Social Media | Social Media University, Global (SMUG)

Arthur W. Page Society and Blue Oceans

I’ve been listening to an interesting book, Blue Ocean Strategy, over the last couple of weeks. It’s about “value innovation” that companies use to leave the “red oceans” of cutthroat, bloody competition and chart a course for wide-open “blue oceans” of market opportunity. As the authors’ web site puts it:

The aim of BOS is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant.

I’ll do a more in-depth review of this book when I’m done listening; it’s one of the most compelling business books I’ve encountered.

As the authors say, Good to Great is, well… great, but they argue that the real unit of analysis needs to be the strategic move. The main point is that companies that succeed in creating blue oceans of relatively competition-free markets identify product offerings that can attract the industry’s previous non-customers. They do this by finding key factors that, if present, would turn these non-customers into customers. Then they eliminate or reduce everything else, to provide great value at an attractive price.

Southwest Airlines, Apple, Casella wines, Novo Nordisk, Home Depot and Curves exercise clubs for women are among the profiled companies that followed this strategic approach.

In every case, the companies needed to think creatively and offer an innovative product or service to find these blue oceans.

In hindsight, their moves may seem obvious. But they weren’t obvious at the time. These companies resisted taking the customary but uncreative approach of benchmarking against competitors and trying to offer a little more at a slightly better price for increased market share, which would have been a recipe for commodity pricing and low profitability.

As the authors indicate, a specific kind of creativity is needed to unlock blue oceans. It finds value innovations that provide compelling value to customers and non-customers. It looks at why non-customers don’t buy from your industry, and what you can do to attract them.

I had planned to wait to do this review until I was done with the book (and I will finish it later), but I couldn’t resist posting this much when I got to the Ritz Carlton Laguna Niguel for the Arthur W. Page Society’s Annual Conference, and saw the beautiful blue ocean you see in the picture above. The camera phone obviously doesn’t do it justice.

We heard an interesting keynote this evening from Miles White, CEO of Abbott, who kicked off the conference. Laura Hall from Wieck Media will be writing the official conference blog, which will be linked to the Page Society web site. If that blog is available to non-Page members, I will link to it. The conference organizers have asked presenters to be provocative and controversial, and Mr. White certainly fulfilled that goal. As a CEO who has been through some high-profile public controversies, he brought home the fact that “red oceans” aren’t always made bloody by competition within your industry, but sometimes by the agendas of “stakeholder” groups.

Technorati: Blue Oceans, Blue Ocean Strategy, Miles White, Abbott, Arthur W. Page, Page Society

Congressional Creativity

Social media tools are just that: tools. What’s needed is creativity in how you use them to accomplish your organization’s goals. “Off-label” uses can be among the best uses, because they involve creative thinking to solve a business problem.

Here’s an “old-media” illustration of the concept from one of my previous jobs, when I worked for a member of Congress. Members, as they’re known, typically hold town hall meetings in the communities they serve. (For the humorously senseless, that previous link is a parody, not a definition.) Depending on the size of their congressional district, they may get to each community once or twice a year.

Traditionally, members have used the franking privilege (which lets them send mail using their signature as the postage stamp) to send postcards or letters to each household in the community. These notices must be approved by a bipartisan group called the Franking Commission to ensure that they aren’t political or campaign-oriented, but are related to the member’s official duties.

Some members also used commision-approved newspaper ads to announce their meetings.

One problem with town meetings is you typically get the same crowd each time you go to a community, especially if the meeting is during the day. Or rather, the same non-crowd. Often it’s just a handful of people, and they are either retired or political partisans. Not that there’s anything wrong with either category, but it doesn’t represent the broad cross-section of the population.

One day I heard that another member had received approval for a different approach. Instead of using mailers or newspaper ads, he got a script approved for radio ads to announce the meetings. Attendance in his district had been somewhat better.

That gave me an idea: what if instead of just advertising the meetings on the radio, we held them on the radio?

So was born the Radio Town Hall. We would purchase ads in the week before the meeting to announce that we would be having a live call-in town hall from the studio of KXYZ, and the station would donate the hour of airtime for the actual meeting as a public service.

This was quite successful; we typically had more callers during the hour than we had total people attending the in-person meetings. The callers also were more diverse and reflective of the community population. We knew that we were multiplying the number of people who were able to at least listen to the proceedings from home or work. And it was less expensive than sending a postcard to every address.

I’m not sure whether I was the father of the Radio Town Hall; someone else may have done that first. But I think I can claim paternity for another innovation: the networked, district-wide radio town hall.

One of the drawbacks that remained with the local radio town hall was we still could only be in each community twice a year. We wanted more frequent and regular interactions with constituents. So we approached nine stations from across the district and asked: “What if we did this every Friday for a half-hour?” We could give a brief update on the week’s proceedings in Congress, and then open up the phone lines for questions or comments. We hooked the stations together by a phone bridge to an 800 number.

The important point of this example is that it didn’t involve any technological breakthroughs. It was just a different way of using technology that hadn’t changed much since the break-up of AT&T and deregulation of phone services. The pieces were all there. It was just a matter of reorganizing how we used them.

The possibilities for such creative combinations in the Web 2.0 world are amazing. Blogs through WordPress.com or Blogger, social networking sites like Facebook and MySpace, photo-sharing sites like Flickr, microblogging tools like Twitter, Jaiku and Pownce, VOIP services like Skype and transcription services like Jott are just some of the examples. They’re all free. And they increasingly can be mixed and matched so you can use them together through APIs that let them interchange data.

I’ve been out of the government service arena for about seven years now, and obviously the internet has become increasingly important in political campaigns, from macaca to online fundraising. All the presidential candidates have Facebook and MySpace pages. Barack Obama has 144,799 supporters on Facebook, and has an application that put his most recent campaign video on your personal profile. Hillary Clinton has just over 42,000 Facebook supporters. Rudy Giuliani trails badly in Facebook, with only 2,700. John McCain has 10,300 and Mitt Romney seems to be the Republican leader, at 17,679 supporters plus this Students for Mitt application (not many users, though.)

I would be interested in hearing how or whether any of these web 2.0 tools are being used in official government capacities, i.e. for taxpayer-funded offices, instead of just campaigns. It seems all of the politicians use Facebook for their campaigns, and it’s interesting that the “friends” are called “supporters” instead (and the 5,000 limit Robert Scoble encountered obviously doesn’t apply.)

Does Facebook charge these campaigns for that kind of account? If not, maybe Scoble should run for something so he could add more friends!

So how are you applying and combining these tools in creative ways to accomplish your business goals? Here’s a compilation of my thoughts on Facebook business use.
Technorati: Congress, Town Hall, Radio, Social Media, Facebook, MySpace, Twitter, VOIP, Flickr, WordPress, Blogger, Barack Obama, Hillary Clinton, Rudy Giuliani, Mitt Romney, John McCain, Robert Scoble

Face(book)less Corporations

The Peninsula employment law firm study of UK time-wasting in Facebook and other social networking sites, and its call for companies to ban employees from Facebook access during the work day, highlights the “all cost/no benefit” mindset behind many studies of social media. Not all law firms are so myopic, though.

To repeat what I said earlier, if companies have employees spending two hours a day on Facebook activities that are unrelated to their work, they have bigger problems than any social networking ban could solve.

But in this post I want to focus on the potential benefits for companies of having their employees engaged in social media, and particularly in networking sites.

The “Faceless Corporation” is a cliche, but there is a reason why cliches achieve their status: the first few times, at least, they communicated a truth in a compelling way.

By engaging in blogging, Robert Scoble helped pull back the curtain at Microsoft to reveal hard-working engineers trying to make the best products they could for their customers. At the time, Microsoft was seen as an anti-competitive monolith, personified only by Bill Gates and Steve Ballmer.Channel 9 helped humanize Microsoft.

Creating Facebook groups and encouraging participation by individual employees, and having them engage customers in conversation, could for some companies help create customer loyalty that can survive a low-price competitor underselling you. If you’re engaged with them, maybe your customers would also give you ideas for improving your services to gain even more business.

There are lots of other ways businesses can use Facebook positively. I have a whole section of this blog devoted to the topic.

But Ethan Kaplan says it well: if you can’t find a way to take positive business advantage of a social networking site with 40 million active members that is growing by more than a million users a week, your company has a serious lack of marketing vision.

Technorati: Facebook, Peninsula, law firm, ban, social networking, social media, employment law, employees, Microsoft, Bill Gates, Steve Ballmer

Facebook vs. Second Life: No Contest

If you work for a major company and have even considered an outpost in Second Life, think Facebook first.

The technical novelty of Second Life has made it a favorite of the geeky set. And just as Facebook has received significant attention from mainstream media recently (e.g. Newsweek and TIME), so has Linden Labs’ virtual world over the last year or so.

Beyond the media hype — or perhaps, because of it — lots of major companies have established “in-world” presence in Second Life, from Adidas Reebok to Wells Fargo and including heavyweights like IBM, Coca Cola, Mazda, Major League Baseball, ING Group, MTV, Toyota, Disney and Dell. In the government and non-profit sectors, the Centers for Disease Control (CDC) and the American Cancer Society have outposts.

That’s why a recently updated blog post, “Why I Gave Up on Second Life,” by Wired magazine’s Chris Anderson is a must-read for anyone consider a Second Life excursion.

I freely confess that I haven’t tried Second Life, so I’m not speaking from first-hand experience. (In some ways, I will even boast of this, because it gives me a ready response at work, where I’m perceived — correctly — as a technophile, when people ask, “Is there any technology or gadget you haven’t tried?”) I’ve seen some demos and screen shots, though, and from what I’ve read — including this Wired article — here is why I think businesses should put much more effort into Facebook (and MySpace) and forget Second Life (unless they want to consider it an educational experience for communications and marketing staff.)

Size. Second Life claims an “in-world” population of 7 million avatars, but Linden Labs says the number of real people represented is more like 4 million because many Second Lifers have multiple personality disorder. Facebook’s user base is 10 times as big, and is growing by more than a million users a week. In other words, Facebook is growing the equivalent of a Second Life population every month.
Engagement. As the Wired article pointed out, only a million Second Life users had logged in during the previous 30 days. Fully half of Facebook’s 40 million active users return at least once a day and spend an average of 20 minutes on the site.
Reality. Do we really need another place on the internet where people can abandon their inhibitions by taking on a fake personality? Don’t we already have MySpace? As the TIME article on Facebook says, one of its chief advantages is that people mostly use their real first names and last names, not a Freudian alter id.
Ease of Entry. You can get into Facebook in minutes, and don’t need any special software, just a browser. In Second Life you need to download the software client, and the hardware requirements are significant.
Scalability – Each Second Life processor can handle only 70 avatars at a time, so you’ll never draw even a virtual crowd. The Apple Students group in Facebook, by contrast, has more than 424,000 members as of this moment.

Chris Anderson is as geeky as they come, as exemplified by his infatuation with radio-controlled UAVs (Unmanned Aerial Vehicles). His “checking out” of Second Life gives me comfort that it’s not a place that I need to check into, at least yet.

Maybe as technology advances and the simulators become browser-based and more scalable, places like Second Life will matter for business. And for some of the corporations investing in Second Life, even the hundreds of thousands of real American (vs. Linden) dollars they spend are barely rounding error in their overall marketing budgets. So they can count it as continuing marketing education.

As Shel Holtz says, it might be a good idea to get the experience with 3D virtual worlds now, so that when they do eventually become important, you’ll be ready. He thinks that might be five to seven years. He didn’t exactly put it this way, but one of the benefits of experimenting with Second Life now is that you don’t have to worry about anyone seeing your mistakes.

I think Second Life is currently a long way from consequential for marketers, but my main point is not anti-Second Life. My main point is a positive one, and I leave it to you in the form of a question:

If you’ve even considered a Second Life presence for your business, why wouldn’t you immediately look for practical ways to use Facebook and MySpace?

Technorati: Facebook, MySpace, Second Life, Wired magazine, Chris Anderson, Marketing, Shel Holtz, IBM, Dell, Coca Cola, Wells Fargo, Adidas Reebok, Disney, Toyota, Linden Labs, Advertising