Bloghound

I don’t know about you but I feel overwhelmed by the number of events and conferences out there. So here’s some editing: here are three where you’ll learn a lot, meet some interesting people, and feel that it was well worth your time and money.

• Word of Mouth Crash Course: My friend and WOM expert Andy Sernovitz is hosting a small-group word of mouth marketing seminar on July 30 and Sept. 4 in Chicago. Usually he only does private training for companies at a very large price, so this is a rare chance for 50 people to get a good overview of WOM. (If you use this code when you register you’ll get a $250 discount: “welovebeelinelabs.” For more: http://events.gaspedal.com.

• BIF-4 Collaborative Innovation Summit: Oct. 15-16 in Providence, RI. This is an amazing two-day conference that I think is better than TED. Hosted this year by Bruce Nussbaum, editor of Business Week and author Bill Taylor, speakers are fascinating innovators from business, science, education, the arts, non-profits. It will open your head up in a big way.

• Web 2.0 Expo is coming to New York for the first time, Sept. 16-19. We at Beeline Labs are running a three-hour experiential workshop on the morning Sept. 16 on how to create and run thriving online communities. Based on private community-building workshops we’ve recently done you’ll come away with a blueprint for creating a community for your organization. Hope you can join us! Drop me a line, lkelly@beelinelabs.com, if you want to know more.

This is a new map of what the emerging news ecology looks like, based on a Value Network Mapping and Analysis tool developed by Verna Allee for the recent NewsTools2008 conference among 150 journalists, technologists and educators. Talk about change!

According to journalists and bloggers Chris Peck, Peggy Holman and Stephen Silha over at Journalism That Matters, here’s what’s emerging:

• Some reporters become “beat bloggers” tapping into networks of bloggers to bring complex stories into focus.
• “Community weavers” create a sense of community among the former audience and with formal news entities.
• “Information architects” make intelligible the vast amounts of data and images now available.
• While editors continue to be sense makers, connecting facts and making story lines visible, ultimately who filters news from noise, how it happens, and who pays for it is still unfolding.
• Even the definition of “news” is up for grabs as memes — cultural units of information equivalent to genes in the body — replace an event orientation to story.

Fascinating model that can be applied to traditional media, online communities and social networks, or company communities for customers or employees.

Last week I had lunch with an editor of a major daily newspaper who is trying to innovate his paper. The question his execs keep asking: “How do we make money on a different kind of model?” As with this news ecology model, no one has figured out a magic money making model. In fact, if newspapers don’t downsize fixed operational costs like printing presses and distribution assets, they may never be able to make model in this new world.

What is clear is that if newspapers do nothing as they wait for the magic model, they will continue to lose their customers, many of whom are no longer just “readers” but active participants. Ditto for marketers and corporate communications execs.

Getting management to buy into innovative marketing approaches can be tough.

Here are six facts to support change, based on performance data that Copernicus Marketing Consulting has collected from more than 500 marketing programs (consumer and B2B products and services.)

1. 84% of programs are resulting in declining brand equity and market share.
2. Customer satisfaction averages just 74%.
3. Most acquisition efforts fail to reach break even.
4. No more than 10% of new products succeed.
5. Most sales promotions are unprofitable.
6. Advertising ROI is below 4%.

For more, see the Harvard Business Review article, “Don’t Blame the Metrics” by Kevin Clancy and Randy Stone.

I feel both exhausted and encouraged from this week’s Conference Board conference on Measuring Marketing Effectiveness. Exhausted because the data shows that despite so much talk for so many years about the need for measures and ROI , we marketers have made very little progress over the past 10 years.

A 2007 ANA study found that just 11 percent surveyed said they are very satisfied or satisfied with their ability to determine marketing ROI. A soon-to-be released Conference Board study found that none of the companies surveyed feel as though they’ve “arrived” at figuring out a good way to measure marketing.

Exhausting, too, because creating approaches that provide insights and guide planning - vs. simply measuring tactics — is hard, scientific work. Companies with successful measurement systems, like Eli Lilly, Unilever, MetLife, said it takes at least three to four years to begin making real progress.

The only measure that may matter?

What was encouraging, however, is that marketing measurement innovators believe one approach is particularly valuable: measuring customer preference or perceived value, which are leading indicators of revenue, profits, and cash flow. (In other words, a measure that helps you manage and satisfy the CEO and CFO AND see glean insights to help manage vs. simply measure marketing.)

Don Sexton, professor of marketing at Columbia University believes that this is the most effective measure, yet is missing from nearly every list of marketing measures. (FYI: Don is releasing a book on the topic this fall.)

Other takeaways:

Relationship preference matters as much as product preference

Mark Kershisnik of Eli Lilly believes (and has the data to back it up) that equity can provide a measurement of both investment and performance, and the way to measure equity is by assessing product brand preference AND relationship preference.

I found this especially interesting as so many marketers focus exclusively on product preference, yet customers make decisions, particularly in the B2B landscape, on relationship factors like trust, likability, innovation.

Most common measures are meaningless: lagging indicators vs. leading indicators

Most of the common marketing metrics are, well, useless. Awareness, mind share, perception, recognition, recall, share of market, loyalty, purchase intention, cost per click, etc. may be easy to measure, but they don’t connect to business value nor do they provide indicators of what to do differently to improve performance. They are lagging indicators measuring past performance rather than leading indicators that can help diagnose where to improve brand and relationship preferences and how to monitor progress of achieving marketing objectives.

Focus on just a few things

Many marketers try to measure too many things - 30 or 40 factors. It’s impossible to properly assess that many factors - or have the resources to work on improving that many factors. Many of the speakers recommended focusing on just 3 - 4 product preference factors and 1 -2 relationship preference factors.

Getting on the same page crucial to success

All of those firms with successful measurement strategies have educated their entire leadership team so that everyone has a shared definition of marketing, marketing value, measures and metrics.

The CFO’s mantra

Kamal Sen, director of business analytics and strategic planning for Unilever in Asia, Africa, Middle East and Turkey, offered what the CFO really cares about:

• Sales is vanity.
• Profits are sanity.
• Cash is reality.

Patrick Schaber over at The Lonely Marketer has a beautiful post about his friend Jill who put two chairs in the middle of a busy corporate campus and sat down to listen to anyone who had something to say. Needless to say there was a line of people waiting to talk and be heard. This is one of the more innovative employee communications strategies I’ve heard in a long time. No technology. Just real listening among people. Thanks for sharing Patrick!

There’s one big thing holding companies back from innovation, growth, attracting and keeping amazing talent, realizing the possibilities of emerging trends like social media: obstacles. (aka fears)

Reflecting on some recent experiences I see it everywhere.

• I spoke with a small group of Fortune 500 executives about social media and they zeroed in on what don’t like about social media: losing control.
• A group of brilliant IP attorneys got really involved in a session about conversational marketing, but suggested I spend much more time on one particular slide: overcoming obstacles.
• A workshop for a Fortune 50 company resulted in a powerful point of view that management, sales and marketing collaboratively created –and loved– but a then decided to stay with a safe, bland message platform. Why? The official reason was “internal politics;” the real reason was fear to have a point of view so different and evocative from the industry norms.
• A pharmaceutical company hired actors to pose as customers because they feared what real customers might say to their employees.

Going to fear school

Every year I do one big thing for my own professional development. There’s only one criteria: it needs to scare me, shake me out of my comfort zone so I really learn something.

This week I’m taking a workshop on how to design and develop transformational workshops at Kripalu. I’m the only business person among medical professors and educational activists, healers and shamans, ministers and coaches. Dropping into this touchy-feely environment where people chant in the morning instead of firing up PowerPoint made me feel very, very uncomfortable — so much so initially that I wondered whether I could learn anything at all. My own obstacles and judgments kept whispering in my ear, “Get in the car and get out of Yogi Dodge.”

Then in a session called “Going Beyond What Usually Stops Us,” David Silberkleit led us through an exercise where we had to articulate those obstacles (and the fears lurking behind them) that stop us from pushing forward to accomplish more, reach higher, take risks. Unarticulated fears/obstacles are what usually stops people. Acknowledge the obstacles, then you can go forward faster. (And David should know; he acknowledged his professional obstacles and walked away a sizable family business and inheritance — Archie Comics.)

During the program I thought about how thrilling social media is, opening up new business models, changing product development, innovation, customers service, CRM, marketing, public relations and leadership communications. Yet for so many companies and people the first step in realizing the possibilities will be acknowledging the very real obstacles of social media: eliminating job types and functions, reallocating budgets, losing control, lacking new skills, feeling irrelevant. I’m sure you can add more as there are many.

Mindset vs. toolset, human change vs. program change

Just as social media is a mind set as much as a tool set, success will require human change as much as functional and program change.

Just as we marketers know strategy and creativity, so we will need to learn how to guide our organizations through tremendous behavioral change.

So for my final project tomorrow morning I’m trying out a new workshop: “Burn Down the Obstacles.”

Oh yeah.

PS — warmest thanks to teachers Ken Nelson and Lesli Lang and my brilliant fellow workshop participants for teaching more in a week than I’d learn in a year of business conferences.

If you’re interested on some widely different perspectives on innovation, check out these mini video clips from people who were at this fall’s BIF-3 innovation conference.

There are some big names like Dallas Mavericks owner Mark Cuban (”innovation is never about the idea”), The Wall St. Journal’s Walt Mossberg, 37 Signals’ Jason Fried, as well as some not so famous people like pirate Matt Mason, Jack Temple, Steve Hardy and yours truly. (Gosh it’s awful to be videotaped on a really bad hair day.

While the headlines are bleak and the politicians’ campaign promises bland, I was made hopeful a the BIF3 Innovation Summit that ways to address some of our most critical problems – education, healthcare, aging – will be found and realized. And sooner rather than later.

Harvard Business School professor and innovation guru Clayton Christensen (few deserve that moniker but Christensen does) talked about his research and work into ways to innovative the health care and education systems. As an outsider looking in to these industries he seems to have been able to pinpoint root cause systemic issues and suggest needed new business models. To increase effectiveness and reduce costs, we need to focus on changing the system – and all its interdependent parts. Current efforts to improve efficiencies of individual pieces of the system are unlikely to solve the real issues.

Rachel Clarke’s transcript from the session provides more details. (Thanks to Rachel for her amazing live blogging skills.)

And for the aging boomers, of which I am one, Joseph Coughlin, director, Age Lab, Massachusetts Institute of Technology, shared some of the work that his group is doing with the purpose of helping people live well and with vitality.

Most inspiring is that many changes good for society need not cost more than what exists. What will be needed, and perhaps this is what we should look for in our government leaders, is fostering an environment that is open to change. It’s unlikely that politicians have the innovation chops of people like Christensen or Coughlin or many of the other speakers at the BIF3 conference. Leave the innovation to the innovators. But demand that government leaders take the lead in mandating change.

At the BIF3 Innovation Summit Irving “Irving Wladawsky-Berger, vice president, Technical Strategy and Innovation, IBM, suggested that the only way a big established company can reinvent itself is having a near-death experience, much as IBM did.

When Wall St. Journal columnist and BIF co-host Walt Mossberg asked Mark Cuban about whether he thought a near-death experience was the only way to keep innovating, Cuban had a different perspective.

“Every day I wake up knowing that there is a 12 year-old out there somewhere that’s trying to kick your ass. If you don’t pay attention to your business your ass will be kicked.”

Near-death or waking up every day and thinking someone could disrupt everything? The latter sounds like a better route.

One of the challenges in getting people to believe in a new business concept is having the right words to describe the concept. At the BIF3 Innovation Summit CEOs Robin Chase of GoLoco, Jack Hughes of TopCoder, William Herb of Linear Air, and BIF3 co-host Bill Taylor talked about the importance of messaging to be able to talk about business concepts in ways that resonate –with employees, customers and investors. Without that messaging, it’s difficult to get people to believe in the idea.

How these execs have distilled their concepts to people “get it” quickly:

• GoLoco: personal public transportation system
• Linear Air: car service with wings
• Fast Company magazine: like Harvard Business Review and Rolling Stone combined

All expressed how difficult it is to hone in on those few words that capture the idea. Note how straightforward these concepts are – and how easy it is for other people to use the language.

A few days a go I was talking to a CMO about his company’s new messaging. “We’ve got it done, but I can’t really explain it to you over the phone,” he said. “I need to walk you through the deck.” Sounds like it isn’t done….

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