What you say is not what you do

There is a bit of ruckus at the moment about the power of Australia’s supermarket duopoly – Coles and Woolworths.

In the past the criticism was that the two supermarket chains had too much market power – over 80% of the Australian market. That percentage probably remains the same today despite all the brouhaha about market dominance over the past decade (i.e. there were lots of protestations at all levels of the community, and a number of government inquiries, but there has been little tangible action to reduce this market dominance).

The main brunt of the criticism relates to market concentration (the duopoly has reduced competition in the market) and has too much market power on the buying side (the duopoly can squeeze suppliers to almost unsustainable levels). In addition, supermarkets can cross-subsidise their products when it suits them, thereby using their market power to artificially lower prices in “competitive” products.

In 2008 there was the Australian Competition and Consumer Commission (ACCC) inquiry into the competitiveness of retail prices for standard groceries. In September 2002 there was the Report to the Senate by the Australian Competition and Consumer Commission on prices paid to suppliers by retailers in the Australian grocery industry.

One of the interesting snippets of information from these public inquiries is that there was evidence that showed a difference in pricing at the supermarkets depending on whether the duopoly was in the one location and where the duopoly had a third supermarket in competition in the one geographic location. In the scenario where a location had three competing supermarkets, the Coles and Woolworths retail prices were generally lower than at locations where it was just Coles and Woolworths in competition. Well, as Michael Porter identified, businesses try to avoid price competition wheneve they can because it directly affects margins.

The impact on suppliers is clear enough. It was loud and clear when I worked at Rabobank throughout the first half of the naughties. I would hear how the supermarkets were screwing agricultural suppliers through reduced prices and increased compliance costs. For example, one banana producer told me that the bananas had to be packed in a box in a very specific way otherwise Woolworths would not accept delivery.

Nowadays, farmers have the same concerns but there are increasing demands from the duopoly concerning on-farm activities. Recently, one berry producer told me that having a dog on a berry farm was unacceptable because the dog may have been washed in a chemical bath that could get onto the berry fruit!

The supermarkets say that driving down consumer prices shows that a competitive market exists. Driving down the retail cost of milk to one dollar a litre makes a lot of sense if one wants to sell lots of milk but milk has a relatively inelastic demand – the lowering of the price does not necessarily see an increase in consumption. For the duopoly, however, a low price for a food staple like milk makes a lot of sense because it attracts shoppers to the supermarket rather than the corner store. If a shopper perceives the saving on milk is large enough, the shopper will alter his/her shopping behaviour to shop at the duopoly at the expense of other food retail providers and small businesses. Instead of going to the local convenience store to pick up milk and some ancillary groceries, the shopper will concentrate their total grocery shopping activity to the supermarket.  The duopoly wants consumers to stop buying any skerrick of grocery items from alternative convenience stores and grocery retailers. The milk war is less about increasing consumer demand for milk, but increasing the market power of the duopoly.

Currently, there is a lot of concern over the duopoly supermarket chains driving down supplier margins even further through “home brands” (also called private labels).  This article and this one sum up the private label issue nicely.

Everyone is out there saying how dreadful it is that the supermarket duopoly can do all these terrible things. However, the supermarket duopoly reduces prices on grocery items at the checkout for consumers (the same consumers who are equally screaming about the high cost of living).

A recent poll in the Sydney Morning Herald found that over 70% of people are against home brands because they limit variety (i.e. consumer choice). There is plenty of chatter to indicate that a similar percentage (or more) of people think that the supermarket duopoly has too much power.

But what does the behaviour say? Talk is cheap when there is no direct and tangible linkage to benefits or costs (i.e. there is no benefit or sanction as a consequence of our response to a survey or to give an opinion). A poll or a survey asks us what we think and we say so. We really believe what we say as well - Coles and Woolworths are bad.

However, it is likely that the very same people do their weekly grocery shopping at Coles or Woolworths. Mums and dads have Coles and/or Woolworths shares as an investment; either directly or via a superannuation fund. Our actions really do speak louder than words.

Whilst the supermarket duopoly is an important economic and marketing case study, the implications of saying one thing and doing another are huge. Are opinion polls really worth anything at all? The monthly tabloid treats of political opinion polls tell us the Gillard government will be wiped out if an election was held today – but it’s not. The next federal election (the real poll where an outcome actually happens) isn’t for another couple of years. Opinion and speculation are now touted as fact in the media. However, these same opinion-makers are not held accountable when the future unfolds in real-time and they are proved wrong.

If we are to make any sense of opinions linked to action, we need to actually examine the behaviours. This applies equally to marketing, economics, and knowledge management. It’s the logic behind behavioural economics, real-life behavioural research, and user experiences. Mark Hurst’s Good Experience is a good example of looking at what actually happens as distinct from what reportedly happens.  It’s the logic that we need to apply in our knowledge management research as well.

Big retail continue the whinge

The National Retail Association (aka the union for profit hungry big retail) is carping on again with their demand for the Australian government to impose a 10%  tax on online goods purchases. A report todays says:  ”Australia stands to lose 88,000 retail jobs over the next five years if the government does not begin levying tax on imported items bought online and worth less than $1000″ says the National Retail Association. The big retailers are just sooooo concerned about their staff and the potential for staff to lose their jobs. Isn’t that jolly good of them!

In reality of course, big retail is only concerned about themselves and their hungry profits. Having ripped off Australian consumers for years with over-inflated prices, baulked at providing real customer service, and completely failed to see the coming of the 21st century, the big retailers now want to keep heaping additional costs directly on the consumer.  Moreover, the high Australian dollar makes buying from overseas for BOTH the retailer and the consumer that much more inexpensive. Retail cannot face up to the fact that we live in a global village with access to a vast range of goods at various prices from around the globe.

One of the great ironies is that these same retailers are happy to source product from overseas at reduced costs. They obviously aren’t concerned about the Australian jobs lost through their offshore purchasing. Indeed, a bevy of big retailing bosses weren’t too unhappy when their businesses boomed at the expense of smaller local competition.

Like most big businesses, they don’t want the competition.  It’s easier without it.

The other self-serving irony is that it won’t be big retail paying the cost of collecting any new tax on online purchases. No, it will be us consumers again through our taxes. The government will have to pay for the cost of assessing and collecting this tax – on goods below $1000. I bet you the cost of administering the tax on my $35 book from Amazon won’t be efficient. And there’s still no guarantee I won’t continue buying from Amazon (or wherever) to get the goods I want, when I want it, and at a price I want to pay.

Changing business conditions have always occurred. The farriers and wheelwrights went out of business when the car replaced the horse and cart. Farm labour got the bullet when farm mechanisation was possible. Service station attendants got the chop when self-serve petrol pumps came into vogue. And big, fat department stores will face the wall from more competitive providers of goods who can serve customers more effectively and deliver faster.

Offsetting these job losses in industries facing rapid change have been new jobs. There aren’t too many unemployed wheelwrights and farriers any more as there won’t be too many bored shop assistants in the future. And courier companies will be looking to soak up new staff to move all these goods around. One wonders why the National Retail Association hasn’t been pushing for a carbon tax – now, that would be real progress!

Instead of blowing additional hot air, the National Retail Association would be better served by having its financial supporters actually provide proper training to staff. They could actually provide excellent customer service. They could  try new ways of  creating relationships with customers instead of treating customers like commodities. They could stop ripping off Australian consumers with ridiculous prices. But most of all, they could wake up to the 21st century and respond (which is different to react) to the new environment with a change to the way THEY operate.

Go, National Retail, Go!

Compliance over customer service

I have had an ongoing saga for two months now with UniSuper. UniSuper has a very tiny amount of my superannuation funds under management (sic). In the period I was with UniSuper they have been deducting payments for insurance without my knowledge and without my consent.

I only found out in late March when the statement to December 2011 showed my balance, eaten away by fees and insurance payments. I immediately contacted UniSuper, by phone and in writing, expressly instructing UniSuper to cease all insurance payments.  Three subsequent phone calls revealed that nothing had happened, although “your request will be confirmed within five business days”. Not.

UniSuper failed to act to stop the payments for this unauthorised insurance. They have subsequently failed to act despite additional follow-up my part over the past eight weeks. They have shown no interest in providing any form of positive customer service throughout this period.

But what happens when an official complaint is made under section 101 of the Superannuation Industry (Supervision) Act 1993? Well, I get a letter from UniSuper within a week. And guess what the letter says – it says that UniSuper has received my complaint and has 90 days in which to respond (under the Act).

What we have here is an act of compliance, not of customer service. Had UniSuper done the right thing in ceasing these unauthorised payments as I directed in April, they would have provided some level of customer service.  But no. UniSuper has not been in touch me other than to say they have received my complaint.

Well, UniSuper, I have received your letter of compliance but I am still waiting for your customer service.

Online retailing doesn’t always deliver

Hey, Gerry Harvey and the crew of the whingeing Australian retail coalition – online retailing doesn’t always deliver!

If you’ve been following the brouhaha here in Australia over online retail then you would know that some of Australia’s biggest retail behemoths have been whingeing boldly and loudly about the non-application of GST (10%) to overseas online retail below $1000 in value.

If you believed these retail dinosaurs, you’d think that online retail was a great evil attacking the very fabric of fair-faced capitalism! Nothing could be further from the truth.

As this latest article identifies, online retail has some problems that should be familiar to anyone who has spent a little bit of time understanding the phenomenon. Problems facing consumers shopping online include:

• non-delivery
• item was not what was claimed online
• privacy and security issues with internet transactions
• confusion over application of domestic consumer law to overseas purchases

One of the reasons consumers shop online is because “bricks-and-mortar” retail has let them down.  Big retail in Australia generally has poor customer service and the range of products on sale is far fewer than what is available online over the internet. The first problem is something big retail could fix but it would cost them extra money in recruitment and training, something they all want to avoid. The second problem is unavoidable due to globalisation and communications – something that has been obvious over the past 20+ years.

Rather than spend the millions of dollars on a public relations campaign whingeing about a paltry tax payment, big Australian retail could actually improve performance through good ol’ fashioned competition. They could provide better service. They could offer a wider array of products. They could lower some of their prices to be more competitive with online (still higher, but not the umpteen hundreds of per cent differences we often see now). This comes at a cost to the retail monoliths and this is the real reason why they fly the online tax propaganda.

Retail stores in Australia have a huge advantage over online:

• products are visible and tangible
• products can be bought on the spot
• there is no postage charges and overseas currency banking fees to pay
• good customer service builds consumer trust and improves word-of-mouth marketing
• Australian retail can use their own online stores to supplement their retail stores, thereby being both supportive of the business and enhancing the brand (but only if the online store actually meets consumer needs)

The trouble is, big Australian retail needs to put in some effort to compete. That’s why the CEO and Board of Directors get paid the big bucks – to work hard on strategy and operational performance. Quite frankly, I don’t see much evidence that they are willing to work hard beyond the easy fix of spending their company’s money on simplistic advertising drivel.

Online selling is here to stay

No doubt you have heard the mad ravings of big store retailers like Harvey Norman, Myers, and Borders complaining about unfair competition from online retailers.

Please note that much of their ranting fails to distinguish between online sellers in Australia and overseas, although the propaganda campaign really targets non-GST payments of overseas retailers. Mind you, Gerry Harvey has had a long-time spat with Australian online retailer Ruslan Kogan who sells televisions in direct competition to Harvey Norman. Perhaps Gerry Harvey has had it so good for so long he has forgotten what competition is all about.

The GST exemption is for goods under A$1000 in value purchased by Australian consumers overseas. At 10%, the maximum tax that could be applied is a pretty paltry A$100.

But of course most people who buy from online retail (about 2% of all retail sales)  don’t do it for tax reasons and don’t necessarily spend big. For example, I buy the odd book or CD from overseas when I cannot source the items in Australia. If  my purchases come to A$60, then the GST exemption saves A$6. I bet it would cost more than A$6 to manage the application of GST to such small individual purchases. But then, the big Australian retailers don’t have to fork out for the costs of administering the tax – the Australian taxpayer does.

The PR campaign from big Australian retail is a whinge that reflects more their lack of adaptability in the market than enything else. Business journalist Michael Pascoe sums it up here and Michael Fox here.

More fundamental to the attack by dinosaur retail in Australia on new methods of consumer shopping is the fact that consumers have far greater visibility on choice of product and price. Whereas before, Australian consumers pretty much had to take what retail offered in their stores. Nowadays Australian consumers can buy what they want and when they want from anywhere. Moreover, Australian consumers can see the different prices for the same goods from many, many different retail suppliers.

Along the same lines, but at least a dinosaur moving into the 21st century, is newspaper mogul Rupert Murdoch with his proposed Ipad newspaper. The digital newspaper will be called the “The Daily”, but the launch has been delayed slightly. Murdoch has in the past vociferously complained about news media’s failure to generate income from news on the internet. This new venture is obviously something Murdoch is pinning his hopes on for the future.

The content will be important if it is to generate big sales.  Murdoch’s News Corporation has often been criticised for right-wing bias (Fox News in the US is a classic example). It will be interesting to read the tone of the content on the digital newspaper and what that means for online sales.  If Murdoch gets his content and pricing structure right, then this will be a huge success.

One of the myths about online is the belief that people want everything for free. The massive increase in online shopping over the past five years belies this myth. The fact is that people will pay for a service or a good online (like anywhere else) when they see it delivers what they want at a price they find acceptable.

It will be interesting to watch the digital newspaper take-off in the same way it will be interesting to watch loud-mouth big Australian retail adjust to the new shopping realities brought about through online shopping. (It seems that the Australian big retail bully boys will persist with their campaign – read here. A more sensible response can be found here).

All of this will have a huge impact on online marketing and communications; a trajectory that continues to advance online media over the traditional forms of media communication.

Reflections on Web 3.0 social media conference

I have had a few days now to reflect upon what was presented and discussed at the Web 3.0 social media conference that was held in Sydney last Thursday and Friday.

The key point is that social media cannot be ignored by companies and nor can it be ignored by “marketeers”. “Marketeers” is obviously some cutesy professional term used these days to describe marketing executives or marketing departments; a noun that I find strangely childish and stupid.  But I digress.

For the organisation, social media offers scope, range, and reach to potential customers and clients. Using social media tools such as blogs, Facebook, Twitter and LinkedIn allows organisations to communicate using channels that are becoming increasingly popular. 

Mark Higginson from Nielsens reported that growth in the online sector in Australia was strong, even showing a growth in online media use from the 55-plus demographic. Moreover, in the words of Alex Crompton from Aussie (Home Loans), “It’s (social media) where the people are.” In other words, look at where your audience is and work out the best (if not all) the media channels necessary to connect with them. The online space will continue to eat into traditional advertising channel revenue as people spend more time online.

Not surprisingly, the case for social media use was strong. Not only did presenters emphasise the communication and marketing aspects, but many also told us of the importance of “community”, “engagement” and “the social” aspects of the online universe. Online brand reputation and “tribal support” are significant, as both Alex Crompton (Aussie) and Karen Ganschow (Telstra) indicated in their presentations. Products and services can be improved by using social media as a way of listening to customers, and then using the feedback to enhance the customer (and brand) experience - all good commercial sense. Generating online champions who advocate (and even solve problems) on your behalf, is even better!

Nick Love from Fox Interactive Media was confident that the internet in the near future would be totally about “the social”. Nick was so confident , that he forecast that “social” media would become redundant since the social aspects of online use and interaction would become embedded into everything that happens online. Nick referred to the “social web” as a way of explaining how pervasive the shift to social networks was becoming. Mark Higginson from Nielsen wasn’t convinced (and nor was I) that the internet in the future would be totally social, but I think Mark and I would agree that the social aspects of online communication and engagement will continue to grow and become very important.

The three of us would agree, however, that social media has an important “reputation currency” associated with it, something at the heart of authenticity and engagement. It remains to be seen how marketeers will leverage “authenticity” and “engagement” to sell their wares and promote their brands.  Actually, it is already beginning to happen on social media sites such as Youtube where content is becoming monetised (product placement is a classic example).

Karen Stocks from Youtube keenly promoted (financial) success from Youtube celebrity spinoffs and content creators such as Australian Natalie Tran. Youtube offered global reach, attention, and eyeballs for product placement and brand awareness. At the heart of Youtube success was “viral marketing” – some authentic and often accidentally successful Youtube clip that captured “people’s imagination” and took off. One quoted example was the Mentos mints in the bottles of diet coke that literally took off, and with it sales of diet coke to boot! Of course, it’s not all beer and skittles (or mints and coke) for Youtube content creators. Naomi Klein warned us in No Logo that companies prowl for ideas from a range of sources (and these days social media is one of them) for emerging trends and then commercialise without any profit going to the edgy content creators who displayed their ideas first.

Michael Kordehi proved that Microsoft has informed and entertaining speakers with a great presentation on enhancing a richer and deeper personal experience with the web. Michael showed off some of the IT whizz-bangery that he and his team had done for NineMSN’s Grazia magazine. The image quality of the digital fashion shoot photos were enhanced for much finer image detail (something clients wanted from fashion photos online) AND also to enhance the way readers could share these images with their friends. Using your own navigation around the images, you could then save and send it to friends so that they saw the same sequence of images as you did. I think he referred to it as an “e-journey” but I think he’ll need to do more work on that term to make it part of the popular lexicon.

Other professionally presented talks were from Paul Borrod of Facebook and Cliff Rosenberg from LinkedIn, both of whom promoted the social media benefits of their respective services. I already use LinkedIn but I must say that I am a little more inclined to take Facebook  more seriously than I have in the past, based on some improvements to the interface and an assurance to improve privacy.

Marc Lehmann (Saasu.com) talked about the naturally selected web which pretty much was about getting the web to cut through the mess and give you exactly what you want without relying on search. Because we are all still time-poor, we need a more life-like web that relates to our own needs and our own digital identity. Marc thought that today it is not about the web, it’s all about the data. How can we get the data we need and personalise the information to meet our individual demands and save us time?  And Nicholas Gruen, in his presentation on Government 2.0 and web 3.0, also advocated how the provision of (government) data could be used by people in many different ways – the classic example was the Gov 2.0 mashup late last year at which an inventive bunch of people reframed and rearticulated government data into informative and interesting ways. In other words, put the data out there and let the people work out for themselves how they will use it and what meaning they will derive from it.

One of the best presentations from the conference was from Sandy Carter of IBM. Sandy gave some excellent real-life examples of companies using social media for a variety of strategic purposes. The message was clear: before using social media, an organisation must articulate and understand the problem it is trying to solve and then work out how (or if) social media can make a positive difference. In fact, 80% of your time should be about planning and setting out the objectives and the strategy, while the remaining 20% is about the technology and the tools. Much of what Sandy had to say, and in far greater detail, is in her book The new language of marketing 2.0. The book outlines a set of six steps (ANGELS) that provide a useful guide to utilising traditional marketing techniques with what web 2.0 has to offer. And thanks Sandy for the free copy!

There  were other interesting papers that I summarised in my notes but I need not go into detail here. Suffice to say, the conference encouraged thought and good discussion about how social media can be leveraged to improve communication, enhance marketing and customer engagement, and promote new forms of interaction and community among online participants. The conference was very impressive indeed.

On network culture

One of the interesting things about humans is their interrelationships with other people.  There are historical reasons for this based on family, tribe, and community.  Such groupings were necessary to survive.  In most human societies today, the family unit is still the foundation of people’s relationships.  Friends and the people we socialise and work are also part of the human interrelationship matrix.  And interestingly, people have relationships with characters in books and on television, they have online relationships, and they have virtual relationships in digital spaces such as Second Life.

It should therefore be self-evident that people relationships are significant in nearly all that we do.  In fact, modern humans are truly part of the networked society as a consequence of the internet and World Wide Web.  We have in fact extended the possible reach of our relationships, widened the scale of intensity of relationships (between very weak to very strong); and increased the scalability of our relationships.  So shouldn’t we now recognise the importance and value of the network culture?

In many organisations, relationships are grounded in an “old style” corporate mentality dealing primarily with direct work-based relationships, often hierarchical in form.  In most cases, the network is based on physical proximity.  However, relying only on work-based physical contacts to get one’s work done is not enough these days.  In order to get the right person with the right information at the right time, we need more than just physical proximity.  We need access and immediacy.  We get access and immediacy through our networks, often facilitated through information technology channels.

In a recent blog post by Stefan Lindegaard, called How to create a networking culture, Stefan outlines some ideas for establishing and recognising a network culture within an organisation.  Not surprisingly, this recognition starts at the top. Stefan says: “Leaders [need to] show a genuine and highly visible commitment to networking. Leaders must walk the walk, not just talk the talk. … Leaders should also share examples of their networking experiences whenever possible”.

At the practical working level, Stefan has identified the following: “People [need to be] given time and means to network. Frequent opportunities are provided to help individuals polish their personal networking skills. Not everyone is a natural networker. But almost everyone can become good at it with proper training and encouragement.   Both virtual and face-to-face networking are encouraged and supported. Web 2.0 tools and facilitated networking events maximize the opportunities people have to initiative and build strong relationships”.

Now this all makes very good sense.  Why wouldn’t organisations want to leverage individual and groups’ people networks to get things done more quickly, more efficiently, and more effectively?  Such networks are at the heart of collective intelligence and knowledge management.

Why not use all the network facilitation services available in our modern world, from coffee shops to internet and Web 2.0?  And why should there be any doubt about the value of people networks when we can see how fundamental interrelationships between people have been over time?  Network culture should no longer be revolutionary – it should be accepted organisational practice.

On bad complexity

How many times have you had to do a task and throughout the experience say to yourself, ”there must be an easier way to do this – why do they make it so complex when it should be so simple”?  I often have this very thought when paying a bill or searching for a product on a website – why is it so difficult to get what I want done?  After all, don’t these people want my money?

Web expert, Gerry McGovern, offers an explanation in his recent blog post, Eliminating bad complexity. Gerry is not talking about complexity science but rather how complex an activity or task is.  Does the activity or task have to be that complex if it doesn’t lead to good customer experience?  Gerry makes the distinction between good complexity and bad complexity.   ”Good complexity leads to greater convenience, choice and options. Bad complexity leads to frustration, wasted time and wasted money”.  I can definitiely say that I have often experienced bad complexity.

There are people responsible for providing services, especially on the web, who are not thinking of the customer but are thinking of their own personal agendas.  Tasks and activities are more difficult  than they have to be because the provider wants to do something else than serve the needs of the customer.

And this type of behaviour also occurs within organisations.  Gerry goes on to say: “Many organizations have enemies within. Departments and divisions care only for themselves. They will introduce complexity that makes the organization as a whole more dependent on them. In fact, the way modern organizations are structured rewards bad complexity”.

I often wonder whether organisations really care about good customer experience. 

I appreciate that understanding the customer and their needs is difficult.  Making complex organisations work together to maximise good customer experience is also not easy – but it can be done. Amazon.com is a great example.  Amazon has a simple (and ugly) website that makes it easy for the customer to buy products; usually books in my case.  In addition, Amazon gives me the occasional alert on books I might be interested in based on my searching and buying history; a service that is not intrusive and where I have often found a book that might otherwise have remained unknown to me.  The work behind the scenes at Amazon is probably a complicated and complex set of interactions and behavious but the customer experience is simple and fulfilling.

It seems clear to me that maximising good customer experience should lead to more sales and greater revenue.  However, perhaps increasing revenue is still not enough motivation to change “bad complexity” within organisations or in service provision.  There are obviously other motives in play…motives we see all the time as a customer, at work, in sport, and in politics.

Perhaps it is the customer experience that is “bad complexity”….. well, at least for many organisations.

On knowing the customer and what they want

It always amazes me that some internet sites are not really set up to serve the needs of the customer.  You see examples of it time and time again.  As many readers will know, I am a big fan of Gerry McGovern and Mark Hurst, both of whom extol the common sense line that the customer experience is all important and should be uppermost in the mind of any selling organisation.

One of the first maxims of internet or intranet design is to know your customer and what your customer comes to your website to do.  People are busy, and in the majority of cases, go on the internet to do something; find some specific information; complete a task.  Sure, there is serendipitous search but website design is not about focusing on the per chance customer; internet design should be about identifying your customers and servicing their needs. 

Let’s take an example – I am going to another city for work or for a holiday and I need a hotel.  What is the information that is most important to me - the customer? 

- the address and service offerings of the hotel
- price (including any discounts or specials)
- availability
- reservations
- maybe booking and cancellation policy for the more detail-oriented patrons among us.

Now, do you think people search for hotels based on price or do you decide upon the place first?  Price is nice, but people want a hotel in a specific place.  Choose the place and then check out the prices. 

So when I went to check out the IBIS hotel (I am an A-club member) in Christchurch, New Zealand, I found this IBIS hotel site.  You will see that the site gives the address and contact details, provides information on the service offerings of the hotel, and allows online bookings and reservations.  This is all good standard stuff.

But what about that header at the top of the page, especially the one titled IBIS special offers.  Naturally, before I check out the price and availability of the hotel I am looking at booking in Christchurch I want to see what special offers might be available.  Well, what you actually get is the global IBIS special offers page with great deals for IBIS hotels in ….. Bregenz, Austria; Marrakech, Morocco; Basle, Switzerland, and Toulouse, France, etc.  There are also major cities to explore …. but not Christchurch.

Please tell me, why would I want to know what special offers are available in Toulouse and Bregenz when I am going to Christchurch?  Why is there a link to these European special offers from the Christchurch IBIS Hotel page?

Well, the answer is that the Christchurch page is a page (a local page) on the global IBIS Hotel internet platform.  The header information at the top of the page is the global banner across all the IBIS Hotel pages, from Christchurch to Marrakech. The banner bears no relation to the local hotel page other than for IBIS Hotels to tell you stuff that you don’t need to know; stuff IBIS Hotels obviously thinks is grand news!

The obvious point is that if you are offering special offers on the Christchurch IBIS hotel page then give me the special offers for the Christchurch IBIS Hotel – that is where I want to go and that’s why I am looking at the IBIS Hotel Christchurch internet page!

The message is: design the web page for the particular customer that you need to service.  Do not design a web page for the ease and ego of the organisation.

On sailing ships and dodos

Dave Snowden told a good story at a knowledge management conference a couple of years ago about the sailing ship.  In the early 19th century, mighty sailing ships with giant masts and sails were the dominant form of sea transport in the modern world at that time.  Along came ships constructed of iron and powered by motorised engines which were more efficient (they could power along whether the wind blew or not) and became more reliable and versatile shipping vessels.  The sailing ship industry responded with even bigger ships with more masts and more giant sails but in the end the sailing ships were doomed by a new technology that made sea transport more efficient and effective.  Perhaps the sailing ship may make a return in an oil-depleted and global greenhouse environment in the 21st century but that’s another story…

And that poor old bird, the dodo, was no match for the slaughter by humans, and by invading pigs plundering their nests and territory.  Alas, they were unable to adapt to the ravages brought upon them in such a short space of time and they became extinct.

Which brings me to this article in the Sydney Morning Herald about a conference in India at which the media moguls of the 21st century are battling to stay in the game in a world enriched and informed via the World Wide Web.  The World Newspaper Congress is hearing from embattled media moguls about how unfair the internet is making the news and information business since they haven’t been clever enough to work out a successful business model for the changed world media environment.

Like the 19th century sailing ship industry, the newspaper moguls are desperate to keep alive a form of business that is actually being surpassed by more modern and disruptive technologies. The internet and social networking are changing the way content is published, consumed, and valued.  Content on the internet is more immediate, more personal, more varied, and more versatile compared to traditional newspaper publishing.  Not only that, but people these days do not have to rely on newspapers for their dose of worldly information since much of the information out there on the internet is provided by people for free and can be accessed for free! Even newspapers and television news programs seek out these stories from ordinary folk who witness events first hand or who have some other form of newsworthy story.

Of course, the newspapers are indeed part of the problem.  Over the past twenty years (at least) newspaper proprietors have dumbed down journalism and investigative reporting so much that newspaper content is hardly superior to much of the informed news and information provided by ordinary people. In fact, it is ordinary people who actually have something interesting to say, without the caveat of having to say something that will generate advertising revenue or hanker for the bouquets from supporting ideologues.

Reading newspapers these days is like reading a bevy of opinion pieces; the opinions being no more informed or relevant than that of bloggers and social networkers.  Instead of lifting quality and gaining some comparative advantage this way, newspapers have taken the easy route and proffered a multitude of opinion, loose reporting and drivel that can be easily replicated anywhere. 

At the same time, newspapers continue to search for more “eyeballs” to convince advertisers that newspapers are still relevant.  Newspapers still want to be found on the internet to capture these “eyeballs”, yet they want to determine and control the method and channels of being found. They want to use the 21st century technology but only in the manner of their 20th century world view of dominance and control of the news. Even advertisers are shifting their world view.  Advertisers are increasingly using new methods of messaging and advertising utilising the new communication mediums available via the internet, social networking, and other forms of communication channels.

At least the newspaper industry hasn’t had it as bad as the dodo. The dodo had relatively little time to adjust to the ravages of invading species before they finally met their final and irrevocable end. Newspapers have had plenty of time, and had plenty of warning about the competitive content available via a host of alternative sources.

Newspaper organisations are like the 19th century sailing ships trying to battle their way forward using their existing tired techniques and old-century attitudes, and failing to confront the new realities of a brave new world.  Like those 19th century sailing ships, newspapers as they exist today will die off and be replaced by a more efficient and effective form of  news communication that does not rely on old thinking and old technologies.

Newspaper moguls can whine all they like but they need to accept the new communication realities and make the necessary adjustments, or go the way of the sailing ship and eventually, the dodo.

On purpose and need: an example

In my previous blog post I strongly advocated the need to determine purpose and need in our knowledge management planning and strategic thinking.  In fact, purpose and need are important in most business contexts.

To illustrate the point more, I was pleased to read in my latest Good Experience newsletter about how a major US hotel chain (Courtyard by Marriott) went about reinventing itself in order to deliver a better service to meet customer need.  You can read the interview from the Good Experience blog.  Also of interest, and something I have advocated previously, is thinking about marketing principles and practices and how we can use this in our knowledge management activities.

The key message from the interview was in defining a purpose (who is our customer and how do we service that customer to ensure they prefer to stay at Courtyard by Marriott) and working out the best way of meeting that particular need.  The method Courtyard by Marriott took to undertake this transformation was in good market and customer research.  Out of this research came “a set of insights based on what we learned from our segmentation, interviews, and ethnography”. Courtyard by Marriott calls these results the “brand blueprint” and the rest of the interview talks about how the hotel chain went to work making the “brand blueprint” come to reality.

And the result: “We’ve seen a dramatic change in our market share, almost 10%, a 28% increase in guest satisfaction from the new lobby, and average food profit has increased 113%”.

The classic marketing approach to determine who really is your customer is something that practitioners in knowledge management should also consider seriously.  Sometimes, it is important to realise that one cannot service everybody to the same extent or in the same way.  It is certainly the case that people have different needs even inside the one organisation.  When the hotel chain determined who was the main game, they sought to understand this particular segment in order to determine how best they could match their needs.  I am curious to find out if they used any form of archetype analysis in their research. 

As a consequence of the research and analysis, the company worked out strategies and designs that would support the now-recognised needs of the customer.  Listening to your customers is very important and doing what is best for them (and not just for yourself) is critical.

I think that those of us in knowledge management can take some lessons from this essentially marketing experience to enhance our own abilities to rethink our purpose and meet the needs of our particular client groups.

On social networking for business

I want to periodically keep up the thinking about the positive benefits of social networking and social media. My interest is both personal and professional. I view social networking, used in the most effective manner, to be of enormous benefit to business and government within the workplace environment. And, like most things, the value of the tool has to be considered within the workplace context and by the manner in which it is used.

I blogged a month ago about Euan Semple giving a series of short interviews on specific topics about social media. Euan gave some very good reasons as to how and why social media is good for the workplace. To complement the sentiments from those vignettes, I want to draw your attention to a simple but very valuable explanation as to why social networking is good for business.

This time, I want to illustrate the point using  Seth Godin’s explanation via Youtube on why social networking is good for business. I recommend you view the clip.  

Essentially, social networking is good for business because it facilitates the establishing of effective relationships based on trust and reciprocity. According to Godin, you can’t count the worth of social networking by the numbers – it’s the quality of the relationships that give the greatest meaning to social networks and that’s where the value sits. 

If we accept Dunbar’s number, we could say 150 people was the upper limit to effective realtionships. It is important to maintain authenticity and depth of interaction within these relationships. I certainly agree, albeit I am conscious that even weak ties within a network may be useful at times, especially in response to specific questions or where making use of the collective intelligence can be harnessed. The difference here is the emphasis on social (indicating interactions at a greater level of personal intensity) than a traditional online network, such as LinkedIn. 

As with most things, use and purpose are critical dimensions to the effectiveness of social networking.

On judgement

The KM Australia conference is over for another year.  There were some great presentations and I took plenty of notes.  Thanks to everyone involved.  In particular, I want to thank Aimee Rootes from Ark Group.  Aimee was always helpful and pleasant, and went out of her way to find people when I couldn’t find them.

I am not going to launch into my notes from the conference just yet.  I do, however, want to tease out something that Dave Snowden mentioned in his presentation on Wednesday morning.  Dave said that “judgement is what KM is about”.  He reconfirmed the importance of judgement by saying that people in organisations “need to be allowed to make good judgements”.  This was not the central thrust of his presentation but it was important to me.

Judgement should be about choice.  On the one hand, knowledge managers need to judge what elements from their knowledge management armoury is appropriate for what problem (or opportunity) and in what context.  Sometimes knowledge managers have a tool box approach wherein everything in the tool box must be used, irrespective of the need.  A KM tool box requires judgement as to what is appropriate for the task at hand.

But I think Dave was referring to allowing people in organisations to make judgements.  And judgements must be made when dealing with complex environments.  How can KM emerge or be successfully facilitated in an environment in which judgement (by the very people KM is supposed to help) is so completely hindered that standard drone-like thinking pervades everything one does?  An organisational culture needs to support and enhance good judgement.

In my current role I am looking at the way in which our information services go beyond just supplying information and research to people within the organisation.  This is indeed part of our function and we can say we have supplied x number of items and had hundreds of people read our material.  But this is not enough.

I am working on delving more deeply into how people use the information and research my team supply; for what purpose, and most importantly, for what outcome.  I will leave impact to later on – first things first!  I am basically seeking to discover the knowledge trail from where my team gets involved, as part of a much wider process, and where that fits in to give people the capability and confidence to make decisions, or in reality, make judgements about what to do.

If judgement is what KM is about, then I want my team and the services we provide now and into the future, to enhance the capacity and capabilities of people to make good judgements.

On social media – the Euan Semple interview on guruonline

Social media is a topic that should be of interest to anyone working in organisations. It still amazes me that social media remains unknown or is treated with suspicion from senior management-types when social media is just an extension of the ways in which people operate in the real world.

People like making connections. People like socialising and sharing experiences. People trust other people they know, and whose opinions they value. And people realise that getting things done or finding out about something can be achieved by relying on their friends, contacts, and networks. Indeed, as choice and decision-making in one’s personal life becomes more complex, so the reliance on personal connections and trusted contacts increases in importance.  Why not amplify these norms for the benefit of getting things done and solving problems more efficiently and effectively within an organisation?

So I was very pleased to receive an email earlier today from a friend about an interview with Euan Semple on social media. Euan Semple is an excellent speaker and authority on the use of social media within organisations. The interview is based on fifteen questions that Euan answers in his usual thoughtful, personable, and considered way. Questions range from why organisations should get involved with social media, how organisations can use social media, what are the tools, and what will be the benefits.

The interview is on guruonline , a web-based service that provides free information on a range of topics from experts in the field. I really like the way the interviews have been presented on the site. Each question is answered as a single slice so that one can choose the questions and responses of interest. I certainly recommend the guruonline interview with Euan to managers in business and government who don’t really understand the benefits and opportunities offered by social media.

I will spend some time in the next few days looking at guruonline and some of the other topics of interest on the web site. But for now, I thoroughly recommend listening to Euan Semple talk about social media and why it is important for business and other organisations to consider for their own workplace situations.

On taking an interest

I was reading this short blog post by Ton Zijlstra on open government from the Reboot conference. Nothing too radical in asking for a more open and transparant system of government with better access to information. I had also been reading an article on democracy and markets by economics columnist, Ross Gittins, of the Sydney Morning Herald. The Gittins article lamented the fact that having good democracy and having good economic markets relied on having an interested citizenry, yet paying attention to these political and economic issues was lacking.

Having an interested citizenry is difficult “because we take so little interest in the details of problems and their solutions, because we rarely follow up yesterday’s concerns, because our emotions are so easily swayed by vested interests or the media, the pollies (and economists) learnt a long time ago that appearances matter more to voters than the reality of the situation”. One only has to look at economic and currency forecasters to realise that!

And this led me to think about how important it is to take an interest in what is happening in one’s own workplace, even if it does not appear to be of immediate or direct importance. So why is it then that many organisations compartmentalise their workforce so much that to take any meaningful organisational interest is almost impossible, let alone actively encouraged?