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.

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.

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.

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?

Context is the conditions or circumstances that surround something; the conditions that define what is of value or what is meaningful.

Well, the citizens of the USA find themselves in a new situation. There are those who have lost their jobs or had their home foreclosed, for these life is truly bleak. Then there are the rest of us with the exception of the truly wealthy. The world looks different to baby boomers who witness retirement portfolios dwindle and not enough time rebound. Many middle aged people have lost confidence, trust or a sense of control. Some have a home mortgage that is greater than the current value of their house. Others witnessed competent colleagues get laid-off to face a gloomy re-employment picture. The employment picture for new college graduates is grim and even if they land a job they can expect a lifetime income that is hundred’s of thousands of dollars less than graduates as recent as four years ago.

Thanks to the economic crisis, there are few of us who haven’t cut back in our spending and many of us worry about our financial future. This jolt to our buying patterns is very likely last into the foreseeable future. We are weary and credit is harder to come by so most of us plan to spend less. At the same time, we are being influenced by a confluence of other factors that are causing us to change our buying patterns and in some cases pay more for new desires and priorities.

As a society there is an increasing concern about the environment and our personal health. These concerns are being taken seriously and are causing many people to reprioritize where and how they spend. It might seem like a paradox that in tight economic time many willingly spend more to achieve new lifestyle considerations.

Yves Chouinard, CEO of the outdoor clothing store Patagonia, recently unraveled the paradox. He said “people want to consume less but consume better.” I think he is on the money.

Strong customer relationships are essential to a company’s ability to sustain profits and have a shot at growth. This was the clear finding of a worldwide study by the Economist Intelligence Unit. They found that 90% of senior executive concurred. Here’s the way they put it:

…the winning differentiator is no longer product or price, it is the level of engagement—the degree to which a company succeeds in creating intimate, long-term relationships with customers.

Intimate relationships imply an openness—a sharing of concerns, challenges and desires. But this type of relationship requires two-way trust. Unfortunately, customer trust is very low.

Low Trust Customer Relationships

It is generally agreed that only a small percentage of participants actively contribute in social media. At the June 2009 Online Community Unconference many community managers were seeking ways to increase the number of active contributors. Since the unconference, I have been pondering two questions. One, what strategies and tactics will get more customers actively involved in company sponsored social media initiatives? Second, what benefit will the company gain from increases the number of contributors?

Will More Contributors Lead to Sales?
More active contributors will make the site richer and more attractive which might increase the number of participants. It also would make the “customer conversation” more representative of the company’s customer base. Both of these warrant further discussion, which I intend to do in subsequent blog posts. In this post I want to raise another consideration:

Will increasing the percentage of contributors influence sales?

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