But all good things come to pass. With the arrival of Scott Thompson as the new CEO of Yahoo!, it makes sense that Scott be given a clean slate upon which to write the future of Yahoo!. This is very much the norm for incoming CEOs, where founders are asked to take a diminished role or expected to leave the company completely.

This is the case with Jerry all the more so, as he was (is?) a vehement supporter of Yahoo! remaining independent. Regardless of Jerry’s real or perceived position toward independence or selling off assets such as Alibaba or Yahoo! Japan, it’s still all baggage hanging on from a previous era. Scott and Yahoo! need the  freedom to set the vision and strategy for Yahoo!, unencumbered by the past. The last thing Scott needed was the ghost of Yahoo! Past — embodied in the very real, very smart, founder and former CEO of Yahoo! — sitting at the boardroom table.

So what does the future bring for Yahoo!? While many people have written off Yahoo! but I’m less inclined to do so for the following reasons:

• Loyal users. It’s amazing to me that Yahoo! attracts 700 million unique and very loyal users each month. That’s somewhat less than Facebook’s 800 million users, but it’s huge by any standard. Through thick and thin, they have stuck with Yahoo!, despite having a plethora of other options available to them. But how there continues to be continued erosion so Yahoo! will have to invest in it’s “front doors” of Mail, MyYahoo!, and Home Page, as well as new offerings around it’s user engagement vision. As my colleague Rebecca Lieb commented in this article, “”Yahoo is a very vaguely defined company strategically,” Lieb said. “It has a million or zero identities. It’s everything and nothing.”
• Access to implicit social and interest graphs. The emails and address books of those 700 million users create an implicit social graph, similar to the one that Google is trying to tap via Google+. Front page content reading leads to tremendous data about what those 700 million people are interested in. This is gold for future targeted advertising, but Yahoo! has done little to develop or market these capabilities.
• Advertisers wanting to reach those users. Yahoo! will generate about $5 billion in revenue this year, most of it from advertisers with whom it has a direct relationship. But those revenues are declining as other options are growing.
• Technology chops. Yahoo! has had the ability to be ahead of the market, from purchasing Flickr and Delicious to starting an early form of a social network in Yahoo! 360 back in 2005. I continue to admire and use Yahoo! Pipes and it’s developer APIs remain excellent. What it’s lacked is a clear vision of how those investments tie into a coherent vision and strategy for Yahoo’s relationships with users and advertisers.

Prediction #3: Connected leaders and employees will create sustained competitive advantages through a culture of sharing. This year will see some companies pull ahead of others because they are able to collaborate, innovate and execute better and faster thanks to an ingrained culture of sharing.

This is the year that companies get serious about investing in their internal social business capabilities, simply because it helps create and sustain a fast-moving, innovative and collaborative culture. It’s one thing to have a Facebook or Twitter presence run by a small social media team in your organization. It’s a totally different ball game that truly social businesses are playing when thousands of employees are connected externally as well as internally.

Culture is often dismissed as the “soft” underbelly of business. But as business leaders like Jack Welch (GE), Howard Schultz (Starbucks), and Herb Kelleher (Southwest) have written, culture is what creates and sustains a great company. And while a company can be successful with a “command and control” culture, I believe that companies that embrace openness (see my book “Open Leadership” for details) and encourage a culture of sharing will be much better positioned in the long run.

There are two ways I see culture changing because of increased sharing enabled by social technologies. The first revolves around connecting your biggest advocates – your employees — with your customers. The second is connecting your employees with each other.

Empowering Your Employees To Connect With Customers

No matter how many people you have on your social media team, it won’t be enough to meet the groundswell of customer interaction demand. To do that, you have to create your own internal groundswell, embodied in your employees.

Let’s go back to Dell. In my first prediction, we saw Dell dealing with flaming notebooks in the summer of 2006. Since that time, Dell has made it a mission to get closer to customers. One way they’ve done this is to train employees on how to use social media on Dell’s behalf. To date, over 5,400 Dell employees have taken one or more social media certification class and more than 2,000 have taken the full 8+ hours of classes to become fully “social media certified”.

According to Altimeter’s benchmarking surveys, advanced social businesses have roughly 20 people working on their social media efforts. That means that Dell effectively has 100 times more people engaged in social media than the most advanced social businesses.

This means that Dell understands customer needs at 100 times more points throughout the organizations, and has 100 times more people poised to jump in and support customers. It’s also 100 times more people looking at ways to improve and innovate the business on multiple fronts.

Many organizations will look at the immense costs (and risks) of training even a significant minority of employees and take a pass. It’s beyond their ability to comprehend so many people freely speaking on behalf of the company, beyond the grasp and control of corporate communications.

But look at the huge benefit to companies that do make that investment. Dell is building a competitive advantage deep into the organization that will difficult for competitors to emulate. It doesn’t replace great products but in the long run, 2,000 points of connection will give Dell a better way to facilitate faster agile design processes.

What’s the actual cost/benefit of social media training and empowerment? Here’s a back of the envelope calculation. Let’s assume that those 2,000 Dell employees had 8 hours of training at the opportunity cost of $50/hour. Add in trainer time and being generous, it’s roughly $1 million or about $500 per employee. I’m pretty sure Dell is realizing at least $500 in value just this year from the engagement of those connected employees.

And what if you are worried about something going wrong? Two ways to get your mind around this. First, your employees already interact each and every day with your customers – and you train and trust them to do the right thing and exercise good judgement. Second, things always and inevitably go wrong. To my first prediction about practicing every day transparency, you have to be able to feel comfortable with this new level of openness in order to have the confidence to empower your employees.

Connecting Employees Throughout The Organization

A hot trend right now is the adoption of “enterprise social networking” (ESN) where a company uses software to connect employees socially within the enterprise. This can be either as a standalone service (like Yammer or Socialcast) or integrated into a collaboration platform or suite (like Salesforce.com’s Chatter, IBM Connections, or Sharepoint with Newsgator). Think of it as Facebook-like status updates behind the firewall.

I’m finishing up a report that looks at these ESNs and one of the most interesting findings is that it’s increasingly the leaders of the organization that are behind the adoption of these technologies. The reason: They see it as a way to transform their organizations, simply by creating the opportunity for people to share.

The result of sharing is that barriers between departments fall. Silos get broken down and the power distance between leaders/managers and front line employees becomes smaller. And it also creates opportunity for new leaders to emerge, where they are defined not by their title or how much budget they control, but seen as a leaders simply because they have amassed followers.

In the end, culture is defined simply the by the values, norms, and practices of how we get work done each and every day. The intractable nature of some cultures means that in order for culture transformations to happen – and to happen quickly – the new norms and mindsets not only have to established and trained, but also reinforced over and over again. Here are just a few ways that a culture of sharing can help achieve real business results:

• Share information about a project to reduce duplication.
• Find experts who have solved a similar problem before.
• Solve problems together, faster.
• Streamline processes in real time.
• Identify innovations, big and especially small. And just as importantly, execute them quickly.
• Gain confidence in distributed decision making because of greater information sharing and transparency.

These benefits as well as action plans will be included in the ESN report (sign up to be notified about the report when it is published).

The crucial action for leaders in 2012 is to make the commitment to these ESNs and to participate by simply sharing *how* you achieving your business goals. The practice of leadership requires constant focus on the important while addressing the urgent. Culture is important and can’t become a sidecar to the pursuit of hard goals. It’s just the other way around – culture becomes the foundation through which you will achieve those crucial goals today and in the long run.

So if you have these tools in house, share something every single day to support and grow your culture of sharing. And if you don’t have an ESN yet, look into how you can quickly get one in place

Your Social Business Journey

That’s it for my 2012 predictions and priorities. To summarize:

Prediction #1: Consumers will reward transparent companies with their loyalty. Companies must get courageous with transparency and make it an every day occurrence. Or they will face the wrath of outraged customers.

Prediction #2: Your customers want to be known. Your customers don’t merely want you to understand their needs or pain points. They want you to know them as individuals anywhere and anytime they engage with you.

Prediction #3: Connected leaders and employees will create sustained competitive advantages through a culture of sharing. This year will see some companies pull ahead of others because they are able to collaborate, innovate and execute better and faster thanks to an ingrained culture of sharing.

One thing I hope you see is that becoming a success social business has at its core being a successful business, period. The tactics and etiquette of social business may be unique, but the foundations are rooted in solid business strategy and practice.

All the best to you in 2012 and be sure to share examples of how you are doing on your social business journey. We will all benefit from your generosity and insight.

Request: Please contribute to Altimeter’s Open Research by taking this survey. You can sign up at the end to have the report emailed to you when the report goes live. Spread the word on this survey too — we want to have broad participation and also share our research findings with the broader market.

At the core of the research is understanding the goals that companies hope to achieve with the most basic fundamentals of a social network — the ability to have a profile, post an update, and receive notifications. While initially the goals of early deployments were simple – “Let’s connect everyone!” – the space as evolved.

Now we are finding that executive support — and mandates — are some of the strongest drivers of organizational adoption of these platforms, regardless of industry. But a key problem remains measuring and valuing the impact – few organizations use anything beyond basic engagement metrics to measure the value of these platforms.

Why is this important? When I was writing “Open Leadership”, I was struck by the potential of these technologies to transform organizations company. From the CEO and CIO to department heads, leaders are eager to increase productivity, effectiveness, and resilience. So this is not a report that evaluates technology platform features, but rather, asks a more basic and fundamental question — what results should you expect when you deploy an enterprise social networking solution?

This is where we need your help. We would like to survey and benchmark the impact of enterprise social networks. How is your organization using enterprise social networks to meet business goals? How engaged are your executives? What kind of impact is it having – and how are you measuring it? While we welcome any user of enterprise social networking to complete the survey, we are especially eager to hear from people who were instrumental in choosing and deploying these solutions.

To whet your appetite, here are some early findings so far from our research:

• Creating a “watercooler” is still the most common reason for deploying — but these suffer because of lack of adoption and more importantly, purpose.
• Companies are beginning to deploy enterprise social networks with specific business goals in mind, ranging from optimizing a business process like sales to supporting a change in strategic direction.
• Metrics, however, are lacking. Most deployment focus on engagement metrics around adoption and usage, rather than tying efforts to business goals.
• Some larger organizations are linking adoption and use of enterprise social networks to employee retention — engaged employees tend to be happy employees.

Also, we are also looking for companies willing to be interviewed as case studies and for best practices. We won’t cite you or your company by name without permission. So don’t be shy! This space is still nascent so we welcome the opportunity hear first-hand about your experience.  If you are interested in being interviewed, please my colleague Jon Cifuentes at jon@altimetergroup.com. Thank you in advance!

Links

Take the survey — it’s 19 questions in total and will take about 10-15 minutes.

Want to be notified when the report comes out? Fill out this form and we’ll let you know. (We promise not to email you about anything else!)

Interested in being interviewed for the report? Email Jon Cifuentes.

This is not a book about how to use social media. Read Brian’s last book, “Engage” as it’s an excellent primer with detailed how-tos. Rather, “End of Business” seeks to explain to executives and leaders who aren’t engaged in social media how connected customers are transforming business as we know it.

Written from the point of view of the connected consumer, the first half of the book looks at phenomenons ranging from the evolution of social networks into personal operating systems to the rise of social commerce. If you read Brian’s blog, you’ll recognize Brian’s fingerprints all over these chapters — rich examples, clear explanations, and always a sense that Brian is at your side as a trusted guide.

But I found the most valuable insights in the second half of the book where Brian becomes prescriptive about how businesses need to approach business differently. In particular, Brian makes the case that you must evolve your business to become “adaptive” to the connected consumer. He’s evolved his call to action from “Engage or Die!” to “Adapt of Die!”. I quote from the book on what is different today:

“The pivot of any business is not whether it can reach consumers, it’s the reality of whether consumers, especially connected customers, wish to connect with them now and over time.”

Brian lays out how a business needs to rewire for this new reality, one that turns away from being internally driven by a strategic plan to one that is guided by an entire organization centered on creating a magical customer experience — and importantly, customer relationship — with these connected consumers. Thus the hallmark of an adaptive business is that it will shift and evolve as an organization, from top to bottom, to be responsive to customers. The last three chapters resonated the most with me, as they layout the framework for an adaptive business, how to evolve your business to shift from rigid to adaptive, and the future evolution into predictive businesses.

You can read more about the book at endofbusiness.com. Other resources:

YouTube video: http://www.youtube.com/watch?v=9DZ9XAzwhlA

Brian’s post: http://www.briansolis.com/2011/10/announcing-the-end-of-business-as-usual-the-new-book-is-available-now/

Jeremiah Owyang’s post: http://www.web-strategist.com/blog/2011/10/18/adapting-to-radical-changes-in-business

But Timeline beautifully solves this problem in two ways. First, Facebook automates the sharing of everyday, miniscule activities that most of us would never bother to expose. But because ALL of it shared as a feed, the whole becomes available and accessible, and thus interesting.  You don’t care that I listened to Billy Joel just now, but you may find it interesting that I listen to him any chance that I get.

Second, the items in the feed are seen in two ways, in the Tickler blended in with all of the rest of debris of our lives, and in Timeline where it’s laid out against the context of time.

It’s this second aspect of the announcements that I find so fascinating, that we now have the context of time to add to our sharing. To understand this evolution and put it in perspective, let’s take a quick look at the history of sharing within social networks. I have long contended that there are three things that make social networks unique: your Profile, your Relationships, and your Activities (see figure below).

Over the past few years, each of these components have evolved. When we first began on our online social journeys, who could have thought that we would be sharing photos of what they were having for dinner online? Yet people frequently not only check into restaurants but also post photos what they are eating, as well as who they are having dinner with.  Our notions of privacy and what we will share change with the perceived value of that sharing. We benefit from the people who have shared before us (you ordered the dish because of a review). We like reading about our friends culinary adventures, and so we reciprocate. The cycle continues to evolve as we expand the things we are comfortable sharing.

And the driving force of this evolution has been Facebook. More than any other company, Facebook has pushed the boundaries of what we will share and how share it. News Feed was met with derision and boycotts but in the end, people found it too valuable. Beacon in 2007 was pulled because it pushed the envelop too far, but that was also instructive to Facebook as they learned how far and how quickly they could push the limits of sharing. 

Now Timeline and auto-feeding of your activities is pushing the edge again. Understandably, people are uneasy about EVERYTHING in their lives being shared on Facebook. It feels like too much power being bestowed on one company. To ally concerns, Facebook is starting in safe territory. This first phase enables media content, which is rarely embarrassing, as long as you don’t stray into X-rated categories. The discovery benefits of seeing what my friends read, watch, and listen to are also evident – I want to find my fellow Billy Joel fans amongst my friends.

But how far will this go? Here are some future scenarios and applications that could take advantage of an activity auto-feed:

• Location-based activities. I hate checking in, because it interrupts the flow of my activity at a location. Instead, I would give permission to be “auto-checked in” to a location. These are the places like my favorite restaurant that I patronize on a regular basis and would be proud to be associated with, especially if I can drive more business to them. So I’d willingly give permission to share that information. This goes beyond Like and moves into Love territory.
• Interest-based purchases. There are specialty retailers that I frequent that are fairly “safe” where I would share detailed purchase information. Pottery Barn for housewares. Wine.come for new wines. Zappos for shoes. And I would benefit from discovering what else people with similar tastes also bought. But there are some retailers where it’s just doesn’t make sense, for example a drugstore or Victoria’s Secret.
• Communication trends. As I previously discussed in a post about Google+, one of the key things Facebook is missing is who I email, text, call, and meet with on a regular basis. All of that information stored in my mobile phone is currently inaccessible and off limits to any application. But what if I could give permission to auto-stream that data so that I could make sense of it, to find the trends and highlights that make it relevant and useful to me?

How far are we willing to share our information and activities? Look no further than to our real lives because we do it all the time. Our credit card transactions are captured and resold to direct marketers. Our Caller IDs – which used to be private – are shared. Caller IDs in fact are a great example of how our notions of privacy get flipped upside down by utility. When Caller ID first came out, many people regarded it as a violation of privacy and were uneasy with the notion that people could see who was calling them. Today, what happens when you get the message, “Blocked ID” on your phone? You don’t answer it! That flip in privacy took about eight years to happen.

But Facebook doesn’t have the luxury of years to change our mindsets around privacy – it has weeks. It has put in place numerous controls to be able to manage the permissions around Timeline feeds, from what is included to who can see it. In the end though, what Facebook is investing in is Trust. Pew Internet recently released a report that showed that Facebook users are far more trusting that the rest of the Internet. “A Facebook user who uses the site multiple times per day is 43% more likely than other Internet users and more than three times as likely as non-Internet users to feel that most people can be trusted.”

Facebook is counting that this remains true, and that sharing will continue to expand at the rate it needs to in order to fulfill this vision.

We’ve been in business as a firm for almost two years and have experienced tremendous growth – and also a great deal of growing pains. I thought I’d share a few insights into our journey, in the same way that we ask you to share with us.

The reality is, being in a start-up is a trying experience. We’ve learned a lot, both good and bad and it is not always easy. Some of us are analysts coming from other firms while others have been in other industries. That means that we had to create a culture from the ground up – and the results weren’t always pretty!

But one of the most interesting things about our culture is that it is based on openness and humility – two values that aren’t usually found in corporate mission statements. We are trying to build on each others’ strengths while also recognizing that we are all still on a journey to learn and grow. And as the author of “Open Leadership”, it’s probably inevitable that we have an open culture!

As you can see from the picture, our physical space is open, with desks ringed around a large open area. The conference rooms are where we work together on research and client projects. But when a third of the company is working remotely outside of the office, we have to work extra hard at staying connected and transparent with each other.

To do that, we use an enterprise social network hosted by SocialCast where we post everything from reminders to change email passwords once a year to celebrating new clients and sharing briefing notes. Other things we share include the view from the desk of wherever we happen to be working (most recently the Outer Banks of North Carolina) and funny pictures of ourselves for people to caption. The result: we feel more connected on both a business and personal level, so that when we need to work together, we have a common connection on which to build.

We also do lots of work together – and by work, I mean physical work. We recently held a Pilot event in the space, where we invited people to a discussion on “Social Analytics and Strategy” led by Lora Cecere and  Susan Etlinger (picture to the left, more pics also available). About two hours before the event, we all came together and assigned tasks, from moving aside the tables to setting up the folding chairs. At one point, I was collecting all of the trash cans and putting them in strategic areas! The event was well received, but it was all the more fulfilling knowing that we all individually had a hand in making it a great experience for people.

But more than anything, being open is also a mindset, and a key thing we try to do is to create a place where people have a say in everything from our values to our long term strategy and organizational design. One of the most satisfying moments of the past week, as we closed out and got feedback, was that each person felt that they had a voice and that their viewpoints were valued. But there was also concern though, that we maintain this level of openness and intimacy as we grow. That will be a significant challenge, as we will require more oversight and overhead to manage an increasingly complex business. But there’s one thing I believe in — as long as we keep at the center our core value of being open with each other, we’ll figure it out.

I’m interested in hearing how other companies have weathered the storms of rapid growth — how do you retain that small, dynamic, and natural closeness as you grow, and across geographic distances? What roles does technology play? What kind of culture are you purposefully trying to create?

And of course, if you’re interested in being a part of the culture-creation at Altimeter, please check out our many “open” positions!

Friend managment has been the bane of my Facebook experience because I don’t want to share everything with everyone. I also made the mistake of accepting far too many friend invitations with the result that I share very little on my “personal” account. While there are tools like Facebook Groups and friend lists, they are incredibly cumbersome and difficult to use.

Google+ leverages the fact that you already have your “real” friends listed and possibly even organized in your address book. This is especially true if you are using Gmail. Take a look at your Gmail address book and you’ll see your top 20 contacts already identified. Google knows this, and also knows who you frequently email together as a group (parents of your child’s class, book club, family reunion email list, etc.) and uses that information to drive the insight needed to suggest natural groups for you to form inside of Google+ Circles.

Google can leverage all of that behavioral information into helping you easily manage your relationships. Because face it–who you share with, how often, and with what other people you do that sharing provides valuable insight into the nature of the relationships.

Now for the scary privacy part — remember that Google also “reads” the contents of your email to show you ads on the side of Gmail. For the most part, we’ve gotten over this. But what if I gave permission (note: permission is crucial!) for Google to make recommendations on if and when I should add someone to a group? If I’m emailing someone frequently about biking trails, Google+ may suggest that I add that person to my biking Circle. Fundamentally, you would have to have a deep, trusting relationship with Google at a different level for this to happen. But the benefits could be tremendous. (See my post “In Google I Trust” for more discussion on this.)

Take that level of trust to a different level if you have an Android phone. Would you be OK with letting Google mine the contact, call, and texting data on your phone to help you build a more social experience with those people you communicate the most? What about your Google Calendar or Google Voice data?

I say this because most of my communications, both personal and professional, are run on Google’s platforms. Facebook does not have insight into all of the “real” sharing that I do in real life, while Google does.

My take on how this will play out is that Google has the natural ability to pull together groups based on communication patterns, and to also leverage the natural groups that already use communication platforms. It will be a no-brainer for Gmail to start using Google+, a much harder sell for non-Gmail users.

The result will be unified sharing, as opposed to unified messaging, on Google platforms. This won’t happen overnight and it will be far from being a “Facebook killer”. Rather, it’s a smart move by Google to leverage its strengths in communication platforms, algorithms, and trust of core users to move into social.

Lastly, I don’t expect Facebook to stay still for long. Look for them to roll out improved friend management tools in the near future. But regardless, they will always lack the behavioral intelligence to help me truly manage my friends, unless I am a devoted Facebook user.

Links to detailed reviews:

Google+

Google Blog

TechCrunch

NYTimes

SearchEngine Land

Tapping Ken’s deep experience in leadership, we’ll discuss the timeless lessons of leadership, and also what has changed. We’ll also look at what people as individuals need to do differently today in order to be more effective.

But most of all, bring your best questions as there will be plenty of time to ask questions. Don’t lose this chance to meet and talk with Ken Blanchard!

Please register below, and help us by forwarding this message to interested peers and colleagues.

Webinar: Leadership Lessons: The Power of Relationships in the Facebook Era, with Ken Blanchard & Charlene Li

Register for this webinar at: https://www2.gotomeeting.com/register/872433659

Date: Tuesday, June 21, 2011
Time: 10:00 AM – 11 AM PDT

Description: Join Ken Blanchard and Charlene Li for a conversation about how to apply the timeless lessons of leadership during a time when organizations are being transformed by social technologies. Ken, the co-author of “The One Minute Manager,” brings 30+ years as a renowned leadership expert, respected consultant, author, and keynoter.

Together, Ken and Charlene will discuss how the simple truths of leadership still hold true, even during this age of social media. That’s because both hold relationships at the center of their leadership and business philosophies. Specific topics include:

• How do you unleash the power and creativity of people inside an organization?
• How do you honor the contributions of your founders and long-time employees even as your organization grows and changes?
• How do you bring out the best in others?
• How can you successfully use social technologies to achieve these goals, while remaining true to how you are as a leader and as an organization?

Don’t miss this opportunity to hear Ken Blanchard and Charlene Li share timeless wisdom about human relationships, even as technology amplifies the speed and volume of interactions. Learn from two experts about how to keep relationships at the center of your leadership efforts.