When I started out in the IT world, the first thing I ever did was to develop a Lotus Notes practice for a small company. This was the early 90s, if I recollect correctly (I’m not being evasive, merely making believe I’m an old codger, by cracky). So I would go to Lotusphere – pre-IBM Lotus versions – every year for about 4-5 of them until 1996 – my last Lotusphere. Interestingly, Lotusphere was at the Dolphin and Swan Hotels in Orlando Florida every year I went. Imagine my surprise in 2011 when I went to Lotusphere and it was at the Dolphin and Swan Hotels (and the Yacht Club Hotel, but let’s not quibble, people) again. Actually, as I found out, not just again, but still. Yes, still. It had never left the hotel – not literally but it had been at the same place all that time. There is a part 2 to this anecdote. While at Lotusphere I spoke with about 2 dozen IBMers a.k.a. Beamers and the vast majority of them were 10-15 and even 20 year veterans of IBM. This was fascinating because back in the very early 90s IBM, known for its loyal employees, had a temporary but loud brain fart and screwed up the pensions of the many 30 and more year veterans of the company – breaking that virtuous cycle of loyal employees for awhile. They fixed the problem but it seemed to be too late. Apparently not. There is a new generation of long term employees who are often no older than their mid to late 30s – meaning they’ve only known IBM or one or two minor jobs before IBM – and they stuck. So what does this long term commitment to the Orlando Hotels mean? What does the long term employee commitment reflect? Both actually and metaphorically, it reflects a corporate culture at this $100 billion company that focuses on not necessarily loyalty per se but continuity. Continuity is important because unlike any other company I know in the enterprise space this company is not only willing to think long term at keiretsu-like levels, but builds the ecosystem necessary to sustain that long term thinking. I’ll get into that as we move through this analysis of where IBM is going and how they are going to play in the space that we all know and love. No, not sports. Noooo. Not sex. What’s wrong with you people? Jeez. The space we know and love is the need for the transformation of large enterprise business in the 21st century. That space.
Nowhere was this long curve thinking more evident than in the opening IBM speech (after a fabulous speech by actor, entrepreneur, web pioneer and all around good guy Kevin Spacey – who’s speech trumped any other keynote to start a conference that I heard this year) done by Alistair Rennie, the GM and VP for Collaboration at IBM where he identified five game-changing trends in business in the last century. He made the point there have been only five with the first being mainframe computer and the fourth being the Internet. What’s the fifth? Social business. He started with a century long timeline – keiretsu like thinking, wouldn’t you say? What makes this long term thinking important is that IBM is willing to capture a trend in its ecoweb and then articulate a framework and strategy that governs them for a large number of years. So when they make a decision on a key concept – they do it really big. To throw a caveat in there, that’s really big, not perfectly or at 100% when they launch their commitments to this idea. What that means for IBM in 2011 is that this year they’ve decided to fully embrace social business – and to not only eat their own dogfood but to breed their own dogs. That’s the level of their commitment. (BTW, IBMer Jen Okimoto, whose tweets are her own saw me tweet this and returned a nicer image -”Prefer to think of it as we drink our own wine, and we’re creating/mentoring our own vintners and wine lovers.” You’re all welcome to invent your own imagery here. Heh. Heh.). Their level of commitment is astounding and potentially game changing.
Because a $100 billion company is driving all their resources into transforming their company into a social business. They aren’t just selling it, they’re doing it and evangelizing it and marshalling whatever they have to so that it will be globally hugged.
Here Comes IBM – 2001-2010
To some extent, this isn’t surprising. Back in 2006, I was speaking at RIM’s Wireless Enterprise Symposium (WES) and met with Sean Poulley who was running Lotus Collaboration Workspace Unit at the time (I think that’s what they called it). They were in the process then of transforming business units in Lotus from the hard core development focus they had for Notes and Domino into a line of business oriented collaboration solution. Since their acquisition of Lotus in 1995, Lotus itself hadn’t been doing much other than what it did when they acquired it – Lotus Notes (which I still think is the most misunderstood development platform in IT’s history. Its so much more than it was made out to be. Sigh.). But IBM until roughly 2006 when they did this massive rejiggering of Lotus, had wasted the value of the company. But since 2006 or so, it has been the core of IBM collaboration efforts and has become something far beyond what it was. But in 2006, it was Lotus focusing on collaboration and all the things that it took to do that. However, there was much more going on than that at IBM itself. I became aware of what IBM was doing when they launched their first truly noticed Innovation Jam back in 2006 (They were doing Jams since 2001). This was a massive crowdsourcing effort involving IBM, its customers, its employees, members of their families, their partners and suppliers in coming up with ideas on how to spend $100 million in the emerging technology space. What IBM did – a reflection of what this massive company was willing to do to adjust to reality in the world -not just the marketplace – was to open up for a 72 hour period a significant piece of their appropriate intellectual property so that the participants in this Jam had what they needed to, well, “jam” about business ideas. Do you realize how big a step this is for a company to make? Especially one of this size? In 2006 when this communications revolution was not fully recognized for what it was – an irrevocable transformation of the culture of human interaction? It was HUGE. Intellectual property was protected traditionally by companies to the point of prosecution for violations and even more. It was a huge risk for IBM and their willingness to take the risk was reflected in their selective release of the IP to the Jam participants. What were the results? They had nearly 160,000 people from 104 countries and 67 companies generate an initial idea pool of 46,000 ideas. They narrowed it down, had a smaller jam to discuss the ideas that they came up with and then chose 10 of them which IBM invested that $100 million in. But, then again, that’s not nearly as monumental as their complete embrace of social business as a company. What they are doing is a progenitor and a corporate cultural indicator that tells you that they were a company that could make the transformation to social business.
Here Comes IBM – 2011
At the keynote session on Feb 1, Mike Rhodin, SVP, IBM Software Solutions Group, made a critical distinction about social businesses. He said, “consumers have unprecedented power over your brand. Social businesses embrace this.” As most of you who have read anything at all I said over the last year (which would be for the most part, my brother and wife and friends who take pity on me), its been that “the customers control the conversation. and that the definition of Social CRM is “the company’s programmatic response to the customers control of the conversation.” Mike Rhodin said it more succinctly than I ever could and he was right. This is the key to the culture change necessary in a company that wants to be a social business. They have to cede control of the business ecosystem to the customer. That doesn’t mean that we are going to have a fascist takeover of corporate HQs worldwide by customer mobs and petty dictators who a week before were shopping mavens. It means that the customer can impact your brand and even, at times, directly impact your revenue, whether or not you want them to or not. AND that they do it in channels that you don’t control. What this means to IBM is that there is a business model, outlined on the stage today that has measurable returns that you can apply to this scenario – well, not really scenario, but reality. There is empirical value that a social business provides.
IBM via Alistair Rennie and Mike Rhodin identified three entry points where value can be derived:
- Customer service/marketing
- Product/service development/operational effectiveness
- Operations/human resources
I’m going to talk briefly about the latter two first and then spend a fair amount of time on #1 both because of my self-interest i.e. CRM and also because it goes to the heart of my concern for what is an otherwise earthshaking transformation.
IBM is looking at this social business entry point in terms of operational effectiveness. That means that they see that products can be invented, created, and brought to market in record time and at lower cost than ever before if the internal resources of a company are marshaled in a “hive-like” (my term) fashion via use of the collaboration environments, tools, and allowances that a social business company has to make. For example, its not just having the wikis up and running for collaboration around a project, but also having the activity streams that can be responded to in real time or nearly so; having the intellectual property exposed so that project success can be enhanced – rather than having it the property of a virtual lockbox; having the social and HR profiles interconnected so that not only can you find the right resources at the right time, but will also know who in the chain of command that likely still exists – social business or not, an SVP will still be an SVP – can free up that resource for the project; getting the legal department’s acquiescence to the collaboration within and potentially, outside, the company. What it really can be is an ecosystem in motion with an enormous range of possible results related to innovation and ideation among many others. In this case, however, IBM prefers to see it as an improvement in operational efficiencies. Which, among other things, it is.
Social business in these areas are the foundation for more effective employee/workforce performance. Social business has a cultural impact, and impact on morale; an effect not as much on how people generally interact, but more specifically, on how they work. It also brings the outside world into the space behind the firewall to the extent that the company becoming a social business empowers its employees to be part of their corporate business efforts. The way that IBM is handling its transformation internally is through a program that they call Social Business – one that is designed to bring every one of IBM’s 400,000 employees up to speed on the use of social tools and with some form of empowerment depending on what they do. They expect that in 2011, about 50,000 of those will be where they need to be for IBM to truly continue its transformation.
Customer Service/Marketing – Social CRM?
Notice I’ve elevated this to a Headline 2 rather than an H3? There’s a reason for that, beyond my obvious interest in Social CRM in general. IBM needs to see this one loud and clear.
As far as what they mean by customer service/marketing as an entry point, IBM via Mike Rhodin and Jon Iwata, SVP of Marketing and Communications, said it loud and clear when speaking about the engagement of empowered customers via both customer service and marketing. This was a place that IBM felt that by empowering their employees they would be able to more successfully engage their customers in these two particular areas.
IBM’s take all in all was interesting from multiple angles.
First, because in terms of CRM, what wasn’t here – sales.
Second, how they redefined the purpose of marketing and customer service.
Finally, how IBM was able to provide a semi-accurate depiction (not definition) of Social CRM and still remain in the dark about Social CRM – despite their recognition of the market, the idea and the customers responsible for creating the need for social business.
Why Not Sales?
I can only guess the reasons that IBM didn’t put sales into the entry point customer-facing pillars. Probably for the same reason that sales has been the CRM pillar with the hardest adjustment curve for social CRM – though not so much Social Business.
What I mean by that is that one of the most important aspects of sales has always been relationships. So you’d think that the idea of “social sales” would be easy to swallow. But there is also a major difference between a sales driven culture and a customer centric one – one which goes to the core of why sales has been the bastard child of Social CRM, even though it drove traditional CRM.
Why so difficult you might ask? Well, I might tell.
Sales isn’t focused on customer outreach or customer input which both marketing and customer service are. Simply put, its focused on closing deals. That means that the customer is in an ordinary sense the object of the sale and the sale itself is the focal point of the relationship.
I’m not saying that sales people are heartless jerks who don’t care about the actual contacts they have. Often, sales folks truly befriend their contacts. But reality is that marketing people get compensated by how actual customers respond to their efforts; customer service people directly interact with customers and are compensated according to the outcomes of those interactions. Sales people interact with customers all the time but they are compensated on the closing of the deal and the financial value of the deal. Not the interactions with customers.
So sales efforts are based on the most effective way to close that deal. What THAT means is that the optimal “social” activity for a sales person is to draw on the collective intelligence of his fellow employees to help him figure out what needs to be done to close the deal. This is how, for example, Lotus Connections would bring technological value to a sales opportunity. So sales is much more focused on internal/enterprise collaboration.
I have to presume that this is why sales isn’t listed as a part of the entry point that marketing and customer service are – because IBM is defining them as the customer-facing components of Social Business – though I have to say, since IBM is so focused on collaboration as the core of Social Business, its actually somewhat inconsistent that it doesn’t appear as one of the entry point pillars anywhere.
What About Customer Service and Marketing Then?
Yeah, what about it?
Mike Rhodin identified customer service and marketing as one of the 3 most important “entry points” for social business. What that means is that these customer-facing activities are where the impact of social business can be the greatest because of how they are structured.
For example, marketing is transformed from what it has historically been a means for the channel to drive its messages into a willing or less willing or at times, even unwilling consumer or business base to a component of business that establishes an initial foundation for a trusted relationship between the company and the customer. I couldn’t agree more with this change in perspective. In fact, the way I present it in my classes/speeches is with the following language:
“Because the model is built on trust, the reputation of the company, not the message, becomes the brand.”
IBM emphasized its focus on this core concept – trust is foundation for the types of relationships that you build with customers and social business is the means you have to engage those customers and build that trusted relationship through the new forms of communication available for their and your use.
They understood marketing as the first line of this conversation with their customers. A big plus 1 for IBM.
Aha. Here’s where sales came in too. Mike Rhodin made the point that the transition to social business means greater integration between sales and marketing among other disciplines.
They had a good idea (though not as well defined) about how “social” customer service can be beneficial. The idea was that a customer’s problems can be resolved in
IBM’s Social CRM Conundrum
The problem that consistently cropped up in their vision, their messaging and their offerings is that despite putting this what was apparently an accidental SCRM message out there as one of the social business entry points, the IBM powers-that-be really don’t have much of a sense of what Social CRM is or how it integrates with social business or what tools comprise the technology or solution to enable or implement it. Meaning they were genuinely puzzled over how to think about it. This came up time and time again in discussions with senior and middle management and with the IBM “ordinary joes and janes” at the conference. They have a brilliant idea on how to collaborate internally but when it involved the customers as collaborators in their social business, they couldn’t really get their eyes in focus.
There’s a substantial amount of irony in this circumstance. Not only did they present a Social CRM entry point but the Innovation Jams that have been going on since 2001 have always incorporated their customers in the mix of crowdsourced collaborators. So they are not unacquainted with the rudiments of SCRM. They’ve lived it more than most companies.
But when a question on “how you define Social CRM” was asked and answered, the definitions were all over the map.
The likely reason for that is not only are they trying to sculpt a new 1IBM corporate culture, but also a way of selling social business as an enterprise vendor, so they are trying to define a “Social CRM solution” on the sales side. That’s pretty much the way that everyone who spoke with me about it talked about it – what social CRM solution will they provide to the public was the way that I heard it from nearly everyone.
That’s a legitimate question. The alliance with SugarCRM is part of the answer – and an important one.
The Newest Partner: SugarCRM
IBM has been making incursions into CRM for the last year plus with their acquisition of SPSS – which, of course, which has strong customer analytics offerings and Unica, which is one of the marketing automation leaders/pioneers – though I’m convinced that it doesn’t come from a conscious CRM strategy.
But even when it comes to traditional CRM, IBM doesn’t really know what it has. For example, I found countless times (lets say more than 10) when each time I mentioned Unica as a pillar of a CRM solution, there was incredulous surprise. “I thought it was just marketing.” CRM was not even in the conversation or the thoughts of the persons involved. While for scientific purposes, this is a meaningless “study”, it does reflect the cultural awareness in the company over CRM.
However, the game changes for IBM with their SugarCRM partnership, which is, beyond their late 90s early 2000s Siebel practice, the first “pure” CRM play that IBM is making. IBM senior management is well aware that a crucial component of social business – whether transforming the company or selling it, is Social CRM – an unavoidable component of a social business strategy and certainly a must have to a social business offering.
SugarCRM is almost the perfect choice for IBM and in meetings with both Larry Agustin, CEO of SugarCRM, Clint Orem, CTO of SugarCRM and Sean Poulley, in charge of all cloud initiatives for IBM – and this relationship – I could see that they not only understood it both ways but were quite pleased about it.
The reasons? From the standpoint of IBM (since, to be fair, this is about IBM primarily), they are not incorporating a CRM application but a flexible CRM platform. They are partnering with a company that does understand Social CRM and has, in its recent releases (particularly 6.1) incorporated social elements that allow developers to create social functions and users to use social channels. They are also partnering with a company that has a hankering to go upstream and is starting to see more and more enterprise level business in their pipeline – something not the case in the past.
Because the platform is flexible, this gives IBM the chance to develop a Social CRM solution offering based on what would be the SugarCRM platform that still could be uniquely customized to their own specifications. The intent to do something like that seems to be there. The first tentative step to indicate that was announced last week with the integration of SugarCRM with LotusLive, IBM’s calendaring and scheduling application.
One BIG cautionary note though. When presented on the stage at Lotusphere, the calendaring and scheduling aspects related to SugarCRM were presented as if this was the package that SugarCRM was providing. That is a SEVERELY limiting message and the wrong one to send to the public and even to the rather techno-focused Lotus Notes crowd. Don’t start by making SugarCRM out to be an addin to create a more robust Lotus Organizer-like PIM application – which is exactly how it came across.
This is a significant alliance with a lot of upside for both companies. It gets IBM into the CRM game much more so than Unica and SPSS alone could do. It allows SugarCRM to start entering the enterprise world with a pretty hefty champion at their side – and might help SugarCRM overcome some of the issues that they have to deal with when it comes to market presence.
But tread carefully, both. Its at the delicate stage and how it gets positioned now is perhaps as important as the alliance itself.
The Messages: IBM as a Fortune 500 Company, Not Vendor
In order to truly understand what is most important here, its not that IBM is turning Lotus from a development platform to a collaboration development platform to a social business vendor. You HAVE to get out of that head. This is IBM as a Fortune 500 company making a transformation from a traditional business to a social business – and with that goes all the difficulties of a company that made roughly $100 billion in revenue on its 100th birthday (hope I can do that on my 100th) attempting to make this change will engender.
This is an earth-shaking move because no company on the planet is trying to change this quickly at this magnitude.
IBM’s messaging justifies their move in technological terms with three Is:
- Instrumented: Smartphone shipments will outpace PCs by 2012.
- Interconnected: Social networking now accounts for 22% of all online time.
- Intelligent: The age of the zettabyte is upon us.
They see this in terms of what it means for workplace performance, customer interaction (yes even here) and product/service delivery. They see that these numbers – all supplied by IDC by the way – mean that the world is moving to an untethered form of social connectedness that is not only a revolution in how we communicate but also is unleashing a vast amount of “natural” (unstructured) data in the form of conversations among other things into the ecosphere – so much that we have to figure out not just how to store it but how to use it in ways that are productive in business. Thus the need for transformation of the company to figure out how to make each of its 400,000 employees a useful part of the efforts to drive business for and at IBM.
That’s why IBM is reorganizing their business units, changing their corporate culture, empowering all their employees through the internal Social Business program, reorganizing some of their compensation schemas so that they fit the metrics, benchmarks, KPIs that meet the grade for a social business and evangelizing this approach at every opportunity to their employees, partners, suppliers, vendors, customers and the general public. Its why they are changing their messaging and verbal/physical cues to something more closely aligned to their Smarter Planet initiatives. Its why they are taking the “social” part of “social business” more seriously than ever with programs that send selected IBM members on missions of mercy with no direct business value or ROI needed except that it needs to be a good thing for the world (I apologize, but I can’t remember the name of the program). In other words, this is perhaps one of the largest – and in my mind – most significant undertakings of any company in the 21st century. IF you can separate IBM the company from IBM the vendor.
Now, needless to say, you can’t totally do that. In fact, the reason that IBM is making this kind of transformation is that they are committed to social business as their vendor offerings too. These are less substantially structured at the moment. We know that there is Lotus Connections and the entirely separate Customer Experience Suite and dozens of products and services associated with the Smarter Planet initiative and dozens of products and services associated with pretty much everything else in the universe. But, to risk being repetitious and boring, there isn’t a Social CRM offering or CRM offering yet – though one can argue that the Customer Experience Suite skirts the edges. There is no integration between the Customer Experience Suite and Lotus Connections. There are social analytics products that are being released and several dozen other analytics products – those extended from SPSS and Coremetrics in particular.
But there is no Social Business Suite yet that is clear and differentiable in the IBM offerings. Nor have a number of things in the IBM organization, culture and infrastructure been changed yet. BUT – don’t be a naysayer – this is a HUGE transformation and will take time – so expecting it to be 100% perfect and smooth is ludicrous – the word meaning ridiculous not the hip hop superstar.
For example, one program undergoing change but not there yet, and near and dear to my heart, is the analyst/journalist/blogger/influencer program. Analysts and press (traditional) were treated differently at Lotusphere than bloggers when it came to resources. Bloggers got far better resources. Not a good move. There were some highly influential analysts there who had no power and no good connectivity and thus IBM lost hundreds if not thousands of tweets because the influential analysts couldn’t tweet – and IBM lost some good will in the bargain. Minimally, treat ‘em the same. Also, as IBM makes a transformation from the traditional Big Blue to Social Business, they need to take a fresh look at who the influencers in that world are. There were an INCREDIBLE number of social business, CRM etc. influencers not there and not even invited. Big error if IBM wants to assert thought leadership – or interact with thought leaders.
I could go on but you’d be bored – actually, so would I – so I’m not going to take it further.
What IBM Needs to Do
So what does IBM need to do – at least from my very customer facing perspective – in the next several months? Here goes:
- They need to develop a perspective on Social CRM and CRM. Social CRM is the customer facing component of Social Business and can’t be ignored. That means establish some thought leadership in the area using their brilliant Institute for Business Value (IBV) for the market research, develop the messaging consciously (unlike the unconscious version unveiled at Lotusphere), and align their market offerings with the perspective.
- They need to change the influencer program significantly – the difference between analysts, press, bloggers etc. is getting murkier every day – and its better suited to be called not PR and AR but have a single IR group. They need to bring forward the Social influencers – most of whom weren’t there.
- They need to get their messaging less scripted and more authentic – they are undertaking a massive effort that at the core will impact global business beyond them if they succeed. But one of the principles of Social Business is authenticity. There were a significant number of times where the message seemed too scripted – up to and including asides in some of the speeches – and thus didn’t carry the necessary feel of “truthiness.” It was much more like hair with mousse and gel than just well combed far too frequently.
- Some of their messages were off – see my reference above to SugarCRM “the calendar app” or saying things like “we even can access external social networks like Facebook and Twitter” as if this is something extraordinary and unique, rather than just table stakes in the social business world. Everyone does that. Drop the “even” (said more than once)
- They need to make sure that the technology offerings – solution offerings for Social Business including Social CRM appear before 2011 is over. The competition is revving up their social business engines and Social CRM is a big part of their approaches. Native Social CRM isn’t going to happen with IBM – so find whatever other partners you need to put it together – though with SugarCRM that may not be a very large number – and make it crystal clear and available by 2011 year end. Additionally, find a way to provide an integrated approach to Lotus Connections and the Customer Experience Suite.
Regardless of the holes, the raw spots, and the occasional skewed message, this is not only a commendable undertaking but an earth-shaking, ceiling-shattering one. IBM is doing something unprecedented for a business here. Because they have the ability to see the long term view of things – and prize continuity – I think that they’ll succeed where others may not even try. But they need to compete in the market too, which I presume is why they are making the transformation. While their competitors are not making the cultural transformation that IBM is nor do they think as long term, they still are building competitive products, services and tools. They too, understand that the world is dramatically changed. They’re moving fast so IBM is in the position of a company that sees long, and has to move fast while its in the midst of a massive, dramatic and important transformation.
An unenviable task. But, if anyone can do it, its IBM and for that I salute the attempt. Next step. Prove it works. Not gonna be easy, but I’m saying that they are more likely to make it successful than not. Which is more than I’d say about any other company attempting to do what they are.
Hope I’m right. But its not up to me.