Recently in Business relationships Category

A little while ago I gave a keynote at the Gartner Symposium. Gartner looks to its analysts to share their deep research at their events. It also invites a handful of external speakers to bring a lighter and more entertaining – though still pragmatic – approach and style.

I suggested the topic of Driving Business Results Through Personal Network, which can readily be made fun and interesting, but is also extremely practical for senior technology executives. It was a broad-ranging keynote, ranging across topics including why we need to understand the Bacon number, why boundary spanners are so critical for organizations, the long tail of sexual activity, how to enhance serendipity, and steps to being an energizing leader.

Inset into the presentation were two sets of recommendations, on building personal online networks and on enhancing organizational networks. At the risk of taking them out of the supporting context, here they are:

Earlier this week I gave a keynote speech to Cisco Insight 2010, the conference for its top-tier partners, with the title Innovation Beyond Boundaries. I’ve always thought it anomalous that I had never done any work for Cisco, given its messages such as the Human Network are so aligned with mine, so I’m glad that connection has been made.

While I spent much of my presentation looking at some of the more interesting implications of a hyperconnected world, suitable for an audience well used to these ideas, I also explored the critical role of knowledge-based relationships in effectively innovating beyond boundaries.

Gideon Gartner has just posted a great article titled Advisory Industry, a future redesign: the “Payment” Model, in which he draws on investment banking research pricing as a model for IT analysts and their clients. Gideon writes:

So in the Wall Street model The buy-side “analysts” will work closely with their most helpful and favorite sell side analysts, and buy-side “portfolio managers” will work with sell-side salespeople who funnel ideas and information from their research departments to the buy-side clients. During the year, when investment issues arise (many dozens of times each day), the BofA money managers and staff analysts will call several(!) appropriate sell-side analysts, and may even effectively triangulate among them until a level of understanding an issue, or a decision to buy or sell stocks or other investing instruments with traders, can be reached.

Not until the end of the year do the buy side money managers and analysts “vote” for those individual sell-side analysts and salespeople who were most helpful and influential during the past twelve months; and when this process is completed and the numbers added up, the decision is made as to the percentage of trading volume (e.g. money) to be generated for each of the brokerage firms for the next year! Thus the compensation will vary somewhat each year based upon trading volumes and perceived relative performance. Most important perhaps, new sell-side firms and analysts are added to the list since innovative and effective research and interactions will be recognized! (the sell-side firm will have sent all its research, and its analysts will accept phone calls hoping or expecting that content and interactions will be recognized and therefore compensated for their value).

He wraps up:

The summer issue of California Management Review a couple of years ago contains an article co-authored by myself together with Rob Cross of the University of Virginia, Kate Ehrlich of IBM, and John Helferich of Northeastern University, titled Managing Collaboration: Improving Team Effectiveness through a Network Perspective. The article can be purchased from the California Management Review website (the journal is published by the Haas School of Business at University of California - Berkeley).

I’ve provided the synopsis of the paper and a more detailed description below. Writing the paper was an interesting process, bringing together specific domain expertise and insights from projects that each of the four of us have run over the last few years. The result is a framework and detailed prescriptions on how a network perspective can take the lessons on teams learned over the last decades to the next level, applied in a number of specific areas. Here is the article title and abstract.

Managing Collaboration: Improving Team Effectiveness through a Network Perspective Rob Cross, Kate Ehrlich, Ross Dawson, and John Helferich 50/4 (Summer 2008): 74-98

Whether selling products or services, making strategic decisions, delivering solutions, or driving innovation, most work of any substance today is accomplished by teams. However, since the early 1990s, teams have evolved from more stable groups-where members were co-located, dedicated to a common mission, and directed by a single leader-to more matrixed entities with colleagues located around the world, juggling time between several projects, and accountable to multiple leaders. As teams have become more fluid, substantial challenges have been posed to traditional advice on team formation, leadership, roles, and process. This article describes how leaders at all levels within an organization can obtain innovation and performance benefits by shifting focus from forming teams to developing networks at key points of execution.

Organizational Network Analysis (ONA) (social network analysis applied to organizations) provides deep and specific insights into how to enhance the performance of organizations.

In the article we ask six questions to determine team effectiveness:

I recently spent three days in Kuala Lumpur, running a two-day workshop for a client and meeting a number of very interesting people. I hadn’t been to Malaysia for six years, so it was great to get back. I thought it was worth sharing a few top-of-mind impressions and thoughts from my brief time there.

The first impression is how rapidly KL has developed in the last years. The glamorous new airport, wide highways everywhere, and the extraordinary Putrajaya area, which houses the federal government, are testament to the massive investment in infrastructure over the last years.

However traffic in KL remains abominable at rush hour. People sometimes choose to wait a couple of hours before driving home, and expect to get home at the same time anyway.

Pic: CEO and PA of Malaysia Industry-Government Group for High Technology, Ross Dawson, Nik Hasyudeen, with Putrajaya landmarks in the background

I was very fortunate to have Nik Hasyudeen, the former president of the Malaysian Institute of Accountants and recently announced executive chairman of the Audit Oversight Board, as my guide for part of the trip. Nik is a connector extraordinaire, and adds to his broad experience in business strategy a great appetite for innovation.

When I wrote earlier Will our reputation systems be distributed? Probably not for a long time, a number of people noted that reputation systems will be gamed.

Absolutely. The more valuable a system is, the more people will try to game it. If reputation systems influence who people buy from, who they date, who they read, then massive efforts will be made to game the systems.

However the value of a reliable reputation system is such that it is worth doing anything possible to counter-act the gamers, and it is possible. The energy and money devoted to trying to game Google is extraordinary, yet these efforts have limited success.

In the last chapter of my book Living Networks I made a number of predictions for the future of the living networks, including that Information filtering will be an evolutionary battlefield.

While reputation is a slightly different space from information filtering, both are absolutely evolutionary battlefields where each party's tactics will evolve in response to the others', all the while creating valuable outcomes for users. Here is the excerpt from Living Networks.

Information filtering will be an evolutionary battlefield

Bats’ use of echolocation to find their prey is one of the marvels of nature. Bats produce high-frequency sounds, and by picking up and distinguishing the immensely quieter echoes off insects in the air, can instantaneously calculate the location of their next meal. The evolution of this extraordinary capability has led to moths evolving in response. The soft outside of their wings and bodies absorbs the bats’ ultrasound. Moths engage in evasive flying stunts when they hear bats squeaking. Some moths have even evolved the ability to produce ultrasound as well, possibly to startle and throw off bats. In turn, bats have developed complex flying behaviors to confuse moths, and occasionally turn off their echolocation to stop the moths jamming their signals.

Michael Arrington of Techcrunch writes that this week a start-up will launch that is “effectively Yelp for people,” and promises detailed coverage in the next few days.

This is of great interest, not least because our own start-up Repyoot will be launching in public beta in the next couple of weeks, starting as an influence ratings engine within a limited domain, and intending to evolve into a broad-based reputation engine for people.

The thrust of Arrington’s article is that if we are all open to anonymous feedback…

It’s time for a centralized, well organized place for anonymous mass defamation on the Internet. Scary? Yes. But it’s coming nonetheless.

…we will have to change how we judge reputation.

We’re going to be forced to adjust as a society. I firmly believe that we will simply become much more accepting of indiscretions over time. Employers just won’t care that ridiculous drunk college pictures pop up about you when they do a HR background search on you.

In 2007 I expressed similar sentiments in Watch out! The intimate details of your life will be visible forever more…, saying

On my earlier post on Social CRM Larry Irons asked a great question about how organizations can engage effectively with their customers and partners when much of their customer support is outsourced.

While there are no easy answers, there are two organizational capabilities that are increasingly critical for success. The first is developing clear strategies for what should be done inside the organization, and what should be done outside. These are difficult decisions to make, and even harder to implement well.

The second capability is aligning business processes with your external partners. In the following excerpt from Chapter 3 of Living Networks (available for download here), I describe the approaches call center giant Convergys takes to try to align culture and process with its clients.

At 6:53pm on November 9, 1989, an official of the East German government stated in a press conference that a new policy had been instituted to allow its citizens to travel to the West. Within minutes mobs formed outside the Berlin Wall. Before long the first bold few scrambled over the Wall unscathed, unlike the 61 people shot dead trying to escape during its grim 28-year history, while others grabbed hammers and anything else they could find to begin destruction of the hated barrier to freedom. An artificial, rigid, and guarded boundary dividing a country and millions of families had succumbed to the fluidity of the times. The same sense of rigidity and boundaries were also evident in the Eastern Germany economy. The East Berlin post office, before the fall, incorporated not just a restaurant and kindergarten for its employees, but also an auto repair shop and fishery. The difficulties in getting anything done meant that managers put boundaries around their organizations and tried to do everything possible inside them, resulting in immense duplication within the economy.

I recently had a chat with R "Ray" Wang of Altimeter Group about what we're up to and our respective business models. Among other things, Ray said that Altimeter wants to work in new spaces that others aren't covering. ERP is boring. But Social CRM, for example, is on the leading edge of where value is being created, but traditional analyst firms are not working.

As a recent entrant to the market (the firm was founded in July 2008 by Charlene Li and now has 7 partners), Altimeter has the flexibility to use different approaches to the existing large firms. In this case, instead of charging in the thousands of dollars for a cutting-edge analyst report, it has launched Social CRM: The New Rules of Relationship Management for free, enabling anyone to embed it on their own site, as I have below.

I was recently interviewed for a report created by the executive forum Vistage, titled 12 Trends That Will Define Business in the "New Normal".

One of the key trends covered in the report in which they drew on my thoughts is reputation management, excerpted below.

Trend 7: Reputation Management

Earlier this week I did the opening keynote at the AMP Hillross annual convention, with the title of Embracing the Future. Hillross, one of the most upmarket of the wealth management networks, is seeking to lead the rest of the market by shifting to a pure fee-for-advice model, and rapidly developing a true professional culture. My keynote was designed to bring home the necessity of individual and firm leadership at this key juncture in industry structure.

One of the central themes of my talk was the increasing importance of reputation for professionals. Clearly reputation has always been critical for any professional, and there are some parts of professional services markets where reputation is already highly visible, such as prominent M&A lawyers, who are identified by numerous client surveys. While clients of other professional services (for example audit or management consulting) tend to be more focused on engaging firms rather than individuals, there is a fundamental shift from corporate to individual reputation under way.

I am running a two-day executive program on Relationship Management for Financial Services in Kuala Lumpur on 28-29 January, organized by IBN International. The workshop will be attended by executives from a variety of local and global financial institutions in South-East Asia.

Over the last few years I have spent less time on these issues as I've broadened my scope to look at the future of business, however much of my earlier career was in financial services, working at Merrill Lynch and Thomson Financial, and my focus was for a number of years on high-value client relationships, best expressed in my book Developing Knowledge-Based Client Relationships. As such , in the late 1990s and the first years of the following decade I did considerable work with major financial institutions on enhancing their client relationship capabilities.

Increasingly, the key client programs applied in corporate and insitutional banking and the CRM initiatives implemented in retail and private banking are coming together. The shift to online and data-driven relationships has facilitated that shift.

To help explain some of the key drivers of CRM programs from a "knowledge-based" perspective, I have created a Knowledge-Based CRM Framework which I will use in the executive program in KL. This will complement my existing content and frameworks on high-value relationships, which are summarized in Chapter 6 of Developing Knowledge-Based Client Relationships. Hopefully the framework below is largely self-explanatory, however I will try to find the time at a later stage to explain the framework in more detail.

Click on the image to download Knowledge-based CRM Framework

Last week I did the keynote presentation in a webinar run by ITNews and Oracle on How to spark sales using social media apps.

My presentation was titled The Future of Sales is Social. The slides are below, and you can listen to the on demand webinar here (registration required).

Taken in the context of many people being unsure about the value of social media for business, it is worth looking at the many ways that social media are directly applicable to the B2B sales process. Just some of those are in this slide from my presentation.

I absolutely believe that the future of sales is social, and that social media in their various forms will quickly become central to the way salespeople and sales teams work.

Given my background in high-value client relationships as well as social media I expect to be spending a lot of time over the next while exploring precisely how sales teams can best use social media in successfully engaging with their clients and prospects. I'll keep you posted.

In March I gave the opening keynote at the Direct Selling Association's conference, talking about the breadth of opportunities in the economy and the role online social networks and communication might play in the future of the industry. From what I learned by preparing for and giving the keynote, I wrote a brief piece Six Key Insights into the future of the Direct Selling Industry.

Last week ABC TV did a short segment looking at the success of the direct selling industry during the downturn, and where it is likely to go from here, shown below. An excerpt from an interview with me was included in the program. During the interview I discussed the perception challenges of the industry, the role of generational change, and the use of social technologies in direct selling.

While it wasn't included in the final TV segment, in the interview I discussed the emergence of 'social commerce' as the likely center of much economic activity, and the potential for elements of the direct selling industry as we know it to morph into creating real in that space. The opportunity is there, however we have yet to see whether the industry will take it.

I was interviewed this morning on Sky Business Tech Report. Some of the things we discussed in the interview are:

* How social media such as Facebook, Twitter, YouTube and many others change how companies engage with customers, become more efficient, and being competitive.