Though their participation and assistance was appreciated, there was a clear need for an official presence in the community. However, we knew that this would not be a simple undertaking. We acknowledged the threat of backlash and carefully crafted our entry strategy to minimize turmoil. As we put our plan into action, five highly effective practices shone through:

1. Start the day on a positive—and influential—note

Without an official morning greeting each day, the tone and attitude of the community can be completely unpredictable. In the case of our project, it was almost assured that the tone would be negative without subtle intervention. Opening each day with a lighthearted greeting and a fun call to action enabled us to announce our presence, engage advocates, align conversation, and put community members in a positive mindset—all in one fell swoop.

2. Set rules and manage expectations

Clear and consistent communication of community guidelines is an absolute must. If a post is removed because it is in violation of guidelines, follow up and explain why the action was taken. Also, if the community does not have 24-hour management, it is important to communicate the parameters for working hours and response times. This prevents community members from feeling ignored if they post after hours. Eventually the community members will learn how to operate within a structured environment.

3. Establish credibility

A sudden brand presence within a community that has long been dominated by members can be jarring. Don’t be alarmed if a user’s first instinct is to disregard your opinion and look to others for affirmation. Building trust and credibility takes time, but with consistent participation and genuine interactions, it will surely happen.

4. Distinguish community opinion from official/brand response

Highly engaged community members often beat even the best community managers to respond. While this level of engagement is great, it often breeds incorrect information. Consistent brand messaging and presence teaches community members the community manager is the official word, even if it is contrary to responses from other members.

5. Nurture advocates

Lastly, pay tribute to the highly engaged community members who established themselves as experts prior to your arrival. Though there’s a new boss in town, their legacy is not forgotten! By acknowledging their efforts, the advocates know that their assistance is appreciated. If they agree to play nicely and provide respectful assistance to community members, there is no reason for them to stop doing what they’ve always done.

When the time comes to establish an official presence in your community, don’t take it lightly. This undertaking necessitates professional guidance and a wrong move can quickly turn the community against you. These five tips will help pave the way, but take time to make them your own based upon your community observations. Make special note of who your customers are, how they use social technologies, and what they expect from the brand and your overall community participation. Your level of consideration directly affects your success. Now get out there and claim your conch!

If you haven’t watched these videos already, they give you a glimpse at what is coming:

• Introducing Timeline — a New Kind of Profile.
• A New Class of Social Apps on Facebook.

Looking at these two new elements together, really what Facebook has done is brought the concept of lifecaching to the masses.Lifecaching as a concept isn’t new but through its massive user base, development platform and the accessibility of mobile computing, Facebook presents users with means, motive, and opportunity to make this happen on a scale that other start ups and researchers can only dream of.

Josh Catone on Mashable points out that Facebook’s all encompassing vision won’t be great for those who need to fill in that timeline retrospectively. And there is also no doubt that some users won’t be happy with these changes, but the number of users with Facebook accounts and the way it is increasingly embedded in the everyday Web means that really we’ve have reached a tipping point that would require a mass exodus to make a difference to the direction Facebook is taking us in.

One of the most interesting changes coming from the new and extended version of the Open Graph (used to enable the new features you see in the videos above) is that the vocabulary of the “Like” is being expanded. Based on a user -> action -> object model, Facebook provides the following examples:

A running app may define the ability to “run” (action) a “route” (object). A reading app may define the ability to “read” (action) a “book” (object). A recipe app may define the ability to “cook” (action) to a “recipe” (object).

Facebook has already linked up a number of social media apps to integrate using this new method. If you are a brand or organisation you should be thinking now about both what these overall changes mean for not just your overall Facebook strategy but also more tangibly, how will you take advantage of this new vocabulary in the apps you existing apps and future apps. For innovators, the new Open Graph is in fact a platform for socially integrated services and products.

And if you are working on social intranets and apps inside your organisation, Facebook has just provided us with a vision of where workforce collaboration is going next once we really interconnect business systems and users through workplace social networking backbone.

Hold on to your seats, everything could be about to change again.

The Social Business Index tracks the performance of the most socially engaged global businesses, providing real-time ranking, analysis and benchmarking. It covers companies’ social business initiatives on Twitter, Facebook, YouTube, blogs, message boards, forums and other platforms, tracking behaviours that can provide evidence for real business KPIs, and ultimately ROI. Currently, it tracks over 26,000 brands from over 20,000 companies, including over 100 million social accounts worldwide, but this is growing all the time.

Whereas social media monitoring has tended to look at what the market is saying about a brand, the idea here is to gauge the effectiveness of your organisation’s own social engagement strategies and tactics - not just sentiment (which it seems to do rather well, by the way), but defined, identifiable behaviours.

We believe that a far greater proportion of marketing budget spend could move to social engagement and performance brand marketing if we are able to develop more sophisticated ROI or measurement models geared to real-world business impact rather than just social metrics like hits, clicks, like and views. As my friend Niall Cook wrote just this morning, ROI is hard to measure as a purely financial metric; but more than anything we need benchmarks and some way of measuring relative success. The Index is Dachis Group’s contribution to that process, and it is the beginning of a journey that will almost certainly involve a lot of tweaking, debate, testing and refinement. But we know the need is there – companies are regularly asking us how they can objectively assess the success of their social engagement efforts, and see how well they are doing against competitors.

The Index is the first service to be launched on the underlying Social Business Intelligence as a Service platform (SBIaaS) that Erik and his team have been building over the past year or so. The team are using a supercharged combination of big data technology, cloud computing and distributed development, combined with crowdsourcing of data analysis, applied to both public and commercial data, to build up a sophisticated picture of each company’s social activity. In fact, there is a fascinating story to be told about just how the platform has been developed, but that is Erik’s story to tell. Of course, seeking perfect data is a fool’s errand, but we hope the SBIaaS platform will help companies start to get a handle on market, industry and competitor benchmarking to put their social activities and results in context.

And, of course, as Rand Fishkin wrote last year, the algorithm + the crowd are not enough – there is still a need for expert evaluation, guidance and sense making. On top of the Index itself, we also offer consulting, design and other services to help companies make sense of their social data and what it means for their business. As I said in Boston at E2.0 this year, it is not how big you data is, it’s what you do with it that counts, and so our focus is on action as much as it is on analytics.

I have argued elsewhere that the social media world is moving away from basic brand monitoring and listening, towards a more business-relevant Social Business Intelligence approach and this is a sign that we are maturing beyond the early period of purely campaign-driven (hipster) agencies towards a more grown-up and grounded view of social engagement as a whole. We think this will be crucial in supporting the case for further investment in social engagement, but also key to how we adapt engagement strategies on an ongoing basis, informed by customer insight and feedback. In (my colleague) Dion Hinchliffe’s recent thinking on the social business maturity model, meaningful listening and smart analytics are a necessary step towards the eventual goal of using co-creation with customers as the basis for new, highly-engaged business models. I think the Index is a very useful piece of that puzzle.

We are really excited to see how companies engage with the SBI, and what sort of insights it can bring to their social activities. If you would like to learn more, or just give us feedback on our Social Business Intelligence practice, then please feel free to contact me directly.

It pays in the long run to think strategically about how you think your organisation, service or product will go about getting, maintaining and ultimately amplifying the attention of the individuals who choose to engage with you. Even brands or services that command widespread recognition in their own right still need to work creatively on maintaining the attention of their followers (for example, look at these case studies from Archrival | Dachis Group and Stuzo | Dachis Group).

While the cost of entry and experimentation with social media is considered to be low, nothing is ever completely free – failed attempts at customer engagement online take their toil in wasted effort and political goodwill from internal sponsors. In some cases you might have even gone as far as engaging a contractor or digital agency to implement your social media channel. But all this will be wasted if you don’t have the attention of the right people. I use the word ‘attention’ in a tactical sense. People can’t follow or like you if they don’t know you exist. But they won’t continue to follow you if you don’t maintain that attention.

Getting, maintaining and amplifying attention in a business-to-business context is different again, because organisations don’t follow other organisations; the people in those organisations have to make this choice on behalf of their organisation.

You may not even realise that you have lost someone’s attention – if you are lucky, they will post negative feedback or even stop following you. But they might also just filter you out – they’ve stopped reading the news or following the links you post. They are effectively disengaged, but still apparently following you.

However, attention also comes in many forms. For some the need is pure utility, others a sense of membership or community, it could be the chance of an offer or a deal, or even the chance to participate in something bigger than themselves. Sometimes it might just be for fun. For some brands, attention means attracting hundreds of thousands of followers; for other organisation it may be enough to attract the attention of the media or other key stakeholders. For example, we expect a global brand to gain widespread attention, but a small boutique brand only needs to nurture the attention of a loyal group of discerning customers. But in all cases understanding the reason for attention is critical, as is making sure your call for attention is in the right place.

To quote Clay Shirky, you need to offer:

a plausible promise, an effective tool, and an acceptable bargain with the users.

Of course, this may still not be enough to get what everyone desires: viral attention. Its quite likely you will need to integrate with other promotional, advertising and marketing channels. At the other end of the customer participation chain, also don’t forget to integrate other aspects of the customer experience, such as customer service and sales. Remember, this isn’t just your conversation – don’t be surprised if people talk back or ask unexpected questions. Drop the ball in any aspect of your online engagement and you risk losing the attention credibility you’ve worked so hard to earn and maybe a loyal customer or supporter.

There are many different reasons why someone will follow or your like you organisation. Make sure you understand exactly:

• Why you deserve their attention.
• How you will maintain it.
• What needs to be done to integrate the customer experience, including advertising, sales and customer service.

This post originally appeared on the Dachis Group | Headshift blog.

1. Intimately know your customers:  Really get to know the customers the community will potentially serve.  Leverage in-depth interviews in addition to surveys.  What do customers need?  What problems do they have?  What communities do they belong to and how do they participate?  What do they like and not like about those communities?  Ask how a community sponsored by your company can enhance their experience.  Don’t overlook asking customers if they even want to participate in a community sponsored by your brand.  Ask customers their opinions about what role should the brand play in the community.  We have found customers typically expect the brand to play an active role – it’s a matter of how active.  Is there an interest a large group of your customers share that can be leveraged as the foundation for bringing together a community?  Conduct a conversation audit to know what consumers are saying about your brand online.  Leverage this listening data to anticipate the types of conversations that will occur in your community
2. Define the target audience:  Based on customer research, which customers will benefit from community the most?  Will the community serve different types of customers?  Are certain customers the focus of key business objectives?  Map this out on a whiteboard to understand all the options and determine where to focus the community.  Once the target audience is defined, figure out how to best reach this audience and the type of community it prefers.
3. Connect community to specific and timely business objectives:  This seems like a no-brainer.  Still, so many businesses are blinded by ‘all of our competitors have a community.’  The community is mistaken as the end when it is really the means to an end.  What are business objectives and what type of customers are the focus?
4. Review competitive communities:  Determine what communities already exist that target a similar audience and solve for a similar problem.  Join these communities if possible to assess their strengths and weaknesses.  Determine how your community will differentiate.
5. Build to solve both a customer and brand problem:  Branded communities are the bridge between customers and organizations.  Communities have to serve the needs of both in order to survive.  What are the unmet needs of customers?  What are the biggest challenges for the business?  Where do customer issues and businesses challenges intersect?  What problems can a community realistically solve for?  What processes need to be in place to support the community is solving these problems?  For example, a community to gather customer feedback on products and services without the feedback loop and processes to support the business in acting on this feedback will turn into a branded community of haters.
6. Design for desired behaviors: Many companies make the mistake of launching a community out-of-box before thinking through the desired customer behaviors the platform features need to support in order to achieve business objectives.  A good exercise I recently conducted with a brand is to outline in detail the required community features and functionality based on customer preferences and the online behaviors we wanted to see exhibited in the community.  For example, if you want the community to persuade customers to buy more product, how will the platform encourage and enable this behavior?  If you want the community to promote word of mouth, how will the platform support sharing within and outside of the community?  How will these sharing behaviors be tracked?  Launching a community with all the bells and whistles without a plan for how the features and functionality should be used is a recipe for failure.  Customers will not use the tools without guidance for what to do and what’s in it for them.
7. Develop a measurement plan:  What are key performance indicators for the community?  What are the community health metrics?  How will these measures prove achievement of business objectives?  Are there dependencies on other groups and websites for measuring success?  For example, how will you integrate web analytics to know where community members go when they leave the site?   How often will you analyze and report on these metrics?  Will the community reporting be incorporated into a larger customer analytics dashboard?
8. Create a content plan:  Community is about its members, but great content is what it takes to attract them and keep them coming back.  Creating engaging content can be the biggest challenge for brands.  This is mainly because companies put the community manager in charge of creating content.  Community content creation should not be taken lightly.  It’s a huge task to constantly create new content for a community and get it approved by Compliance – one best assigned to a person or team that already specializes in content creation.  (Tip: Content creation can be outsourced.)  The content plan needs to define the purpose, tone of voice, style and formats for community content.
9. Plan for promotion:  How will you promote the launch of the community and attract your target audience to the site?  Think through all possible channels, both on and offline, to socialize the existence of the community.
10. Sell the community internally to garner support:  Customer communities require the support of the entire organization.  No one can predict exactly what a customer will say or do here.  It’s safe to say customers will post a complaint or ask for help – issues that the community manager cannot and should not handle alone.  It’s best to gain buy-in from other internal groups and educate them on the commitment of time needed to support the community before it launches.  A major component to selling the community internally is learning to speak the language of each external group approached to support initiative.  The community sponsor should translate how the community will help achieve the goals of other departments. We recommend enterprises create a community task force that includes a representative from Marketing, PR, Research, Analytics, Content/Production, Customer Service, Legal, Compliance, IT, and even from Agencies or Consultancies involved in customer initiatives.  (Tip: Meet with Legal as soon as possible because this is where most of the community project delays occur.)
11. Determine the platform provider:  Picking the platform provider to host the community should be one of the last things you do in the planning process.  While most of the providers appear to support similar features and functionality on paper, how they support these features and functionality is what differentiates them.  Will you consider an open source solution or use a full-service, third-party provider? Do certain providers have more experience serving clients in your vertical industry?  Do certain vendors have a culture and style you prefer?  Do certain vendor platforms require more costly customization to meet your needs than others?
12. Scope the business requirements:  The community sponsor needs to take the time to think through all of the business requirements to support the community.  Define the FTE staffing model, internal processes and workflows, professional services, and technology required to support the community at its various stages.
13. Forecast the budget required to build and sustain community:  The budget includes technology platform costs (setup and ongoing maintenance), technology systems integrations costs (e.g., single sign-on, CRM integrations), FTE people and agency costs, content costs, marketing and advertising costs (to promote community), and more.  To understand the ROI of community, the sponsor needs to meticulously track exactly how much budget is allocated to support such an initiative.

Disclaimer: There are a million different details to planning for a customer community not included here.  This is a high-level outline for how we approach building a business case for a customer community.

This is because they know that the capacity for innovation and organisational creativity comes from the creative intelligence and interaction that takes place when their people come together. If the trust, support, respect for differing talents, and a coherent vision is tangible in a group, then the likelihood of passionate engagement and substantial performance gains are dramatically increased. It seems the quality and extent of these cooperative relationships across an organisation are critical for the emergence of ultra-innovative high-performance teams to take place.

But innovation doesn’t lie solely in the comfort of close friends and strong work relationships. Another vital ingredient is also required to truly raise your chances of evolving a ground breaking group. That is to gain the involvement and stimulation of people far outside the group – especially those who are comparative strangers or hold a different worldview or way of thinking. Only with this reaching out across boundaries can you stop the overfamiliar dominating, and harness the significant value that comes from fresh and ‘novel’ combinations of perspectives.

This also applies to the online customer engagement space, as social media continues to transform the nature of relationships with our customers, business partners and public. Forcing us to deal directly with them on their terms or to be ignored.

Through social business design and by employing powerful online participation tools, companies are starting to create deeper and more engaging community based relationships, where customers are treated more like partners than names to be ‘managed’.

So the dynamics are the same: for an effective ‘coming together’ there needs to be trust, mutuality, dialogue and respect. The real opportunity however, could lie in going one step further, by reaching out to those ‘comparative strangers’ by letting customers right into the heart and workings of our organisations, to collaborate and even co-create products and services with us. In doing so this could be inviting in that essential ingredient that helps turn our organisations into creative powerhouses.

This item originally appeared on the Headshift | Dachis Group blog.

Here at Dachis Group we frequently field requests from current and potential clients on how best to establish and implement a social servicing process. It’s really not that surprising. Widely publicized successes like ComcastCares combined with fiascos like Dave Carrol’s “United Breaks Guitars” have forcibly made companies understand the value of a rock-solid social servicing process. What is surprising to me is how infrequently the conversation turns to wringing additional incremental sales out of social media by focusing on social handraisers.

Social handraisers are those individuals that like to hop onto their social media platform of choice and ask the world (or more accurately their friends) stuff like:

• “McDonalds or Wendys??” – @ DuhMonster
• “which one is better a dell laptop or a mac laptop?” – @ rrking08
• “iPhone 4 or Blackberry Torch? Hrmm…” – @ debonair247

It feels like many brands stay away from social handraisers for two main reasons. First they have a (very reasonable) fear of being ‘creepy’ and alienating potential customers. Second, they lack a process for actually doing something with the handraiser once they’ve got them.

This sense of fear and lack of preparedness is, in part, what pushes brands to experiment with services like FourSquare. Location-based checkins let brands identify potential customers and hit them with a meaningful offer at a moment when their purchase intent is relatively clear. This is timely, straightforward and blessedly non-creepy. Nonetheless, despite the value in low-creepiness approaches like location-based offers, I still have this nagging feeling that brands are leaving money on the table.

It seems to me that it is possible to aggressively court social handraisers without being ‘that weird guy in the corner of the bar’ you just need to be tactful about it. Here are a few suggestions:

1. Set expectations around service and fulfillment - This doesn’t necessarily mean that you have to have a full-blown social sales team in place. What it does mean is that any channel in which you are placing an offer needs to have the people, process and technology to actually fulfill your promises and address complaints if they can’t. My colleague Tom Cummings’ post on Social Media Middlemen may be a good place to start.
2. Rebuild your lexicons - If you are like most brands you’ve built up your social media monitoring strategy around listening for crises and major service issues. There is nothing wrong with that, but if you are going to assess the value of a social handraiser strategy, then you need a comprehensive picture of what your opportunity looks like. Plus, that information needs to be reviewed, captured, and filtered in much closer to real-time than you’ve probably done before. It’s unlikely that your crisis avoidance and servicing lexicon is going to do the job in this case. Kate Niederhoffer’s recent blog post about biases in your lexicon might be an interesting place to start.
3. Experiment in your own spaces - This one may be obvious, but it is WAY less creepy to reach out to someone that pops up on your Facebook page with a product question than it is to hop into the middle of a conversation on Twitter.

Hopefully, these thoughts will spur a few of your own – What do you think? What are you doing to court your handraisers?

Photo attribution: Jeff Wright on Flickr

Today’s guest post is from Debi Kleiman, the Vice President of Product Marketing at Communispace, who will be speaking at Social Business Edge. A leader in generating insights via private online customer communities, Communispace has created more than 350 customer communities for industry leaders such as Kraft, Hewlett-Packard, Charles Schwab, Hallmark, Best Buy, Microsoft, MTV, GlaxoSmithKline, and Hilton Hotels Corporation.

There’s too much data.  Way too much, and it’s not helpful. There, I said it.

Social media monitoring, web analytics, quantitative market research, trackers, clickthroughs and opens… your ecosystem produces a firehose of data, but not a whole lot of meaning.

How about some insight instead?  Insight – what we’re really after – can create new businesses, grow existing ones, solve problems, tell stories and deliver real value to your organization.  Businesses today are drowning in data and missing real insight. But they don’t have to. The same forces that are converging to bombard us with more data are the same ones that will help us. Customers today want to participate with businesses and brands more than ever before, which creates a real opportunity to use that connection for insight.

It’s great that your customers can give you feedback on products using the ratings and reviews, and being alerted to their dissatisfaction on Twitter is important. But what if I told you that you’re missing the heart of what really matters to your customers? CRM expert Denis Pombriant calls this “CSI approach” to customer intelligence badly reactionary, and he’s right. How powerful would it be to truly understand your customers in a way that allows you to be relevant to them, right out of the gate?

This is what the insight discovery process is all about – actively engaging with customers in an ongoing, intimate dialogue over months and years through private insight communities, so they let you into their lives and mindset – the insights, big and small, will blow you away.

Brands that have harnessed the power of customer-driven insight know that the rich, meaty center of their customers’ needs lies in their hearts and minds. And it’s hard work to get to that place where they’re willing to share it with you, but the payoff is certainly worth it.

Here are a couple of examples from our experiences at Communispace:

• A leading financial services company tapped into the mindset of Gen X using a private online community over six months and learned that 90% of what the company is saying in the market is irrelevant to them. (That 90% is not data, just my rough dramatic insight.) The intimate and comfortable environment of their private online community enabled members to tell their personal stories, hopes and fears in new way and provided insight into how to reach this skeptical generational cohort. Through a variety of activities in the community, the company was able to learn from Gen Xers not only about their perceptions of investing and financial services firms but also their life priorities, their savings goals and important messaging cues.  The members evaluated new product concepts for relevance and appeal, as well as started their own conversations so that the company could hear what’s important to them. By deeply understanding Gen Xers, the company found that their challenges are more about successfully maintaining a checking account rather than setting up their 401K, for example. Insights like these helped to create products and messaging that were more relevant to Gen X – things like a high yield checking account, special features for savings accounts and new pages on their corporate website that spoke directly to their needs. Overall, their deep exploration into GenXers lives translated into significant ROI in the form of an entirely new base of Gen X customers who appreciated finally being understood by their bank.
• A top technology solutions company used their private online communities to explore what “value” meant to their customers in a recessionary environment and how that affected what they were buying and why. Busy professionals who already bought millions of dollars worth of technology from this company were more than willing to help them develop new offerings that better address their changed priorities in a rapidly-shifting economic context.  By creating different value-add marketing and promotional programs tailored to speak to what affected community members the most, the company built stronger, more durable customer relationships and generated $70 million in new revenue in one year.

A truly social business will take advantage of this motherload of insight by connecting important elements of the ecosystem, and using that to create value. It’s not easily acquired, but private insight communities have proven to be a way to bring emotions to life, and to discern meaning beyond the numbers.

“Clients usually ask us how they can drill that hole in the wall. As consultants we are obsessed with finding the best drill that does it in the fastest and most cost-effective way. Sadly, we often forget to ask the client why he or she needs that hole in the first place.” (coaching advice from a VP in my previous company)

Think about the following problem and respond with the first thing that comes into your mind: “I have 24 bottles of water to carry from the supermarket, which I obviously can’t carry all by myself. How do I get them home?”

My first reaction would be to use a car, but if you don’t have a car you can order it online at one of the big supermarket chains and get it home delivered. Problem solved? Yes.

This solution would be a good example of “finding the best drill” as discussed earlier. So let’s take a step back and wonder why we need all this water in the first place. Perhaps I don’t trust the water quality that comes out of the tap. Perhaps I just don’t like the taste. Perhaps it has never occurred to me that in certain regions the tap water is perfectly drinkable.

A solution could be to figure out whether the tap water is perfectly ok to drink in your region and buy such a small water purifier to filter the tap water. This avoids me to even have to think how to carry 24 bottles of water home. Focus on the cause of your problem, rather than the problem.

Let’s bring this to a more familiar corporate environment and think about the following problems:

1. “There is a lack of communication in our company.”
2. “We have absolutely no idea what the customers are saying.”
3. “Our employees can’t find each other.”

Very popular solutions to these problems are:

1. “We need a company blog.”
2. “We need a Twitter account.”
3. “We need SharePoint.”

There is an instinctive reaction to come up with solutions that seem to make a lot of sense at first. If you have a communication problem on the one hand and you know that blogs are an extremely easy way to communicate, then a blogging platform must be your solution. Problem solved.

When someone asks for your help with their SharePoint platform rollout because they want to improve the communication inside the organisation, just take a step back. Ask them what is broken with the way they are doing it now in the first place. Why SharePoint? What do they hope to improve? When do they consider the communication inside the organisation as successful?

Throwing in a social software platform in your organisation isn’t going to solve the challenges you are facing. You first need to figure out what is wrong with the process in the first place. A good starting point might be to have a chat with some of the employees. People that are dealing with that (broken?) process every single day might be a good source of information, don’t you think?

You might learn that the most obvious solution isn’t going to solve the problem at all. Perhaps a surprising result could be that employees find that there are far too many emails being sent out with newsletters, announcements, updates etc. so the problem is that nobody reads them anymore. Your new company blog isn’t going to solve that.

So stop reacting like Pavlov’s dog. Focus on the people, not on the technology.

After the presentation, I met the guy during a smoke outside (he was smoking, I was just chatting with a colleague) where he said in all honesty that this was not going to fly with his client. Why is that, was my obvious question. He explained that his particular client suffered really hard from the economic downturn and didn’t invest anything anymore in technology related projects. He argued that this makes sense because the company was in the process of mass firing people, so how could they justify spending money on technology transformation projects if it couldn’t even pay its own employees?

I have to admit that as an external consultant, you are not always realizing the daily sorrows and worries that a company and its employees have. You’re often parachuted in, firefighting on a project, start up something, but after a relatively short time you leave again to your next engagement. However, this situation was so real. The account manager was genuinely concerned about the faith of his client.

Keep on moving like a shark

I kept on and off thinking about that one particular case for a while and the Aha-Erlebnis came a little later after coincidentally hearing about the fact that several shark species need to keep on swimming, otherwise they die.

Does this hold for companies as well, or more specifically for this particular client? Is the approach from the executive management to stop almost all investments and focus on the reality of today, rather than tomorrow (since there might be no tomorrow) a good or a bad thing? Will this “stop swimming” cause the death of that company, as it will do for a shark?

Internet driving competition in traditional markets

In order to better understand the background of this particular business (sorry can’t disclose exactly what market it was in), you need to understand that it was in a very very traditional market sector. A certain type of service that existed already far before the first computer was around.

As with many other sectors, it regarded the rise and ubiquity of the Internet as a big threat for its business. You can say the same for the music, movie and newspaper industry.

But is it really a threat, or is it an opportunity?

I’m pretty sure that the average music and newspaper executive that grew up before the Internet era, is convinced that it is a threat. Look at the way certain big newspapers are closing off all content behind a pay wall, or how fiercely the music industries hunts down downloaders.

But let’s be honest with each other, how much innovation have we seen in the above-mentioned industries? Decades long, we’ve seen very few innovations happening that were started or pushed by these industries. You can almost say that they had a monopoly in their market and all of a sudden their biggest fear is not a competing newspaper or a record label, no it’s… innovation itself.

In a liberal economy, we stimulate competition because that drives innovation. If you only have one supplier in a market, that supplier has no urge at all to keep improving its services and products. Why should they? It’s not that its customers are going to buy from another non-existing competitor.

So, is the Internet – and actually technology in general – the big driver for innovation in those markets? You’d think so, yet they still fight fiercely against it.

“Wait a minute…”

… I hear you saying, “what about all those bands that don’t get money because people download their music, and what about the loss of income for the record label?”

Very valid points, but what if the whole concept of “record label invests and pushes artists in the market and gets money for it” is outdated? What if that system we know already for decades became obsolete? How can these bands still earn money then?

Well, what about the mineworkers in coal mines? What about them? In a short time span, the industry moved on to other sources of energy and coal became obsolete.

I’m just trying to explain here that it’s not because we know something is working already for decades, that it will be relevant for an eternity. ESPECIALLY if that particular business or industry almost refuses to innovate.

One piece of advice: never fall for the trap of feeling comfortable in your success. I’m not that old yet, but I did see some successful businesses come and go in a matter of a few years, because they failed to keep on going for that extra mile.

Oh, and regarding how bands can earn money… In China, the place where they invented copying as it seems, they’ve been quite creative with this. Several artists actually explicitly distribute their copied CDs in markets almost for free. This gives them a better chance of being heard by people and they get their income from sponsor deals and performances. So, as you can see, the music industry CAN adapt to changing market conditions and be very innovative in their delivery model!

Stop becoming obsolete

Now, to link back to the story that started this blog post: what about the account manager’s client? In hindsight, I should’ve said to provoke a discussion: “well perhaps they just deserve to become graciously obsolete then”.

Knowing the account manager, he probably would’ve slapped me in the face and yelled “help me getting this client back on track, stupid!” and I would’ve secured a nice new gig

One of the key mistakes that almost all of these “being threatened by becoming obsolete” companies make is the lack of focus on… people. I said it before, and if necessary I will repeat it every single day: BUSINESS IS FUNDAMENTALLY HUMAN!

That is a key message in our Social Business Design philosophy: your employees, your customers and your partners are human; treat them with that respect and dignity. The moment you start only focusing on your products and forget that it is actually the people that bring you these profits, you are becoming obsolete.

So, tell me. Do you want to succeed or survive?

Ping me on lee.provoost@headshift.com or http://twitter.com/leeprovoost to help your company becoming a social business.

This post originally appeared on the Headshift blog.