Disruptive Trends to Watch in 2014

Forward to 2014 new year concept

This post is part of Altimeter’s Trends to Watch in 2014

To kick off the new year, here are seven trends I’m following closely in my research at Altimeter, inspired by my conversations with clients, keynote audiences, social media communities, and very generous thought leaders. The list is not exhaustive of what is important, but these are the key issues I’ll be digging into in 2014. For each trend, I also include a few thoughts on the implications for organizations — and what actions they should take.

1. The Imperative for Strategic Disruption

Innovation is hot, hot, hot. I’m constantly asked how companies can use digital and social tools to capture and develop more innovation that leads to strategic growth. These executives want to develop a strategy that builds innovation into the DNA of the organization, with strategy, organizational structure, and processes to make innovation the job of every single person. But I don’t think it’s enough. Given the pace of change, I’m hearing from executives the need to set a goal of becoming disruptive, because innovation won’t be enough to keep startups and competitors intent on disruption at bay. The key difference is that disruption involves conflict and friction, the dilemma that Clayton Christensen says is the bane of innovators within organizations.

But there’s a key difference today, in that new technologies and management approaches like agile development create organizations that can sit on that knife’s edge between managing strategic disruption and crumbling apart in chaos. The implication for organizations is how will you create the strategic imperative to build resilience and adaptability into the organization so that you can disrupt yourself and your industry – rather than be disrupted. I’ll be researching how organizations create a strategy to become a disruptive organization, one that can identify and capitalize on The Disruptor, that unique leader who can identify a disruptive opportunity and pull the resources, people, processes, and most importantly, culture, into a coherent strategy.

2. The Rise of the Digital Executive

The year 2014 will mark the 20th anniversary of the World Wide Web. This means that people entering their 40’s — the time when they come into positions of power and responsibilities in organization — have had spent their entire professional career with the Internet. They will think digital first, integrating mobile and social holistically into the strategies that they develop for their departments and eventually, companies. The implications for companies is that this is going to inevitably set up conflicts in executive board rooms. If these up and coming Digital Executives are not given the support and latitude they need to fulfill their vision, they will leave.  and their mindsets will set the directions.

Implications: Clash of the board room as senior board members who are not digital natives will have to align with the strategies being created by a digitally-minded executive team.

3. Social Goes Mainstream — and Gets A New Name

At the end of 2013, Pew Internet Research released a report that showed every demographic group in the US had the majority of people online using social networking sites. And the Seniors — those age 65 or more were not far behind with 43% of those that are Internet users using social networking sites. And overall, 72% of ALL Internet users are social. So if you think “social” is still something that is done only by the young, you need to get your facts straight. The  implications are that your customers and your employees are social in their personal lives — and you’re missing out on precious relationship-building opportunities if you don’t respect this medium. That said, there is almost an allergic reaction to “social” in some enterprises, especially when it comes its internal use. So we’ll see a gradual usurping of social initiatives into overall digital strategies — which should be the case as it becomes more integrated and feature, rather than a destination.

Percent of Internet users using social networking sites

4. Increasing Privacy Concerns

The recent NSA data collection revelations and security breaches at Target and SnapChat have people more on edge than ever about the collection and use of their personal data. Add to that the potential of big data being used by companies, Facebook, Google and Apple tracking your every move and it’s no wonder people are concerned. The data supports this feeling: GlobalWebIndex found that in the US, the percent of people who say they are concerned that the Internet is eroding their privacy increased from 47% in September 2010 to 57% in Q3 2013, a 21% increase over three years. Similar trends exist in other countries, except, curiously, in China where it’s been dropping slightly over the past year.

 The implications are that organizations that hope to tap the promise of big data will need to begin NOW to clarify what data they are collecting, how they are using it, and how they will secure it. And this can’t be buried in the user agreements — it needs to be front and center as part of the relationship definition with customers. The key — developing trust so that when you collect and use the data, it makes sense in the context of the growing relationship.

 5. Holistic Approaches to Building the Future of Work

The seminal research being done by Lynda Gratton at London Business School on the Future of Work points out how the realities of technology, globalization, demographics, social, and energy resource changes means that organizations will have to rethink how work gets done. In response, organizations are starting to make strategic preparations — Dell recently announced a goal that by 2020, 50% of its workforce will have some sort of flexibility work arrangement [link]. This is much more than simply deploying an enterprise mobility platform or having a BYOD policy. I recently moderated an Evolving Workforce Roundtable at Dell where a key takeaway is that the CIO will need to be much more focused on the overall experience of not only employees but also customers. That “experience-first” mindset will be needed to shepherd in a new era of employer-employee relationships. In this holistic approach, culture and leadership will provide the guiding principles and strategy, while technology will become the means, not the ends.

6. Engaging Empowered Employees

In speaking with HR professionals over the past decade, one of the biggest things keeping them up at night is how to tap into and engage what they perceive as their biggest assets — employees. What’s changed over the past year is that it’s now also the concern of business line leaders as well as the rest of the C-Suite. They all see that engaging and involving the workforce from anything from driving innovation to engaging directly with customers can create a powerful and sustainable competitive advantage. But here’s the rub — most companies lack the culture and leadership mindset to do this. My research in this area is closely linked to the Future of Work research, but looks at how the combination of strategy and technology creates engaged and empowered employees. I’ll be looking at how collaborative and social platforms are merging, and which day-to-day activities make the most sense tackle first.

 One company I spoke with was highly discouraged because an early experiment in employee engagement went nowhere. When I dug deeper into the situation, we discovered that the company decided to focus their enterprise social network primarily on upcoming labor negotiations — talk about jumping into the deep end! Their hope that the ESN would help foster conversation and engagement left out a key component — the relationship between management and union members simply wasn’t there to be able to allow the conversation to take place face-to-face, let alone in a digital environment. The implications for organizations is that you need to have an employee engagement strategy that takes into account how technology will — and won’t — be used.

7. Customizing Enterprise Platforms to Increase Productivity

Improving productivity with technology continues to be a priority for many companies, but is becoming harder to do as most firms have already realized initial gains. One emerging area is the customization of enterprise applications. Most of the work to date has been around integrating your favorite platforms so that they work well together (e.g. Salesforce + Box, Exchange + Facebook) but an emerging trend is moving beyond the traditional  “one-size-fits-all” approach and customizing enterprise apps for each employee.

The email inbox is a great example — we all use the inbox in different ways, some of us keeping emails in there as a to-do list while others live by the Zero Inbox rule and creating specific task lists elsewhere. The adoption of new productivity tools in the consumer space, such as LinkedIn Intro, and Mailbox phone app, mean that these or similar offerings will shortly grow legs and walk into the enterprise through the back door. CIOs should look for ways to reflect the flexibility of these productivity tools in the way traditional enterprise and collaboration platforms are used.

If you have ideas, suggestions, or examples of how your organization is addressing one or more of these trends, I’d love to hear from you. Please add to the comments below or email me at charlene@altimetergroup.com.

Infographic: State of Social Business 2013 and Outlook for 2014

Living 2013This past year has been a busy one for me and Brian Solis on the research front. We’ve published the following:

Brian and I recently introduced an infographic that summarizes high level findings across all of our work in 2013 (scroll down to see it below). And the key finding is that while organizers are making significant headway in terms of building out their social efforts, they are far from realizing real business value.

My outook for 2014 is that many more organizations will overcome the stigma of “social” and seek ways to articulate connections with customers and employees into their business. In just the last half of the year, we’ve worked with several organizations that are doing the hard work of connecting their social efforts to business value — it sounds easy to connect the dots but actually building the organization, governance, and process to do this will be most of the focus in 2014.

It isn’t glamorous. It doesn’t have the appeal of new consumer bright shiny objects or excite of a tech IPO. But this is where the real value will be created, real benefits will be built. It’s going to take a lot of hard work, a bit of gut-wrenching leaps of faith as employees and customers are empowered, but hopefully in a year we’ll have seen key numbers like the percent of companies associating social with business value increase from today.

Highlights from the State of Social Business Infographic

Companies are organizing and formalizing social media strategies into social business strategies…

  • 78% of companies have a dedicated social media team. This is up from 67% two years ago.
  • Social media teams have grown from 11 people in 2010 to almost 16 in 2013.

Social business strategies are spreading across the enterprise…

  • Social media headcount across the enterprise has more than doubled at the largest companies from 20 in 2010 to 49 in 2012.
  • According to our research, there are 13 different departments across the enterprise with at least one person dedicated to social media.
  • The majority of resources are allocated to marketing at 73%, but as you can see, social media covers almost every major function. Now, whether or not social media is organized and integrated, well, we know that it’s not really.

Marketing = 73%
Corporate communications = 66%
Customer support = 40%
Digital = 37%
Social media = 35%
HR = 29%
Product/R&D = 16%
Advertising = 16%
Customer/User experience = 15%
IT = 14%
Legal = 9%

Companies are trying social business to positive business outcomes…

  • About 50% of companies say social business has improved marketing optimization, customer experience and brand health.
  • Nearly one in four have actually seen an increase in revenue.

Companies though have a long way to go…

  • Many social business programs lack a strong foundation.
  • Only 17% of companies identify their social strategy as mature.
  • 52% of companies say that executives are aligned with the overall social strategy.
  • Just 26% of companies approach social media holistically (operating against a cross-enterprise level strategy.)

To succeed, build a foundation for social business…

  1. Benchmark you program with Altimeter’s Social Business reports (see below…underneath the infographic).
  2. Document existing challenges and opportunities to address in 2014 and 2015 (we don’t move as fast as we’d like).
  3. Align all social business efforts with business objectives and priorities.

New Report: Social Media Education for Employees

Last year, we asked companies about their top social strategy priorities. The second top response was “Developing Internal Education and Training.” Yet, when we surveyed companies earlier this year, we saw that only 38% had any education program in place, beyond ad hoc efforts.

Over the past few quarters, we identified a number of large companies that have developed social media education for their employees, to learn why and how. We interviewed companies as diverse as ARAMARK, Kaiser Permanente, RadioShack, and more — and learned that social media education helps achieve two key business objectives:

  • Reduce the risk of social media violations to protect employees and the company, and
  • Increase employee advocacy and effectiveness, both on and off-domain.

In addition, one of our most important findings is that social media education can be deployed given limited resources. For example, at Adobe two social media team members spend approximately 10% of their time on this business program. One person told us: “You can do it with a very limited budget,” while another said “You don’t have to have all the bells and whistles, and you can roll this out to a limited set of employees first.”

We’re happy to share with you research today, particularly for those of you who may be including social media education in your 2014 plans. Our report, Social Media Education for Employees, includes a framework to structure your education program — based on four unique roles and learning objectives — and a 10-point checklist of requirements for success. It’s embedded below, along with the four data charts from the report.


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The State of Social Business 2013

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Altimeter hosts an annual Social Business survey to learn how social media is evolving within enterprise organizations. Data is then compared to previous reports providing a sense of movement to the numbers and also a developing benchmark for our analysts and clients. Our last survey was studied in Q3 2013 and also Q4 2012, the latter was used to provide context to a report published by me and Brian Solis in our report, “The Evolution of Social Business: Six Stages of Social Business Transformation.”

We are now making the data available to the public for free use under Creative Commons (cc) as part of our Open Research program. The figures included in this report are also compared to previous survey findings from 2011 and 2010. There are two publications available, which are embedded below as well — there’s a report with some analysis and we’ve also just published a PowerPoint deck so that you can easily incorporate the information in your presentations. All we ask is that you properly attribute the research back to Altimeter.

Overall, we found that investment in headcount and infrastructure have steadily grown, as companies reach “intermediate” stages of social business. Several are turning their sights from “social media” as an extension of marketing and communications, and seek to push a “social business” agenda throughout the organization. Top findings include:

  • Most organizations are “intermediate,” with only 17% self-described as “strategic” in the execution of their social strategies.
  • 78% of companies have a dedicated social media team, at the division, corporate or both levels — only 22% of companies do not have a dedicated team.
  • Companies are committing more headcount to social media across all sizes of organizations. The biggest jump is for companies with more than 100,000 employees, which now report an average of 49 full-time employees supporting social media, compared to 20 in 2010.
  • 85% of companies have an organizational social media policy, yet only 18% of companies report that their employees’ knowledge of social media usage and the organizational policy is either good or very good.


The Twitter IPO: Some Initial Analysis

Twitter just tweeted that it has filed a confidential S-1, with the appropriate disclaimer. Here are a few reasons why this filing and IPO warrant close scrutiny.

  • Twitter is the last of the Big Four to go public. In the social networking ecosystem, Twitter is seen as a must have in terms of a social strategy, and is the only major player left that is still up for grabs — YouTube (owned by Google), LinkedIn (IPO), and Facebook (IPO) are all spoken for. Other upstarts like Pinterest are just getting started so Twitter is going to be the talk of the town into 2014, which is the earliest the IPO can be expected. There will be a certain “last call” mentality to the Twitter IPO that wasn’t there for Facebook.
  • Confidential filing gives Twitter control. Twitter took advantage of the JOBS Act pass last year, which allows firms with less than $1 billion in revenue to file an S-1 confidentially. This means that unlike Facebook, Twitter won’t be subjected to a microscopic dissection of every word of its filing. This is a good thing, because Twitter’s business model isn’t the easiest to explain. As Twitter begins the roadshow, they’ll be able to roll out their story to investors in a systematic, orderly way that enables them to tell their growth story to the world.
  • Timing and Friends benefit Twitter. Twitter should be saying a big “Thank You” to Facebook for carving out the path before them. Facebook has spent the past year educating the market about social media advertising, doing much of the heavy lifting and laying out the red carpet for Twitter.
  • Challenge: Twitter’s Advertising Model. The biggest challenge that Twitter has is that its main form of revenue comes from “sponsored tweets” which is a form of native advertising (see Altimeter’s just-published report on Native Advertising). The problem with these sponsored tweets is that they are not, at present, a standard ad format that can travel outside the Twitter platform. That makes ad buying — and scaling to media buyers — more difficult.
  • Discipline to Stick to the Business. The tweet that Twitter posted one minute after the “filing” one shows everyone at the computers with the next, Now, back to work.” The company has been preparing for this day, and realize that it’s a long, long slog for the next approximately six months before the actual IPO. The team will need discipline to focus on the work, rather than pulling out spreadsheets to calculate their potential net worth. Not an easy thing to do!

These are still early days, and I anticipate that we’ll learn a lot more about Twitter’s business over the next few weeks and months. I, for one, am eager to not just see the numbers, but also to hear their story. Because as one of the four foundational platforms of the social space, they have the ability to shape the future as they envision it unfolding. And the vision that Twitter CEO Dick Costello and his team roll out is sure to be interesting.