Thought Flickrs: 03/01/2007

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edelman talk

By hugh macleod

Edelman have kindly asked me to come to their London office today and give a talk about blogs and post-Cluetrain reality for one of their clients. Here are my notes:

SETUP:

1. I'm not here to tell you about your business. You already know it's a jungle out there. You already how hard it is to fight out there, just to earn a few pennies on the dollar. You don't need me reminding you of that. What I would like to do, however, is pass along what I've learned from blogging, and explain where I think it can help your cause.

2. To me, The Cluetrain is the most important book about the internet ever written. Why? Because it was the first book that talked about the internet the way it REALLY is- i.e. people talking- as opposed to the way business and the media pretend it is- i.e. people buying.

A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter-and getting smarter faster than most companies.

I'll be blunt: In marketing terms, I don't think anyone can truly understand the internet until AFTER they've read The Cluetrain. Highly recommended.

3. Nobody cares about you. That last sentence terrifies a lot of corporate types. We grew up thinking corporations and the media was all-powerful. That all a guy in a suit needed to do was snap his fingers, buy some TV commercials, and suddenly the masses would line up in droves, begging to buy your product. Seth Godin calls this old world the "TV-Industrial Complex". Those days are over. We've got too many choices. We are over-programmed and oversupplied with great choices already. In the future, the companies that will win are those that can rise above the clutter. To rise above the clutter you have to offer something remarkable; something worth talking about. A great, award-winning TV ad campaign for a lousy product won't cut it any more. People have gotten too smart. And like The Cluetrain says, thanks to the internet, they're talking to each other.

4. You've already done "efficient". We're living in a post-efficiency world now. We already know how to make things better, cheaper and faster than the previous generation. We already know how to squeeze our suppliers till the pips squeak. We already know how to build systems that maximize profits at every stage of the production and selling process. We're already outsourcing our stuff to China, and so is everyone else. Been there. Done that. So where does the growth need to come from? What needs to happen, in order to save your job?

THESIS:

5. The growth will come, I believe, not by yet more increased efficiencies, but by humanification. For example, take two well-known airlines. They both perform a useful service. They both deliver value. They both cost about the same to fly to New York or Hong Kong. Both have nice Boeings and Airbuses. Both serve peanuts and drinks. Both serve "airline food". Both use the same airports. But one airline has friendly people working for them, the other airline has surly people working for them. One airline has a sense of fun and adventure about it, one has a tired, jaded business-commuter vibe about it. Guess which one takes the human dimension of their business more seriously than the other? Guess which one still will be around in twenty years? Guess which one will lose billions of dollars worth of shareholder value over the next twenty years? What parallels do you see in your own industry? In your own company?

6. If corporate blogs work, it's because they help humanify the company. I wrote about this earlier in an article I called "The Porous Membrane". To paraphrase: Ideally, you want the conversation between customers [the external market] to be as identical as the conversation between yourselves [the internal market]. The things that your customer is passionate about, you should also be passionate about. This we call "alignment". A good example would be Apple. The people at Apple think the iPod is cool, and so do their customers. They are aligned.

When you are no longer aligned with your customers is when the company starts getting into trouble. When you start saying your gizmo is great and your customers are telling everybody it sucks, then you have serious misalignment.

So how do you keep misalignment from happening?

The answer lies the cultural membrane that separates you from them. The more porous the membrane, the easier it is for conversations between you and them, the internal and external, to happen. The easier for the conversations on both sides to adjust to the other, to become like the other.

And nothing pokes holes in the membrane better than blogging.

7. Blogging is not about reaching a mass audience. Blogging is not about creating yet another sales channel. Blogging is about allowing "The Smarter Conversation" to happen.

Why do some companies lose, while other companies win? Because the latter has a smarter "conversation" with its customers. Pret-A-Manger has a smarter conversation about food than Burger King. Starbuck's came along 20 years ago and began a smarter conversation about coffee with millions of people within a very short space of time. Wal-Mart's massive growth started from a smarter conversation about prices. Savile Row tailor, Thomas Mahon came along and, with his blog, had a smarter conversation about $4000 English bespoke suits.

Blogs allow you to cheaply and quickly begin a smarter conversation. And once you get it going, that conversation starts bleeding out into all other areas of your business- including advertising, PR and corporate communications.

8. Having a "Smarter Conversation" is not an intellectual decision. It's a moral decision.

9. Just because the conversation started out smart, doesn't mean it stayed that way. You have to keep evolving your conversation to keep it interesting. I always tell people, "Blogs don't write themselves." This is hardest part of blogging: keeping the mojo going.

WRAP-UP:

10. A fairly comprehensive list of corporate blogs can be found here on Wikipedia. [UPDATE: The Wikipedia list seems to have been taken down; but thankfully there's another list here.] For example: even though I know very little about Sun Microsystems, I read their CEO, Jonathan Schwartz's blog pretty regularly. So now I have a pretty positive image of Sun. So the trick then becomes, how does one take this little piece of generated goodwill, and turn it into something bigger? That answer goes back to the "Smarter Conversation". Blogs train you to speak to people the way they should be spoken to, simply because you won't get a response otherwise. And once you learn that, you can start applying it to all aspects of your businesses.

11. Blogs are very culturally disruptive- more so than people realize. So the question you have to ask yourself is, what part of your business are you trying to disrupt? Because you have to be ready for it.

12. "Conversation" is just a metaphor. Then again, no it's not.

13. Here are some links to give you some food for thought:

A. Robert Scoble's Corporate Blog Manifesto. Required reading.
B. Jeff Jarvis made blogging history when he blogged negatively about Dell Computers. Once the dust settled Dell started a blog of their own. Smart move.

C. Mark Cuban's Blog Maverick is a textbook case of how a CEO ought to blog.

D. Microsoft's Steve Clayton is as good an example of a mid-level employee blogging on his company's behalf as any I know. And to see a big list of Microsoft bloggers, go here.

E. Read everything Doc Searls writes. Shut up and just do it; the man's a genius [Doc was one of the co-authors of The Cluetrain. I'm also a big fan of another Cluetrain co-author, David Weinberger, who also consults for Edelman].

14. Remember, our internal drives were hardwired into us long before money was invented. So we're not doing it just for the money. We're really doing it to find meaning. Just my opinion.

15. Thoughts from my day job: "What's driving innovation and sales on our end is not a technological issue, it's a cultural issue. Get the right culture going, and the tech looks after itself."

16. I will leave you with the words of NYU Professor, Clay Shirky: "So forget about blogs and bloggers and blogging and focus on this- the cost and difficulty of publishing absolutely anything, by anyone, into a global medium, just got a whole lot lower. And the effects of that increased pool of potential producers is going to be vast."

The People's Bank of China announced Saturday afternoon that, effective Sunday, it was raising by 0.27 percent the regulated interest rates that banks may charge for loans and may pay for deposits. The benchmark rate for one-year loans to companies with reasonably good credit will become 6.39 percent, while the one-year deposit rate will become 2.79 percent.

Higher interest rates could widen China's trade surplus, economists said, as its exports keep rising but its demand for imports may slacken somewhat. Higher interest rates tend to brake investment spending on costly industrial equipment.

--
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