Much has been written about Steve Jobs the creator, the technology visionary and the enterprise leader, but none of these personas entirely get to his essence. Steve Jobs was all these things, par excellence, but what deeply touched and inspired Apple’s customers and what made Steve bearable as a boss was an unconscious yet poignant feeling that he was there to serve people. He flew the flag of The Rest of Us. Unswervingly. Vehemently.

Without this higher calling, Steve would have been merely a successful tyrant. However, Steve’s commitment compelled thousands of brilliant and highly intelligent people to work for him and millions of customers to feel that Apple stood for something rare. Beige boxes and senseless software are optimized for profit, but Steve loathed mediocrity and its inherent compromises because they didn’t serve people, they acted at the expense of people. The desire to serve drove Steve Jobs, the creator, the leader and the innovator. Steve would never have led an oil company or a CPG, because he wasn’t a businessman. He wanted to make people’s lives better through technology. That was his love and his life’s work. Perhaps it was felt most palpably through interactions between people and Apple devices. My tribute to Steve honors him for this, in an unusual way…

“STEVE?! Thanks for answering.. everyone told me it would be better to email, but I wanted to call because it’s personal.

“Can you hear me okay? There’s some static on the line. Good. Well, I’ll try to make this short, but I have quite a few gifts for you.

“The day you died, I found myself on Michigan Avenue in Chicago, fighting tears in front of the Apple Store. This surprised me but was completely understandable later. At that moment, I knew that something unusual was happening. I realized that you had touched me and other people, in front of the stores and millions of screens around the world, in a rare way. People everywhere are talking about you, there’s an outpouring, because you were personally responsible for giving us—dignity and the power to create. We have never met, but I built my first business on a Mac Plus when Multifinder was sexy. I’ve also worked with teams that built huge enterprise systems, and I’ve used dozens of Macs and PCs to design and deliver in all kinds of situations—as a strategy consultant, designer and communicator, not an engineer, although I’ve worked with some of the best. I don’t know if we’ll be cut off, so I want to give you the biggest gift first.

“Steve, the rational part of me says I’m crazy for being so sure, but I want to honor you for serving—me and millions of us. Your irascible commitment to making Apple machines unantagonistic, and even considerate, was your greatest gift. People are at their best when they serve others, it’s a humble act. Service is the highest calling, and you showed us, time and time again, how much you cared.

And caring when you are leading a huge organization can mean being a stickler and a prick when showing how much the details matter. Being the best and giving everything you have is an uncompromising proposition. People take that for granted, they forget too easily.

“Steve, on client engagements, I’ve read thousands of conversations in which desperate mothers, students, waitresses and fathers are begging other forum members to help them deal with inane machines and obstreperous software; the pain that exists is immense, and you extinguished it for millions by giving us intuitive interactions and human error messages. Steve, having designed things myself, I know how “dumb” machines are. When they appear to be “intuitive,” that means a lot of dedicated people are running use cases and identifying exceptions to anticipate and design in the machine’s “intuitiveness.” Steve, you and your team made it look easy, to the point that effete pundits glibly talk about “the next device.” But you didn’t have to do that. Millions of business optimizers would’ve told you to cut corners, it might’ve been more profitable in the short run. But you were not about that, and we felt it. You wanted to bring the best to us, and that meant beauty and efficiency and always. Bless you for that. You unlocked computing for people who didn’t want to become engineers just to get important stuff done.

“Your brilliance as a creator is probably your most visible energy. A creator who knows that his gift is urgently needed, who is relentless about delivering it because he knows the need is infinite. A creator who knows he’s inside the tornado and that his days are numbered (as all of ours are). I feel that this is what drove you when you went back to Apple, it was your determination and ability to galvanize people. I was there during the dark clone days, I saw you come back. At NeXT, you came to understand software at the abstracted, enterprise level. Hardware only makes software possible, software is closer to people. Machines are only commands and scripted responses. And we humans are nothing but exceptions because we deal with a world that’s complicated. You elevated machines by making them appear considerate. Of course, machines have no feelings or soul, but your and Apple’s attention to detail anticipated when things would go wrong, and you gave the machine that humanity. Instead of error messages that said, “Stop 0x0000001E or KMODE_EXCEPTION_NOT_HANDLED” (Restart, you will lose everything [that's the breaks]), you had human messages and even explanations. As a designer myself, I realize how much commitment this takes, and it doesn’t pay money directly. It’s the closets, Steve, the only reason that those messages were there is that someone cared, someone was committed. That was you—and your band.

“Steve, thank you for showing us how to lead with integrity in an era whose Zeitgeist is loss of courage and abject followership. Most people think that any executive or politician is a leader because s/he heads large teams. No. Leaders stand for what they believe, especially when it’s inconvenient and risky. They aren’t looking behind to see if anyone’s following because they’re going anyway. But true leadership is inseparable from service, which also means commitment and not sugarcoating things. You were a fierce leader with a laser focus on competing and winning—because you insisted on offering the best. That’s why Apple was so rare. Serving is the only way leaders can motivate people to rise above themselves, time after time, year in and year out. We all need to be paid, to take care of “earthly business.” But far more meaningful is how we serve a higher cause. So you recognized that “people don’t know what they want until you show it to them.” That could have been an arrogant statement, but it wasn’t. Arrogant people might get it right once or twice. The humble person looks, observes, reflects. Relentlessly. And uses that insight to create, test, perfect and serve. You rose above the arrogance when you were fired and came back. People want to be led by someone who wants to serve them. Because they can trust that person to not be politically correct, to lay it on the line. We trusted you. And you didn’t let us down.

“You have inspired enterprise CIOs and individuals alike. Tonight, I had an amazing conversation with some smart non-techie friends. Years ago, I’d helped them get going on Macs, and they were telling me about you. They talked about you as if they were your neighbors, and of course they are; people who have Apple devices unconsciously feel the commitment, the consideration and the pain that goes into the design—especially when they use other machines at school or work. Everyone knows that computers are important, they are the tools of our age.

But you had a vision to transform the natural antagonism between humans and machines into a kind of unprecedented harmony. You elevated machines and devices and services by making them as beautiful and human as possible.

“Most machine and software makers are egotistical; they love their products and expect the people to accommodate them, and people do because they feel they have no choice. People feel intimidated and desperate and powerless before the machine, but they submit because they sense how important computers are. Many enterprise executives have similar attitudes. But you fought for us. You made the machines sensitive to us. You treated us as fellow human beings. We weren’t “consumers” to you, we were fellow creators who wanted to use computers to do our life’s work. And you enabled us to do it. I’m trying, but I can’t express how that makes me feel. It’s too vast.

“Your creativity and genius enabled you to serve us at an incredible level, and that’s why we adorn Apple stores with flowers and try to show you our gratitude in millions of ways. And you’ve led a retail renaissance along the way because Apple stores are oases of consideration, intelligence and service in a sea of pass-the-buck shoddy service that’s dehumanizing for employees and customers alike. Most of us have been brought to tears by machines designed by engineers. They cause us to get enraged after 45 minutes of phone trees trying to change an address, we miss flights and weddings due to their inane PINs and error messages, their capricious crashes cause us to lose days of work, and they even maim our family members with unapologetic error messages complaining of exceptions we have caused. We have all experienced this. But you were able to do something about it. And you did. Beautifully. Savagely. Tenderly.

“And I don’t mean to focus on exceptions and errors. Many times, on my iPhone, iPod and Macs, I’ll intuitively try keyboard combinations or “finger gestures” that often work. This brings a profound moment of elation because it shows that someone cared, someone felt and thought as I did because the “machine” responded. It “knew” what I wanted to do. This is controversial but I don’t care, we don’t have much time. It is a strange kind of empathy, of intimacy, when that happens. But it’s not the machines even though people attribute it to them—it’s people—you and Apple—who care, who imagine, create and test, relentlessly, who follow up, who close the loop, who make us feel that someone cares, someone thinks of us. And, Steve, no one expected that. You gave it because you were driven to make it happen. Always. You gave us dignity and the ability to do our best work, and we are eternally grateful. Steve, there are very few people who have touched others in such a vital way. Many of us speak about “the means of production” in the Knowledge Economy being computers and networks, but it couldn’t have happened as easily without you—because most computers and systems cause massive friction, they don’t encapsulate complexity like you and Apple did. Just as important, you showed everyone else that it could be done different. More in harmony.

“Service and mission were also a big part of your ability to inspire. Of course, you were a mortal, just like anyone, but all people have the natural desire to rise above themselves, even though most don’t know how to act on it. However, people in the presence of someone who is emphatic, who will not take no for an answer, get inspired when they know it serves a greater cause. It’s not for money. Too many employees are in mercenary mode, they aren’t fighting for their own country. You were, though, and Apple was. Steve, your desire to serve was the substrate, made it all happen. People talk about your autocratic style. Autocracy motivated by power is empty, it’s simple tyranny because it’s about itself, not other people. But insistence on the higher purpose elevated the whole enterprise. That’s what you were about. Because you served normal intelligent people, your colleagues understood even though you were abrasive at times. Apparently you humiliated people, but the cases I’ve heard about targeted the true enemy of being the best—mediocrity (and Mobile me was the worst Apple offering I can ever remember). Being terrible at something does not serve people although it’s not the biggest threat because it’s obviously bad.

However, mediocrity is an insidious poison because it masquerades as goodness, it leeches passion out of people, and it’s the slow boil.

“Most of us humans have the urge to coast at times, but you relentlessly stamped out that tendency. Commitment isn’t convenient, it’s a pain in the ass, and often. We all understand service when we see it, and most of us want to rise above ourselves. You never lost that. It’s simple in concept but very hard because you have to transcend. And to do it time after time is next to impossible. Groups of people need a heart and a conscience to keep them going. That was you.

“Now for something more out there that I still have mixed feelings about. By making computers easier to use, you led the merging of man and machine. The Mac logo shows it beautifully. We are separate, of course. But the 21st century so far is showing that man + machine is another S-curve. More than any single person, you made this happen by your insistence on making machines approachable. There is an intimacy between people and their machines that people don’t like to talk about. The fact is, with Macs and other Apple devices showing the way, we are rewiring our brains. Although we humans know little about how the brain works, it’s pretty well established that the brain is quite plastic. So there’s tremendous potential for people who learn how to do this. If you hadn’t been driven to create humanlike machines, we would have been retarded until someone else did. How many decades from now? I don’t think I’d have lived to see it, and I’m about your age.

“I want to thank you for something that’s with me constantly. During the Businessweek interview, you talked about how Apple outperformed because you said no more often. You led the team in making the hard calls. You didn’t pursue most ideas, which enabled Apple to out-invest competitors and to continuously set the bar. I run my business according to this principle, too, and my approach to helping clients incorporates it. In an era of infinite choice—of whom to follow, whom to serve, whom to read, what to do—saying no is a critical survival strategy. Most of us are terrible at it. We want it all, we don’t want to choose. To be the best, you have to choose.

“Steve, I’m so sad—and afraid because you’re not here as you were. Because you gave us a precious gift, the ability to do our life’s work. Beautifully.

“Steve, I don’t want to hang up, but I know I have to go now. Thank you for accepting these gifts, and bless you.

“Good-bye, Steve. We will never forget you. Ever.

Since the 1990s, I have advised clients in many industries on using disruptive technology to change the rules, and one of the themes that has constantly recurred is companies’ decreasing ability to maintain high profits from product businesses. Products are not as profitable as they used to be. In the Industrial Economy, product life cycles were long because communication was infrequent and poor compared to today, which prolonged ignorance and novelty and product life cycles. It took years for fashions to cross the Atlantic, through the 1980s. Now fashions emerge simultaneously no matter where they originate. Today, novelty is consumed with alacrity, erasing differentiation and price premiums.

To reference one statistic, in 2011 two billion people access the Internet, one third of the global population. They have access to infinite amounts of information and relationships. They share information about using products and services to create value in terms of their situations, and other people find them and interact. When people interact, they make each other smarter, fast. They expose product shortcomings and opportunities, and millions of other people discover those conversations. Product ignorance is a diminishing quantity. Witness Hollywood “blockbuster” wannabes that die within two weeks of release because individuals panned them online; no matter how many millions in advertising support studios spend, the films never recover. On the flip side, films emerge the same way. YouTube is increasingly used to “pre-release” films.

Monopoly Rules provides some of the missing links. Milind Lele references product overcapacity and new competitors as I often have, but he provides a simple actionable approach to strategy that is very easy to understand and useful. Most businesses are still oriented around physical assets, but the key is to focus on situations, pockets of need, that emerge. If you can satisfy these pockets of need in an unusual way, you can create a monopoly and high profits.

Book Overview

Everyone in business probably dreams of having an unfair advantage, although most people would be careful about admitting it. But what if you could develop an approach for consistently creating an unusual advantage in any business? That’s exactly what Lele proposes in Monopoly Rules, which revolves around the concept of “situational monopoly.” Most relevant, however, is that situational monopolies are driven by shifts in customer needs, competitor businesses and industries, which are occurring far more rapidly in every business. Increased market dynamism is easy to understand once you consider that communication drives change, and our communication tools are an order of magnitude more efficient.

As usual, I outline the book’s chapters before adding my Analysis and Conclusions.

Part One: The Truth About Monopolies

Challenges conventional wisdom about “monopoly” while updating its definition and sharing numerous examples.

One: No Trespassing

• Definition of monopoly: an ownable space for a useful period of time: capable of being controlled and producing high profits for a defined period
• Honda minivan example: Honda debuted the Odyssey just after competitors had refreshed their models, so it had a monopoly on the fold-flat back seat feature for four years (major modifications of automotive manufacturing lines happen every four years)

Two: The Two Dimensions of Monopoly

• Space has many possible definitions: geography (bottling plant), product/service uniqueness (Fedex’s early days), price difference (Walmart), emotional involvement (Apple, Harley-Davidson).
• Fascinating example of jet Blue and JFK International. Due to its international focus, JFK was deserted during the middle of the day, so jet Blue negotiated aggressive landing fees with the airport authority.
• Time is the “monopoly period.” The best way to think about this is patent, which is a monopoly for a defined period during which the inventor has a monopoly. General business monopolies, though, don’t have patents, but situational barriers provide the monopoly conditions. Market conditions provide the limits, as with the Honda example.

Three: Economics 101

• Debunks standard assumptions about and attitudes towards monopoly: large, illegal, promoting collusion. The new monopoly is none of these.
• Historical anecdotes: British (tea, spices), Romans (London only fordable spot on the Thames), Venice (salt), Spain (New World gold), United States (helium begetting the Hindenburg’s tragic use of hydrogen).
• New monopoly: smaller, legal, niche market focus.

Four: It’s Not About “Sustainable Competitive Advantage”

• Debunks SCA as having an incremental improvement focus, too limited for breakthrough in most cases. Will not guarantee unusual profitability, only monopoly does that. Starbucks had no SCA: not scale, uniqueness, experience curve, brand or cost.
• Starbucks’ secret was using Coffea arabica instead of coffea canephyora, which was far cheaper and tasted awful, yet most of U.S. coffee suppliers had long depended on it. This coincided with the rise of two-family earners and (he doesn’t mention this though) the rise in the portion of U.S. college students going on foreign study and tasting real coffee in cafés. For example, one derisory French expression for U.S. coffee is “jus de chaussettes,” sock juice. Starbucks went to market fast in urban areas and did not franchise, which enabled it to control the taste of the coffee. Starbucks made monopoly rents because it had the best tasting coffee in the U.S.
• Southwest Airlines: succeeds when it has a monopoly on cheap seats; competition is train or bus (this argument less powerful for some routes in 2011, as large airlines have merged and succeeded in getting their costs down). Southwest has a monopoly on price-conscious travelers in chosen markets.
• Other companies that enjoy monopoly, not SCA: Whole Foods Market, Enterprise Rent-A-Car, Iams, Dell, Fedex… Walmart focused on delivering low prices in small town locations. Points out that these companies gained prominence in mature industries: grocery, airlines, car rental, computers. They thrived while competitors went out of business.
• Is SCA the Anna Kournikova of strategy? (“lots of endorsements, but no tennis championships”). SCA does not guarantee high profits; it can enable a company to outperform competitors in defined areas; it can deliver higher profits but need not.

Five: Monopoly Flavors

• Three examples: Pfizer Lipitor (patent), Coca-Cola (history, brand, trademarks, copyrights) the Super Bowl (also World Cup, Olympic Games).
• Sports: short monopoly period; drugs fairly long; Coca-Cola decades.
• Warren Buffett invested in Washington Post’s parent due to the Post’s monopoly on federal government news and gossip.
• Clear monopoly vs. fuzzy. Patent is clear; Honda’s Odyssey was fuzzy.
• Very useful point: assets vs. situations. Assets are traditional root causes of monopoly: natural resources, products, technologies. Situations are where most monopolies exist today: “the right product at the right place at the right time.” Enterprise Rent-A-Car’s monopoly on the insurance replacement car market. As of writing, it was the biggest rental car company in the U.S.
• Situational monopolies are more subtle and complicated than asset types.

Six: Barriers that Protect Monopolies

• Customer islands: how Dow chemical surpassed Monsanto by courting chemical engineering students with a comprehensive design handbook on heat transfer.
• Midwest Express had a monopoly on luxury flights out of Milwaukee.
• Harley-Davidson’s patented sound. Switching costs (cameras), network effects (eBay).

Seven: The New Competition and the Rise of the Situational Monopoly

• Asset-based monopolies are losing influence in favor of situational monopolies. Kodak, Compaq casualties.
• Dell: custom-order computers online or phone: circumventing the I.T. nazi (I.T. controlled what models, configurations, so business units ordered their own).
• Earning monopoly rents from a commodity product: Egg Beaters.

Eight: Monopolies Drive Market Value

• No big surprise here: monopoly drives stock price.
• MQ = M x R (monopoly quotient = monopoly period x annual sales growth rate).
• Playing with Apple, Google, Pfizer and others’ monopolies and stock prices to prove the point.

Nine: Monopoly Kaleidoscope

• Lele uses the idea of the kaleidoscope to describe how fast-moving market conditions create different competitive opportunities.
• Creating situational monopolies: recognizing industry shifts, competitor shifts and customer shifts. CNN, the only all-news cable channel for 16 years.
• Examples: GM and Toyota & Honda; Kodak & Fuji…

Part Two: The Monopoly Rules

This is the guidebook to creating and managing (mostly) situational monopoly.

Ten: Understand Your Current Monopolies

• Look for monopolies you may own: where are they, why are they there, how long will they last?
• Especially useful: You have a monopoly when: five monopoly tests:
  • Do customers see only you? Windows customers, Enterprise, Apple.
  • Are you invisible to your competitors? Folgers & Maxwell House ignored Starbucks. Sears ignored Walmart. American Express ignored gold Visa. This happens because incumbents rely on false assumptions (don’t see the shifts). “Walmart’s a discounter, we’re a department store.” – Sears executive. (Did customers care? No.)
  • Are your true competitors outside the dotted lines? By definition, monopolies don’t have competitors but they can have substitutes that cater to similar needs in different ways. Blockbuster and Netflix.
  • Do you price like a monopolist?
  • Do you enjoy monopoly rents?
• Why does it exist? Honda’s monopoly, did it exist due to its brand or due to the fold-flat feature. Later, when others duplicated the feature, the monopoly dissipated.
• Is Apple’s monopoly the iPod? The iTunes Music Store? If so, its monopoly may prove short-lived (although many years on ;^). However, suppose its monopoly is the total system: then it could be far longer.
• How long will it last? H&R Block: created when the IRS stopped preparing returns for taxpayers: since the need was seasonal and simple, accountants didn’t want the work, so H&R Block expanded rapidly; today, biggest threat is TurboTax, not Jackson Hewitt.

Eleven: Defend Your Current Monopolies

• Mercedes and Lexus: “It’s just a Toyota.” – Mercedes executive. Product uniqueness is vulnerable to imitation. Often, management doesn’t understand the monopoly and mismanages it.
• Sun Microsystems didn’t embrace Linux fast enough. Cadillac in the 1970s started pursuing volume, targeting the larger market of aspirational buyers, and largely destroyed its monopoly of the U.S. automotive luxury brand.
• How to avoid surrendering a monopoly:
  • Don’t sneer at competition, especially from emergent sources.
  • Be sure you understand the true nature of your monopolies. Rarely are monopolies due to “brand” or “quality.”
  • Be ready to shift with market dynamics.
  • Keep your eye on the monopoly ball.
  • Don’t be complacent.

Twelve: Discover the Next Monopoly

• Look for situations: emerging needs, incumbent inertia, new capability. Lele doesn’t go into it, but legal and compliance situations, licensing, etc. can also produce monopoly.
• Examine an industry’s “core beliefs.” They are often vulnerable to shifts. Examples: “People rent cars when they travel.” “People buy coffee at the supermarket.”
• Offshoring is threatening core aspects of professions, accounting, law, consulting, medicine, engineering. This trend is beyond the scope of the book, but it is disturbing the organizational structure of professional services firms, which were built on the assumption that they could pay top dollar for consultants/associates and bill them out to do basic research. Increasingly, research processes can be offshored, which confronts firms with changing the core of their structure. I predict that higher education will see similar trends within the next ten years.
• Think like an entrant: if you weren’t in your industry already, how would you enter the market?
• Validate ideas: how big is the potential space and how long will it last? Why does it exist, why isn’t anyone serving it? Can you create barriers that competitors might perceive?
• Objectivity very difficult, but it is critical. The exercise involves using the insight you have due to your experience with the industry but stripping off assumptions you (and others) make because you’re in the industry.

Thirteen: Seize the Monopolies in Your Own Backyard

• Sears failed to see the Walmart threat; Southwest failed to see the JFK opportunity; Ford passed on the minivan in the 1960s and 1970s. Lee Iacocca went for it when he went over to Chrysler. IBM and Compaq failed to see Dell.
• Often businesses are so focused on performing within their rulesets that they miss opportunities. Discussion of frame blindness and how to avoid it: question conventional wisdom, don’t take yes for an answer, study adjacent markets, rewrite your formula, interrupt your mental routine.

Fourteen: Work Backwards

• Begin with the end in mind. Monopoly is the goal, strategy is how to get there.
• Copying Dell isn’t the same as being Dell. The Gateway example. Dell’s monopoly arose due to business unit managers’ ability to circumvent IT. Gateway served small business and consumer markets, so it didn’t have the monopoly.
• The “new competition.” In the global market, new competitors emerge from anywhere. They don’t heed your industry’s assumptions. Market shifts are changing much more rapidly. Proprietary features are much more difficult to retain.
• [Don't let engineers or product managers convince you of the uniqueness of your products, or features. Or marketers talk about your great brand. They are usually incremental advantages, not monopolies.]

Fifteen: Focus on Speed to Space

• This is an obvious chapter, as one half of the monopoly equation is time.
• If you have true barriers, you have more time, but be honest about this. Southwest had a lot of time due to the mental lock-in of their competitors, who had killed off discounters in the past. Sol Price dawdled and lost the Price Club monopoly to Sam’s Club.
• Starbucks focused on becoming a national brand from the beginning; jumped to Chicago rather than staying West Coast.
• Microsoft has been very effective at maintaining its monopoly for many years.
• But don’t focus on fast time to market if you don’t validate the monopoly and understand it. Several examples of Web 1.0 startups that rushed to market before they had a value proposition.

Sixteen: The Art of Monopoly Leapfrog

• A short chapter whose main point is optimizing entry and exit from monopolies. Mostly companies are late to realize that their monopolies are ending. Blockbuster stayed way too long at the fair. Yet, Movie Gallery has a similar business, but with a monopoly due to its rural video rental focus.
• Scenario envisioning is a structured process in which (usually) strategy consultants lead a multidisciplinary group of executives and specialists in consideration of possible shifts that could affect their business. [This can be very effective; I've led these sessions with clients, and it can be breakthrough].
• Reverse engineering the future is a different tack. It posits an end state and asks what would have to happen to realize the end state. Describe the end state and work backwards.

Seventeen: What to Do When the Monopoly Ends

• Every monopoly becomes a commodity at some point.
• Try to set up a “country club” in which you are the leader and compete gently with one firm (duopoly) or two/three (oligopoly) if you must.
• Examples of drugs market; how the patent holder raises prices as its drugs are going off patent. But this can’t be done through collusion, which is illegal. But it’s a common industry practice which most players understand.

Epilogue: The Monopolies of Tomorrow

• Customers are changing: older in rich countries, younger in emerging countries.
• Internet [and social technologies] is heavily used in emerging markets by default. People are much more educated, or can get educated about information very quickly.
• Retail is going the way of Walmart and Amazon.com, so brands continue to lose influence. Lele reiterated this point throughout the book.
• Excess capacity is the rule, which pulls the rug from under asset monopolies.
• The dynamism of the market makes it easier to create situational monopolies, but the markets move fast.

Analysis and Conclusions

• Practitioners of strategy will be familiar with most of the fundamental concepts in this book, but, although it is based on a few simple rules, I found its clarity and simplicity valuable.
• The examples are excellent for illustrating how incumbents overlook new entrants; they don’t operate at a sufficient level of abstraction, so they miss shifts.
• Lele implies but doesn’t say that creativity, that is, looking at situations in new ways, is the way to profit now. He dismisses SCA as the holy relic because it’s too often focused on a particular function or competency. There are too many other people in the world who can replicate an idea and execute it more cheaply. The final frontier is creative, or discontinuous, thinking. As he points out, this can be completely compatible with discipline and management.
• He doesn’t mention it explicitly, but agility is a pre-requisite for exploiting monopolies you discover or develop. You have to out-execute potential competitors, especially when structural conditions or barriers to entry are fuzzy.
• You may love your organization; you have created it, and you live by its fruits. However, customers don’t care because it doesn’t add discernable value to them. A widespread threat among management is that businesses fall in love with themselves, their brands, their products. What they fail to appreciate is that they became successful within a context of customer and market conditions. They developed a brand promise. However, those conditions change and the rate and degree of change are accelerating due to increased amount and quality of communication. Companies have to realize that very few customers are willing to go down with the ship; most customers really don’t care about the company or the brand, they respond to its ability to satisfy a need. This is humbling but in most cases a far more realistic way to regard a business.
• Encapsulated within the monopoly proposition is barriers to entry for competitors. An key element of strategy is trying to embed within your proposition some distinctive competency that others can’t duplicate easily. However, it has to add relevant value to the customer, who doesn’t care about your business (and should not).

Opportunities for Monopoly Related to Social Technologies

• Social technologies are critical to recognizing emerging possibilities for monopoly because an increasing spectrum of all communication occurs online, and this communication is more rapid than ever before.
• A huge gap in understanding exists among management of established companies about “brand” and “word of mouth.” If you understand it, you can create monopoly. Social technologies create a third player to the familiar producer and the customer, the “friend” or “referrer.” Companies need a self-referential, authentic value proposition for the referrer, who is distinct from the desired customer. When they do this, social technologies click in as powerful accelerators.
• TOMS Shoes is an example of what is increasingly called a “social business” because a key part of its value proposition is producing social value. One thing I mentioned but didn’t stress in my coverage of Blake Mycoskie is the importance of being organic. TOMS created the “buy one, give one” space in shoes and will imminently expand beyond shoes, and its employees and business partners feel the passion and authenticity of the creator. The connection to that authentic creativity is differentiating. If Hush Puppies did it tomorrow, it would be a copy. The creative spark, if managed correctly, is differentiating. People know it when the see it, feel it.
• Socialtech is coming to B2B, but the barrier is that social “gurus” don’t have sophisticated business process knowledge, which is critical in applying socialtech to complex B2B businesses. Hence a significant monopoly exists in B2B.
• We humans are social in our DNA, and socialtech enables us to be more social. We talk about notable situations in which we are using products and services, and this is what I call the social channel of value, and it exists for every product or service. Companies who can create situations that makes our social propensity easier can create monopoly. Marketers don’t understand the social ladder of participation, so they mistake small numbers of participation for little impact. One of my favorite examples is Sam Adams’ Long Shot.
• Cross-border collaboration is a significant source of monopoly due to the intricacies of cross-cultural interaction. It raises the bar significantly for advanced social and management skills. However, I have long predicted that it would prove to be a deep well for creating uncommon value. Where there is extensive tacit knowledge, significant barriers are created. If you crack the code, you can create monopoly. Lele doesn’t say this openly but implies that (probably) half the challenge of creating monopoly is intention. For this alone the book is immensely valuable.
• Companies are used to asking customers to interact with them to share insights, but that leaves money on the table if you want to understand sources of new monopolies. Smart companies pay more attention to customer-referrer-customer conversations, which are inherently much more customer focused. The fold-flat seat is one example. There are a million conversations, but companies have to look for them. But it doesn’t have to be an accident: for example, CSRA helps organizations create and nurture conversations that drive innovation with socialtech.

Having advised CEOs, CIOs, COOs and CMOs on adopting disruptive technology at various stages of my career, I have a broad perspective of the enterprise and executive roles. From the mid 1990s through 2006, I focused on enterprise software and corporate strategy. In 2006, I launched CSRA to advise enterprises on social business strategy, and I’ve been working with CMOs, which has been personally rewarding as I have also led marketing several times in my career. For context, here are a few things that most executives don’t yet appreciate about social business.

Context: Social Technologies Are 21st Century Dial tone

You have undoubtedly heard that Web 3.0 will soon be as widespread as Web 1.0; however, most visions of enterprise use of social technologies miss these points:

• Social business is transformational out of the box because it is coincides with customer “empowerment,” in which individuals’ voices collectively rival the voices of government and enterprise. This matters because people will increasingly expect to have one-to-one conversations with relevant people in the enterprise—and they’ll reward enterprises with more business that can respond to this expectation.
• Social technologies are 21st century dial tone. Imagine an enterprise whose employees didn’t know how to talk on the telephone. Ridiculous, yes. Social technologies are more complex than telephones, but stakeholders will increasingly prefer to relate to the enterprise using social technologies in many situations, but employees currently don’t know how to use them. It’s a huge adoption issue. Within ten years, it will be unthinkable to not be using Twitter for certain business processes, for example. It already is in some situations.
• Adoption will be more efficient and effective at organizations that approach it explicitly. Socialtech rips the skin off the enterprise. It will pressure massive business process change. Here’s one discussion in which I participated today.
• Most organizations treat “social media” as a marketing or communications competency. That underestimates it considerably. It will soon be as fundamental as talking on the phone. All functions will communicate that way, including “marketing.”

Prediction: CIOs Will Have a Crucial Role in Successful Social Business Adoption

During my remarks on the second day, I surprised the audience by predicting that CIOs and IT would play a critical role in enterprise adoption. Here’s why:

• CIOs depend on their increasing sophistication with business process design, measurement and management. Heavy lifting in process design will be central to making social business deliver. CIOs are often the heavies in the enterprise for process design.
• In general, CIOs have strong backgrounds in developing internal competence among diverse talent pools. Social business teams will be distributed, virtual and process-focused. It will require internal competence in most cases.
• CIOs, because they touch almost every part of the enterprise (not to mention the extended enterprise via extranets, mashups, proprietary networks…), have a much broader knowledge of enterprise business processes than almost anyone.
• CIOs excel at managing distributed teams of internal and external resources.
• Since many CIOs have a hand in software design, many understand the principles of abstraction and making roles and risks explicit to mitigate risk. CIOs that have experience with enterprise architecture teams have a huge advantage; to encourage and support social business adoption, organizations will require analogous social business competency teams.
• CIOs have a strong service ethos.
• However, a traditional weakness among IT staffs is a focus on technology, with people as an afterthought. They shy away from the limelight.

But CMOs have stewarded social media initiatives at most organizations. CMOs have complementary skill sets to CIOs’, but I believe most CMOs will continue to struggle to make social business deliver without CIOs’ help:

• In most companies, marketing is about image, brand and positioning. Communications is often practiced like public relations, that is, trying to create desired perceptions about organizations. Neither of these is about empowering customers or other stakeholders, which is where the market is going.
• Many marcom organizations outsource large swaths of operations to agencies; they are focused on orchestrating the bevy of providers, but most aren’t terribly strong on business process design or developing internal competencies.
• Marketers have and practice invaluable communications skills that are relevant to social business, but they are serving the wrong master in many companies. All but the most radical marketing principles are still founded on what companies say to create and maintain brand image. Word of mouth has always been the most prevalent communication channel about organizations, but it’s been invisible and relatively insignificant up to now, so the organization and its proxies had extensive influence with “creating brand.” Even though it has been expensive to create and maintain brand, it has paid off because other voices were relatively absent. Of course, social technologies are disrupting this state of affairs.
• CMOs are caught in the uncomfortable position of having to manage “business as usual” while adopting a whole new ethos: nurturing strangers’ conversations. Catch Stan Rapp and Don Peppers on marketing transformation.
• Marcom’s instinct is to practice “social media” as marketing, PR and communications. However, to be effective, “communications” skills have to be completely retooled, at all levels of the organization (and at all agencies).
• Once marketing learns to support empowerment and focuses on serving and supporting stakeholders, it will be transformed, and marketers’ creative and communication skills will be able to support social business in creating breakaway value.
• Social business is about point-to-point communication, about interaction. It will be harder to outsource because outsiders don’t have the knowledge that will be required. The customer is so over the canned response read off the monitor by someone in Bismarck or Manila.

At most organizations, successful social business adoption will result from a close collaboration between CMOs and CIOs. This will break new ground for both.

Social Business Advice for CIOs

• Plan to get involved with social business because communicating with socialtech is 21st century dial tone. Remembering Web 1.0 will be instructive; the Web and http have invaded every manner of enterprise application and network, but you undoubtedly remember that “the Internet” was scoffed at for years. Social business is similar. Commit to interacting on several platforms personally. You don’t have to spend much time, but aim for several interactions per week on each platform, consistently. As I’m writing this, Twitter broke the news of Osama bin Laden’s death. We don’t even notice this anymore, but Twitter has become the global news network of first resort.
• Start building competency within select members of your team. Remember, the demand for social business competency will grow geometrically because it’s as 21st century dial tone. Form a team to start using Twitter, Facebook and LinkedIn. Make sure to get a social media policy in place beforehand. Start small and build. You may find the Executive’s Guide to Social Networks helpful.
• As the popularity of distributed applications grew, adoption was chaotic as they started popping up everywhere. Social business is the same except more extreme because barriers to usage are far lower. From an enterprise competency perspective, having a social business competency team to identify, organize and group-share social business best practices can significantly cut the time and cost of adoption. The social business competency team is cross-boundary. You probably understand how to create and manage this team better than most other executives in your enterprise.
• An obvious candidate to begin using social business is recruiting. You can have a content strategy that will be very attractive to certain people. It can be very efficient. Also think about a “private Twitter” solution like Yammer.

Social Business Advice for CMOs

• Obviously adoption of the transformation thumbnailed above will vary as a function of your stakeholders. But you can be sure that you will be surprised because the market moves much faster than organizations. Start thinking about social business as the transformational proposition it really is.
• Take a personal stake and develop your own brand by blogging, either on your own blog or by guest-blogging. You certainly present at conferences, just share these insights on blogs. Develop a point of view. Randall Beard is a CMO with an excellent blog.
• Plan to and start developing serious competency among members of your team—addressing your core business processes. You can start small, but build steadily.
• Social business is a fundamentally new way of interaction, although many marketers think of it as “another channel” to deliver their message to market. As stated above, I believe that marketing will have to transform to meet the needs of customers. If this makes sense to you, start making an explicit plan to transform by using social technologies for core business processes.
• Connect with your CIO and explore these ideas. Take his/her temperature. Plan to collaborate on using social technologies, but start small and informal if possible. Keep expectations low at the beginning, but move fast.
• The Social Network Roadmap offers extensive free papers and tools online that may be helpful.

In addition to being the founder of LinkedIn, Reid Hoffman is a Valley insider with rich insight into technology trends, markets and building companies. His main message in this talk at South by Southwest 2011 was that the future was bearing down on us, and he prophesied that it would “arrive sooner and be stranger than we think.”

• He painted the context for his theme, “Web 3.0 as data,” with a simple timeline:
  • Web 1.0 was a low bandwidth environment in which individuals searched for files online (and on demand). The concept of “cyberspace” was separate from the “real” world. It was an anonymous world in which many people participated as animes.
  • Web 2.0 was a shift in which people increasingly participated with their real identities (MySpace notwithstanding), and the online world become increasingly integrated with the offline world. Social networks mapped social graphs (again, with real people), and most people blogged as themselves. Online became firmly embedded in offline life, as a way to help manage and navigate by using reviews and other buying and “managing” tools. Wikileaks and the current revolutions in the Middle East are part of this larger trend.
  • Web 3.0 has mostly to do with the massive amounts of active and passive data we are generating. An example of passive data is phone calls from mobile devices. Bandwidth is increasing, which enables video, audio and graphic sharing and data. Hoffman advocates thinking hard about this development and acting to protect data. Think about what kind of future we want to create.
• Web 3.0′s data introduces significant risks to privacy because every transaction, passive and active, is linked to real people. Mobile device transactions are constantly tracked, and this is relevant because they are tied to real identities.
• Hoffman’s biggest fear is that governments could use information to control people. Governments are organizations that are closest to what he called “pure power” (because they integrate information, legal authority and military/police power). They can mine email, text and all other digital data to learn anyone’s social graph.
• Unlike corporations, government is not incented to care for citizens; he implied it is less accountable.
• He introduced an interesting wrinkle to this: data is data, and the Web is global, so citizens can be outed and exposed by governments that are not bound by their laws. For example, if (U.S.) Americans pass legislation that controls how their government can use data, nothing prevents another government from using the data. As I argued in this privacy discussion, the threat is far greater that hacker groups will use the data because they are outside the law:

The ironic part is that companies or governments can be held accountable to law, but others flout law. I can imagine [pervasive privacy] disclosure being open sourced and free online, like Wikileaks or Napster, even if countries’ legislatures pass laws barring governments or enterprises from using such data. In fact, I think there is very little people can do to prevent it..

• Ask yourself what kind of Web 3.0 world we should make. Our decisions may determine whether we find ourselves in a “Genuine New World” or a “Brave New World.”
• Hoffman offered two guiding principles to mitigate risk: 1) companies should make sure they never “ambush their users” by exposing them and thus betraying their trust (for safeguarding their data). 2) Realize that all data is not equal, things like credit card numbers need different protection than age or gender or physical address.
• The data we are producing falls into three types: explicit data is information that we understand is about us and we want to protect; implicit data is less known, we are unaware of it, examples are mobile calls, payments; analytics is data about data that tries to analyze and create meaning. Sources of all three types are exploding.
• Networks are data graphs.
• He would like a data dashboard of the information “the government” has on him. Analogous to credit reports, so you could correct errors.

Next, Hoffman gave some examples of what he meant by Web 3.0 and its data.

• LinkedIn Skills is new; the site introduced a new section of the LinkedIn Profile, skills that are keywords and hotlinked. It encourages users to use the keywords to describe their capabilities. This enables LinkedIn to show skills graphs that are tied to various entities. For example, “blogging” and “reverse mergers” are associated with companies and geographies, which enables people with that skill to see how relevant it may be to a prospective employer; likewise, if they want a job with that employer, they can see how they can increase their chances by developing new skills. Moreover, people can see how skills are related to each other. They are mashing skills up with Wikipedia, too, to provide additional insights.
• Waze is an Israeli company that (through opt-in) tracks drivers’ velocity and location so that users can see, real-time, traffic flow. Here is another example of the importance of safeguarding data. People who are speeding self-incriminate if Waze doesn’t safeguard their identities. (I wonder how they prevent police from using the anonymous data to zap people in various locations).
• There are numerous examples of sharing financial information to gain insight from the crowd; sites like Wasabe invite users to upload bank statements, so they can discover opportunities to buy and manage their finances better.
• Redfin is the Charles Schwab of real estate; its users share anonymized information about home prices, values, payments, etc., so they get a better idea for how to buy and sell, real-time.
• He suggested that top-down topologies are inferior to bottom up. With LinkedIn Skills, they analyzed existing profiles to create the “skills” (i.e. keywords).

He introduced by sharing ten rules of entrepreneurship because entrepreneurs would have a big part of developing Web 3.0.

1. Disruptive change should be a big part of the concept behind your business; a hallmark is that, if you succeed, you will spawn a “platform” from which numerous new businesses will be born.
2. Aim big because it takes the same effort to launch something small (incremental) as something really big. You also have more room for error.
3. Build a network around your company, and tap it for everything, thereby amplifying your knowledge base and peripheral vision. Ask your network for advice and help, treat it as your board of advisors and distributed intelligence.
4. Plan for good and bad luck by anticipating disasters and fortuitous things that could happen. Be ready to capitalize on good things. He is an alum of Paypal, where they were not excited by “all these eBayers” using Paypal at first. Then they thought, “Wait a minute, maybe these are our customers.” Be paranoid, try to consider challenges and bad luck that could present, and consider how you could mitigate damage.
5. Practice “flexible persistence” by actively considering when you need to be in persistent mode and “go through walls”—and when you need to realize that maybe you need to flex and tweak your concept. The above eBay example also probably works for this.
6. Launch early, don’t let perfectionist tendencies delay you. You should be embarrassed by your first release. No matter how smart your team is, you won’t get it right in isolation of customers and users. You will lose valuable time getting it too perfect; you want to be early to start fast iteration cycles by interacting with users.
7. Be ambitious but don’t drink your own kool-aid because you’ll lose your way. Be paranoid, ask your network what’s wrong with your company to draw out faults.
8. Realize that product is important, but distribution is even more key because a great product that no one knows about will fail. Build a solid distribution concept into the DNA of the product.
9. Pay attention to culture from the beginning because the people you hire will hire all the rest of the company. Hire people who are adaptible rather than experienced.
10. Break the rules sometimes, nothing is holy here.

Analysis and Conclusions

• This post and subject may seem like meaningless tech babble, but I also encourage you to think about it, and deeply. Wired has been covering this for a long time, pervasive information and data has been a major theme there, even predicting the death of the scientific method.
• You have undoubtedly heard of Moore’s Law and Metcalfe’s Law, which describe the falling cost of computing and the increasing value of networks respectively. Once you appreciate that every time every person and every machine hits a button of a digital interface, that represents a transaction that can be recorded and analyzed. Behavior can be deduced. Falling computing costs make it increasingly feasible to analyze these transactions and understand trends.
• [Update] Hoffman addressed my question about protecting our “anonymous” identities from being outed by analytics software like Thelma Arnold was. It was a difficult question but he recommended being aware of the possibility and striving to create data knowing that possibility increasingly exists. He asked the audience to continue the conversation with this hashtag: “#web3″ – I offered a couple of ideas: I have predicted for years that we would pay to get off the grid and be anonymous (similar to foursquare’s “off the grid”) under certain circumstances. Today we check in, tomorrow we’ll check out.
• Hoffman didn’t go down this road, but Chris Anderson’s and Wired’s big thesis is that we can eliminate a huge part of uncertainty by using statistics. To call this “disruptive” probably trivializes it; it is so immense in signficance.
• Hoffman’s clear message is exceptionally valuable: “Don’t let this happen to you. Take an active part in creating that future.” Influence it the way you think it can serve best, and try to mitigate threats. Assess how you can exert the most influence.
• Think about your business or the most important things in your life. Reflect on the sources of uncertainty. Research the types of digital transactions that are occurring around your business and your life, and anticipate how data could change the rules. It won’t be even, but you will be ahead of the curve by thinking about this, constantly. Invest some cycles in learning and sharing with complementary thinkers.
• Hoffman’s Ten Rules are solid; I would wrap them in the larger context of seeing your company (or yourself) as a surfer. You are interacting with some kind of market (a body of water) that is far stronger than you. However, if you watch it and respect it, you can use its power to create amazing things. My favorite is probably #5. It’s an interaction. #3 is critical, too, building your network with purpose is probably the most important thing you can do. It’s a well known law in the Valley among people who are serially successful.

I had never attended SXSW before because I always had other things happening, and the value proposition was never obvious to me. In general, I attend very few “social media” conferences as the hype usually exceeds the delivery in an “industry” that’s particularly prone to self-congratulation. This year, a client launched a new venture at SXSW, so I decided to stay a couple of days afterward to see what the noise was about. Here are my informal impressions that I hope will be useful to you in deciding whether it might be worthwhile for you to attend. I invite your comments and impressions, too.

[Update: links to additional coverage below: Gowalla, TOMS, LinkedIn execs]

Back of the Envelope Features and Impressions

• SXSW celebrates its 25th anniversary in 2011; it has morphed from a music festival (1987), to incorporate film (1994) and “interactive” (1995). You can get an excellent feel from Wikipedia’s history article.
• It’s important to realize that the DNA of the event is a music festival; there’s an element of Woodstock there, it takes over the city of Austin, which bears it well because Austin is very congruent with independent art, intellect, and fun yet with an appreciation for law and order. The atmosphere is intoxicating and stimulating. Austinites are very hospitable all around the city; due to last minute preparations, I had accommodations north and south of the center, and I got around on the small but efficient transit system, so I was exposed to a larger part of the city than most.
• The Warehouse District is retro and most of the bars, parties, nightlife and conference hotels are there. The festival calls its organization a “campus,” and this is accurate; the event has outgrown any conference center, which is a strength and a weakness: event programs list talks in five or six separate venues, and they have shuttles circulating among them during the day. That is frustrating because you can waste an inordinate amount of time when talks are in different venues. What is inexcusable is that the kiosks and materials are poorly designed, and it is difficult to organize yourself when you are oriented toward the presentation topics, which are invariably in different venues. The mobile application requires iOS 4.x, which is inconsiderate of people who don’t have the latest versions.
• However, the “campus” is a strength when you regard SXSW as a festival, not a conference. You will never be able to see everything you want anyway, it’s a sumptuous banquet, so you sample.
• There are too many people as well, which is a strength when you look at it that way.
• The event is having growing pains, and it’s mainstreaming fast. Many people I met were there for the first time. In retrospect, the festival’s “unconference” feel probably maintains the festival DNA because people wanting to attend a conference will not return.

Recommendations

• The most important CSF (critical success factor) is operating with a serendipity mindset. As a festival, SXSW is unstructured, so don’t think about it as a conference. Most people who return get this, and it makes people more approachable and open to connection.
• Get over “trying to get a lot out of” SXSW because you are fighting its lack of structure and creating mental resistance for yourself.
• Approach events, parties and sessions with a networking point of view. Choose topics that are likely to attract people you probably want to talk to. Be much more outgoing than you may be normally. Attend fewer sessions and linger and talk to people. The event is set up for this; there are usually gaps between events.
• Attend parties that are affiliated with companies, applications or technologies that are strongest connections for you because they will likely draw other people you want to meet. There is too much of everything, so be discriminating. When you do this, you can let go, have fun and be productive.
• Have coffee in pop-up cafes with live music.
• Don’t overlook the “expo floor,” where you can meet a ton of interesting companies that are relevant to social technologies. Unlike sessions and parties, you can cycle through them quickly. I met several potential business partners and client prospects. Of course it is laid out according to the festival: Interactive, Film, Music.
• Definitely use a geosocial app like Foursquare, Gowalla or Facebook Places to know where your friends are. They can also help you find interesting events to attend.
• Using geosocial at SXSW will enable you to understand its value proposition quickly.
• However, be prepared to be constantly frustrated by the lack of connectivity and tech breakdowns. The Interactive festival is growing exceptionally fast, and infrastructure is not keeping up. Try to engineer redundancy into your plans. Be aware of various wifi plans as well as your wireless phone capabilities.
• Hotels book up very fast, so you will reduce your costs and save travel time by reserving early.
• You will have the opportunity to see renowned speakers, so take good notes and share with friends who didn’t go.

Updates/Additional Coverage

• The Future of Location: Josh Williams, CEO Gowalla
• Giving as Cultural Glue and Smart Business: Blake Mycoskie, Founder TOMS Shoes
• Understanding Web 3.0 as (Pervasive) Data: Reid Hoffman, Founder LinkedIn

2011 will mark a turning point in the adoption of digital social technologies because the experimentation phase is drawing to a close, and stakeholder expectations are increasing. Organizations and people will no longer gain attention by executing badly. At the enterprise level, participation will wane in venues and initiatives that have no business strategy, focus, content strategy and commitment. Paying inexperienced people or agencies to “share” snappy content will expose brands as digital clodhoppers and push customers away. Individuals will also have to improve their game and focus on the most relevant people in their networks. Stop sending default invitations on LinkedIn. Proactively support people whom you respect and trust the most. The theme is determining and executing on strategy, focus and commitment.

In 2011, the bar to attract and hold attention will be higher, which will present organizations with a new threat: when participation falls, some executives will conclude that “social media” was only hype anyway, and they will curtail investments. This reaction will create opportunity for people who understand what works and why. At the same time, stakeholders are more savvy and responsive when you show sincere interest in them, which will result in stronger relationships and business results when your interactions are based on a sound strategy.

In 2011, there will be few opportunities to make any impact by using a casual approach, so our focus here is to lay out predictions that will form the context for this year’s opportunities and threats relative to social business. From there, I’ll build my 2011 recommendations for enterprises and individual executives. By the way, this follows the Year in Review—2010/Initial Glimmers of Social Business.

2011 Predictions

1. The Economy will continue to improve, but it won’t feel like a recovery for most people, and there is still considerable risk of a major disruption—The United States and Japan are being threatened by ratings agencies due to their “unsustainable” debt levels, and both have aging populations and concomitant looming health care costs. Japan has never really recovered from its property-sparked “lost decade” during the 1990s, and the U.S. has tried to buy its way out of its own financial debacle since 2007. And Europe is far from a safe haven. The European Central Bank and major members struggled in 2010 to alleviate pressure on the Euro, and some economists wondered whether the currency would even survive. The U.S. Dollar is being questioned as a reserve currency. As 2011 begins, it appears that many of the acute financial uncertainties have been patched up, although most G8 economies’ finances are seriously weak and vulnerable to exogenous shocks of which there is no shortage of candidates. Financial institutions, automakers, airlines and consumer goods firms will be bought on the cheap, as enterprises flush with cash remove competitors and production capacity. The list of mainstream media brands will continue to behave like a Peanuts spelling bee. This will keep the employment picture cloudy and uncertain for many people. “Austerity” will be the watchword for the G8 for much of this decade as governments admit their people will have to lower their expectations. Although I’m not predicting it, I wouldn’t be surprised if there were a serious challenge to executive salaries in countries with large wealth disparities. Social technology could be an enabler. This is an environment in which enterprises, executives and countries can protect themselves by maintaining flexibility: it’s a good time to question assumptions (i.e. knee-jerk U.S. Dollar reserve currency) and to diversify investments.
2. Employment will not recover in 2011, but executives can increase security by changing their approach—At the individual level, people can improve themselves along cost and revenue vectors: by scaling back consumption and by rethinking their expectations of “employment.” Fixed costs kill many businesses and wreak havoc with family finances, so get creative with managing your burn rate. In 2010, several executives consulted me on job search; many VP+ people with Ivy League schooling and years of Fortune 1000 experience can’t keep jobs; they keep getting laid off after less than a year on the job, then they end up hunting for many months or longer. The ways out of the crisis are:
   • Accept the new normal, that consulting is the new job for executives with highly compensated and specialized skills like rebranding, managing post-merger integration or setting up shared services. If you think about it, a “job” is only a bundle of services agreed upon between the individual and the organization. Although I mean no disrespect to human resources, as a career consultant in a past life, I constantly saw far better job search results when management clients would approach the company’s line management, who had a much more real-time feeling for their requirements. By the time line executives create jobs and communicate needs to recruiting, much time is lost. And the economy has markets moving much more quickly these days, so organizational processes get further out of alignment with organizational need. Hence the need for specialist free agents to adopt a consulting mindset: focus on how you can impact the organization and package those services smaller (i.e. consulting), so they are easier to buy.
   • Commit yourself to learning to use social networks better than anyone you know because this will lower your business development/sales costs as a consultant and your job search time. People who know how to use the tools can reduce sales costs three to five-fold at least. Here’s a start.
   • Start blogging. When you put your thoughts on “paper” ;^) you make yourself easier to buy. Blog about specific business challenges and situations in which you add serious value. I have advised executives to do this for years, but they rarely follow through because 1) they don’t see how it can help them create reputation; 2) they aren’t comfortable with putting themselves out there and 3) they don’t know how. This post will help you solve all of these issues. Seize it.
   • Most executives will create more security for themselves and their families by looking for consulting work that may turn into “employment,” rather than the other way around. In times of uncertainty, consulting is easier to buy than employees, and it pays to be aligned with your client.
3. Marketing 2.0 will continue to grow, but social media campaigns will disappoint in 2011—For the last several years, “social media” has been one of the two line items (email marketing being the other) that has been growing budgets in most large brands, which have been cutting legacy marketing programs. On the client side, it will become mainstream in 2011 to hire vice presidents of social media, who will build small teams and manage agencies. However, social media results will prove illusive when marketers act like, well, marketers. Don’t expect to hear about this because it’s unflattering, but 2010 tactics will be far less effective in 2011, so firms will have to raise the bar. Salient points:
   • More firms are jumping into social media, resulting in more noise and competition for scarce attention. It will be increasingly difficult to attract and hold attention using marketing and promotional tactics, which are just more media of which people have too much anyway. In most cases, the route to attention and loyalty will be showing people that you care—by listening and responding proactively. People don’t want more media, they want consideration, care and responsiveness. And it’s precisely because media is scalable that its value trends to zero. Individual attention and care, however, are harder to scale, which is why they are more valued. They generate world of mouth because they are exceptional.
   • Social technologies don’t change the old adage, “You can’t please all the people, all the time.” To attract and hold attention, brands will have to prioritize, be clear whom they are serving, and focus on those people. This will require business strategy to drive content strategy and coordinated action within the team. Enterprises will discover that relationship takes time and investment, but it pays dividends. Social business strategy will be needed to create a vision, to get buy-in from relevant parties and to maintain commitment long enough to generate repeatable business results.
   • Customers/stakeholders know care and consideration when they see it, and firms that conduct themselves in ways that show they care will raise stakeholder expectations of all the others. To create a word of mouth engine and hordes of advocates, firms need to focus, invest and follow through. This is a significant opportunity for firms that follow through—and a poignant threat for laggards.
4. Government 2.0 will continue to pioneer social tech initiatives in select areas—In 2010, it has been refreshing to see many instances of (no, it’s not an oxymoron) government social tech leadership (of course, “Gov 2.0″). Necessity is the mother of invention: budgets everywhere are being cut, and openly cutting the level of services is political suicide. Hence, governments are discovering that social technologies can increase citizen satisfaction (because social can make decision making more inclusive and transparent) while reducing costs. Citizens can service each other online and provide very useful and relevant input to government. Several examples: Manor Labs is an initiative by a local government that crowdsources an increasing portion of its decision making to townspeople. In another case, one of my clients is a city near Washington, D.C. that is discovering that social networks can realign their relationship with their citizens by giving government a face. This echoes the “humanize the enterprise” theme that will prove increasingly pervasive in this new decade. There is considerable untapped potential, so look to see increasing government social business efforts. Elections are another visible aspect of Gov 2.0, and social technologies are proving to be change enablers, to say the least. Barack Obama should be anointed the patron saint of the political side of social networking: his decisive 2008 win stunned competitors and clearly showed the promise of social networks, thereby increasing adoption significantly. All too predictably, however, Democrats and Republicans have since showed themselves to be largely inept; they have quickly degenerated into spammers who show little personality or personal interest in their communications with people (the Obama team included). That will eventually change. Read these case studies.
5. Empowerment is clearly assuming a political as well as a commercial dimension—As I write, North Africa is currently embroiled in popular revolts. Activists have used social technology tools to organize (Tunisia, Egypt, Jordan…), having followed Iran in 2009, and other activists have already scheduled revolts in Sudan and others. The chart, right, shows interesting correlations between unemployment and Internet access in North African countries. Although social technologies certainly didn’t cause these revolts, they are clearly serving as enablers: they have helped crowds to self-organize quickly, and governments who have used force to crack down in the past realize that they will be on YouTube instantly, which limits their use of military force. The latter is a major deterrent for countries like Egypt, which have a strategy of (at least) paying lip service to democracy; that’s why social media were less of a deterrent in Iran, which isn’t playing that game. On the commercial side, people are using social technologies to out companies or governments or people (Wikileaks is a prominent example). People are increasingly using social tools to challenge authorities of all kinds, which adds dynamism and uncertainty to the economy and society. This will continue to leach into more social contexts in 2011. It will be most destabilizing to organizations that have secrets and that are not connected with their stakeholders. Although the issue of “secrets” is complex and varies considerably with each organization, executives can use scenario envisioning to anticipate unwarranted disclosures of their secrets and prepare for the inevitable.
6. Geosocial will continue to be Web 3.0′s visible face—2010 saw two big stories in geosocial, a flavor of location-based services that uses real-time mobile technologies to broadcast one’s whereabouts and activities to one’s friends: 1) the launch of Facebook Places and 2) faster-than-expected adoption of pureplays like Foursquare. Adoption clearly shows that, for some stakeholders/ users/ members, geosocial is an idea whose time has come. Although there are several reasons for Foursquare’s success, a major tipping point was the in-workstream gaming element (users earn badges by checking into places under certain conditions). People won’t admit it, but they just love earning badges and other trinkets and showing off/outdoing their friends. We have an innate appreciation for visible tokens of accomplishment hardwired into our brains. Online forums have known this since the 1990s when they introduced badges/icons to reflect user activity, giving power users visible status. This is a key lesson in Foursquare’s success that you can apply more broadly in your social business initiatives. For another example, listen to what the City of Manor’s CIO says about gamification.
7. Social business will be increasingly mentioned in 2011, but few firms have the capability to do it—Enterprise adoption of social business—using social technologies to transform business—was only a concept in 2010, and 2011 will see slow pockets of development. For most organizations, using social technologies has been child’s play imbued with few business-relevant metrics and pie-in-the-sky expectations (see Web 2.0 Adoption Curve, 2009-2015). In 2010, I witnessed numerous instances of “respected” leaders of PR firms talking about meaningless “metrics” that were largely based on vapid numbers with no stated business connection. That immaturity is changing; intent, focus and strategy receive more attention today and will grow in 2011-2012. CSRA’s 2010 client work was pregnant with the realization that “engagement” was a marathon, and social technologies required considerable finesse to use well enough to get results. Refreshingly, results proved very predictable when groups of people stopped acting like marketing functionaries and started being themselves (people) and treating people as people, not “consumers.” Most organizations do not yet have the skills to think about transforming their businesses in 2011, but once they master the social business skills, they will start transforming their business processes. For most pioneers, this won’t become a reality until 2012-2015.
8. Social actions and Internet advertising—Facebook is literally built around “social actions,” which are transactions that occur within a social context. Social actions are building Facebook’s insights into the social graph, how people act and why. This is also why Facebook will probably make unbelievably large profits, and why they are playing the slow game in geosocial and other areas. Although relatively little has been written about it, I posit that Facebook has begun to transform all Internet advertising, but people don’t realize it yet. In 2010, Facebook introduced a new social action, the ability to “remove” ads from your screen (yes, I know they reappear, but realize that you are educating Facebook’s algos every time you click; they have a business to run, so they don’t permanently remove the ads, but they will when it makes sense). This “option” will prove to reset the bar for all advertising because it plants the expectation that, not only can you make that ad disappear, you can give the reason. If marketers truly care about the people with whom they are trying to communicate and influence, they will appreciate that feedback and use it to focus their efforts better. I already want the ability to remove ads from everywhere. I do wish Facebook would give us more ways to indicate approval of ads. They have several reasons for removing an ad but only one way to indicate approval (“like”). But that will change. Facebook is paving the way; their ads are smaller AND you can “remove” them; I would implement that on EVERY site with advertising, even if it’s like thermostats in corporate offices (80% of them aren’t even wired; they are there to give employees the illusion of control). I can’t speak for Facebook, but the very suggestion that users can “remove” ads is brilliant; I predict all ads will have that feature within the next 5 years, depending on user/reader demographics. If your brand uses online ads, begin experimenting with this feature in 2011. Work with your viewers, not against them.
9. Social business models and tactics—In 2010′s predictions, I anticipated the increased use of four models, which saw increased case studies in 2010. Good news, none of them are anywhere near being tapped, so most commercial and government enterprises can still pioneer in 2011:
   • Crowdsourcing—is by far the most popular. Here you ask the crowd for input or advice on important questions, usually in a social network, so participants can vet responses, which drives up quality and cred. Most executives don’t understand the dynamics of transparent forums, so they underestimate the power of crowdsourcing, which has three axes: 1) quality is high due to the diversity of responses and the crowd’s evaluation of them; 2) crowdsourcing increases engagement because people feel honored that you are asking their opinions; 3) it is fast and inexpensive. You cannot afford to not do it because you will be harmed by competitors who do. It is not complicated, but you need to develop expertise and approach to how to ask, manage venues and follow up to maximize value. Read Manor Labs’ case study and others.
   • Gaming and virtual worlds are still on the ascent, and their application is virtually limitless. Executives need to be on Foursquare, if for no other reason than to understand how to use location and gaming to motivate groups of people and increase their excitement, satisfaction and activity. The gaming element is widely transferable to social initiatives. Manor Labs case study also illustrates this. Virtual worlds have ironclad case studies for certain use cases, too. IBM, for example, saves millions per year on collaboration costs by holding events in virtual worlds. In another case, Weopia’s CEO, Dave Wilkie, told me at #snc2011 that their clients have doubled their success rates by having in-world “pre-dates” because in-world interaction can suggest body language, thereby providing some “gut feel” about a person. This corroborates IBM’s findings when holding conferences in virtual worlds, which give participants a real feeling of “being there” even though they’re at their desks, sans flights, hotels and ground transportation. Look at your organization. What if it were true? It could be transformational and have a major impact on your bottom line.
   • CommCo—is my term for “the Threadless model,” (community company). Here, the company serves as an enabler for its online community, whose members design products and decide which products are made into physical goods (if applicable). I’ve long predicted that CommCo would become widespread for consumer products in general. I’m talking cosmetics, mustard, beer, apparel, bicycles, tech gadgets, cars. By giving customers a role in designing products or services, you give them a chance to give of themselves, which increases engagement tremendously, for participants and their families, friends and digital social networks. Remember, even if only nine participants out of 100 contribute (the average), the others will participate vicariously. Their engagement will increase because they know they could create if they wanted to. Several case studies here. For one, HGTV created a multimillion dollar business at ultra low cost by using CommCo to pilot the concept.
   • ProAm—has professionals and amateurs working together, and it’s an excellent example of understanding core competency as the basis for collaboration. Amateurs supply passion, out-of-the-box ideas and time while professionals magnify their expertise by collaborating with amateurs. Remember, everyone is an amateur of several things and an expert in a couple things, and your enterprise can unlock the value by inviting amateurs to contribute. Quality is high and cost is low. The Pro-Am model will be prominent in continuous innovation. Read this NASA example.
10. Sociology will be the competency of the next 20 years—hire or engage people with sociology backgrounds to form a cornerstone of your social initiatives. The I.T. phase of the digital transformation is largely over. For the last 25 years, “I.T.” has enabled and constrained our use of digital tools, but tools and even access are becoming free. Generally speaking, “marketing” by pushing content to people has fossilized, and its ROI will never recover. Marketers will add more value when they focus on using their research skills to learn how to serve people better because people will do the talking. However, the new fulcrum is understanding group dynamics, how the individual affects and is affected by the group. To get this, read Robin Dunbar.

2011 Recommendations

My 2011 recommendations for enterprises and executives echo last year’s. With respect to adoption of social technologies, we are very much on the trajectory I described in 2006, 2007, 2008, 2009 and 2010; however, there are more facts and details about how to realize the vision, some of which I will share to help you get more clarity on how to use the insights to improve your competitiveness.

Enterprise

• Get to know your ecosystem and how you can interact with it most effectively. This sounds elementary, but I have yet to meet an organization that knows its stakeholders’ preferred venues, workstreams and networks in sufficient breadth and depth from which to create sound strategy. Millions of conversations are taking place in an ecosystem around you, and you need to understand what digital venues are most influential. You also have to look at your organization, honestly, and develop a vision for what value you can bring to these conversations and venues (hint, it’s probably not your products and services). You need concrete answers for:
  • What are stakeholders (customers, investors, regulators, employees, partners, alumni…) doing in digital social venues?
  • Why are they there, what are they trying to do?
  • Which venues do they use, how do they use each venue and why?
  • How are they engaging with each other, competitors and other players in these venues?
  • Based on your culture, core competencies and business goals, what do you have to give your ecosystem that is valuable and unusual? (this gives you authority)
  • Only when you know this will you be able to engage efficiently and effectively; most organizations are ineffective because they shoot from the hip and just talk.
• Develop resident skills with digital social technologies, processes and behaviors. This is a strategic imperative because stakeholders will increasingly expect you to interact how they want to interact. Social technologies moved the cheese of one of my clients, who sends reams of paper and digital newsletters to customers. But Gen Y respondents told us flat out, “If you’re not on Facebook on the iPhone, we won’t talk.” If you want to be available, you have to go to where stakeholders are. And don’t assume it’s Facebook or Twitter: B2B companies are especially in the dark about where their customers are online. Keep in mind, social venues are all about social behavior, not technology that you can buy and put in place; your people will need time to learn how to act, and that’s a process you need to pursue urgently.
  • Blogging is about what you think and creating a network around yourself, not about selling. Leave the latter for your website. No matter what your business is, you have to share your thoughts online. Energize your network by engaging relevant bloggers by commenting on their blogs. Most blogs should comment more than they post.
  • Experiment with geosocial pilots; you need to understand Web 3.0 and how your stakeholders can use mobile technology and social actions to create value for themselves. Why shouldn’t you position yourself as a leader in helping them?
  • Gaming doesn’t mean what most execs assume—spending zombiesque hours in front of some console. Everybody likes to play (golf, day trading, bridge), in business and social contexts, and it’s a fantastic motivator. It will become the new work, so you can create fantastic advantage for yourself by understanding this earlier rather than later.
  • Contribute to online forums frequented by stakeholders. This might be LinkedIn Answers, industry forums, prominent blogs, trade journal or mainstream media comments, wherever stakeholders are asking questions and solving problems.
  • Deploy social business infrastructure internally to drive skill development and increase productivity; kick off pilots in which teams use wikis, blogs, microblogging, social bookmarking and rich media.
• Assign a top executive to manage your adoption of social business because changing stakeholders’ expectations will change your business. Your only choice is how do you want to participate: if you don’t get involved and lead, others will set the table for you—to their advantage.
  • Develop a social business strategy to articulate your approach by considering risks, rewards and business strategy. It lays out goals, timelines and resource requirements; metrics and measurements. Your availability to interact with stakeholders will increasingly drive your brand value because they will expect you to be present, appropriate and sincere. Your company, employees and proxies need to learn how to do that. It’s hard work, so the earlier you get started…
  • The strategy will enable you to create a strategic dialog among management; in 2011 and 2012, executives are going to be doing remediation because social projects are happening all over the enterprise, in some cases counteracting each other. I’m not advocating centralization and controlling message, but having goals and meeting them collaboratively will significantly increase returns.
  • Hold focused conversations within the organization and with partners and people outside. You need an adoption approach that considers the spectrum of risks and focuses your efforts on rewards that move your business strategy.
  • This executive should have experience leading innovation initiatives that break rules and ruffle feathers. S/He should also be open to personally embracing social practices (i.e. blogging, tweeting, interacting online).
• Create and maintain a relationship-centric ethos for your social initiatives. During the Industrial Economy, all of us forfeited our humanity to serve the machine, which created unprecedented value. Digital social technologies are enabling us to create and scale our human communications, which will “humanize the enterprise.” Your organization can get in front of this, so you are leading, not complying after the fact. See the Social Network Life Cycle Model and the Relationship Life Cycle for more on this.

Individual

• Start blogging. There, I said it once more. It’s the easiest way to differentiate yourself. Two of my largest clients last year came through people finding my blog posts and videos online. Here is my free Quick Launch Guide to get on in about an hour.
• Don’t treat LinkedIn as a website, but as an engagement platform. People go to LinkedIn when they are looking for expertise, but “content” engages far less than interaction. You can pay for content, but your attention is priceless. On LinkedIn, this means:
  • Participating in LinkedIn Answers: answer others’ questions and ask questions; this attracts attention
  • Focusing on highly targeted Groups: interact there regularly; commit to 2-3 groups
  • Using Polls to have fun and attract attention to issues relevant to you and people you want to engage
  • Putting your slides on your profile via LinkedIn’s Slideshare app
  • Invoking your blog posts from your profile with the WordPress or BlogLink Apps
  • Are you courting clients on other continents? Recreate your profile in other languages.
• Start tweeting. Twitter is a new mode of communication that you need to understand because it is transforming communication and creating new kinds of relationships. See Twitter: Key Disruptive Innovation of the Decade.
• Cut back on unproductive networking. Don’t fall into networking as an activity trap. If you drive half an hour to an event and spend 3 hours there, that’s half a day. You could have written six blog posts and answered four LinkedIn questions. When you have a content strategy for your blog, it creates digital breadcrumbs that are always working for you. If you choose the LinkedIn questions you answer judiciously, people will discover them at any time. At face-to-face networking events, the value dissipates much more quickly. I’m not saying to reduce face-to-face significantly, but cutting back on two events per month will give you more than enough time to ramp up online, where the leverage is far greater. Optimize.
• Relentlessly conduct yourself so that you increase trust with people who count. Make introductions, answer questions, give help, ask for help, follow through on what you promise. In digital social environments, other people are observing our interactions. We can choose to be creeped out by that, or use it to our advantage. When you are authentic and help people, other people see. Huge leverage.
• Experiment with video. If you have a family member or friend who has some video skills, make a couple short videos of yourself talking about something your stakeholders are worried or excited about. Start by creating two or three slides, talking through them and recording a voiceover. Stand up and present it. Then go for the video. It’s forever. Don’t neglect keywords and tags when you post to YouTube. Ask around, it’s not rocket science.
• Get on Foursquare, Facebook Places or another geosocial app. You need to understand Web 3.0, and it doesn’t take much time. Don’t let it happen to you.
• Carpe diem!

Compared to its progenitors 2009 and 2008, 2010 was a relatively calm year because the amplitude of market gyrations was clearly less, and businesses began to find a new floor on which to build stakeholder expectations. Although I watched with high interest the unfolding drama in Europe, I didn’t have the time to conduct the research necessary to do a rigorous interpretation. I did publish a reflection in January, which is not included in this year in review. However, 2010 marked a major turning point in the adoption of social technologies: the recognition that analysis and strategy were necessary to achieve consistent results with social initiatives.

2010 Macro trends

Social has been in adolescence up through 2009-2010 in which “being on Facebook” was an end in itself, agencies produced vapid content and little interaction happened because people won’t interact when brands are talking at them and not listening. People feel it when a brand is interested in using social tools to promote itself (I call this “social media”). They also feel it when a brand is interested in building relationship, which is marked by active listening and responding, along with a relative absence of self-promotion. Brands that build relationship know that they don’t have to promote themselves if they are truly interested in people: people will promote them. However, this approach is future state for most companies.

The growing use of strategy is also a harbinger for what I call “social business,” in which leaders use social technologies to transform their businesses by collaborating openly with various outside and inside stakeholders to innovate constantly. Early movers will only begin emerging in 2011. Only a few gutsy players will aim to aggressively adopt cutting edge social business practices in 2011. I believe they can change markets.

This Year in Review includes articles from the Social Network Roadmap(SM), MENG Online, the Executive’s Guide to LinkedIn, the Executive’s Guide to Twitter and the Executive’s Guide to Facebook. Heavy client work curtailed my attendance at conferences, but I logged 14 speaking engagements this year, so I also covered some of the other sessions. This year, I have selected twelve articles as Must Read, which are clearly marked in each section, and I ALL-CAPPED five of the best of the Must Reads. Most important, I invite you to share your thoughts and questions in comments.

Economy, Enterprise, Strategy and Adoption

In 2010, “the economy” slowly improved at a pace of 1.25 steps forward, 1.0 steps back, but enterprises slowly gained confidence that the “period of bad news” was finite and mostly behind them—unless they were in Greece, Ireland or, to a lesser extent, Portugal and Spain. Their adoption of social business was predictable, steady and slow. Most of 2010′s posts highlighted here hail from the Social Network Roadmap(SM) because they focus on the drivers and practice of social business. Heavy client work in 2010 included a Fortune 50 retailer, a global semiconductor manufacturer and a prominent local government on the U.S. east coast. In 2010, executives realized that they needed a more coordinated sense of purpose, a “strategy,” and strategy began maturing social initiatives. Prior to 2010, the mantra was, “Throw a couple of interns at it, they know how to do Facebook.” In 2010, I helped clients clean up some of those messes: activity doesn’t equate to business results. I expect the cleanup phase to continue through 2013 at least because, well, success depends on being social in meaningful ways to customers and practical ways to businesses. From a business perspective, strategy provides the rationale for prolonged focus, which is required because relationships need commitment. Businesses’ commitments must be grounded in business purpose. Being social for its own sake is a short-lived phenomenon. As this section’s “must reads” point out, most businesses don’t know how to “be social” in authentic, meaningful ways. In most cases, it also requires extensive mentoring to learn the tools, processes and behaviors well enough to be natural online. Social knowledge is indeed a key barrier. Also read the “Decade in Review..” to understand the context of where we are today.

• MUST READ—Enterprise Adoption of Social Business 2010—Social Knowledge Gap a Key Barrier
• Must Read—Enterprise Adoption of Social Business – 2010 Midyear Update
• Must Read—Decade in Review 2000-2009/The Rise of Web 2.0, The New Pervasive Human Space
• American Express: The Bearish U.S. Economy Will Drive Social Networking Adoption
• How Social Networks Change the Rules of Sales and Profit
• Alcatel-Lucent Study: Social Networkers Not Very Social
• 2010 Predictions and Recommendations for Web 2.0 and Social Networks
• Social Networking Bootcamp Combines Strategy, Management & Practice
• Social Networking Conference Miami 2010 Wrap

Social Business for Commercial and Government Enterprises

This year’s posts are jammed with case studies that reflected steady progress with social media by business and government, but most businesses are still at the level of learning the tools; they aren’t yet focused on building durable relationships, which require deeper focus and more sharing. I sponsored a collaborative piece on 2010 predictions, collaborating with 16 executives in my enterprise social networking group on LinkedIn (“17 Visionaries..”). I also shared best practices on social business competency teams, which serve as a virtual PMO to drive enterprise adoption of social business as well as a post on comparing different types of social media consultants. Enterprises are also starting to experiment with geosocial apps and algorithms everywhere, both hallmarks of enterprise 3.0.

• MUST READ—17 Enterprise Visionaries Release 2010 Predictions for Social Networks, Web 2.0
• Must Read—Social Business Competency Teams: How to Boost Enterprise Social Business Performance and ROI
• Must Read—Comparing Enterprise Social Media Consultants & Providers
• Social Business Summit Case Study: Donna Rossi, Western Union
• Social Business Case Study: Jennifer DeMarco Herskind, Dave & Buster’s
• Fraud in Social Networks: FBI Countercrime Initiatives
• Case Study: IBM’s Experience with B2B Social Business
• Case Study: Social Networking at the CDC
• Case Study: Miami Dolphins Use of Social Networking
• Case Study: Seattle Seahawks & Seattle Sounders

Social Networking Platform Review

Most CMOs know the names and logos of the major platforms and like their exploding popularity, MySpace notwithstanding, but the lack of in-depth platform knowledge of social media providers produces mediocre success. I encountered many cases of firms just “doing Facebook” because it was popular and, well, who wouldn’t want to be there? It’s disheartening to encounter agency-produced snappy social media speak on Twitter and Facebook, which is far worse than doing nothing for most brands; people can smell it a mile away; brands are just flushing money down the toilet. Likewise, few organizations understand that the power of blogging is largely built on networking and relationship. Two must reads this year discuss network-oriented approaches to building Facebook Pages and blogs. The mind bender post is on LinkedIn body language, which is key to reaching another level of relating online.

• MUST READ—Four Steps to Building Facebook Presence, Network-Style
• Must Read—Blogs: The Relationship-Centric Approach to Building Readership
• Social Networking for Professional Services Firms
• How LinkedIn Changes the Economics of Cross-border Relationships
• LinkedIn Body Language: How Touch Creates Stronger Connections
• Blogging: Quick Launch Guide
• Visions of Facebook 2.0
• Suggestions for Facebook: How to Triple Value of Friend Suggestions
• Executive’s Guide to Twitter Releases Free Online Courses
• Introducing Twitter Value Vectors: The Key to Building a Quality Following

Marketing 2.0 and Customer Experience

In 2010 I was invited to do a series of posts on MENG Online, and this section’s must read hails from that. “Rude Awakening..” debunks word of mouth marketing as a flawed concept, riffing on Don Peppers’ remarks at the Alterian Social Business Summit, which I covered fairly extensively. Most of the speakers emphasized how marketing was changing forever, and most meant it. Others shared marketers’ frustrations with trying to drive social initiatives from a legacy marketing viewpoint; the root of their teeth-gnashing was that relationship building doesn’t fit the style of marketing metrics on which they are currently measured.

• MUST READ—Rude Awakening— Only 15% of Word of Mouth Marketing Campaigns Show Positive Results
• Social Business Summit Keynote, Marketing Changed Forever—Stan Rapp, Engauge
• Social Business Summit Keynote Continues Disruption Theme—Don Peppers, Peppers & Rogers Group
• New Age of Socialized Engagement
• Social Business Summit Panel: Brands at Risk
• How Do You Know if Your Act is Together if You Can’t Measure?
• Social Business Summit CEO Address—David Eldridge, Alterian

Technology

Although “technology” enjoys shrinking attention in the ongoing adoption of social technologies, 2010 proved once again that it’s critical to keep one’s ear to the ground because technology enables quantum leaps in capability. I covered the accelerating adoption of Web 3.0, in the particular form of geosocial, a specific type of mobile social networking (Foursquare et al). Other must reads here discuss Facebook Connect and Google FriendConnect, Web 2.0-style single sign-on (with benefits ;^). Make sure to delve into the PopTech coverage, which highlights using social tech for social initiatives. I loved meeting Patrick Meier and listening to his story about using Ushahidi in Haiti and Chile.

• MUST READ—Enterprise Adoption of Social Business 2010—Three Technologies to Watch
• Must Read—Are Geosocial Apps Foursquare, Gowalla, Loopt & Brightkite Ready for Prime Time?
• Must Read—PopTech Maps Course of Social Change
• Noodle VII: Tablets Won’t Save Mainstream Media But This Might
• Social Business Technology Preview: Mike Talbot, Alterian