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Developing & Measuring Open Leadership Strategies

Part 2 of four part series about the ideas in the book "Open Leadership" by Charlene Li. Presented on May 7, 2010. For more information about the book, visit open-leadership.com.

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Developing & Measuring Open Leadership Strategies

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  1. 1 Developing & Measuring Open Leadership Strategies Charlene Li Altimeter Group May 7, 2010 #openleader

  2. 2 Determining how open you will be CMO: We need a blog and Twitter strategy. VP Customer Service: We’ll just complaints. VP Product Development: But we need feedback and new ideas to beat the competition. VP Sales: Competitors will steal the ideas and unhappy customers. CMO: With reviews, we’ll know what’s wrong and can then fix it. CEO: Negative reviews will kill sales. VP Biz Dev: Dell does this CEO: We’re not Dell. © 2010 Altimeter Group

  3. 3 Social technology forces you to be open When people get what they need from each other “How open do I need to be? © 2010 Altimeter Group

  4. 4 Open Leadership Having the confidence and humility to give up the need to be in control, while inspiring commitment from people to accomplish goals How to give up control, and be in command © 2010 Altimeter Group

  5. 5 Steps To Create Your Open Strategy 1. Identify a strategic goal to address. 2. Put in place learning systems to support that goal. 3. Determine which open-driven objective can help the most. 4. Gauge the need to be open. 5. Gauge your ability to be open. © 2010 Altimeter Group

  6. 6 Align openness with strategic goals Examine your 2010 and 2011 goals Pick one where open and social can have an impact © 2010 Altimeter Group

  7. 7 Four goals define your open strategy, but always start with learn Dialog Learn Support Innovate © 2010 Altimeter Group

  8. 8 Open learning adds to traditional tools Focus groups Open Learning Ethno- graphics Customer surveys Employee surveys © 2010 Altimeter Group

  9. 9 Open learning adds to traditional tools Focus groups Ethno- graphics Monitoring Tools Open Learning Employee surveys Customer surveys © 2010 Altimeter Group

  10. 10 Learn with basic monitoring tools © 2010 Altimeter Group

  11. 11 Open learning adds to traditional tools Focus groups Ethno- graphics Monitoring Tools Open Learning Employee surveys Customer surveys Listening communities © 2010 Altimeter Group

  12. 12 Community insight platforms » Communispace Networked Insights Passenger Umbria © 2010 Altimeter Group

  13. 13 Open learning adds to traditional tools Focus groups Ethno- graphics Monitoring Tools Open Learning Real-time analytics Customer surveys Employee surveys Listening communities © 2010 Altimeter Group

  14. 14 Understand who that person is – in real time Service Cloud w/social LinkedIn in Lotus Notes © 2010 Altimeter Group

  15. 15 Listen so you can respond appropriately Is “lkilpatrick” an elite customer? © 2010 Altimeter Group

  16. 16 The value of open learning Traditional Learning Days and weeks Open Learning Speed Minutes and hours Scale Thousands Millions Costs $$ to $$$ Free or $ Distribution Market research All employees © 2010 Altimeter Group

  17. 17 Calculating the value of open learning Description Benefit Reduce the cost of focus groups - Assumes 12 sessions @$5K each Real-time insight generation - One extra product per year - Avoid a big mistake, cost savings from not doing a campaign Alignment for a strategic goal - Reduce training classes - Increase employee buy-in, morale, retention -- Strategic partners develop solutions Total benefit Total cost Net benefit Return $60,000 $100,000 $25,000 $160,000 $200,000 $250,000 $795,000 $410,000 $385,000 94% Spreadsheets online at open-leadership.com © 2010 Altimeter Group

  18. 18 What’s hard about open learning?  Finding the signal in the noise. • Analytics are still in infancy stages.  Insights are not always representative.  Distributed, open learning threatens the market research department. • Example: CEO keeps repeating “insight” from a single tweet or blog post.  Market research reasserts its authority by being the enabler of open learning. • Aggregate and distribute with speed • Analyze and distill with deeper insights. © 2010 Altimeter Group

  19. 19 Dialog with your community Dialog Learn Support Innovate © 2010 Altimeter Group

  20. 20 Blogs establish thought leadership Richard Edelman has been blogging since 2004. © 2010 Altimeter Group

  21. 21 DellOutlet drives sales with Twitter © 2010 Altimeter Group

  22. 22 Kohl’s has conversations on Facebook © 2010 Altimeter Group

  23. 23 Engagement Pyramid: Focus on Watching and Sharing Curating Producing Commenting Sharing Watching © 2010 Altimeter Group

  24. 24 Engagement Pyramid Data United States United Kingdom South Korea Brazil Curating <1% <1% <1% <1% Producing 26.1% 53.1% 52.7% 21.1% Commenting 34.4% 76.2% 54.0% 31.9% Sharing 63.0% 64.6% 79.3% 61.8% Watching 78.1% 89.3% 89.3% 78.9% Source: Global Wave Index Wave 12 Trendstream.net, January 2010 © 2010 Altimeter Group

  25. 25 Engagement scores of 100 top brands +18% revenue +15% gross margin growth +5% revenue +3% gross margin growth +10% revenue +1% gross margin growth -6% revenue -11% gross margin growth Source: EngagementDB.com © 2010 Altimeter Group

  26. 26 Calculating the value of open dialog Description Benefit Increased revenue -$3 million incremental revenue (10% profit) - Deeper engagement with customers Increased awareness -Advertising equivalent (5M impressions at $10 CPM) Improve reputation of the organization -Negative sentiment reduced from 25% to 10% and reduces customer churn Avoid potential PR blowup - Assumes cost of $250,000 in lost revenues Hire better people Scale engagement Improve SEO Total benefit $300,000 $100,000 $500,000 $100,000 $250,000 $400,000 $500,000 $500,000 $2,650,000 Total cost $150,000 Net benefit $250,000 Return 1,867% © 2010 Altimeter Group

  27. 27 Help your members support each other Dialog Learn Support Innovate © 2010 Altimeter Group

  28. Solarwinds uses community for call deflection and product development © 2010 Altimeter Group

  29. 29 Comcast made support proactive with indirect deflection Took 3 minutes to notify entire system of off- air channel © 2010 Altimeter Group

  30. 30 Cisco supported employees with open collaboration and social platforms © 2010 Altimeter Group

  31. 31 Calculating the value of open support Description Benefit Call deflection - 10% of 100,000 calls/year at $10/call Identify support problems in advance (indirect call deflection) - Notify customers ahead of time Greater employee productivity (fewer emails, find experts, fewer meetings) -Get back two hours/week - Cost avoidance because employees find solutions Better employee moral and commitment - Lower employee churn, reduce recruitment costs Total benefit Total cost Net benefit Return $100,000 $100,000 $600,000 $200,000 $200,000 $1,200,000 $300,000 $900,000 300% © 2010 Altimeter Group

  32. 32 Innovate with customer feedback Dialog Learn Support Innovate © 2010 Altimeter Group

  33. 33 Dell’s IdeaStorm measures the health of its community, not value of ideas 13,000 ideas 389 implemented (11/month, 3% of all ideas) Metrics used: -% who comment - quality of ideas - rate of Dell’s response to ideas © 2010 Altimeter Group

  34. Starbucks involves 50 people around the organization © 2010 Altimeter Group

  35. 35 P&G goes outside for innovation P&G made outside-in innovation a priority © 2010 Altimeter Group

  36. 36 Calculating the value of open innovation Description Benefit Diversity of designs and ideas - Results in products that sell better Innovations develop faster - Gets product to market quickly More accurate projections and predictions - Anticipates product won’t be a success, so closes it Customer& employee commitment and loyalty - Better buy-in, reduce customer/employee churn Total benefit Total cost Net benefit Return $1,000,000 $250,000 $50,000 $200,000 $1,500,000 $200,000 $1,300,000 650% © 2010 Altimeter Group

  37. The new lifetime value calculation • Percent that refer • Size of their networks • Percent of referred people who purchase • Value of purchases + Value of purchases -Cost of acquisition + Value of new customers from referrals + Value of insights • Percent that provide support • Frequency and value of the support + Value of support + Value of ideas ____________________ = Customer lifetime value Spreadsheets for call calculations available at open-leadership.com © 2010 Altimeter Group

  38. 38 Use metrics to help make decisions Find more fans with large networks Refers Large network Doesn’t refer Fans Refers Small network Doesn’t refer Encourage fans to make more referrals © 2010 Altimeter Group

  39. 39 Steps To Create Your Open Strategy 1. Identify a strategic goal to address. 2. Put in place learning systems to support that goal. 3. Determine which open-driven objective can help the most. 4. Gauge the need to be open. 5. Gauge your ability to be open. © 2010 Altimeter Group

  40. 40 #3 Understand how open you need to be Information Sharing • Explaining • Updating • Conversing • Open Mic • Crowdsourcing • Platforms Decision Making • Centralized • Democratic • Self-managing • Distributed © 2010 Altimeter Group

  41. 41 Determine how open you need to be to meet your goals Explaining Updating Conversing Today Where we need to be Open Mic Crowdsourcing Platform More on openness metrics at open-leadership.com © 2010 Altimeter Group

  42. 42 The Apple Factor Open-driven Objective Learn Apple’s Openness Apple closely monitors high levels of dialog for ideas, opportunity There’s already a great deal of dialog, but without Apple. In fact, customers anticipate big announcements so secrecy adds to the Apple experience. Apple support forums have many eager contributors, Apple rarely participates. Arguably already the most creative minds are inside Apple. They don’t want/need outside input. Dialog Support Innovation © 2010 Altimeter Group

  43. 43 Why Apple can afford to be less open  Brilliant engineers and designers  Charismatic CEO  Brand that its customers love and support © 2010 Altimeter Group

  44. 44 Action Plan  Define your objectives, and make sure they are aligned with your strategic goals.  Identify the most important key performance indicators already in use in your organization.  Identify open activities that support your KPIs.  Establish a baseline for your objectives and KPIs.  Optimize and adjust your KPIs and priorities. © 2010 Altimeter Group

  45. 45 Upcoming Open Leadership Webinars  Finding &Supporting Your Open Leaders • Friday, May 14th, 10am PT (bit.ly/openleaderweb3)  How Open Leaders Embrace & Recover From Failure • Friday, May 21st, 10am PT (bit.ly/openleaderweb4) © 2010 Altimeter Group

  46. 46 Summary  Focus on relationships.  Align your social strategy with strategic goals.  Support open leaders in your organization.  Be prepared for failure – you’ll encounter many. © 2010 Altimeter Group

  47. 47 47 Thank you Charlene Li charlene@altimetergroup.com charleneli.com/blog Twitter: charleneli For slides, send an email to slides@altimetergroup.com Learn more and buy the book at open-leadership.com © 2010 Altimeter Group

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