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A Hackathon to “Reinvent Business”

Can social technology enable companies and the people within them to make better decisions? Can it improve corporate behavior? Can it perhaps even help restore the social contract between business and society? These are just some of the questions to be tackled by the “Reinvent Business” hackathon – a collaborative, rapid ideation and programming workshop – to be held in San Francisco on June 9-10, Hosted by frog and LRN, in partnership with BSR, Carnegie Mellon University, Dachis Group, Net Impact, Silicon Valley Bank, Fast Company, and the World Economic Forum, the two-day event will bring together software developers, designers, gamers, film makers, writers, business leaders, and other creative minds to imagine, design, and build a more human and truly social enterprise. The goal is both simple and bold: to develop concepts and prototypes for innovative products and services that have the capacity to transform business from within.

The World Economic Forum formed a Global Agenda Council on Values in Decision-Making (of which I am a member) in response to the current economic crisis to realign our collective mindset and develop practical approaches for a more moral economy. It has developed an ambitious agenda to help organizations translate human values into practices and behaviors that strengthen our institutions and positively impact the state of the world. New challenges call for new approaches, and we hope that with this hackathon as the starting point, we can engage the tech and creative communities in an ongoing constructive dialogue on how technology, and especially social technology, can change corporate behavior.

This need for behavior change, for “reinventing business,” is an urgent one, considering the growing number of voices that observe a crisis of capitalism and demand its fundamental transformation. In an op-ed piece for the Huffington Post, “The End of Capitalism – What Comes Next?,” World Economic Forum Founder and Executive Chairman Klaus Schwab draws a clear line between the original, defensible idea of the free market economy and the worrisome decoupling of the financial system and value-creation that makes an overhaul of its technical aspects mandatory. But he also argues that simply correcting excesses is not enough – we need a more radical reset. Schwab reminds us of the Stakeholder Principle he introduced in 1971, which is now more relevant than ever, propelled by the rise of social technologies: “In an age when social networks are enabling greater participation and transparency, companies will only be able to achieve economic success if they can generate long-term benefits not just for their shareholders, but also for the common good.”

While most companies will subscribe to that point of view rhetorically, the disconnection between business and society (and, as studies show, between management and employees) is indisputable. From Occupy Wall Street to public resignation letters in the New York Times, the widening ‘trust gap’ between business and society can’t be ignored. In a recent column, The Economist contends that companies should worry less about their reputations and more about how they do business. And indeed, increasingly, consumers and citizens demand that companies match their words to their actions, far beyond just Mission Statements, Codes of Conduct, and Corporate Social Responsibility (CSR) programs. For today’s consumers and citizens, integrity means that a firm’s decisions and behaviors are fundamentally and consistently aligned with its values and principles as well as those of its stakeholders (which include society at large).

Yet the crisis of capitalism is not only a crisis of integrity, it is also one of meaning. “It is the job of companies to produce meaning,” writes management philosopher John Hagel, and with a growing number of consumers and employees expressing a strong desire for purpose beyond profits, and even the Harvard Business Review espousing happiness as a new economic paradigm, this appears to be a ripe time for reinvention. As the world becomes more interconnected and interdependent, the lines between the corporate and the social, the professional and the personal blur, and the younger generation of netizens in particular expects heightened levels of transparency, responsibility, and inspiration – both as consumers and employees. Being “In Search of Excellence” therefore no longer suffices; companies and their leaders now need to pursue significance.

Achieving this vision requires changes in two key dimensions of our economy: what we consider to be “value” and the values that guide how we create it. We need a more inclusive value definition that is respectful of all stakeholders’ needs, fully aligned with human values, and transcending the merely transactional; and we need inclusive models of value-creation that are inherently social.

At the national level, Bhutan’s Gross Happiness Index, as an alternative to the Gross Domestic Product (GDP), has gained many admirers, and both the French and the UK governments have begun to emulate it. Moreover, there are supra-national organizations and NGOs such as the New Economics Foundation in the UK that have long proposed new indicators of economic progress grounded in the belief that we need a more holistic, integrated understanding of the economy instead of one that is purely based on financial terms.

At the corporate level, social media and networks have disrupted traditional paradigms of productivity and organizational behavior, and enabled participatory models of value creation that fully harness human potential by leveraging social technologies to maximize social capital (e.g. enterprise social networks, crowdsourcing). Consequently, the social enterprise of the 21st century recognizes social capital – in other words: talent, inside and outside of the organization – as its key asset. In his article, Klaus Schwab describes this as a significant paradigm shift:

“Capital is being superseded by creativity and the ability to innovate – and therefore by human talents – as the most important factors of production. If talent is becoming the decisive competitive factor, we can be confident in stating that capitalism is being replaced by ‘talentism.’ Just as capital replaced manual trades during the process of industrialization, capital is now giving way to human talent. I am convinced that this process of transformation will also lead to new approaches within the field of economics. It is indisputable that an ideology founded on personal freedom and social responsibility gives both individuals and the economy the greatest possible scope to develop.”

With the rise of “talentism,” the need for a real understanding of the common human values that connect organizations and individuals is becoming ever more important. Transparency, inclusivity, individual empowerment, and organizational responsiveness are crucial in nurturing businesses’ social fabric and facilitating empathy and collaboration. Yet, the challenge remains: How do we translate these values into day-to-day corporate behavior and into tangible, personal experiences? How can companies become open organizations that harness and build social capital both inside and outside of their institutional boundaries?

This is where our “Reinvent Business” hackathon comes in. Whether it is a mobile app that uses real-time peer feedback from social networks to help address ethical dilemmas, or a tracker that captures and measures alternative types of value, or a data visualization tool that illustrates the unintended consequences and the externalities of decisions, or an ‘empathy app’ that lets you see the world through someone else’s eyes, we hope for concepts that radically rethink the current business frameworks while at the same time offering practical solutions to business leaders and employees.

To be clear: We don’t expect this hackathon to produce any silver bullets, nor do we aim to “productize away” the deep and complex challenges of a moral economy and a more human enterprise. But we are poised to spawn a conversation by tackling concrete problem spaces that might inspire further-reaching, broader solutions.

Learn more about the "Reinvent Business" hackathon: http://www.reinventbusinesshackathon.com/overview.html

To participate in the "Reinvent Business" hackathon, apply here: http://www.reinventbusinesshackathon.com/apply.html

Embracing Openness

Rotman magazine, the print and online quarterly of the Rotman School of Management, has just released its new (Winter) issue, devoted to the theme “Open.” Openness has been a buzzword for a while, ever since Henry Chesbrough wrote his seminal book on Open Innovation, but, to apply Gartner’s Hype-Cycle terminology, now it seems as if Openness has finally reached a plateau of productivity after going through years of troughs of disillusion.

The Rotman issue is thus timely, and it is wise to (re-)frame the topic as “culture (and economy) of sharing,” as the foreword does:

“The fundamental rules that govern how relationships work between organizations and stakeholders are being rewritten: computation, storage and communication capacity – the basic means necessary to produce information, knowledge and culture – are now in the hands of every connected person worldwide (30 per cent of the world’s population of seven billion people.) The result: a culture of sharing powered by ubiquitous access to information that empowers stakeholders and demands radical transparency.

Unfortunately, many business leaders remain flummoxed in the face of stakeholders empowered by new tools that once seemed unimaginable: blogs, Facebook and Twitter, to name a few. Make no mistake, as your stakeholders become more adept at using these tools, they will demand that you become more open about your activities, and that you engage them in conversations that matter. With one billion new middle-class consumers set to enter the global economy in the next decade, the more you understand the new culture of sharing, the better off you and your organization will be.“

Amongst other contributions, the Openness issue features articles from management guru and Rotman dean Roger Martin and Wikinomics author Don Tapscott, as well as interviews with Charlene Li, founder of the Altimeter Group and author of Open Leadership, and Linus Torvalds, the godfather of Linux. (Full disclosure, it also includes an article I originally wrote for design mind, “Openness or How to Design for the Loss of Control”).

Only if you’re open, you can share and be shared with. And if you share, you shall receive the greatest benefit, the greatest gift of all – someone else sharing something with you: their knowledge, their networks, their passion, their ideas. It is worth noting that the TEDGlobal conference 2012 – committed to sharing “Ideas Worth Spreading” – in Edinburgh will be held under the theme Radical Openness: “The world is becoming increasingly interconnected and open. Radically open – manifesting itself in open borders, open culture, open-source, open data, open science, open world, open minds. With the loss of privacy that it implies, openness carries its own dangers. But it breeds transparency, authenticity, creativity, and collaboration.”

My company, frog, is embracing Openness, too. We share our thinking with more than 330,000 followers on Twitter; more than 60% of our employees engage on Yammer in conversations that range from water-cooler topics to crowdsourced insights research firms would kill for; and design mind, the outlet you’re reading, is an open forum for all of our employees to publish their thoughts. We also recently launched SpeedMe, our own ‘speed-dating’ activity, to faciliate the bonding between new hires and ‘old frogs.’ In the words of our NY-based Associate Creative Director Dino Sanchez: “frog has grown quite a bit over the past year and with all our busy schedules it’s been difficult to keep up with new hires. Creativity is something that hinges on critique and in some cases brutal honesty, so knowing your colleagues and being comfortable with them is essential to a productive process.” Openness needs to be designed for.

At a the recent i7 Innovation Summit near Paris, frog ran a session at the beginning of the conference where we asked the conference attendees to break out into pairs and interview each other based on a questionnaire that we had prepared. Questions spanned the professional (e.g. “When was the last time you fired someone?” or “What was your biggest failure with the greatest learning?”) and the more personal (“What is your favorite movie?” – “What was your biggest lie”? etc.). The pairs had to fill in the answers in poster-size sheets which were subsequently mounted to a huge wall in the lobby, as a sort of “physical Facebook.”

David Rowan, editor of Wired UK, ran a similar exercise at WPP Stream in Athens, and in both instances the exercises were true ice-breakers for the attendees, forcing them to experience the implications of Openness first-hand: How open do I want to be? At what point does Openness become uncomfortable? What do I consider private in public? How much do I have to give in order to receive? Rowan argued that this kind of interactive, public data-mining would benefit any gathering as social interactions are typically more valuable when they’re facilitated by even a basic level of familiarity and trust among strangers. (On a related note, I’ve begun lately to ask job candidates to fill out the Proust questionnaire. Sure, professional qualifications matter the most, but at the end of the day you want to know who the person is you hire because chances are you’ll spend more time with them than with your own family.)

Yet pretending that Openness is just like any other business initiative that you can plan and execute would be disingenuous. It is a massive cultural change and requires a whole new mindset. The real challenges await the advocates of Openness after the first glitch, when things, very openly, go awry, and the conservative minds quickly come out of the closet to stigmatize one-time errors as systematic flaws. With every failure of Openness, the power of those who prefer Control rises exponentially. There is no doubt about it – openness, true, radical openness, hurts. It makes you uncomfortable, vulnerable, weak, and deprives you of the subtleties that came with control – but the benefits are huge. Pick the moments of Openness carefully: they will be your worst enemies and your best friends.

Marketer sind die Feuilletonisten der Wirtschaft

The German Werteindex blog has published an interview with me (in two parts, in German) about values-based-based leadership and how marketers can act as “chief meaning officers” to fight the disentchantment of business.

Part 1

Herr Leberecht, Sie bezeichnen ein “meaning surplus”als grundlegend für zukünftige Markenloyalität. Und während sich unser gesamtes Wirtschaftssystem im Umbruch befindet, rufen sie gerade Marketer dazu auf, diesen Prozess des Wandeln federführend zu gestalten – als Interface zwischen Kunden und Unternehmen. Was ist das Neue an der Idee von “Meaning”? Inwiefern unterscheidet sich dieses Meaning von anderen emotionalen Markenbotschaften?

Ich sehe “Meaning” als ein vorgelagertes oder weitergreifendes Konzept. Emotionale Markenbotschaften sind Instrumente zur Verbreitung von Meaning. Aber die Botschaft ist nicht die Marke. Erfolgreiche emotionale Markenbotschaften berühren den Konsumenten nur dann, wenn der Markenkern für ihn von Bedeutung (“Meaning”) ist. Die unmittelbare Erfahrung der Marke kann (und sollte,  im Idealfall) emotional sein, aber der Markenkern – die Werte, die die Marke verkörpert und der Sinn, den sie stiftet – sind eher langfristiger und übergeordneter Natur. Die beiden Ebenen sind interdependent: Emotionale Momente in der Markenerfahrung verstärken die spirituelle Grundbindung an die Marke, und die bisweilen religiöse Bindung zur Marke (siehe Apple) manifestiert und festigt sich in emotionalen Marken-Momenten.

Aber das Neue am Meaning-Konzept ist nicht der Wertekatalog der Marke. Wirtschaft ist per definitionem kein wertefreier Raum (niemand wusste dies besser als der Moralphilosoph Adam Smith, der ja bezeichnenderweise vor Wealth of Nations eine moralphilosophische Schrift mit dem Title Theory of Moral Sentiments veröffentlichte). Schon immer haben Werte die Entscheidungen von Unternehmen und Organisationen geprägt: vom nach innen gewandten Arbeitsethos – wie arbeiten wir miteinander und behandeln wir unsere Mitarbeiter? – zum nach aussen gewandten moralischen Kodex – wie gehen wir mit unseren Stakeholdern um, und welche Werte liegen unseren Produkten und Dienstleistungen zugrunde? Seitdem zahlreiche Studien aufzeigten, dass Konsumenten “moralische” Marken bevorzugen, haben Unternehmen verinnerlicht, dass die Triple-Bottom-Line-Ausrichtung einen echten Wettbewerbsvorteil darstellt (“doing well by doing good”) und durch Modelle wie CSR (Corporate Social Responsibility) und zuletzt Values-Based Management Werte externalisiert und ethisches Handeln zunehmend als strategischen Erfolgsfaktor in ihr operatives Geschäft integriert. Noch einen Schritt weiter geht der stark wachsende Bereich der Social Enterpreneurship: for-profit Firmen, deren Geschäftsmodell einzig und allein auf der Schaffung sozialen Mehrwerts basiert. Schon jetzt sind 10% aller europäischen Firmen Social Enterprises (mit insgesamt 11 Millionen Angestellten), und die Europäische Union hat gerade eine neue Social Business Policy erlassen, die diesen Sektor weiter stärken wird.

Was das Chief Meaning Officer-Konzept von all diesen Paradigmen unterscheidet, ist, dass es das Unternehmen – und hier Marketing als die treibende Kraft – als den Urheber von “Bedeutung” begreift, der aktiv Moral schafft, und zwar nicht nur als Grundlage und Checkpoint für die Moralität des Geschäftsgebarens, sondern als vorrangiges, philosophisches Ziel der gesamten Unternehmung, jenseits von CSR und Social Enterpreneurship: “The job of leadership today is not just to make money. It is to make meaning”, schreibt der US-Autor und Consultant John Hagel. Meaning ist nicht auf die soziale Verantwortung eines Unternehmens begrenzt, sondern reicht weiter und meint die Produktion von Bedeutung. Diese kann sich in einer intellektuellen, emotionalen, spirituellen oder ethischen Kategorie manifestieren, oder idealerweise in allen gleichzeitig. Unternehmen sind nicht nur ein moralischer Kompass für Konsumbürger und bieten Orientierung; Meaning Officers produzieren selber Moral und stiften Sinn. Sie setzen auf intrinsische Motivation und erweitern die Maslow’sche Pyramide um Meaning – um eine transzendente Erfahrung, die über materielle Bedürfnisse und die Selbstverwirklichung hinausgeht.

Wie können Meaning Officers das bewerkstelligen?

Dies kann durch umweltfreundliches Handeln geschehen, durch das Wahrnehmen von Verantwortung in der örtlichen Kommune oder die Achtung von Menschenrechten, aber eben auch durch individuelle Sinnstiftungen abseits der großen CSR-Themen, wie z.B. die Schaffung von kleinen Ritualen. Ein bisschen ist das wie Religion for Atheists, um den Titel des jüngst erschienenen Buches des britischen Philosophen Alain de Botton zu zitieren, der eine Art Gebrauchsanleitung zur praktischen Re-Spiritualisierung  unserer säkularisierten westlichen Gesellschaft verfasst hat. Chief Meaning Officers kämpfen gegen die “Entzauberung” der Wirtschaft, gegen die Diktatur von ROI und Excel-Tabellen, und gegen Marketing als objektive Wissenschaft. Sie bringen die Kultur zurück in die Technokratie, verbreiten Ambiguität und Geheimnis in einer weitgehend prozessbestimmten, zweckorientierten Arena, und schaffen Erfahrungen von Intimität und Exklusivität in aller Öffentlichkeit.

Diese neue Art von Leadership gewinnt an Bedeutung vor dem Hintergrund der aktuellen Ereignisse – von Lehmann Brothers zur Euro-Krise, dem Arabischen Frühling zu Occupy Wall Street. Wir erleben den Autoritäts- und Vertrauensverlust der traditionellen Institutionen und eine fundamentale Legitimitätserosion des Kapitalismus, und beides sind letztlich moralische Krisen. Konsumenten und Bürger erwarten mehr von der Wirtschaft, aber nicht nur im Sinne von praktizierter Umwelt- und Sozialverantwortung, von “guten” Produkten und moralischer Orientierung. Es geht um die Transformation von Wirtschaft an und für sich, um die ‘raison d’etre’ von Unternehmen, um die “Moral von der Geschichte”. Und da legen es die jüngsten politisch-ökonomischen Entwicklungen nahe, ein radikaleres Umdenken zu fordern. Was ist, wenn der Sinn des Wirtschaftens in der Sinnstiftung liegt? Oder aus der Marketing-Perspektive: Machen Marken nur dann Sinn, wenn sie Sinn machen? Der amerikanische Ökonom Robert C. Solomon argumentiert in seinem Buch A Better Way to Think About Business – How Values Become Virtues, dass das Marktsystem sich nicht durch Effizienz oder Profit rechtfertigen lässt, sondern nur dadurch, dass Menschen vor allem soziale und emotionale Wesen sind. Märkte bieten ihnen einen Mechanismus, eine “sympathetic community”, wie er das nennt, zum sozialen Austausch.

Wer in diesen Communities, diesen Netzwerken, florieren will, muss eine eigene, identifizierbare Kultur pflegen und jede Menge Sozialkapital mit einbringen. Marketing – ganz im Sinne des in jeglicher Hinsicht prophetischen Cluetrain Manifestos von 2001 – ist daher immer eine kulturelle Leistung, ein Diskurs. Chief Meaning Officers sind die Feuilletonisten der Wirtschaft. Sie schaffen die Soft Power, die den langfristigen Erfolg des Unternehmens gewährleistet. Das mag sich in der Tat “soft” anhören, aber in der Network Economy, mit ihrer zunehmenden Komplexität von Beziehungsgeflechten zwischen Konsumenten, Produzenten, Konkurrenten und Partnern, sind Sozialkapital und soziale Intelligenz zu entscheidenden Erfolgskriterien geworden.

Inwiefern sind auch Werbe- und Kommunikationsagenturen gefordert, “Meaning Agencies” zu werden? Was machen Agenturen heute schon richtig? Was machen die meisten noch immer falsch?

Viele machen vieles richtig. Die Branche ist viel smarter als ihr Ruf, und vordergründige pseudo-soziale Kampagnen wie Pepsi’s Refresh Project sind eher seltene Ausrutscher. Wie Wieden + Kennedy für Nike authentische Sub-Kulturen begriffen und behauptet hat, verdient höchste Anerkennung. Toll ist auch die Dachis Group, die den Begriff des Social Business konsequent auf alle Bereiche des Unternehmens augedehnt und eine einflussreiche Plattform aufgebaut hat, die unter anderem den Social Business Index und zahlreiche wegweisende Veröffentlichungen beinhaltet. Oder die Ads Worth Spreading Kampagne von TED (“ads so good you choose to watch!”).

Werbe – und Kommunikationsagenturen sind, glaube ich, insgesamt einen Schritt voraus und haben “Meaning Production” schon lange zu ihrer Domäne gemacht. Allerdings bleiben Agenturen aufgrund ihres beschränkten Einflusses letztlich nur Impulsgeber; die Hauptverantwortung liegt bei den Inhouse Marketing Departments – und die tun sich schwer, von traditionellen Marketing-Konventionen abzurücken, weil in der Konzernzentrale oft der Mut zum innovativen “meaningful marketing” fehlt und ihnen daher das Mandat zum umfassenden Change Management versagt bleibt.

Wo sind die größten Hemmschwellen auf dem Weg zum “Chief Meaning Officer“?

Die größten Hürden für den Meaning Officer sind jedenfalls intern. Da stoßen Meaning Officer naturgemäß auf jede Menge Skepsis, und es ist nicht immer einfach, den Zynismus der eigenen Mitarbeiter, die Kluft zwischen den Glaubensbekenntnissen der Geschäftsleitung und der tatsächlichen Kultur des Unternehmens, zu überwinden. Ein Bekenntnis zum Anderssein, kreative Risikofreudigkeit, der Mut zu sozialem Marketing und der Drang zum Experimentieren sind die Charakteristika des Chief Meaning Officers. Wie Marketing-Guru Seth Godin so schön treffend formuliert: ‚Wer sich nicht der Gefahr aussetzt, wegen seiner Idee gefeuert zu werden, dessen Idee ist nicht wirklich originell.‘ Ich weiß, das ist leichter gesagt als getan, aber Marketer müssen endlich aus der Defensive heraus und selbstbewusster ihre Philosophie vertreten – und anstelle des ständigen Nachweises des Wertes von Marketing neue Werte definieren, einfordern und schaffen.

Part 2

Herr Leberecht, Sie fordern Unternehmen auf, mehr meaning zu produzieren statt neuer Produkte. Den Marketer sehen Sie als zentrales Interface zwischen Kunden und Unternehmen, der den Prozess der meaning production führt.

 Haben Marketer überhaupt ausreichend Einfluss auf die Praxis ihrer Unternehmen in Bereichen außerhalb der Marketing-Abteilung?

Die Irrelevanz-Falle ist allgegenwärtig, aber inwieweit man reintappt hängt vom Selbstverständnis des Marketers ab. Marketing wird ja oft fälschlicherweise als Cost Center gebrandmarkt, als Luxus-Funktion für gute Zeiten, dabei ist es ein kritischer Erfolgsfaktor (wir wissen von zahlreichen Studien, dass der Erfolg oder das Scheitern von Unternehmen stark vom Marketing abhängt) und im Idealfall eine der wenigen Funktionen, die eine ganzheitliche Sicht auf das Unternehmen haben. Das sollten sich Marketers zu nutze machen. Sie sollten Beziehungen aufbauen zu anderen Funktionen und auf (Marken)Kontrolle verzichten, um somit mehr Einfluss auszuüben.

Das einflussreichste Marketing ist Marketing ohne Marketing: Marketing, das sich mehr als ein Netzwerk versteht als eine Funktion. Ich sage meinem Team immer, dass wir unser Ziel nicht erreicht haben, wenn unsere Funktion unternehmensweit an Macht gewinnt, sondern wenn das ganze Unternehmen zur Marketingorganisation geworden ist und wie ein Marketer denkt und fühlt.

Was zeichnet Unternehmen aus, in denen Marketer erfolgreich ganzheitlich gestalten können?

Erfolgreiche CMOs wie Beth Comstock bei GE sind für Geschäftsfeldbestimmung, Produktentwicklung und strategische Wachstumsinitiativen verantwortlich, in enger Zusammenarbeit mit den Business Units. Wie es Comstock vorgemacht hat, sollte Marketing nahe beim Kunden sein, eine langfristige Sicht einnehmen (und sich darin deutlich von Vertrieb/Sales unterscheiden) und als ein Change Agent agieren. Dies trifft insbesondere auf den Bereich Digitale Transformation zu: Ein jüngste Studie von Cap Gemini/MIT besagt, das zwei Drittel aller globalen Konzerne mit der Transformation zum digitalen Unternehmen erhebliche Schwierigkeiten haben. Das Thema Enterprise 2.0 – also der Einzug sozialer Medien in den IT-Mainstream und die Auswirkungen sozialer Technologien im allgemeinen – bereiten Chef-Etagen erhebliche Kopfzerbrechen. Wie Business zu Social Business wird, und nicht nur im Sinne von Social Responsibility, sondern viel weitreichender, im Sinne einer kompletten Neu-Definierung von Wertschöpfung – durch Ko-Kreation mit dem Kunden, Crowdsourcing, radikale Transparenz, usw. – diesen Wandel können Marketer als Meaning Officers entscheidend mit antreiben.

Unterliegen nicht auch Werte und Sinnstiftungen der Gefahr, austauschbar zu werden? Z. B. Umweltbewusstsein ist schon längst kein USP mehr. Welche kritischen Erfolgsfaktoren gibt es ist in der Positionierung von Werten und “Meaning” zu beachten?

Meaning hat kein Verfallsdatum. Die Produktion von Bedeutung kann nicht austauschbar werden, weil sie eigentlich immer austauschbar ist. Es ist ein Template. Mit anderen Worten: Was zählt, ist die Erfahrung, der Moment des Sinnstiftens an sich, das “Unterschiedmachen”. Mit welchen Werten und Ideen das im einzelnen geschieht, sollte jedes Unternehmen für sich entscheiden. Apple steht für die Humanisierung von Technologie, IBM für die globalisierte Nutzung von Technologie im Dienste eines “Smart Planets”, Coca-Cola für Happiness und so weiter. Marken müssen ihre These finden und dann jene Argumente im kollektiven Bewusstsein verorten, die ihnen recht geben.

Aber über diese allgemeinen Markenassoziationen hinaus: Wie produziert man Bedeutung? Was macht Bedeutung aus?  Vereinfacht gesagt, sind das, denke ich, vier Komponenten: Disruption, Seltenheit, Soziabilität und Transzendenz. Disruption bedeutet die Abweichung von der Routine, die Verletzung einer „mental map“, eines standardisierten kognitiven Modells. Zum Beispiel: Das iPhone stellte die mental maps von Computer und Telefon in Frage und verband beide zu etwas Ungesehenem, einer neuen Kategorie, die eine „dritte Bedeutung“ schuf.

Sehgewohnheiten und kognitive Muster brechen – so funktioniert Werbung. Meaning braucht daher noch weitere Dimensionen. Nehmen Sie das Beispiel der deutschen Nationalmannschaft: Hört sich trivial an, aber was würde den EM-Sieg des Teams bedeutungsvoll machen? Nun, zum einen, Seltenheit. Die deutsche Elf hat schon seit 1990 keinen internationales Turnier mehr gewonnen. Meaning ist umgekehrt proportional zum Auftreten von bedeutenden Ereignissen.

Und der Seltenheitswert eines Ereignisses potenziert sich, wenn er teilbar wird, d.h. ein soziales Moment hat. Dies kann auf vier Arten geschehen: durch die Möglichkeit, an Bedeutung teilzuhaben und sie aktiv mitzugestalten; durch das Teilen einer bedeutenden Erfahrung mit anderen (Bedeutung entsteht immer im Austausch mit anderen, ist ein soziales Phänomen – siehe „Fanmeile“); durch Großzügigkeit (wenn man mehr gibt als nimmt, entsteht ein Bedeutungsexzess, ein “meaning surplus”); und durch den sozialen Mehrwert, den Beitrag zur Gesellschaft, zum allgemeinen Wohl oder dem von benachteiligten sozialen Gruppierungen.

Letzteres führt zum Kriterium der Transzendenz: Es kann ein gesellschaftliches Ziel sein, das das individuelle Ereignis überhöht, eine Ideologie, oder eine abstrakte, universale Wahrheit. Bedeutende Erlebnisse deuten immer auf eine übergreifende Vision, eine „dritte Bedeutung” hin. Sie stehen nie nur für sich selbst. Warum wird eine Fussball-WM zum “Sommermärchen” und ein Team zum „Weltmeister der Herzen“? Das ist ja kein reiner PR-Spin, sondern eine echte emotionale Bewegung. Das konnte man auch bei Steve Jobs Tod sehen, als die kollektive Trauer fast schon ekstatische Züge annahm, oder in Obamas vieldiskutierter Präsidentschaftskampagne von 2008, in der sich Hunderttausende von jungen Amerikanern engagierten, weil sie von der Vision von “Hope” – von der Machbarkeit echten Wandels – inspiriert waren. Oder zuletzt Occupy Wall Street. Es gibt einfach diese Momente, die eine tiefe innere Wahrheit in uns bloßlegen.

Chief Meaning Officers behalten alle diese Faktoren – Disruption, Seltenheit, Soziabilität und Transzendenz – bei ihren Aktivitäten immer im Auge. Aber ein fünfter fehlt noch: Echtheit. Nur wenn die Intentionen des Unternehmens ehrlich sind, wird die Authentizität der Marke fühlbar. Ansonsten ist Meaning bedeutungslos.

Wie passt die Entwicklung zu mehr Meaning zur ansonsten ebenso immer öfter hörbaren Forderung nach mehr Meßbarkeit und effektiven ROI?

Zunächst einmal: Ich schenke der geläufigen Formel, dass man nur das managen kann, was man messen kann, keinen Glauben. Im Gegenteil: Die besten Manager sind Experten im Managen des Nicht-Messbaren. Um es noch etwas mehr zuzuspitzen: ROI ist eine Schimäre und in der Regel ein Alibi, um Chefs zufriedenzustellen. Wer keine Ideen und keine Vision hat, der hat eben Zahlen. Verstehen Sie mich nicht falsch, ich bin nicht grundsätzlich gegen die Quantifizierung der Wirkung von Marketing-Programmen. Aber nur, wenn man im Hinterkopf behält, dass diese Zahlen immer nur eine Annäherung dastellen, eine Interpretation, aber niemals eine objektive Wahrheit. Der ROI bleibt zwangsläufig oft “intangible” (Anm. d. Red.: immateriell). Wobei selbst der Sprachgebrauch zweifelhaft ist. Dass die vermeintlichen “tangible assets” (Anm. d. Red.: materielle Vermögenswerte) unter Umständen wesentlich volatiler sind als die “intangibles” hat die jüngste Finanzkrise ja nachdrücklich bewiesen. (Sie hat uns auch daran erinnert, dass ein Grossteil der Buchhaltungswerte eines Unternehmens sich als vollkommen virtuell herausstellen kann.)

Das schöne deutsche Wort der “Wertschätzung” wird immer noch unterschätzt im Vergleich zu den sogenannten “harten” Metrics wie Leads, Funnel Contribution oder Revenue Contribution. Goodwill, Reputation, Customer Lifetime Value (der Wert eines einzelnen Kunden über den gesamten Zeitraum der Kundenbeziehung), soziales Kapital oder “organizational capital” (wie es der US-Finanztheoretiker Baruch Lev nennt) – diese Werte sind meiner Meinung nach wesentlich aussagekräftiger, wenn auch ebenso schwer präzise zu messen.

Hinzu kommt, dass die meisten ROI Messungen meist kurzfristig gedacht und allein auf das Quartalsergebnis oder die unmittelbare Wirkung von Marketingaktivitäten bezogen sind. Aber das Quartal (und wie überhaupt der gesamte übliche Budgetrahmen von einem Jahr) sind recht willkürliche Planungseinheiten, die nur selten mit der Realität eines Unternehmens übereinstimmen. Der Markt steht niemals still, Kunden denken und handeln in unterschiedlichen zeitlichen Perspektiven, und die Investition in Marken, in die Beziehung zu Kunden, in intellektuelle und emotionale Erfahrungen, lässt sich nur schwer formal erfassen. Jeder Marketer, der erklärt, genau zu wissen, mit welchem Effekt er wo investiert, lügt. Der ROI von Marketing ist letztlich immer eine Scheinkalkulation.

Und dennoch machen die meisten Marketingleute das Spiel mit – weil sie durch die Machtkonventionen in ihren Unternehmen dazu gezwungen werden und glauben, sonst ihr Mitspracherecht bei strategischen Entscheidungen zu verlieren. Wer Zahlen hat, gewinnt.

Ich bin mir sicher, dass viele Marketingabteilungen 50% ihrer Zeit damit verbringen, ihre Programme zu evaluieren und ROI Reports für das Management-Team zu erstellen. Stellen Sie sich vor, wie viel mehr sie erreichen würden, wenn sie auch nur die Hälfte dieser Zeit nicht für Reporting, sondern für kreative Marketing-Aktivitäten aufbrächten! Wie viel mehr Bedeutung könnten sie produzieren, wie viel neue Kunden könnten sie schaffen und wie viele existierende Kundenbeziehungen stärken? Ich kenne viele Kollegen, die gezwungen werden, detaillierte ROI Analysen zu erstellen, bevor sie überhaupt Geld ausgeben können – aber dann ist es meistens schon zu spät. Im Zeitalter des Social Web hat das Marketing keine Zeit mehr für ausgiebige Planung – alles was passiert, passiert jetzt. Just do it! Der Marketing-Mix ändert sich jeden Tag. Das einzig konstante sind Experimente – und die Werte, die sich in langfristigen Beziehungen zu Kunden und Öffentlichkeit ausdrücken.

Ein letzter Gedanke noch: Trotz des ganzen Hypes um Big Data und die totale, Echtzeit-nahe Erfassung und Analyse von Kundendaten, sollte man nicht vergessen, dass Daten immer nur reaktives Verhalten ermöglichen; selbst die datenbasierte Zukunftsplanung ist eine Reaktion. Statt auf Big Data setze ich auf Big Intuition! Wer wirklich innovativ sein will und etwas verändern will, vertraut seiner Intuition. Die ist nämlich schneller als alle Daten. Paradoxerweise gilt in der Wissensgesellschaft: Intuition sticht Wissen aus. Chief Meaning Officers wissen das. Sie erahnen Trends, bevor diese messbar werden, vertrauen ihrem (Mit)Gefühl und machen somit den Unterschied aus, der dann in ein echtes Differenzierungsmerkmal mündet. Wer nur Daten analysiert, ahmt das Bestehende nach. Wer selbstbewusst genug ist, um Daten zu ignorieren, kann Verhalten beeinflussen und tatsächlich etwas Neues schaffen. Henry Ford hatte Recht: ‚Wenn ich auf meine Kunden gehört hätte, hätte ich schnellere Pferde produziert‘. Daten helfen uns zu verstehen, wie die Welt ist; Innovatoren und Visionäre aber (und Chief Meaning Officers sind beides!) sehen die Welt, wie sie nicht ist.

 

The Opposite House

Otherness and other pillars of a new moral economy

“So, what is the reason for your existence?” the German professor at a Chinese business school reception in Shanghai asked me, to start a conversation. I felt like ad man Don Draper in the TV series Mad Men when his false identity is unveiled. Who are you really? Caught off guard, I answered: “I’m a marketer.” The conversation moved on, others had wittier sound bites to contribute, and my unease continued. It had been weighing on me since I had put my foot on Chinese soil a few days earlier, and here in this beautiful mansion, confiscated by the government from the corrupt former mayor of Shanghai, it was a steady companion.

You may think that the homogenized cosmopolitan settings of the tier one cities Beijing and Shanghai would seem familiar and comforting to a seasoned Western business traveler like me, but this time the glitzy, uber-capitalist façade did not alleviate my profound sense of dislocation and alienation. I was a stranger and everything was strange to me. This sentiment was exacerbated when I checked into the Opposite House, a chic designer hotel in Beijing’s Sanlitun village district that literally comprises of two opposing halves, each housing generous rooms, connected through a vast space underneath, which is used as both art gallery and lobby. Designed by the Japanese architect Kengo Kuma and catering to the ‘global soul,’ it was meant to make you feel at home in an open, accessible space of kindness, but it did the opposite to me. It manifested the Otherness of my being here, in the heart of this strange city, with other strangers, who, like me, probably had no clue and so, like me, just marveled at the strangeness of it all.

It occurred to me that the Opposite House was a metaphor for some of the issues I had been pondering for the past few months. “The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function,” wrote F. Scott Fitzgerald, and while his words were infinitely wise, I thought that a more intelligent mind than mine may very well hold the two opposites, in Beijing or anywhere, but perhaps even the most intelligent mind would not necessarily be happy in doing so. It’s hard to be happy if you are denied a happy ending, and it’s an unpleasant, arduous task to withstand the temptation to reconcile dual or multiple truths. We are hardwired to believe – and to believe in one truth.

Having just worked through the intricacies of integrating a marketing function and harmonizing two brands (and very different business cultures), I know how exhausting it can be when there is always ‘the other side of the story.’ This ‘other side’ can be the externalization of effects (responsibility), or it can mean putting yourself in someone else’s shoes (empathy). What the other side rarely appreciates is how hard you have worked to be on yours, and how much effort it has been for you to truly believe in it. Whatever it takes then to make you switch sides (or at least recognize the opposite one), it must include some kind of reimbursement for the intellectual and emotional work that went into asserting and upholding your one truth. The grass may or may not be greener on the other side of the fence – the path there, the ‘empathy dividend,’ better be worthwhile. This is true for conflict management at the individual, institutional, societal, and international level: Israel and the Arab world, Shiites and Sunni, Pakistan and India, China and the US, North and South Korea, Occupy Wall Street versus the 1%, and the list goes on – the world is conveniently framed by antagonisms, by dualities that stubbornly resist both reconciliation and the parallel truths that Fitzgerald heralded.

China resolves dualities by grasping Yin and Yang as complementary, interconnected forces, and its defiance of dichotomous moral judgments is not always easy to accept for the Western mind. Henry Kissinger’s views On China are a notable exception to the many books (e.g. Martin Jacques’ When China Rules the World and James Kynge’s China Shakes the World) that have recently examined how an ascendant and increasingly confident China could affect the rest of us. Kissinger seeks to understand China’s place in the world from the conditions of China’s complicated history and rich culture, not through the lens of Western morale. Kissinger does not portray China as hegemonial power but as an introverted nation that aims at protecting its ideal of a ‘harmonious society’ by making calculated offensive moves. He compares them to the Chinese board game Weiqi where the onus is on strategic encirclement rather than the black and white of absolute victory or defeat. Morality, essentially, deals with the question of how we treat the Other – the one who is not identical with us. Empathy, or even sympathy, is its foundation. With respect to China, this raises the question: To what extent can you leave your comfort zone, your moral center of gravity, to understand the Other before your absolute truth becomes relative, your ethical behavior situational, and your moral compass rudderless?

Moreover, a concept of morality based on Otherness presumes the Cartesian continuum of Ego and Self. But what if the line between Self and Other is fuzzy? In his writings, the British moral philosopher Derek Parfit (who became famous through his teleporter thought experiment and was recently portrayed in this stunning New Yorker article) rejects the integrity of personal identity and instead proposes a reductionist view of human life that renders the Kantian concept of the Self’s moral autonomy obsolete. If parts of your brain cells were to be transplanted into another body, he wonders, what would that do to yours and the other body’s personal identity? Who would be you? Parfit claims there would be two Selves (or none). Consequently, morality, in his view, is meta-personal and non-relational, and can only be derived from universal truths. To him, the loss of the concept of a separate Self is liberating, which puts him him in close proximity to Buddhists, who identify and recognize themselves in the Other:

“My life seemed like a glass tunnel, through which I was moving faster every year, and at the end of which there was darkness... [However] When I changed my view, the walls of my glass tunnel disappeared. I now live in the open air. There is still a difference between my life and the lives of other people. But the difference is less. Other people are closer. I am less concerned about the rest of my own life, and more concerned about the lives of others.” [Derek Parfit]

Sam Harris’ latest book The Moral Landscape: How Science Can Determine Human Values covers reductionist terrain as well, albeit from a very different vantage point. Harris seeks to constitute moral relevance from the alleged objectivity of scientific findings. But do we really want to entrust science all of our moral decisions? Science is not an authority on morality; it is its very subject. The moral landscape is not as flat as Harris wants us to believe. Or to riff on William Gibson: “Morality is here, it is just not very evenly distributed.”

Steven Pinker, in his recent book The Better Angels of Our Nature: Why Violence Has Declined, argues that the spread of literacy led to a “circle of empathy,” propelled by many rights movements of 20th century that brandished immoral behavior as anti-social and by doing so accomplished to largely ban it from Western societies. If you look at the Occupy Wall Street movement – as nascent as it may appear – one wonders if we may see a similar social norm-shifting phenomenon emerge in the corporate world. Writer and Techonomy conference curator David Kirkpatrick wrote a poignant piece on how the new social power we witnessed in the Arab Spring may lead to a corporate revolution, and indeed one may wonder: Will the American Fall usher in the demise of the corporation as we know it?

Trade is an arbiter of peace, as Pinker argues. Collaboration and inclusion produce morale, an effect that is amplified by the tremendous amount of social capital generated by social media and in particular through the principle of reciprocity at work on social networking sites. Facebook, through this lens, can be viewed as the biggest morale producer of our times, not in the sense of giving to charities or supporting causes one click at a time – the so-often-derided ‘clicktivism’ – but through rich interactions and an appreciation and experience of Otherness that is made possible through the voyeurism emanating from the transparency of individual behaviors at public display.

On the other hand, hyper-connectivity may yield the opposite effect: When everything and everyone is connected all the time, will the individual moral Self be neutralized by a seamless collective that absorbs Otherness into Sameness? In this vein, Eli Pariser argues that the Social Web is a self-selecting Filter Bubble, and that rather than experiencing the Other, we’re just experiencing an increasingly narrow projection of ourselves, so that our social graph, based on our web history of purchases, clicks, friends, and likes, will ultimately become congruent with the social universe of One. Then our lives and the lives of others will be identical, and even with our identity spread beyond our Selves, it will not occur in the way Parfit envisioned it.

This debate on the Other is the main debate we ought to have in light of the crisis of our economies. A ‘moral economy’ puts the Other at the center of all its activities, and if it truly does, it will no longer need the qualifier ‘moral.’ However, our largely secularized and rationalized economy is struggling to restore its moral and spiritual acumen (see Umair Haque’s musings on The Meaning Organization and my own piece on the Chief Meaning Officer), and simply borrowing best practices from religion as proposed by Alain de Botton’s “Atheism 2.0” (see a good rebuttal here) won’t suffice when what we are really lacking is not a practical “god-free” tool kit but an idealistic and spiritual vision, a social contract that is meaningful at the personal level. Economist Robert C. Solomon described it aptly: “Markets systems are justified not because of efficiencies and profits but because humans are first and foremost social and emotional beings, and markets provide a sympathetic community for social exchange.” Consequently, Brad McLane, in a recent Huffington Post article, makes the case for the role of a “Chief Community Officer,” a leader who can reconcile individual interests with the satisfaction of trusted cooperation (research has shown that trust and trustworthiness produce oxytocin, the “hormone of love”).

Embracing Otherness has been the foundation for business since its inception – business serves the Other, as in the customer, or the stakeholders of today and tomorrow (future generations), but it has gained new relevance. Another, perhaps more important side to it is innovation. Otherness is the very source of innovation. The deviation from the normal, the conventional, and the routine is how new and different ideas are born – ideas that change the world for the better, which at the end of the day is the entrepreneur’s fundamental moral obligation. This is the legacy of Steve Jobs and other “fools” who “saw the world as it is not” – and changed it.

The new moral leadership starts with business school education. Harvard Business School professor Rakesh Khurana therefore asks for a “reprofessionalization of the manager,” so that he can overcome the self-interest-driven homo economicus, the self-inflicted Machiavellian mechanisms of competition and short-term gain, and instead focus again on his true task – to build and nurture long-term cooperative relationships that allow an economy, a plurality of interactions and transactions between trusted and trusting Others guided by shared values, to thrive.

Back to the initial question: what justifies my existence? As a marketer, it is my responsibility to understand the Others and connect them through many parallel truths – even if it’s just for a moment, a flickering desire, a shared passion and experience, or a common purpose. I am an engineer of trust, and I enjoy communicating for the very act of communicating. I can create and cultivate “sympathetic communities” that rely on “woven interactions” rather than “vector communications.” In the best case, I can help build a house of opposites on the basis of the social capital and goodwill generated by meaningful brands that serve as moral stewards, embrace paradox, and balance the dialectic forces of competition and cooperation, codified behavior and open-ended innovation. I am not here to generate impressions; I am here to reward attention with lasting value.

(c) picture by Coolhunting

The Economist and the Human Potential

If TED is about “Ideas Worth Spreading,” then the Economist’s Ideas Economy conference series is – as the title would suggest – about ideas worth monetizing. It’s the Economist, stupid! The venerable publication, a notorious late adopter, has realized that despite solid market standing it must reinvent itself to survive, both through a suite of new digital products and by branching out into the conference business. The focus on Innovation (as in “a commercialized original idea,” as the excellent moderator Vijay Vaitheeswaran defined it in his opening remarks) is a natural fit: The Economist has always stood for liberal economic policies and liberal social values – which is typically the kind of fabric that innovation thrives in.

The most recent event of the series took place last week in New York: With the theme “Human Potential,” 250 business leaders, entrepreneurs, politicians, and academics discussed for two days how to foster and tap into the creativity and intellect of their employees, stakeholders, peers, and students. The cynic could object and ask “Do we indeed have potential?,” inferring that the term “potential” implies progress and betterment – but are we, humans, even good? And if so, can we get better?

According to Harvard psychologist Steven Pinker, the answer is a clear yes. He presented a “history of violence,” arguing that violence is on the decline, which, as he readily admitted, appears to be somewhat counter-intuitive, knowing that there has not been a single day without war in the history of mankind. Attribute this to a recording bias: The magnifying effect of mass media makes violence more visible than ever before. Yet, Pinker cited empirical studies showing that the amount of actions which cause physical harm has steadily decreased over the past centuries. Despite the many atrocities it saw, the 20th century was not the most violent century in terms of absolute numbers (compared to the total world population), and acts of terrorism, Pinker pointed out, can only be described as (statistically) “insignificant.” Clearly, Pinker commented, the US overreacted in response to the 9/11 attacks. Before you cheer about the rise of human enlightenment and moral reasoning, however, consider that the way violence is committed may have become more subliminal, and that, more pressingly, weapons of mass destruction in the hands of a few rogue individuals (or states) can arguably do more harm nowadays - that is, cause ‘ultimate violence' - than ever before. Additionally, it remains difficult to project future trends based on historical data so that an overly optimistic, non-violent concept of human potential might be flawed because of a bias of retrospective. In fact, the Rational Optimist's great blind spot is that it cannot look into the “heart of darkness,” that it has no means to explain or forecast truly irrational behavior.

On top of that, it is, of course, particularly hard to assess the human potential when you are human. Is human potential limited to humans? Can humans really fully unleash their own potential or will it take artificial intelligence to do so? Were the attendees in New York able to realize human potential or rather its impediment? The conference, for the most part, stayed away from such provocations. Notwithstanding the occasional excursion into macro-economic or philosophical debate, most of the program was devoted to more pragmatic topics such as employee motivation, knowledge management, institutional and non-institutional learning, and creative thinking.

Like Pinker, Richard Florida struck an optimistic tone in his opening keynote, in which he heralded creativity as the essential resource of our societies. According to Florida, one third of the US workforce is employed in the creative sector, generating 50% of the overall wages. The unemployment rate has only gone up by 5% during the economic downturn, much less so than in other market sectors. Creativity, says Florida, is the key to economic recovery and the main catalyst of the “Great Reset” that he proposes. Asked about what he would tell the citizens of Detroit, he said “harness the creativity there,” claiming that “if we could turn 60% of services jobs into creative job we would boost the economy.” While that stood uncontested, his insisting on the metropolitan region as the hub of the “creative class” provoked more audience dissent in the subsequent Q&A. In the connected age of virtual worlds and social networks, the physical density of “idea people” seems to have lost some of its relevance. This is not to argue the importance of geographical talent clusters, but increasingly, innovation overcomes boundaries of space and happens whenever, wherever people meet (online). Geography is no longer destiny, and no longer does human potential start in cities, as Florida claims.

My colleague Robert Fabricant, VP of creative at frog design, who spearheaded a “social experiment” at the conference (more about that in another post soon), offered a less class-centric view on creativity. For him, creativity does not exist so much exclusively within an individual as it does between two entities: “Because that which is created needs a response to bring it to life.” He used the analogy of the old Roadrunner and Coyote cartoons to illustrate this collaborative creative interaction that is at the center of innovation.

The relationship between creativity and well-being, values and value, social purpose and money, self-actualization and economic success was the main theme of the conference. Jim Clifton, the CEO of Gallup, shared some remarkable insights, based on his institute’s annual survey on “what does the whole world want?” This time, the majority of respondents said: “A job” – in stark contrast to previous years when the answers had ranged from “a happy life,”and “family,” to “health.” The responses this year shifted the focus to the bottom of Maslow’s pyramid. Why is that? First of all, the inequality between the rich and the poor is growing, and it is no surprise that many living in developing countries consider “finding a job” an existential need. Secondly, the growing middle class (in India and China, and other emerging markets) has become much more aware of its possibilities and views employment as the main enabler of a brighter future for themselves and their families, one that often includes better education and increased consumerism. And then, well, there was the recession in the developed world - and its lasting implications.

So are we seeing a renaissance of materialism? Does money beat meaning? The final debate of the conference, conducted in classic Oxford-style, looked at this conflict through the veneer of employee motivation. Yaron Brook of the Ayn Rand Institute and entrepreneur Lynn Tilton, CEO and principal of Patriarch Partners, contended that “money motivates more than social purpose.” The two were facing formidable opponents in Clay Shirky (author of Cognitive Surplus) and Dan Ariely (author of The Upside of Irrationality), who argued that social purpose was the more powerful motivator. The pro faction – albeit perhaps exhibiting more passion – ran out of arguments soon and could eventually only help itself by evoking the Nazis (Godwin’s Law posits that “as an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1. In other words: all discussions - regardless of topic or scope - inevitably end up being about Hitler and the Nazis.") Brook and Tilton’s mechanistic concept of human behavior was easily rebutted by Shirky and Ariely, who insisted that money is always only a substitute of meaning,refering to Wikipedia, Lego, and other examples of meaning-driven engagements. “Money can motivate your employees to show up,” Ariely said, but if you want them to not just show up but commit with their full creative and intellectual potential, you need to motivate them with non-monetary incentives.”

This view was echoed by Cristóbal Conde, president and CEO of IT services company Sungard, who endorsed transparency and called “creating a platform for collaboration” the most important task of today’s business leader. It didn’t matter that he almost literally borrowed his own words from an interview with the New York Times earlier this year – they still rang true. “Collaboration is one of the most difficult challenges in management. I think top-down organizations got started because the bosses either knew more or they had access to more information. None of that applies now. Everybody has access to identical amounts of information.” Conde said further: “The answer is to allow employees to develop a name for themselves that is irrespective of their organizational ranking or where they sit in the org chart. And it actually is not a question about monetary incentives. They do it because recognition from their peers is, I think, an extremely strong motivating factor, and something that is broadly unused in modern management.” Conde: “Micromanagement doesn’t scale because it spirals down, and you end up with below-average employees in terms of motivation and ability.” Sungard uses enterprise micro-blogging service Yammer to enhance internal knowledge sharing: “It has given our employees a voice.”

With CEOs like him, the company is not a 20th century idea: “The more I teach, the more I learn," Conde said. Humility, openness, and collaboration are the hallmarks of a new kind of humanistic organization, led by humane leaders. That’s an idea worth spreading – and monetizing.

Openness or How Do You Design for the Loss of Control?

 

Openness is the mega-trend for innovation in the 21st century, and it remains the topic du jour for businesses of all kinds. Granted, it has been on the agenda of every executive ever since Henry Chesbrough’s seminal Open Innovation came out in 2003. However, as several new books elaborate upon the concept from different perspectives, and a growing number of organizations have recently launched ambitious initiatives to expand the paradigm to other areas of business, I thought it might be a good time to reframe “Open” from a design point of view.

What sparked my interest in particular was the Dachis Group’s list of Six Social Business Trends to Watch which referenced the phrase JP Rangaswami coined at this year’s Enterprise 2.0 conference: “Design for the loss of control.” His point was more IT-specific, arguing that the combination of pervasive digital infrastructure, software-as-a-service, cloud computing, social software, and smart phones have enabled employee- and customer-driven solutions to a degree that renders top-down IT systems obsolete. As Dion Hinchcliffe of the Dachis Group writes: “Enterprises currently expend considerable resources trying to impose control on a situation that increasingly appears like it not only can’t be controlled, but almost certainly doesn’t need to be.”

No longer in control

The new paradigm Hinchcliffe describes has implications far beyond just IT. For one thing, employees, who are facing an increasingly hybridized work/life proposition, are eager to do what they are passionate about, and they will increasingly find the digital spaces and tools that allow them to do this most effectively without having to ask anyone for permission. Companies have to come to terms with the fact that the traditional model of managerial resource allocation and coordination (mainly coerced through extrinsic motivation in the form of rewards and punishments, such as payments, promotions, demotions, etc.) has become outdated and no longer reflects the social fabric of today’s workforce.

Moreover, customers, too, seek out relationships with brands that go beyond the merely transactional. Empowered through ubiquitous access to information and therefore radical transparency, through an abundance of choices on the web, as well as the ability to contribute and tap into social networks (and thus social capital) in real-time and on-the-go, they expect brands to offer engagement and collaboration models that match the more distributed and multi-layered mechanisms of value creation through social media.

Commitment is fickle, reputation volatile, and loyalty scarce. In short: Companies have lost control – over their workforce, their customers, and as a result, their brands. Or, more precisely, as Charlene Li points out in her book Open Leadership, they have never really been in control – what they are actually forced to give up now is their need for control.

The power of pull

So what can they do besides just bemoaning this loss and passively observing how the new centrifugal forces of the Social, Real-Time Web are disrupting their traditional business and engagement models? Li lays out how business leaders can and (must!) embrace the new rules of openness. John Hagel, John Seely Brown, and Lang Davison, in the The Power of Pull, provide an actionable framework for how these new forces can be leveraged through “shaping strategies” on the individual, institutional, and societal level.

These “shaping strategies,” as the term suggests, present an exciting challenge for design. If designers embrace the insight that influence is replacing authority as the new currency in the “pull economy” and that the best way to gain influence is to give up control, they will have significant impact on how this new economy is shaping up. In fact, they are uniquely positioned to develop what Hagel, Seely Brown, and Davison call levers of “access, attraction, and achievement” that provide the “creation spaces” and tools for employees and customers alike to design their own destiny, create their own meaning, and thus convert their very own skills and passions into productivity and loyalty.

In essence, businesses can use “shaping strategies” to amplify and accelerate the inevitable loss of control in order to avoid employees and customers abandon them. This may sound counter-intuitive but the upside is considerable. A deliberately designed loss of control grants companies the only remaining and arguably most critical competitive advantage – access. As long as they enable and facilitate knowledge flows, ideas, passions, skills, and experiences, they have access to them. In fact, if they fully leverage the “powers of pull,” these assets will gravitate towards them.

X-problems and social networks

Openness is no longer just a nice stunt but a fundamental requirement for any business that wants to thrive in the new “pull economy.” Because we’re increasingly dealing with "X-Problems," as my colleague Adam Richardson reckons in his book Innovation X, we need approaches that allow us to come up with creative solutions to problems we may not even know yet. In other words: Solutions that help define the problem. Or as Hagel, Seely Brown, and Davison put it: “If you want to find out what it is you don’t know that you don’t know, you need to hang out with other people who might already know it.”

The loss of control enables the creation of more weak ties in a company’s network (inside and outside of the organization), and, as social network research has shown, weak ties are more conducive to transporting foreign ideas, knowledge, and skills – because they move faster from one node to the other as the network becomes more accessible and nimble on its fringes. The further you get away from the core of your network, the less control you (may want to) have.

You could argue that designers have been designing creation spaces, feedback mechanisms, and other participatory experiences for some time now. They certainly have, but perhaps without fully recognizing or deliberately orchestrating the amount of loss of control that their designs represented. It seems like the time is ripe to understand these efforts as part of a broader shift and consolidate them into a series of formats that, going forward, shall serve as blueprints for “design for the loss of control,” across different corporate functions and disciplines.

Frequently, these solutions will involve de-institutionalizing decision-making by removing the intermediary. In many cases, this may imply an act of democratization, but it is also important not to see this as a zero-sum game. Control is not just shifting from one hand to many; rather, it is dissolving and defragmenting and along the way diminishing – or turning into something else, far more valuable: social capital that resides in the public domain and is no longer controlled by anyone. The formats that propel this new mode of collaboration and value creation are emergent and informal, and they typically carry a significant amount of tacit knowledge.

Here are some recent examples:

Open ideation/crowdsourcing: Open ideation (or crowdsourcing) is based on the assumption that the best ideas for new products, services, and business models may come from outside of your organization or from those people inside your organization who are typically (by function or hierarchy) excluded from the ideation process. Like all open innovation efforts, crowdsourcing redistributes control from an elite group of thinkers and doers to a broader group of self-selected participants. By broadening the funnel, companies can harness the accumulated or aggregated knowledge of these voices. Crowdsourcing is usually focused on ideas and insights but can also cover a wider array of collaborations with external parties throughout all stages of the innovation cycle. Dell, Starbucks, P&G, and many other organizations use crowdsourcing. Nike partners with Creative Commons and Best Buy for GreenXchange, a platform that promotes “the creation and adoption of technologies that have the potential to solve important global or industry-wide sustainability challenges.” TED is expanding its reach through TEDx, “independently organized TED events," without compromising the exclusivity of its brand. Furthermore, Victors & Spoils brought crowdsourcing to the world of advertising; and IDEO recently launched its crowdsourcing platform, OpenIDEO, inviting the public to join “creative challenges” that tackle social issues through design. And there are firms such as InnoCentive that specialize in crowdsourcing services for other companies. All these companies not only make ideas accessible to more or less open publics (to some extent, giving up control over IP) but also commit to making the follow-up on these ideas (at least partially) transparent (giving up some control over agenda-setting and strategic planning).

Open design research: frogMob, developed by frog design, is a tool for crowdsourced design research, based on the idea that everyone can be a researcher for a day, just by paying a little more attention to the world around them. frogMob uses guerilla photography and stories to take a quick pulse on global trends, behaviors, and artifacts. Launched internally first – tapping into frog’s eight global studios – we are now expanding frogMob to a broader public. Through frogMob, we are able to “mobilize” not only our internal network around a specific assignment but also external contributors on an ad hoc basis, in a short amount of time (like a Flash Mob). frogMob allows us to provide lightweight, rapid design research for clients who ask for a “trend scrape” that identifies patterns and offers unexpected inspiration. The key here is to tap into existing knowledge flows - in a nimble way that does not require too much commitment from the participants and eliminates bureaucratic hurdles.

Open strategy: Crowdsourcing can also take place as a combination of online and offline collaboration, as demonstrated by NPR and its Think-In on the future of digital media. Supported and facilitated by frog, NPR hosted an open strategy session, bringing together 60 thought leaders at the intersection of media and technology to explore new approaches to content creation, distribution, and funding for NPR and NPR member stations. The Think-In harnessed the collective expertise and creativity of an exceptional group of entrepreneurs, executives, and innovators, and it developed concepts that NPR incorporated into its organizational roadmap. The event was augmented through live-commentary and streaming via various social media channels. This social augmentation made the workshop accessible for a broader audience, which – like the on-site participants – felt so genuinely passionate about NPR that they committed some serious time to this collective brainstorming. Such passion for brands could also be put to work through a more radical version of a Think-In: a “brand hijack” that convenes customers and other interested parties to explore new directions for a brand – yet with the twist that the brand itself would not participate (but may have the option to co-opt the results of the session afterwards).

Open-source humanitarian software: In the software space, open-source projects have long been an established form of open innovation, see IBM’s Eclipse platform. Random Hacks of Kindness (RHoK), founded by teams from Google, Microsoft, Yahoo!, NASA and the World Bank, uses open-source methods to “hack for humanity.” It describes itself as a community of “developers, geeks and tech-savvy do-gooders around the world, working to develop software solutions that respond to the challenges facing humanity today.” The group runs “Hackathons,” inviting the best and the brightest hackers from around the world, who volunteer their time to tackle disaster relief issues with through software applications. The Hackathons are designed as so-called “codejams,” fast-paced competitions that give the participants a set amount of time to solve the challenges they are given. At the end of a two-day marathon of hacking, a panel will review each hack, and the winners will walk away with prizes, as well as the right to call themselves “RHoKstars” ever after. Another example of open-source humanitarian software is Ushahidi’s CrowdMap which displays crowdsourced crisis data on maps as a free cloud-based service.

Open-(source) social networks: Lockheed Martin, the giant defense contractor, built its own networking site called Eureka Streams and released it open-source for the public to use. As Fast Company writes in a recent blog post, “The company's management had recognized that an internal social networking tool could have all sorts of procedural benefits for a large, and geographically disjointed organization. Essentially it lets ‘knowledge workers’ inside the company find and talk with other experts who may have valid input to particular projects, but who would otherwise have zero oversight or input.” Dow Chemical is another example of a company setting up its own social network, in this case to help managers identify the talent they need to execute projects across different business units and functions. Dow has even extended the network to include former employees – a smart move. Closed networks are of diminishing value. A recent McKinsey Quarterly report argues, “In the longer term, networked organizations will focus on the orchestration of tasks rather than the ‘ownership’ of workers’ and advises executives to ‘make the network the organization.’”

Open branding: In the spirit of transparency, design firm Continuum is partly revealing to the public its creative process. The specific challenge is to create a brand identity for the Design Museum Boston, a nomadic institution that exhibits mainly in the virtual space. For six weeks, Continuum is partnering with Core77 on a blog series that will reveal the firm’s process and progress as it takes on the challenge. Readers are invited to comment but it is not quite clear to what degree they can influence the creative work. It’s a non-commercial client and a low-risk project but in any case, making a creative project transparent – even somewhat haphazardly – is an interesting experiment that is worth following. The more radical experiment would of course be to put the creative control over a project fully in the hands of the “smart crowd” and have the creative team steered by a disperse group of “remote creative directors”- beyond just input comprising of insights and ideas. Other, more radical formats are imaginable: For example, sharing a company’s entire communications (some, more or less tightly managed corporate Twitter accounts are in a way a precursor to this) with the public. This would be radical transparency indeed, and an experiment with unpredictable outcome – will the benefit of enabling reciprocal, collaborative relationships outweigh the risk of reputational landmines and IP violations? Is it IP, in the end, as proprietary “knowledge stocks” (The Power of Pull), that serves as a company’s greatest asset or isn’t it rather the ability to attract talent and grant access to knowledge and skills? There’s another, softer benefit to it: Brand personality comes from being personal. The more transparent and the more vulnerable brands are, the more personal, they more authentic they will appear. Transparency is a prerequisite for authenticity – an unmasked and immediate act of communication.

Open social-capital enablers: Small, ad-hoc, start-ups are popping up that leverage the principles of self-organization, which Clay Shirky so aptly described in Here Comes Everybody, to rethink “capital” and reinvent human resources allocation in order to tackle global issues. Originated from the Sandbox network, an exclusive network of young innovators and entrepreneurs under 30, this movement calls itself “Emergent Transformation,” and Max Marmer, one of its masterminds, writes on its group blog: “Lately we have been observing an accelerated movement of ventures that are revolutionizing how we take initiative on a global scale. They can be mostly found in the areas of education, innovation, collaboration, networks, entrepreneurship, and human development: spaces that most likely will dominate the future of value creation in our society. These ventures are leveling the global resource play, unleashing unused & undeveloped human capital and leading to a socioeconomic transformation.” For example, there is Supercool School, an online school platform that strives to give people worldwide access to education by building a new global infrastructure of live online schools. Or Assetmap, an online platform that helps individuals discover and leverage resources directly from the community around them, using the methodology of Asset Based Community Development (ABCD). Max Marmer believes “One huge differentiator that sets these projects apart from almost all other organizations is their emphasis on ‘human potential’ or ‘social capital,’ rather than economic capital. The hope is that by creating a clearly defined space for these organizations to work in, there will be more opportunity to share this social capital, allowing them to achieve complimentary aspects of mutually shared visions. Their aspirations are tied to value creation, based on co-operative contribution, and will allow them to fulfill personal passions. Giving new meaning to their work, it’s helping people lead happier lives.”

Open conferences: Un-conferences are facilitated, face-to-face, participant-driven conferences centered on a specific theme or purpose. They are the antidote to the conventional conference format, radically disrupting the delineation between curator and attendees, speaker and audience. The attendees are the experts. Many organizations and groups have begun to use un-conferences to capture and externalize the full breadth of expertise assembled at conferences. Some conferences prefer to incorporate only some un-conference formats into their program – participant-driven sessions that are developed on site in real time.

Open conversations: Modernista did it. Skittles did it. And ad shop Crispin Porter + Bogusky did it. All of them use their corporate web sites as social hubs that curate what is being said about their brand rather than staging what their brand has to say. These efforts are attempts to at least co-opt the conversation on the Social Web before brand-specific aggregators could benefit from being parasites of the brand's social universe. In other words, what if a brand faced unexpected competition from a third-party site that provided a much more comprehensive and easier-to-access curation of Skittles conversations than the brand itself? Or if McDonalds suddenly saw itself confronted with a site aggregating blogs, videos, news, and tweets, all about but not by McDonalds? Think of this as the logical extension of the company profiles that already exist on LinkedIn and Glassdoor.com, which aggregate individual member data into a fairly transparent view of companies, including employee information, salary information, and recent news. Indeed, third-party brand curators might realize that brands live in the ‘social commons,’ and that whoever builds the right aggregation mechanism and establishes the most popular channels to reach a mass audience will “own” the branded conversation on the web. Take a look at how Get Satisfaction’s “community-empowered customer support” plays this – it is not an uncontroversial model, but it is “designed for the loss of control (of brands),” enabling customer-to-customer service. You could also spin the idea of a “social homepage” a bit further and not only curate the social web conversation about your brand but actually give away your whole homepage to third parties and to public service announcements, stories, or art. Give up control – gain social currency.

Open HR: Of all critical business functions, HR might be the one with the greatest potential for innovation. With dynamic, quickly accessible expertise replacing static piles of proprietary knowledge, and companies moving from organization-centric to network-centric modi operandi, HR becomes a key enabler of assets through the nurturing of relationships, developing talent, and fostering a culture of openness and participation. This is not just pep talk but includes new tools and methodologies that radically alter the relationship between employee and firm. A recent study by Birkman International that surveyed nearly 20,000 HR professionals found that 83 percent of respondents see great potential in social media-based HR solutions, particularly when it comes to improving communication, learning, and knowledge sharing. Here at frog design, we have launched frogForward, an open-ended, conversational, and social performance management app that allows our employees to provide 360-degree feedback any time throughout the year (not just during review cycles). Goal-setting is entered as a stream, and the feedback – peer, managerial, and employee feedback – can be shared openly or privately. This new approach reflects the changing realities of work performance, from a task-driven control and coordination approach with quantifiable goals to a holistic view that is more situation-and context-aware, gives the employee significantly more control of the process, and considers intangibles such as tacit knowledge, social intelligence, and relationship-building. frogForward shares this approach with Rypple, an ad-hoc social network that provides simple, direct, anonymous, and ongoing customer and employee feedback.

All of these initiatives, whether they apply to brand, CRM, product development, R&D, customer service, or HR, exhibit some similar characteristics:

- easy access;

- open platforms that harness the creativity and expertise from people outside of the organization or untapped sources inside;

- open-ended formats that can evolve as the problem statement changes;

- ample room for participation and emergent self-organization;

- easy mechanisms for tinkering and hacking (e.g. through open-source formats);

- small formats that can be easily shared

- strong incentives (ideally intrinsic motivation or social currency);

- real-time visibility (through sharable content);

- tie-ins to dormant or active social networks;

- and distributed decision-making.

Openness as permanent crisis

There is another aspect to this: The most imminent and urgent manifestation of “loss of control” is of course a crisis. And in times where terrorism, financial downturns, natural disasters, as well as catastrophic events on the individual level are a steady companion to our societies and personal lives, designing for crisis has become a default skill, forcing designers to make contingency planning an integral part of the experiences they create. Often, this means developing exit scenarios that are flexible enough to provide a structure for emergent solutions in response to emergencies. (The notion that architects design spaces so they can be escaped from has been thoroughly examined by Stephan Trueby in his book Exit-Architecture - Design Between War and Peace). In other words: an easy way out. And in. Because exits are entry points as well. If you design ways out of the system, they might as well serve as ways into the system.

If you think about it, this insight may provoke a different notion of openness – understanding it as a system where exit and entry are identical. In this line of thinking, an ecosystem on the Social Web could be seen as a system in permanent crisis – it is always in flux, and its composition and value are constantly threatened by a multitude of forces, from the inside and the outside. What if we understood “designing for the loss of control” as designing for structures that are in a permanent crisis? Crises are essentially disruptions that shock the system. They are deviations from routines, and the very variance that the advocates of planning and programs (the “Push” model) so despise. At their own peril, because they fail to realize that variance is the mother of all meaning; it is variance that challenges the status quo, pulls people and their passions towards you, and propels innovation. “Designing for the loss of control” means designing for variance.

One system in permanent crisis that contains a high level of variance is WikiLeaks. The most remarkable thing about the site appears to be the dichotomy between the uncompromised transparency it aims at and the radical secrecy it requires to do so. The same organization that depends on the loss of control for its content very much depends on a highly controlled environment to protect itself and keep operating effectively. But not just that: Ironically, secrecy is also a fundamental prerequisite for the appeal of WikiLeaks’ “there are no secrets” claim. Simply put: there is no light without darkness. And there is no WikiLeaks without secrets.

Applied to systems and solutions design, this means that total openness is the antidote to openness. When everything is open, nothing is open. In order to design openness, one of the first decisions designers have to make is therefore to determine what needs to remain closed. This is a strategic task: making negative choices for positive effects. You need to build enough variance into a system to make it “flow” and yet retain some control over the underlying parameters (access, boundaries, authorship, participants, agenda, process, conversation, collaboration, documentation, etc.). Only if you maintain the fundamental ability to at least manage (and modify) the conditions for openness, will you be able to create it. To design for the loss of control, control the parameters that enable it.

These are just some initial thoughts. What other formats and business models can you think of that “design for the loss of control” to everyone’s benefit and increased social value? What other variances can be created and effectively shaped? What design principles must be applied?

Over to you.

“It's Been Like Walking Into a Forest With a Match”

For Wired UK’s “Work Smarter” issue (just released), I had the pleasure to speak with John Winsor, co-founder and CEO of Victors & Spoils (V&S), the world’s first creative (ad) agency built on crowdsourcing principles. You can find a shortened article in the Wired UK magazine. Here’s the interview in full length.

Q: V&S launched a few months ago. How is it going so far? How many clients do you have, and can you share some of the work that you are doing?

It's going really well. We're working with a half dozen clients and have done a dozen projects, thus far. We've been doing everything from brand strategy work, to developing digital tools, to design projects. We've just started working on a couple of TV spots and an industrial design project. It's been a fast three months. You'll see the work start rolling out the door in the next few months.

Q: I guess it's one thing to have a bold idea like crowdsourced advertising and another to actually do it. What made you believe that this might be a viable business model?

I think what we're doing is bigger than just crowdsourcing. The rise in digital connectivity has fueled new ways to use co-creation, mass-collaboration and open-source innovation as powerful tools for business. I've been a firm believer in these disruptions since I wrote my first book about co-creation, Beyond the Brand, in 2004.

Likewise my career has benefitted from several disruptions. First, the rise of desktop publishing allowed me to start a publishing company, Sports and Fitness Publishing. Without the revolution that Apple started with the Macintosh, along with Quark and Adobe's help, I would have never been able to afford to go into the magazine publishing business. Likewise, the rise of other digital technologies allowed me to build Radar Communications, by combining the worlds of anthropology and journalism to provide a new way to do brand strategy and market research. And now, Victors & Spoils wouldn't even be possible without the communities of talented people that are aggregating online.

Of all the disruptions I've had the opportunity to build businesses upon this is the greatest opportunity in my career.

Q: With Starbucks, Best Buy, and other big brands launching crowdsourcing platforms, some industry observers seem to believe that crowdsourcing has jumped the shark. Is V&S the logical end of the line or are we going to see more crowdsourcing, across other creative disciplines?

I think we're seeing a bigger and deeper change going on in the way we work. Every time a new technology disrupts an industry, there are those who try to protect the current way of thinking. While this current digital disruption might seem like a new and frightening trend to those how hold on deeply to the current paradigm.

Just look at history. During the Renaissance, in the middle of the 15th century, there was a similar disruption happening that was shaking the pillars of the then current media world. The methodology of using movable type on a printing press, developed by Johannes Guttenberg, was spreading like wildfire, making books more accessible throughout Europe, allowing a whole new generation to have the tools that only a few held. At the time, books were produced by an elite group of monks in a few monasteries. These scribes were the media elite of their day. As it became more obvious that the new disruptive technological changes produced by the printing press some felt the need to turn the page back. In 1492, Johannes Trithemius, the Abbot of Sponheim, a well-known monastery, wrote, In Praise of Scribes. In it he wrote, "We must preserve the old order at any cost." Yet, he had a problem. If he used scribes to produce the book it might take too long to stop the tide of the disruption caused by the printing press. Instead, he used a Guttenberg press to print In Praise of Scribes, only accelerating the change.

The same thing is going on now. Agencies are trying desperately to protect the old way of doing business while bigger cultural trends are shifting the sand below their feet.

Q: If the crowd turns out to be more creative than specialized professionals, will that be the end of the creative industry?

It's only the beginning. How much creativity was there when only monks could write books? Likewise, Apple and Adobe have ushered in a new age of democratization of creativity. The current trends of mass-collaboration, co-creation and crowdsourcing, based on mass connectivity are only further democratizes creativity. Just look at You Tube. When digital tools become cheap enough everyone can gets involved. Now, it's a question of what's good content and what's bad content. But often, that's a matter of personal taste.

Q: Some people say that your radical crowdsourcing approach might just be a PR stunt to get some publicity around the launch but that V&S will eventually become a more traditional creative shop or at least a hybrid of crowdsourced and expert services. What do you tell them?

For us, it's been unbelievable. It's been like walking into a forest with a match. Sure, we wanted to start a fire and build a business. The cultural conditions have been right for something much bigger. We've gotten calls from several of the most progressive CMOs in the world. They are tired of paying too much money for too few good ideas. They want change.

It used to be that creative quality and price were diametrically opposed. The more you paid, the better quality you could get and vice versa. It was an "or" relationship. You could get quality or price. Certainly, that's been the way the current advertising and design world works. What we're seeing is the opposite. Two things are happening. First, with our own projects and with projects like Unilever's Peperami's crowdsourced scripts project on Ideabounty, talent rises to the top and wins. Our contention has been that in truly free markets, the best work produced by the most talented people rises to the top. It's not blocked by internal politics or hierarchical competition that can smother the best ideas inside big organizations. And, it's only accelerating, many of the most talented creatives and strategists are starting to play around and do work on the new digital networks that are emerging. We've also found that in an apple to apple comparison with the projects we're working on, clients typically save 75% in their creative fees for the same quality. Projects that used to cost $100,000 now can cost $25,000 (or $1,000,000 is now $250,000) for the same quality. We're seeing that with the same strategic and creative direction, results are very similar. Clients are telling us they want to leverage the power of "and." They want the best creative work and pay the best price. That's what we're trying to do. We're using the latest digital tools to provide the best creative product for the best price. Crowdsourcing is only one of the tools to accomplish that goal.

Q: How do you hire, and how do you manage the crowdsourced creative department? Is it limited to a submission of "big ideas" or do contributors collaborate on projects from start to finish?

The first thing we've noticed is that there are lots of different ways to use co-creation and crowdsourcing to solve marketing and product design problems. We've run projects on Crowdspring, 99designs and GeniusRocket. All of these platforms are good for different things. They get a lot of people involved in a project. But it's easy to get overwhelmed by the number of entries. And, Sturgeon's Law, that only 10 percent of any large group of creative output is good, definitely applies. In these large community crowdsourcing projects it takes a lot of creative direction. One of our core principles is "Victors" instead of "Victor" or paying many winners instead of just one. We do this with every project we run.

Another way we've been using the community for projects is by selecting small groups of people from our 500+ strong creative department, a global network of some of the best creatives and strategists in the world. In these projects we've been inviting 50-100 folks to participate in a project, selecting between 6 and 12 finalists to compete. In these cases, the finalists get a fee for participating. There is then another fee for the winner of the competition. These smaller, swat team efforts have been working well with all kinds of projects from more complicated design projects to strategy and brand platform projects. One of the advantages has been the ability to keep projects more tightly controlled confidentiality and the ability to creatively direct more complicated projects. But, unlike the larger public projects, the sheer number of ideas is more limited. There are lots of tools in the toolbox and surely more are coming.

It still comes down to the strategic and creative direction to make sure the work produced by any crowd, either internal or external, pushes the work forward in the right direction to accomplish a client's objectives.

Q: How do you pay your crowd(s)? Do they receive a percentage of the client fees? Are there several layers of contributors with varying payment levels? Do contributors have any influence on V&S' strategic decisions?

Yes. We have many different payment models, as described above, and are constantly developing new ones. People in our creative department have a ranking based on their reputation. And, we constantly ask the department to participate in decisions. This space is bigger than all of us and is constantly evolving.

Q: You previously worked at Crispin Porter + Bogusky (CP+B), a legendary firm with a distinct brand. With V&S, how can you develop a creative identity over the long term when your creative is crowdsourced? How do you maintain your quality standards?

Working with guys like Alex Bogusky and Chuck Porter was an honor. Alex and Chuck are fearless the way they approach work and life. The attitude is the key ingredient of making CP+B what it has become. Quality and consistency of the V&S brand comes from great strategic and creative direction. My two partners, Evan Fry and Claudia Batten, are two of the best. The three of us spend a lot of time developing the V&S brand. So far, we feel like it's going pretty well.

Q: You write on your blog that "Brands need an alternative to current ad agencies and crowdsourcing platforms. One that offers the strategic direction, engagement and relationship management that agencies deliver today but one that also delivers engagement, connectivity, creativity, and ROI that crowdsourcing platforms have the potential to deliver." How does V&S measure ROI?

We believe that marketing and product design should be judged on how it affects sales and profits for our clients. At the end of the day, that's what they're being judged on. We do work with clients to develop goals for every project. Each project has a different ROI metric. That said, when clients are saving 75% on their creative investment to start with they can achieve their goals much more easily. They also have the ability to try a lot more creative ideas.

Q: At CP+B you launched a product innovation group, and now you have set out to innovate the entire creative industry. In your opinion, what are the biggest barriers and challenges that stand in the way of organizations becoming more innovative?

When Alex Bogusky and I were doing research for our latest book, Baked In: Creating Products and Businesses that Market Themselves, we noticed that the biggest stumbling block to being more innovative for most companies were the internal silos that have been created. Marketing is a silo. Product Design is a silo. Innovation is often its own silo. To be more innovative companies must knock down the internal silos and start to get everyone working together.

Q: What business innovation are you still waiting for?

I'm really looking forward to even more collaborative digital tools, especially video conferencing technology.

[photo credit: David Sykes for Wired UK)

Lift10: Connected People

Describing itself as "a series of events built around a community of doers and thinkers who get together in Europe and Asia to explore the social consequences of new technologies," Lift is definitely one of the best conference networks out there. Laurent Haug, Lift founder and curator, is a wonderful host and has managed to maintain a strong sense of community despite continued growth. In addition to numerous satellite events with partners, Lift organizes conferences in France and Korea, as well as the annual Lift conference in Switzerland as its main hub.

Lift10 will take place from May 5-7, 2010 in Geneva and welcome 1,000 participants from 40 countries to "explore the most overlooked aspect of innovation: people. Known in the techno-parlance as users, consumers, clients, participants, prosumers, citizens or activists, people ultimately define the success of all technological and entrepreneurial projects. They adopt or refute, promote or demote; embrace, reject, or re-purpose. Their approaches are unique, influenced by cultural and generational diversity. A decade after the rebirth of user-centered design and innovation, it's time to explore the myths and uncover the reality behind the 'connected people.'"

Check out some of the Lift10 speakers that have already been confirmed.

The early-bird deadline just got extended to January 31 – you can register here.

Forrester: Adaptive Branding and the New Four P’s of Marketing

Forrester is about to release a new report on “Adaptive Brand Marketing: Rethinking Your Approach to Branding in the Digital Age,” in which it proposes replacing “brand managers” with “brand advocates.” Advertising Age provides a sneak peek at the ‘new 4 Ps of Marketing’ presented in the report: permission, proximity, perception, and participation. Other core elements include: “embracing an expanded role for consumer intelligence, focusing on strategic brand platforms, and empowering a federated organization."

A fervent advocate of marketing as a cross-organizational catalyst for change myself, I wholeheartedly agree with BBH Labs which believes the Forrester report points to a potentially larger opportunity for the discipline: “It’s not just the marketing organization that needs to reorient itself given the now normal digital age, but the company itself should consider how it reorients itself around its marketing organization. In most progressive companies, it is the marketing function that has most quickly and deeply engaged with the new interactive toolkit.”

This view is really becoming a groundswell, and you will be hard pressed to find anyone these days who would deny the profound change social media presents for all customer relations; the new need for openness, agility, and hyper-sociality; as well as the call for “networked” (or “federated,” as Forrester calls it) organizations. David Armano from the Dachis Group (“Social Business Design”), Francois Gossieaux (Beeline Labs), or Charlene Li and her Altimeter Group are just some of the pundits who have very succinctly articulated these themes.

Further reading:

HSM Interview with Amazon’s former Chief Scientist Andreas Weigend on the four P’s of marketing

Ogilvy and Acision white paper on advertising in 2020

Jones and Bonevac: "Should We Be In the Advertising Industry?"

Dave Evans: "Social Business: the New Black" 

John Ellett: "Marketing has changed"

George Potts: "Political Campaigns: The New Paradigm for Marketing Organizations in the Social Media Age"

Rob Rose: "Stop Being a ‘Data Driven’ Marketer"

New Perspectives On The Work/(Life) Conundrum

My mom always told me “Make your passion your profession, and you’ll be a happy man.” She was right, and I am glad I followed her advice. Yet I appear to be part of a minority. In an article about growing disenchantment at work (“Hating What You Do”), this week’s Economist cites a survey conducted by the Center for Work-Life Policy, an American consultancy. It found that between June 2007 and December 2008 the proportion of workers who professed loyalty to their employers slumped from 95% to 39%, and the number voicing trust in them fell from 79% to 22%. Furthermore, the article refers to a more recent survey by DDI which found that more than half of the respondents described their job as “stagnant,” as in “nothing interesting to do” and “little hope of professional growth" within their current organization. Half of these “stagnators” said they were planning to look for another job as soon as the economy recovered. These survey findings are flanked by several recent cultural events in the US that indicate a shift in the way we negotiate the meaning of work, for example Michael Moore’s “Capitalism – A Love Story” and a whole New York Times Magazine issue on “Anxiety.”

And yet, Americans will be surprised to hear that the most dramatic manifestation of this apparent misery-at-work trend occurred in “socialist” France. A spate of attempted and successful suicides at France Telecom that occured over the past twelve months, many of them explicitly prompted by stress and dissatisfaction at work, forced the deputy CEO to resign and sparked an emotional national debate about life in the modern corporation.

“You are what you do,” German philosopher Immanuel Kant contended long before we started talking about Work/Life balance. Having always been an idealistic concoction most fervently promoted by those biased towards Life, this balance wouldn’t even need to be promoted if it were indeed a battle of equal powers. It isn’t. Work has invaded every single aspect of our lives, and it has infiltrated our society Mafia-style: controlling and demanding every hour of our lives without appearing to do so. Increasingly, Work is no longer visible as such and is instead embedded into Life, which makes its power even more frightening: If you do things that are work but don’t feel like work, then Work has ultimately prevailed.

With the advent of digital media, the relationship between Work and Life has again dramatically changed. Social computing has turned the workplace into the living room and the living room into the workplace. For the digital knowledge workers of the attention economy, it has become harder, if not impossible, to separate Work and Life. The concepts of live-to-work and work-to-live, often pitted against as a clash of American and European cultures, are too one-dimensional to truly capture the reality of most professionals today. Work is Life, and Life is Work, and there is not much in between. The question is no longer how we can balance our digital lifestyle with our professional lives, the question is: How were we able to get any work done before the digital era? And how did we have a life before Twitter?

The new digital work lifestyle has profound implications for one’s (professional) identity: What do you do when everyone else does everything all the time? With everything and everyone connected, the once clear contours of our existence give way to an indistinguishable maelstrom of stimulation: the story of our life is no longer a curriculum, it is a non-linear stream. You can go swimming, fishing, snorkeling, and sailing in it. You can choose to stay on the surface or take a deep dive. But you can never leave. And you can always drown. With Work and Life being the Big Blend, it is shocking but not surprising that for some the only way to take a break from Work is to take a permanent sabbatical from Life, as in the case of the France Telecom workers.

The borderless Work/Life experience creates agoraphobia, an anxiety about an indefinite space of self-actualization possibilities and one’s position within. As Alain de Botton, the philosopher for the knowledge worker, put it: “It’s perhaps easier now than ever before to make a good living. It’s perhaps harder than ever before to stay calm and be free of career anxiety.”

The Economist suspects that companies aggravate this anxiety by a new, ill-conceived form of Taylorism: “Giant retailers use ‘workforce management’ software to monitor how many seconds it takes to scan the goods in a grocery cart, and then reward the most diligent workers with prime working hours. The public sector, particularly in Britain, is awash with inspectorates and performance targets. Taylorism, which Charlie Chaplin lampooned so memorably in ‘Modern Times,’ has spread from the industrial to the post-industrial economy. In Japan some firms even monitor whether their employees smile frequently enough at customers.”

These are all measures that will very likely deter Generation Y workers, the digital natives who have grown up with the Internet and expect organizations to provide them with much more ambiguity and empowerment than these were willing to give to their parents. For the Gen Y’ers, Work is no longer just what you do; Work is another way of Life – a meaningful life. It implies a Work-Life package that reconciles passion and profession, meaning and earning, impact and income. A good job is what you believe in – as long as you can abandon it at will. Sure, Work has become invasive, but so has Life, as work performance is being constantly disrupted by the micro-events in one's digital life feed (email, Twitter, blogging, social networks, etc.). Companies need to learn to convert this distraction into productivity. In fact, this might be the biggest management challenge for the next ten years: Learning how to leverage the tools of distraction to increase productivity – and happiness.

No matter where on the Work/Life continuum you’d place yourself, you will acknowledge the one premise that unites us all: how we are going to work in the future will determine how we’re going to live in the future. Consequently, the Berlin-based creative collective Palomar 5 believes that the best way to find out about the future of work is to let people from different backgrounds work together. Palomar 5 has therefore organized a six-week long Innovation Camp in Berlin that gathers, Big Brother-like, 30 handpicked uber-achievers under 30 to explore (and live together) a vision of work in the digital future. The Camp’s agenda and workflow have been carefully crafted and encompass various modules, guest experts (among them a team from the frog studio in Stuttgart), and collaborative creative assignments that tackle Work/Life as one big design challenge.

In a similar vein, The Internet As Playground and Factory: A Conference on Digital Labor will be held at the Eugene Lang College of The New School in New York City on November 12-14. An overview Introduction sets out the seminal questions arising “in the midst of massive transformations in economy, labor, and life related to digital media.” The conference is free, with advance registration required.

There’s no dearth of books on the subject either: If I had to pick two, I’d go with Alain de Botton’s The Sorrows and Pleasures of Work (with a poignant chapter on accountants) and Don Tapscott’s Grown Up Digital which provides a comprehensive overview of the aspirations and habits of the Gen Y workforce.

Oh, and last but not least, our next design mind issue will be dedicated to “Work/Life” – if you would like to contribute or submit ideas for articles and art, please contact us at designmind@frogdesign.com (we love our work so much we’ll even respond on weekends…).