1. The number of users. And I do not mean to be large.
2. The level of users. Neither understood as high nor as low … I mean quality for the purpose of the network and your network.
3. The user activity. There’s no “nuance”. Either there is activity or not.

I am in various social and professional networks and have come to the conclusion that they are a great channel of communication, but still not a place to share, as they should be. But if any of the above parameters fails, then they are not those great channels at all. And what the current reality shows is that the network activity, especially professionals, is rather low. True, the traffic can be high and we must not despise passive users but the interesting thing is when you build communication.

But there is a point that worries me. I get the impression that there is a discrepancy between the value of the network for users and for managers of the network itself. The managers seem more concerned with “capturing” new users than consolidating old ones and generate debate and activity that, after all, lead to more natural activity, greater commitment from users since they were recommended by other users. A WOM that works.

I once heard a network manager saying, roughly, “we put the platform and the users have to do the rest.” And it sounds as if the board of a football club said “we put the stadium, the rest is up to the members.”

If managers do not identify the leaders, the animators, who are the end of the day moving the network and motivate users in some way, the network will die.

It is incumbent upon those who  self define as “ believers” in these environments to give a serious tone and for managers to focus on something more than simply put the platform.

If you like this post, take a look on:
Social networking laboratory
Facebooknomics

I also recommend take a look in the graphic of this post in RocaSalvatella on the cycle in the implementation and management of Social Media. I'll take the end: "Social media is not the goal but a mean to develop the business." I agree.

A couple of months ago I was “discussing” with one of the country’s culture section leading journalists and a well known editor and they told me “nothing is going to happen to the paper book. There is nothing to worry about.” I wrote a post in which I made a parallel between the book, media and music, and someone told me “they had nothing to do with each other.”

Well, looks like they do.

The first “enemy” seemed to be Google. Now it also appears that the problem is to prevent piracy (?) by controlling the distribution of digital book using the same methods than in the real world.

Could it be that they make no difference between FREE ACCESS and FREE OF CHARGE? Could it be that the publishing sector actors and the media have not realized that the rules are changing?

All actors that revolve around the publishing industry, as it happened with the administrators of labels and media, believe that we should not liberalize the contents because it makes people think they are free. They still want to control what you buy and how you buy it.

I believe that in the Internet you can not apply the same strategy as in the real world, you cannot “try to stem the tide” to how books are distributed. But that does not mean we have to provide all content for nothing. No doubt there are or will be models where advertising may eventually supports a free of charge model, but I think:

• The content is what is valuable but, perhaps, is priceless. Maybe you have to build a world of products and services around the content and that will not be for free. The book, like music, would be the “excuse” to attract users.
• We need to make our books available in all formats so the user can decide what to buy. This enables you at the same time to reach all targets.
• Everything has its price. You just cannot price the same a hardcover book and pdf version, not even like a paperback.
• Implement a content policy “freemium”. A part is free and the other is free access but you have to pay something. For instance: in a CD offer something free or put a bonus track for free. In a technical book allow access to the abstract for free (not worth just the first chapter).

These are just some ideas. Surely there is no a single solution and every publisher should adapt its offer, but something I am sure about is:

• As in the music industry, this “revolution” will only popularize reading. Seize it.
• You can spend all day debating whether or when this will change. Let’s do something.
• Someone in the value chain will not survive or at least not all of that link.

This strategy aligns well with the type of diffusion we want. Relationship marketing is market oriented, customer committed and create, develops and maintain relationship with them. Client and provider roles are not fully defined and are flexible. Disintermediation, search for value creation and a strong emphasis on customer service are some of their characteristics.

Relationship Marketing requires a complex, ongoing internal marketing, an interconnection between major functions and marketing mentality across the organization. Relationship marketing considers target audience not only consumers but also dealers and after-sales service.

A new trend extends the scope of Relationship Marketing to suppliers, competitors, government, media, etc. We consider this new approach as a more effective way of creating a fully integrated relationship environment in a sort of holistic view of the company’s position (see SRM – Stakeholder Relationship Management).

The ultimate goal of relationship marketing is customer loyalty. Modern companies award value to each of its customers based on its CLV – Customer Lifetime Value – or net present value based on the returns offered in the customer’s estimated life cycle. But often they forget that the most valuable element of a loyalty process – affiliated programs – lies in the importance of the client as product prescriber.

Everybody knows that it is five times more expensive to get a new customer than keep an old one – a golden rule to build a long lasting company. However, dissatisfied customers are much more belligerent. Some studies show that unhappy customers transmit its dissatisfaction to an average of nine people. Others show to be much more skeptical when buying, a client who has bad reference about a certain product than the customer who conveyed its dissatisfaction.

If everyone agrees that the greatest gains in productivity will draw by implementing a strategy based on Web 2.0, what then is the reason to wait so long for such a coveted takeoff?

There are several reasons but for those who already know the benefits, it comes from the fact that particularly middle management, but also by high-level executives (technocracy), fears to lose their institutional power – the blurring of power is an intolerable threat.

Today it is simply unrealistic to envisage that an organization changes, turns upside down and becomes flat, not hierarchical, horizontal communication channeled, democratized in their status. Technological tools for this are already developed but they can just provide support, never be able to undertake such a change. It is a full-scale cultural change – someone will say that requires a redesign of the human essence.

For large organizations, is more effective to start this process in a new business or product line by creating a new division, start-up or so where this new concept can be put into practice with the required mentality and a brand new organizational design not influenced by the main office.

Another common case is that of medium-sized companies wishing to acquire international visibility but do not have large advertising budget allowance. These companies can perform tactical actions such as a preliminary to its strategic reorientation by creating a specific department.

Small firms are more flexible and easier to deal with change processes. Only one condition to meet, the owner must be convinced of the benefits of this new strategy and commit to take it forward.

The benefits are many and varied type but one of the most important is to “feel” the market.

At Bridgedworld we analyze the company potential, help define the new positioning, establish tools and channels and deploy a set of actions during the period deemed necessary.

This is Consulting and Interim Management. This is Bridgedworld.

Related Posts:
Viral Marketing and Enterprise 2.0 (I)
Facebooknomics
Social Networking Laboratory
SRM – Stakeholder Relationship Management

Deimel, Kraus and Reiche defined planning and strategic management “as the attempt to prepare to embrace the opportunities which the future depares and to respond to the complexity and dynamics of the environment”.

However, in times of economic crisis the strategic planning is missed, which really would allows us, if not to predict the future, to be ready to meet it.

Strategic planning has evolved from the position of developing visions and strategic objectives, to tackle what would happen given current trends.

To do this, large companies have central departments that allow them to deal with this aspect of business. But what happens in small and medium-sized enterprises? Who plans in small and medium-sized enterprises?

Also in small and medium-sized enterprises there has been an important evolution in recent years. We have moved from some entrepreneurs that lacked advanced studies in management, very persona lists, to a more professionalized management.

Spanish SMEs generally do not use strategic planning. The reason or reasons given in different surveys are: lack of time; do me not need because I am small and therefore flexible; and it is a long and expensive process.

Further analysing, the lack of time is translated into lack of, and an excess of confidence in their own ability. Leaders believe that planning is less urgent than the day-to-day business.

Flexibility means that can specialize in niches that fall outside the scope of others.

The length in time of the process and cost translates into as well as lack of time: ignorance.

The conclusion is that you we must plan to succeed. Some studies conclude with a direct correlation between planning and the success of the company.

It is obvious that strategic planning in small and medium-sized enterprises is necessary and also that in some cases; they are not prepared to do so.

Bridgedworld consulting spirit is to accompany SMEs in this process, creating a series of easy-to-use planning instruments and especially designed for them. And, furthermore, for a “reasonable” period of time, called “learning curve”, we accompany SMEs to obtain the expected returns and to cope with future developments, based on actual trends, with greater confidence and security.

When these action takes place in the domestic market, geographic segmentation reduces substantially this cost. But when the company decides to expand its scope, the cost rises dramatically and constitutes a true entry barrier.

This is especially true in foreign markets where the need to hire an international media agency, significantly increases the marketing budget.

On the other hand, audiences are increasingly segmented and saturated, are more skeptical and require accuracy in the information.

New technologies have opened new avenues and are positioning themselves strongly as valid high effective tools.

Born in 1995, Hotmail free email launched what it is today known as Viral Marketing. The concept has been developed as a potential low-cost diffusion tool for products or services.

Still a new concept in many developed markets but with a certain level of implementation in other countries like the USA where the figure of a paid professional blogger, who independently comments about products, is becoming common.

In general, viral marketing is presented more as a set of promotional activities (videos, permission marketing, etc.) than for what it truly is: one of the pillars of a new way of understanding business.

Viral Marketing is basically defined as a tactical tool, but its foundations and effectiveness depends on being part of a sustainable strategy. People can be infected by a virus but the body reacts and becomes immune. This is where we turn to the concept of Enterprise 2.0.

First of all, you need a well defined business strategy, a honest proposal (you don’t want to trifle with networks) and a product that should be in line with customer expectations.

All information should be transparent and reliable because the receiver will participate and interact with the organization.

And for it to spread, we must identify what motivates customers, how to trigger the desire to convey the message. And this can only be achieved by maintaining an empathetic relationship with the customer – creating a “loved brand”.

With regards the Website, this should allow interaction through comments, forwarding information, chat rooms, affiliate programs and comparative product panels (within the margins of the law).

We have to get presence in media and online networking sites using advanced Social Media tools. We should note that consumers often do not connect with the company’s Website but seek information on Google, YouTube, Wikipedia or Yahoo Answers just to name a few.

Nothing drives better product diffusion than having prospects participate in its design or feel part of the company. Enable co-creation platforms, create communities for discussion and feedback, etc., is the best way to attract attention and create that empathy.

Sometimes we get carried away by the innovations of the information society and forget that traditional concepts are still valid and should be clearly defined. Every company must define the four Ps of Transactional Marketing. But once this has been duly achieved, we must implement the so-called Relationship Marketing.

TO BE CONTINUED

Some researchers (including Christopher, Payne and Ballantyne, 1991) have expressed their theories arguing this new approach is too focused on the market.
Several authors have identified a number of areas where companies must establish bidirectional communication channels:
- Functional: Suppliers, Employees and Customers.
- Industrial environment: Strategic Groups, Competitors.
- Triggers: Investors and Governments.
- Diffuse: Community, Media, Influential, NGOs, etc..

The reasons are obvious and in line with the contributions for example by Michael Porter and his five forces (The Five Forces That Shape Strategy, Porter 1979), where he was tempted recently in his update to include the government as the sixth force.

Porter's Five Forces

The whole industry has been applying this concept for years. CRM applications, employee portals, Lean Management, lobbies, and so on., are tools used – some with dubious success – in many organizations to positively affect the P&L.

In short, it seeks to establish and maintain relationships with stakeholders.

Some of these actions have shown the best ROI as in the case of relations with influentials.

Others are absolutely essential for sustained growth. Aligning employees with business goals is critical and is one of the most important sources of competitive advantage. “It’s about gathering the necessary human capacity to facilitate desirable social and individual change” (The Foresight Model, Slaughter 1995).

When considering the value chain – as part of in-depth analysis of the Business System in which the company operates – of a product or service, one inevitably perceive the need to strengthen relations with all these estates.

Obviously not everyone has the same impact on the company’s performance. Even more, their relative importance varies over time thus requiring the monitoring of each of them in defined time periods.

Some studies show that organizations that have implemented a methodology to apply the tools that encourage this communication have achieved a marked improvement in its ROI.

The SRM is a strategic framework that boosts synergic effects to provide sustainable growth to organizations.

The challenge is to find a simple and intuitive implementation system.

Since late 2006, began to sharply rise the iPod index – whose framework defines how many work hours are needed to afford an iPod Nano, by the inhabitants of a city . But salary policies about iPodnomics would demand another post.

So, playing with words I arrived to “Facebooknomics”, perhaps as a synthesis of social networks monetization, caming from the state scope to the enterprises one. That way, the production of one Facebook action would be valued theoretically equally as in Sweden, in Mexico or India. As we talk about companies and states should not compare the rates between companies, in which higher FB rates would indicate a greater digital perception, highly influencing on the spontaneous recognition (TOMA, top of mind awareness).

Of course, this Facebook basket betrays his absences. Just as the Big Mac one miss it own, a full-2.0-basket should posses corporate blogs, professional as industries networks, and of course all social-media marketing (SMO, Social Media Optimization) from Facebook until Twitter, not forgetting the inetrnal workforce, dealing with corporate intranets.

However, while corporate communication is planned from the Board, digital performance in Spanish companies seem to suffer from factors such as lack of planning, positioning, optimization and measurable objectives (1). And this digital communication execution “from the company” usually ends with a simple website development, while forget all social-media impact.

Thus, remains a vast wilderness communication area, where individual participation becomes external and alien to the corporate message, whether it’s for wanting to exercise control over productivity (forgetting the digital world) or lack of comprehension and manage of these resources, companies loose their inside Facebook-production, resigning its strategic profile. So, the corporation forgets the communication potential of the media for the company which results in individual actions, orphans of a brand.

A cold, raw and full of sauce Big Mac is too indigestible; both as a network unattended.

If you liked this article ...
Laboratorio de redes sociales
También:
The Big Mac index
The iPod index

• Select a country from a G8 club.
• It is imperative that their ingredients must be top social-networkers.
• Let us add “mobile technology lovers” and “highly addicted to sending SMS”.
• Add a valid network, I & M vitamin zed (Mobile & Internet).
• Add salt to the stew with blogs, gadgets and techies.
• Expected results: a professional enterprise field, widely adapted to web 2.0

However, when we talk about Spain, considered the first country in Europe and second in the world after Brazil in percentage of Internet users participating in social networks (as reflected in the study ‘The Network Society 2008′ ‘La Sociedad en Red 2008‘ National Observatory Telecommunications), where six of every ten Spanish are connected to the Internet, where the sending of SMS is at the forefront of Europe (GSMA 2008), where the ICT industry’s turnover grew 1.5% in excess of € 114,000 million, where the development of blogs and gadgets is spread over the peninsula, we find that the finished dish is rather poor: 95% of Spanish companies have not adapted to digital media.

This study shows us a tangible reality: only a few companies have been able to successfully deal with a concrete strategy of communication directed to digital media and moreover, to digital communities.

There are many reasons for this recurrent failure, although we found that all of them have deep roots in strategic planning specifically, or the lack of it. Countless times I have experienced companies that have wanted to establish non-related communication-actions without having a valid structure nor a corporate pipeline to enable these actions to flow, in order that these actions can be measured, analyzed and recycled according to the company’s strategic objectives.

More than once -as I said in a previous post- I have seen that awareness of a given event (let´s call it a crisis, a pandemic stage or a leaderless event) hastens the demand for contingency planning. That´s the equivalent of contracting fire insurance after seeing your house turn into ashes. However, the story does not end there. It is usual that once made this sovereign Contingency Plan, be kept safely under lock and key.

Well, nobody’s going to read the Fire Manual when the house is burning.

Behold, in strategic communication, we find a reality mirror. Just as the sheer fact of having a corporate website doesn´t turn “digital” an enterprise, having employees operating in blogs, using Facebook or Skype doesn´t grant the company a “web 2.0″ license.

Ultimately, the only way to be a “web 2.0″ company is through business development, focusing on the external and internal clients (hey, they are digitals!), and understanding communications as an exercise in corporate growth and implementing -thru professional companionship- the necessary cultural change.

Or we will have a very distant technological ´casserole´ for our consumers to taste.

Changes in the price of RMB against the USD

Moreover, the impact of a yuan revaluation on U.S. dollar can reduce the purchase of American treasury bonds by the Chinese government resulting in higher cost of interest. Something not very advisable especially at times when the U.S. has injected some 700 billion dollars to save its economy.
The question is: Can China allow a devaluation of American currency?
With the vast reserves that it holds in this currency, China is probably more interested than anyone in the dollar maintaining its status as the reference currency.
On the other side and to the context of generalized crisis in developing countries, China turns its eyes to its domestic market. If, as expected, inflationary pressures begin to loom on the horizon, and given that China also needs to finance internal growth, the fear of importing inflation can give arguments to the Chinese government not to strengthen its currency.
The exchange rate of the yuan vs. the US dollar has remained relatively stable until late 2004. In 2005 it was priced at around 8 yuan per dollar, from that year has been revalued to stand today to 6.86 yuan per dollar.
The two-year economic stimulus plan encryption in 586 billion approved by the Chinese government is in line with the need to maintain growth in the vicinity of 8%.
In the past 30 years, China has staged a success story in fighting poverty through increase in GDP in the first place, improvements in education and increased life expectancy. The average income of a Chinese capita has grown more than 10 times during this period.
However, some shadows threaten these economic plans. Social security covers only 25% of the population that makes families tend to save more to ensure health care.
Environmental degradation, where China has some of the big cities in the top  air pollution ranking, is another factor that will require heavy investments in the renewables sector.
The Renewable Energy Plan speaks of installed wind capacity to reach a medium-long term of 1,000 GW (a considerable sum given that the world production today is 120 GW).
The Shanghai World Expo to be held in 2010, is fueled by so-called Shanghai East Sea Bridge Wind Power Plant with a generating capacity of 100 MW.
Will there be decoupling of the Chinese economy of Western countries as some economists predict? 78% of exports to Asia as a whole performs is destined for the U.S., Europe and Japan while interregional trade only accounts for 22%.
If this decoupling does occur, will inevitably be slow but may benefit international growth.

This simple thought is what led Daniel Carasso to success, when he called as “Greek yogurt” what was medical yogurt, to abandon pharmacy retail in Spain, landing later at U.S. restaurants, doing a transformation from a prescription drug into a high added value dessert. This thinking also enabled Carasso (who died recently at 103 years old) to create a company based on its own product. The company is known as Danone.

As Ignacio Prieto says on “Que inventen ellos“, we usually understand as “innovation” the progress on top of knowledge, both academic, scientific or high technology. Even if these processes (see “Innovation & Internationalization“) sooner or later result in the industry, from textiles to food, our first reaction is confined to certain areas such as pharmaceutical, energy, military. However, the creation of concepts is the viral ability to generate new ideas, concepts and research.

In this way, opening the HIT Barcelona in mid-June, Professor Rosabeth Moss Kanter made a great conference called “How to become one of the companies that are transforming the world”. Fortunately, I had the opportunity to talk to her after the speech. Moss Kanter is the Ernest L. Arbuckle Professor at Harvard Business School, where she specializes in strategy, innovation, and leadership for change. She has been named to the lists of “50 most powerful women in the world” (London Times), and the “50 most influential thinkers of the world” (Accenture, thinkers 50). Without doubt, an exceptional person with a great knowledge of academic and real world of business. And crisis in particular.

Precisely about this, arose the “innovation into globalization” issue, as a needed backdoor of all mid-range industries (in Spain and in other countries). And then Kanter summarized: “We say that we want to be innovative, but you see, let others to innovate the firsts” adding “that bad practice is about waiting to a foreign companies call”. In the same vein, I heard saying: “if the market does not want our solution maybe the market is wrong”. This is not mismanagement but a weak conceptual position of the institution in relation to its environment.

It all starts with a sort of fear of emptiness, which is where we haven´t built a state of continuous change of corporate culture. We need to become aware that the only constant pattern is changing scenarios, where the only thing stable is the acceleration speed of the change.

When we accept the “continuous change”, we can transform that knowledge into a corporate desire, into a new horizon of targets. This is ultimately of another class of needs, another sort of crisis: those which we are consciously pursuing, in order to grow.

Finally, Kanter gives us an escape door to deal with the paralysis feelings (executives´ stress, lack of energy on the Board, delays facing changes) that is, instead of waiting an internal change, provoke the twist from the borderline, regenerating the corporate culture, landing in new markets with our existing and known products, carrying our local medicinal yogurts to foreign restaurants as very tasty desserts.

This is the first of three articles arising from the global HIT conference: visit the next one called "Singularity on internationalization"

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