Speaking about professional services marketing


Bruce Marcus has been writing the Marcus Letter on Professional Services Marketing for about a decade, originally as a print newsletter, and now online. His broad experience makes him one of the true doyens of the field. His excellent recent book, co-authored with August Aquila, Client at the Core, goes into the practical detail of creating the oft-spoken of but rarely realized “client-centric firm”.

Bruce recently wrote an insightful and kind review of my second edition of Developing Knowledge-Based Client Relationships. Well worth a read – just taking a few brief excerpts from his review:

“Two critical elements have evolved, and are continuing to evolve. We see more clearly the uses of information as a discipline in law and accounting practices. And we begin to learn to harness that information to our benefit in serving our firms and our clients. And that is what Ross Dawson addresses, and addresses brilliantly in this book.

It is, I should note, a pleasure to read this book, not only for its lucid and rational instruction, but for its confirmation of much that I and others have been saying for some time. We agree on virtually every aspect of it, although he goes much farther into the process than most have done.

As knowledge management penetrates the consciousness of a greater body of professionals, Developing Knowledge-Based Client Relationships will be a well-read and well-thumbed handbook. It is certainly one of the more important works in the field of client relationships and practice management.”

Thanks Bruce!

Collaborative filtering for music picks up pace


I believe that “collaborative filtering” is at the heart of how the networks are coming to life. The basic concept is that we must collaborate to filter the massive information overload we face. We can do this simply by taking the recommendations of friends we know and trust. However now software can amalgamate the views and perspectives of thousands or millions of people to direct you to the information or entertainment that is uniquely relevant to you. One of the many domains in which collaborative filtering can be applied is music, by recommending or playing music based on your preferences.

Last.FM, which I last wrote about in this blog in 2003, has developed a lot further, and seems to have gained critical mass. Last.FM’s underlying recommendation engine, Autoscrobbler, is now also available separately, helping to fund Last.FM’s free, no-advertising offering. Last.FM creates personalized radio stations based on people’s preferences, and makes recommendations based on what other people with similar tastes like. As such, it is intrinsically based on social networks, and also provides group functionality so people with similar taste can interact. A newer service, Pandora, works quite differently. It uses sophisticated algorithms to analyze music based on its rhythmic, melodic, and harmonic structure, instrumentation, production qualities, lyrics and so on. You seed the service by nominating a song or an artist, and it creates an entire radio station from that. You can also provide feedback on your preferences, as in Last.FM. The service is available for free with advertising, or there is an advertising-free subscription service. Pandora raised $12 million last November, bringing its total raised to over $22 million, showing the faith investors have in the value of these models. However one venture capitalist prefers Last.FM to Pandora in an interesting comparison of the two services. Check out these music services and support them! The better they get, the more we can discover and listen to the music we love the best from the many millions of songs produced every year.

Localized blog search


A new Australia-specific blog search engine called gnoos will be launched in February in pre-beta form, by Ben Barren’s company Feedcorp. This is interesting and relevant because many blog conversations are often about local issues, not least politics. Some blog search engines, such as Bloghub.com and LSBlogs.com, offer the ability to search within countries, but have very poor coverage, so are of little use. Similar problems apply to country-specific engines such as the Brazilian blogs.com.br.

An article in the Sydney Morning Herald on gnoos compared the initiative to other Australian Internet search engines, such as Panoptic, which have struggled, as most people prefer to use the global search engines such as Google, with which they are familiar, have very broad coverage, and which offer some degree of local search capabilities anyway. However this is not an appropriate comparison. Blogs are interlinked, they are not usually meaningful on their own. Blogs discuss issues of interest to a particular community, which are often local in scope.

Currently, the deeply intertwined discussions that happen in the blogosphere tend to revert to a US-centric perspective, as that is where the dominant pool of bloggers reside. In a way it’s easier for those who don’t speak English, as their community can be easily defined. Certainly the conversations of the blogging-mad Brazilians get entwined with those of the Portuguese, and those of the French with the rest of the francophone community, however there is a reasonably defined community just by virtue of language. In the case of English, the de-facto global language, conversations tend to get drawn back to the US. However Australians, Britons, and English-speaking Indians, among others, are often more interested in engaging in discussions on their own local politics or issues rather than being drawn back to the US domain. Right now we are in a situation in which US conversations are dominating globally, simply due to the size of the US blogging community and the globally interlinked nature of blogs. An excellent country-specific blog search engine can facilitate the creation of interlinked conversations among bloggers of that nation. I hope that gnoos fulfils its promise, and helps the Australian blogging community to develop a greater identity and ability to engage in discussion on local issues. That will be a big move forward in making blogging conversations relevant to local communities. Politics and consumer issues are largely local, and unless there are ways to tap into those blogging conversations, they will have little impact.

Is the balance of power shifting from advertising to PR?


A thought-provoking article in this week’s The Economist, subtitled “As advertising struggles, PR steps into the breach,” suggests that PR will grow faster than the advertising industry. It refers to an internal Procter & Gamble study that found that PR gives a better return on investment than advertising. Investment bank Veronis Suhler Stevenson has forecast that in the U.S. spending on PR will increase at 9% annually over the next five years, ahead of growth in advertising spending. This has to be put into context. Total PR spending in 2005 was around $3.7 billion out of a total pool of $475 billion spent on advertising and marketing. However all of the PR spending goes to agencies, while the majority of the remainder goes to media companies.

Today PR entails being involved with every aspect of how people encounter information and make sense of it. It is about being engaged in the flow of messages through an intensely networked world. These capabilities are far more pertinent and valuable than formal advertising, that seeks to persuade from within a defined frame. There is no question that PR, or whatever the field morphs into, will hold greater sway in coming years. What I wonder about is how this will affect the integrity of the content we have access to. Already newspaper articles are often reprinted or rehashed press releases. PR agencies have significant blogger initiatives, looking to influence “citizen journalists” as well as traditional media representatives. How far will the influence of PR flow into our sources of information, and will it be possible to filter these effectively? The answer is yes, however it will require greater attentiveness, and willingness to seek multiple sources. The energy and sophistication that will go into influencing the flow of messages in the few next years will be staggering.

Welcoming a busy and fun year ahead!


Back from a fabulous holiday in Thailand, and straight into an array of very interesting – and time-consuming – client work. Blogging is central to who I am, but clients ultimately have priority. I’ll try to make sure I maintain my target of 2-3 posts a week (or sometimes more), but do expect a little variation along the way…

I just thought it would be worth sharing some of what I have on the agenda for 2006. Advanced Human Technologies is continuing to work with a variety of major professional and financial firms on enhancing their client relationship initiatives. Through this year I will be focusing substantially on applying social network analysis (SNA) approaches to a variety of topics. In the near future CNET will be releasing a study I’ve done in collaboration with them on how influence networks affect the success of major technology purchasing decisions. There are some fascinating results, and I expect the report to prompt my influence network work to be developed and applied in a range of directions. As research leader for client connectivity for the Network Roundtable, the leading body of expertise on SNA, I’m currently engaged in a round of studies with major firms on what drives the success of their high-value client relationships. Other areas I will be applying SNA approaches to include creating value in industry assocations, and fostering cross-border innovation. In addition to all this, I will shortly be setting up a global organization studying the future of business, with a kick-off event mid-year on the future of media. More information on all of this before too long. In a word, plenty on my plate, but all great fun! I look forward to sharing details of what I’m uncovering along the way, and hopefully interacting with you at some point in the year. Happy new year!

On holidays!


I’m about to head off to Thailand for two weeks with my wonderful wife Victoria. I’ve been to Thailand a fair bit over the years, but it’s first time for Victoria, and we’re going to two places I haven’t been before: Hua Hin, a resort area a few hours drive south of Bangkok for some relaxation, then Chiang Mai in the north for some exploration. So this blog is now officially on holidays – back mid-January! Have a fabulous New Year and start to 2006!

Global business and outsourcing


If you happening to be flying Qantas anywhere in the world in the month of January, you can listen to an interview with me on the Qantas radio business channel, hosted by Peter Switzer. The interview was on the general theme of the future of the global economy and followed quite a few different tangents, but probably the most interesting part was about how we should feel about work being outsourced to China, India, and elsewhere around the planet. Work is becoming increasingly specialized, and technology allows business processes to be unbundled into small elements that can be easily integrated. Unless you are truly world-class at what you do, you can’t expect to do well in the long-term. The real value is often in coordinating how the pieces come together to create something new and valuable.

For example, many leading Indian technology services companies, such as Infosys, Tata Consultancy Services, and Satyam, have won contracts to run Chinese software development centers. These companies clearly have the expertise to do this. They weren’t chosen because Indian programmers are cheap, but because these companies know how to manage offshore software development centers. Yet why shouldn’t Australian, or Brazilian, or Singaporean companies do this? It is not an issue of cost, it is about effective project management and client liaison. Those organizations that have excellent capabilities at this level can create far more value than is possible by providing large numbers of inexpensive software developers. The problem is one of mentality. For example, there are any number of great software products developed in Australia and other mid-sized developed economies that are successful internationally. However I see very few initiatives being put together that deliberately draw on global best-of-breed suppliers, and create distinctive and high-value services and products from those inputs. This is where the smaller developed economies need to be playing. It is not about competing where you can’t compete, but about recognizing that value creation will cross boundaries, and positioning yourself effectively in that space.

[Update]: Just found out this is actually airing in February.

The future of robots in an aging Japan


As a highly relevant follow up on my earlier post on emotion-focused robots, there’s a great article in the current issue of The Economist on Japan’s peculiarly propitious environment for robots. With the news just out that Japan’s population has peaked and is starting to decline, it is a particularly pointed issue where workers will come from to drive the Japanese economy. Having lived and worked in Japan for over three years in the early 1990s, I long ago came to the conclusion that Japan would never accept high levels of immigration in the way Western Europe has, and that as a result the long-term future for Japan’s economy looked rather gloomy. The Economist article also affirms that immigration is not seen as an option by Japanese to address labor shortages. However Japan’s significant technological lead in robotics is supported by a lack of “robophobia”; in fact there is a strong enthusiasm for robots in contemporary culture, comfort in dealing with them, and hope for them to help Japan to become self-sufficient in labour. Japan’s very pointed demand to develop robots to replace human labor, and their technological skills combined with plenty of capital, could dramatically accelerate the long-mooted—yet inevitable—arrival of the household robot. [Update]: For example.

Needy and therapeutic robot toys


A group from New York University (NYU)’s Interactive Telecommunications program has come up with an intriguing idea that seems to have struck a chord. Their “Needies” are soft stuffed toys with microprocessors and wireless technology that not only vocally request attention from the people around them and respond well to being petted and held, but actively compete between each other for attention. Jealous Needies may shout out “me, me, me!” or even “throw him!” if another Needy is being held. A video interview shows the Needies in action.

This reminds me of Paro, the Japanese robot seal, which responds to affection (but without the jealousy). It has successfully been tested with autistic and handicapped children and with elderly people, who can respond by becoming more social and interactive with other humans. Other robots are being used for similar therapeutic applications based on human/ machine bonding. While the Needies are intended as novelty toys, there is no question that people will will increasingly form emotional ties with robots. Tamagotchi was just the beginning. When robots are cuddly, responsive, and can speak, real bonds will be formed. A robot nanny that children will love will be here in a basic form in the next few years. Of course it would terrible if people left robots to bring up their children. But emotion-focused robots can and will play a positive role in play, care, and society.

Steps to corporate blogging


So, corporate executives are saying, it sounds like we need to be doing something about this “blogging” thing. So what do we do? According to Marketing Sherpa, there are five steps for major corporations launching blogs: set goals, assemble stakeholders, decide who can blog, write a formal blogging policy, and announce the policy. Sounds sensible, right? Not according to Robert Scoble, the most-read of the 1,000 plus Microsoft employees blogging to the world at large. “Oh joy, we’re going to get more committee-run blogs… Wrong first step, too. The right first step is to read blogs!” Robert provides a link to one of the more outspoken (and unauthorised) Microsoft bloggers, whose disclaimer on his Mini-Microsoft blog reads:

These are sole individual personal points-of-view and the posts and comments by the participants in no way represent the official point-of-view of Microsoft or any other organization. This is a discussion to foster debate and by no means an enactment of policy-violation. These posts are provided “as-is” with no warranties and confer no rights. So chill. And think.

In one recent post, Mini points to problems with the release of Visual Studio 2005, which may have been done before the product was mature. Immediately, Channel 9, the blogging and communication site for Microsoft developers, which is visible to outsiders, took up the issue and debated it. No stonewalling and corporate PR. Customers got to see what Microsoft developers personally thought about it, including strong reservations. Do customers trust Microsoft more as a result? Absolutely. They know they are seeing the reality of the debate, not just the corporate hype. Incidentally, all Microsoft blogs are stated to express personal opinions, not corporate ones.

Yes corporates do need to start with having some clarity on what they are doing, and establish appropriate parameters for blogging. But if this results in exactly the same communication as you get from the PR machinery, why bother? It’s just pretending that you believe in genuine discussions with your community. I should also add that the discussion about corporate blogging over-emphasizes external communication. Blogging is absolutely an immensely powerful tool to improve every aspect of your external relationships, not just in reputation management, branding, and loyalty, but also in areas like customer-driven innovation and quality improvement. However the use of blogs and other social software “inside the firewall” is equally important, as it represents the next phase of effective communication in large organizations, moving on from email and intranets, which today constrain as much as they enable effective collaboration and work.

Update: For a slightly different point of view see this post from former Microsofter Jim Fawcette on how Microsoft’s corporate blogging is helping to steer attention away from “real, insightful, internal criticism of Microsoft… with more bite than gums” such as Mini-Microsoft. Robert Scoble believes he’s the supposed decoy here and says that if that’s his role, he’s failing miserably.