If ‘interconnected’ is the word of the century, than how can we build ‘The Interconnected Strategy’?

+ DIGITAL: Inheriting a Complex World

The Digital World is reshaping the way that brands interact with their customers. The rise of social media has laid the groundwork for the world 2.0, creating an environment where consumers can engage with their favorite brands and stay ‘connected’ from the palm of their hand. Via smartphones and portable devices, the ‘consumer,’ as they have become known, is becoming a ‘prosumer’ and beginning to shape the brand in the manifestation of their own desires. And the key enabler is the digital medium.

The implication that this has for brands is immense. The question is, where should an enterprise focus their digital resources?

The initial evolution of Digital Business has focused on two areas: eCommerce and social media.

Corporate titans like Amazon and Facebook have pioneered these digital avenues. Amazon has built an empire through the development of an eCommerce channel, leveraging technology to create supply-chain efficiencies and cut costs. While Web 2.0-giant Facebook has risen to prominence by creating an advertising platforms based around social interactions.

The question is, does generating eCommerce sales and getting a few thousand Likes really shift the customer experience?

In some ways yes, but in many ways no. Because for many they are still focused around the monetization of customer interactions, and not the experience. At the core, brands are facilitators of experiences and act as a proxy between the customer and a specified outcome. The problem for many of today’s companies is that they view themselves as the owners of these experiences, and are thus constantly stuck in a mode of trying to sell.

What the digital medium is doing is transforming the dialogue from a one-way message to a two-way conversation. The conversation itself is becoming the centerpiece and reshaping the way brands are perceived. This is the beginning of something big.

Businesses need to wake up to the fact that customers want more. Deliver a great experience, make a positive impact in society, and provide the means to engage – this is the new baseline. In today’s world, customers are looking to build a connection rather than simply engage in a transaction.

That’s why the Interconnected Strategy is the new strategy for doing digital business.

Rather than trying to build online channels and networks to push products and scale promotions, the focus should be on connecting. While Likes on Facebook or Followers on Twitter can have some significance, that is not where the real focus should be.

What matters is the quality of engagement. The sharing, the participation, the conversation – in the long-term, those are the qualities that will define a brand.

So what does a company need to build the Interconnected Strategy?

Website

Given that it is 2013, pretty much every company at least understands now that a having website is essential. But what should the website have?

That, of course, depends on what type of message and image the company is trying to convey. But there are a few essential points to focus on:

  • the site should be responsive – adaptable to any device – so that visitors can comfortably read and engage with the content from mobiles phones, tablets and laptops;
  • the site should look active; rather than being a one-way ‘look-at-us’ website, there should be the feeling of some ongoing conversation – ideas include a blog, special content features, podcasts, or video features;
  • the site should focus on communicating and conveying the essence of the brand. There doesn’t need to be any digital ‘bells and whistles’ to show how avant garde the company is, the beauty is in the simplicity and execution of the essentials. Make the site design driven, rather than digitally driven.

Video Networks

A Like, a Follow, a PIN – these are great, but they are passive actions.

The real movement behind a brand happens through word of mouth, people need to be talking to a brand in order for it to build traction.

However, in a world where everybody has a connected device and network connectivity is becoming omnipresent, customers no longer need to be physically present to connect with a brand.

While Skype was the pioneer, new services such as Google Hangouts enable brands to take video chat to a whole new level. Via Google Hangouts, companies can chat with up to ten people simultaneously. And here’s the kicker, it’s free.

The power of real conversation has not diminished because of ‘social media,’ if anything it has increased. One expert estimates that only about 7% of word of mouth happens in these social-media channels.

eCommerce

A decade after the Dot-Com Bubble, eCommerce is finally starting to blow up. But it is an area that is very poorly understood by most companies. Why?

Because it is not like traditional retail and there is no instantaneity to it. It requires an investment of time and resources, along with a little experimentation.

But the eCommerce channel is essential to The Interconnected Strategy because a great eCommerce strategy will help hurdle over geographical boundaries and tap into new markets globally.

Earlier this year, we talked about a few companies who are doing this really well in our ‘Collaborative Commerce’ post.

+ DIGITAL: The Advent of Collaborative Commerce

The key is to build both the eCommerce framework, and the strategy to move customers there. Now that customers are engaging from mobile and tablet devices, the whole process needs to be thought through comprehensively.

It takes thorough research, planning and time, but eCommerce is the essential cornerstone to The Interconnected Strategy because it provides companies with a mechanism to SHIFT their business model and open new market boundaries.

Overall, the world of business is changing rapidly and the digital domain is the new frontier. While entering the fray with a traditional business mindset may bring in a few Likes and eCommerce sales, companies of the future realize that customers want more and that the real power lies in connections and conversations. That’s why ‘interconnected’ is the word of the century.


+ BMBreakdown: ETSY
+ Time For BMi


PLAN – the Business Model

We live in a complex world, the days of black and white decision-making are over. And while there is little doubt as to whether or not that complexity exists, the real question is how do we deal with it. The answer to that question, as we will explore in this post, will depend on who you ask, Gen Ys or CEOs.

Back in 2010, IBM conducted a survey ‘Inheriting a Complex World: Future Leaders Envision Sharing the Planet.’ It was a global study that compared the insights from IBM’s annual CEO survey with its first ever survey of Students, over 3,600 Gen Y respondents from over 40 countries. What the study showed was that there exists significant discrepancy between Gen Y’s views and values on the world of business, and those of CEOs.

A large part of the study was dedicated to trying to understand how the different Generations will use data to aid in decision making, but a significant amount of research was also done to analyze the values and viewpoints of each group. Many intriguing insights that were shared in the three-year-old survey illustrate how there is a large Generational Gap between Gen Y and the Boomer/GenX-led CEO cohort:

  • in a question that asked what they thought would be the top three factors that impacted organizations:

Gen Y placed a much higher weight on ‘Globalization’ and ‘Environmental Factors’ than the CEOs

  • in a question that asked what they thought would be the top three leadership qualities:

While both placed creativity at the top of the list, Gen Ys placed much greater importance on ‘Global Thinking’ and ‘Sustainability.’

Fundamentally, the biggest difference between the two groups is that Gen Ys are born with a natural understanding that the world is interconnected:

Thus they recognize that the decisions made by a company cannot be calculated in a vacuum and measured only against shareholder wealth creation. The externalities (social, environmental and cultural) must also be taken into account and calculated.

What makes this report so interesting is that the qualities described by those in Gen Y are much more conducive to the #NewEraBiz. At the top end, this means creating global companies that generate profits for all stakeholders, act in the best interests of society, and focus on creating genuine relationships with customers rather than viewing them exclusively as profit centres.

To reach this level will require a new methodology of leadership, one that fosters creativity, harnesses collaboration and empowers employees.

The kicker in this situation is that both groups do not have equal opportunity. The CEOs are the ones with the power, who make the decisions and control the companies that drive our respective economies. Very little has actually changed in the world of business over the last three years at the top level, despite the new ethos that Gen Y brings to the table.

Furthermore, it’s been a pretty great last few years for Banks and Fortune 500 Companies. Profits are up, market share is increasing, and governments have given them access to ‘free’ money.

Gen Y’s, on the other hand, have seen their fortunes heading in the opposite direction. Youth Unemployment is skyrocketing past historic levels in countries all over the world, while many youth who are employed work for organizations that run counter to their beliefs. This generation has even been labeled by some as the ‘Lost Generation’ to reflect the loss of hope and disparity being seen by young graduates.

The real problem is that many Gen Ys are beginning to come to the realization that they will be the ones who are forced to resolve and clean up these problems being created by reckless businesses. One on side, this can be viewed as a great opportunity, but on the other side it is infuriating to witness the destruction from the sidelines.

Thus as Gen Y gets ready to ‘Inherit a Complex World,’ the question becomes when will ‘Future Leaders’ get the opportunity to put their talents to the test?

At a moment in history when many businesses are beginning to face an existential crisis, and reaching the crossroads where they realize their path is no longer sustainable, it’s time to focus on interconnectivity and sustainability as the drivers of future commerce. For the young Generation, who are born with an inherent understanding of these concepts, the golden opportunity to step up and grab the reins has arrived.

And while an awareness and inherent understanding of these concepts may not generate results in the next quarter, they can be used to drive long-term strategies that will enable businesses to survive the transition and thrive in a complex world. It’s part of the move to the #NewEraBiz and will open up a new array of paths for global business in our interconnected world.

How do you think we can bridge the Generational Gap between Gen Ys and CEOS?


+ BMBreakdown: ETSY
+ Time For BMi


PLAN – the Business Model

One of the newest buzzwords floating in the business ecosystem these days is ‘social commerce.’ Now that Facebook, Twitter and other large social platforms have reached critical mass, marketers and execs are starting to see the big opportunity to start selling their products through these networks. While there is no doubt that ‘social commerce’ has the potential to redefine e-commerce, the real potential lies in what we will call ‘collaborative commerce.’

The dawn of the new ‘Collaborative Economy’ is upon us. While there are many adjectives being thrown out there to describe this big economic shift (New, Sustainable, Sharing, Creative … Economy), at the core of the movement is a drive to collaborate across the business ecosystems and bring the next generation of big ideas to life. Perhaps there is no bigger indication of this movement than the advent of crowdfunding, which in the space of a few years has already began to reshape the entire financial landscape.

Late last year, we travelled through Spain to research elements of this new ‘Collaborative Economy.’ The most interesting part of the research process was seeing how different entities were coming together to form a more cohesive and fluid business ecosystem. When you combine crowdfunding platforms / collaborative consumption portals / community hubs, the whole framework for conducting commerce starts to shift. Rather than being driven by competition in a top-down fashion, commerce is being initiated by the community from the bottom up based on real needs.

+ The Collaborative Economy – Inspiration from Spain

In that light, we start to look at the possibilities enabled by ‘collaborative commerce.’ As these entities start to solidify themselves in the ecosystem and the networks develop, those networks become markets and the communities themselves will be driving commerce through them. And it’s not going to be the big platforms (ie. Facebook and Twitter) that drive all these transactions, although they will play a part in it, but the most cohesive platforms (mainly niche) that build the tightest community interactions.

A recent article on Social Media Today sheds more light on this trend. The leaders in ‘Social Media Marketing and Commerce’ were small and mid-sized web-only merchants, many of whom were new in the space; but they all shared one thing in common, they put social media at the forefront of their business strategy. It wasn’t big-budget marketing that drove these transactions either, but a sincere focus on developing real relationships with customers through social channels. Fab.com is considered the darling in this space, where 50% of the site’s membership registration comes from social media.

Beyond just the SME’s, artisans and merchants are also joining in, as can be seen by Etsy’s fantastic fiscal performance last year. In 2012, sales for the company were up 70%, new buyers increased 83% and there were 10M new members. Etsy allows such artisans and small merchants to create micro e-commerce stores to sell their products online and has built a loyal and diligent community to help protect the integrity of the listed products.

These examples are not simply an anomaly or the result of hyped-up advertising, but rather they represent part of a much bigger movement towards a more social and collaborative way of doing business. As we are now starting to see a new era of businesses that are being built from the ground up using social technologies (ie. crowdfunding, social media), these community-driven enterprises will continue to expand their social presence in order to drive sales. From the small baker on the corner to the upstart technology company downtown, the way commerce is conducted is being radically redefined as part of the advent of the Collaborative Economy.

And what do the numbers look like?

From this video, Pinterest : The Future of E-Commerce, the following data was revealed about the average order size generated through each of the following social networks:

As a further example, it was reported that consumers who were referred through Polyvore, a community of young stylistas who create and curate personal style collections (Lookbooks), had an average order size of $220. Bringing together a cohesive online community on a clean, vibrant platform is a lethal combo these days.

Overall, the ‘Collaborative Commerce’ trend signals that the pieces are fully in place for anyone to start empreending (see post The Reason to Empreender – Impact). The new era of business is about creating enterprises that work together in tandem to drive commerce that matters. Instead of buying a cheap product from Asia, people can start to buy great products from the people they know the best and reestablish trust in the business environment. Technology has enabled the connections to occur, now it’s time for the next generation to capitalize.


+ BMBreakdown: ETSY
+ Time For BMi


PLAN – the Business Model