CEOs, C-Suites, and Suicide

Posted on July 12, 2012 by Nigel Cameron

Image representing Facebook as depicted in Cru...

Image via CrunchBase

Seems that approximately once a week a report is coming out giving fresh evidence for the same, utterly bizarre, fact: That most top execs are simply not engaged, personally or professionally, in social media. To qualify a tad: One well-placed observer tells that he believes many are actually engaged in private social media (such as Yammer) within their companies. I should be interested to see the evidence. Some I am sure are. But the whole point about social is that it is substantially public; private chat/bulletin experiences are not exactly the point. And while we are being skeptical: Anyone have data on private social use? Key issue is that the dynamic, transformative, threatening, swirling, social ocean needs to be swum in. It’s not just chit-chat among colleagues.

Back to point: Just before reading this nice piece in AllThingsD, I had posted a cry of distress that our major “social” corporations (that is, Facebook et al.) are themselves way down the list of those corporations benefiting from social engagement with their customers/users. Way down.

That is, the argument is a fortiori. If even our top social corporation isn’t engaging with its environment socially, what hope for B2B and B2C players in more trad industries?

This is bad.

Top CEOs Aren’t Using Social Media, Study Says — Should They Be? – Mike Isaac – Social – AllThingsD.

The CIO Issue is about Strategy; Strategy; got that? (futureofbiz.org)
CEOs Afraid Of Going Social Are Doing Shareholders A Massive Disservice (forbes.com)

The CIO Issue is about Strategy; Strategy; got that?

Posted on July 11, 2012 by Nigel Cameron

In a helpful review of the various studies on CIO social media use et al. Theresa Clifford draws attention to the most details, a Gartner piece from earlier this year, with its alarming (though hardly surprising) data point that social is not on the list of the top ten CIO priorities for the next 3 years. Links below.

Having discussed the social-C-Suite problematic on various occasions I am wrestling with a way of understanding what this is emerging as one of the most ridiculous deficiencies (and, at least for now, biggest opportunities) in the entire business environment.

Plainly, the extraordinarily limited personal engagement of top CIOs in (public) social media (4 blogs/250, 25 Twitter accounts . . .) is one factor. Back of that is the hiring and promotion policies that have set in perhaps the most sensitive position in corporate America the least prepared persons. Back of that is the tech focus of the CIO office, which should be about information – the core of value in C21 – and is far too much focused on system upgrades and playing defense on security and employee social use and BYOD and . . . Back of that that the CIO office it typically reports through the – ugh – CFO (it really does). And back of it all: that the CEOs and Boards of our top companies have yet to realize that the seismic development of this generation has not been about comms and database systems but about the information that they contain and enable.

Kinda basic, don’t you think? But at the end of the day amazing insights and dumb errors usually are. Think, once again, of Thomas Kuhn. Every exec and board members should read him; just as they should all do social immersion courses. I’m serious. And happy to help.

It’s about information; and once you get that, you will get that it is about social – knowledge and relationships, and the threat and opportunity the offer in tandem to every organization on the planet.

That is to say, taken together, they present the core strategy issue to C21 business. Every C21 business. And the bigger, by and large, the more central.

http://www.gartner.com/it/page.jsp?id=1897514

Is social media the next area for CIO innovation? | CIO New Zealand.

The Great Tech Election – not

Posted on July 10, 2012 by Nigel Cameron

Romney (Photo credit: Talk Radio News Service)

Here in the United States we are preparing for Presidential and Congressional elections in which the core issues being fought over by the parties are focused on technology and the future. Research, space, implications for security and social values; innovation to drive our research and development; the steep climb up the exponential curve that will take us far in the next 2 and 4 years; the next rounds of the digital revolution.

Except that we aren’t. Whatever the merits of our parties and their respective leaders, there’s not a soul who would describe the 2012 campaign in those terms. I wonder why.

Look at these expert panels that explain something of the answer:

Looking Ahead: Investing in America’s Competitiveness » Tech Policy Summit.

The Two Most Stunning Facts about American Business

Posted on July 7, 2012 by Nigel Cameron

No hires from west of the Mississippi! (Photo credit: Kevin Saff)

Serious question: Is there anyone out there in the Fortune 500 who actually wants to make money?

Because mainstream American business is deliberately ignoring the two key drivers of value creation – with a remarkable degree of consistency. Companies vary, but not by that much, which is why the competitive advantage implications of both should be causing CEOs (and investors) nights of sweaty, nightmarish sleeplessness or first-mover overtime.

1. As I keep noting, every survey that reports on the number of women in senior positions tells us something ridiculous. Not, primarily, unfair (though of course it is unfair). Ridiculous. Whatever they may say, corporate leaders have taken a decision to ignore 50% of the talent pool.

Think about it. No-one with brown eyes. No-one from west of the Mississippi. Dog-lovers, fine; no-one with a cat. I know, it’s complicated. But when you get paid a whole pile of moolah, you can expect zero sympathy from me if things that are complicated prove to be beyond you. Get it fixed, or get out.

We know the national numbers. Men make up 84% of corporate officers, and 86.5% of executives. To focus more narrowly, look at the latest numbers (referenced below) from the state of MA: 41 out of the 100 largest companies by revenue have no women on their boards; 52 have no women executives. No-one with brown eyes. No-one from west of the Mississippi. No-one with a cat. It is frankly hard to see how in these circumstances officers and board members can claim to be exercising their fiduciary responsibility. At a time when the pressures on U.S. business are as bad as they have ever been, nearly half the talent pool is being ignored. I feel like I should be writing this for The Onion.

I think it’s unfortunate that this has been branded as an issue about fairness, like minority representation. Because it is quite different. It is something investors, were they thinking straight, would understand. Something boards would understand. It’s about value and competitive advantage. Get it?

There’s more to be said. I’ve argued that many women are in general better suited than many men to the flexible thinking, agility, relational management, and personal shape of C21 business. There’s actually a bonus in brown-eyed, western, cat-loving hires.

2. The second stunning fact is recent, obvious, dramatic, and at least as hopelessly out of focus as the first. It’s “social.” We keep talking about it. The posts linked below give some telling numbers that drive home the point. Not one of our major corporations has grasped the strategic significance of social media and social customer engagement. Some have responded more seriously than others. A few CEOs have set a lead. But only a handful of top CIOs are personally engaged in that combo of tech and human interface which will define both the relation of corporation and customer (B2B or B2C) in this generation and the corporation’s own capacity for agile, responsive change. It’s as big as that.

So, were I to be asked, I’d suggest the CEO snap up the top 10 social gurus on the planet and build a unit that engaged equally with CIO, CMO, every customer-facing unit, product development, and strategy. With the authority of his (sigh, yes, likely, his) office. For starters. Then next week, something else.

Now, guess what? Anyone seriously think that with women occupying around half the board and executive positions the revolutionary impact of social would be ignored? Anyone seriously think that if and when social is taken proportionately seriously, and customer values demand alignment with those of the company, the asinine male-dominated corporate culture that is well-nigh universal in U.S. business will survive?

Point is, the misalignment of society and corporate governance culture will find its most ready corrective in the revolutionary impact of social in permeating the organizational boundary and enabling market-driven pressures to reshape the business enterprise. It’s all under way. Who’s interested enough in the bottom line to jump ahead?

Customer Service and those who don’t get it: https://futureofbiz.org/2012/07/06/the-social-revolution-customer-service-and-those-who-dont-get-it/

How to Become a Social Business

82% of Moms of under-18s On Social Networks

Tech and Corporate Culture: #social #DC #Gov2.0

The business case for investing in women – Boston Business Journal.

via The Two Most Stunning Facts about American Business.

More on the #social #CIO (futureofbiz.org)
Facebook, Diversity, and Leadership in the C21 Corporation (futureofbiz.org)
Oh really? Directors go Digital? (futureofbiz.org)
More Facebook Malarkey: Why? (futureofbiz.org)
The Social Revolution: Customer Service and those who don’t get it (futureofbiz.org)

The Social Revolution: Customer Service and those who don’t get it

Posted on July 6, 2012 by Nigel Cameron

Gordon Moore on a fishing trip (Photo credit: Wikipedia)

The glacially slow capacity of major companies to adjust themselves to the new world order of social media is going to cost them dear. Here’s a handy infographic to stick under the nose of your CIO/CMO/CEO. If you dare.

Seems a full 58% of Twitter users who have tweeted about bad customer experience have never had a response. Seems also that it costs, on average, three times as much to get a new customer as it does to retain an old one (I know, that varies enormously by industry; key thing to remember is that the impact is cumulative . . . an exponential factor that was around long before Moore’s Law). Ergo: duh.

We have noted repeatedly the lack of first-hand engagement by CIOs and other senior personnel in social, the continuing functional divisions that mar alignment between technology and strategic decision-making at C-Suite level, and the fact that (per Gordon Moore and his terrifying law) every single day these factors grow faster in their impact on customer retention and broader competitive advantage.

I’ve also suggested – further out on a limb – that it may be time to ditch the office of the CIO. As it has evolved, it is a tech-focused office; and in most major corporations it reports through that of the CFO (more horrors). Information now lies at the core of every endeavor, and with every passing day will drive value to a greater extent. Nobody should get anywhere near the C-Suite, whatever labels are being used, without a drenching in social media usage. Not that they all need to be coders (in fact that can be a negative; this is far from a geeks’ charter), but unless they are au fait, they should go do something else. At the leadership/management interface that the C-Suite embodies, they are incompetent. Whatever their other accomplishments. Sorry.

So back to the customer. Unlike the, well, institutionalized consumerism of a generation and two ago (think Nader), consumers are now directly empowered; and they will drive the culture of those companies sufficiently agile to be able to survive this revolution. The more numbers like those infographicked below persist, the faster we can expect new brands to emerge that get it.

Listen up, investors.

My earlier piece: https://futureofbiz.org/2012/04/13/social-risk-seems-cios-think-social-is-beneath-them/

And https://futureofbiz.org/2012/06/12/more-on-the-social-cio/

Social Customer Service – The Next Competitive Battleground [INFOGRAPHIC] – AllTwitter.

82% of Moms of under-18s On Social Networks (futureofbiz.org)
#C-Suite Executives and #Social (futureofbiz.org)
Most consumers prefer social media customer service (prdaily.com)

More Risk: Resilience, Amazon’s Snafu, and the Cloud

Posted on July 3, 2012 by Nigel Cameron

Clouds (Photo credit: richardcox8592)

It’s good to know that most of Amazon’s backup power generators were working at the end of last week as some seriously bad weather hit the most internet-infested part of the planet, aka the DC area. But it is far from good enough. If we are to succeed in shifting data storage to the Cloud, with the vast benefits that many believe will flow, we need to have security-conscious grown-ups making resilience decisions. Else all we are doing is continuing the trend of porting our most valuable data assets into increasingly insecure locations.

Some months back I was invited to visit the Network Operating Center of one of our major corporations, located in Northern Virginia, and got a taste of what it takes to ensure resiliency. They have two separate power access points; an oil-fired generator that is constantly run in readiness; and a huge battery backup. And aside from redundant server capacity on site, they have two more complete operations in another state. Any one of them can be switched in seconds. They have never been down for more than a few.

Cloud suppliers need as a minimum to offer this kind of redundancy to ensure resilience, and to game “two-war” situations in which a major hack attack comes at the same time as a natural disaster (weather, earthquake) or the outbreak of an infectious disease that takes out many of their personnel. Seems to me that unless standards are that rigorous, neither commercial nor government agencies are going to entrust their data, and the Cloud will continue to be – as it is now – on the fringe of data storage and management.

The experience of the past few days raises other issues of resiliency. It is astonishing that the area where the most powerful people in the world reside can’t get its power utility to bury its cables (Europeans are routinely shocked to discover U.S. practice, which is defensible in scattered rural and semi-rural areas, but reeks of the Third World in suburban centers).

And all that before we start talking about the prospect of an EMP (electro-magnetic pulse), which could essentially reproduce the results of the weekend storm right up the East coast and take a year to fix. But I hear a movie is in the works about the Carrington Event, the mid-19th century EMP that melted telegraph wires. Perhaps that will wake up legislators, regulators, and utilities. And consumers.

Amazon Explains Cloud Computing Snafu – Digits – WSJ.

Cloud Redundancy: How Amazon Should Repair Credibility (broadbandconvergent.com)
Thoughts on the AWS outage: making the cloud more resilient to failure (cloudflare.com)

More Facebook Malarkey: Why?

Posted on July 3, 2012 by Nigel Cameron

Rupert Murdoch and Wendi Murdoch at the Vanity Fair party celebrating the 10th anniversary of the Tribeca Film Festival. (Photo credit: Wikipedia)

Mark Zuckerberg, founder and CEO of Facebook (Photo credit: Wikipedia)

If Facebook were looking for further ways to undermine user and (by implication) investor confidence, it is on a roll.

The big story has been their switching 900 million default emails to their own system; with an adjunct (and even nastier) effect in some phones of changing contact lists also. This latter is put down to a bug that is being fixed, though the fact remains that scads of emails will have ended up in Facebook mailboxes rather than where they were intended to go.

There are two other stories floating around. One is that Facebook staff have what has been referred to as a private (anti-) stalking capacity, so they know who checks their own pages. Another is that Facebook has created bogus Facebook pages for non-users.

The basic email switching issue, unlike various others, is not a “privacy” issue. Much of the discussion around Facebook’s approach to its users has centered on what are seen by some as competing ideas of privacy. This decision suggests an overbearing disregard of consumer choice, and, back of that, a failure of judgment and governance. These failures, which become more egregious all the time, are illustrated by the privacy concerns. But they are more fundamental, and now that Facebook is a public company are revealing flaws that need to be taken seriously by the market as well as users.

It seems to me there are, at root, two.

1. Facebook’s governance culture, and the structure which in the post-IPO situation has grown out of it, are distinctive and would much better fit the “old economy” companies that flourished in the 20th century than one prepared for the 21st. Not to go over old ground: The board’s lack of diversity is well recognized (adding one woman has been good but is a marginal shift since she is is an exec who reports to Zuckerberg). And the shareholder governance structure gives Zuckerberg supreme command, in a model reflected most publicly in current business by Rupert Murdoch’s family control of News Corp. It may be a good model for some companies; that is not my point. But no-one would argue that it represents the cutting-edge of governance designed to navigate the Moore’s-Law-driven rapids facing a digital behemoth in the 21st century.

2. There is a dramatic discontinuity between Facebook’s de facto emergence as the world’s major social network, and governance structures that would seem to be utterly unaffected by any interest in, well, “social.” One could mount a more radical argument and suggest that social networks will best be governed using models of shared, stakeholder governance, that will require distinctive corporate and financing structures – either reflecting mutualization or the non-profit status of Wikipedia; or developing innovative models that are both for-profit and multi-stakeholder in nature.

Point here is more limited. Just as the most visionary companies around are slowly learning now to use social engagement to align values and decisions with their customers, the leading social platform doesn’t seem to give a fig for what they think about their own email access.

All of which suggests to me that, qua company, Facebook is aging fast.

Is Facebook Doomed?

Is #Facebook Doomed?

On diversity:

Facebook, Diversity, and Leadership in the C21 Corporation

Facebook’s Email Change Results in Changed Address Books, Fix on Way – ABC News.

Risk, Risk, Risk: Competitive Advantage, Value, and Knowledge in C21

Posted on June 29, 2012 by Nigel Cameron

A recent HBR blog post from Ernst and Young helpfully summarizes research that shows the increased profitability over time of companies with “mature” risk management functions – engaged with strategic risk and integrated with strategic decision-making. It’s a good read with some solid data behind it.

Here’s another slant. Plainly, in times of general stasis, when technologies, markets, other factors, are changing little, risks are comparatively low. The risk function in major companies, and risk itself as a para-profession, developed in such times. The rapid uptick in disruptive change powered chiefly by the digital revolution (aka Moore’s Law) and (directly and indirectly) related factors such as globalization and the furious growth rates of some less-developed economies have changed everything. Risk has moved from the edges of the business (traditional trade-offs between insurance and self-insurance, data backups, leadership transition planning – the many aspects of prudent housekeeping) to the heart of the enterprise – and its competitive advantage.

The sorry tale that came to a head on Wall Street in 2008 has underlined this in rather crass terms. But the tale is being told in many companies, most recently the effective collapse of Kodak and now RIM – companies built largely around a single product and technology (Kodak) or merely product (RIM) that have suddenly gone the way of the dodo and the travel agent. In an oped for the Sydney Morning Post during my visit to Australia’s finance powerhouse AMP last year I described Groupthink as public enemy number 1. Groupthink, from a specifically risk perspective, is of course about the fundamental mis-rating of risk; a consensus lock-step in ignorance that by understating risk balloons it into 2008 proportions. (I shall paste the piece below.)

Point here: The Risk Management team is the C Suite. The Chief Risk officer is the CEO. Together with certain core functions, like hiring top executives and directing corporate strategy, the key risk function is not one that can be delegated. While this may not always have been true, as we climb the curve of disruptive and often destructive innovation in the second decade of C21 it is now not only true but urgent, vital to the flourishing – and survival – of every business. While finance and banking do not deliver all the best bad risk stories (we have noted RIM and Kodak; we could add BP and Susan Komen), the gearing is much higher and the disasters unravel more dramatically and with more strategic impact. So J.P. Morgan’s Jamie Dimon apologized for letting $2bn slip through inadvertence; a week or two later it now looks closer to $9bn. And Barclays, with other banks, have just been revealed fraudulently manipulating the LIBOR rate. On it goes.

The CEO is Chief Risk Officer. And as I have argued elsewhere (summary in the oped below) one essential risk management tool is the assembling and respecting of widely diverse opinions in every strategic conversation. It’s true of the board; of the executive team; of every context in which – essentially – ideas are put into the furnace to create value and competitive advantage. The further we ascend the Moore’s Law slope, the higher the risks, and the more diverse and respected such voices need to be.

How Mature is Your Risk Management? – Michael Herrinton – Harvard Business Review.

Groupthink – public enemy number 1 as we face the future

Posted on June 8, 2012

Groupthink hasn’t worked, it’s time to embrace the maverick

Giving credence to the outlier thinkers in our midst might have avoided things like the Wall Street crash. Photo: AP

As the Arab spring continues to unravel into an Arab summer, the most important lesson is that hardly anyone knew it was coming. Much like the collapse of the Soviet Union, and Wall Street could it be that as much as conventional wisdom may be conventional it is not always reliably wise?

I recently hosted a conference in Washington on the future of nanotechnology. All kinds of experts were round the table talking tech and policy and business. Then one of them made a stunning statement. She was there on behalf of a big, mainstream environmentalist group. “I have never,” she stated, “been on such a diverse panel in Washington.”

There was a brief but palpable intake of air around the room. I thanked her for the compliment before adding that I was now more concerned for Washington than I was before.

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Whom do we invite round the table when the questions are big and the stakes high? It tends to be those in the centre; the mainstream thinker whose wisdom is regarded as conventional.

When will we ever learn? We are still paying for the lesson we learned from Wall Street in 2008.

Conventional wisdom can be dead wrong, even in the hands of the smartest people because they tend to agree with each other. People with way-out views are kept at arm’s-length.

Whatever the issue, if your views deviate too far from the mean, however articulate you may be, you are unlikely to get invited, funded or promoted.

We have learned a lot this past generation about the value of diversity in age, gender, and ethnicity but we have learned little about the enormous and growing value of diversity of opinion.

Of course, we do disagree about a lot of things. With friends, and with co-workers. But we live in communities of ideas that set boundaries around acceptable diversity of thinking, and make sure we keep out those who challenge our shared assumptions.

We don’t want to rehash old issues we regard as closed. We don’t want to give room to opinions we find deeply objectionable – or threatening. Most of us find it challenging to take forward our thinking when there is someone in the room always, always asking why?

So our natural tendency is to put unconscious faith in Groupthink, the tendency for everyone’s thinking to move in the same direction to the exclusion of any serious questioning.

People in management know all about this as a problem for work groups and other teams. But it is more insidious and far more dangerous on the grand scale.

What brought Wall Street down, and with it threatened the entire global order? The G-word. And on smaller scales: what led Monsanto into huge losses in the late 1990s and ensured that Europe rejected genetically-modified food? What led Detroit to near-oblivion as they insisted on producing 1950s-style autos into the 21st century? What about the power company TEPCO and the nuclear disaster that the entirely predictable tsunami sparked in Japan?

Knowledge is building very fast, disciplines are converging, globalisation is changing the ground-rules of everything. Change powered by Moore’s Law, the digitisation process and the revolution in communication is driving shifts in the technical, economic and social order that most of us strain to grasp. Yet the faster change takes place and the greater its disruptive, innovative power, the harder it will be to make good choices.

So who should be party to the conversation? This is where the outliers come in; people who are articulate and serious, but outside the mainstream assumptions that generally drive conversations. Experts tend to resist the participation of thosewith unorthodox opinions. It needs to become the norm for them to sit round the table in every discussion. All articulate voices round the table; all the time.

This approach is hardly new. The century before last, US poet, essayist and journalist Walt Whitman asked the question his own way. “Have you learned the lessons only of those who admired you, and were tender with you, and stood aside for you? Have you not learned great lessons from those who braced themselves against you, and disputed passage with you?” In the 21st century, great value lies at the extremities of opinion; and we need to harvest it as we move through change faster than we have ever known before.

First appeared in the Sydney Morning Herald, June 9, 2011.

The Law of Digital Instability

Aside

The collapse of RIM’s sales and postponement of its latest model, hard on the heels of what have seemed to be less than adroit management changes, underline a principle that seems obvious enough even though it is generally being ignored.

Digital-age companies, to the extent that their technologies are digitally powered, and to the extent that they essentially are built around one technology, are inherently unstable and liable to rapid collapse.

This directly follows from the profoundly disruptive impact of Moore’s Law over relatively short periods of time.

But it is not widely noted. Which is why during IBM’s centennial year there was speculation about which great contemporary companies would be around in a century. Which is why the valuation of companies such as Facebook is so high – and that applies also to Google, for example, even though it has a much lower P/E ratio. Both Facebook and Google, despite their best best efforts (especially on Google’s part) are essentially one-tech digitally-driven companies – with, which is of course a separate point, one dominant business model and product.

It’s the Law of Digital Instability. The sooner we build it into our valuations, the better. And the sooner companies in its grip realize (as Google gives evidence of realizing) how risky is their position over time, the more likely they will find ways to broaden their product/tech/biz mode base.

IS FACEBOOK DOOMED? https://futureofbiz.org/2012/06/04/is-facebook-doomed/

RIM earnings: BlackBerry maker plans to slash 5,000 jobs, new devices delayed until 2013 | FP Tech Desk | Financial Post.