Yesterday, Axel Shultze, Chris Carfi and I had the privilege to open the Social Business Executive Summit. I hope you had a chance to listen in and plan to catch more of the excellent panels today and tomorrow.

Time was short so we didn’t get a chance to pull together the ideas that we individually presented. Here are a few of my thoughts.

During my presentation I made the point that learning must now be an integral part of work – the role each person performs within their organization and, in fact, the larger business ecosystem. Traditionally, learning in organizations has been learning to do a job, task or to use technology. This is explicit learning. When things change quickly and in unforeseen directions as they do now, organization must adapt. However, learning tasks or jobs most often has the opposite effect – it contributes to rigidity of process and resistance to change (over-commitment to what is known.

An IBM Global CEO Study found that less than 50% felt their organization were prepared to handle a volatile and increasing complex business environment.

This is not surprising since most corporation as still operating on a 20th century command/control business model that focus on internal efficiency not adaptability to rapidly changing external forces and dynamics.

In the upcoming Social Business Executive Summit, I will describe a framework that will dramatically increase organizational adaptive potential. My talk

Social Business Strategies for Adapting to the New Normal in Business

is in the opening session on May 25th.

There are 9 other speakers who will also shed light on the challenges. This is a free online event sponsored by CustomerThink.

Click to register.

For at least the past 5 years, the tried-and-true formulas to boost sales and market shares of brands have been become increasingly irrelevant and losing traction with customers.
(John Gerzema and Ed Lebar, The Trouble with Brands)

To understand what is relevant and does get traction with customers, it is critical to recognize that the pursuit of market share and commodity sales are not the same thing. Germane to this distinction are the two buying personalities I have discussed elsewhere. Here is the short version that makes it especially relevant to this differentiation.

When customers are not emotionally involved or indifferent they are usually seeking a means-to-an-end. For example, gasoline is gasoline to me. I go to the filling station that offers the best trade-off between price and convenience. I am loyal to this heuristic, not a brand name. Sure, there are people who seek out a name brand gas station and are willing to pay more per gallon. For them, the brand either has meaning or they are mindlessly hung up on an old habit. Both are proving to have a tenuous hold on loyalty and profitability.

Recently, my wife and I spent a lovely weekend at the Boonville Hotel which highlighted some key principles for delivering a great customer experience.

First, a little background, Boonville is located in the Anderson Valley wine area of Northern California - a beautiful location for a laid back weekend. With only 10 rooms, it is like you are a guest in a country mansion. The ambiance is fantastic but the people are what make’s the stay so pleasurable. Everyone is genuinely friendly, not contrived but genuine and relaxed. It is clear from the start they you are welcome guest. The staff has an uncanny ability to greet you without intruding, whether are reading in the library or enjoying a glass of wine in the garden.

Now to the dinner. First off, it is prix fixe on the weekend with no choices. Shouldn’t the customer have a choice? Not in this case. Chef/proprietor, Johnny Schmitt pulls together a culinary experience that exploits the best ingredients available, many coming directly from the hotel’s garden. Rather than choose menu items, you are lead through a delightful tasting experience.

So what are the customer experience lessons from the Boonville Hotel?

IBM is a 114 year old company - one that is remarkable in its ability to reinvent itself, to adapt to current business conditions. Here are some of the ways they are shifting from a 20th century command & control enterprise to a flatter, more collaborative, innovative, engaged and agile organization, one prepared to face 21st century challenges.

A quote for a recent IBM study sets the stage nicely.

67% of employees in mid to large organizations believe there are people in their company who could help them do their job better but, they don't know how to find them or engage with them.

Well, Casey Hibbard has spelled out how IBM does this and more in her recent blog post:

How IBM Uses Social Media to Spur Employee Innovation.

This sort of open and collaborative organization is not just vogue, it is essential of a company is going to thrive in today's fast-paced and increasingly complex business climate.

Change is the only constant! We have all heard this before, but…

…let me embellish and illustrate how it can impact your business and career in the immediate future.

John Hagel, John Seely Brown and Lang Davison have been taking about the Big Shift, radical changes happening in the business world. Here is a particularly relevant quote:

The more the business environment changes, the faster the value of what you know diminishes. Success hinges on the ability to participate in a growing array of knowledge flows.

Sounds ominous but few people take it serious enough to dramatically change their behavior. Maybe this will be the motivation.

Search Engine Optimization (SEO) and Social Media Marketing are relatively new marketing approaches. For the purpose of illustration let’s say SEO start becoming important to marketing 8 years ago and Social Media Marketing exploded on to the scene 4 years ago. Here’s another way to put it. Eight years ago you had to sell most companies on the need for someone with SEO expertise, 4 years for Social Media Marketing.

Today, there are very few marketing jobs that do not expect expertise in both – it is a requirement spelled out in most job descriptions. That means the 10, 20 or even 30 years of marketing experience you might have has dramatically lost relevance. While some of your expertise might still be valuable, your overall value is dramatically diminished.

In a recent opinion piece in the New York Times, Thomas Friedman took a very provocative stance on the Google-China struggle, one that puts the free flow of information into a much broader context. Here’s the essence of what he had to say:

If China forces out Google, I’d like to short the Chinese Communist Party.

Where is he coming from? Well, like a lot of us, he see the command/control model of management giving way to the free flow of information and ideas fueled by networking and collaboration. There is a parallel here echoed by a diverse set of business leaders from John Chambers at Cisco to management guru, Gary Hamel.

Command/Control business management must give way to the power and potential of social business. By social business I include not just social networking on facebook but the deliberate collaboration and sharing that happens inside savvy companies and with a diverse set of external partners. This form of social business is fast and has less operational friction, but its real power comes from the innovation and agility to exploit new possibilities.

Hutch Carpenter’s latest post on the Four Quadrants of Innovation caught my attention and provoked a few reactions. I guess that’s the sign of a good blog post.

His quadrants are the combinations of two dimensions:

minimal technology change to radical technology change, and
manage existing markets to create new market.

My first reaction was very positive. Hutch argues that companies should pick their innovation spot. By this he means they shouldn’t all be lured towards disruptive innovation. This is very sage advice. Companies differ dramatically in their ability to envision disruptive innovation and even if they hire outside talent, their organizational dynamics might not let them reap the benefit. Also, the timeframe and risk level of innovation may not match with the company’s circumstance.

My second reaction was provoked by his focus on technology and the inside-out perspective. There are many great examples that illustrate that it is not the technology per se, but value creation it enables that is important. These days' customers and an outside-in perspective are critical elements of getting it right as well as being critical fueling engagement and demand.

We are experiencing not merely another turn of
business cycle, but a restructuring of economic order.

"Restructuring of economic order!" That's a very intimidating concept and many business leaders might inclined not to give it serious thought. Yet focusing on more tangible issues and leave this to the big thinkers to sort it out could be a very big mistake.

But this statement wasn't directed at thought leaders. When Ian Davis, Worldwide Managing Director of McKinsey & Associates made it he was forcefully making a case that the new normal in business should not be dismissed or deferred but require the attention of any business leader who expects to adapt, thrive and have a shot at sustainability.

...the new normal in business should not be dismissed or deferred but require the attention of any business leader who expects to adapt, thrive and have a shot at sustainability.

This goes beyond the current economic crisis. Most people recognize that business is fast-paced, fast-changing and increasingly complex and most businesses have undertaken more than one initiative to adjust or cope. The pressing question is whether this is a turning point, a point where playing by the old rules lead to seriously diminished returns. Have business dynamics shift so significantly that sustainable opportunities and expansive new possibilities cannot be seen from the prevailing perspective?

Over the past few years Dell has become a poster child for using social media. Their wake up call came in 2004 when an irate customer blogged about their horrible service. This prompted Dell to take Social Media seriously.

They first discover was that there were thousands of mentions of Dell daily in the blogosphere and nearly half of them were negative. Dell gets a lot of kudos for the positive way they responded to customers via social media and over time brought the number of negative posts down to the low twenties.

Dell didn’t stop with online reputation management. They setup a site called IdeaStorm to harness the innovation of the crowd. This also seems to have been highly successful in terms of the number of participants and the number of ideas they incorporated into new laptop designs.

Next, Dell was credited with winning over $3 million in incremental sales with a novel Twitter strategy.

Dell clearly figured out how to leverage social media.

Here’s the problem. During roughly the same period of time Dell market valuation dropped from $100 billion to $30 billion. What’s up?