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.

Predictions Social Business in 2012, Part III: Transforming Your Organization

This is the last of three posts I’m writing on predictions and priorities for Social Business in 2012. You can read the first and second prediction posts for more context.

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.

Predictions for Social Business in 2012, Part II: Knowing Your Customer

Rather than simply make prognostications, I wanted to give actionable advice based on these trends. This is the second of my three predictions and priorities for Social Business in 2012 (read the first prediction).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.

Companies sure know a lot about us, without knowing much. For example, I’m classified for marketing purposes as a Gen X, 35-45 years old, graduate degree holding, Real Simple and Wired magazine reading, working mom. I frequently “like”, “follow”, and engage with companies on sites like Facebook and Twitter. And yet when I walk into a store or visit the site to which I am loyal I get…the same 15% off, free shipping offer, and experience that everyone else gets. To most companies, I’m a faceless member of a target market.

What I want instead is a relationship with companies that feels more like the ones I have with small business owners in my community. It goes beyond simply recognizing or understanding me. They KNOW me. They’ve taken the time to see me as a person and I have come to know them as well.

The problem is that this is hard to scale on two levels. First, there is a huge fire hose of rich social and mobile context that is not put to use because of the difficulty of connecting unstructured data to transaction data. Second, it’s hard to tailor it for a single individual at scale.

For example, I can check-in on Facebook or FourSquare when I enter my local grocery store, but the store won’t know it’s me until I punch in my loyalty code in the checkout lane. At that point, it’s too late — I’ve already made my purchase decisions and the tailored offers and coupons being printed out will remain in the bottom of my shopping bag awaiting recycling. What a lost opportunity to know me.

Instead, what if I could automatically “check-in” to my grocery store and receive a list of tailored specials on my smartphone dedicated app. They might also know that I’m shopping for a big party (thanks to integration with my Facebook status updates) and someone from the Deli section would make some recommendations. I could also see and pick which specials to include in my shopping list and then be guided by an in-store GPS app that navigates me to the shelf where each of my items are located.

Some people call this “social CRM” and the evolution of “Big Data”, two very hot tech topics these days. But these are spaces that are still being defined and the data integration needed means that it may be years before most of big data and social CRM can reach their full potential.

I’m advocating something much simpler and that can be applied today — which is the hard work of thinking through how your customers *want* to be known by you. This means turning the tables and anticipating how your customers want these new relationships to work.

How To Get To Know Your Customers Better
One way to do this today is to find simple ways to integrate current social data about your customers into your every day work flow. I use a very simple plug-in for Gmail called Rapportive that shows the latest Facebook posts, tweets, and other social media updates right next to an email from someone. It provides context for follow-up emails and conversations and is a great way for me to be connected with what’s important to the people I interact with.

In the beginning, this will be a highly manual effort, but over time you’ll find commonalities and trends in terms of what works to get closer to customers. More advanced tools like Nimble (aggregates all social account activities) and GetSatisfaction (aggregates customer questions into a single community) can enable additional aggregation and help scale. My colleague, Jeremiah Owyang, will be releasing a report this Thursday about the latest social media management suites that can help with this as well.

The other thing I see companies doing is putting in place the building blocks for these new experiences. The Midwest grocery/department store chain Meijer recently launched a smartphone app called “Meijer Find-it” where a shopper can search for an item, add it to a shopping list – and see it’s exact shelf and aisle location. It’s only available in a handful of stores and it’s a static map — but it’s a beginning.

How To Tell When You Know Too Much
The biggest question that comes up when discussing this topic is privacy and permission. How much can and should you piece together across social media about your customers? How can you tell when you’ve crossed from knowing and anticipating what your customer want, to uncomfortable spying?

It comes down to constantly checking in to make sure that the relationship is moving in the direction that both parties want. At some point, your customers will have had enough — they feel they are known enough and don’t want to take the relationship any deeper.

The master at this process has been Facebook. With each innovation, they push the boundaries of where we previous drew the line on what we would consider sharing. Not everyone is eager to embrace each new change, but more do because they see the value. Facebook has had the courage to lead change and advances, knowing that not everyone will follow. But they also knew where to draw the line — and to acknowledge when they had crossed it.

You will have to risk crossing that line as well, and as long as you are transparent about your mistakes (see my first prediction) you will be able to recover and retain a strong relationship with your customers. And isn’t it worth it, to be able to get to know your customers

Your task in 2012 is to discover what it is that your customers want you to know about them — and how it adds value for them, as well as for you as a company. It will take a lot of testing and learning, as well as numerous mistakes. But by the end of the year, you should have learned a great deal more about what it is that your customers want you to know — and hopefully have strengthened the relationship to allow that “knowing” to take place.

Next up: How connected are your employees?

Predictions and Priorities for Social Business in 2012 – Part I

My pet peeve about the annual predictions ritual is that they lack context for action. It’s nice to know that tablets and big data are important — but what should you do about it?

So here’s my attempt at not only forecasting but also to provide actions that companies should be prioritizing in 2012.

The Process: I went through my speaking and client engagements in 2011 and looked at which topics and themes I kept referring to over and over again, especially toward the end of the year. I also analyzed which of the tweets from these events were most retweeted to verify where the heat was.

I boiled it down to three predictions and also explain why I think these are a priority for business leaders to address in 2012. Because they are on the long-ish side, I’ll be posting one a day so that there can be discussion about each prediction and priority.

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.

Almost 8 million people have now seen the FedEx delivery guy tossing a monitor over the fence. FedEx’s response was timely and tried to be authentic, but lacked only one thing — a link to that video. It was just a short search away, so why not link to what everyone already knew existed? Regardless, I was glad to see FedEx respond quickly when so many other companies facing a crisis try to wait for the situation to fade away.

The gold standard on transparency reaches all the way back to July 2006 when Dell’s brand new blog had the courage to write the post entitled  “Flaming Notebook” about a Dell computer bursting into flames in Osaka, Japan. And they included a link to a photo of their product exploding into flames.

Where did they find the guts to do this? Michael Dell made it crystal clear in his instructions for the post: Dell was built on the value of going direct to consumers and the blog had to communicate and live by those same values.

I’ve told the Dell flaming notebook story and shown that photo at hundreds of speeches and asked a simple question: If your organization had it’s version of flaming notebook happen today, would you be able to write that post? In a most telling way, there are only a few hands that get raised.

Dell’s flaming notebook was five and a half years ago, before there were Facebook Pages, before Twitter even existed. It was the Dark Ages of social media and Dell understood then that it was important to build a new, unique relationship with their customers.

Think about what would be needed to get your organization to that point and make it a priority to be transparent about the everyday small problems that always occur. Practice on the easy stuff to get prepared for The Big One.

Too busy you say, with your existing social media efforts to do this? All of the efforts that you make updating your Facebook page or posting on Twitter add up to mere hand-waving if you can’t master this new type of relationship demanded by your customers.

Does your organization have the courage to engage when things go wrong, no matter how big or small? How did you organization get to this point? Please share where you are on your journey, and what you found helpful to bring greater accountability and transparency into your company.

Next up: How well do you really know your customers?

Hot Or Not: Disruptive Technologies To Watch in 2011, Part 1: The Framework

Last month, I gave a presentation on the top disruptive technologies to watch at the SFAMA monthly meeting. One of the things I did to prepare was to read as many tech predictions for 2011 as I could find. You can see them all collected in one place.

The one thing that struck me was that many of these forecasts didn’t provide a reasoning for why these trends (and not others) were picked. Having done my own predictions and trends to watch forecasts in the past, it was very much a subjective list.

I decided to approach this task from a different perspective. Instead of thinking about the trends first, I wanted to create a framework that would help organizations figure out themselves which disruptive trends they should prioritize and focus on. That’s because companies have limited people, time, and budget to focus on these disruptive technologies that are far-off on the horizon. They can’t focus on everything, so how do you pick and choose?

As a business focused on companies helping companies thrive with disruptive technologies, the work we do at the strategic level focuses on creating a strategy that’s robust and resilient in the face of these new tech forces. What amazes me is that companies can often see these tech disruptions coming from a mile away — and do nothing about it. That’s because they don’t have a way to prioritize, think, and plan a strategy around the technologies that matter. Guiding my thinking in this area is the outstanding work of people like Clay Christiansen, who have been thinking about disruptive innovations for decades.

I believe there are three major drivers that make a disruptive technology important to a particular business. While I frame these at a high level, each organization should look at these drivers to prioritize their focus.

  • User Experience. Does this technology pass the “no manual needed” test? Does it allow people to connect in new ways? Twitter is powerful as a platform, but inscrutable if you’re not familiar or comfortable with @ and DMs — which thereby limits its disruptive power. In comparison, social networks like Facebook are intuitive and provide tremendous value with the new experiences they enable.
  • Business model. Simply put, can you make more money, or save costs because of these new technologies? And by using the technologies better and faster than your competitor, can you gain an advantage? An example of this is YouTube, which when deployed in a strategic way can lower acquisition and support costs for companies.
  • Ecosystem value. The most disruptive technologies though are when ecosystems get impacted. Streaming, on-demand video seemed to be the dominion of cable companies but then along comes Netflix who wasn’t even in the streaming business at all — but has the relationship with movie viewers who were sick of keeping track of red envelopes. Value shifts with the entrant of a new player who is able to tap into this new technology.

I’ll be doing a Webinar on this topic — and sharing the top trends I’m watching — on Thursday, Feb. 17th at 2pm PST (go to this link at that time). I’ll be using Slideshare.net’s new Zipcast service, so be one of the first to give it a try with me. I’ll likely be doing repeat presentations, and will update this post with that information.

I welcome your thoughts on the basic outlines of this framework. What am I missing? What else should I be considering? How can I refine my thinking further? And how does your organization go about prioritizing which disruptive technologies to focus on — and creating resilient strategies to thrive with them?

I’ll be going into greater detail the individual technologies over the next few weeks as my research digs deeper into this area, and I hope you’ll come along with me on this journey.