Last night I wrote, in the context of customers:

• They want to be treated like human beings, not account numbers.
• They want to know they can trust the people they do business with.
• They want to know that the people they give their business to actually value their business.
• They want products and services that are fit for purpose, made available at a reasonable price.
• If and when something goes wrong, they want to know the facts. Quickly. Without window-dressing.
• They’d like to know what is best for them, so they’d like to talk to their friends and relatives about it.
• They’d like to know what their friends recommend, and they’d like to recommend things to their friends.
• They’d like help when something turns out more complicated than they’d expected, or when they’re trying to do something different.
• And they’d like to know that they’re being treated fairly.
• In exchange for all this, they are willing to give their custom regularly and loyally. As part of a trusted relationship. Where people buy from people and people sell to people.
• In exchange for all this, they are willing to become customers.

Today I want to spend a little time looking at each of these things, seeing how companies can make it easy for customers to do all this. But before that I want to remind you of the question I repeated before these points, on building trust.

Trust. The lynchpin of any relationship between customer and company.

Whenever you’re designing products and services for the customer, start with the question:

Will this help build trust between the customer and the company?

If the answer to that question is No, then everything else doesn’t really matter. Just icing on a cake that no customer wants to eat. No customer, no business.

That’s Social Customer Rule 1. Whatever you do, it must not weaken the trust relationship between the customer and the company.

[An aside. I am trying to frame this in such a way that we no longer have to worry about terms like B2B and B2C and large-cap and enterprise and SMB and SME. These principles should work in the limit case of a single-person “company” dealing with a single person. And then we should be able to scale those principles up.]

For now, let us assume that the answer to the question is yes. I will come back to this overriding question, this “envelope” of trust, later on in this post.

So let us now look at some of the detail in what a social customer wants to be able to do. In order to do that, I’d like to work with a simple model of the customer.

There’s been a lot of research into why people buy. It’s written by people a lot smarter than me. This blog is not where you should come for that research. What I’m trying to do here is to build a simple from-first-principles model of what makes a customer buy, and then to explain what a “social”customer would want as a result.

So let me start with an impetus to buy, formed by one or more of many possible stimuli (a perceived need, a whipped-up need, a slice out of Maslow’s hierarchy of needs, a want, a wish to keep up with the Joneses, a drive to acquire a la the Nohria and Lawrence 4-driver model, a lonely impulse of delight, environmental psychological design a la Paco Underhill, “retail therapy“, Christmas, the consequence of this appalling modern tendency to build obsolescent products, children, TV, advertisements, excess credit, pure unadulterated greed, whatever).

Someone wants to buy something. Which is made easier by the existence of an inventory of all the things that can be bought. That inventory needs to have some classification, some labels, some tags, an ontology and a taxonomy. If you want an understanding of this, you should read David Weinberger’s Small Pieces Loosely Joined as a starting point. Customers need to know what’s available, in a simple and convenient way. The problem is, there’s a forest of things out there and it’s not easy to see the trees. So the labels and classification and search tools and find tools matter. This by itself is not a “social” thing. What makes it social is the support for folksonomies, citizen tagging, above and beyond the chosen ontology and taxonomy.

Which brings us to Social Customer Rule 2. Inventory should be taggable. Your inventory of products and services, besides being easily discoverable, must support some form of tagging, some way to harness collective intelligence in solving the you-say-tomahto-I-say-tomayto problem.

So now the customer’s found something, which may or may not be suitable. There are lots of questions that need to be answered, in terms of quality, price, reliability, future-proofness, whatever. Here, “social” really comes into its own. In many cases, collaborative filtering techniques will come in useful. People who looked at this also looked at. People who bought this also bought. X% of people who looked at this bought it. The customer wants to know that the seller is reliable. Which means that seller ratings become worthwhile. In the same way, information about the product can be gleaned socially, via reviews and suchlike.

And so we have Social Customer Rule 3. Product and Seller information should be made social by allowing for reviews and ratings to be shared; price comparisons and collaborative filtering should be supported.

At this point I want to return to the question of trust. Reviews can be gamed. Ratings can be gamed. Those of unscrupulous bent have mastered the act of “shilling” the web. [Incidentally, a paper on Collaborative Filtering with Temporal Dynamics won the KDD 09 Best Research Paper award, and is worth a read if you’re interested in such things. Filters can be useful, but they can also be insidious if selected by others. Eli Pariser makes this point well in The Filter Bubble. You need to be able to switch filters on and off at the subscriber level; to be able to look at collaboratively filtered information at a general level (people who did A did B) or at your network level (people in your network who did A also did B). Support for all this needs a sensible approach to identity at a minimum.

Which brings us to Social Customer Rule 4. A sensible identity framework, supporting federation, should be in place.

Of course it doesn’t stop at identity. Because attached to that identity can be a whole slew of information to do with behaviour, preferences, activity, friends, purchases, rentals, status, location. From a social viewpoint, two things matter in this context. Who can see that information. Who decides. And the simplest answer is that the customer is the sole decision-maker of who can see what, when it comes to personal information.  If the company wants to be in the business of sharing that information, it has to be done on the basis of informed consent.

One key point to remember is that this is not just a company issue. Individuals may choose to share their transactions, their activities and their intentions with their network of friends, and even beyond that network. The customer is also in the sharing business. Customers will want to share the price at which they bought the airline seat, the hotel room, the album or the car.

And that gets us on to Social Customer Rule 5. Customers should be able to share their preferences, their profiles, their actions, transactions, activities and intentions with others if they want to. They must be able to decide what they share and who they share with. Sharing of this sort does not happen with the publish side alone, there has to be a subscribe part to it as well. A customer should be able to “tune in” to the general populace in terms of what they’re buying/selling/eating/reading/making/shaking; to be able to restrict the listening area to a location or a level of personal network, to filter the population as needed.

Underpinning all this we would need what I’m visualising as an “envelope of trust”, embodied in a set of rights”. The right to change your mind when you buy or rent something. The right to take your business elsewhere. The right to take your data elsewhere. The right to know what data is held about you, and who has access to that data, and for what purpose. The right to know how long that data is held, and why. The right to know when and where the whole enchilada has been breached, either through government agency or by “bad actor”. The right to know the status of all online services. The way old rights disappear and new rights emerge. The right of appeal.

Instead of listing a whole series of rights, I could just have said “behave with openness and transparency”.

These are just my thoughts. None of this is going to happen overnight, and there are many reasons why companies won’t invest in all this anyway. Many companies have been of the belief that customers are like children, preferably not seen, definitely not heard. So they concentrate on “managing” products, since products tend not to complain or ask for their money back.

But it’s changing. Some companies are providing tools that allow customers to become social. To share their activities, to be able to give and receive recommendations, to rate and review participants and products and services.

To put it another way, some companies are investing in real relationships with their customers. And customers are responding by being frequent and regular in their custom.

This has been happening for a while now, in some cases for over a decade. None of this is new. None of this is rocket science.

Customers are social by nature. They enjoy being with their friends, sharing their thoughts and beliefs and experiences and preferences. They will continue to do all this.

When they decide which companies they will give their custom to, they will look for companies that make it easy for them to share all this.

That’s what designing for the social customer is about.

Time to quote Drucker again. In an interview about a decade ago, he said:

No financial man will ever understand business because financial people think a company makes money. A company makes shoes, and no financial man understands that. They think money is real. Shoes are real. Money is an end result.

That’s pretty harsh about financial men, and probably unfair. I have known many good financial men, men who understand that “shoes are real”. But then I don’t know the context in which Drucker stated it.

What I do know is that the principle is sound. That we should all concentrate on making shoes well, openly, transparently, to the spec that the customer wants. And if we’re good at it, the money will come.

More in a week or two, once I see the responses to this post. No responses, no follow-up post. The market decides…..

 

 

Peter Ferdinand Drucker has influenced a great deal of my thinking, particularly about management, about organisation, about organisations, about all of business.

And about the customer.

After all, there is no business without a customer. As Drucker famously said (on page 61 of his seminal work Management: Tasks: Responsibilities: Practices):

There is only one valid definition of business purpose: to create a customer.

His italics, not mine.

The purpose of business is to create a customer.

A customer.

 

According to the Oxford English Dictionary, the noun “customer” has a number of meanings:

• One who acquires ownership by long use or possession;  a customary holder.
• An official who collects customs or dues;  a custom-house officer.
• One who “frequents” any place or sale for the sake of purchasing; one who customarily purchases from a particular tradesman; a buyer, purchaser.

We are not required to guess which meaning Drucker meant to rely on. The OED informs us that the first two usages above are obsolete, and that the “chief current sense” is related to the third and final definition.

So the current and only extant definition of “customer” is fundamentally about a regular, habitual, returning buyer. And this definition is no fad: there are references to this particular meaning in publications going as far back as 1480, 1523 and 1611. Not a fad.

None of this is new. None of this is startling. Everyone knows that businesses don’t exist without customers. Everyone knows that it is much easier to do business with an existing, “repeat” customer.

So why am I saying all this, and why now?

It’s for a simple reason. I’ve spent over a decade trying to make business “social”: writing about it, implementing tools that help businesses become more social, talking at conferences and seminars and workshops about it, engaging one-to-one with organisations keen on starting the journey towards becoming social.

And every now and then, the same question comes up, in one form or the other:

Where’s the payback? Where’s the ROI? Why is it worth doing?

When I started with the use of social tools in enterprises, at Dresdner Kleinwort, Andy McAfee was looking for people engaged in what he later termed “Enterprise 2.0”; the questions he asked, his lines of investigation and his subsequent SLATES framework did much to help me understand where the payoffs were in what we were doing then. We’d been using some of the tools since the late 1990s, and were adding to our toolset as more became available. In those days, many of the tools were open source, so there wasn’t really a significant investment decision to make: in many cases, we allowed multiple pilots to run in parallel before deciding the way forward on the basis of adoption and usage rather than mandate.

To many of us, the payoffs were as plain as proboscides. Not just any proboscides. Prominent proboscides. As prominent as the proboscis on the primate below.

The tools may largely have been free; our investment was nevertheless significant, in terms of the time we spent documenting and sharing what we were doing, what we were learning, what we could re-use. Early payoffs were simple, and were encapsulated in the McAfee SLATES model: improvements in knowledge management as a consequence of the use of Search, Links, Authorship, Tagging, Extensions and Signalling. Communications improved as a result; email traffic went down; meeting agendas became easier to construct, the meetings themselves were easier to run, and documenting the results and decisions was done more effectively. The persistence of the information, and its simple shareability, reduced translation and misinterpretation risk in global projects; version mismatch was minimised, since we tended to be looking at the same document; the ability to learn from mistakes was enhanced quite considerably.

We weren’t really using terms like “social” then within the enterprise, though people had begun to group the tools into this emergent category of “social media”.

Since then “social” is everywhere. We use terms like social business, social enterprise, connected company, and even argue about what they mean. Incidentally, I just love the words the Drucker Institute uses as a description:

We are a social enterprise that makes people more effective, organisations more responsible and work more joyful. We do this by turning Peter Drucker’s ideas and ideals into tools that are both practical and inspiring. We do this because society is only as strong as the organisations within it.

With the explosion of interest in “social”, there is no dearth of evidence on the rationale for investment in companies becoming social. Locke, Levine, Searls and Weinberger gave us The Cluetrain Manifesto to set out the agenda over a decade ago. Hagel, Seely Brown and Davison then provided the business rationale, the move from stocks to flows, in The Big Shift and The Power of Pull. Michael Chui et al at McKinsey Global Institute then gave us the research on how this was affecting corporations by publishing The Social Economy: Unlocking Value and Productivity Through Social Technologies. More recently, IBM, in its regular annual Global CEO Study, majored on how chief executives now regard “social” as where their interests lie and where their investments are going.

There is no dearth of evidence.

And yet.

And yet the questions continue.

So that’s why I wrote a series of posts recently on “The plural of personal is social” to try and go back to the beginning, to the customer. To try and explain that customers expect, even demand, to be treated as people. To try and explain that “social” was actually a way of doing this. Somehow, even after writing those posts, I felt there was more I wanted to say about it. Hence this post.

 

Companies need to become social. Because their customers are becoming social.

Companies are used to deciding to do (or not do) something because it makes “business sense”; now they have to learn to do (or not do) something because it makes “customer sense”.

From a business viewpoint, if something does not make sense in the eyes of the customer, then it is not worth doing. Not if you want customers. Not if you want people who return, and return regularly, to do business with you, people who provide you with their custom. Customers.

That’s what I meant when 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.

So, every time you do something you believe makes your company more “social”, ask yourself the following question:

Will this help build trust between the customer and the company?

Customers aren’t stupid. There may be a sucker born every minute, but customers are not suckers. Even suckers don’t return.

Ask yourself  “Will the customer get a better product or service as a result of what I’m doing?” Ask yourself  “Will the customer return and trade with me again?” Ask yourself  “Will the customer recommend me to others?” And again and again, ask yourself:

Will this help build trust between the customer and the company?

Sometimes customers don’t know what they want, and may need help in that process of discovery: much has been written about Henry Ford and “faster horses”. Sometimes customers don’t  know what is possible, and may need their imaginations to be given wings: much has been written about Steve Jobs and “a dent in the universe”. Sometimes customers are happy with what they have… until they see something much better: much, too, has been written about (and by) Clayton Christenson and “The Innovator’s Dilemma.”

These are limit cases.

Most of the time, customers know what they want.

They want to be treated like human beings, not account numbers.

They want to know they can trust the people they do business with.

They want to know that the people they give their business to actually value their business.

They want products and services that are fit for purpose, made available at a reasonable price.

If and when something goes wrong, they want to know the facts. Quickly. Without window-dressing.

They’d like to know what is best for them, so they’d like to talk to their friends and relatives about it.

They’d like to know what their friends recommend, and they’d like to recommend things to their friends.

They’d like help when something turns out more complicated than they’d expected, or when they’re trying to do something different.

And they’d like to know that they’re being treated fairly.

In exchange for all this, they are willing to give their custom regularly and loyally. As part of a trusted relationship. Where people buy from people and people sell to people.

In exchange for all this, they are willing to become customers.

In the end, that is the reason why businesses need to become social.

Unless they do, they won’t have any customers.

 

Was a sunny day
Not a cloud was in the sky
Not a negative word was heard
From the people passing by
’twas a sunny day
All the birdies in the trees
And the radio’s singing song
All the favorite melodies

Paul Simon, Was a Sunny Day, 1973

Have you noticed how, when you listen to an old favourite, you get transported instantly to the time when you used to listen to that song regularly? And sometimes do you feel yourself teleported more precisely, more specifically, to the time and place when you first heard the song? The surroundings. The temperature. The aromas and smells, the light, the colour, the weather.

And the people. Memories are made of people.

This teleportation, it happens to me a lot. Probably because I spend so much of my time listening to music made in the mid-to-late 1960s and early-to-mid 1970s. A wonderful decade. As a result, almost every day, I experience what the Carpenters memorably called Yesterday Once More. It doesn’t mean I wallow in nostalgia, I’m essentially a happy person, happy with my lot, happy in my present. Contented. I just happen to like the music of that time: I don’t listen to the music in order to evoke memories. But memories do get evoked.

Paul Simon’s Was A Sunny Day is a case in point. Every time I listen to it, I am reminded of a time when I would hear childhood friend Gyan sing it, often in duet with my cousin Jayashree. The same thing happened more recently when I was walking past a store and heard Wings’ Wino Junko. Suddenly I found myself in the “chummery”, the bachelor pad for young executives of a bank in Calcutta, sitting on a chair made out of a sawn-off wine barrel, with Gyan and Jayashree, listening to At The Speed of Sound for the first time. I think we also heard Diana Ross do the Theme from Mahogany for the first time that day. Memories.

Earlier this week, I was away in the western US on business. Woke up around 5am as usual, showered and got ready, then sat down to check on news and messages before going down to breakfast. Web headlines. Check. Chatter messages. Check. Twitter DMs and @messages. Check. Facebook messages and notifications. Check.

Freeze.

Rewind.

Facebook notifications. My classmate and friend of 46 years, Minoo Wadia, had commented on something that Les D’Gama, another schoolmate, had shared. Does-Not-Compute.

Rewind. Read again. And again.

Compute.

Freeze.

That’s how I learnt that my childhood friend, husband to my cousin Jayashree, father to my nephew Jiver, Gyan Singh, had passed away. He was only 61.

Floods of tears. Floods of memories. I didn’t know what to do. So I called Jay and spoke to her, tried to pass on my condolences. Had no words.

Then I sat and prayed. Prayed for Gyan, for Jay, for Jiver, for their family and friends.

I still had a few hours before my first business meeting. Hours to reflect on Gyan and to give thanks for him.

I’d known him since 1972, when I was approaching 15; we were introduced by Albert Silliman, my then girlfriend’s brother. A few weeks later, I had the opportunity to be present while Gyan played Leonard Cohen’s The Stranger Song and then followed it with Famous Blue Raincoat. I was hooked. Entranced. Even in those early years he was an absolutely brilliant guitarist and musician.

Over the next 8 years I got to know him better, as he met my cousin Jayashree and they became fast friends. I think I introduced one to the other, but that may be my memory playing tricks …. we all like to rewrite history the way we’d like history to have been. One thing’s for sure, my heart was fit to bursting with joy when I heard they were getting married, and I knew I just *had* to make it back to Calcutta for their wedding, even though I could not afford it. I was there. Twas a Sunny Day.

Gyan was always “family” in practice, and with the wedding that status became a legal one as well. And so I felt close to him even though I was thousands of miles away; no trip to Calcutta made sense unless it centred around spending time with Gyan and Jayashree. Sometimes Gyan would make it to London, but our meetings weren’t frequent, spread over half a dozen occasions over the past thirty years. And I would try quite hard to speak to him on the 5th of September every year, just to wish him happy birthday.

I could not see him the last time he came to England; I was myself hospitalised unexpectedly in the US and could not fly back. These things happen.

Gyan was a brilliant musician. The tributes that are flowing everywhere are testament to that. But that’s not what I want to write about.

I want to write about the Gyan I remember, above and beyond musician. Gyan the friend. Gyan the shoulder to cry on. Gyan the guy who did the things that needed to get done, often without being asked. Gyan who never sat in judgment, Gyan who knew when companionship was what was needed.

I want to make sure the world knows about the Gyan who made himself available unquestioningly and self-sacrificially whenever a friend was in need. I was a pretty moody teenager; seeing I was upset about something, Gyan would say “Come on, let’s go for a ride”. Sometimes it would be the Strand, sometimes Bihar (near Nizam), sometimes the fruit juice sellers near Lighthouse, sometimes just driving around. It was an amazing quality of his. No words. No judgments. No nothing. Just a companionable silence, during which I would calm down, settle myself and be fit for human consumption again. [I learnt a few days ago that he would do the same thing for my sister Sreepriya, something I’d neither noticed nor known. And I’m sure he did it for others.] It was something that Jayashree would also do, so I’m not surprised they got on swimmingly. I remember the two of us sitting somewhere on the Maidan, watching the sunrise, saying nothing.

I want to make sure the world knows about the Gyan who would speak with incredibly infectious enthusiasm and passion about the things he was interested in: it didn’t matter if it was a book, a play, a song, a band, a film, a dish; all you had to do was listen to him and soon you would have that same enthusiasm. So it’s no surprise that he was a big influence in the kind of music and books and films I listen to, read, watch, even to this day.

I want to make sure the world knows about the Gyan who’d pitch in and help, practically, whatever the situation, even if it meant putting himself to considerable inconvenience and sacrifice. Giving people lifts. Being the designated driver before the world realised the need for designated drivers; Gyan was the one who’d make sure everyone got home safe…. especially the ones who had somewhat reduced their chances of getting home safe by the end of the night. If someone was ill, he’d offer to go get the medicines from the pharmacy; if someone needed picking up or dropping from station or airport, Gyan would be there. Gyan and his little black Fiat, seemingly running errands for the world.

At a time when many of us didn’t know what stable meant, Gyan was the epitome of calm. At a time when irresponsibility was common, Gyan was a pillar of prudence.

It’s not that he never let his hair down. His smile was infectious, his laugh a delight. He just knew how to retain balance and limits at a time when many around him didn’t.

I was one of those many.

It was a privilege to have known him, his ability to befriend “warts and all”, unjudging, yet uncompromising in his values. An unconditional love, a covenant relationship.

It was a privilege to have shared his companionship, sometimes in silence, sometimes in gales of laughter.

And it will continue to be a privilege for me to be able to say “I knew Gyan. He was my friend”.

Gyan introduced me to much of the music I listen to, many of the songs that are my favourites. So every time I listen to one of those songs, I’m going to be reminded of Gyan.

Gyan, from whose mouth Not A Negative Word Was Heard.

My thoughts and prayers continue to be with Jayashree, Jiver, and the rest of his family and friends.

Requiescat in pace.

[Photo of Gyan credit Hari Adivarekar].

[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.