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“Long-Term Success is Made Up of a Series of Short-term Successes” Q&A w IBM’s Yuchun Lee

12/5/11

While doing homework for another article, I ran across a recent study by IBM called “From Stretched to Strengthened” that offers insights into the challenges facing CMO’s around the world. The study is well worth reading, especially if you are a CMO, and stresses a number of important themes including the needs to:

Deliver value to empowered customers
Foster lasting connections
Capture value, measure results

After reading the study, I reached out to IBM with some follow up questions and got in touch with Yuchan Lee, General Manager of IBM’s Enterprise Marketing Management business. I think you will agree that Mr. Lee has smart things to say about measuring ROI, using social media for research, the importance of having a clear “corporate character” and finally, the need to think long-term when it comes to customer relationship building.

DN: Is ROI the right metric for CMOs or just one of many important metrics?
It is the most important, as reflected by our CMO Study. Other than a metric based on reflecting customer up-take (e.g., revenue, satisfaction level), which most companies already measure, marketing ROI is essentially the highest level scorecard for an organization’s ability to efficiently and effectively allocate its resource to hit marketing goals.

DN: Why do you think so many CMOs struggle to demonstrate ROI?
The heart of the challenge is the nature to which marketing activities influence buying behavior, and how behavior manifest itself over time. Measuring ROI in marketing involves sifting through tons of noise in the data to connect all the pieces of evidence that influenced the purchase behavior. This is an inexact, statistically-based science that, until recently, was too hard to tackle.

DN: Why do you think marketers have been so slow to embrace research via social channels? (i.e. only 14% mine blogs)
Before a company embraces a social channel, it must first believe it has to. This requires a shift in strategy based on the realization that consumers are more in control and the company is losing its grip on branding. In my experience, this shift is scary to many companies and many are slow to realize it and to turn this realization into action. Furthermore, even if one is ready to take action, the newness of engaging social networks makes it challenging to know where to begin.

DN: Why should marketers expand their research horizons beyond traditional channels to things like blogs?
We believe traditional marketers need to expand not just research but all areas of market and customer engagement as well as demand generation to the social channels. That’s where the center of influence for purchase decisions is and will continue to be. That’s where detailed, real-time, and unfiltered market feedback data can be best gathered and analyzed, and ultimately where the brand of a company will truly be reflected in the future (if not already!).

DN: What’s in it for the more proactive marketers who are mining new digital data sources?
Additional data, if incorporated properly, allows a company to know what is relevant to its customers — potentially down to the individual customer level. We believe the ability of a company to deliver relevant communication in sales/marketing/services is the basic ingredient to a successful customer relationship and a prerequisite to staying in business.

DN: A lot of marketers pay lip-service to their corporate values. Will developing a clear ‘corporate character’ really deliver competitive advantage?
Having clarity on a company’s corporate character is a necessary but not sufficient element of success. It must be followed by execution by the organization, every day, delivering a consistent customer experience that is aligned with the corporate character. The true reflection of the corporate character will come out quickly, most likely in social media.

DN: Your report emphasizes the need to “foster lasting connections.” Is this goal in conflict with the typically pressing need to deliver short-term revenue?
No. In our experience, being relevant and adding value to the customer in every communication and interaction is the common denominator for forging a lasting connection with the customer AND the ability to drive successful short-term revenue. After all, long-term success is made up of series of short term successes!

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Social Media

Q&A with IBM’s Ethan McCarty, Part 3

09/13/11

I realize this was a long interview and you may be ready for me to move on BUT this last part contains some really smart advice for other companies looking to develop their own Social Business programs. Also, this interview produced my latest post on FastCompany.com entitled Move Over Social Media; Here Comes Social Business.

Drew: What advice would you give to a B2B company interested in pursing a similar program? What three things would you say to them?

Ethan: Probably, don’t use the word, “expert.” There are some cultures that are completely allergic to using that word in reference to themselves.

Drew: Makes sense. How did you get this thing up and running?

Ethan: One of the things we’ve done that’s been really helpful is we made sure that we had people from all around the world working on the project. I’m a member of a team we call the Expertise and Eminence Round Table. It started with six of us just meeting on Friday morning and talking about the work we were doing. The group represents some people from our hardware group, some from software and others from Services and the CIO office. They heard about the work that my team and I were doing and they wanted to be apart of the project. We realized we were all managing lists of experts, so we got our lists together. We started with a base population in the Expertise Locator System that’s very diverse so we can learn a lot from that. From there we hit the ground running.

Drew: What else would you advise?

Ethan: We are trying to apply what’s called “agile development” to this system so we put out a new version or update it just about every two weeks. The idea is we try to learn quickly, and if we need to fail quickly, we’re failing quickly. When stuff doesn’t work, two weeks later we’re changing it. With Digital systems like the Expertise Locator, you can’t spend 10 months planning it and then launch it. From the point when we wanted to get this on ibm.com to the point we had it on ibm.com was four weeks. It wasn’t a service at that point; it was this manually coded thing. In the next version we had the database set up, and in the next version we had the API described.

It was very iterative; my advice – you really want to get something up that you can start to have people experience quickly. It’s complicated because people expect [that because] it’s from IBM, surely it’s done when it’s out the door. It would be quite different if this were a product that we’re putting into market, but this is a cultural program, a communications and marketing program. In that way we have a bit more flexibility to iterate and learn as we go— that would be a very key lesson for anybody who’s going to try to get into this. You’re talking about working with lots of people, and you can’t predict how people behave. It would be tremendous hubris to say that you could predict how people are going to behave.

Drew: Is there a component of this where the accessibility of these experts is giving away the very expertise that you sell?

Ethan: The interaction that experts have or that people have with IBMers right now through this is pretty light. It’s not like a free six-month consulting engagement with a team of our principle consultants. I think it’s more of a means to get to know us, and we can help you build your business through that.

Drew: What’s in it for the expert? I mean they’ve got their own job.

Ethan: That’s a great question. First of all, there are some IBMers for whom interaction with the public, clients in particular, or prospective employees or whomever, is a facet of their job. If you’re going to be one of our most eminent technologists, you’d be called a distinguished engineer or maybe you’d be a member of our academy of technology or a master inventor. These people already have it in their job description to interact with clients and prospects, and they’re supposed to be mentoring people. There are all kinds of things that they’re already supposed to be doing and quite directly participating as someone in our Expertise Locator System or participating in social business at IBM would allow them to do that more effectively. Soon, they will actually be able to track it. You could say, “Look, I showed up on web pages 350,000 times.”

Secondly, these days employees are sort of global capitalists in a way. You’re a citizen of a digitally interconnected globe at this point, and your reputation is everything. If you cannot manage your reputation— your digital professional reputation— you’re in real trouble. One of the things that we’re building out in social business at IBM is a personal dashboard that starts to show things like how many times you were surfaced and how many times people connect with you. We’re helping to establish each IBMers digital reputation with these tool, and a digital reputation is becoming vital in today’s business world.

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Social Media

Q&A with Ethan McCarty, IBM’s Senior Manager of Digital and Social Strategy

09/11/11

Here is the first part of my interview with Ethan McCarty IBM’s Senior Manager of Digital and Social Strategy. Its hard not to be impressed with IBM’s approach to social, elevating the discussion from a “nice to have” media component to a “must have” means of doing business.

Drew: Most businesses are trying to get their mind’s wrapped around social media, and you folks are now talking about social business. What’s the difference between those two terms?

Ethan: I think there’s a variety of interpretations for these terms : social media and social business. Social media is typically about mediated experiences with content, and sometimes it’s about dis-inter-mediating the experience. Social media is about media and people, which is one dimension of the overall world of business. With social business you start to look at the way people are interacting in digital experiences and how you can apply the insights derived from all the data and apply them to business processes that may not necessarily be about dissemination of information.

Drew: Tell me about the various dimensions of Social Business, and how companies can deploy it.

Ethan: Social business is about looking at business processes differently; from how you are listening to your customers, to how you are engaging with a wide-variety of constituencies. It could be your employees, or it could be potential investors; it could be current investors; it could be prospects for your business.

One of the main dimensions of social business is about managing relationships through these new business processes. Social media is more about disseminating information in new ways, using people as the medium rather than broadcast systems as the medium. In social business you might be managing community relationships or relationships with individuals; you might be identifying and activating experts or rewarding and recognizing certain kinds of behaviors. And then of course another really important dimension of social business is collaboration. I think that is beyond the thought of social media because it’s not always about creating an information document. It could be things like collaborative editing, but it could also be file sharing or expertise location.

There are things in the realm of social business that are more about working to improve the efficiency of teams as opposed to just getting a message out there, which I think a lot of the initial social media really were about. Social business is sort of a super-set of social media. Social media is one component of social business.

Drew: Is social business a mind set or a skill set? Or is it a product?

Ethan: All of the above. There are certainly products that enhance an organization’s ability to become a social business. For example, IBM offers a platform of products that enable social business – wikis, blogs, communities, instant messaging, etc. Beyond these products, and really in order to implement and adopt them successfully, social business has to be move than just a mindset, it has to be an organization’s cultural priority. Leaders have to be committed to making significant business process changes in order to actually make work getting done easier and more efficient. We have at IBM a social business management council that includes some very high-ranking IBM executives, IBMers in the CIO office, in HR, etc., [and] we perform risk analyses and opportunities analyses to help us establish new modes of work. One of the efforts that I’m leading with an IBM HR leader is to look at how we’re going to formalize these new modes of work into our skills at IBM. Social business at IBM is a priority, we’re constantly fine tuning our processes to better serve our customers, partners and ourselves.

Social business is a pretty broad thing, and it includes skills that aren’t necessarily obvious to every employee. Also there’s a broad area of policy development that we, as an industry, need to do. If you think about how many relationships between an enterprise’s employee base and those with whom they are supposed to be working have been mediated and controlled by processes that are not necessarily enabled by the most contemporary social business approaches, you’ll see the world has a lot of work to do in this area. That is, to me, very promising.

Drew: How is Social Business being integrated into IBM’s business model?

Ethan: There are a couple major concepts that we’re currently working on. One is acknowledging that social, digital activity is moving from the periphery to the center of business. And to me, that’s a big part of what social business is. It’s the transition of all the interesting and fun social activity that’s taken place in the commercial domain is becoming increasingly applicable to enterprises, and how enterprises get work done; how enterprises manage relationships with their clients; how employees work together. That’s a significant change in business. Social, digital activity and experiences are no longer a frivolous, nebbishy thing for teenagers and college students. Enterprises are realizing the power of these tools to transform there business.

IBM’s a great example of this social business transformation; a lot of our work is done using digital, collaborative means. Consider this, I’ve got eight people on my core team, and, not one of us lives in the same city, and many of us are in different time zones. I work with IBMers in Australia and California and Michigan and all around the Tri-State area, and we’re doing all kinds of great work together, every day. It’s asynchronous; it’s collaborative. The way we work together is digital and a lot of it this work and collaboration is not happening over email. Email is a very limited tool, and in some ways completely antisocial. It does a lot of things to silo the work efforts. Instead of email, we’re using social tools – file sharing, video conferencing, wikis, communities, instant messaging, etc – to get our jobs done.

FYI, you can follow Ethan on Twitter @ethanmcc.

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Could IBM Be Bigger in Social Media than Facebook?

09/22/10

Fathoming a new product from IBM via a launch event is like trying to understand the ocean by watching a wave. Nonetheless that was my task, swimming through the presentations and ultimately landing an interview with Jeffrey Schick, IBM’s VP of Social Software. Drenched in the vision Schick shared for the IBM Customer Experience Suite, it occurred to me that IBM could end up being more important to the business use and monetization of social media than Facebook.

While the comparison between IBM’s new social software solutions and Facebook could be considered all wet from the start, the mere fact that I’m discussing both in the same sentence should make you take notice. IBM is not sitting idly on the dock as web and mobile usage transform business interactions. Rather they intend to ride the wave of Web 3.0, creating and implementing the software that according to Schick, “can better connect people with people and people with information.”

Social software is not a new idea at IBM

Long before Mark Zuckerberg aggregated his Harvard friends online, IBM’ers could find their colleagues in a similar manner. According to Schick, “at IBM 15 years ago, we had a way to look up people to create a globally connected enterprise.” “Today we have approximately 500,000 people within IBM and we do about 6 million look ups a day on pages that look strikingly similar to other social network profile pages with features like blogging and photo posting,” added Schick.

IBM’s internal network served as both an incubator and torture test for its latest offering. “The idea of getting the right person over the right time at the right opportunity and yield the right result was really important,” explained Schick. So while Schick and his team watched the rise of Facebook with interest, they took greater inspiration from the technology they were already using to deliver “an exceptional work experience for employees” which also translated into better client service.

Social software for business that is as easy as Facebook

Recognizing how simple it is to publish on the web today, IBM aims to make their social software tools as easy to use as social networks like Facebook. Acknowledging the early adoption of social technology by kids, Schick noted, “now I say this stuff is so easy us old people can use it!” This simplicity of use has fundamental implications for business, “making a tremendous difference in the way that people can collaborate and share information,” added Schick.

The emphasis on ease of use also means that IBM may be able to address some of the needs of small and medium size businesses with its new offering. By taking the capabilities they’ve created for big companies and putting them on the cloud, smaller businesses may indeed be able to leverage these services and according to Schick, “easily create a community that would allow them to invite their clients and engage them.”

Reaching for more than 500 million “likes”

While pundits debate the value of a Facebook fan, IBM has no doubt about the value of its new social software portfolio. In addition to using the software to “build better client and employee relations,” Schick expects that “people can get genuine business value [from it].” While dialog is important, all of this, according to Schick, “is done to drive revenue, to create better customer satisfaction and gain some competitive advantage.”

And though IBM calls its Customer Experience Suite “new,” they are already touting case histories that prove its merit. Schick explained how the relatively small Practicing Law Institute is “leveraging the web to create communities to better engage their attorneys that take their classes.” He also explained how a large construction firm, “created a web experience that allowed them to hear the types of homes they should be building.”

Being a social organization is more than being on a social network

Though Facebook is the reigning social network, it is simply a ripple in the ocean of IBM’s vision for the new social organization. Businesses of all sizes need to think social across their intranets, extranets, the internet itself and the emerging mobile marketplace. Whether it’s about sharing information internally, with clients in a walled garden, or with prospects on their cellphones, “social is an important dimension and critical to what we’re doing,” explained Schick.

Recognizing that the social tsunami could be a bit overwhelming to its customers, IBM also tried to use itself as an example, employing a range of external and internal social tools at the launch event and online. Attendees were encouraged to tweet using the hash tag #IBMexperience while the event was streamed live online. All of the launch-related content was shown in real-time using IBM’s social media aggregator providing proof positive that IBM was indeed practicing what it preached.

Final Note: Regardless of your business size, IBM’s big move into social software should be a clear indication that every business needs a broad-reaching social strategy not just a Facebook fan page! This strategy needs to address the needs of your customers and your employees, ensuring optimal collaboration between them anytime and anywhere. (This article first appeared on FastCompany.com)

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Marketing as Service

Don’t Sell Chocolate Broccoli: Serious Games Turn Play into Revenue for IBM

05/9/10

The argument raged until 2am when the guy stormed out. The guy, an MBA student at UNC insisted that “games are for kids and IBM isn’t going to buy it,” while the demure Phaedra Boinodiris, also a first year MBA candidate, stuck to her guns, knowing the case challenge posted by IBM “screamed for a business SIM.” Just a few hours later, Sandy Carter of IBM was asking Phaedra to build a prototype of her idea, an idea that became Innov8, a highly successful “serious game” that explains business process management to non-technical people and is my new favorite example of Marketing as Service.

In retrospect, it wasn’t really a fair fight. Phaedra was not your typical MBA student with ten years of entrepreneurial experience under her belt, having founded two companies including WomenGamers.com, now a popular portal for female gamers. Thus, her expertise on the gaming world was substantial and while Sandy Carter’s request would have tripped up most students, Phaedra was up to the challenge. In my interview with Phaedra at Impact 2010, IBM Software’s annual conference, her experience with IBM over the last two years provides a gripping playbook for innovators, especially “intrapreneurs” seeking to build “start ups” within large companies.

1. Pursue your Passions

Phaedra got into the gaming business back in 1999 because she was a gamer, her sister was a gamer but not one of the industry publications addressed the category from a female perspective. Knowing that 35% of women play video and computer games, she leapt into the void by setting up WomenGamers.com. She became an activist for the cause, starting the first scholarship program for women to get degrees in game design and development in the US, helping to share her passion with others. After two years full-time with IBM, her passion for the power of games remains strong, adding that, “through self-discovery and experience consumers can better understand what you’re selling.”

2. Find a Champion

When Sandy Carter first approached her at the Case Competition, Phaedra wasn’t sure what to make of her prototype request. Now she knows that Sandy is the kind of internal champion that every “intrapreneur” dreams about finding. “What amazed me is that Sandy attends the Case Competition’s herself instead of delegating this to a junior person,” marveled Phaedra. “That takes real cajones and reflects Sandy’s commitment to find innovative ideas,” added Phaedra. After the Case Competition, Sandy offered Phaedra an internship that lasted the rest of her time at business school and led the way to the now successful Serious Gaming group at IBM.

3. Partner with Pros

Given only three months to build a prototype, Phaedra and her team at IBM knew they needed great partners and aligned with Centerline.” “There are so many bad games out there,” noted Phaedra, “you really have to find a developer with a light touch,” to create an engaging experience. In fact, Phaedra notes that of the three key ingredients of entrepreneurial success; people, process and ideas, people is by far the most important. “A great idea without the right people will fail, whereas even an okay idea could succeed with great people,” she added. Phaedra’s confidence in Centerline was thoroughly justified as they turned the initial idea first into a prototype and later into a simulation game played now played at over 1000 colleges and business schools around the world.

4. Start with the Low Hanging Fruit

Once Innov8 was produced, it was quickly adopted and lauded by teachers, students and the press. USC’s Marshall School of Business soon required every student to play Innov8. Phaedra noted with understandable pride, “One class at a Turkish University uses Innov8 for its final exam!” Teachers thanked Phaedra because “BPM is not an easy thing to teach.” “We took something that was highly technical and made it more intuitive,” added Phaedra. “Students were the low hanging fruit but they also represented future business opportunity,” which would eventually help to get Business Process Management software adopted by more and more companies.

5. Build from Success

Once Innov8 had gained traction with graduate schools, Phaedra got approval to develop a flash-based online version of the game that could reach and engage a wider audience. Adding social networking elements like a leader board, the online version soon became a lead machine. Currently thossands of potential and current customers play Innov8 2.0 Online per month generating thousands of leads, many of which have been converted into sales. In fact, Innov8 online generates many times more leads for IBM’s BPM software than any other source, creating an ROI that even “VCs would love.” “We took baby steps, building our case internally, showing ROI of each subsequent project, just like we would have to external investors,” offered Ms. Boinodiris.

6. Don’t Sell Chocolate Broccoli

One of the happy by-products of the online Innov8 game was that it introduced the idea of serious gaming to a broader audience. Soon IBM’s business partners were asking if they could customize Innov8 for their customers. And eventually a new group within IBM Global Business Services was set up to do just that! This speaks to the power of selling by educating as well as the quality of the game itself. As Phaedra opined, “people can smell chocolate broccoli from a mile away,” so even educational games have to be extremely well crafted. This insight is a truth for all such marketing as service programs, if the experience isn’t top notch, the customer or prospect simply won’t engage. On the other hand, if the experience is rich and educational, there is simply no better way to sell.

7. Revel in the Naysayers

Since her late night argument with a fellow MBA, Phaedra has reveled in the challenge of selling games as a serious business tool and formidable marketing weapon. Some have resisted the idea, calling games “fluff” and “kids stuff.” When I asked her about sales force adoption, she noted that there has been some resistance there too. “Sales has their lucky underwear and don’t like to change it,” she winked. Fortunately, her continued emphasis on proving ROI internally has been rewarded with the green lighting of a next gen simulation game called CityOne that will launch Fall 2010. CityOne is already being lauded by the press, with Gizmodo saying “if SimCity introduced legions of gamers to the world of urban planning, then IBM’s upcoming CityOne game looks to take that education to the next level.”

Final note: I consider myself lucky to have met Phaedra. As proud as she is of her accomplishments thus far, she remains humble. She states with realistic clarity that “games won’t displace anything; they will supplement other sales tool, driving people down the purchase funnel.” My guess—the potential for games as educational sales tools for highly technical products is truly unlimited and Phaedra will remain on the forefront for quite some time.

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