BRW on blogging power

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Today’s issue of BRW, Australia’s major weekly business magazine, has an article on “Blogging Power”, which hopefully will contribute to putting blogging and social software on the corporate agenda in the country. After opening with the salutary lesson on how what started with a single blog post brought Sony low, the article quotes me on how Australian corporates are lagging on implementing social software, and draws out this theme throughout the piece. I can’t resist using another quote the journalist Kath Walter took from her interview of me, which I think captures one of the most important issues about blogging and social software (I think I’ve been slightly misquoted here – blogs are in fact an additional source of insight, but the basic point is important):

“People say ‘I haven’t got time to read blogs’, but it is the exact opposite of the truth. Blogs are a very efficient way of filtering information. They are not an additional source of information, they consolidate information.”

The article goes on to look at Telstra’s new “blogging” initiative, which ostensibly has the intent to be authentic. The head of new media at Telstra, Paul Crisp, says that bloggers will be allowed to “challenge and question how the company could work better”. Crisp goes on to say that Sol Trujillo, Telstra’s new chief executive, will not be blogging. “It would be nice if he did, but he has other things on his plate,” says Crisp. BRW is definitely a mainstream business publication, so this piece could help to plant seeds in the minds of Australian senior executives. This blog is featured in the article as one of a small list of blogs to look at – welcome to any visitors from reading the article!

Innocentive and open innovation

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I originally wrote about the open innovation model of Innocentive several years ago in Living Networks (see page 12 from selected excerpts from Living Networks). Last week The Economist named Innocentive’s chairman Alpheus Bingham winner of its business process innovation prize for developing the company. Innocentive was originally founded by Eli Lilly, which recognized that the solutions to specific issues in the drug development process may be easier to obtain outside the organization than by trying to do everything itself. By defining specific solutions that it is seeking, it can open participation in its R&D process to any scientist anywhere on the planet. Scientists win a pre-specified reward for solving the problem, and in return sign over the related intellectual property rights. Now other companies including Boeing, Dow, Ciba, DuPont, Procter & Gamble, and Novartis have joined Innocentive to seek their own solutions to R&D problems, helping build the critical mass which makes Innocentive a true innovation exchange. Innovation no longer needs to happen entirely in the one organization. It can be unbundled into different elements, allowing participation from the best and most relevant talent in the world. It is great to see Innocentive’s success, as this will help pave the way to more initiatives and new approaches to opening out the innovation process.

The sorry state of Australian corporate blogging

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I am based primarily in Sydney (though I also have US residency and a secondary base in San Francisco to run the US operations of Advanced Human Technologies and for my speaking and consulting work there). As such, I find it extremely frustrating when I find that Australia is significantly behind in the adoption of key technologies. Australia has some fantastic talent, and the best of what is happening here is truly world-class. Yet often this doesn’t diffuse more broadly, notably into the Australian corporate sector, which can be rather slow on the uptake. A case in point is blogging.

It is over 3½ years since I submitted my manuscript for Living Networks, opening with a description of how corporate blogging was changing business. When I spoke at The Blogging Goes Mainstream conference in New York in May of this year, the conference title was describing the reality of the US market. As mentioned in this blog, not just companies like IBM, Microsoft, Google, and other technology companies are blogging, but also generally sceptical Fortune 500 companies such as Morgan Stanley, Boeing, Dresdner Kleinwort Wasserstein, General Motors, McDonalds, Disney, and a whole raft of mid-tier companies across all industries.

In some domains, Australia is doing very respectably in the global blogosphere. A number of Australian-based blogs rank in the top blogs globally, such as Cameron Reilly and Mick Stanic’s The Podcast Network, Darren Rowse’s ProBlogger (and other blogs) and Duncan Riley’s The Blog Herald. Journalists are fairly well represented, with The Bulletin’s Tim Blair, the Sydney Morning Herald’s Charles Wright, the Australian Financial Review’s Mark Jones, and The Age’s Leon Gettler all prominent and dedicated bloggers.

Yet despite this, virtually no major Australian corporations have even experimented with blogs, let alone applied them to useful effect.

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The debate on monetizing eyeballs

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At the end of September I wrote a blog post titled Back to Monetizing Eyeballs, suggesting that business models were returning to the good ol’ “monetizing eyeballs” model, driven by online advertising dollars finally reaching critical mass. At the end of November Om Malik, senior writer for Business 2.0 and also author of the excellent Om Malik on Broadband blog, wrote an interesting article in Business 2.0 titled “The Return of Monetized Eyeballs”. (I’m by no means suggesting Om is cribbing my work or is even likely to have seen my post, it’s just this idea is clearly ripe.) However the story doesn’t end there. Jason Calacanis, who recently sold Weblogs Inc., a blogging company, to AOL for a rumored $25 million, disagreed vehemently, and said so on his blog. Where this gets really interesting is that the New York Times then published an article on this discussion, Eyeballs Are Back, Or Maybe Not, describing the to-and-fro between Om, Jason, and other bloggers on whether or not we are back to a world of “monetizing eyeballs”, and what that implies for the tech economy. News is now generated by bloggers. I have seen numerous mainstream media articles that only quote blogs. In which case, why go to the newspaper, which intermediates the news? You might as well go straight to the source, the blogs of the best commentators, who are themselves generating the debate, interacting and reflecting on the most current issues, and providing rich input for us to make up our own minds.

The MySpace Generation

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BusinessWeek continues its attention to the unfolding online world with a cover story titled The MySpace Generation. MySpace is the most successful social networking site, boasting 40 million members, and serving an extraordinary 10% of all online ads viewed in October, according to BusinessWeek. People who have grown up in an online world want to socialise in an online world, tapping the immense power of mutual visibility, sharing, and multi-channel communication (of course without supplanting “meat” world interactions!).

Rupert Murdoch demonstrated he was finally a convert to the online world when he paid $580 million for MySpace’s owner Intermix Media in July. Under 25s have little interest in traditional media. Circulation figures for teen publications are plummeting. The only way to capture their attention is to get into the interstices of their immensely rich social interactions. Statistically and anecdotally, far more teens and young adults use MySpace or other social networks than have blogs. The reality is that the individual spaces on MySpace are much like blogs, yet within a bounded domain, and with specific tools to share music and other entertainment, the glue that binds together youth culture. I don’t believe that social networks such as MySpace are overhyped. We are just now getting to a stage where the technology allows easy, media-rich online interaction that supports offline socialising. As social network technologies shrink and enrich our personal degrees of separation, the next generation’s natural habitat is being born.

Business transparency or mob justice?

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The recent case of a blogger who had a poor experience with a camera shop brings out the phenomenal power of the blogging. Thomas Hawk, a professional photographer, ordered a camera online from PriceRitePhoto. When he was called by a salesperson to sell him expensive accessories, which he turned down, they reportedly refused to deliver the camera and abused Hawk. Hawk blogged his tale. Many other bloggers wrote about the story. However most importantly, Hawk posted the story at Digg, a technology news site that allows its readers to vote on the most interesting stories. Thousands of votes for Hawk’s story later, the story spread onto top-ranked blogs such as Boing Boing, and on to the mainstream media. PriceRitePhoto was quickly delisted by Yahoo Shopping, CNET, and PriceGrabber, and is under investigation by the New York Attorney General.

In the aftermath, Hawk wrote:

I think that the popularity of this story comes in large part because the message resonates so strongly with all of us. Although in a sense it is the classic tale of David and Goliath retold, it is much more than this. We all have at one point or another in our lives been bullied and most of us have been defrauded or ripped off. The fact that so many times in the past there was nothing we could do about it makes us feel all that much better about the fact that in today’s internet and blogosphere we actually CAN do something about it.

Absolutely. In an intensely connected world, trustworthiness becomes completely visible. You used to be able to get away with doing poorly by your customers, because although you wouldn’t get much repeat business, there would always be suckers who hadn’t heard about you. The ability to do business this way is quickly disappearing. Customers have the right to complain, and today the ability to be heard by many. Partly as a result, there is no question that the general level of customer service in the economy will continue to improve at a significant pace.

Some would ask whether this is not a case of mob justice. We’ve only heard one side of the story, after all. This neglects the fact that PriceRitePhoto too has the right of reply, one that they haven’t chosen to exercise in a public forum. I wrote recently about how a scientist exercised his right of reply when he felt he was misquoted by a journalist. We now all have that power. Perhaps this was mob justice, yet the answer is not to cut off people’s ability to complain publicly about the service they receive. As with the case of the Sony DRM debacle, any small signal will get amplified in line with how strongly people respond to it. That is the world in which we live. And we are better for it. However what it certainly means is that companies today need to be in a position to respond effectively, by themselves engaging in the debate rather than simply being subject to it.

Best books of 2005

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BOSS magazine has named Developing Knowledge-Based Client Relationships as one of the best books of 2005 in its December issue, out today. Always nice to get positive feedback! If you haven’t got hold of a copy of the book yet, feel free to download the free chapters.

What is the future for newspapers?

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Newspaper circulation appears to be on a slippery slope, with over the last six months U.S. newspapers showing a circulation drop of 2.6% for weekdays (after falling 1.9% the previous six months) and down 3.1% for Sundays (after a 2.5% drop in the half-year before). The worst was the San Francisco Chronicle, down 16.4% over the last six months, though this was the result of a deliberate strategy to cut unprofitable circulation. In this context, Robin Miller, editor-in-chief of Open Source Technology Group, the publisher of an array of online technology media sites, including Slashdot, has written a very interesting article titled A Recipe for Newspaper Survival in the Internet Age.

For those who haven’t come across it before, Slashdot (whose tagline is “News for Nerds”) is one of the founding examples of the power of participatory media. Readers submit to Slashdot news articles they think are interesting. A group of moderators then select the most pertinent articles, and readers can then submit their comments on the articles. Where the real magic happens is that every reader has the ability to rate the value, relevance, and interest of everyone else’s comments. Even though every story gets hundreds of comments, you can quickly sift through to find the ones that a large, sophisticated audience has collectively deemed most worth reading. Anyone can quickly delve in and get the condensed insights of this eclectic and intelligent group of über-nerds. Those whose comments are most highly rated are invited to become moderators for a period. The community collectively filters and creates the news, which is why Slashdot is one of the top few technology media sites in the world.

In his article, Miller uses lessons from Slashdot to provide recommendations to the newspaper industry. He discusses the need to draw in reader contributions, while addressing issues of both the value and propriety of their input. Most relevantly, Miller focuses on the local community strengths of newspapers. There is a massively important role to play being a voice for a community, something that newspapers have long proclaimed they do. Yet today they truly have the capability to provide their readers with that public voice. If they can do that effectively, there are a wide range of ways to build effective and sustainable business models around that, and absolutely keep their readers. However few newspapers today seem to be following this path other than half-heartedly.

The heart of professional services strategy

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Last week I chaired a conference on Strategic Law Firm Management organized by Ark Group. While there was disappointingly little on law firms’ high-level strategic positioning and how that may shift over coming years, there were a wealth of insights into more general management issues. Clearly, people and culture are at the heart of managing professional firms, while the competition for talent is growing ever more intense. Getting people and culture right is the single most important determinant of success. Other success factors will be driven by this.

Listening to the speakers reminded me of a framework I’ve been mulling over for a while, on how attracting, retaining, developing, and motivating great people is linked to attracting the most worthwhile work from the best clients. Clearly, these two highly desirable outcomes feed on each other, yet many firms do not explicitly link them in their strategies and activities. To my mind, building knowledge-based relationships is at the heart of being able to link client development and people development. In knowledge-based relationships you are able to learn most from clients, get the most interesting work, and attract the best clients. Providing “black-box” services to your clients disengages your ability to attract either great people or great client work. It is important to recognize that there is a very real difference between great clients and great client work. Many professional firms have outstanding clients, but often the work they do for them is mundane and unstimulating. It is getting great work that is more important for developing your people and capabilities than getting brand-name clients. Small clients can give you fantastic work.

The framework below shows the nature of great people and great client work, how these feed on each other, and what is required to link them. At the center of attracting both great people and great client work are a set of common values and behaviors. These are fundamental to both of these outcomes, and how they are linked. Leaders of professional firms need to consider what specific activities and initiatives will help to develop this cycle, which is at the heart of professional services strategy. Successfully engaging in this cycle will rapidly develop meaningful, recognized differentiation in highly competitive marketplaces.

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Moving on from email

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Investment bank Dresdner Kleinwort Wasserstein is using wikis, blogs, instant messaging, and other collaborative software tools to supplant email, according to an article in this week’s issue of BusinessWeek titled Email is So Five Minutes Ago. J.P. Rangaswami, Dresdner’s CIO, an ardent critic of email, says that in some cases use of these tools is resulting in project-related email being reduced by 75% and meeting times being halved. There is no question that email as a corporate communication tool is in fact more representative of communication breakdown. When a significant proportion of executives get literally hundreds of emails a day, it is hit-and-miss whether any one email will actually be read or answered, even with the best of will from the recipient. While email will not disappear for the foreseeable future, the problems with email overload and more are rapidly accelerating the uptake of collaborative software tools. For specific, focused applications, blogs and wikis are admirably suited. One of the most relevant applications, and where there is strong traction already, is in project management. There is defined scope, known yet diverse participants, and a need to make issues quickly and readily visible to all. These requirements are usually better addressed with collaborative software than with email. Expect to see email fairly rapidly shift out of favor as a core project management tool, now that there are simple, inexpensive, effective alternatives.