Outside Innovation

Trends from Customer-centric Visionaries

On May 9-10, 2007, we held our semi-annual get together of “Patty’s Visionaries”—a handpicked group of customer-centric executives in a cross-section of industries, each of whom has impressed me with his/her accomplishments in designing their businesses from the outside in. This two-day meeting is always a treat for me. It’s relaxed, casual, reflective, and gives us all good insights into what’s up with customers, business, and technology and how we’re doing in harnessing technology to deliver a great customer experience and to grow our businesses. Everyone came away with actionable insights—several of which have already been put into practice!

Eight Key Patterns and Themes

Here are eight topics that rose to top of mind for me after swimming in this rich conversational soup. I suspect each Visionary may have had a slightly different set, based on his or her own context. Here are the themes that are still reverberating with me a week later:

1. Outcome-based ecosystems

2. Customer communities

3. The primacy of search

4. The disappearing home page

5. Cloning capabilities across channels

6. The opportunities and dangers of serving baby boomers

7. Online gaming, virtual worlds and kids’ innovative behaviors

8. Driving organizational change thru operational customer metrics

Great Tips for Search Optimization and Internet Marketing

Saw a great presentation by Jay Berkowitz on the Ten Golden Rules of Internet marketing at the CRMC CALA Customers Forever conference in Coral Gables, Florida. I've heard lots of these presentations, from a number of marketing gurus. This was the first one that made me feel empowered!

Jay has a lot of useful tips and free tools you can use to do a much better job of optimizing your search-driven marketing and customer engagement.

Jay also blogged during my presentation. Here's a link: Jay's Blog during Patty's Outside Innovation presentation. Thanks, Jay!

THE WEB 2.0 WAVE--WHY IT’S NOT A FAD

This week, I attended the Web 2.0 Expo in San Francisco. It was a great conference--meaty sessions, thousands of smart people, great logistics--all the things that matter were well-orchestrated and unobtrusive. I continue to be impressed by the O’Reilly organization and its many partners (in this case, CMP). “Spreading the Knowledge of Innovators” is the O’Reilly motto. If you want to know where lead customers are taking us--this is the place to be.

The Web 2.0 Culture: Loosely-Coupled Innovation

The Web 2.0 Culture isn’t a youth culture. There weren’t a lot of kids at this conference (although admission to the keynotes and exhibits was free or $100). In fact, most of the Web 2.0 Expo attendees have kids. The 10,000 participants ranged in age from mid-20s through 60-somethings, definitely skewed towards 30-somethings. There were seriously optimistic business/technology strategists (like me), corporate IT renegades, seasoned architects, professional developers, marketing and design professionals, lots of entrepreneurs--some on their second and third ventures--and venture capitalists, as well as plenty of professional bloggers and reporters.

The mood was optimistic. There are no evil empires that can stop innovation. Anything is possible. It’s a culture of DIY, roll your own, solve your own problems, invent a new toolset, secure in the knowledge that:

• Whatever you invent will plug into and interoperate with everyone else’s innovations
• The simplest approaches are the most elegant and valuable
• It doesn’t really matter if someone else has done something similar before
• Esthetics count--clean, crisp graphical UIs are in

WHAT’S BEYOND WEB 2.0 AND ENTERPRISE 2.0? BIZ 3.0!

Align Your Business Strategy Around Your Customers’ Processes And Outcomes

Before you build upon the principles of Web 2.0 to craft an Enterprise 2.0 strategy for your firm, take a moment to reflect on what’s coming next. Remember that Consumer Web 2. isn’t really about technology enablement. It’s about consumer participation. Enterprise 2.0 isn’t really about supporting rich user interfaces, blogging, tagging, RSS feeds, and social networks for your employees. Enterprise 2.0 is about customer and employee empowerment. Tim O'Reilly refers to this as "the architecture of participation" in his compact definition of Web 2.0.

What are the Benefits from Web and Enterprise 2.0?

The bottom line benefits of both Web 2.0 and Enterprise 2.0 accrue when you empower your consumer and/or business customers to participate in shaping their online experiences with your company and with one another. Empowered customers are more engaged and more loyal. They cost less to serve and they contribute value by adding their own “spin” to your Web sites, your products, and to your brand experience.  Your firm profits from the network effects that result as customers interact electronically around your products and your business. Web 2.0-enabled customers become designers, contributors, consultants, guides, and promoters to other prospects and customers.

COMMUNITY 2.0-Leveraging the Wisdom of Crowds

Crowdsourcing 2.0

Kathleen Gilroy, Otter Group
Sylvia Marino, Edmunds.com
Michael Sikorsky, Cambrian House

Kathleen:
Wikipedia definition: relies on a combination of volunteers and low-paid amateurs who use their spare time to create content and/or to solve problems.

Examples of crowdsourcing:
Zazzle I use it to generate stamps as presents for my nephews and nieces.
Goldcorp -- Took its data and made it public and encouraged people to analyze the data and suggest mining opportunities for a reward. (Written Up in Mavericks at Work.)
Threadless--T-shirt design

This notion of earning credentials from crowdsourcing is great.

Community 2.0-Lessons Learned from Non-Business Environments

PANEL DISCUSSION

Craig Newmark, Craigslist

In 1994, Craig was working at Charles Schwab evangelizing the Internet. It's an information-intensive business. He began to comment on arts and cultural events. His buddy Jim Buckmaster is the Webmaster. "We pretty much do one thing well. We prefer not to screw it up. I pretty much do full time customer service. I still do. "

Scott Meyer--About.com

Bought a year ago by the New York Times. Our audience is so different than

We're now about the 10th largest on the Internet in terms of business services. We're a distributed publishing network. We're also a technology company... we've developed search optimization and other technologies that are propagated around the company. I didn't start this business. About.com started as a human search company.. rebranded it as About.com to be a full-service portal. We retrenched as search took off.. We made all the people who were organizing content into journalists. and organize communities around those pieces of communities. We've got 600 sites today, each one captures. 60,000 topics. We have the biggest pregnancy site. We also have one on Tatoos, cats, etc. Help you find information and people who share the same interests...

Alexandra Samuel, Social Signal
My previous life was in politics and social science. We worked on on the internet--helping political organizations do grass roots outreach. There were limited ways to mobilize the passion. A couple of years ago, Web 2.0 tools made it easy to mobilize -- A community at the March of Dimes for parents with children who are in neonatal intensive care.

Lessons Learned:
Alex: You have to connect with people who are  passionate about your brands. The approach we use is "Reflective Glory Marketing".. create a community of something that people do feel passionate about. Example: You can Change Everything if you change your bank..Vancity credit ... let's you list all the things you'd like to change in your community... you can't sign up for a credit card there. You can declare what you care about in the community.

Craig: We are a community service to a degree. If you focus on being a community service, you tap into that human social need to connect and to help. Newspapers used to perceive itself as community services, which is important in a country that is trying to be democracies. But in recent years, they've focused on profit margins; they've fired investigative journalists. That's a mistake. There are now folks who are helping journalists get paid for doing investigative journalism. For example, what lobbyists are paying what congressmen for what legislation. It all comes down to community service and trust. It's an interesting observation that the most trusted name in journalism in Stephen Colbert and John Stewart.

Alex: Right, Colbert really gets 2.0.He lets his  fans build and maintain the Colbert Nation web site and he just plays with them on it. 

Scott: I Told the Boston Globe--guys here's the fundamental problem with traditional publishers, I just rented my vacation cottage on Craig's List. You need to decide what you're trying to achieve. If you're a news organization, you have to decide what you're trying to achieve. The NYTimes doesn't want citizen journalism. Lots of people talk about OhMyNews in South Korea. They have 12 or 15 editors, all the content is sent in from folks out in the field.

Craig: Companies should engage their communities to provide better customer service and to improve products. If you have customer company reps on discussion boards where they're helping customers solve problems and have company people visibly listening, to actually change the products and services. Provide discussion boards, engage your community thru them, take some chances. If someone says the wrong thing, it may haunt you, but it's worth the risk. We should also have internal discussion boards. The people on the front lines know a lot more about what's going on... Everyone tells their boss what they want to hear. Internal discussion boards offer the possibility of breaking the internal communication failure.

Scott: About is actually a pretty small organization... 600 people. A lot of our content is generated by contractors. They have their own internal discussion site to share what's going on. It's incredibly valuable. Talk about Control: We did things with NBC for the Olympics.. it's all about the Control of the Olympic Committee. We had a blog that allowed people to sound off about what wasn't working in the NBC coverage of the Olylmpics, which they wanted so they could get out from under that control.

WEB 2.0, SOCIAL NETWORKING, AND CUSTOMERS IN CONTROL

Last week, we hosted our semi-annual Visionaries meeting for our lead users in the “Let Our Customers Re-Design Our Businesses” camp. Unfortunately, our timing isn’t so hot. O’Reilly’s Web 2.0 Summit was also last week. They have more technorati. We have customer-centric business leaders who are recruiting customers to help shift their corporate cultures to become customer-adaptive. The Web 2.0 Summit is on the West Coast. We’re meeting in Boston. But we’re both talking about many of the same things: customer-created content, customers taking control, customer communities, customers designing, sharing, and voting on each others’ creations, customers acting as promoters and marketers, customers acting as problem solvers and guides, and customers creating folksonomies.

For our customer-centric visionary business executives, Web 2.0 enablement is both a boon and a curse.

ISSUES THAT CUSTOMER-CENTRIC EXECS ARE FACING AS CUSTOMERS TAKE CONTROL

For many of our corporate visionaries--representing both large and small companies--our conversation last week puzzled over several key issues:

1. If customers want to strut their stuff, help each other and solve each others’ problems, how tightly should those customer communities be integrated into our more carefully structured customer support knowledgebases and resolution flows? Does it make a difference if we’re charging for support? Will customers pay for support if some of it is provided by other customers?
2. If customers promote our brand and contribute to our marketing and create our collateral, how do we ensure that they capture the essence of our brand image and don’t dilute it or take it in the “wrong” direction?
3. If customers are creating their own solutions and accomplishing their own results using our resources and tools, how much of their accomplishments are they willing and even eager to share? If we let them see how they’re doing compared to others, is that welcome or invasive?

The “New Work” of the IT Architect: Innovation Labs and Incubators

Last week I enjoyed my semi-annual “whack on the side of the head” meeting with my Pioneers—our lead users who are veteran technology and business architects. This small band has been gathering twice a year since the early ’90s. What they have in common is a way they view themselves and the world. This worldview evolves over time, of course, but there seem to be some basic principles that are wired into their nervous systems/perceptual filters.

They were all pioneers in the early days of distributed object computing—so they view the world as a place in which intelligent robust services come together dynamically to empower and enable complex operations. They have designed and implemented a variety of very impressive systems over the years—from nuclear power plants to global banking systems, from complex logistics systems to derivatives trading systems. Their IT designs often feature large shared memory in which big abstract models can run—these abstractions are connected to the physical world and instrumented with real-time events. The designs often incorporate rules engines. Yet they love simplicity. Every element is self-contained and self-describing. 

GOOGLE: THE CAMEL’S NOSE IN BUSINESS SOFTWARE?

Our search and findability guru, Sue Aldrich, characterized Google’s latest enterprise software additions as the camel’s nose strategy. First, Google offered search appliances for the enterprise and the desktop to make it easy for employees to “Google” the information within their companies the way they use Google to find external resources. Then, Google offered consumer email, which many business people quickly adopted as an alternative personal email service. Now, Google is providing “Google Apps for Your Domain” which offers good-quality email with integrated calendaring, chat, VOIP and other features that will appeal to small businesses and to end users within large enterprises as well. Google Earth for the enterprise is picking up traction as more and more companies use the app for strategic applications from construction to oil exploration to logistics to environmental applications.