Perhaps the most important question in business.

Here’s the question that most companies still don’t ask themselves at the start of a project: what problem am I trying to solve?

Start with that, and you’re 80% of the way there. Blow it off, and you can be sure that you and your organization will waste a shit-ton of time and resources on something that won’t yield any concrete results.

For instance: discussions at planning & management meetings increasingly point towards three “projects” that seem increasingly inevitable – Your CMO wants to revamp the logo. Your CEO wants to get into social media. Your SVP Digital wants to redo the website.

Now what? Well, now begins the process of getting the projects approved. What questions will be asked? Well…

Why are we doing this?

How much will it cost?

Who will be in charge?

Who will do the work?

And that’s about it. That’s as far as it goes.

Why are we doing this? Because it’s been a while. Because it’s time. Because we need change. Because our competitors are doing it. Because it will improve our image.

How much will it cost? Somewhere between $x and $y.

Who will be in charge? Fill in the blanks.

Who will do the work? Fill in the blanks.

Except here’s the problem: companies have limited resources. When you think of resources in terms of money, talent, technology and man hours (and you should), you quickly come to realize that focusing a significant percentage of those resources on Project A rather than Projects B, C, and D means that you’ve just introduced an opportunity cost into your planning. In other words, choosing to monopolize these resources on Project A could limit your ability to really kick ass with Projects B, C and D.

If Project A is necessary or really smart, that’s probably a good thing. You’ve prioritized possible outcomes and you’ve decided that Project A has a high potential for ROI or impact on x, or whatever it is you’re after.

But of Project A isn’t necessary, what you’ve done is you’ve just taken essential resources away from essential projects… to feed a wasteful endeavor that won’t yield a whole lot of benefits to your company.

You know what question helps determine whether or not a project is worthwhile? This one: what problem am I trying to solve?

A practical overview: new logo.

We need a new logo. 

Yeah? Why? What problem are we trying to solve?

If you can show that your old logo is hindering your sales, you might be on to something. Do your customers complain about it? Do your competitors’ customers make fun of it? Okay. Time to consider an upgrade. In your considerations, ask yourself this: will the new logo solve a real problem for consumers? Will it solve a real problem for us?

If the answer is yes, and you can identify these problems clearly, move forward.

What problems will the new logo aim to solve?

If the answer is no, or you can’t quantify the “problem,” consider what else you might be able to focus on this quarter or this year that will solve a real problem. (Like customer service, R&D, packaging, messaging, shopping experience, etc.)

A practical overview: new website.

We need a new website. 

Yeah? Why? What problem are we trying to solve?

If the answer falls along the lines of “It looks like it was designed in 1995, the UX is horrible, it uses flash, it’s horrendous on mobile devices, our customers complain about it all the time,” then you’re good to go. Dig deeper and move forward. What is it that your customers complain about? What can we improve in terms of user experience? What do we wish the site could do that it can’t in its present form (and why)? What kinds of functionality would we like to build into it (and why)?

What problems will a new website aim to solve?

If the answer falls along the lines of “It’s been two years since we redesigned it, and I want to rebuild it in Drupal,” then that meeting is adjourned. (No offense to Drupal. I just needed to throw something in there real quick.)

A practical overview: new social media strategy/program.

We need a social media strategy. 

Yeah? Why? What problem are we trying to solve?

If the answer falls along the lines of “we physically can’t continue to do business without it anymore,” then you’re on to something. Dig deeper. Your next conversation should include items like these:

47% of our customers prefer to engage CSRs through Twitter and Facebook than by calling a toll-free number now. We can also serve 5x more customers per hour via these channels than we can via traditional call centers, so we’ll even save money that way.

We’re losing traction in category and keyword searches because we have no fresh content for the Googlenets and the Bingwebs to index. If we had a blog and some social media properties, we could potentially double our web traffic and digital exposure.

We can’t really get into mobile commerce without it. It’s already costing us $23,000,000 per quarter, and we’re even losing customers and market share as a result. if we keep operating like this, we’ll be out of business in 5-7 years.

We’re spending $12,000,000 on outsourced digital marketing research every year that we could do ourselves if we just assigned two people to monitor the web using social media monitoring platforms.

Our PR department can’t anticipate, monitor, respond or manage PR crises without it. The cost to the company each year in lost revenue is $x, and our brand image is suffering more and more each year as a result.

40% of our net new customers leave us after 12 months. We think we can use social media to engage them, find out why they’re think of  leaving, and give them a reason to stay. Potential impact on the business: an additional $xM per year.

Social media can help drive word-of-mouth recommendations. We want to use social media as an in-network lead generation engine. The impact we expect: a) more leads. b) more qualified leads. c) a higher conversion rate (prospect to customer).

It will help us recruit better talent. Period.

It will amplify our advertising’s reach and make it stickier. Look at the numbers that Coca Cola, Pepsi, Ford and Old Spice have been getting against companies that only use traditional (paid) media.

If done properly, engagement = loyalty. Right now, only 23% of our customers consider themselves loyal. We want to bring that up to 60% over the next four years. Some of it will be offline, but we need an online piece as well.

69% less expenditures on each new product launch.

Etc.

All of these suggestions solve one or more of the following problems:

1. Not enough leads? Doing this will attract net new potential customers.

2. Not enough new customers? Doing this will convert net new prospects into net new customers.

3. Short term customer attrition? Doing this will develop net new customers into returning customers.

4. Long term customer attrition? Doing this will develop returning customers into loyal customers.

5. Budget cuts getting in the way? Doing this will cut costs while delivering equal or better outcomes.

6. Frozen budgets getting in the way? Doing this will keep costs level while delivering better outcomes.

7. Wasting money on outdated services you feel locked into? Doing this will help you free your operation from unnecessary burdens.

8. The chasm between you and your customers has been widening? Doing this will shrink it.

9. Feeling less relevant than you were 10 years ago? Doing this will help you find your way again.

10. Shrinking profitability is an increasing concern? See 1-9 (above), particularly 5 and 6.

11. Not reaching enough potential customers? Doing this fixes that. See 1 (above).

But if the answer to “what problem are we trying to solve with a social media program” is never asked (or worse, answered incorrectly,) then you will basically end up with an endless churning out of cheaply produced, keyword-optimized “content” that will vaguely boost web traffic and online mentions without ever yielding particularly helpful results. Say hello to crap metrics like “likes, Return on Influence, and all of the rest of the bullshit that still plagues the digital world and social business these days.

Because… we need to be on Facebook so we can engage with people and have conversations.

Because… we have to have a social media strategy.

Because… “content is king.”

Because… our competitors are doing it.

Because… our agency told us we should be in social media.

Because… something about owned, paid and earned media.

Because… we need followers and likes.

Because… we don’t know, but we’ll eventually figure it out.

Okay. Good luck with that.

The reason why snake oil, incompetence and irrelevant metrics are still so prevalent in the social business space is because they fill the gap created by the absence of proper questions and answers at the start. Starting with: what problem am I trying to solve?

Which is to say: what is the purpose of doing this in the first place?

New product feature? What problem am I trying to solve?

New packaging? What problem am I trying to solve?

New logo? What problem am I trying to solve?

New branding strategy? What problem am I trying to solve?

New campaign? What problem am I trying to solve?

New Facebook page? What problem am I trying to solve?

New blog? What problem am I trying to solve?

New hire? What problem am I trying to solve?

Don’t just go through the motions of doing something or going somewhere just because the rest of the herd is shuffling that way. I know it might make you the annoying guy in the room to be the one who asks the question (so… do so judiciously), but the question MUST be asked by someone. And more importantly, it must be answered. Otherwise, you’ll be wasting resources and a chunk of your potential for real success.

Cheers,

Olivier

*          *          *

Social Media ROI – Managing and Measuring Social Media Efforts in your Organization was written specifically to teach managers and executives how to build and manage social media friendly business programs and incorporate social technologies and networks into everyday business operations. The book is divided into four parts: social media program strategy & development, social media program operationalization, social media program management, and best practices in measurement and reporting. If your boss doesn’t yet have a copy, time to fix that. If everyone on your team doesn’t yet have their own copy, fix that too. It makes for a great desk reference.

(Now available in several languages including German, Korean, Japanese and Spanish.)

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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Monday Business Briefing: The Leadership Advantage

Today, instead of doing all the talking, I will let people with a whole lot more experience than me give you some tips about how to become a better leader.

Great stuff that transcends the typical quotation mill.

Anne Mulcahy – Former CEO of Xerox:

In a crisis, you have the opportunity to move quickly and change a lot – and you have to take advantage of that.

Change doesn’t happen if you don’t work at it. You’ve got to get out there, give people the straight scoop, and get buy-in. It’s not just good-looking presentations; it’s letting people ask the tough questions. It’s almost got to be done one person at a time.

There’s not a lot of room anymore for senior people to be managers. They have to be leaders. I want people to create organizations that get aligned, get passionate, get really inspired about delivering.

Stories exist at every level of the company. Whether it was saving a buck here, or doing something different for customers, everyone has a story. That creates powerful momentum – people sense that they’re able to do good things. It’s much more powerful than the precision or elegance of the strategy.

I communicate good news the same way I do the bad news. I thank people and make sure they feel a sense of recognition for their contribution. But the trick is always to to use the opportunity to talk about what’s next, to pose the next challenges. Where do we want to go? How do we want to build on it?

Margaret Heffernan – Author, The Naked Truth:

Nothing kills morale like a staff’s feeling helpless. This often plays itself out when there are rumors of a new strategic shift or a major personnel move, or worse, when the papers are littered with bad news about your company. A big part of boosting morale is about constructing a haven of logic that offers individuals shelter from any storm. At its most basic, leaders have to communicate their awareness of business conditions and place their plans in that context. Each time [a CEO outlines] a future that comes true, he demonstrates his own competence and reinforces trust.

The happiest people aren’t the ones with the most money but those with a sense of purpose – a sense that they are contributing to something bigger than themselves. At least some of this has to derive from work. The purpose of a business, then, must be explicit and go beyond boosting the share price or fulfilling some bland mission statement. People want to believe that they are part of something meaningful. The sense of purpose doesn’t have to be grandiose or revolutionary, merely credible and anchored in values.

Purpose is achieved through goals, and the acid test for any leader is defining the appropriate ones. Too small, and celebrations soon ring hollow. Small goals breed cynicism. But too-big goals produce helplessness. Although it can be temporarily thrilling to rally around a big corporate slogan like “kill the competition,” the reality is that employees can’t do it alone and they can’t do it quickly.

Alignment between corporate goals and personal development has never been more critical. The more unpredictable the outside world, the more urgent the personal quest for self-determination. What employees look for in leadership is a sense that their personal journey and the company journey are part of the same story.When these goals aren’t aligned, employees tend to whine with others, eager to share their sense of anger and injustice, polluting morale. The only way to combat this and get back on track is proper feedback. Give employees the tools to influence their own fate.

Get a life. Keeping morale high is like being on a diet: It requires constant effort and is never over. New ideas, stimuli and motivation come from all around you. It’s the larger life, after all, that gives purpose to the climb.

Alan Deutschman – Senior Writer, Fast Company – writing about how IBM builds new businesses:

Look for opportunities that can become profitable [billion-dollar] businesses in five to seven years. You’ll probably find them by talking to customers rather than to brilliant researchers in the labs, who are are looking further ahead.

J. Bruce Harreld – IBM:

You want to celebrate failure because you learn something. You need some level of security to say ‘I screwed it up,’ and be comfortable that you won’t be fired.

Marcus Buckingham – Author, Break All The Rules:

Turn anxiety into confidence. For a leader, the challenge is that in every society ever studied, the future is unstable, unknown, and therefore potentially dangerous. By far the most effective way to turn fear into confidence is to be clear – to define the future in such vivid terms that we can see where we are headed. Clarity is the antidote to anxiety, and therefore clarity is the preoccupation of the effective leader. If you do nothing else as a leader, be clear.

Effective leaders don’t have to be passionate, charming or brilliant. What they must be is clear – clarity is the essence of great leadership. Show us clearly who we should seek to serve, show us where our core strength lies, show us which score we should focus on and which actions we must take, and we will reward you by working our hearts out to make our better future come true.

See? Told you these folks know what they’re talking about.

Thanks to Fast Company‘s March 2005 issue for providing much of today’s content. (My collection goes way back.)

It’s a brand new week. Make it count. Cheers.

***          ***          ***

Social Media ROI – Managing and Measuring Social Media Efforts in your Organization is the reference manual for business managers involved with  social media program development, strategy, management, measurement and reporting. If your boss doesn’t yet have a copy, time to fix that. If your team doesn’t have copies, get them their own. Tip: you’ll want to have a highlighter ready. Earmarking of pages is strongly recommended.

Now available in English, German, Korean, Japanese and Spanish.

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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On leadership, competence, and fixing your shit.

So my buddy Tyler passed this on to me over the weekend, and it stirred a little brain sauce I felt I should share with you. In the piece, Kivi Leroux shares some of the complaints she’s been receiving from some of her NFP friends about patterns of incompetence that they run into at work. Here are some examples:

[…] what I do find a little surprising is how often I will meet a program or policy director, or even an executive director, for the first time, and upon learning what I do for a living, they will say, “Ugh. Our communications director is a complete idiot.”

[…] When I probe a bit further, here are the more specific complaints I hear.

“She knows zero about what we do. She is always asking really stupid questions.”

“She edits the articles I submit for the newsletter, and she dumbs it down so much or cuts it back so far that what we are left with is factually incorrect, and therefore embarrassing.”

“She wants to know about my day, because she says she needs to tweet it. WTF?”

“It’s her job to update the website and write the newsletter. So why is she constantly bugging me to write stuff for her?”

Okay, look…yes, people can be annoying, and yes, sometimes it takes them a while to figure out how to operate in an organization they just joined, especially if some of the staff has taken a dislike to them out of principle. But in ever one of the instances mentioned in the piece, there is also obviously a leadership problem within the organization. Here’s a quick overview:

Poor hiring practices. (Why did they hire this clown?)

An absence of employee development. (How does he still not know how to do his job?)

Lousy internal communications. (Why does she never seem to know what anyone is doing?)

Zero team work or esprit de corps. (Why do those Marketing people have to be so annoying?)

An absence of clearly defined goals. (Okay, I’ve allocated our budget. Now what?)

Not a whole lot of discernible guidance or supervision. (See everything above.)

Did I miss anything?

By the way, here are some of the comments I picked up from sharing the article on Facebook so far:

6/10 times the problem is poor training, leadership, or general communication. Another 2-3/10 can be poor job fits, in which case you should have open discussions with that employee about finding a different niche in your organization, or another job. That misplaced employee might recruit and train their replacement while looking for a new job. Then there is always the 1-2 rotten egg. […]  One of the strongest determinants of employee engagement is leadership. Are you, as a leader, communicating, rather than coercing, coaching rather than criticising, taking the time to set expectations, rather than assuming they should know? – Cherie Turner

Part of the problem is that when someone does their job very well it looks easy. What’s more a lack of understanding of what any job entails means that people can think something is very simple to do in short order. — On the other hand, I’ve also seen people in various job functions who refuse to keep up with the changes in their field. Or, worse, think they are and are just trying to overlay something new on the old ways of doing things. — That said, communication only works if both sides want it to work. Contempt for the other person’s work has a way of shutting down a person’s hearing and understanding of what is being requested of them. – Brenda Young

Yeah, I was thinking before I read the post … Ummm if you’re captain of that boat and your crew are all incompetent ( or if you think they are) what does that make you? – Joseph Allen Gier

So let’s talk about leadership for a second, because incompetent employees, crap internal communications and an absence of clearly defined organizational goals don’t happen when an organization is being properly led.

A note to managers, officers, business owners and corporate executives:

If all of your employees are competent, great. Keep on focusing on ways to translate that into growing market-share, designing the best products in your industry, making your customers rave about you, or whatever other criteria your business uses to define success.

But if some of your employees no longer are competent, then you have two choices: a) Train them properly, or b) replace them with someone who is. That’s it. Those are your only two choices. There is no c) option: look the other way and hope things work out.

As a business owner or manager, part of your job is to make sure that incompetent employees (and managers) don’t become a drain on your resources and overall morale.  It is your responsibility to make sure that everyone on your staff is the best possible person for the job that you can afford. You’re in charge. So if you have people like this on your payroll, what you need to do is basically this: fix your shit.

How to fix your shit in 5 simple steps:

1. Be competent.

I know this seems really basic, but if everyone observed this rule, our economy wouldn’t be in the crapper, unemployment rates wouldn’t be what they are.  So let’s talk about it.

Competence begins and ends with you. If you’re going to be in charge of something, you need to really know your shit.  And if you don’t, you at least have to be 100% committed to getting there as quickly and thoroughly as possible. That requires a “perpetually in beta” mindset. (Great leaders tend to operate in this mode. It is one of the most conspicuous distinctions between business leaders and mere managers, by the way.) There is no getting around this. The alternative is to be an incompetent boss. How do you think that’ll work out?

Every winning organization in history has had at its head a supremely competent leader. Disney, Jobs, Ford, Chanel, Patton, Cousteau, Ferrari, Candler, Alexander, etc.  You don’t get to safely send astronauts to the moon and back by just being okay at math. You don’t get to turn a company you started in your garage to become a Fortune 500 in under 20 years by being kind of clueless about your market or industry. It just doesn’t happen.

Julius Caesar knew his shit. When he took on the conquest of Gaul (and later fought his rival Pompey for control of Rome), good old Jules wasn’t looking to sort of tell his legions to walk north, hang back and look forward to a fat payday. We’re not talking about a guy who sat around and delegated strategy to agencies, intelligence to research firms, and the fighting to cheap foreign labor. There wasn’t a damn thing he didn’t know about soldiering, about campaign logistics, about siege warfare, about politics and geography and morale. The guy lived for one purpose: to be the most capable and accomplished general on the planet. His legacy of success was so great that today, his name is synonymous with “leader.” Czar and Kaiser are variations of his last name. There’s a reason for that. (He eventually overreached and paid for that, but that’s Caesar the emperor, not Caesar the general.)

Every time I run into a manager, director, vice-president, CMO or even CEO who hasn’t bothered to remain informed about and fluent in the developments that have driven his or her field forward in the last 20, 10, 5, even 2 years, all I see is someone who has given up on being competent. I don’t care if the reason for that decision is laziness, being too busy, being distracted, or whatever the excuse happens to be. The end-result is the same: that person no longer has the appropriate set of competencies required to be effective at their jobs. Period. I’m sorry, but if you’re the least knowledgeable person in the room, you aren’t fit to lead. And if you’ve allowed your competencies to fall ten years behind the times, you need to go fix that shit because otherwise, all you are now is a liability to your organization.

Here’s something I have a difficult time understanding: for some bizarre reason, we don’t accept incompetence from brain surgeons, restaurant chefs, military officers, FEMA administrators, football coaches, and first responders, but we give business managers and corporate executives a pass. Why? Because it’s no big deal if a CEO or a CMO doesn’t know his shit? Well… actually, it matters. It matters to the 10,000 people who just got laid off because their boss just invested $150,000,000 in worthless acquisitions and ineffectual media spends. It matters to every employee of Circuit City and Blockbuster, neither of which should have gone belly-up for something as dumb as not being able to adapt to obvious market changes. It matters to all the folks at Microsoft advertising who lost their jobs this year, folks at RIM, who ten years ago thought they owned enterprise mobility, and everyone at Yahoo who is probably wondering if 3 CEOs in 12 months is a sign that they should update their CVs. It also matters to the folks at GM, the Olympic Games, the NFL and hundreds of other organizations who depend on their bosses to eventually (sometime this decade) figure out how to properly leverage Social Media and finally step into the 21st century. (It isn’t complicated, guys. Really. This is what I am talking about.)

As a leader, the success of your organization, whether it is a multinational corporation, a small team of developers or a small clothing retailer, is your responsibility. It’s a lot of pressure, I know. That’s leadership for you. It isn’t all titles, prestige and fat paychecks. Responsibility is worry that you won’t be as good as you hoped you would be. Responsibility is shame when you let your employees down. Responsibility is making sure that your organization comes before your ego, your swag and your golf swing. It means that you have to devote yourself to being the best possible leader that you can be. It demands it. That begins with being competent. Not only competent but ridiculously competent. So competent that if someone were to put you in a room with the world’s top 100 people with the exact same job as yours, you could kick all of their asses with how awesome you are at your job. You should want to be so competent that they all want to be you. If you aren’t that guy, then fix your shit and become that guy. Don’t start tomorrow or next week. Start right now. I shouldn’t even have to tell you this.

2. Surround yourself with competent people. 

We’ve already touched on this, but here are the basics:

Hire the best people possible. If you can’t convince the best people to come work for you, figure out why and then fix your shit.

If you can’t afford to hire top talent, then recruit young talent before it gets expensive. This isn’t difficult. It just takes work. You know… It really is as simple as building a network that you can leverage to identify and approach young talent for you. Be involved enough in your industry (or other industries that might breed the types of folks you want working for you) and key universities that you are constantly aware of either rising stars or kids still studying to become someone you might want to mold into an executive someday. The three rules here are these: Be there. Do your research. Invest early.

Once you’ve recruited your diamonds in the rough, train them. Develop them. Mold them. If they leave after a few years, it’s okay. People leave. So what? I guarantee that if your company becomes known as the place where top talent goes early in their careers before moving on to Apple, Nike, Disney or Ogilvy, that won’t exactly hurt your brand or your HR department. If you really want to keep those junior champions from leaving, just figure out what it is they’re walking away from, and fix. your. shit.

By the way, that training, developing and molding thing, it only happens if done by competent people. If the managers and execs doing the developing are incompetent dumbasses, all you’ll manage to accomplish is turn perfectly promissing young professionals into messes of confusion and frustration. Competence breed competence. Discipline breeds discipline. Incompetent dumbasses breed incompetent dumbasses. (It’s just science.) Shape your organization accordingly.

3. For the love of puppies, start hiring outside of your industry.

Stop hiring the same 500 fucking people. Seriously. Stop it. I know their CV looks awesome, but look… ten years ago, they were director of whatever for competitor A. Seven years ago, they were VP of Business Development for competitor B. Five years ago, they were SVP of communications for competitor C. They’re just going round and round the same circle of crap, and all you are is the next stop. If they ever had great ideas, they’re gone. They’ve been sucked out of them by your competitors already. Now, these hires are only working for you because their last boss wouldn’t give them a raise. Worse yet, they’re only working in your industry because they’re too chicken-shit to go try something else. They’ve stopped being interested in learning anything new. They’re just looking to move up in the world and use you to give their career a 6.3% annual boost. I know these people. I can smell them down the hall the moment I walk into your offices. Stop hiring your competitor’s hand-me-downs. You’re hiring yourself into a cycle of failure and you need to snap out of it.

You know what works? When a designer who spent ten years working on sailboats goes to work for a race bike manufacturer. Or when a product manager from the pet toy industry goes to work for a faucet manufacturer. That designer from Pixar you met at the Pivot Conference or FusionMEx, she’s the missing ingredient in your medical imaging group’s patient UX team. It’s at the intersection of those worlds that cool stuff happens. Where it doesn’t happen, ever, is in a conference room filled with ten guys who have worked at the same jobs for the same kinds of companies for the last 35 years. Think.

So please, cut out the industry inbreeding, and start fixing your shit once and for all by making it a habit to inject your company with fresh DNA.

4. Communicate better.

Your employees’ job isn’t to “do their job.” It’s to do their job so that the company can become… (enter answer here). You have to figure out what that blank is, and you also have to figure out how to communicate that to your employees (and customers, for that matter). Just so we’re clear, I am not talking about mission statements.

Note: nobody cares about your mission statement. The only asshole who ever did was the consultant you overpaid to help you come up with it in the first place, and he sure as shit doesn’t care about it now.

No, what I mean is your purpose. Your raison d’etre. Your actual mission, without the statement. Even if it’s just for this month or this quarter or this year, figure out what it is.

What your purpose it is not: “To establish a global leadership position in the ball-bearing polishing industry.”

What it could be: Become #1 in customer satisfaction for our industry, starting at 10:04 this morning. Consistently be 18 months ahead of our competitors in terms of product innovation. Become the most highly recommended resort destination on the French Riviera. Earn a third Michelin star this year. Make the coolest looking purses in the world. Make the most comfortable toilet seats known to man. Etc. Get it? Start there. So what’s your company about? What do you want it to be? Clarify that simple vision. Strip it down to the core. Then communicate it to everybody you know, starting with your employees.

Once your organization knows what you want (and they also know the role they are to play in getting there,) good things will start to happen. People in your org will become mission-aligned. Silo walls will start to erode bit by bit. People will start to feel like they are working towards a common goal. If someone isn’t up to speed on something, the team will naturally help them get caught up. Good shit will happen.

But if all you do is give your employees individual or departmental goals month after month after month, or worse, expect them to carry on with little more than their job description and an endless stream of vaguely connected projects, all you’ll end up with is an organization that spends all day spinning its hundreds of stupid little self-serving wheels with nothing to show for it. Your best talent will get frustrated and leave, and before long, all you’ll be left with are people who only stick around for the paycheck and the benefits. Oh what wonders will you accomplish with a building-full of those highly-motivated overachievers!

If that last paragraph sounds like a horrible plan, fix your shit and learn to communicate better.

5. Say no to excuses.

Kill excuses. All of them. Ruthlessly exterminate those little fuckers. Why? because if you don’t, failure will spread like a bad case of herpes across your entire organization and infect everyone. Before you know it, rationalizing failure every time you fall short of reaching your goals will become your corporate culture’s very own little brand of crotch rot.

Just for entertainment purposes, here are a few of the excuses I’ve actually heard in meetings these past few years:

“We already tried that. It doesn’t work.” (No, you didn’t. And it does.)

“We’ve already committed to another solution.” (Yeah. It isn’t working. Change it.)

“It’s what we’re already doing.” (No, it most certainly isn’t.)

“That isn’t my job.” (Yes it is.)

“It isn’t in my budget.” (Yes it is.)

“It’s the economy.” (No, it isn’t.)

“Our competitors can afford to spend a lot more money on that than we do.” (So what?)

“That isn’t one of our core competencies.” (Why not?)

“We’ve just hired someone to do that.” (So why isn’t it being done?)

“Actually, we thought it was a huge success.” (Really? Are you serious?)

“We’re not in the video streaming business.” (No? Are you in the “staying in business” business?)

“I don’t know. Our digital agency handles that for us.” (Are you sure they know that?)

“Our IT manager doesn’t want us to do that.” (Oh? Is he your boss?)

“Legal won’t let us.” (Legal won’t let you? What are you, six years old?)

“We can’t compete against Chinese imports on price.” (So compete on something else.)

“There’s just no demand right now.” (Really? See below.)

No demand? Okay. Tell that to luxury car manufacturers. Lexus saw a 99.7% growth in June 2012 over June 2011. Acura saw a 76.5% increase in sales for the same months. Infinity: 66.1%. BMW sold almost 22,000 cars in June 2012 alone, just shy of the number of cars sold by Mercedes-Benz in May. Tell that to Kate Spade, whose direct-to-consumer sales were up 74% last year. Tell that to Fortune’s Top performing companies for 2011.

Here are some growth stats for you, just in case you haven’t kicked your organization’s dependence on excuses in the nads yet:

Oh, but the odds are stacked against you? Unfair competition and all that? Tell me all about how the world is unfair. Please. I’m all ears. Meanwhile, companies with a fraction of your resources are well on their way to kicking your ass and eventually displacing today’s Fortune 500 companies. It might take them five years, maybe even 10 or 20, but they’re not letting that get in their way. They’re figuring it out and pressing on. What are you doing?

Start to think of excuses as tiny little ball bearings that make it easier for you to fail a little more every day. That’s what they are.Excuses give you permission to fail. You didn’t get it done this month? Let’s walk over here to the wheel of excuses and spin it. Let’s see what the reason was this time… (Does it matter?) You can’t seem to retain your top talent? Spin that wheel. Your tablet can’t compete against Apple’s? Spin it. Your TV show was reviewed poorly? Spin it. Your Facebook ads aren’t converting? Spin that shiny wheel. You aren’t happy with where your company, your marketing, your product penetration or your career is going? That really sucks. So what are you going to do about it? Truth is, you have two choices: a) spin the wheel of lame excuses again, or b) figure out what didn’t work and fix your shit.

In closing… fix your shit. No, I’m kidding. (But not really.)

There’s no cosmic force at work here. Whether your company becomes an incompetent dumbass factory (or not) is up to you. Whether your company is drowning in idiotic silos (or not) is up to you. Whether your company falls out of the Fortune 500 club (or not) is up to you. None of this is rocket science.

All you really need to do is make a decision not to settle for mediocre bullshit, and then follow that impulse all the way through: be competent, surround yourself with competent people, look for ideas outside your professional bubble, communicate better and stop accepting excuses. There’s more, but if you follow these five basic little rules, you’ll be a lot better off this time next year and then we can talk about the next five.

So this week, please, instead of perpetuating the same droning routine of meetings, emails, presentations and more meetings that haven’t really gotten you anywhere these last few years, take a step back from the quick-sand of everyday busy-work, and take concrete action to start fixing your shit.

Cheers,

Olivier

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Social Media ROI – Managing and Measuring Social Media Efforts in your Organizationisn’t a social media book. It’s a business management book, and it focuses on social media program strategy, management, measurement and reporting. If your boss doesn’t yet have a copy, time to fix that. If everyone on your team doesn’t yet have their own copy, what are you waiting for? (Now available in several languages including German, Korean, Japanese and Spanish.)

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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Customer Lifetime Value: one of the keys to measuring long term ROI, among other uses.

LTV infographic by Kiss Metrics

“People pay you. Not pageviews.” That pretty much says it all. (image source.)

This is as badass as it is self-explanatory. For those of you who don’t know how to estimate customer lifetime value (LTV, or CLTV), this infographic should be a pretty handy little tool. (Just ignore the Starbucks references.) Why is this important? 3 reasons:

1. When justifying an investment in a marketing program whose goal will be to acquire (create) new customers, you can sift through your customer data and determine what the average customer spend (their value to the company in terms of net revenue) should be over time. You can drill into demos or average out every customer category to arrive at a gross average – that’s up to you. This helps you set targets. If the investment is $100,000 and management expects a x10 return on their investment for a certain timeframe, you can now figure out what your net new customer target needs to be for this campaign by performing some basic 8th grade math. If the brass still isn’t sure about the value of the investment, you can make your case by projecting the lifetime value of net new customers rather than monthly, quarterly or even annual sales. For that alone, it’s a handy little set of equations

2. Good marketing is about more than customer acquisition. It also has to focus on customer development and customer retention. When making your case for a program that focuses on keeping existing customers from leaving, being able to present LTV/CLTV figures provides you with a compelling argument for the funding of such programs. (It is a lot more cost effective to develop and retain customers than to acquire new ones.) Use LTV to model for management what breaks in the conversion chain will cost the company in lost revenue over time, and loyalty programs will be a lot more likely to get a little more love. If you spend $5,000,000 to onboard 10,000 new customers per year only to lose 60% of them by the following year, you can see whether or not your marketing plan is in fact a leaky bucket. You can’t know what you don’t know. Calculating LTV gives you parameters with which you can properly analyze your programs’ efficiencies and inefficiencies, including long term ROI.

3. Once you know your customers’ overall average LTV, you can start attacking not only the net new customers piece (acquisition) and the retention piece (loyalty), but the development piece as well. Say your overall customer LTV average works out to be $14,099. Why not try and move that needle up to $15,001, then $15,100, then $15,250?  This is the purpose of the customer development side of marketing (or business development, even). Devise ways to grow wallet-share. Increase average spend per transaction (yield) and buy rates (frequency). [Remember FRY? That’s what we’re talking about right now.] Tracking this number not only gives you baselines from which to devise targets and tactics, but it also gives you a dashboard needle with which to gauge your progress AND revise long term sales projections.

Do you know how many product managers and CMOs know how to do this (or bother to do this kind of analysis even if they do)? Not many. If you smell an opportunity to suddenly become a whole lot better at your job and maybe even impress higher paygrades with your business acumen, it means your nose is working.

One quick piece of advice: Don’t just file this away for later. Do something with it. Print the infographic, start playing with the equations, and see what you come up with. Create a baseline. Play with projections. Sift through customer data to see if certain demos might be more receptive to different types of messages and offers. Then use the data; don’t just collect and report it.

Very big hat tip to Business Insider and Liz Scherer for starting the information daisy chain, and of course a big thank you to Kiss Metrics and @avinash for putting together such a clean, clear and concise infographic detailing the LTV calculation process.

PS: If you aren’t familiar with F.R.Y. methodology, it’s all spelled out here:

Score your own copy of Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization (Que) just about anywhere business books are sold, if you haven’t already. The book is actually about a whole lot more than ROI and focuses on a lot of business fundamentals with applications reaching beyond the digital world. (The Chapter on F.R.Y. will be particularly helpful given today’s blog topic.)

You can also check out smroi.net to dig deeper into the book and even sample a free chapter, or let the reviews on Amazon.com help you decide whether or not it is worth the price of a turkey sandwich.

Cheers,

Olivier

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Brand management: The asshole effect

Every doctrine has to start somewhere. Even this one.

Want to boost your repeat business, get tons of free referrals, acquire bunches of new customers and get lots of positive buzz for free? There’s a pretty simple way to do it that doesn’t have to cost you a whole lot. Can you guess what it is?

Simple: Purge your company of assholes.

In fact, let me share item #1 in my Better Business Doctrine with you real quick. Are you ready? Here we go:

The customer-facing organization with the fewest assholes wins.

That’s it.

A simple example, from the friendly skies.

Does this seem like common sense? Of course it does. And yet here we are, routinely forced to endure a passive-aggressive or plain argumentative jerks who would rather exercise their “authority” than provide customers – even stressed out customers – with pleasant experiences. Why is that? Let me answer that question: Because companies are still hiring assholes.

Let me give you a few personal examples:

1a. The Continental flight I was on a few months ago

Flight Attendant (sternly) to a passenger in the process of turning off their iPad, just not quickly enough: “SIR! I need you to turn that off right now!” (Stares angrily at passenger until the device is turned off, and walks away, visibly annoyed.)

This probably happens to flight crews 20+ times per day. Every time a plane pushes off from the gate and prepares its approach, passengers in the middle of a song, of a paragraph, of a game of Angry Birds or Brick Breaker take an extra 10-30 seconds to “comply” with the “please turn off your electronic devices at this time” announcement on the PA. I get it. It probably gets annoying after a while. But guess what: You’re a flight attendant. Asking people to turn off their electronic toys comes with the job. You don’t have to be an asshole about it. Case in point:

1b: The Delta flight I was on the following day

– Flight Attendant (with a smile, jokingly) to a passenger so absorbed by what he was reading that he missed the “turn off your electronic devices” announcement and kept his Kindle going: “Good book?”

– Passenger, sensing that he was the object of the flight attendant’s attention, looks up from his device: “I’m sorry?”

– Flight Attendant, nonchalantly points at the Kindle: “Good reading?”

– Passenger, smiling back: “Yeah. Very!” (Gets it. Laughs. Starts to look for the “off” button.)

– Flight attendant: “You can turn it back on as soon as we’re on the ground.” (Walks away. Stops. Turns around.) “The book. What is it?”

Passenger answers. Flight attendant repeats the title as if to remember it, nods as if interested, and returns to his station.

The difference between the two isn’t training or pay. It isn’t corporate policy or procedure. It isn’t even company culture. The difference between the two occurrences is this:

One of these flight attendants, at some point during the course of her day, week, month, year or career, decided to let her asshole flag fly. The other one didn’t.

The basic impact of an asshole on your customers

How every asshole on your payroll affects your brand equity and impacts your business on a daily basis.

The impact of just one asshole’s behavior in a customer-facing role doesn’t stop with the one customer they treat poorly. Ten rows of passengers witnessed the exchanges on both flights, and I can guarantee that the ten rows on the Continental flight (30 passengers) were not impressed, while those on the Delta flight surely were. The ramifications of this are simple:

Whatever shot Continental had at influencing these 30 people to develop a preference for flying its friendly skies, for being more loyal, for looking to book future flights with them first, just flew out the window, not because of price, not because of delays, not because the plane was dirty. The price was great. The plane left on time and was impeccable. Continental did everything right except one thing: Someone there allowed an asshole (and probably more than one) to take on a key customer service role. Delta, on the other hand, scored some points.

And just to be fair, I’ve run into my fair of assholes working for Delta too. Few domestic US airlines seem immune to this phenomenon these days, except for perhaps Alaska Air, whose service and hiring practices, to my knowledge are still impeccable.

That said, my experience with Delta flight crews recently has been stellar, and not just because of this little anecdote. (Expect another post about what else happened very soon.) The difference between the two airlines for me was limited to my experience, as it is for all of us. Before the recommendations and the word-of-mouth and the marketing, our own experience shapes our bias.

Every positive experience creates positive associations with a brand, while every negative experience creates a negative association with a brand. More positive than negative = positive bias, preference, even loyalty. Consistent negative experiences (especially those that repeat themselves, like frequent delays, rude employees, apathetic managers, or being talked down to by an unprofessional asshole) = negative bias, preference for your competitors instead of you, and cynicism towards your brand.

The wheels of this mental equation – more emotional than empirical – start turning every time the thought of your brand comes up, and you need to understand it isn’t linear. The way we process the negative and the positive isn’t as balanced as you might think. For whatever reason, until you have grown into a loyal fan of the brand, the equation tends to be heavily weighed towards the negative: What you did right six months ago – or for the last thirty years,- doesn’t matter nearly as much as what you did wrong yesterday or just last week. That’s part 1 of how the mental math of brand experiences work. Part 2 is this: People will easily forgive incidents and accidents: Lost luggage, no available upgrades, long lines at the counter, mechanical problems, etc. Those things are out of your control, and once the anger and frustration subside, they’ll get it. Those negative impressions will evaporate. But one thing customers won’t forgive of any company: Being deliberately treated badly by an asshole.

Just as being an asshole  is a choice, – especially when dealing with a customer – hiring an asshole and keeping them on staff is also a choice. Because of this immutable fact, every company bears its part of responsibility in the hiring and promoting of assholes. Customers instinctively understand this, which is why when they run into one of your company’s assholes, they don’t blame the asshole for treating them poorly, they blame you. They blame the brand. The negative association they take home with them isn’t with that person (whose name and face they will forget inside of a week), but with you. Your assholes are faceless. All customers remember is the context: You. Your company. Your brand. The asshole just goes on being an asshole day after day, happy to have a job that pays him – even rewards him – for being a complete raging asshole all day long.

At the end of their shift, what you have to understand is that assholes in your employ don’t lose customers. You do. You spend your resources bringing them to the cash register, and every asshole on your staff spends all day making sure they never come back.

For this reason if none other, choose and evaluate your employees carefully.

The impact of just one asshole - amplified by social media

The real cost of letting assholes poison your brand from the inside.

If you are in business and have employees, let me be VERY clear about this: You are always only one asshole away from losing your best customer. The more assholes you have on staff, the faster and more often this will happen.

Not only that, but assholes tend to turn off, not only the one customer they happen to be unpleasant to, but everyone within earshot as well.

And today, ladies and gentlemen, “within earshot” isn’t just the ten rows on the plane or the ten people in the store waiting to check out. It is also potentially the hundreds of thousands of Facebook and Twitter users who might get a glimpse of that negative experience and be turned off in turn. Even millions, for that matter. (See previous 2 images, inspired by David Armano’s “Influence Ripples” theory (Edelman), below:)

David Armano's "Influence Ripples" (Edelman)

Let me give this a financial angle for you: Over the course of a year, one asshole on your staff, just one, can invalidate every dime your company has spent on advertising, marketing and PR. That’s the real liability of assholes. For small businesses, an asshole might only cost you $10,000 in wasted marketing, messaging or brand positioning. If you’re a bigger company, the same asshole (or a whole army of them, which is more likely) could cost you hundreds of millions of dollars in wasted marketing and brand management dollars.

That was part 1 of that equation. Part 2 is measured in lost revenue from disappointed customers taking their business elsewhere (your competitors thank you), lost revenue from all of the net new customers delighted customers would have recommended you to (but didn’t, because your assholes chased them away), and so on.

As a result, the higher the proportion of assholes to caring professionals a company has on staff, the more likely it is to have to spend more and more on marketing (with increasingly diminishing returns), while customer retention falls flat and even starts to dip into the red. Assholes aren’t just bad for customer service or your brand’s image. Assholes are bad for business. They are a counter-current to your hopes and dreams. They are the cancer that first weighs you down, then eventually makes your brand begin to fail, then wither, then die.

So let me repeat today’s lesson: The customer-facing organization with the least amount of assholes wins.

Don’t believe me? Ask Zappos. If you have never heard of Zappos, they sell shoes on the internet. That’s it. Well… LOTS of shoes. So many in fact that Amazon bought them for a pretty penny. Not only that, but Amazon decided not to make any major changes to Zappos’ leadership or culture. They left Zappos alone because the model works well just as it is. What’s Zappos’ secret? The customer experiences they create are stellar. Why are they stellar? Because Zappos pretty much has a “no asshole on staff” policy. Their hiring practices focus on this, and for good reason: They know that a happy customer is a loyal customer.

The simple truth (and we all know this) is that happy customers are good for business. In fact, no. They are GREAT for business: The happier a customer is, the more likely it is that they will come back, spend more, spend more often, and recommend you to all their friends. This is what you want. This is what makes businesses insanely successful. This. You don’t have to invent the iPad to be a huge success. Zappos just sells shoes on the internet. Virgin Airlines just flies people from airport to airport. Intercontinental Hotels (disclosure: client) are basically just… hotels. We’re not talking space walks or time travel, here. Your favorite restaurant, your favorite coffee shop, your favorite mechanic, none of them necessarily reinvented the wheel, right? They didn’t win a Nobel prize for revolutionizing their industries. No. What they did was this: They figured out that a happy customer is good for business, so they focused on that. They earned your trust, your respect and your loyalty. Want to know how they did that? By giving you theirs.

Let me let you in on a little secret: An asshole doesn’t think that way. An asshole doesn’t think about happy customers. He doesn’t care about happy customers. An asshole only thinks about himself: His own mood, his own frustrations, his own personal dramas, his own power trips. An asshole doesn’t give anyone their trust, respect or loyalty. Assholes just don’t think that way. And that is precisely the rub: No matter how well you pay them, you can’t make assholes give a shit. And that is bad for business. Very bad.

A fork in the road for every organization:

Do you know one way to make sure your customers are always happy? Only hire people who want your customers to be happy too. People who want to be helpful, who want to fix problems, who take pride in making someone’s day better instead of worse. People who genuinely want to see the company do well. People with pride and self respect and ambition beyond their own bank account or advancement. Do you think this is too hard? It isn’t. Just hire better.

Want to guess how to guarantee that your customers will not be happy? Hire assholes to take care of them. (It works every time.)

That’s your choice: Door A or Door B.

Door A: Hire super nice, helpful people and your business will soar.

Door B: Hire assholes, and your business will forever struggle to stay afloat.

Every time you run into one of your employees (or candidates) and he or she acts like an asshole, I want you to think about that. I want you to think about how much harder you want to have to work to make your business successful once they start pissing off every customer and client they come in contact with.

Taking a step back so you can see your entire business now, how many assholes do you really want on your payroll, and how many customers do you want to put them in front of? Pull out a piece of paper and write down a number. Do it. Write it down. How many assholes do you want on your payroll?

Next to that number, write down how many assholes you have on your payroll now. Go through your mental org chart, and start counting them in your head. When you’re done, write down how many assholes you know are in your company right now. If that number is higher than the first number you wrote down, you have some cleaning up to do.

In closing, let me leave you with the top 5 ways to make sure that your company starts becoming asshole-proof.

Top 5 ways of asshole-proofing your company:

1. Don’t hire assholes. They are bad for business, and they breed inside organizations like weeds.

2. Don’t promote assholes. The only thing worse than an asshole is an asshole with authority (including the authority to hire and promote assholes when you aren’t paying attention).

3. Give your current assholes the “opportunity” to go work for your fiercest competitor. Do this immediately. Make sure the door doesn’t hit them in the ass on their way out.

4. Once removed, replace your former assholes with nice, smart friendly people. (They’re out there and they want to work for you, but your assholes probably already turned them down. Go find them and invite them back.)

5. Reward all of your employees for NOT being assholes.

That just about takes care of it for today. Any questions?

Inspired (in a good way) by conversations with Julien Smith, Geoff Livingston, Keith Burtis, Chris Brogan, Kristi Colvin, Tyler Durden, Jeffrey Jacobs, Peter Shankman, among others.

*          *          *

And in case you haven’t picked one up yet (or your favorite client seems to be having trouble figuring out how to bring social media into their organization), you can pick up a fresh copy of Social Media ROI at fine book stores everywhere. If you have sworn off paper, you can also download it for iPad, Kindle, Nook or other e-formats at www.smroi.net.

Tip: Leave it sitting conspicuously on your desk when your boss does his rounds. It seems to be a good conversation starter.

(Click here for details, or to sample a free chapter.)

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A tale of two agency social media models

Some things actually are black and white.

A conversation with a good friend in the agency world the other day (and particularly her horrified reaction to what I shared with her) prompted me to finally write this post. If your company is working with an agency on building or managing a social media program, you probably need to read this. And if you work for an agency that works with social media, you definitely need to read this.

Here’s the skinny: I work with agencies around the world, and more importantly, I have friends in a lot of places, both on the brand side and the agency side. Every chance we get, we talk shop. When someone does something cool, we talk about it. When someone does something not so cool, we talk about it too. And when we start noticing things that bother us, especially when those things touch on ethics, we most certainly talk about it. Over the last few months, one conversation has dominated all others, and it is this: The existence of two prevailing agency models when it comes to building and managing social media programs for clients. One is primarily client-focused and good, and the other… well, not so much. And yet, the latter seems to be gaining traction in the agency world, and that isn’t good.

Here is what these two models look like:

Model #1: The proper, working model.

In this model, the agency identifies the client’s business objectives and uses its capabilities to support them. Note that in this model, the agency doesn’t simply pitch a campaign or provide a cookie-cutter service. It identifies the client’s goals. It clarifies them, even, if not for themselves, for the client (as this is sometimes needed).

For example, if the client comes into a meeting and says “we need a social media program” or “we want 100,000 new Twitter followers by Christmas,” the agency doesn’t simply nod and set to work building a social media program or acquiring 100,000 new followers. What it does first is dig a little deeper: It finds out why the client wants a social media program or why 100,000 new twitter followers is a significant number for them. It finds out what the social media program is there to accomplish. Is it to attract new customers? Is it to capture more relevant data from existing customers? Is it to improve conversion rates or facilitate positive word-of-mouth? Is it to build the foundations of a consumer insights program? Is it merely to monitor brand mentions for a while, until the executive team has a better idea what they want to do?

Whatever the client’s ultimate goal (or series of goals) is, that becomes the basis for the program or campaign. That complex of end goals becomes the driving force behind the ideas, the mechanisms and the activities that will become the core of the pitch.

Why? Because a social media program that blends customer acquisition and increased buy-rate with facilitating WOM and activating hobbyist communities looks VERY different from a social media program whose objective is merely to “build and fill.” (The self-serving process by which an empty space is built only to be filled by a budget.)

What comes out of this type of model is a social media program that blends into a client’s overall business ecosystem. It deliberately supports its marketing efforts, its PR efforts, its customer service efforts, its sales efforts, and so on. Success is measured not only in social media metrics (net new likes/fans/subscribers/followers, net mentions, sentiment deltas and estimated advertising value) but in business-relevant metrics as well: Net new customers, Net growth in sales, increased buy-rates, net positive customer recommendations, improvements in loyalty metrics, increased market share, faster customer service ticket resolutions, improvements in PR crisis resolution, greater operational efficiency in x, etc.

In this model, the agency works with the client as an integrated partner, not just an outsourced service provider, and the results are concrete. In fact, the question of R.O.I. pretty much answers itself. It is never in question. Whether in a support role or a leadership role, the agency and the client act in tandem from start to finish.

This is the proper model for agency involvement in Social Media with a client. The ideal model, if you will.

Model #2 : The improper, unethical model.

In spite of the amazing breadth of potential for agencies in the social media space in terms of impact, revenues and success, many unfortunately choose to just cut corners and go for the fast, easy money. In this model, an agency knowingly sells what essentially amounts to bullshit to unsuspecting clients.

Let me give you two examples:

1. “We need to be in social media.”

Client comes to agency thinking they need a social media program. Their competitors all have one now, and after years of resisting, it looks like they are just going to have to get into that social media “business.” They don’t know much and they don’t know what they want, so they are relying on the agency to provide them with whatever help they need.

What the agency comes up with is a package that includes the development of an official Facebook page, several customized Twitter accounts, a YouTube channel, some internal training, and a content package to go along with it all. If the client has the funds, some campaigns will be thrown into the fray, maybe a contest or two.

Enter the “win an iPad 2 for liking our new Facebook page or following us on Twitter” discussions.

Enter the 5 tweets per day and 3 Facebook updates per day content packages.

In this model, nothing actually happens that directly impacts the business. Nothing is done to support a particular business objective or outcome. The model is simply this: To create billable social media “activity,” bill the client, and generate metrics that seem to indicate that the social media activity is a success. (We will come back to that in a minute.)

What the client ends up with is noise. Ask the client about his social media program, and he will proudly tell you how wonderful it is. Ask him what it is doing for his company, however, and the answers begin to sound less concrete. “Well, we’re attracting a lot of comments and likes. Like, 30 or 40 per week now.”

Yeah? That’s wonderful. But what is it doing for your business?

2. “We need 100,000 followers asap.”

Client comes to agency with an urgent need to grow its social media reach from 7,359 likes/fans or followers to 100,000 by Christmas. Why? Could be anything: Because the CEO said so. Because their closest competitor is there already and it’s embarrassing to be that far behind. Because the digital manager just came back from a conference during which a social media guru told them that 100,000 followers was a minimum benchmark for a brand.

What the agency comes up with is a simple package based on “the value of a fan” or “the value of a follower.” From this subjective metric, the agency quotes the client on a price: “We can get you your 100,000 followers before Christmas, but it will cost $x.” Negotiations ensue. A price is agreed upon.  The agency throws in a little hat trick: “If we get you to 120,000 followers by Christmas, how about a 5% bonus?”  The answer: No, but if you get us to 100,000 by December 1st, you’ll have your extra 5%.

This is a real situation, by the way. A real conversation.

From the client’s perspective, this is an awesome deal:

1. Internally, nothing is required except signing checks, signing off on activity, and keeping track of the agency’s progress. If the agency fails, no one is really to blame internally. The agency can be fired and replaced. But if they succeed, there will be enough glory to go around.

2. It would cost 5x more to reach potential customers in more traditional ways, even email. Social media really is cheaper!

3. We have a social media program! How cool is that?!

4. The client thinks it could have never gotten 100,000 followers on his own by Christmas. God bless that agency and its amazing social media savoir-faire!

From the agency’s perspective, this is an even better deal:

1. The client hasn’t figured out that social media activity is there to support business objectives. He is so focused on hitting that follower goal that nothing else really matters. All the agency will be goaled on is its ability to reach that number by Christmas December 1st. Nothing else matters. Not conversions, not positive WOM, not FRY, nothing. Just get those 100,000 followers.

2. The client is clueless about social media, and there is no reason to change that. The less they know, the more they rely on the agency to deal with their needs. This is very good for the agency, as we will see in a moment.

3. The agency, like an increasing number of its “competitors” around the world, has been recently and repeatedly pitched by companies out of China, India, South America and Eastern Europe that offer followers, fans, likes, clicks and other digital traffic à la carte. It can, like any other agency with the funding to do it, pay for all the new followers and fans it wants. You can buy all the positive mentions you want too.

Let me explain how this works: Money changes hands. Somewhere in a country where the client has no business presence, 25,000 people either create accounts or use existing ones via proxies and simply click “like” or “subscribe” or “follow.” These people will NEVER become customers, but to the client who doesn’t know, they have just become his 25,000 new followers on Twitter.

The only two details for the agency to worry about at that point are a) making sure to cover their tracks, and b) figure out the optimal markup.

This, boys and girls, is how it’s done, and we aren’t just talking about small fly-by-night outfits. Think bigger. Much bigger. And it doesn’t stop there.

4. The agency doesn’t need to have experienced professionals on their social media integration/management team anymore. Why waste money on that when you can just buy fans and followers?

Agencies opting for this model have two options:

A) Hire someone with an influential blog on Social media and put them on staff as a sort of social media mantle piece. These folks will be there to woo the client and help pitch them. They’ll charm them and do some internal trainings for them. They’ll create content for the agency blog, put a face to the agency’s social media capabilities, speak at events (always pitching the agency’s “case studies,” of course), and serve as a “thought leader” but will never actually work on building anything for clients.

B) Hire or promote someone with zero experience in social media integration and build them up as “experts” anyway. Any intern will do, but someone with a few years of experience in any “digital” field will look better. If you’ve ever wondered how some of these people you have never heard of become “experts” almost overnight, wonder no more.

Think about it: Why bother staffing up with expensive talent when you can just buy your followers and fans? The page builds can be outsourced to developers. The content can be outsourced to any number of content farms. The structure is already in place. If the agency is already working on a campaign, its content can be easily adapted to social media channels. (Add revenue line items here, here, and here.)

5. Once the followers have been purchased and the campaign or program seems to be gaining traction, start beating your own drum. Convince the client that their success could make a great case study, then build it up. In a few months, wouldn’t it be great to present at conferences around the world how “engagement” and “content” took Brand A from 7,000 followers to 100,000 in just a few months? Oh, the white papers. Oh the slide decks. Oh the positive press in Mashable and ZDnet. Oh the blog posts. Oh the awards.

Get on the phone with the PR team pronto.

Meanwhile, those 100,000 followers provide nothing for the business. Sure, it looks good when people check out the account’s profile page. It looks like the company and its agency are doing something right. The stats are easy to graph too. Empirical data, right? Is anyone ever going to go back and check where all of those “fans” came from?

Unfortunately, that number is a smoke screen. The vast majority of those followers will never become customers. They will never recommend the company (unless paid to do so). They’re paid extras, pretending to like your company, nothing more. Chances are, they had never heard of it before an email notification with a Paypal link told them to.

Meanwhile, the agency looks like a superstar. In the next few months, other brands will visit them and these words will fill their conference room time and time again:

“Can you do for us what you did for [Brand A]?”

The answer will always be yes.

6. Do not pass Go. Collect that 5% bonus for spending the client’s money faster than the original timetable called for.

In this type of model, KPIs (key performance indicators) will tend to focus on digital measurement only:

Net new follows.

Net new likes.

Net new subscribers.

Net new & volume of mentions.

Click-throughs.

EAV/EMV (Estimated Advertising/Media Value)

Reports will include fascinating graphs measuring “engagement” and “social equity.” Middle-managers will have exciting (albeit somewhat complicated) reports to present to their bosses that clearly indicate that the agency is kicking ass, doing its job, earning its pay. And yet, nothing concrete will come out of it. No actual new customers. No increases in loyalty. No preparedness for the next PR crisis. No improvements anywhere, except for all that “activity” in social media, except for all that noise.

I’ve been in the room when deals like this were discussed. I’ve had drinks with agency professionals who confirmed, disgusted, that it was becoming standard operating procedures at their firms. I’ve worked with clients who had no idea the extent to which they had been screwed by their own agencies in precisely this manner until they started digging under the surface of easy “social” metrics and “R.O.I. is not really applicable to social business” discussions.

This is happening in your market right now. It doesn’t matter if you’re in New York or Paris, Atlanta or Brussels, San Francisco or Hong Kong. This model is gaining traction because it’s easy, it’s cheap, it generates revenue and accolades for agencies, and the clients don’t know enough to make a stink. (Not that making their disappointment public would be to their advantage anyway.)

Where your choices lead:

Fortunately, because the second model is now so widespread, it won’t remain a dirty little secret much longer. Before long, clients will start figuring it out, other witnesses to it will start talking about it, and the agencies they work(ed) for will be exposed. Careers will be tossed down the proverbial drain, and the higher the pay grade, the harder the fall. Don’t kid yourselves: It is as inevitable as the fall of Enron.

Take a step back and ask yourself: What will clients do when they find out? How many new clients will these agencies attract once the curtain falls away? Who will want to go work for that kind of organization? What kind of professional will they attract (and more importantly, retain)? What future can this sort of organization really hope for?

To use a cycling analogy, do you really want to be remembered as the guy who won the Tour de France only to be stripped of the honor for blood doping a year later?

Cheating to win sucks. Cheating to get paid or to get ahead sucks. And no one gets away with it. No one. Not anymore. What side of the ax do you want to be on when it finally falls? That’s your call.

The agencies who opt for real results, on the other hand, who truly want to be the best in the business, whose relationship with clients is not predatory or parasitic, will stand out and attract solid talent, the people with insights and ideas and the ability to win and help them grow. Their success in recruiting the best talent in the world and use it properly will get around. This will gradually score them bigger clients. Meanwhile, the idiots who ripped off their clients with purchased “success” will just vanish from the scene altogether.

I know this because Tyler knows this. And also because I also know that reputation is everything. People talk. People always talk. And they always remember too.

As I begin to transition from being just an independent consultant (where my impact is often far too limited for my taste) to joining a larger organization (where I will be able to do a lot more), I realize how difficult the next few months will be. Sorting through potential new ‘homes’ for me won’t be as easy as just agreeing on a figure anymore. Now I have this stuff to deal with too, and the big famous name on the door doesn’t mean what it used to back in the day. As sad as that is, it’s the sad reality of where the marketing world stands in 2011. The vetting process on my end will have to be more thorough than it ever has been, adding a whole new layer of scrutiny in my search for #thenextgig.

This should be interesting.

PS: If you are an agency that falls into the first category (the proper model), let’s talk. If you fall into the second, let’s not.

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If you haven’t already, learn how to properly build, manage and measure social media programs at your own pace. Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization will help you avoid common pitfalls of  most bogus social media program pitches and help you develop your own business-focused framework instead. Think of it as a 300-page blueprint for anyone looking to build a proper social media program. Download a free chapter here and find out for yourself if it is worth the paper it is printed on. You can also check it out on amazon.com or pick it up at just about any bookstore.

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You want results? Time to start reinvesting in people

“I never knew what I wanted, except it was something I hadn’t seen before.” – Robert Altman

Today, let’s talk about how to really get a competitive edge by hiring the right kind of people. Edelman Digital’s David Armano would call them T-shaped people, or even Sun-shaped people. He isn’t wrong. The point is: A company is only as good as the sum of its parts. And by that, I don’t mean equity, technology or assets. I mean people. Invest in people, really invest in them, and your company will soar. Hire on the cheap and treat them like asses in seats, and your company will falter. It’s that simple.

What do you think makes Apple great? Trust me, it isn’t their servers or cool offices. It’s people. People come up with the ideas. People turn concepts into reality. People fight for their projects and make sure they happen. People invent, design and perfect the iPod, the  iPhone and the iPad.  People explore new ideas and figure out what the next big thing is.  People make customers feel special. People either make or break companies and brands, from the CEO to the greeter, and from the designer to the cashier.

It’s always been like this. Social Media didn’t invent anything. “Putting the people back in business?” Why did you ever take them out to begin with?

“If I complain about a traffic jam, I have no one but myself to blame.” – Steve Wynn

Neither my posts, my wisdom nor my ideas emerge from a vacuum. Everything I have learned until now and everything I will ever learn in my life will come from doing, learning, experimenting, and from listening to people who tried to do the same thing in different ways before I came along.

It is strange to me to hear people sometimes lament that “there are no original ideas left.” I think they are completely missing the point. The importance some people attribute to the originality of an idea is completely overblown. It’s an ego trip. They’re just disappointed because they couldn’t be known as the guy who came up with it. Truth is that the next big product won’t be a completely original idea. It will be an original take on a dozen old ones. What was the first iPod? A portable CD player without the CD. What’s the iPhone? A phone that does more than other phones. What’s a venti latte from Starbucks? A 20 oz cup of coffee with a Starbucks logo on it. What was the first light bulb? A candle without the candle.

Truth: What makes an idea good isn’t how original it is. It’s how relevant it is for its time and how well it works. Who cares if you were inspired by a dozen things other people did? Who cares if you borrowed from artists and designers and engineers who solved a problem or created something great twenty years before you became the precious little center of your mother’s world? That’s how it works. You go out into the world and get inspired by other things. You take bits and pieces of things that work somewhere else, and you adapt them to your needs, then piece them together to create something better.

Here’s something else: Great ideas, real innovation, the next big thing, no one is going to come up with them sitting at their desk or brainstorming with a roomful of  suck-ups.

Great ideas, real innovation, the next big thing, they’re all out there, waiting to be pieced together like a puzzle. And the puzzle pieces, they are scattered all over the place waiting to be found. How are you going to find them? In a meeting? During a powerpoint presentation? At the end of a RE:RE:RE:RE string of emails?

Who are you hiring? What are you doing with these assets? What types of tasks are you giving them? Are you evaluating them based on their ability to respond to emails, schedule meetings and drive incremental points of change, or are you recruiting and evaluating based on people’s ability to truly drive your company forward?

“If you don’t go, you’ll never know.” – Robert DeNiro

You want to find out how to get better at customer service? Take off the suit, get in your car, and go talk to your customers. Better yet, become a customer all over again. Heck, do both.

You want to find out how to design better products? Start looking at every product out there a little more closely. Things that have nothing to do with your industry. Dog toys. iPhone applications. Action figures. Tennis rackets. Bicycles. Sunglasses. Mechanical pencils. Media players. Faucets. Swiss Army knives. Even cat food is designed to look, taste and feel cool. Learn what works.

You want to find out how to become a wiser business leader? Go out and talk to people who have suffered under some really bad ones. You’ll learn very quickly how to avoid becoming the next mediocre suit with a big title.

If you’re too busy to do any of this yourself, then make sure the people who work for you get to do this. If they can’t hire people who will, then give them permission to. Send them out into the world. They aren’t going to learn anything new sitting at a cubicle all day, filing papers.

You want to generate great ideas on a regular basis and execute on them the way Apple and Nike do? Surround yourself with creative thinkers who will challenge groupthink, uninspired corporate obstacles and collectively work together to figure out how to rock the As all the way to the Zs.

Inspiration and wisdom are everywhere. Whatever unbeaten path you may find yourself on, it’s still a path. People have been there before. Maybe the path looked very different then, but it’s still the same path. Find these people and learn from them. Since you probably didn’t have time to clear your schedule today, let me bring a little bit of that wisdom to you… but after that, you’re kind of on your own.

Very few of the little bits of wisdom below were meant to be used as business advice, which is precisely why I selected them. They’re all really about life, about decisions, about integrity, about the choices we make. But it doesn’t take a genius to see how some can be applied to customer service, to hiring, to innovation, to career management, to choosing whom to work with, and to coming out of this recession a market leader.

“If a guy doesn’t have a little gamble in him, he isn’t worth a crap.” – Evel Knievel

You don’t get to be a market leader by playing it safe.

“Let’s see what our competitors do first” is not the path to market leadership.

“Can you show us some case studies first?” is not the path to success.

Every time I hear executives speak enthusiastically about the crazy projects their junior teams are working on, I smell success. Whenever I hear career administrators dismiss ideas from junior members of the organization because they’re too bold, because they’re unproven, because they haven’t been tested by the market, because they aren’t guaranteed to work, I smell failure.

Success – just like good ideas – doesn’t emerge from a vacuum. Success is nothing but the final intelligent outcome of a thousand purposeful failures.The light bulb wasn’t invented overnight by a major technology company based in Palo Alto. Neither was the automobile.

Success is a process. It has its own architecture. Its own unique elements. Its very own DNA. Think about the quality of people you hire and promote. Are they just there to be asses in seats? Does their job consist of spending a third of their day responding to emails? Are they merely “head count,” as some companies call them? Do you truly encourage and reward initiative, innovation and courage, or do you make a process of crushing them out of your organization?

Here’s a tip: If you feed your organization average, don’t expect to get anything but average results. If you only feed your business “safe,” don’t expect to get anything but “safe” results (which means no results at all). If you surround yourself with suck-ups and cowardly little self-serving tyrants, don’t expect a whole lot either.

Fortune does favor the bold: Apple takes chances and wins. You could say the same of Pixar. Google didn’t get where it is by playing it safe. Look at what Ford has been doing for the last three years. How do you think Zappos got to be Zappos? Even Old Spice, for that matter, took a chance and scored big – turning a tired, irrelevant brand around with a few deliberate strokes of genius and a healthy dose of courage. Where do you think all of this started? With decisions. Decisions made by people. People who were willing to take calculated risks in order to win. People who were willing to go where no one had gone before and see how far the rabbit hole went. Where did these people come from?

Imagine where those companies would be today if they had hired unimaginative desk jockeys whose idea of advancement was to fly under the radar long enough to get promoted and just “do their jobs and go home.” Your company should be a hotbed of ideas, not paperwork and reports.

So invest in people. Be smart about it. Treat them like the assets they are. Give them what they need to make you next year’s success story. If there ever was a secret to gain a definitive market advantage, it’s this.

But hey…

“Wisdom is knowing when to shut the f*ck up.” – Adam West

Here are a few additional tips from some people far smarter than I am:

“Courage is doing something you need to do that might get you hurt.” – Bobby Bowden

“Change is not threatening.” – Steve Wynn

“I love discourse. I’m dying to have my mind changed. I want to know, you understand? I like listening to everybody. This to me is the elixir of life.” – Jack Nicholson

“Take a bit of the future and make it your present.” – Andy Grove

“If you’re not nervous, you’re either a liar or a fool. But you’re not a professional.” – Jerry Lewis

“Hire people who will treat the switchboard operator as friendly as they’ll treat the managing director.” – Sir Richard Branson

“My definition of evil is unfriendliness.” – Muhammad Ali

“Tell the truth. sing with passion. Work with laughter. Love with heart. ‘Cause that’s all that matters in the end.” – Kris Kristofferson

“Never accept ultimatums, conventional wisdom, or absolutes.” – Christopher Reeve

“If you want results, press the red button. The others are useless.” – Homer Simpson

“Hypocrisy is a detriment to progress. There’s always a hidden agenda.” – Larry Flint

“Money doesn’t make people happy. People make people happy.” – Steve Wynn

“A nickname means you belong.” – Buck O’Neil

“Risk means guessing at the outcome, but never second-guessing.” – Mel Brooks

“The measure of achievement is not winning awards. It’s doing something that you appreciate, something you believe is worthwhile.” – Julia Child

“Nothing is just one thing.” – Carrie Fisher

I hope that gave you something to think about. Have a good’n.

 

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Running into snags integrating social media into your business? Not sure how to separate social media snake oil from business-relevant planning? Looking to understand how to connect ROI to your social media activities? Check out ‘Social Media ROI: Managing and Measuring Social Media in Your Organization‘ (Que/Pearson). Not a complete guide to social media integration for business managers (it’s only 300 pages long), but it comes pretty damn close.

Read more about it here, and if you’re still on the fence about it, download a free chapter to check it out.

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