00:00:01
[Music]
00:00:08
[Music]
00:00:20
Barry, thank you so much for joining us
00:00:21
today.
00:00:22
Thanks for having me today.
00:00:23
As we know, Brian Dunn, the CEO of Best
00:00:26
Buy, resigned. What does this show about
00:00:29
the role of social media and its ability
00:00:32
to affect corporate life? Very simply,
00:00:35
networks, including social networks that
00:00:37
include customers and employees, are
00:00:39
gathering strength relative to
00:00:41
organizations. And believe it or not, as
00:00:43
they gather strength in the marketplace,
00:00:45
they create real risk for enterprises
00:00:48
and in many shapes like Best Buy, they
00:00:50
take them down and destroy their
00:00:52
business model.
00:00:54
There have been other examples as well,
00:00:55
right? And Best Buy was hardly alone.
00:00:58
What were some of the other recent
00:00:59
examples of this type? Well, my favorite
00:01:01
one is Encyclopedia Bratannica that had
00:01:03
been around for 244 years. It only took
00:01:06
Wikipedia about 11 years to destroy a
00:01:09
business that had been around for 24
00:01:10
almost 50 years. And so that's another
00:01:13
good one. But there's so many now.
00:01:14
There's Kodak, there's Best Buy, there's
00:01:17
Borders, Susan G. Kman, and the list
00:01:20
goes on where the social networks now
00:01:23
have much greater power than the
00:01:24
businesses that serve them. You know,
00:01:26
there was also recently the example of
00:01:28
banks which had imposed some fees and
00:01:30
and it was a virtual onslaught of social
00:01:33
media outrage that forced them to roll
00:01:36
back their decision. If you take all
00:01:38
these things together, what are some of
00:01:39
the lessons that companies should be
00:01:41
learning from these experiences?
00:01:42
Well, I think risk is the first one as
00:01:45
should as reward. Let's talk about risk.
00:01:47
In the days in which you and I grew up
00:01:49
as a business leader, it was clear that
00:01:51
execution was about and operations was
00:01:53
about what we did. But the first lesson
00:01:55
I think organization have to realize is
00:01:57
that the risks live outside the
00:02:00
organization because that's where the
00:02:02
power is in the network and in the
00:02:04
social communications. That's rule
00:02:05
number one. And rule number two I always
00:02:07
say is you have to embrace that risk or
00:02:09
you have to embrace those social
00:02:10
networks if you want to prosper in a
00:02:12
sociallyorked world.
00:02:14
So what are the implications for
00:02:15
companies when risk resides outside
00:02:18
rather than within the organization?
00:02:19
Well, I think that's a great question.
00:02:21
Currently, organizations be boards and
00:02:23
management teams are organized and
00:02:25
oriented towards inside data, financial
00:02:27
data, sales data, marketing data. That's
00:02:29
internally focused data and they're
00:02:31
trained operationally to be sales
00:02:33
executive, a marketing executive, a
00:02:35
finance executive. I think people have
00:02:37
to start thinking externally. They have
00:02:39
to build brand new skill sets. And so I
00:02:41
think the first thing I have to do is
00:02:42
begin to gather large amounts of data.
00:02:44
It's called big data, customer
00:02:46
sentiment, and employee engagement. and
00:02:48
get comfortable thinking about that's
00:02:50
the data I need to make good decisions
00:02:53
and
00:02:53
companies are not uh the only ones that
00:02:56
are vulnerable as we saw during the Arab
00:02:58
Spring a number of uh governments also
00:03:02
uh toppled because of u social media uh
00:03:06
do you have any sense of what actually
00:03:08
drives some of these social media
00:03:09
uprisings
00:03:11
I think for a long time we all have been
00:03:14
waiting for a voice um you know it
00:03:15
wasn't more than a decade or so ago know
00:03:17
that Thomas Friedman wrote the book the
00:03:19
world is flat but he was thinking about
00:03:20
it physically he wasn't thinking about
00:03:22
once the world becomes flat you and I
00:03:24
can connect digitally and so although he
00:03:26
was saying that India and America
00:03:28
connected from an outsourcing
00:03:29
perspective he wasn't thinking
00:03:31
crowdsourcing and open sourcing and
00:03:33
virtual sourcing so once the world's
00:03:35
digitally collected and connected all of
00:03:38
a sudden countries and city states and
00:03:40
religions become subject to I want to
00:03:43
say people's desires to be connected
00:03:46
regardless of their country and city
00:03:47
state and therefore countries like the
00:03:49
Arabs and other countries that rule like
00:03:52
that will fall to the basically these
00:03:54
new ways of thinking.
00:03:55
But if you if you push a little harder
00:03:57
on that same theme, uh the connections
00:04:00
always exist, but every once in a while
00:04:03
there's something that sparks an
00:04:05
uprising of this sort. Something goes
00:04:07
viral.
00:04:08
What what what sparks these uh these
00:04:11
waves and uh what sustains them?
00:04:14
Well, I think they've always existed.
00:04:16
remember the old French revolution and
00:04:17
basically people said let them eat cake
00:04:19
right well there's a big difference
00:04:21
today um and I always say I carry my
00:04:24
weapon of mass destruction I along with
00:04:26
you and this is my WMD and as long as
00:04:29
there's a billion of us carrying social
00:04:31
networks and five billion people
00:04:33
carrying one of these things then what
00:04:35
happens is as as long as you and I begin
00:04:37
to agree that the leader is not serving
00:04:39
us which is the important part serving
00:04:41
your constituents not serving yourself
00:04:43
then an uprising becomes viral role in
00:04:46
today's world and somebody sparks one of
00:04:49
these things which is called Twitter and
00:04:51
Facebook and LinkedIn to begin to
00:04:52
realize I feel the same way you do and
00:04:56
let's work together to change the
00:04:57
leadership.
00:04:58
So I mean you you brought up a really
00:05:00
good point you referred to Facebook and
00:05:02
Twitter and and and generally speaking
00:05:05
uh people use uh social media in a
00:05:07
generic way to refer to these platforms.
00:05:10
Uh now addition to th to those two are
00:05:13
there any other social media platforms
00:05:15
that you think that companies should be
00:05:17
paying attention to?
00:05:19
Absolutely. So all all the people talk
00:05:21
about those two there's so many there's
00:05:23
so many exciting ones. Everything from
00:05:25
Dropbox which is a way to store data to
00:05:27
Evernote to how do you share information
00:05:30
to Pinterest which is how you build
00:05:31
brand relationships. I'm only talking
00:05:33
about America. You and I had a
00:05:35
conversation about one in China
00:05:36
yesterday. There are social networks
00:05:38
everywhere. So what's happening is
00:05:40
although people see Facebook and Twitter
00:05:42
as sort of the leaders, these are very
00:05:44
powerful movements that are using
00:05:46
today's technologies to connect our
00:05:48
interests.
00:05:50
Why are companies and their CEOs often
00:05:53
so reluctant to recognize the growing
00:05:57
impact of uh social media?
00:06:00
I think two reasons. One is we all have
00:06:03
been trained to look inwards to build
00:06:05
operational components I would say and
00:06:07
greatness which is in search of
00:06:08
excellence re-engineering the
00:06:10
corporation. So their skill sets lie
00:06:12
inwardly focused. The second reality is
00:06:17
these outside networks are
00:06:18
uncontrollable. They're self-organizing.
00:06:20
They flare up and they calm down. They
00:06:23
organize and they disorganize. And so
00:06:26
they're not controllable. They're
00:06:27
individual in their nature but connected
00:06:29
collectively. And so leaders have not
00:06:32
been taught and do not understand how to
00:06:34
embrace this new way of acting with a
00:06:36
network as powerful as these. And it's
00:06:38
not just the consumer networks. It's
00:06:40
true in the financial networks. They're
00:06:41
called electronic trading funds and
00:06:42
ETNs, electronic trading networks. They
00:06:44
do risk on and risk off in the moment.
00:06:48
Assuming a company figures out how to
00:06:51
embrace the network,
00:06:53
how can a company use them for positive
00:06:56
outcomes?
00:06:58
I think um whether it be investors,
00:07:00
partners, customers or employees, the
00:07:02
networks want to be embraced. They want
00:07:05
to feel just like you and I do cared
00:07:07
for. They want to know that you're there
00:07:09
to serve them. That governments are in
00:07:11
the business of serving others, not
00:07:13
serving themselves. So once companies,
00:07:16
countries, and industries really go back
00:07:19
to the basics, how am I going to serve
00:07:21
the people that I'm responsible for? I
00:07:24
think the networks will feel cared for
00:07:25
and they'll embrace the people that
00:07:27
serve them. So, it's a change in mindset
00:07:29
because my view is these networks want
00:07:32
to be heard and as soon as they're
00:07:33
heard, they're going to basically act on
00:07:35
behalf of the organizations.
00:07:37
In practical terms, how do you actually
00:07:39
embrace a network?
00:07:40
You let them have a voice in your
00:07:42
business. You let them help you design
00:07:43
your products called crowdsourcing. You
00:07:46
help them deal with your customer
00:07:47
service problems. You even help them
00:07:49
design like Doritos does um their
00:07:52
marketing programs. you make them a part
00:07:54
of your business, not just a marketing
00:07:56
outlet for your business.
00:07:58
So, we talked earlier about companies
00:08:00
that haven't done such a great job in
00:08:02
recognizing the power of uh of of social
00:08:05
media. What would be some contrary
00:08:08
examples? You referred to Doritos, but
00:08:10
are any companies doing a good job in
00:08:12
leveraging social media?
00:08:14
Absolutely. Um Nike has done a
00:08:15
spectacular job and there's some great
00:08:17
research about it. They've reallocated,
00:08:19
which is important, 800 million of their
00:08:21
traditional advertising budget. And they
00:08:23
did something very simple. They
00:08:25
allocated it, as they said, to where
00:08:27
their customers are. They allocated it
00:08:29
to mobile devices, to social
00:08:31
interactions, to crowdsourcing. And let
00:08:34
me give you simple examples. They
00:08:36
literally embedded, as you know, mobile
00:08:38
device in your sneaker. They now have a
00:08:40
wristband that my son wears that allows
00:08:42
you to keep track of how much running
00:08:43
and how much weight you lose. And you
00:08:45
can socialize that with your friend. and
00:08:47
they let you keep track of how many
00:08:48
miles on the courses you run. They're
00:08:51
really taking their product and making
00:08:53
it part of your life both on a social
00:08:56
and physical basis. So they reallocated
00:08:58
their capital and they doubled their
00:08:59
revenues while they cut their cost in
00:09:01
doing that.
00:09:03
Uh well, one final question, Barry. U
00:09:06
what advice would you give CEOs and
00:09:09
corporate boards about how what are some
00:09:12
of the two or three things they need to
00:09:14
be doing with relation to uh harnessing
00:09:17
the positive power of networks and
00:09:19
social media?
00:09:20
Well, I think it's a basically a
00:09:22
four-step process is one and I'm going
00:09:25
to call the process called care. Take
00:09:26
care with what you do. One is create
00:09:29
relationships with these networks
00:09:31
because they are existing and they're
00:09:33
growing exponentially and they're larger
00:09:35
than countries and companies. Now two is
00:09:38
begin to add which is the second letter
00:09:40
of kitten care add their competencies
00:09:43
their insights to your product and
00:09:46
service offerings. Three hard to believe
00:09:48
this I think you begin to need to reduce
00:09:50
the internal focus you have in your
00:09:52
organizations. Stop being focused so
00:09:54
much about what you do and more on what
00:09:56
they can do for you the way Apple's done
00:09:59
with their developer network. And
00:10:00
finally, you need to eliminate your fear
00:10:03
of them because they're here to stay and
00:10:05
there's nothing you can do about it.
00:10:07
Barry, thank you so much for speaking
00:10:08
with Knowledge at Warden.
00:10:09
Thanks for having me today.
00:10:18
[Music]
