6/ 8/ 2013

Observations about the impact and meaning of information technology upon strategic communications in

organisations.

We Will Cover

• The relationships between stakeholders.• Technology changes organisations.• In key ways, organisations are closed systems. • A brand is more than the sum of its parts.• Organisations are not culturally adapted to new communications technology. • Organisations are not structurally adapted to new communications technology. • Organisations struggle to integrate social media.• Content is key to any communication - yet one of the most variable. • Who will pay for information?• Emerging economies and their impact.• “Creating reciprocal meaning” remains the key task of any communication between any two

pr more persons, regardless of the relationship type.

1. Technology is not only an enabler, it fundamentally changes organisations.

• In the early days of IT, technology was employed to replace mundane, repetitive human tasks.• As technology developed, the “amount” of information content it added to simple

transactions, started increasing. The applications of technology become more complex as the amount of information IT could handle, increased. We moved from simple to increasingly complex tasks. Instead of being one-dimensional, IT applications became multi-dimensional.

• Today, technology – from statistical models on organisational data, to Internet search patterns and what that means for business and thought leadership, to interactive “what-if” customer offers for companies like Amazon.com, to intelligent search engines, to idea generation and mind-mapping or similar techniques, to customised communication (including advertising) based upon customer understanding (i.e. Sky in the UK).

• Even in marketing the Marketing CIO is becoming more widespread. IT is inverting “into” the business, rather than replacing systems. In fact, there is no longer a logical role for technology, it is literally unlimited if we apply our minds to it.

Technology is not only an enabler, it fundamentally changes organisations (cont.).

• In wider strategic terms, the convergence of technology has enabled massive acceleration of innovation and a dramatic increase in the competitive space for most organisations. Whereas companies are used to working one-dimensionally, we work with technology that is able to straddle traditional boundaries.

• Do we even know what technology is capable of in future??? We as humans may now be the greatest limitation we place upon technology.

• The question is how we can apply technology to create the competitive organisations of the future.

We are in an era of “meta-technology”. Meta-technology is about how we interpret, use and manage information content.

• Today, technology must fundamentally question the prevailing way the organisation works and enable a different and integrated way of working – or a new enterprise architecture: we are talking about an era of “meta-technology”.

• It impacts its market; – its understanding of its stakeholders and their needs and wants; – its understanding of its competitive space; – its business, market, competitive and stakeholder intelligence; – its people & processes; – its stakeholder feedback mechanisms; – its stakeholder relationships and degree of engagement… everything.

To assist us, how do we “unpack” how stakeholder needs connect with our operations? “Unpacking” assist with “re-constructing”.

• Take every department in the organisation.• Assess what stakeholders expect in terms of product and service delivery.• Interpret that in terms of how your particular organisation must deliver “on-brand”.• With the operational staff in each department, assisted by the executive, unpack how the

intersection of these areas impact:– Structure & hierarchy.– Constraints to delivery.– Systems.– Processes. – Staff recruitment. – Staff training. – Decide clear standards of performance, i.e. how will customers be greeted, what happens if systems are off-line; how are

complaints dealt with; how are exceptions handled. Standardise & indoctrinate staff. Apply the principles of franchising. – Set clear staff KPI’s.

• Portray that visually.• Launch, train and institutionalise. • Carry on doing it, never stop.

2. Many organisations today are actually “closed systems” (even if they believe they are not) - technology exposes that.

• Most organisations are still hierarchical - or they act that way even if they are not.• Even competitively we are “closed systems” – we compete within clear and simplistic boundaries and

define it that way - if you compare what strategists like Gary Hamel says (“99% of what you need to know about the future, happens outside of your industry”).

• Most organisations are silo’d. Divisional. Just compare most global banks!• There is often no clarity between what staff does in their daily tasks - and what the customer experiences. • How the organisation accurately identifies, analises, interprets, understands, uses and disseminates

information… the greatest competitive space lies here now: HOW to USE information, based upon what it really MEANS to the organisation.

• This applies to governments and many other stakeholder types: society is based upon a system where certain things are known and others hidden… whether this is good or bad is not the issue: – Is Assange right or wrong?– Is Snowden right or wrong? – This depends upon whom you ask - and why you ask – or what you want to do with the information!

Quality is now paramount. A return to the fundamentals of marketing: satisfying consumer needs.

Flash-era of business.• Believe what the marketer says. • One-way. • The dominance of flash over substance.• Marketing budgets rule.

Substance-based era of business.• Quality of products & services. Does it deliver

for customers?• What the consumer actually sees and

experiences (what the product does and looks like).

• Fact and substance-based. • Totally interactive, even if most companies

cannot “talk back” with ease. • Yet, amidst emotional consumer volatility!

“Design is not just what it looks like and feels like. Design is how it works.” (Steve Jobs)

• The greatest impact of the Internet upon brands, is the “equalisation” it brings to the world. • Everyone, anywhere, with access to the Internet, can communicate, in any way, with anyone, about

anything or anyone.• This means any viewpoint – good, bad, considered, inconsiderate, emotional, rational, violent, valid,

invalid - or whatever, can be shared. • And because there is no mediation, even slander will get widespread coverage before anyone can stop it. • This means the true authenticity of a brand owner (what it really is), the values it holds, the way it

operates, is open to scrutiny by anyone inside or outside the organisation. • This puts the true “purpose” - and real values - a company founder, its executives and staff “live” - not that

that is written on posters - at the centre of the debate. • If the value system of a company is profoundly based upon honesty, truth, respect for humanity, respect

for society, respect for fellow-human beings and all living things, respect for the environment and the sustainability of our universe, respect for people and their values, respect for its customers, respect for suppliers, respect for its future… it will be ok, and it need not live in fear of social media. If the company honestly makes products and services it believes enables and empowers humanity, it need not be concerned. This kind of organisation is not secretive, it shares, involves, engages. It is open to the world. This means it is also willing to recognise its mistakes. It also recognises that to earn a decent – not excessive - profit margin, it needs to retain a balance of interests.

• Much of this will stem from the leadership of an organisation.

The integrity of a brand owner is now paramount: your values will be apparent to all, not in what you say, but in what you do.

Instead of being great new media tools for brands, most of the impact of social media upon brands are far more fundamental. In fact, at this point,

social media “threatens” more than they “enable” brands!

• Marketers and brand owners are used to notice, investigate, discard or use new media types as they come along. They “made the rules”, decided whether these media was worthy or not, and what they were worth. Media stayed in business because they fulfilled a marketing purpose.

• NO LONGER!– With social media, this is still true to an extent, but it does not prevent consumers from using any social media type they choose

when talking about the brand. – The brand owner has a far lesser “say” when it comes to social media. In fact, some social media are quite dismissive of business

in general.

– What is true, is that brand owners have no control over what is being said about their brands. The power has shifted, fundamentally. And forever.

• Marketers are struggling with this loss of control. Most do not know how to handle this… and it is only the beginning.

• Yet, marketers still face having to retain and grow their customers, using all media types, including social media. So marketers need to beat he odds.

• Like in all areas of business, the winners will be those who can leverage these new opportunities to their advantage, better than their competitors.

• The losers will be those who think that they still have the control, or that believe it is business-as-usual. At this point, this is still the vast majority of brand owners and marketers.

3. A brand is more than the sum of its parts – it is the whole experience the customer have.

• Steve Jobs, Apple Inc. Akia Morita, Sony. These two people are icons of great product design, the one in the last century, the former more recently. – Strong brands are valuable value-propositions. They really offer something that is good and what works. – Strong brands use intuition, listening, innovation to interpret… so even though these kinds of people do not do formal

consumer research, they are intuitively attuned with their environment and the people they design products for.

• Brand is often still seen as “a marketing, advertising or identity thing” – that whilst strong brands have inherent integrity or functionality.

• A strong brand is the collective sum of its parts… as outlined and elaborated upon in my book, “The Brand Book”.

Business objectives

Market GAP

Brand Presentation

Quality of Product &

Service delivery

Trade Presentation

Segment;Value

Proposition &

Strategy

X XX XX

Brands require aligning different aspects to create one “set of meanings” for stakeholders.

• Customer retention & churn.• Customer value growth.• Customer profit margin growth.• Customer acquisition.• Market share in numbers and monetary.• Costs to manage & market.

• Market size, growth, penetration rate.•Market segments & proliferation. Market needs & occupied positions. • Market dynamics, i.e. innovation, new entrants & profitability rates. • Profitability rate in industry and related industries.• Drivers & inhibitors of growth.

• Brand status: brand factors; product & service factors.• Comparative brand status within same & related industries.• Relative brand awareness, perceptual ownership within chosen segments.• Brand talk-ability.

• Relative brand performance in product and service quality.• Relative brand performance in value/ price. • Rate of recommendation.

• Relative brand performance in the trade: numeric, value distribution.• Relative trade impact.

• Strategy, positioning & message overlap.• Segment reach & frequency.• Segment objectives by media channels.• Marketing budget efficiency and application.

•Positioning of competitors.• Opportunities for value propositions, segments or strategy or positioning gaps.• What-if: alternative gaps.

To illustrate: aligning organisational resources with brand positioning.

A brand is where everything is designed to deliver the value proposition to the customer.

The “whole” of the brand is more than the sum of the parts.

• Unless your fundamentally understand your brand, you are exposed. Whilst this sounds obvious, I know very few brands owners who really understand all the aspects of their brands deeply and honestly.

• This includes:– How, where and how your brand is produced. Whether that adheres to global best practice - or not.– Minute detail of suppliers, raw material providers, associate companies, shareholder profiles. Who these are and

what their intentions are.– Links to outside organisations with dubious roles or profiles. – Who produces the brand and whether they are being paid properly – and have proper working conditions - relative to

the standards of their user territories. – How your brand compares to the market needs and competitive offers.

• Are you better, worse and why.• If your brand delivery is worse, are people paying less for it - or are you taking exceptional and unsustainable profit margins?• Are you monitoring the quality of production and end-user delivery?

– If your brand requires a service delivery component anywhere, are the staff informed, trained, empowered? Is the physical infrastructure able to present and deliver the brand in the best possible way, relative to the expectations of the market?

– Are staff happy?– Are staff being paid well relative to similar brands and the profit margin of the company?– Are there processes in place to deal with issues, complaints, breakdowns?– Are you aware of what is happening everywhere in the organisation at all times? – Are the systems able to scrutinize supervisory and other behaviour on an ongoing basis?

To ensure you do this, audit your brand in every way, to ensure the integrity of its production and user delivery.

4. Organisations are not culturally adapted to new communications technology.

• Despite books that indicate the importance of “ideals” or “purpose” in aligning staff to organisational goals (i.e. Jim Stengel, “Growth”), this is rare in organisations.

• In most organisations, there is a huge disconnect between:– What staff do and what the customer receives (often also what they pay).– How staff understand how they relate to one another and the end-goal.– What staff do and what they get paid.– What value the organisation holds for society and the community. – How staff sees their contribution to society and the community.

• New communications technology; regulatory and legislative requirements are exposing these issues.– This means organisations are forced to close the gap between what they say they are and what they

really are.

5. Organisations are not structurally adapted to new communications technology.

• Lack of empowerment of most staff, even senior staff. • Most companies cannot interact 24/7/365 with its stakeholders. • Silo’s means a “disconnect” between what happens in organisations and the value it delivers

to stakeholders and end-users. What we produce and what we do, are not the same!– How does every action contribute to stakeholder satisfaction?– Most staff cannot answer that.– Many CEO’s cannot even answer that!

• It will require an “unpacking” and “repacking” of how value is created. This must clearly define the role of all in it (as outlined before – the book, “Business Model Generation” is excellent in this regard).

• Often, companies are not structured to easily communicate… communication is not a core competence in most organisations!

6. Organisations struggle to use and integrate social media well. To add to what was said above…

• Integrated marketing communications (“IMC”) is still not used well by most companies. • Social media is used as organisations would employ traditional media tools: in a structured,

“corporate” way. • Social media is social… that is why people engage with it. They interact in mutually beneficial

ways with one another. • Some brands, i.e. recently McDonalds in Canada, have started to create a new form of “open-

ness” of communication. • It is early days to know what technology will enable: in some way, it will ultimately be a

balance between what technology is able to do and what stakeholders WANT it to do.

Integrating social media into business properly -”how to”.

• Social media is about “social & human” issues, not brands. Brands are not used to working this way. – How would you feel if a friend sells insurance at your dinner table?

• Cultural alignment of the business to become an “open system”. Many will not survive.

• Connecting with communities and customers in meaningful ways that add value to their lives. Real engagement expects real customer knowledge and insight.

As an example, the way the tools seem to be used best.

The company-side of the

story

The consumer & how they interact

• Websites.• Profiles.• Newsletters. • Online brochures.

• Linkedin profiles.

• Blogs.

• Facebook profiles.

• Youtube.

• Twitter.• Instagram.

• Discussion groups and forums.

Line of greater engagement.

Where involvement is now. One-way.

Where engagement must go – and where the opportunity lies. Two-way.

7. The issue is not the ability of technology, but deciding upon which one to use and most importantly, HOW.

• Technology proliferation is increasing – making selection complex.• Social media is fast becoming as “SPAM” prone. • CONTENT is key, yet it remains the one area that is most variable, i.e. content

quality. • So the challenge is how to communicate, in meaningful and engaging ways, that

adds reciprocal value to all stakeholders of the communication. • This is often content that is engaging, meaningful, useful, funny, relevant…• This means more focus on understanding, listening and creativity.

8. So far, new media is struggling with their economical models, with no one or clear answer evident. Many types of mass media are struggling for survival. So, who will pay – and how?

• This is a serious challenge facing most media types. • Is it because we are trying to “retrofit” existing economic media paradigms to new

ways of working?• Is it because new technology has undermined, almost by default, the value of

content? That content, for most people, is now “free”?• If so, how do you then “pay” for content? Or how do your determine what content

is worth? There is now discussion in the US about the dominance of iTunes, which may further undermine the value of content.

• Clearly, branding is the only way content can be protected, i.e. assuming people will pay for strong brands like The New Yorker, Vanity Fair, The Wall Street Journal or Financial Times – or unique brands like Huffington Post, even though they may not want to pay for Business Day or The Star.

Traditional media like newsprint suffering. New media is trying to find its economic feet, supported by more “promise” than financial results.

• Recently, two newspaper icon brands in the US, were sold:– Washington Post: $250 million.– The Boston Globe: $70 million.

• Compare that to two recent sales of social media:– Tumblr.: $1,1 billion. – Instagram $1 billion.

• Yet, despite this, new and social media are still struggling with low rates for advertising; how to charge and what to charge for without alienating users; they are experimenting with different ways of charging; some want to move to a pay-by-response method, yet many clients are still not comfortable with that; some charged so little historically that they now trapped in a low rate zone.

9. In emerging economies, what are happening?

• Leapfrogging the West, often.• Emerging markets are often more attuned to social media as people are more

social, less individualistic. Yet, even there there is evidence people are becoming irritated with the intrusion of technology already.

• The value system of society is important: we may today have an imbalance between the communication we are able to have, with the values of society: if everyone has an equal weight in what they say and how they express themselves and feel, will democracy survive it? Will Syria or Egypt gain a state of equilibrium again? If so how – or when?

• The underlying assumption is that access to communication pre-supposes equal levels of awareness, insight, understanding and values. Yet, this is not true!

• Also, is it a fact that all communication must be shared, or will everyone at times have information they do not want to share (not hide, that is a different matter altogether).

10. Ultimately, the challenge is how companies interpret and leverage information to add “meaning” to their organisations.

• Roberto Verganti, “Design-Driven Innovation”: much of what we do is about “the creation of meaning”, the traditional definition of communications.

• The production process of an organisation, has one prime drive: to create “meaningful meaning” that will satisfy the needs and wants of stakeholders it engages with.

• “The depth of meaning” is a function of the amount of information you add to the organisation.

• The greater the information content added, the greater the value created, compare iconic brands… the less replicable they are, the greater the value they hold. The more unique they are, the more unique information content they hold. The deeper the content depth, the more valuable they become.