they have interest in the current conversation.

The difference with a private community is that much of the outlier noise has been pre-filtered by making sure that the voice of the customer is one that has the highest probability of value creation. Without the proper selection of participants, Web 2.0 technologies may offer feedback that is no more effective than any other methods.