Archive for the ‘Barriers to Entry’ Tag

Institutionalizing Social Media for Large Organizations

My friend, Jeff, made the observation that social media has the ability to change the rules for the little guy. Kind of like boxing, a good small man can be a larger man, but a good man can beat a good small man. Size still matters, but skill can also still be a game changer.

Same in social media, first mover advantage does allows small players to get traction, but that does not preclude secondary major entrants from catching up. It may cost them more, but unless the new entrant creates barriers to entry that are sufficiently difficult to overcome by entrants buying their way into a market, they better have a niche or market integration strategy to adjust.

Couple this with my recent conversations about the mix between developing intuition and validating assumptions in new product development. Same set of assumptions and market dynamics, but the mix that an entrepreneurial company will balance approach to the market versus a mature player is far different. The 80:20 rules still apply, but the entrepreneurial company will focus the 80% on intuition and the mature player will focus 80% on validating assumptions.

Hence the time to market and the difference in approach between small and large players in social media. Small companies can jump on participating online. See a unfulfilled opportunity, jump on it. Mature organizations have to weigh the impact on existing operations, customers, plans, budgets, etc. May see the same opportunity, but when you are moving a small army, it isn’t as easy as “picking up the tent”.

So how does this map to social media? Mature corporations have mature planning processes. Some are good, others bad, but the reality is that large organizations weigh risk management equally as important (and some cases more) as innovation. Small company fails, you lose a few bucks and you move on. Large company fails;  they can lose a lot of customers, money, jobs, and investor’s money. Stakes are higher, you gotta make sure that you cover the bases.

Social media represents more of the innovation side of the 80:20 rule analogy above – innovation. It has the ability to be disruptive. Social search taps into the emotional side while search engines & standard search tap into the intellectual side. If I trust person A’s opinion on a topic and follow their links to find a product, that is actually an emotional decision. Yes, I intellectualized the decision, but emotionalized the “trust”.

Social marketing, evangelism, social networking, social CRM, collaboration, and all of the related terminology are really about systematizing the human interactions that have been lacking on the web. Websites were about content. Now they are about content, relationships, sharing, collaborating, and communicating. It is what we do every day offline, just moving more online. Great opportunity to fix a lot of poor customer relationships from over-automation. Think every bad call center experience that you have had; voice prompt hell, untrained customer service reps, crappy scripts, and frustration.

Now, think about that one shining example of the customer service rep who actually could figure it out and saved the day. They were bright, articulate, knowledgeable, and had a real conversation about you. In a sea of bad interactions, the human element shines through. That is the beacon on the hill for social marketing. Think agile manufacturing for “customer relationships”. My mantra these days is that you cannot have a relationship with a system and transactions don’t make relationships. Relationships are built on interactions; good ones and bad ones, but your relationship is the sum of your interactions (online and off).

Put this together and you will see that large organizations need to build the business case and the strategy for “how to move the army”. They need to institutionalize planning around social media to incorporate the impact on the organization and to validate the planning assumptions. Many already understand the innovation, but getting consensus on the direction requires some assistance in translating the social media innovative vision into call-center, product management, operations, finance, sales, and senior management strategic planning.


Unhorsing an Entrenched Competitor







Major Factors














Web Marketing: Leveraging First Mover Advantage on the Web









