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Let's burst the bubble of the Social Media bubble

October 27, 2010 //

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You hear and read it everywhere: Social Media is overhyped. Social Media experts will soon be applying for jobs at Burger King. In the end, the bubble will burst and Social Media will be Second Life 2. Or Zune 3.

Even in the Social Media echo chamber, we can feel the skepticism and defeatism when discussing the future of Social Media. The big agencies and brand will take over and ruin everything. Again. (Cue the Kleenex box.) Brands don’t get it. (Fist against the wall.) Money ruins everything. (Head against the wall.)

And we thought Social Media would change the world.

Let me burst the first bubble: Social Media won’t change the world. Stop drinking that Kool-Aid, it’s not good for you. Technology has changed everything: Transforming people from consumers to producers. Changed human behavior. Redefining human relationships. Transforming how we live. Transforming companies how they do business. Transforming institutions. Changing everything.

Social Media is just one expression of that change. Nothing else. It’s more than another channel to broadcast your messages. But it’s not the messiah that will miraculously change the world.

We wanted to change the world and all we got was Lolcats.

The essence of human beings didn’t change because we have new technologies. Silliness is just another expression of human creativity. But we see people helping each other by using these technologies. On a small scale. On a big scale. I can send my kid every night a good night story while 7,000 miles away and share a video of my experiences in Tokyo with my wife, feeling a connection to my girls. I can meet the woman of my dreams online. I can have meaningful discussions with people all over the world without ever meeting them. Or finally meeting them. And that’s the just bottom of the first inning of a long game. I would argue, this is the bottom of the first inning of a Best of 7 World Series. Soon, you’ll be able to own your own data, share it on your own terms, issue personal RFP’s and revolutionize everything: healthcare, politics, marketing, enterprises – you name it. And that might be bottom of the second inning. Who knows what will happen in Game 7, bottom of the 9th?

So, let’s burst the bubble of the Social bubble.

If you define social as Facebook pages, Twitter feeds or a fancy application: That bubble will burst. I totally agree with you. And you should be cheering for it. Most of these initiatives are just applying the old broadcast strategies, tactics and metrics to a new way of interacting with people.

Social isn’t a beauty contest, a chase to add your follower counts or another popularity contest. These are the LolCats of social. What social is really about is trust, connection and community. Social is about rewiring human beings, communities, societies, business and the world.

So stop whining, stop being afraid of the Twitter/Facebook bubble to burst. Just keep on moving foward. We’ve barely begun.

“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan “press on” has solved and always will solve the problems of the human race.” – Clavin Coolidge

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The marketing revolution is on its way

October 11, 2010 //

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Marketing continues to be a one-sided affair. Brands have massive budgets, highly-trained professionals, numerous support services and agencies, mountains of data and insight, arsenals of technologies to target and communicate with people.

What do people have? Ad blockers, DVR’s, unsubscribe buttons and, most importantly, indifference. As Soren Kierkegaard said: “At the bottom of enmity between strangers lies indifference.” While Social Media shows some signs of turning this one-sided relationship into more of a partnership, the fact is: All the resources are still with brands. And it’s hard for anyone of us to imagine a future where these roles we all are used to playing, will change. When the seller-centric paradigm transforms into a buyer-centric reality.

Until today.

Mydex launched today the personal data store service. It’s a first step in the marketing revolution that will turn people into owners and managers of their own data. It is a very small test but it’s an important piece of the puzzle to change the way marketing information flows. Personal Data Stores empower individuals to become owner and managers of their data, allowing for a real partnership between buyers and sellers. They will help restoring the balance between two parties.

Marketers might find that scary since it threatens their power of influence. I would argue this will transform passive consumers into more active producers, both helping the individual to achieve his goals. And help brands become more efficient in their product development, branding, marketing, advertising – you name it. And that’s just a small part of the transformation. Once individuals will take ownership of their data, major industries will be reinvented: Health Care, Education, Politics.

Please read Mydex’ White Paper for a more detailed look at Personal Data Stores: “The case for personal information empowerment – The rise of the personal data store”

Congrats to the folks at Mydex.

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Excellence is a mindset. Not a goal.

July 12, 2010 //

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Throughout the World Cup, I received many emails and tweets congratulating “my team”, Deutschland, for their great tournament and playing really exciting soccer (Fussball, as I call it.). Reading German newspapers and magazines, I experienced a lot of self-congratulation for the new, exciting German soccer game, how suddenly the world loves Germans and the multi-cultural faces that played on the team. Oh yes, and 3rd place was lovely.

Enough already.

We’re talking German soccer here. We’re supposed to win each time. Sure, we won’t, but any tournament we don’t win is a loss. Period. Did you ever see the Lakers or Yankees fans celebrate a second place? Or a good loss in the Division Final? Of course not. On paper, Germany’s performance in the last 3 tournaments looks outstanding: Third place World Cup 2006, 2nd place Euro 2008 and 3rd place World Cup 2010. Great. But, where’s the trophy?

Match it up with all that nonsense talk when the US tied England in a group game and people started to celebrate it as a victory. That kind of talk will get you nowhere. Very, very quickly.

Winning organizations are like “A” students: They expect to get an “A” each time they perform. Whenever they get a “B” or worse, they’re disappointed and work hard to get back to the “A” level. Mediocre organizations are like “C” students: They get a “B-” and high-five each person they encounter. They are still not as good as the slip-up of the “A” organization but they’re ecstatic because for once they’re out of the “C” cellar. Just to slip back into it again very, very soon.

We all worked with “A” people before. They might fail, maybe even often, but they always give everything they have. They believe something can be done when others think it can’t. They can solve problems others consider unsolvable. They don’t believe in expectation of others, they have their own expectations. And, we all worked with “C” people. They might talk a big game but their actual work is sloppy. Mistakes. Not failures. Laziness. No high standards. No inner push.

If your organization does things that everyone arounds you thinks you can achieve, then your organization is just a “B” student, not pushing everyone hard enough. I’m not talking about pipe dreams, I’m talking about Big, Hairy, Audacious Goals. Rationally, you will achieve your goals when you meet certain metrics. But, that’s not fulfilling, organizational achievement. Real accomplishment and achievement comes from pushing everyone, including yourself, to the limit. Beyond the place where everybody else thinks you could ever go. As a “C” organization, you need to push for constant “A” scores. It might take a while,  a lot of “B” scores, but as long you keep up an air of excellence, deeply rooted in your organization, you are on the way to become an “A” organization.

An interesting thing happens on the way: The people that didn’t believe in you and your organization in the beginning, will be starting to believe in you. And these people will do everything they can to make you even more successful. Nothing in your balance sheet might have changed, you still employ the same people, deal with the same stakeholders – a mindset of excellence will change everything.

My kid’s Karate teacher said to the class a few days ago: ” When you want to tear a piece of paper with your hand, you don’t aim for the paper. You don’t aim for a small space behind the paper. You aim for a place 2,000 miles beyond the paper.”

Shoot for the stars.

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Transform your business – Leadership for organizational development (Part 12)

July 2, 2010 //

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Development is not something that is done to an individual or group; it is something they do to themselves. It is an increase in the ability and desire to satisfy one’s needs and legitimate desires and those of others. It is a matter of learning, not earning. No one can learn for another, but one can encourage and facilitate the learning of another. Development is not a matter of how much one has, but how much one can do with whatever one has and what resources can create out of what is available.

Organizational development requires leadership, which is primarily an aesthetic activity. One who leads development must inspire pursuit of a vision in whose production the leader had a hand. A vision is a picture of a state more desirable than the one that the organization currently is in. Leadership must also faciliate development of the strategy, tactics, and operations by whose means the vision can be pursued. Since the vision is often one of an ideal that can never be attained, though it may be approached continuously, leadership must see to it that the pursuit itself is satisfying, that it is fun as well as meaningful and valuable. Effective pursuit of an ideal requires the leader to extract the best possible effort from those who follow. In a corporation, this requires providing nothing less than a very high quality of work life.

Part of leadership is an appropriate ethical-moral judgement process. The ideal process would encourage leaders to make decisions only by consensus of all stakeholders. And the final decision should never deprive another of the ability or opportunity to develop unless the one affected by the decision would otherwise deprive others of this ability or opportunity.

However, the number of stakeholders of some corporate decisions runs into the millions, and there is just no way of involving all of them in every decision that affects them. For that reason, multi-national enterprises have to use representatives of various stakeholder groups. In a perfect world, any organization would designate individuals who will be responsible for identifying and evaluating the effects, if any, of current decisions on future generations’ choices and the ability and desire to make them.

A vision that involves a radical change in the way an organization is conceptualized is a transforming vision. One who leads the pursuit of such a vision is a transformational leader. Transformations are primarily qualitative, rather than quantitative, and are large discontinuities, not merely reform or incremental improvements.

The transformation to systemic thinking has brought with it a growing awareness of the fact that the effectiveness with which any of our daily activities (work, play, learning, inspiration) can be carried out depends on the extent to which they are integrated. Making it very apparent that a transformational leader must be able to integrate the various aspects of life in order to effectively pursue development. The transformational leader is one who can create an organization that reunifies life, who integrates work, play, learning, and inspiration.

The transformation of an enterprise from one conceptualized as an animate system to a social system is only one kind of transformation that is possible. However, in our current environment – one characterized by an increasing rate of change; increasing complexity; and an increasing rate of production of understanding, knowledge, and information – there is no other type of transformation that can bring about the necessary focus on employees, customers, and the other corporate stakeholders. A corporation that continues to focus more on shareholder value and less on stakeholders will ultimately fail.

In our last installment of the “Transform your business” series, we’ll talk about Human Business Design.

Previous installations can be found here: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6 and Part 7, Part 8, Part 9, Part 10, Part 11.

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Transform your organization – Asset Planning (Part 7)

June 22, 2010 //

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Image: Courtesy of 3.media.tumblr

Most organizations refer to asset planning as resource planning. We don’t like the term, especially when it comes to humans. Human beings are assets, not resources. The essential difference between assets and resources is that resources have no value outside the business process they are used in, whereas assets have an intrinsic and potential value. Managed as resources people do what resources do: they become depleted or absent – they burn out or move to another company. Managed as assets they flourish, growing in value for themselves and from there – engaged in heart and soul – add value to the companies (and all other communities) they are part of.

What companies need more than anything in these challenging times are people who are for and are involved in their work with their hearts and souls. That level of involvement and caring is therefore the core issue and determiner of sustainable corporate success in today’s market environment. People engaged with their heart and soul are the most valuable asset any company can have.

Many companies are aware of this and try integrating “human-oriented thinking” into their corporate strategy; some even realize that appreciating people as the asset they are goes much further than being “nice” to them as a motivational incentive; it adheres to a scientific understanding of businesses as complex adaptive systems.

Types of Assets

In asset planning, these types of assets are usually involved:

  1. Money
  2. Capital Goods
  3. People
  4. Consumables
  5. Data, Information, Knowledge, Wisdom

It’s clear that the required amount and the available amount of each type of asset will not be equal. Because the requirements and supply of any asset are seldom, if ever, in perfect balance, asset planning usually creates the requirement for continuous planning.

Financial Planning

Making a profit was once thought to be the only legitimate objective of an enterprise. But times have changed. More and more enterprise consider profit now as a basic pillar, not the ultimate goal. For that reason, enterprises need to determine the financial conditions required to survive and implement the new plan. This requires financial modeling, measuring financial performance measures under a variety of assumed conditions and decisions to use assets.

Capital Expenditures

Given its planned pursuit of an approximation to its pie in the sky design, what new facilities and equipment will a company need? Usually, the needs are treated individually and justification to deploy assets based on estimated returns on the investment. Enterprises need to consider the fact that some investments might look poorly on a plan when considered individually but contribute to the bottom line when integrated into the overall system.

People as assets

People are e the most valuable asset a company can have. Nevertheless, they are generally used less efficiently than any other type of asset. The waste of employees’ time and competence is huge. The quality and competence of employees had increased significantly during the last decades. However, the way people are being managed and the organization of human capital has not. More often than not, humans are seen as extensions or replacements of machines.

The trend of increasing the number of people as much as possible (no matter the output required) when times are good and downsizing (no matter the output) in bad times shows how unsophisticated our approach to human asset planning is. In later parts we will offer a solution to that problem by implementing a market economy within the enterprise.

Consumables

Each organization consumes assets it uses: material, energy, services – just to name a few. These assets are supplied by either an internal or external source; most enterprises focus on supplying itself with any consumable asset to avoid interdependency. However, in this networked and globalized economy, it has become almost impossible for many companies to obtain and retain the competencies required to provide many of these assets in an economic manner, threatening their ability to compete.

Let’s just look at the media agency world: When enterprises bring advertising in-house, they often have problems attracting superior talent. As a talent, would you want to work for a huge media agency with good opportunities to advance, or would you work for an enterprise with no chances of real advancement since the rest of the enterprise is devoted to anything else but media? Specialized enterprises are able to provide specific assets at a lower cost and higher quality than most in-house divisions.

However, the relationship between suppliers and enterprises are often negotiated so as to guarantee behavior not supporting (or even fighting against) the interest of the enterprise. Let’s continue with the example of the media agency: If the enterprise reimburses the agency based on a percentage of company’s media spend, the agency will do anything to increase the media budget. No matter the effect, no matter the outcome. A whole industry of research institutes and consumer behavior studies survive because agencies need data to convince enterprises to spend more money on media. Has there ever been a real study that shows the effect of advertising on sales? In many cases, agencies are better selling to enterprises than to sell the product of the enterprise to customers. As a result, agencies become lobbyists for media, not for their customers they’re supposed to sell to. To break this vicious cycle, agencies should be compensated for increases in sales without increasing media spend and for decrease in media spend without loss of sales.

This would serve customers much better. Currently, media agencies increase their profit often at a cost to customers. (Time, Annoyance, etc.) Once enterprises preach the gospel of media spend cost reduction by sharing the benefits with all suppliers, a paradigm shift will occur.

Information

There’s a frequent misconception that implementing a KMS (Knowledge Management System) can provide all the support decision makers require. Research has shown that most KMS’ miss; they fail to fulfill the promises that were used to justify their development. For that reason, we need new assumptions about information.

Managers need less irrelevant information

All of us experience it each and every day: Information overload. Email bankruptcy. Social Media fatigue. Once we have to deal with too much information, we tend to use less information to make decisions. And we have a natural drive to know more and more about less and less. This might be the perfect approach for boutique firms but large corporations need less specialists and more generalists – T-Shaped people. For them to be successful, enterprises need KMS’ to help them filter out irrelevant information and condense relevant information appropriately.

Managers shouldn’t be burdened with knowing what information they need

The complexity of systems requires executives to manage effectively without understanding the system well. A system that can be comprehended fully doesn’t need a good manager. In return, a manager that requires each and every detail is scared and will play it safe, not advancing the system appropriately. Executives earn their pay when they possess the skill to make a decision based on enough facts not on all facts.

The information that managers need is whatever information enables them to do better with it than without it.

A Knowledge Management System shouldn’t be static, it needs to be embedded within the organization and management system as an infinite learning loop, capable of constant improvement. This  will enable executives to learn what they need or they will be stuck in the “always-asking-for-more-information-loop”.

Less communication between certain stakeholders is better

The Information Age has one gospel: More information is better. When all stakeholders are aware of what the other stakeholders are doing, this should enable stakeholders to coordinate their activities better and improve performance, correct?

No.

Various stakeholders often have different measures of performance and those are often in conflict with the various divisions. Increased communication between stakeholders might actually hurt the overall performance of the enterprise. Before opening up the flood gates of communication, the enterprise, it structure and performance measures need to be aligned with all stakeholders. Once implemented, each stakeholder communication should be evaluated and communication levels adjusted accordingly.

Managers have to understand their KMS

A Knowledge Management System has one objective: to support the enterprise and improve performance. Executives need to control the system, they need to ensure not to be controlled by the system. This requires a deep understanding of the system, its capabilities and limitations.

In summary, asset planning’s objective is to deliver useful inputs to decision making and the ability to identify and learn from mistakes to ensure improvements of pie in the sky and gap planning. This will help implementing a system that improves decision making and allows for rapid learning and adaption.

Let’s talk about that in the next part.

Previous installments can be found here: Part 1, Part 2, Part 3, Part 4, Part 5 and Part 6.

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Transform your business – Gap Analysis and Gap Planning (Part 6)

June 21, 2010 //

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Organizational design produces the vision of an organization and a desired behavior. The gaps between what the organization is and now is doing, and where it wants to be and to be doing, expresses the challenge to be tackled by gap analysis and gap planning.

Gap Planning determines how the gaps are to be closed or reduced. It is the preparation of the design’s “initial  drawings” which provide the instructions required to close or reduce the gaps. Gaps can be filled by adding things, eliminating unnecessary things or by changing things.

Assessment

Before any assessment can take place, each stakeholder needs to understand and agree on the new direction of the organization:

  • Communicate widely the vision, mission and pie in sky design
  • Design the data-gathering process and explain to all stakeholders that an enterprise-wide gap analysis will take place
  • Discuss with each stakeholder the benefits and difficulties involved in the transformation process
  • Establish the initial design and data-gathering lead teams
  • Determine the stakeholder task force
  • Establish expectations for ongoing communication, and communicate the philosophy for staffing the organization

Using a combination of survey and group interview techniques, gather information on the effectiveness of the current organization. Data gathered should include: core processes and their effectiveness, additional customer data, critical tasks or key activities, work load, roles and responsibilities, decision-making authority, qualitative data on management practices, and internal issues and suggestions for improvement. Enterprises need to consider the current culture, how change has been implemented in the past, and how is has been received by employees at all levels.

Gap Analysis

In planning the analysis, it is essential to clarify what information is most relevant. This involves specifying intended outcomes and possible unintended outcomes. It also involves plans for assessing how well processes have been implemented and where improvements are needed.

We use the example of a luxury car dealership to illustrate the gaps. In this example, there are several gaps that are important to measure. From a service quality, these include (1) service quality gap; (2) management understanding gap; (3) service design gap; (4) service delivery gap; and (5) communication gap.

Service Quality Gap

Indicates the difference between the service expected by customers and the service they actually receive. For example, customers may expect to wait less than 10 minutes for their loaner car but reality is an average waiting time of 20 minutes. Most cars are being dropped off early am and 10 minutes before work are more valuable to people than after 5pm.

Management Understanding Gap

Represents the difference between the quality level expected by customers and the perception of those expectations by management. For example, in a car dealership customers might expect expediency on their repair but management focuses more on excellence than expediency (for many legal reasons).

Service Design Gap

This is the gap between management’s perception of customer expectations and the development of this perception into delivery standards. For example, management might perceive that customers expect someone to answer their telephone calls timely. Customers might think “timely” is less than twenty seconds and management defines “timely” as less than 40 seconds, thereby creating a service design gap.

Service Delivery Gap

Represents the gap between the established delivery standards and actual service delivered. Now, management might establish a new standard of answering each call in less than 20 seconds but average time of answering is 27 seconds, creating a service delivery gap.

Communication Gap

This is the gap between what is communicated to consumers and what is actually delivered. This happens frequently when dealerships offer low-price oil changes and then charge customer for questionable labor.

Gap Fillers

The most important criteria used in evaluating the gap plan is whether it will the enterprise to push in the right direction, avoiding a chaotic transition and helping the organization to utilize opportunities. It’s extremely important to refer back to the mission statement, and understand if the gap plan will help to fulfill promises made in the statement.

When an individual or a group is confronted with a gap between where they are and where they most want to be, they can respond in four different ways: absolution, resolution, solution, and dissolution. Learning and creativity are enhanced more by design (dissolution) than by research (solution), more by research than trial and error (resolution), and more by trial and error than by doing nothing (absolution). The goal is to design an organization that considers dissolution as their main goal. Dissolution of boxes,  paradigm, linear thinking. Through organizational design, all stakeholders will contribute to the creation of a world they are envisioning to live in.

The efficiency and effectiveness of the gap fillers selected in gap planning are not only matters of selection one of a set of available gap fillers, but are also a matter of creating gap fillers not previously available. Organizational business design unleashes creativity in developing a vision to be pursued by an enterprise. But creativity also has an important role in selecting the gap fillers by which to pursue it. Therefore, the selection of gap fillers can also be more a matter of design than research or common sense.

Last but not least, the gaps treated as challenges in gap planning are almost never independent of each other.  Therefore, their solutions interact systematically. The selection of solutions to close the gaps should take into account these interactions, especially their joint efforts on the enterprises’s overall performance.

Tomorrow we will discuss asset planning.

For your reference, you can find the previous chapters here: Part 1, Part 2, Part 3, Part 4, Part 5

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Transform your business – Planning for Pie in the Sky (Part 5)

June 18, 2010 //

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Image: Courtesy of Minddesign

“Vision is the art of seeing what is invisible to others.” – Jonathan Swift

Every enterprise needs to set Big Hairy Audacious Goals. These Big Hairy Audacious Goals are your limit. It’s an idealized goal that might never be attained, it’s your Moon Landing. We will talk later how to reduce the gap between enterprise reality and pie in the sky ideal. But, forget about limits for a while. This is about expansive thinking: no borders, no limits, no boxes.

Planning for Pie in the Sky includes:

  • A clear vision of your enterprise
  • A mission statement, expressing the Big, Hairy, Audacious Goals
  • Specific features the enterprise needs to have to achieve the goals
  • A pie in the sky design of the organization

A clear vision of the enterprise

Corporate visions are usually developed by executives, not involving all stakeholders. While developing the vision by few might be more efficient, the vision needs to be shared by all stakeholders in order to be pursued effectively. Most visions define what executives want the enterprise to be in 10 years or so, often forgetting what these executives want the enterprise to be right now. I would argue, it’s imperative to develop a vision that communicates the ideal design of the organization for the here and now, assuming the organizational design will be able to handle changes (and there will be many) without actually forecasting the future. Instead, organizational designs have to incorporate contingency planning.

I have all the plastic in the world but I still carry a few bills with me all the time. I don’t forecast a cyberattack on the banking system, I don’t forecast a massive quake in LA that won’t allow me to access my account for weeks. But all these things and other scenarios are possible. And I would like to be prepared for it.

A Mission Statement, expressing the Big, Hairy, Audacious Goals

Most mission statements are borefests: platitudes of epic proportions. A real mission statement should answer the following questions:

  • Why does this enterprise exist?
  • What are the aspirations of the enterprise?
  • What does the enterprise do to succeed?
  • How will the enterprise pursue its Big, Hairy, Audacious Goals?
  • How will the enterprise serve each stakeholder?
  • What makes the enterprise unique?

While formulating the mission statement, stay away from empty sentences/words, corporate speak and anything your best friend outside of your expertise doesn’t understand.

Specific features the enterprise needs to have to achieve the goals

Whenever we develop a website, the first step is to sit down with all stakeholders to go through their wishlist: What features does each stake holder would like to have? Enterprises have to go through this exercise as well to design their ideal organization.

This can be a laundry list of thousands of items or just a minimal document that describes the structure of the enterprise, corporate culture, management style, employee expectations, high-level ideals of products/services, etc. Each ideal enterprise design is different and the features list will reflect its uniqueness.

A pie in the sky design of the organization

Imagine, your enterprise stopped to exist last night. Nothing else has changed: Technology, laws, regulations, taxes, etc. The environment and systems that surrounded the old enterprise still exist and they haven’t changed. Just your enterprise is extinct. Start designing your new enterprise.

What kind of enterprise would you design if you could start from scratch? How would you design it so the enterprise is capable of being improved continuously from within? We’re not asking you to create Utopia, a perfect enterprise. Instead, your pie in the sky design should incorporate what you want to the organization to be right now. While you discuss these ideas with stakeholders, many new ideas will evolve and creativity will flow freely. This process of collaboration is often the most important product of this step to transform your business. Enterprises need to make sure that during this step self-imposed constraints are kept to a minimum. Stakeholders should not be concerned with feasibility, budgets or implementability. Reminding them that the enterprise was destroyed last night might help limiting those constraints. Keep dreaming.

Next, we will discuss gap analysis and gap planning.

For your reference, the first parts can be found here: Part 1, Part 2, Part 3 and Part 4.



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Transform your business – Ultimate Apocalypse Scenario (Part 4)

June 17, 2010 //

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Image: Courtesty of 24.media.tumblr.com

“It turns out that an eerie type of chaos can lurk just behind a facade of order – and yet, deep inside the chaos lurks an even eerier type of order.” – Douglas Hofstadter

One of the fundamental characteristics of today’s enterprise environment is change. Today’s rate of change can often be experienced as chaos. All of us are grappling with the implications of technology, demographic changes and the impact of the human race on the planet. And we have an armada of experts that tell us how it will affect us physically, psychologically, socially, and organizationally. The fact and necessity of change needs to be a major consideration in the management of any enterprise. In addition, it is imperative for executives to be competent in introducing, responding to, or coping with fluctuations in the environment.

Before an enterprise can deal effectively with chaos and the always-present change, it needs to craft a situational analysis. It provides a comprehensive view of the system they manage. It also helps with determining its projected future, where it will be if it continues on the current path and be prepared for situation where the unexpected happens. These projections are imperative to understand how the enterprise will be affected unless it changes.

Situational Analysis Content

The situational analysis needs to contain at minimum:

  • Flow of business transactions from initial order to final delivery
  • Information flow required by underlying business transactions
  • Flow of financial resources
  • Culture of the enterprise. Differentiating between real culture and externally communicated culture (Policies)
  • Conflicts within the enterprise and between the enterprise and other stakeholders
  • External Trends and implications to the performance of the enterprise

This situational analyis is a much more in-depth look at the overall health of the enterprise compared to the typical SWOT analysis. In addition, we do recommend enterprises developing an ultimate apocalypse scenario.

Ultimate Apocalypse Scenario

The goal of the ultimate apocalypse scenario is to understand when and how the organizational system will break down if there are no adjustments. We all know that enterprises will eventually intervene and adjust. (Often too late or not early enough.) To be clear, this scenario is very unlikely to happen. But it helps enterprises to understand when and how the system will break down if no changes are implemented.

Fact is, the majority of organizations will not change their course unless they are in a state of crisis. Let’s just have a look at the current state of the U.S. government: For how many years have we heard we need to change fiscal direction? For how many years have we listened to politicians talking about the crisis of entitlements? Only after we stepped away from the brink of the financial abyss, we started to have an intelligent discussion about fiscal policy. Projections about our impending bankruptcy revealed the crisis of of our fiscal policy unless we change our behavior.

The ultimate apocalypse scenario should be communicated through a lively narrative. Humans react favorably to real stories, to vivid images. Just explaining the the federal deficit might reach 50% of GDP doesn’t evoke any emotions. A scenario where nobody will buy our debt and bond vigilantes will run the fiscal policy of the US evokes strong emotions.  The ultimate apocalypse scenario provides an enterprise with an opportunity to control and influence a significant part of its future. The goal of the enterprise is to influence the future and not be influenced by the interventions of others.

In Part 5, we will discuss Pie in the Sky planning.

And, in case you missed the first three parts, you can find them here: Part 1, Part 2 and Part 3.

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Transform your business – Interactive Management (Pt. 3)

June 16, 2010 //

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“The conventional definition of management is getting work done through people, but real management is developing people through work.” – Agha Hasan Abedi

Humans are a very diverse species. Each one of us is unique, we all have our strengths and flaws. Surprisingly there are not many variations of basic management categories: Reactive, inactive, proactive and interactive. Let’s briefly evaluate all four of them:

Reactive Management

Run, run, run. And then run more. The reactive approach to a problem is first to identify its cause or source, then try to remove or suppress it. Being reactive implies your action begins after the fact; acting in response to a stimulus or situation, as if simply poised waiting for something to happen. We know, this is never the case. Managers usually feel reactive when they are hit by something they didn’t anticipate.

Organizations in which reactive management is dominant tend to use as their model the oldest and most stable form of organization known, the big family. Like most families, most reactive organizations function as autocratic hierarchies. Ironically, although reactive planning is authorized from the top down, the actual planning is carried out from the bottom up.

Reactive planning is always focused on getting rid of what is not wanted. The problem with that paradigm is that when one gets rid of what one does not want, often one does not get what one wants but gets what one wants even less. However, effective management focuses on getting what one wants, not getting rid of what one does not want. Reactive organizations walk into the future, facing the past, backward.

Inactive Management

We all experienced it: A crisis is unfolding before us and we don’t do anything. We might have good intentions to solve the problem but another, more important crisis is taking all of our attention. A few days later, the initial crisis resolved itself. That’s Garden Eden of inactive management. Unlike the reactivist, who tries to eliminate the cause of a problem, the inactivist settles for suppressing the symptoms. The inactive manager is always in crisis management mode. Our increasingly complex world increases the numbers and severity of crisis. That keeps the inactive manager very busy trying to prevent change. His attention is occupied keeping people busy doing nothing.

You’ll find inactive managers in organizations whose survival is independent of its performance. Many government agencies come to mind, subsidized and regulated organizations. They tend to change when somebody imposes their will on them.

Proactive Management

Proactive management implies that your response is preceding the action. Creating a solution before being requested to have one. Anticipating what is needed and having it ready. This seems like a great position to be in; however you need to know what to be ready for. You cannot anticipate everything. Proactive managers predict and prepare, that is, they attempt to predict the future, then establish the objectives they want to attain, and finally create a plan to get from where they are to where they want to be. Forecasting is a major preoccupation of proactive managers.

The proactive manager believes there are a few problems that technology can’t solve, the reactive manager tends to think they can only be solved by a softer, human approach. Unfortunately for proactive managers, as the rate of change in the environment accelerates and the environment becomes more complex, their ability to forecast accurately deteriorates. Many proactive plans are never completely implemented because errors in the forecasts on which they are based become apparent, nullifying the plan. In addition, it is very apparent that the objective of planning should not be to prepare for a future that is largely out of our control, but to control that future as much as possible by developing mechanisms/products that have the most effect on our futures.

Interactive Management

The objective of management should be to create as much of the future as is possible. Implementing an interactive management style means managers get involved with people without there being a problem or a situation. They understand what’s happening around them. The more a manager knows about the whole organizational system, the goals of each person, the more successful the organization and the manager will be. Interactive management asks executives to very involved with the system environment, thereby giving them access to a myriad of insights and knowledge. It allows an organization to maximize their resource – they don’t have to wait for events, overplan for possibilities or jump the gun.

Implementing an interactive management system doesn’t mean the organization will never be blindsided. However, when the unexpected happens, management will have a better sense of how urgent the matter is because they live and experience the priorities of the business. They will know who to deal with so the situation can be resolved with a minimum of resources and effort.

There are three major characteristics of Interactive Planning and Management: a) Interactive Management plan backward from where they want to be to where they are. b) Interactive planning, management and execution is a continuous process. The process is the goal, not the final plan. Because there is no more final plan. c) Every stakeholder  is part of the collaborative planning process. This increases the chances of successful implementations dramatically since every stakeholder has a vested interest in success.

Because the principal product of interactive management is engagement throughout the organization (Planning, Implementation and Optimization), and because it requires as many stakeholders as possible to participate, it requires a significant change in the role of management. They are no longer required to spend the majority of their time preparing plans. Instead, their role is to encourage and facilitate, educate and advise.

In Part 4, we’ll be talking about the interactive planning process in detail.

For reference, Part 1 (Systems Thinking) can be found here and Part 2 (Systems) here.

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Marketing Out Of Fear

June 7, 2010 //

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Image: Courtesy of 27.media

Fear passes from man to man
Unknowing.
As one leaf passes its shudder
To another.
All at once the whole tree is trembling
And there is no sign of wind.
– Charles Simic

Most marketers live a fear-driven life in which thoughts, decisions and actions are motivated by fear. Fear is quite insidious. It creeps into our lives and stops us from doing the things we want. Fear stops marketers from experiencing things that could really allow them to grow a brand into greatness.

We experienced this fear-driven marketing paradigm in the first stages of the digital revolution. How many PowerPoint presentations were developed to convince brands to invest some of their traditional dollars in digital initiatives? I must have created at least 50 decks just speaking to that topic. Someone must have listened because digital marketing spend is increasing yearly. But the tactics are not changing – It continues to be about reach: According to Razorfish and their media budget report for 2009, site specific buys commanded more than 30 percent of client budgets, search and directory buys held 25 percent, ad networks had 20 percent, and portals had more than 10 percent. Proving my point: Fear reigns supreme in marketing.

While the tool boxes have changed dramatically, the marketing paradigm hasn’t shifted a bit: Reach at an affordable cost. Period. End of story. Clients have entrusted me with rather large digital accounts and this is what you get when you engage in the ‘Reach Game’: Tons of impressions that nobody can account for, horrendous click-through rates and a bunch of visitors to your site. To save your job, you better negotiate a few awareness studies with publishers, communicating to executives that people actually saw your advertising and responded positively. Did they respond to your product or the ad? Will the positive response lead to purchase? Oh, come on, you’re asking too many questions. We already had to bribe the respondents with Amazon gift cards, can’t be too specific in our questions.

Sure, marketers venture out of their fear-driven existence once in a while to develop a Facebook page or even allow for a Twitter feed. As Razorfish’ report indicates, these are just some crumbs of the overall marketing pie. Marketers continue to go for the Time Square stunts, Yahoo home page takeover, plastering their advertising all over the Web in the spirit of “You can run but you can’t hide” and the always popular celebrity endorsement. Why? Because it’s safe. It’s what they taught us in marketing school decades ago. And the C-Level suite understands reach metrics.

Ironically, because most marketers don’t take risks they risk the existence of the brand they are asked to grow and, ultimately, they risk their job. Don’t try to buy time by asking for gazillion decks explaining how Social Media can drive your business. (Just Google it – there are tons of case studies.) Don’t cover your behind by delaying any innovative Social Media initiative by letting Legal run the show. Stand up to everyone in the organization (even your agency) and lead your way out of fear. Dump tactics that don’t perform or are kept alive for any other reasons than driving sales. Allocate a healthy portion of your budget to innovative ideas. Take risks. Show your leadership. And kick fear. Hard.

The person who risks nothing, does nothing, has nothing, is nothing.
They may avoid suffering and sorrow, but they simply cannot learn, change, feel, grow, love, live…
Chained by their attitudes they are slaves.
Only the person who risks is free.
(Author unknown)

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