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IS5600 – 2

Markets are Conversations!

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Unlimited Information – Opportunity or Hazard?

• In the late summer of 1994, a mathematics professor found errors in Intel’s Pentium Processor.

• When Intel refused to respond, he posted his comments on a website.

• Later, Intel announced that the error would only happen once in 9 billion calculations. Critics disagreed, noting that one would never know if a calculation was correct or not.

• Within 1 month, IBM stopped shipping Pentium-based PCs.

• In November, Intel admitted the problem, and offered a replacement chip “if you can prove the need”.

• By late December, following huge public outcry, Intel offered the replacement chip to anyone who asked.

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In 1994• Who had Internet access?

– Globally, less than 1% of the population

• Who read newsgroups on the web?– Even fewer people

• Search engines were primitive and missed a lot of content

• Internet-literacy was low– Were you online in 1994?

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In 2014, it is a bit different• 34% of the world is online – 2.5 billion

people– Far more Chinese are online than Americans

• Wikipedia: written by anyone & the 5th most popular website globally

• eBay/TaoBao buyers /sellers rate and comment on each other’s performance.

• Customer feedback on products is normal• Avaaz delivers social activism online• Dopplr keeps you in touch with your

friends’ travel movements, doodle with meetings & schedules

• Wikileaks is more informative than governments

• Everything we do online is monitored

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Markets Have Changed

• The Internet enables new forms of communication

• Deep linking subverts hierarchy• Better quality information comes from

other consumers, not vendors– Does anyone actually read/listen to what the

vendors say anymore?– Do the vendors know what we say about

them???• There are no secrets from anyone

– you can find anything online, good or bad, if you know how

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So What? Markets are Conversations.

• Markets are about People as much as Products– Widespread access to the Internet– Dedicated feedback sites – Ease of posting / publishing – Dedicated feedback mechanisms– Feedback aggregation

• Conversations drive business!

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What Do People Go Online For Now?• To socialise• To shop• To become part of a community• To be entertained• To learn• To have fun• To date

• Learning about:– New subjects 47%– The world 45%– Disease 31%– Medicine 27%– Health 26%

• Buying– Clothes 38%– Electronics 27%– Music 27%– Movies 20%www.intentindex.com

This data is from a US survey. Would it be the same in HK? China?

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GroupOn – GroupBuy – BeeCrazy • Group-based systems are social and can

be exploited.• Dell created DellSwarm

– The more people who join, through social networks, so the cheaper the prices

• Limit losses by restricting available inventory– lots of positive feedback on the social web

• Enhance the brand and generate more sales

• Try BeeCrazy.hk

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You Tube• In Spring 2008, a musician was

travelling through Chicago.• He saw his guitar being carelessly

handled by United Airlines (UA) ground staff.

• They admitted their bad behaviour, but refused compensation.

• So, he wrote a song to complain about it, posted the song for free on YouTube and…

• Do you think UA wants this bad publicity?– http://www.youtube.com/watch?v=5YGc4zO

qozo

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The Social Web Environment

• Companies no longer have 1-1 relationships with their customers

• Customers talk to other customers instead – on a massive scale

• Companies need to practice social CRM

• They need web-credibility!– So that people trust them.

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How to Develop Web Credibility?

• Listen to the web!– What do people say about you?

• Corporate you, not personal you.– What do you do that they like?

• Employ people who understand this world.

• Move from inactive listening, to reactive responding, to proactive action-taking

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Crises, Complaints, Opportunities

• You can only react to crises and complaints– Use facebook, twitter, weibo to

apologise– Your fans will rise up and protect you

• But you can proact to create opportunities, as you seek to turn the social web to your advantage as you gain credibility

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Steps to Leverage the Social Web• Monitor

– Gather data, experiences, opinions• Assess & Analyse - what did you learn?• Strategise

– What to do, set as a target, achieve?• Test your strategy• Embed in regular processes• Review continuously. Keep listening.

– The social web is dynamic – so you must be too.

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Implications for the Organisation

• New skills, new employees, new culture

• Communication between departments

• Recognition of the value of innovation

• Leadership – this is the CIO’s job– If you have a CIO!– IT is not just for support! It is for

innovation.

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What’s All This Got to Do with Global IS?

• Social Media is a powerful IS weapon –For individuals and organisations–For offence or defence–For marketing, sales, service–To promote loyalty–Propaganda or counter-

propaganda– Information or mis/dis-

information

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Microblogging: Twitter & Weibo• These are also powerful tools for

communication• Users become roving journalists,

tweeting message-bites immediately

• Sina and Twitter each claim 500M+ users– 40+% of tweets are mobile

• Very hard to control the content– But are the followers real or just bots?

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Application Example (for you!)• Your company produces high-end smart phones in

China and sells them worldwide. Your latest model, SX88, has been an excellent seller, and is factory-guaranteed for 3 years.

• However, 15 minutes ago, you (the CIO) received an e-mail from your CMO about an on-line discussion forum that reports several breakdowns of the SX88 after as little as four months.

• When you search for “SX88 failure” on Google, you find over 1000 hits, many on social media sites

• How will you work with the CMO to stop this negative publicity?

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Social Networks• Seem to be a powerful tool and a way of

tapping into the 'wisdom of crowds'.– Are crowds that wise?– How about the folly/stupidity of crowds?

• Social networks need to be focused and refined so that they actually do add value.

• We will look at social networks again in week 6 in the context of knowledge management.

Crowdsourcing

• TED Crowdsourcing – what does an ox weigh?!– http://blog.ted.com/2012/02/29/of-oxe

s-and-the-wisdom-of-crowds-lior-zoref-at-ted2012

• Great minds think alike, clever minds think together.

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Organisational Web 2.0 Perspectives• McKinsey reports widespread interest

– Web 2.0 is seen as being strategic• But not just Facebook!

– Instead, a focus on networking and automation

– Web services, collective intelligence and peer-to-peer networking are particularly popular• Social networking, blogs and wikis are less

popular.• Yet, there is a huge fear of ‘social’ at work.

Digital Work and Digital Cultures

• Digital natives constitute the majority of new employees entering the marketplace

• However, these new employees face an organizational culture that enshrines the vested interests, habits and values of a very different type of person– At best, digital immigrants– At worst, digital dinosaurs!

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Tensions• Digital tensions are found across

most societies.• Facebook is not ubiquitous, but

some kind of social media is virtually ubiquitous among digital natives.

• Some organisations do deliberately obstruct digital work.

• So, how do employees cope in organizational cultures managed by digital dinosaurs?

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Digital Natives• Are people who are “…digitally literate,

highly connected, experiential, social, and in need of immediate gratification”. They “tend to be more comfortable with extensive peer-to-peer collaboration” (Vodanovich et al., 2010, p.712).

• “Being connected is not only part of what digital natives do – it is who they are. They consider the digital world to be part of their personalities” (Vodanovich et al., 2010, p.720). 23

Digital Immigrants• “Digital immigrants are people who were born

before such technologies became widely available and thus learned how to use them in their teens or adult life” (Wang et al., 2012).

• There are more/less enthusiastic natives and immigrants who adopt to a greater/lesser extent.

• Digital Dinosaurs are the avoiders who minimise contact with any digital technology.

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Case Study in a Global Hotel Chain

• Interviews with 86 employees in 16 hotels over 14 months across China

• All ranks interviewed from GM to clerical

• Hotels ranged from 2-star to 5-star• We asked questions about problem

solving techniques, knowledge sharing, organisational culture and digital work

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Results• Chinese digital workers leverage technology to

create and maintain digital relationships (guanxi) with selected others

• Guanxi is ubiquitous in Chinese society and involves close interpersonal relationships premised on mutual respect, reciprocity and an obligation to help one another

• Many of our interviewees stressed that without guanxi, they could not accomplish their work since the cooperation of other people was critical

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For Example• “I need use QQ to contact external

parties who refuse to use email … or the telephone”.

• “I leverage my guanxi with suppliers to gain favourable prices and discounts”.

• “I have guanxi with external experts in media and printing. This enables me to complete work at a higher level of quality and more efficiently”.

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Corporate Perspectives• The corporate culture prohibits use of social

media applications at work – they are blocked. • As a senior manager in China remarked: “There is

no value in chatting. Web 2.0 applications have no role to play in our corporate culture”.

• The Global VP for IT informed us that they have a zero tolerance policy towards software applications that might breach security. There is no BYOD culture here – all employees must use standard platforms.

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Resolving Tensions

• Employees can’t fight management or the culture, so they work around

• Many use the networks designated for hotel guests to bypass management restrictions– This may even be approved by local

managers, who are also victims – policy is set in global HQ, not locally.

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Web 2.0 Value: The Case of IMs• Web 2.0 applications like Instant

Messengers (IMs) are designed to be interactive – but are they also interruptive?

• Deloitte reports that only 41% of 750 companies surveyed allow Social Networking tools to be used at work.

• So what value can tools like IMs (MSN, QQ) provide to organisations?

• Can social networks also be work networks?

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A Recent (IM) Research Project

• We surveyed 253 employees & managers in four Chinese cities:– Shenzhen, Beijing, Hefei, Xi’an

• M/F: 63:37; 75% BA/BSC or higher• Age 26-35: 65%; 18-25: 25%• # of IM contacts: 1-20: 45%; 21-

50: 30%

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IM Use at Work

.20**

.57**

Work Interruption

R2 = 5% -.02

-.01

20**

.39**

CommunicationQuality

R2 = 33%

InteractivityR2 = 32%

.26**

Mutual TrustR2 = 50%

.58**

.55**

.03

..07

.33**.50** .33**

Group OutcomesR2 = 40%

Group Process

Satisfaction

Group Outcome

Satisfaction

GroupOutcome Quality

Results of Survey

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Analysis & Implications

• IM use does predict work interruption– But work interruption has no negative

impact on group outcomes. Why?• IM use has positive effects on

communication quality and trust in team work

• Are workplace interruptions ‘normal’ – nothing special at all?

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Analysis & Implications

• Interactivity is a key variable, driving trust and communication quality – and ultimately group outcomes

• So, what next?• Should organisations be more

open-minded about IMs? Are the fears misplaced? Can we measure group outcomes more objectively?

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Social Media @ Work in China• I see increasing evidence of Web 2

applications, e.g.– Instant messengers– Microblogs

• … being used as normal work tools for– Collaboration & Communication– Knowledge Exchange– Marketing

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Social Media Based Communications

• Many Chinese companies allow or encourage employees to use IM at work

• QQ is less common, esp in BJ/SH– But it is used for large file transfer

• MSN is seen as being more formal• RTX is quite common in high-tech

firms• Even Yammer is seeing some

traction

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For Example

• RTX (Real Time Exchange) or Yammer are used as corporate IMs in– YinHai - www.yinhai.com – TenCent – www.tencent.com – iSoftstone – www.isoftstone.com – Glodon – www.glodon.com

• Skype, G-talk and G+ is used widely in– Thoughtworks –

www.thoughtworks.com

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Resistance to Web2?• Not all organisations have strong senior

management or grassroots support• Management and customers alike can

still be traditional and apathetic, seeing any IT as a cost, not an opportunity.– CIOs need to cut costs through virtualization

and then create new innovative opportunities for value

• Does Web 2.0 generate enough value to cover costs?

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Who is Leading the Web Way?• Is this the job of the CIO? CTO?

CMO?• Which people in the company are

best connected to cutting edge web 2.0 applications?

• Who is in the best position to assess the business value of web 2.0?– Management? Users? Consultants?

• How do you see Web 2 applications being leveraged for global business?