Categoría: Strategy

Digital Age, Digital business, Events, Strategy

The Laws of the Digital Age: from Moore to Martec

I recently wrote about what I called Cyberlife, the third wave of the Digital Age. I was very happy to see that some presentations at the DES2018 in Madrid confirmed my insight and provided other perspectives about it. We are on the same page as there are clearly three waves under the overarching concept of Digital Age.

These waves are based on revolutionary technological developments according to IBM and David Farrell, general manager of IBM Cloud Watson & Cloud Platform. He organised the three waves based on some classic laws of the Digital Age: the first is a very known law that describes the doubling of microprocessing power roughly every two years (Moore’s Law, after Gordon Moore, from Intel). This a typical law of the cybernetics world. The second is Metcalfe’s Law, which states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2). I had the pleasure to attend a conference with Robert Metcalfe in Brazil many years ago, he was a truly visionary. This is the law that governs the Cyberspace.

Finally, as a third trend emerges with AI. IBM describes its effects with another law/principle, the Watson’s Law, named after the company’s founder and its supercomputer. Currently the term is not fully adopted but this is the postulation and suggestion of IBM at this stage, which relates to the use and application of AI in business, smart cities, consumer applications and life in general. It makes sense, no doubt, and for me it is  basically the Law of Cyberlife.

Elementos del omni businessFor his part, Antonio Marín Rivals, director of KPMG in Spain, focused on creating value in the digital economy. For him, companies seek to offer an omni business experience to their stakeholders. I found KPMG’s division of omni business in four layers very interesting: Brand, Products and Services, Interactions and People. Marín Rivals pointed out that the role of people is key in this process of dramatic change that we are going to observe in the coming years with the increasingly digitalisation of every aspect of a company. Technological changes will influence internal and external operations, therefore they will also affect employees and consumers. The workforce and the marketplace are changing. New technologies will create new channels; new relationships will result in new behaviours.

Law of MartecI thought it was very interesting, in this sense, the slide presented by Scott Brinker, from Hubspot. Zooming in in the marketing area, he brought us a more specific law: the Law of Martec. Basically it describes that organisations change at a logarithmic rate, while technology advances at exponential speed. This explain one of the reasons why the challenge of marketing departments is so daunting to adapt to the new reality of a highly-intensive data-driven marketing. These departments are basically running against the clock and consequently capability-building and attraction of talent are high-priority items in the CMO agenda.

These different conferences indicate that there is a fundamental aspect of marketing decisions in the Digital Era that cannot be neglect: People. This reminds me Forrester and its POST method of digital strategy creation : people come first, then objectives, strategy and in the end the technology.

Digital business, Events, Future, Strategy

How the Digital Revolution is unfolding: notes from DES2018

The Digital Revolution is a reality and in the DES2018 I saw it at full speed. I was at the DES2018 – Digital World Business conference held in Madrid last week and I can confirm that the social networking is old news. What is being discussed now is something else. There were three intense days leading speakers and excellent participation, with the topics focused on the new technologies that are already transforming the world: in short, companies and society in general must buckle up and be ready for important changes. It was an excellent event and could not ask for more: information and first quality network. It was worth the trip.

There was a great diversity of themes in the DES2018, but in the next posts I will share some ideas shared by key players in the digital landscape, and some lessons that caught my attention, namely:

  1. KPMG and IBM: the confirmation that we are entering a new phase of the Digital Age, as I mentioned in my post about what I call cyberlife, the third stage of this era.
  2. Accenture: the new marketing business to consumer, highly analytical, personalized and based on insights
  3. Opel: in an exclusive interview, let´s do a deep dive on the importance of analytics in business
  4. Mercer, the largest human resources consultancy, and the impact of digital in the business to business market and in people
  5. University of Berkeley: the challenges of Artificial Intelligence – amazing!
  6. Acalvio Technologies: the challenges of cybersecurity – scary!

Shall we start?

Online Reputation, Strategy

The Online Reputation Management Integrated Model: a roadmap for the management of digital corporate reputation

I developed and published in my doctoral thesis (2015) the Integral Model of Corporate Online Reputation Management – MiROC  so that organisations can structure their plans to achieve four general objectives: a) create; b) maintain; c) defend and d) recover the reputation in the digital environment. Monitoring (or web analytics) is a transversal element of the model as it feeds the organisation with real-time information about users, relevant topics, competence and the level of engagement that is being generated with its stakeholders.

After defining the objectives, at the next level is dedicated to strategy formulation, which I call Engagement Strategy and it follows the typology of strategies described by Beal and Strauss (2008) based on the paradigmatic case happened with the company Dell and its reputation crisis known as «Dell Hell» (Del Vecchio, Laubacher, Ndou and Passiante, 2011). The strategies are the following:

  • Listening Strategy: it is the most basic level of action in the digital space, with little interaction, where the online presence occurs simply to extract information so the organisation can use it as another source of intelligence in their business plans.
  • Dialogue strategy: it is when the company starts to move towards a dialogical relationship admitting the existence of the other (Internet users), but not necessarily assuming positions and making changes in their business behaviours. But, undoubtedly, the level of engagement is superior to the previous phase.
  • Response Strategy: this level implies, from the dialogue with the interested parties, the openness to offer answers to the concerns of the users, in a level of dialogue more accentuated and, perhaps, risky, but these answers do not necessarily mean the acceptance of the proposals/ideas of the users. The answer can be both a «yes» and a resounding «no» to their requests, complaints, etc.
  • Change Strategy: this level involves the co-creation of meaning and value between the company and the users. It is the highest level of engagement because it signals to users that the company is «embracing» collective intelligence and acting with users in the search for negotiated solutions. It is not easy because, basically, this strategy implies a almost a «partnership» between the organisation and its stakeholders.
Implementing the model

It is obvious that the strategy of Change is much more complex than that of Listening, since there is much more investment of resources from the part of the organisation (and from the stakeholders, as well). However, this definition is essential as it indicates how the organisation wants to achieve its objectives through its online reputation plan. The strategy is not necessarily for the whole company, it can be defined at the corporate or at the business unit/brand level. Therefore, there can be more than one digital strategy in an organisation (and this is more habitual, of course).

From the moment you define what you want with the online presence qne how you are going to achieve that (the strategy), it is time to create the «foundation» of the online presence: content and participation management.

Content management involves the use of the platforms available in the different digital domains according to the topology proposed by Donovan (2009). The company may decide to create static content, such as web pages, or create a dynamic presence on social media according to the strategy defined previously. Without this content it is not possible to «occupy» the web, and therefore it is commonly said that «content is king». This is proprietary content («owned»), not customer generated content (CGC). However, if content is king on the Internet, in the social web participation is the queen. Participation management refers to the protocols that must be followed by company’s representatives to act «live», and a key part of this process is the work of the community managers and moderators. Participation activities are directly related to the conversational and relational system, and clear protocols are needed to establish behavior guidelines in the interactions with users.

The action plans

From these key elements of digital presence, it is possible to define specific action plans that correspond to the conversational, relational, referential and expository subsystems. These blocks provide the framework for the execution of digital activities, and the first four are dedicated to proactive action, and the fifth to reactive action (crisis management):

  • Viral marketing plan: It is related to the conversational and expository subsystems and includes digital word of mouth or buzz communication actions. It is the new advertising on the social web, which creates content that will be shared or mashed up by users. Very often, companies starts this “viralisation” with advertising / paid media to start the «contagious» process.
  • Search engine positioning plan: according to Clippinger (2011) «there is no greater reputation creator than Google», and in fact it is very common in the professional literature to associate online reputation management solely with the activity of «cleaning» the name of the company in the search engines or to get a better position for companies and their products on Google’s first mentions. I consider that this task (known as SEO-Search Engine Optimisation) is fundamental, but it is not the only one in a comprehensive management plan like the one I propose. This plan also includes the paid activities (SEM-Search Engine Marketing) and it is referencial by nature
  • Online user experience management plan: this plan is responsible for the interactions with users from the perspective of usability and interactions through representatives of the company in the digital environment. It is closely associated with the field of electronic commerce and customer service and corresponds to the relational subsystem.
  • Online public relations plan: these are public relations activities aimed at influencers, such as certain bloggers of interest to the organisation, and who may or may not refer to an explicit action of paid advertising/sponsorship. This plan may contain actions that correspond to the conversational or expository subsystems.
Online crisis management

The fifth block of the model is related to online crisis management and online issues and risks. These are risks that challenge the conventional strategy of crisis management (Aula, 2010) and can be, for example, lies, half-truths, manipulated images, leakages, and also harassment, deceptions and ridicule (Fertik and Thompson, 2010). On the other hand, social media can be used to help in cases of crisis that do not occur on the Internet, as an additional element in the crisis communication plan (Wendling, Radisch and Jacobzone, 2013). It is a particular area of my interest, and was the subject of my previous blog (2011-2014) and the subject of my thesis.

As we can see, several  specific objectives can be defined by an organisation in its online reputation plan at strategic and tactical levels. However, I highlight that, in terms of reputation, the final results sought by the model are very clear: that an organisation is known, be known for something and obtain a general favourability – the pillars of any reputation program, digital or not.

Big Data, Data mining, Strategy

Data Fest in London: Sysomos Summit

Last Tuesday, I went to the Sysomos Summit in London, a celebration of technology, data science, social media and business. The event was also the place where Meltwater, a leading company in the area of market media monitoring and business intelligence software, announced the acquisition of Sysomos. Jorn Lyseggen, Meltwater’s founder and CEO presented the ideas behind this acquisition, which will help crystallise the company’s new vision: Outside Insight.

I was happily surprised to see the impact of the new digital reality in decision making mentioned in one of Lyseggen’s slides, as this is exactly the key theme of this blog. Actually, Lyseggents wrote a book about this subject, which I’m halfway through reading, and I can say that it is 100% worth reading.

To start, it’s not a book about data only, something you might expect from a company that helps make sense of the abundance of data we have nowadays. It’s about change, decision-making and strategy. It’s very action-oriented as well, and the key thesis of the book is that organisations not only need to have an internal view of data (typically, managed by ERP software) but, fundamentally, should keep permanent sight (and keep all other senses alert) to external factors, such as “online breadcrumbs” that are available online (I also like to call this the “digital footprint”), from varied sources.

The pay off for this attitude is clear: companies acting (instead of reacting) on real time, make smarter decisions and are able to predict, rather than explain, their actions in an ever-changing market.

Very interestingly, as well, was Lysenggen’s mention of Michael Porter’s 5 Force Model. Perhaps as a vindication for detractors that consider that the model is outdated, he showed that the model remains valid as an essential part of strategy analysis and formulation. With the new paradigm proposed by the book, the model is tremendously enriched and its apparent static nature changes completely into a vibrant, real time competitive arena.

The whole-day event included the participation of several other speakers from different areas, and perhaps the most important point shared amongst the presentations was how external data can be a source of competitive advantage (Porter, again). Companies that are integrating data in a way described by Jorn Lysenggen in his book as “fighting preconceived beliefs and breaking through their internal bias” will certainly avoid the kind of tunnel vision or marketing myopia (another classic autor, Levitt) that affected big brands such as Kodak or Blackberry and will survive these hypercompetitive times will less difficulties.