Month: November 2012

[Note: This is the third in a series of posts I’m going to be writing on how “social” represents “personal” at scale. Right now I have no idea how many posts I’ll write, or when. It all depends on where you take the conversation. If you want to read the prior posts, they are the two immediately preceding this one].

In a previous post I described myself as a satisficer rather than a maximiser, terms I learnt from a Barry Schwartz book nearly a decade ago. The way I interpreted him, a maximiser shops around, must check every possible nook and cranny before making a buying decision, and often spends the post-buying time worrying about having missed a bargain. A satisficer, on the other hand, has a price and quality level in mind for the product or service sought, looks for that product or service, and stops looking once there is a reasonable match. [I accept that I have tended to load the terms by describing them that way: I am a satisficer, after all].

As a satisficer, I find it easy to be a creature of habit. I like going to places where everybody knows your name.

 

So I invest time and effort in my business relationships, helping create and reinforce trust. Once I choose a product or service provider I stay loyal, as long as the trust relationship is sustained. The people I engage with know who I am, where I come from, what I do, where I live, what I like, what I dislike. And how those likes and dislikes change. For decades I went to the same pub, the Stag and Hounds. It was a “regulars” pub, a proper local, not much in passing trade. It’s no more now, I think they’re building flats there. And the landlady has moved on, she runs a different pub now, with her husband. Their new pub is ten miles away. I’ve known them for over 25 years through three pubs. Now, if I go and see her, she knows what I drink. Water, diet sodas. Not the G&Ts of the 80s, not the Kronenbourgs of the 90s. It’s nearly a decade since I had a drink. People who have a relationship with me will tend to know that.

“Personal” begins when people are in relationship, know each other, likes and dislikes, strengths and weaknesses: they know what makes each other tick. These things are necessary but not sufficient. For sufficience you need people who care.

In a traditional bricks-and-mortar high-touch low-volume business people find it easy to care, the environment is right. But, as I explained in my second post, as businesses tried to scale up, too often the environment that enabled caring was dismantled brick by brick. The people who held the relationships were either “downsized” out of their jobs or moved around; the people at the coalface had their discretion stripped away and were made to resemble machines; and the focus was on standardising and dehumanising the customer, the individual. It wasn’t just in business, you could see similar developments in healthcare and education.

So before “personal” can be made to scale, the environment that encouraged people to care has to be restored.

This is easy in analogue terms, and where scale is unimportant. All the action is local, the volume is low, and everyone is happy.

It is also easy when scale is obtained by joining together small pieces in a sort-of fractal way, with each piece continuing to have its own identity and relationships and empowerment, with each piece allowed to sustain its circle of trust. And that’s why the Etsys and the Abebooks succeed at scale. Theirs is scale by aggregation-without-integration. That’s why Kickstarter succeeds, personal at scale. Once you protect the trust (which is established as a result of the protected identity, the relationships and the empowerment) then scale is possible.

When I shop at Abebooks, when I go to a shop I used to go to before the Amazon takeover, I don’t see any change. My relationship with the shop itself is sustained. I am dealing with the same person or people. And even the way I engage with them is the same. Trust has been protected.

The Abebooks and Etsy and Discogs people, while working within umbrellas of trust, continue to add their personal touch to business engagements. Often, the goods arrive with signed thank you notes, sometimes even with a smile emoticon or a heart sign. Signed by a person. The same person who you had the email conversation with, the same person who never said “I’m sorry, I can’t do that, it’s against the rules” when you ask for something simple but non-standard. Like when they say “Does not ship internationally” and you ask them if they would. Usually all it takes is a trusted relationship and a basis for agreeing delivery charges, and a way to transfer the charge. I remember many years ago, when Amazon had z-Shops, someone actually arranged a private auction for me where I was the only bidder and the Take-it price represented the postage. The seller found that it was easier to do that than to change his status from “Does Not Ship Internationally”. He sent me the custom URL in minutes. And we had a deal.

Machines operate in contract, they know no better. If it’s not within the rules laid out in code it doesn’t happen. [Or at least it shouldn’t happen. But code is rarely perfect].

Humans, unlike machines, can operate in covenant.

A contract relationship is one where the two sides negotiate recourse in the event of breach. So when something goes wrong, the question to answer is “Who pays and how much?” A classic example of a contract is a pre-nuptial agreement.

A covenant relationship is one where the two sides are committed to each other in an environment of trust. So when something goes wrong, the question to answer is “How shall we fix it?” A classic example of a covenant is that between parent and child.

For personal to scale, trust and covenant must be protected and sustained. Even enhanced.

Which is where social comes in.

How?

Let me try and explain. By now regular readers would have been aware that I’m a big fan of The Big Shift, the Shift Index and the Power of Pull, all part of the oeuvre of John Hagel, John Seely Brown and Lang Davison over at the Center for the Edge. Until I delved into their work, until I’d spoken to them at length, there was something missing in my view of what’s happening.

I was comfortable with the idea that having covenant relationships in business was the right way to go: that was consistent with my upbringing, my attitudes and beliefs, consistent with my satisficer status. I was comfortable with the idea that the advent and evolution of digital infrastructure, and the likelihood that it would become both affordable as well as ubiquitous, these things meant that “scaling” trust and covenant relationships was going to be possible. Similarly, I was comfortable with the idea that the problems of the 21st century, covering climate change, energy, water, nutrition, mineral resources, education, wellbeing, healthcare, poverty…. these had all evolved into new forms and shapes…. none of these problems was going to be solved using the tools of the old command/control hierarchy-based paradigms… new tools, related to covenant relationships based on deep-seated trust and requiring mutual respect and collaboration across multiple and complex cultures and disciplines.

All this I was comfortable with. And the Sixties-Child-technology-tinged optimism that I inherited made it all the more likely that I would hope and expect that the internet would help make this world a better place.

But balanced against this was a pragmatic expectation that life, the universe and everything would carry on as before, with Fear and Greed being the primary drivers. That companies would continue to concentrate on maximising profit, that the rich would get richer and the poor would get poorer. That people like me would fade into retirement listening to the same old protest songs and wondering about what might have been.

Then came my aha moment, as I dug deep into what John, JSB and Lang were saying. They weren’t just saying that there was a better way. They were saying that that better way was the only way. The only way for companies to succeed in a world where digital infrastructures and liberal public policies had created the Big Shift. Now they had my attention. [This is something I’ve written about quite a lot, so if you’re interested please search for “Social Enterprise” occurrences here at confusedofcalcutta.]

I began to see that “social” was not just a way for personal relationships to be sustained in trust and covenant, but that it was a way to improve the lot of everyone involved. Customers. Businesses. Partners. Even products and services.

How?

It all begins with sharing.

Being able to share who I am, what I’m interested in, what I’m like, so that the first part of the analogue relationship can be transferred to the digital. And, as in the analogue world, this view of who I am has to be built in an environment of trust. Which means informed consent. Consent to collect information about me, obtained once I’d been educated and informed about how that information is to be used, particularly when that information is not part of what I have shared voluntarily in the public domain.

With whom would I share this information? With people I trust. People I have personal relationships with. When those people work for companies, that domain of trust is extended to those companies. A company’s employees are all frontline ambassadors of that company’s values and ethics and brand. You trust the people, soon you will trust the brand. Over time, this has a more powerful effect: since I trust the brand, I will now trust the people associated with that brand; I will begin to have relationships with people I don’t know, because they work with people I know. One degree of separation becoming zero degrees of separation over time.

So the first thing that gets shared is what gets called a “profile”. This is nothing new, it happens all the time everywhere. When my wife and I are talking, and one of us is trying to describe someone we’ve met for the first time to the other, we create profiles. Profiles that persist in our memory, descriptive of the person, his/her likes and dislikes, history, and so on.

When profiles are shared between people in an environment of trust, identification becomes easier, and the inherited investment in the relationship means that personalisation and customisation become easier. But that alone is not enough.

The second thing that needs to be shared is communication. Ideas. Feelings. Wants. Needs. Hopes and aspirations. Worries and concerns. Feedback loops. People in relationship tend to share these things. So too in a digital world. To protect and sustain trust, this has to be done with everyone being equal, everyone being a node on the network as it were. Networked not hierarchical. With communications taking place in trusted pairs and groups. With informed consent as to what is being shared and for what purpose.

Profiles and networks are by themselves not enough, unless the person-to-person dialogue is taking place between empowered people. Which requires businesses to think differently, behave differently. Institutional innovation.

This then leads to the network-related collaboration curves that the Power of Pull speaks of, where focus is on the flows of learning rather than the stocks of experience, and where marginal returns are on an increasing curve. Network effects.

Then the stage is set for the payoff. Creation spaces. Where value is created communally. As people coming from different cultures and experiences and skills can share their learning and continue to learn together, creating ways of reducing waste and building value. At home. At work. In society. In the world at large.

Creation spaces are enabled and facilitated by the common profiles, the networked communications and the institutional innovation that ensures that the edge is empowered. It’s where social acts as ambassador, as recommender, as warning, as filter. It’s where the power of bringing together people from different environments and cultures and genders and ages and skills and beliefs starts showing.

All the while protecting the trust and the covenant of the original relationship, as a result of the empowerment, the transparency, the informed consent, the feedback loops.

And the willingness to adapt, to modify, to change.

To evolve.

Comments? Views? Part 4 to follow in a day or two.

 

Yesterday, in my first post on the subject, I said:

“Social” is not a layer. “Social” is not a feature. “Social” isn’t a product.

Social is about bringing being human back into business. About how we conduct business. About why we conduct business.

Social is something in people’s hearts, in people’s beings, in their DNA.

Man is born social.

Many companies were not.

 

Why weren’t the companies social? After all, business used to be social. People always bought from people, sold to people. They knew each other, knew where they lived, what they did. People were in relationship.

So what changed? I can’t be sure, but I can surmise.

People wanted to grow their businesses, to “scale”. And, using the technology of the day, ostensibly built around assembly-line thinking, scaling began with standardised identification and nomenclature, then probably went through some form of homogenisation to reduce standard deviation, and finally process optimisation to elongate the mean time between failures.

So I guess customers had to resemble parts in a manufacturing process. Everyone was allocated a number. And since customers did business with many businesses, everyone was allocated lots of numbers. It didn’t matter what the number was called: customer number, account number, roll number, ledger number. Customers were numbers.  Lots of numbers.

The dehumanisation had begun. Next step was to optimise the workload by making it switchable. So, as many of us experienced in many retail environments, particularly in banking, we saw traditional relationships sundered, as the people with the relationships were themselves standardised and moved around, as they became standardised, transferable, exchangeable, replaceable. Sometimes, if you were lucky, they were promoted to cover a range of outlets, and your outlet was one of them. But for the most part, the people you knew were moved around until you didn’t know them any more.

Now that we’d all been made into homogeneous numbers, and now that the historical relationships were systematically torn up and thrown away, there was still one more thing to do before the dehumanisation could be completed. And that was to remove all discretion from the people you actually dealt with at the till, at the counter, at the coalface. To make everything so systematic that the person you dealt with might as well have been an ATM. All rules and no relationship.

The dehumanisation was complete. Now, finally, the “real” customer looked and felt like the “model” customers that were researched, sampled, broadcast-advertised to, channelled, influenced, controlled. Any colour you like, any car you like, as long as it was a black Model T. And the “real” staff acted and behaved exactly like the machines that were being designed to replace them. And business grew and nobody complained. Nothing was wrong with that picture.

Until the Cluetrain guys came along and suggested that perhaps that was not the case. That perhaps there was something a teensy bit wrong with the picture. [Obviously they were not the only ones doing the pointing out. Howard Rheingold, Eric Raymond, Karim Lakhani, Clay Shirky, Steven Johnson et al on communities and emergent behaviour; John Hagel, John Seely Brown, Don Tapscott, Chris Meyer et al on how the digital context was changing business; Carlota Perez, Yochai Benkler, Eric Beinhocker on the implications of all this in markets and in finance; Tom Malone, Andrew McAfee, Andrew Abbott et al on how work was changing as a result of all this; Albert-Lazslo Barabasi, Duncan Watts, Clay Spinuzzi on the connectedness and networks aspects of all this; Esther Dyson and Tim O’Reilly, both personally as well as professionally, in what they said and what they enabled the publication of. The list is by no means exhaustive, and I am sure I’ve left a pile of key people/readings out. But what I was trying to show was that change was afoot, that something big was happening. And it all revolved around networks not hierarchies, empowerment at the edge, community-based value creation and the continued dance of Moore’s Law, Metcalfe’s Law and Gilder’s Lemma.

Something big was happening. With the customer moving to the front and centre of the stage.

Demanding that things become personal. Again.

Walmart had figured out that if you could aggregate distribution points virtually, you could deliver economies of scale over a wider area. Amazon took that learning, and made every home the edge of the distribution network. Facebook went further, and made every person the centre of the distribution network.

Business was becoming personal. Again.

There may be a million reasons why business had stopped being personal; my explanations above should not be taken as gospel, just as one possible set of reasons. There may be a million reasons why business may become personal again; I’ve tried to explain that there was a whole zeitgeist driving towards that change, and that the change is happening now. Again, don’t take this as a conclusive analysis, just as a set of possibilities. These are not things I want to imbue with cloaks of certainty.

What is important is that change is happening, and that change is happening now. That business is becoming personal again.

What does that mean? Is it just a sound-bite? Or, as Shakespeare may have preferred to describe it, is it just a tale?

“a tale. Told by an idiot, full of sound and fury. Signifying nothing”

I guess some companies hoped that customers would behave like terracotta warriors. Standardised, standing in line. Spoken to and unable to speak back. [Unable to listen either, but who cared?}

 

The more enlightened companies probably realised that customers would prefer to retain part of their humanity, so they didn’t think terracotta warrior, they probably imagined “calm and anaesthetic labour ward, with everything in its place”:

 

Doesn’t that picture amaze you? Where and how did they find a labour ward that looked like that? [The picture is taken from a Practical Parenting series in New Zealand].

Instead, customers were human. Distinctive in their differences. Strengthened by their socialness. More like this photo from Steve Snedeker:

 

Some businesses are happy not to scale, but to focus on quality of service within a boutique market. Some are happy not to have any relationships with customers, working strictly on a pile-them-high-sell-them-cheap model, cost leadership being their aim.

And then you have the rest. Businesses that have woken up, that would like to have personal relationships with customers, and somehow to make those personal relationships scale.

Can such businesses exist? Is it possible to scale while remaining personal? I think yes. Provided.

Provided people understand the plural of personal is social.

I buy regularly from Abebooks, a collection of small bookshops that allied to use a common digital infrastructure in order to scale and achieve geographic reach. They were bought by Amazon some years ago. And then apparently left alone by Amazon, for some strange reason….. my accounts remain separate, the Amazon recommendation engine does not work on my Abebook purchases, the Amazon review process has not yet made its way into Abebook world. But I’m happy. Because I get the simplicity and convenience of a very large inventory across thousands of bookshops, a built-in price comparator, one-click fulfilment processes…. and personal service.

Most of the time, when I get something from an Abebooks shop, the person who ships the book (often the seller) leaves a personal note. Usually signed. Usually saying thank you for your purchase. And over the years I’ve gotten to know some of those people. We have a relationship, we know each other by name, know something about each other, enjoy doing business with each other. And guess what? I’ve never had a problem with Abebooks. Never had to worry about damaged goods or returns or faulty or anything like that.

How can Abebooks do this? I think there are four reasons. One, it’s an aggregation of individual shops, a network rather than a hierarchy. Two, that network retains empowerment at the edge, the people in each shop still remember what a customer looks like and why a customer is important. [As Peter Drucker said “The purpose of business is to create a customer”. We should never never forget that]. Three, they use digital infrastructure to do the mundane repeatable things that digital infrastructures are good at: reducing search costs, taking fulfilment and billing friction away allowing for two-way communications, connecting the participants up. And four, because they care.

Because. They. Care.

When personal is scaled up, we need to ensure that the ability to care is retained and enhanced.

It’s not just about Abebooks. I shop regularly at Etsy. Again the same thing, personal service from individuals whom I dealt with by name, people who remembered my name, people who signed their names to the missives and thank-you notes. People who were polite and courteous. People who appeared to care for my business. For Abebooks read Etsy. For Etsy read Discogs. The list could go on and on. Places where I could deal with real people and have real conversations. Places that had the same characteristics as Abebooks.

Social is the plural of personal. It starts with caring. Something that has to be in the DNA of the firm.

That caring mentality leads to a relationship where people know each other, their names, what they do, what they like, what they don’t like.

That caring mentality leads to the willingness to invest in the relationship, to spend time, to build trust.

The digital infrastructure is only there to enable and enhance all this, by making it easier to connect with each other, to converse, to remember likes and dislikes. That digital infrastructure is there to help ensure that analog errors can be reduced: forgetfulness, name and address errors, mistakes made in hearing what was said. That digital infrastructure is there to reduce friction and to simplify discovery, inventory searching, price comparison, order entry, fulfilment and billing.

But it all begins and ends with the person, and being personal.

What does all this have to do with social? Well, when you try and scale up personal, think of what happens to the customer. More choices. More inventory. More selections. More advertising. More More More.

So customers need help. Help to find what they’re looking for. Advice on what is good and what is not. Signals on whom to trust and whom not to trust. How do customers do this? They turn to their friends.

Hello social.

Social. Not a layer. Not a feature. Not an app.

Social is the plural of personal.

[I intend to write at least two more posts, one on how scaling up personal to social helps build community and community action, and one on how this then enables the creation of real and sustainable social value. I may write a third, about choice, about anonymity, about B2B contexts, whatever.]

It all depends on what you say about this post. Whether you found it helpful or not. What you’d like to see in my next post. What you didn’t like. What I got wrong. What you think I should watch or listen to or read in order to learn more.

 

 

 

 

There was a time in my life when everything I would consider “business” was also personal.

As many of you may know, I was born in Calcutta nigh on fifty-five years ago. I stayed there till 1980. There were no supermarkets in Calcutta in those days. For most things you walked down to your local provisions store, where you knew everyone and everyone knew you. By name. They didn’t just know you, they knew your family, where you lived, when you moved there, what you did. They knew when and if to offer help, advice, credit, whatever. Not everything was available at that friendly neighbourhood provisions store; so sometimes the Mountain came to Mahomet. Milk and newspapers were delivered home; new cooking vessels were bartered for old newspapers and saris, or at least that’s what I remember, in some variant of rag-and-bone-man. And occasionally we went to New Market to buy something more exotic, unavailable in the normal shops.

We always appeared to do business with people we knew well, and who knew us well. As a family we were probably satisficers rather than maximisers (to use Barry Schwartz’s parlance in The Paradox of Choice); we didn’t shop around, we looked for an exchange of value within a stable relationship. So my haircuts were at A.N. John on Park St, when we were well off, and 003b Short St, when we weren’t. Sports equipment was always bought at Castlewood, next to A.N.John. Books at Oxford Book Emporium on the other side of the street. Second-hand books and comics and magazines came via Mr Mallick of Free School Street, round the corner. When times were good, meals were at Firpo’s and Sky Room and tea at Flury’s. Indian food was at Amber. Shoes were bought round the corner from Amber, usually from the same shop. Clothes used to be tailored to fit at K.C.Jakkimull’s, next to Sky Room.

It wasn’t just that we went to the same shops. Or that the shops were so close to each other you could have covered them under a large blanket. Those things were important.

What was far more important was that they knew us by name, knew everything about us, knew what we wanted and knew what we needed. And we knew them, knew them by name, knew what they were good at and what they weren’t good at.

It was personal.

It was a relationship.

The relationship tended to be sustained over time and over generations. I can’t remember the number of times someone has told me that my father had sat in that very seat and been provided a shave/a meal/ a suit/whatever. Sometimes it went beyond that, and my grandfather was brought into the conversation.

Relationships. Where both sides invested. Where, after a while, you couldn’t see that there used to be two sides. No haggling over price or bargaining, that was reserved for the forays into the exotica of Hogg’s New Market.

And then, in 1980, after my father died, I came to the UK.

It took me years before I went into a supermarket, they scared me. I wanted personal. So I went for personal: the corner shop, the local newsagent, the local pub, places I could walk to, people who knew my name and whose names I knew. People I saw regularly. During those days you went to your bank branch to get many things done, and the staff there knew you. Your bank manager knew you. When you got a letter from someone you did business with, often enclosing a bill, you recognised the signature.

You knew the person who sent that letter. And they knew you.

You had a relationship. It was something in your DNA. A part of what proclaimed you to belong to the human race.

Then, as the Eighties progressed, we began to lose something of our humanity in how we did business with each other. Bigger became bigger and better than Better.

And during the 17-year sleigh-ride bull market that followed, a part of our humanity was lost in how we did business. The foundation for that loss was set in the broadcast age, in how firms communicated with people, how people couldn’t communicate back, aided and abetted by the one-directional technology that was television, occasionally exacerbated by those in the advertising business.

That’s what Christopher Locke, Doc Searls, Rick Levine and David Weinberger rebelled against in the Cluetrain Manifesto. How business had become not-personal. How companies had built walls between them and their customers, how much damage was being done by those walls, why that situation could not be sustained and how the internet and the Web was going to change all that. That’s what evoked Chris’s memorable words:

We are not seats or eyeballs or end users or consumers. We are human beings—and our reach exceeds your grasp. Deal with it.

Those very emotions were what drove Doc to work on Vendor Relationship Management and then to write The Intention Economy. Those very emotions were what drove Chris to write Gonzo Marketing; you can see them at work when you read David’s Small Pieces Loosely Joined, Everything is Miscellaneous and Too Big To Know, as he looks through the lens of Cluetrain on how information is organised, accessed, labelled, enriched, made into useful knowledge and imparted as wisdom.

Those very emotions were probably responsible for making Rick into a great chocolatier.

[Disclosure: I have the privilege of being able to call the authors of The Cluetrain Manifesto my friends. To have broken bread with them in different continents over the years, to have broken sweat with them in different escapades. We know each other by name. We know a bit of what makes each of us tick, the little bit we can know. I had the honour of writing a chapter in the tenth anniversary edition of that book, something that thrilled me and humbled me.]

Business is personal. It’s about relationships. It has always been so. Until we tried to forget it and concentrated on making money, not shoes. [As Peter Drucker said, people make shoes, not money]. Then, for a short while, business became not-personal.

As the Cluetrain guys signalled way back in 1999, the web was changing all that. Business was becoming personal again.

It comes as no surprise to me that salesforce.com was born during those heady times, as business started becoming personal again. It comes as no surprise to me that Marc Benioff understood that the plural of personal is social, and that it’s in the DNA of the company that he and Parker Harris founded. That’s why I went to work for them.

“Social” is not a layer. “Social” is not a feature. “Social” isn’t a product.

Social is about bringing being human back into business. About how we conduct business. About why we conduct business.

Social is something in people’s hearts, in people’s beings, in their DNA.

Man is born social.

Many companies were not.

And the companies that weren’t, they can’t just become social by buying layers or features or even products. Porcine unguents, nothing more.

You need to be reborn social.

You need to start thinking of the customer as someone to have a relationship with, to get to know, to invest in, to trust, to respect.

And you need to get everyone in the company to think that way, to act that way, in everything they do.

And you need to do this everywhere, not just with your customers. Not just with your supply web or your trading partners. Not just with your staff and your consultants.

Everyone. Everywhere.

The plural of personal is social.

Comments? [I hope to follow this up with a second post looking at how companies are doing this today, to be written sometime tomorrow].