Regulation does not excuse inaction

All too often the regulations governing particular market sectors – finance, pharmaceuticals, healthcare, legal etc. – are used to excuse a lack of activity when it comes to social media. Banks and other financial institutions are especially guilty of hiding behind Financial Services Authority regulations.  In one extreme case, the marketing head of a leading financial services company admitted to me that it was taking them 10 days to issue a Tweet.

In reality, social media professionals operating within even the most highly regulated of environments, have a reasonable degree of freedom and flexibility in which to work: they simply need to stick to some basic principles:

  • Make sure everyone involved in social media understands the regulations that govern your sector: what they can and can’t do and say. Don’t simply rely on the interpretation of the compliance experts within your company.
  • At the same time build bridges with the compliance and legal professionals within your organisation. Although naturally cautious and risk averse, in my experience most are smart enough to see the value that the organisation can derive from social media.
  • Explain the regulatory constraints under which you operate to employees, customers and other stakeholders. If they understand the reasons why you cannot do or say certain things, they are less likely to criticise you.
  • Talk to the regulators and share best practice with other companies within your industry. Regulation is generally struggling to keep pace with the fast moving world of social media and the people responsible for drafting it will value your help and advice.
  • Create a library of approved content covering the most popular topics. For all that we talk about the importance of agility and responsiveness within social media, it is possible to pre-prepare the vast majority of the content that you will actually need. This will give you the ability to issue or link to material that complies with all regulations, without the need for complex approval processes.
  • Put together a set of operating protocols and an escalation procedure that will ensure that on those rare occasions when something goes wrong, your company is able to involve the right people at the right time.
  • Commit to a culture of continuous learning. Share best practice and bad practice on a regular basis across your organisation.
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No uncharted territory

A company that only sells products to other business doesn’t need to bother with Facebook. That was the consensus of opinion during a recent social media workshop I ran for the Institute of Directors. Facebook is a place primarily for consumer products and especially those that fit neatly into people’s social conversations. Holidays, entertainment, music, fashion, food, cars, celebrities: these are the things that people like to talk about on Facebook. Which is why a company manufacturing components, widgets or any other arcane technical product – unlikely to ever be part of normal people’s social conversations – can happily ignore it.

At this stage in the discussion, one of the workshop delegates raised his hand. He runs a typical business-to-business operation, producing high-specification components for a wide range of companies. You won’t have heard of them, but they are a critical supplier to many major corporations. He recounted a tale of how one of his delivery lorries was involved in a traffic accident that blocked a busy road on a Friday evening. The driver was uninjured and whilst sitting on the side of the road, waiting for the emergency services to arrive, decided to take a photo of the lorry and post it to his Facebook account. Within minutes the post had taken on a life of its own. It was picked up by frustrated drivers, stuck in the queue waiting for the accident to clear, who now had a focus for their anger. The driver’s employer started receiving a torrent of criticism across multiple social media platforms. Even more damagingly, news of the crash, via social media, reached many of the company’s customers, who were understandably concerned that their vital components may have been stuck on the stricken lorry.

Unfortunately, because business-to-business companies typically don’t monitor Facebook, the company was blissfully unaware of the impending crisis. That was until the phones started ringing with calls from anxious customers and photos of the company’s lorry started appearing all over the web.

The moral of this story is simple. Whatever business you operate, the requirement to protect your reputation demands that you monitor every social media channel; even those that you may feel are largely irrelevant to your business or your customers. Some years ago, a major high-street bank was on the receiving-end of a customer protest that started life on Facebook. Admittedly this was during the early days of the app, but even so the comment from one of the company’s directors that Facebook was ‘uncharted territory’ led to a wave of criticism and derision. There is no uncharted territory in social media.

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Standing on the shoulders of business giants

Business leaders operating within the new economy are often quick to dismiss the received wisdom and practices of an analogue age. Every generation likes to challenge the views, conventions and behaviour of the previous one, but we appear to be experiencing a particularly profound generational shift within the world of business. William W. George, a professor of management at Harvard Business School and director of both ExxonMobil and Goldman Sachs, is one of a number of commentators to have observed the emergence of a new, post-Boomer business mind-set. In an interview in Forbes magazine, he says, ‘We baby boomers were raised in an era coming out of two world wars and the Depression that our parents had experienced. From that we developed a command-and-control mentality of how to run an organization. The great corporations of the world in the 1950s and ’60s were command-and-control organizations. With this new century, that concept of command and control has totally gone out, because employees today are knowledge workers, they have options, and they don’t stay around. Most important, they’re looking for meaning, not just money.’

Tamara Erickson, author of What’s Next, Gen X, describes how ‘Today’s businesses are facing new, unpredictable challenges. What we’ve thought of as leadership skills – setting direction, having the answers, controlling performance, running a tight ship – are less relevant in an environment of constant change. Increasingly, leadership is about creating a context for innovation and inclusion in the face of ambiguity and the unexpected.’ Consultants Booz & Company talk about how ‘The many virtues of digital marketing – its speed, flexibility, interactivity, and accountability – require a whole new set of marketing strategies and skills to make it work.’

The business world has certainly changed. New patterns of consumer behaviour and changing expectations, new technology, combined with a bewilderingly complex social, cultural, economic, political and environmental landscape have posed a whole new set of business and leadership challenges. Centralized, hierarchical systems made sense in a world in which information and knowledge were relatively scarce commodities and could be tightly controlled, but the decentralization of knowledge, brought about by the inexorable rise of the internet, combined with a collapse of trust in traditional sources of authority and expertise, have legitimized the creation of flatter, decentralized operational models.

Everything has changed and yet nothing has changed. Despite a complex array of new challenges, the fundamental principles and practices of good business and good leadership have remained largely unchanged for decades. Businesses continue to succeed or fail depending on their ability to manage money and people; to think and operate strategically; to put in place the systems and procedures that support rather than constrain the ability of talented people to get things done; to recognise the importance of good governance without becoming a slave to it. Around 20% of business start-ups continue to fail within their first year and a third will not celebrate their third anniversary. This Darwinian survival of the fittest is no respecter of digital sophistication: even the smartest technology businesses – employing the brightest coders, programmers and technologists – will fail if they ignore the fundamentals of good business.

The traits of good business leadership have also remained constant. In their report ‘The Six Social Media Skills Every Leader Needs’, leading business academics Roland Deiser and Sylvain Newton describe how “The dynamics of social media amplify the need for qualities that have long been a staple of effective leadership, such as strategic creativity, authentic communication, and the ability to deal with a corporation’s social and political dynamics and to design an agile and responsive organisation.” The characteristics and behaviours that have traditionally defined good leadership continue to define good leadership, even in a digital age in which so much received wisdom has been challenged.

Sir Isaac Newton said; “If I have seen further, it is by standing on the shoulders of giants.” He accepted that his scientific breakthroughs owned much to those who had gone before him. And despite centuries of scientific progress, Newton’s discoveries and theories continue to influence today’s generation of scientists. The smart business leader also knows when to borrow from the past and to recognise that despite the almost limitless possibilities of a digital age, the core business principles and practices, developed and codified by earlier generations of business leaders and theorists, are just as relevant as they have ever been. They will invest in management training and development. They will learn from best practice. They are humble enough to stand on the shoulders of business giants.

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The value of being boring

Why older, later adopters of new technologies represent the future of social media

Why older, later adopters of new technologies represent the future of social media The author and social media theorist Clay Shirky describes how technological “tools don’t get socially interesting until they get technologically boring.” What he means is that even after the early adopters have inevitably moved on to something new, it is the adoption of technologies by mainstream audiences that ultimately determines whether or not they will have a positive social impact. Businesses such as Facebook, may have built their early appeal amongst younger early adopters, looking for something new and exciting, but they will make the bulk of their money from older, more loyal users.

Much of the talk in social media circles is how young people have started to abandon Facebook. A recent US report by iStrategyLabs has revealed that the number of teenagers using the site has dropped by 25% in the past three years. Conversely, the 45-54 age group is now the fastest growing demographic on Facebook and Google+ and the number of 55-65 year olds using Twitter has increased by 79% since 2012. Admittedly these growth figures reflect a low starting point, but they underline how even Facebook – which reaches this grand old age of 10 this month – has reached a stage of maturity.

When your parents, and even worse your grandparents, are on Facebook, it will inevitably lose some of its cachet. According to anthropologist Daniel Miller, as far as Britain’s 16 to 18 year olds are concerned, Facebook is “dead and buried” and quite frankly, they are “embarrassed even to be associated with it.” How the mighty have fallen. One minute you’re the hottest new technology on the planet, attracting a hyperbolic stock-price valuation, next minute, you’re as fashionable as your father’s record collection.

All technologies operate in a Darwinian ecosystem: they are always at risk of being replaced by something new. Remember when Sony dominated consumer electronics, IBM dominated PCs and Nokia enjoyed a 70% market share? History has shown that technology-based businesses with dominant market shares and apparently bullet-proof business models will eventually be replaced by younger, more innovative versions of themselves. As we speak, there are smart people working in sheds and cluttered labs in Silicon Valley or any other Silicon derivative – Silicon Fen, Silicon Roundabout, you name it – inventing better versions of Facebook and Twitter.

The latest hot new social media app is the typically idiosyncratically-named ‘Jelly’, created by Twitter co-founder Biz Stone. The Jelly app allows people to pose questions, accompanied by a picture, to their Twitter and Facebook contacts. Some of the early uses of the app, according to the Jelly website, have included providing photography advice, advising on a winning chess move, fashion tips, saving a life (of a spider) and learning how to hang art on a brick wall. Admittedly, these don’t sound like the most essential things in life, but never underestimate the social value of the apparently trivial. As with most new social technologies, many people’s initial response is to question the need (‘what’s the point?’) and criticise the name. But Biz Stone’s track record merits respect. It took most people a few years to see the point of his Twitter app beyond trivial questions such as ‘should I have bacon or sausages for breakfast?”

There will always be another Jelly around the corner, grabbing the attention of fickle youth and potentially cannibalising the business models of more established technologies. The good news for the social media businesses trying to appease demanding investors and justify inflated share prices is that older users are more likely to stick with them. They are less worried that Facebook has become a bit boring and unfashionable. They like it because it is useful, not because it is trendy. The technology is tried and tested and just about everyone in their social circle uses it. It may be boring, but it works.

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Social media and the value of experience

For over 20 years the US retailer Nordstrom issued new employees with a handbook and a company rulebook. The rulebook featured only one rule, “Use good judgement in all situations.” When The Guardian’s management team was looking for a set of social media guidelines for its journalists, it borrowed Nordstrom’s mantra to emphasise the most critical behaviour it wanted to encourage: the ability to exercise judgement.

Social media experts are fond of proclaiming the immutable laws or fundamental rules governing social media success, but the most important quality that determines success from failure is this ability to exercise judgement. Do I respond to that negative Tweet, Facebook update or blog post or will doing so only make the situation worse? Should my response be informal and humorous or will this appear unprofessional and patronising? Should I wait to see if other members of the community respond on my behalf? Are these the ramblings of a professional complainer or is this the spark that has the potential to ignite a social media frenzy? These are all subtle judgement calls. And judgement is primarily a product of experience.

This is why some of the most proficient social customer teams are comprised of people in their 40s, 50s and even 60s: experienced customer service professionals who have spent years listening to customers, dealing with their moans and unpredictable behavior and learning how to judge situations. They may not be the stereotypical ‘digital natives’- the younger generation that we assume are most likely to thrive in a world of Tweets, Posts and shares – and they may struggle to get their heads around some of the more Byzantine technological innovations, but their life experiences have tended to fortify their judgment skills.

I run a social media course for the Institute of Directors. As you might imagine, the delegates tend to be experienced professionals in their 40s and 50s. They have reached the top of their game professionally – running some of the UK’s most successful businesses – but they can feel out of their depth when it comes to social media. They find the technology confusing and the behaviour of social media users bewildering, especially the willingness of the younger generation to share every aspect of their lives with complete strangers. They have also witnessed at first hand the changes in customer behaviour and expectations that have been unleashed by a decade of social media innovation. Traditional business hierarchies have been challenged and operating processes shown to be too slow and unwieldy, creating a whole new set of challenges for which their training, MBAs and experience have left them largely ill-prepared.

The mood at the beginning of these courses is a mixture of anxiety and mild confusion. But before they despair entirely of their ability to cope I remind them how their well-honed skill in making sophisticated judgement calls – balancing detailed analysis with the intuition that only really comes with experience – gives them a huge advantage in today’s fast moving, socially connected economy. You can train anyone to use social media technologies – their simplicity and usability has been fundamental to their growth – but you can’t train judgement. It takes time. It takes experience. Age is not a barrier: in fact it gives you an incredible advantage. Your children may still treat you as a technological dinosaur but your experience gives you the ability to not only survive but thrive in this new world.

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Appreciate Me

It is becoming increasingly clear that social media is more of a cultural phenomenon than a technological one. It is shaping our behaviours, our expectations and increasingly our view of ourselves. This is well illustrated in a new piece of research from the Future Foundation, which reveals that social networkers are 48% more likely than non-users of social media to “strongly feel the need to be appreciated by others.”

You could argue this this betrays a woeful insecurity, but it is a logical consequence of social media’s cult of affirmation. The quality of everything we do, everything we create, everything we say in the ubiquitous online world is determined by the opinions of others: their shares, likes, retweets, links. As an attendee at a focus group once told me: “If it isn’t worth sharing it isn’t any good.” Not surprisingly, the same Future Foundation study indicates that 59% of us “like it when people acknowledge my posts/photos/comments on social media sites.”

This has interesting implications for internal communications. Employees have always wanted to feel appreciated – for their unique contribution to be recognised and rewarded – but the Future Foundation argues that social media has magnified this fundamental human need. Like me, retweet me, share me … but whatever you do, don’t under appreciate me.

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Digging yourself out of the trough

It isn’t much fun in the ‘trough of disillusionment’. The heady days since you launched your breakthrough online business are long gone. Investors are demanding a return on their money. New, fresh faced competitors have spotted the gap you created in the market and are stealing your hard won fans and followers with the bravado that characterised your formative years. The joys of community power and crowdsourcing are starting to look a little less attractive, now that you need to start generating a sustained growth in revenue.

The ‘trough of disillusionment’ was coined by research specialist Gartner to describe the post-boom phase encountered by all technology business. It is a stage in the ‘hype cycle’ model that Gartner has used since 1995 to track the introduction of new technologies. All innovations move through five distinct phases in the Gartner model: an initial ‘technology trigger’ is followed by ‘the peak of inflated expectations’, when the enthusiasm and hyperbole is at its most intense. This is followed by the ‘trough of disillusionment’, when the technology or service inevitably fails to meet the exaggerated expectations of its launch phase. A gradual recovery through the ‘slope of enlightenment’ ultimately leads to a situation in which the technology becomes stable or mature, its benefits become broadly accepted and it is adopted by mainstream consumers: a stage appropriately described by Gartner as a ‘plateau of productivity.’

The first wave of social media-empowered businesses has experienced its ‘peak of inflated expectations’ – when they could do little wrong and the breathless hyperbole was at its most intense – and are now trapped in the ‘trough’. Investors are starting to get restless and are questioning the ability of the people who founded the business to turn it into a viable commercial operation. The gimmicks and stunts that worked well during the early years are no longer sufficient to keep followers engaged and the media interested. Investing time and effort in social media and community management seem no longer sufficient to drive sales. New employees don’t appear to share the founding team’s passion for the business.

The good news is that, if the Gartner model is to be believed, business can make it through to ‘the slope of enlightenment’ and the ‘plateau of productivity’, so long as they recognise the need to change. This doesn’t mean behaving like a ‘big boring corporate’ or abandoning all of the things that made them special in the first place, but it does mean embracing grown-up concepts such as customer data analysis, propensity modelling, brand positioning and ROI. It means thinking strategically, rather than purely tactically and building a positive and resilient internal culture. It means recognising the need to support their investments in social media with more traditional forms of marketing communication, including advertising, and embracing the highest standards of customer service and employee training. Not every business is capable of making this transition. Many lack the experience, skills, motivation and the right external agency support to make the necessary organisational and cultural changes. They will continue to struggle in the depths of the ‘trough’ until bought-out by a smarter, more commercially astute competitor. Or they will simply fade away, to be replaced by the next business going through its ‘peak of inflated expectations.’

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Customer Service Goes Social

The application of social media that appears to be gathering the most momentum is its use as a customer service channel. The cost efficiencies of dealing with problems using social media – monitoring customer comments on Twitter and Facebook – rather than a call centre, are compelling, especially at a time when most organisations are looking to cut operational costs . According to Ben Kay, EE’s head of digital strategy: “not only are social agents four times more efficient than telephone agents, but they also result in better Net Promoter Score ratings” (the critical metric for most customer service teams). It would appear that customers would far rather voice their complaints on social media than spend hours on hold in call centre hell, waiting to speak to a real person. The social customer service specialist, Conversocial, claims that 50% of us are already using social media for this purpose. The cost efficiencies of social customer service are also highlighted by a statistic from British Gas: according to Laura Price, the company’s social media manager, “Each view of a YouTube customer support video equates to an £80 saving on call centre costs”. Producing a simple YouTube video, explaining the solution to common customer problems, can generate massive cost savings.

Another growth area is the concept of mutual support, in which existing customers help new customers solve problems. This has been standard practice within the technology sector for years, but it is beginning to be used in other business sectors. According to the consultants at McKinsey, “Using customer communities to solve customer problems costs 10% of traditional call centres.” Not only does this approach save a huge amount of money, but it also flatters the people providing the advice: they feel good about being a source of expertise.

The innovative giffgaff business – O2’s experimental telecoms brand – has taken this collaborative model to a particularly sophisticated level, offering financial incentives – in the form of discounts that can be redeemed against the cost of calls – if members of the giffgaff community help other people resolve problems with their mobile phones. It is so successful, that according to giffgaff’s commercial manager, Vincent Boon, “Customer communities handle 85% of our customer support.” The cost savings that result from not having to operate an expensive call centre operation allow the company to offer some of the lowest call prices in the market.

Social customer service is not without its challenges. It turns the act of complaining and the resolution of those complaints into a public act: anyone can follow the interaction between customer and company. Some organisations will recoil from this level of public scrutiny, but the smart ones recognise that being seen to handle problems quickly and professionally, especially when done in a friendly manner, can enhance their reputation. Conversely, mishandling a customer complaint or adopting an inappropriate, over-officious and unfriendly tone of voice can have serious repercussions. The fashion and homeware retailer, Next, recently found itself in the middle of a social media storm when one of its social media team spotted a customer complaint on Twitter. The language used by the complainer was a touch fruity, although the Tweeter was not directly addressing her complaint to Next – i.e. she didn’t address her diatribe to @Next but to her personal followers. The Tweeted response from the person at Next was particularly clumsy: “We kindly ask you to remove your original tweet as the language used may offend other readers.” Another Twitter user, tracking the conversation, wasn’t impressed: “Dear @nextoffical Perhaps address/sort the complaint first before ticking customer … off for language?” A veritable Twitter-storm followed, summed up by another Tweet from an interested observer: “Bad delivery service, bad twitter management … is there anything Next can do well?”

The other big challenge posed by the rise of social customer service is the need for speed. Customers complaining on social media expect their enquiries to be dealt with within minutes. Research conducted by Social Habit (a US-based social media analyst) indicated that 67% of customers expect a response to their social media complaint within 24 hours, 42% within an hour and an impatient 32% within 30 minutes. This is a major challenge, given the tortuously slow nature of most organisational decision-making, in which front-line staff are often forced to seek the approval from multiple layers of management before responding to a customer complaint. It will also force organisations to operate their customer service function beyond traditional working hours: consumers will expect a rapid response to their complaint, even during evenings and weekends.

Within five years, social media will be the primary customer service channel for most organisations. The cost efficiencies are compelling and customers seem to prefer this way of complaining, so long as the subject of their complaint is able to respond quickly and sensitively. Traditional call centres will be replaced by teams monitoring streams of social media chatter, increasingly 24/7. The smart businesses are already experimenting with different monitoring systems and training their customer service teams to operate the technology. The social media-empowered customer has arrived.

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The real spirit of sport

Sure Nike can do the celebrity razzle-dazzle – check out the latest McIlroy/Woods production number – but where the brand really comes into its own is the ability to capture the essence of grassroots sport. For Nike, the real spirit of sport is on the streets.

I have only recently come across this ad, in which the brand expresses the views of ice hockey supporters locked out of their favourite sport by a financial dispute between owners and players.  I can’t imagine that another sports brand would have even attempted this, let alone deliver something this simple and effective.

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The power of the Christmas message

There is one Christmas marketing campaign that continues to stand head and shoulders above all of the commercial rubbish: Lowe SSP3′s work for the Colombian government. For the past few years the campaign has used the power of Christmas – and the insight that even the most hard bitten guerrilla fighter are likely to be thinking about home and family at this time – to persuade FARC fighters in Colombia to demobilise.

This year’s campaign – Operation Bethlehem – involves the creation of beacons of light to mark safe havens for the wannabe deserters:

The campaign builds on the government’s previous initiative in which Christmas lights were left in parts of the Colombian jungle frequented by the guerrilla fighters. This simple use of Christmas imagery was enough to convince more the 300 fighters to demobilise.

A powerful insight. Brilliant execution. True ROI. Happy Christmas.

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