Memo to the CEO: Why we need an annual report for technology

This lead into an article in The McKinsey Quarterly caught my attention:

“Memo to the CEO: Why we need an annual report for technology

Although most companies realize that business units and the technology organization must be much more integrated, many don’t know how to make this happen. Business leaders sometimes have only a vague sense of technology’s value, while technology executives often fail to address issues in terms that businesspeople find meaningful. In a hypothetical memo to a CEO, a chief technology officer proposes a solution: an annual report for technology, analogous to the annual report for investors and the broader market.”

The article goes on to succinctly capture a point that I think is true for IT and, as I have been trying to point out, even more of an issue for those evangelizing the adoption of social media and other manifestations of the broadband networked era we are moving into …

“The basic problem is a lack of shared understanding. Our business unit leaders … just see bits and pieces and don’t seem to grasp the interdependencies. It’s understandable that they get upset when things go wrong, but it’s less understandable that they hesitate to invest time and energy to sponsor solutions. Our technology leaders, for their part, often fail to address issues in ways that businesspeople find meaningful and therefore lack credibility … “

Well, the idea of an “annual report” is dead.  We would be looking for something that can be updated frequently or reported in real time.  And, despite a good effort to tackle a major problem, McKinsey’s language still highlights the chasm in thinking.  Taking a org chart and process approach to management instead of a network view leads to compartmentalization instead of integration.  Increasingly, the “value the technology organization delivers” is not somehow distinct from the value that the entire organization is delivering.

In any event, their point is spot on.  There is a need for tighter integration between day to day business and the technology that is already available.

As we have completed the Design Phase proposal of a research and development program that will test Social Capital Value Add in three to five Fortune 100 companies, I have had a chance to talk in depth with others for the first time about some of the far reaching implications of the method.

Social Capital Value Add does not try to measure all of the social capital of a company.  It zeros in on this new form of scaled up social capital that is attributable to broadband empowered individuals.  In this way, it is a leading indicator of how corporations are integrating broadband and the associated applications into their operations to postion themselves to maintain stable earnings and achieve breakthroughs in productivity and innovation.

The “Giving Up Control” Myth in Social Media

I have articulated this thought during my presentations at conferences and corporate speaking engagements recently, and it just came up again in a phone call with Jenny Ambrozek.

Aside: We were discussing an action plan to gather together a few folks to exchange ideas on how to address the “What’s Wrong with Corporate Social Media” thread that we covered at the Business of Community Networking Conference in Boston, was the theme of a panel yesterday at Web 2.0 Expo and is the challenge ahead for the Enterprise 2.0 movement.  More on that later …

I have used Ron Burt’s structural holes theory to depict the shift from broadcast to social media in this short slide show which I have shown on this blog before & is linked into the “Introducing Social Capital Value Add” ebook.

(insert into page 35) SCVAviaStructuralHolesFig11-15

(Uses Burt’s structural holes theory to illustrate shifts taking place in media, brand and power.)

I think Burt’s insight debunks the “loss of control” myth that most corporations suffer from when they think about social media & web 2.0.  Even social media experts who are advocating adoption of social media talk about how a corporation needs to “give up control”.

That is bull. Broadband penetration, mobility and integration of GPS and RFID are trends that corporations do not have control over. They urgently need to adopt management methods that enable them to deliver value (sustain and develop control or at least earning power) in the context of these trends. They have lost control. The question now is how to get back on top of these trends.

Secondly, I think that Burt’s innovation coming along roughly 20 years in the wake of Granovetter’s Strength of Weak Ties arguement is a model for understanding the relationship between the idea of brand valuation and Social Capital Value Add.

They are related, they describe different facets of similar structural value drivers.  Both deliver required, complimentary insight.

#smfail, Why Social Media Fails: The Experts Weigh In @ #w2e

Thank you to @sagenet for turning me on to the #smfail twitter thread that was streaming out of today’s Why Social Media Marketing Fails  – and how to fix it panel at the Web 2.0 Expo.  Industry thought leaders – Peter Kim (Dachis Corporation), Charlene Li (Altimeter Group), and Jeremiah Owyang (Forrester Research) led the discussion.  UPDATE:  Thanks to Peter, Charlene & Jeremiah for linking to this post.

My comment on a post by @miaD on her Marketing Mystic blog has turned into this post here.

Mia reported “Keeping true to the spirit of social media, Peter Kim invited input for this session before the show, on his blog where folks respond to what they wanted to see at this session. Not surprisingly, it was standing room only for this brilliant panel of former and current Forrester analysts.”

Here are my thoughts along the themes established by the panel:

1. How to get culture to adopt & get C level buy in:

Demonstrate the link between corporate value & social media the way that the link between brand & corporate value was established in the late ’80s.  Brand value is now the 3rd most monitored benchmarks by CEOs (can someone help me find the link to where I read this factoid?).

2. How to make “campaigns” work:

I agree with the panel, the campaign model is wrong.  It leads to the wrong metrics (CPMs, web analytics), wrong strategy, etc.  However, cycles of activity tied to a good strategy are required.  “Campaigns” will work if they are part of corporations mobilizing their internal & external networks toward the creation & defense of enduring value … not about going viral, not about views or meaningless registrations.

3.  What Measures Matter (are right for social media):

Measures should be derived from the academic work that has been done in quantifying social capital.  Nan Lin’s network theory of social capital is a good place to start for a definition.  Social network analysis is also an important place to look for meaningful measures (see @barrywellman and INSNA for more).

4. Does social media matter?

Oh yes.  It is very critical.  That is like asking is it important that major American corporations maintain market share that is disproptionate to population as China, India and the developing world begin to project their power into global culture.  The shift to common perception shaped by broadband empowered networks is accelerating (as opposed to broadcast networks).   Broadband connectivity is set to triple every six months and it is the key driver.  The broadband trend, along with mobile communications & GPS integration is eliminating the boundary between the virtual worlds & the so-called real world, establishing the link between broadband empowered people and stable future earnings.  Ultimately the ability to maintain margins is dependent on a shared perception of sustainable difference between price and costs.  So yes – social media matters, very much, to every publicly traded corporation … in fact to everyone & it will only continue to increase in importance.

Here are some of the other recaps of the panel …

And Kate Brodock did a good wrap up of the Business of Community Networking conference where we covered similar issues last week in Boston.