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Sales Execution: Cooking with Saban Consistency

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How’d the year finish?

For sellers in the Enterprise space, too often this is a high drama question that can’t be answered until it’s all over (including the shouting). Did you get the big deal(s) at the bell or not? Lumpy and last-minute are not the way we prefer our results, but that seems to be the standard in Enterprise sales. This issue is at the heart of some of the most difficult executive conversations.

When we treat sales as if we are ordering up a nice meal, we set ourselves up for this drama. We think, order politely at a place with good reviews and you should get a good meal. You’ve eaten at places like this before, you spent good money, the reviews and feedback are solid… but you never really know until you’ve eaten. Expectations are high and the results don’t always match. A great deal of time and money is wasted chasing bad meals. Who can you hold accountable? The restaurant, sure. But that doesn’t change the result. What have we learned for next time? Not much, other than try your luck somewhere else.

If, on the other hand, we make the meal ourselves, we have much better control over the results. More importantly, if we screw it up, there’s learning and a quick recovery. When we learn to cook, we eat well – and for far less cost – all the time. So, how?

Our default is to hyper-focus on the big sales result and pay too little attention to consistency of sales process. We step in at the late stages, when most of the critical work has (or should) already be done. This management behavior, which we might call “management by forecast”, is a common – and serious – mistake. If your sales leaders are constantly demanding more quantity of opportunity (bigger pipeline, more leads) while conversion rates remain low, this may be the issue.

Part of the issue is a confusion over the use of the term “process”.

Quick story that reminded me of this problem recently. I was talking with an over-confident Enterprise sales leader who was preaching his wisdom on sales process. He worked himself into a lather and leaned in to deliver his magic solution like a thunderbolt: “MEDDIC”

Oh boy.

If you aren’t familiar with MEDDIC, you can find all you would ever want to know with a simple search. To learn it is a much different exercise, to use it properly is again something else. It’s been around for about 25 years and traces back to tremendous success created by the sales team at PTC. In short, it’s an acronym for the key elements of a good sale. It is often (mis)used as a qualification checklist by sales managers. I am not disparaging MEDDIC. It has a place as a reference for less-seasoned sellers. Too many, including my cocksure counterpart, use it like a crutch in an effort to over-simplify Enterprise sales.

Turns out, someone who probably did understand MEDDIC had sold him a big, fat consulting engagement, which was going to revolutionize the business…

In the Enterprise world, we love acronyms. That’s true as much or more in sales as anywhere else, where we are so intent on accelerating that even our processes get stripped down (See also: BANT, NEAT, SPIN, …). All these acronym’d processes are trying to express the core principles of value-driven sales methodology, most of which are timeless. The problem is you end up with sales managers who just plow through the checklist – with convenient acronyms and buzzwords – on the forecast call. There’s very little growth in that and sellers quickly learn how to spew the buzzwords back at managers (anything to get off this mindless call). The answers are all great until the moment of truth when – surprise! – there is no deal. Bad meal.

For college football fans the better example is the leadership style of Nick Saban, perennial champion/contender in one of the most fiercely contested leagues in the business of sports. Saban, head football coach at the University of Alabama, learned a valuable lesson while he was coaching at Michigan State University. In 1998, the unranked MSU Spartans were heading to Columbus to face the #1-ranked Ohio State Buckeyes. Few gave the Spartans any chance to win on the road.

Of course, they did win and Saban was vaulted to national attention. Now he’s achieved legendary status.

He often recounts the story of preparation for that game. “Everyone was always so focused on the outcome; winning or losing was everything. That game was the first time” Saban said “that we focused on the process rather than the outcome.”

This is now the mantra of one of the most successful franchises ever built. (If you think college football isn’t a good parallel for big business, you need to take a closer look at the numbers.) Every day, his staff coaches to improve technique. Daily, weekly success is measured primarily by the player’s ability to execute the right technique. Games are reviewed at an individual player level. Wins may come under heavy criticism by Saban and his staff if technique is poor. Losses, though very rare in his case, may still be full of praise for proper technique. When technique is consistently good, good results follow consistently. That attitude and mindset is the culture of excellence and it is extremely successful.(Update: Nick Saban just won his record sixth national championship!)

So it is with Enterprise sales. Constant focus on technique and execution of all steps of the sales cycle takes a great deal of effort. To understand technique and help improve it are among the enterprise sales leader’s most important skills. Not doing but coaching the team to do it right. It also builds trust and understanding among the team, rather than tension and “CYA” behavior so prevalent in aggressive sales cultures. The reward is consistency at a high level. This has to be a management priority for organization seeking strong, predictable results. No checklist will short-cut this process.

You want to eat well consistently? Don’t order the meal and hope for the best. You can’t buy consistency. Work with your team from the time they are choosing the ingredients, through their preparation, plating and presentation. They are the cooks but you can instruct and occasionally step in as needed. You will probably find that some are better at specific techniques than others. They can guide each other or you can segment. Both are powerful. The team-building is priceless. Ultimately, this is the foundation of a strong sales culture.

Checklists are for critics. Get in the kitchen and feel the heat with your team.

Sales Execution: Acceleration Through Communication

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People disguise their ignorance with an over-abundance of words, usually meaningless ones. The trick is not getting lost in all those words. Here are some thoughts on how to find your way and train others to do the same.

Communication is the lifeblood of business. If you can’t communicate effectively you’re severely disadvantaged. The poor communicator is useless in many, probably most, of the meaningful roles of this era. For example…

  • How do you identify a need without the ability to understand what the market is telling you?
  • How do you rally support for a vision if you can’t articulate it to others?
  • Why does an employee give her best if you haven’t understood what motivates her?
  • Why would a customer work with you if you haven’t explained how the offering can uniquely help them?

Despite the amazing variety of communication tools, professional communication is generally poor. As our availability and volume – meaning both loud and infinite quantity – of communications has grown. Our ability to deliver and comprehend meaningful messages has deteriorated.

Good communication is brief and precise. Poor communication is vague and verbose. Want to improve communication? Here are two tips to help you become an active listener, the starting point of communication:

1)   In conversation, verbalize a summary of key points and gain agreement on it.

2)   Always question the use of jargon and buzzwords, literally.

The summary is a critical part of all live, verbal communication. Very often, people don’t know what they want to say until the words start tumbling out of their mouths. The result is usually a flood of words in which the whole room drowns. Sometimes it means they haven’t thought through their own understanding of the subject. The summary forces them to sharpen their thoughts. More often, it is an indication that the speaker doesn’t know what they are talking about. You’ll know for sure when they are unable to summarize and begin a whole new river of words. At this point, your counterpart is gasping for air. Some reach for help, others get frustrated and submerge.

For sellers – that is, anyone trying to gain agreement on any idea, product, service, etc. – the summary moment is a chance to make the meeting valuable. This is the reason you came/called. It’s not necessarily the final “yes”. It’s a milestone of progression. “Yes, we agree the definition of the problem.” Or “Yes, a solution just described would be high value.” Or “Yes, that’s a plan to go from here to where we want to be.” etc.

If you get to agreement on a summary you have built a consensus. It’s joint progress with your counterpart, whether positive or negative. Remember, truly “bad” meetings are those where nothing changes. Even if your agreement is “no sale”, at least you understand where you are and can move on to a better opportunity. The seller that stays in limbo is the biggest loser. They’re wasting everyone’s time. Ironically, weak sellers like to summarize these no-progress interactions: “Good meeting! We had a long conversation…” More on that later.

Best practice: Always and quickly follow a verbally-agreed summary with a written restatement to anchor it.

This is just a written capture of what was agreed in the meeting. People forget what they said very quickly. The note is a longer-term record for the participants. This accelerates deals. You don’t have to go back and rebuild forgotten progress when you meet again.

If you struggle to come to an agreed summary, either positive or negative, an opening is created. You’ve prompted for a summary, then offered your own version of summary and still can’t come to a common understanding. One of you is confused. Hopefully, it’s your counterpart! (Remember, understanding a negative situation is different than not understanding the situation. Understanding is the foundation for progress either way.) The phrase “I don’t know” is like a dog whistle for an alert seller. Great sellers recognize and seize this moment to educate their customer and shape their vision. When you get to a shared vision with your customer, shaped by you, success typically follows.

The ability to leverage this moment is a complex, highly valuable skill in sellers. Sometimes a counterpart will acknowledge their need for guidance, though not explicitly. Nevertheless, they are open to being guided. Other times, they may get frustrated at what they perceive as your lack of understanding. If you know what you’re talking about, you can stand tall and turn this into a positive. If not, you’ve got a problem. Preparation and experience are critical. That is a separate article. For now, recognize the need and technique for getting to an agreed summary.

Use internal meetings to coach your team on the value of precise, brief communications. My favorite opportunity is the sales forecast call. Classic sellers fall in love with words. Some guys think they can ride out the worst forecast with an overwhelming wave of positive-sounding words. “Really great meeting. Guy loves me. We had a great lunch and I invited him to the event and now we’re buddies and…” Stop. Maybe we can hear more about the Adventures of You at the reward trip (though not likely). A good manager knows better. She knows that she’ll be delivering a version of this forecast herself soon. Execs don’t have time for the fluff. No one should.

In report-out meetings like forecast, have your team start with a summary. Make it clear what you need to hear and the vocabulary you want them to use. (Establishing vocabulary is an important topic for another time.) Drive meeting preparation as a priority, including internal meetings. It’s a format you need to establish and enforce. Take the spin out. Sellers are great story-tellers and that’s a valuable skill. Forecast isn’t story time. If the summary doesn’t have all the info you need, you can ask questions. For internal meetings, “I don’t know” is more painful. It’s your business to know. So make it your plan to go find out and include that in your summary. If you’ve set expectations on the contents of a forecast summary and the seller still can’t summarize, there’s clearly a problem. A seller who can’t communicate is in trouble and needs your help urgently.

If they don’t know what they’re talking about how will you, at the next level? Good execs have highly sensitive BS-detectors. Develop your own.

Speaking of bullshit, let’s talk about buzzwords!

Words have literal meanings. Unfortunately, in this era, even “literal” is a word that gets widely abused. (“I literally can’t live without wifi.” Unless your pacemaker needs a signal to operate, you can literally live without wifi.) So, we are often stuck with implied meanings. But there is no clarity in implied meanings. As quickly as buzzwords appear, they evolve to mean different things to different people in different contexts. Poor communicators use that imprecision to cover their lack of understanding. Literally.

Buzzwords enter the language as a shorthand to refer to broader themes. They are, by design, vague. They have no place in useful communication, which is why they are so prevalent in social media and trade show presentations. Even the term “buzzword” has disguised itself in other words: “Jargon” for business and “hashtag” for, well, everything.

Be an active listener. When you hear a word that is used outside its strict definition, stop and ask what the speaker means specifically.

“It’s great, Mr. Account Exec, that you are selling ‘business value’ for this opportunity, just like our literature says. Now, please clarify what specific value this customer will derive from our solution.”

“Thanks for letting us know that you want an ‘AI-driven Customer Journey’, Ms. Prospect. Here are some specific examples of what I would consider useful AI and successful Customer Journey solutions. Does that jive with your definition or do you have other examples?”

Buzzwords and jargon, like long monologues, are fertile ground for ambiguity and confusion. When you spot them, recognize that the deal has become S-L-O-W, both intellectually and pace. Slow is a deal- and year-killer. When you hear ambiguity, stop and rout it out of the dialog. Define terms specifically for this scenario. The more detail the better. That’s where the real learning occurs. Sound uncomfortable? Good. Lots of people will simply assume (or pretend) they can communicate in gibberish rather than interrupt. You can differentiate yourself with clarity, which ends up as expertise. Pity the fool that keeps playing buzzword bingo for work.

Finally, a bonus communication red flag for you: Grammar. Yes, grammar. There are a couple of simple grammar rules for useful business communication that you can train yourself and others to use.

First, the more adjectives the more likely it’s BS. Be wary. Anyone telling you it was a “very super awesome amazing <anything>” is obviously over-selling it and probably concealing the fact that they don’t have much detail. Ask the questions to get underneath the fluff. If this person is on your team, you need to tell them that they lose credibility with hyperbole. One adjective at the most, preferably no use of “very” (truly, seriously, really, …). If it’s special, say why. Preferably with numbers to back it up. Let the listener add the adjectives in their mind. It’s far more impactful.

Second, pronouns and labels are vague, proper nouns are precise. “The guy in charge of their HR DT project says he’s gonna make a decision soon. We look good.” May get a newbie excited but doesn’t say enough. “Eleanor Johnson, VP of HR, told us in our Tuesday meeting she has committed to the CEO, Meg Chen, that the Digitally Enabled Employee project will be delivered by end of 3Q. Eleanor says she needs to begin implementation in March and contract with vendor in February. She says we are one of three finalists, along with SaaS Co and Big Co.” Yes, there are more words in the second version. They deliver detail where the first version is vague.

Nouns that need to be capitalized. Good. If sellers don’t know the proper noun behind the pronouns and titles they are using, they aren’t close enough to the deal. They’re probably getting their info far from the decision makers. There may not a be a deal at all. Make sure your sellers know you will be asking for names and dates and they should, too (that’s right, you’re taking names and kicking… well). The steps to discover this level of detail seem simple but they are strong proving grounds.

We’ve looked at some basics of communication, one of the keys to accelerating quality business. Great sellers know how to communicate because it makes them consistently successful. And no, that is not the same as BS. What are your communication tips? Got any good buzzy business / BS stories? I’d love to hear ‘em.

Creating for Critics is Mad, Men

I have an unpopular confession to make:  I didn’t really like the Mad Men finale.  It had some great moments but… it didn’t really make sense to me.  Long going (and going and going) story lines suddenly wrapped up in radical 2 minute scenes.  Old characters killed off in a snap.  Multiple major life redirections all happening in simultaneous bursts. Don hugging his way to enlightenment, which yields… more of good old Don.  Huh?!? It seemed like my long-time girlfriend was leaving me and she wanted to make it easier by insulting me first.  It’s not you, it’s me.  You know who did like it?  All the pundits, professional and amateur (if there’s a difference) who reviewed the show with the vigor of Parisian art critics.  Then I realized, “Oh. That’s who they made it for, the critics not the audience.”  I felt stupid.  Then I thought about it some more.  Does that work?  Can you create for the critics and end up with something good?

Draper Meditates
Upon further reflection, I get it.  I think.  If you read any of the reviews, they talked about the “arc of the characters” and symbolism and zeitgeist.  The New Yorker called it “Existentially Brilliant”.  Yeah.  Ok.  Except, well, it was completely unbelievable.  Everyone was stumbling along for 10+ years, then they all had grand epiphanies of redirection, all at once.  Joan says she’s seriously contemplating marriage then ends the relationship, in one brief conversation.  Peggy fell into a worm hole and popped out in a romantic comedy.  Pete gives up his perennial a-hole of the year title to become a dedicated family man in one sequence… Right.  All the loose ends are tied up.  Super tight.  Just ask the critics.  It all makes sense in the abstract.
Maybe that’s why everybody watched.  I know several people who wouldn’t comment until they had read the reviews.  Maybe then they knew what the hell just happened and why.  Or maybe this is how the show lost its direction years ago, trying to satisfy the commentators rather than commoners.
Ford Faster Horses
No doubt creating art, or any unique offering is difficult — maintaining that edge is even tougher.  In this case, Mad Men was wildly creative and extremely enjoyable for years.  Personally, I think it ran out of steam awhile ago and recycled stories.  A few scenes from the last few years will be remembered.  The first few were a series of iconic sequences.  Where do you go when you run out of the creative energy?  Well, fortunately, there are many audiences ready to tell you where to go.  You need to listen to some of them and ignore most of them.  Many great “makers” are incapable of listening.  Most of them have no second act.  A very select few deliver something new again and again.  We call them geniuses.  Many more listen to the wrong group – maybe its the critics – and miss the mark.
Jobs Customer Focus
Consider a couple of the great innovators:  Henry Ford and Steve Jobs.  “If I asked people what they wanted, they would have said faster horses” – Ford.  Popular quote, often referenced.  Here’s another oft-referenced Ford line “They can have any [Model T] colour they want, as long as its black.”  Heck of a creator.  Controlled up to 50% of the US market for cars at one point.  Refused any significant changes to his one and only Model T… and opened the door to a huge wave of competitors, in a rainbow of colors by the way.  “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” – Jobs  Again, an often quoted line.  And often misunderstood.  He also said, about 15 years before this became an industry mantra, “You’ve got to start with the customer experience and work backwards to the technology.” All things considered, you have to give the nod to Jobs in this match up.
Tough creative balance, especially after that first act.  Tune in.  Ommmmmm……

Of Art, Science and Bullshit in the Cosmos… and Digital Marketing

The more our world goes digital, the less our previous limitations apply – as if we were stepping into outer space.
Open the pod bay doors, HAL, we are moving on. The weightlessness is exhilarating, but we haven’t got the air supply right yet. Over-oxygenated “experts” are making wild proclamations, while many of us have too thin a mix in our tanks, resulting in major confusion. Digital may be limitless in its appetite, but that doesn’t mean it is ready to digest everything. Simple work, like spreadsheets instead of accountants, is like launching a satellite. Mimic the moon, but not too hard.
Art Science BS Cosmos image
The Digital Marketing Galaxy
Then there’s a galaxy far, far away called digital marketing. Huge promise. But most of us are still Lost in Space. Warning, Will Robinson … 
So as the Enterprise (naturally) sails through digital markets, there’s an imperative to separate the science from the science fiction and understand areas where “state of the art” still requires heavy human involvement, even as we make digital progress. Above all, we need to take an honest look at what art is, what science is, and where we are confusing the two, yielding a great deal of bullshit.  
Cosmology itself can be our guide. Philosophy – a human art – dominated the field for most of its history. Ptolemy and Aristotle presented a neatly packaged geo-centric view of the universe. They were smart. Let us take their wisdom as truth!
Alas, philosophy, for all its wonder, is not a physical science. It is insufficient to describe our world in a logical framework. Hence: bullshit … with 2,000 years of staying power!  
Shame on the pope for telling Galileo to go to his room for life. Copernicus, Newton, Einstein, Hawking, and others dramatically advanced our understanding of the physical universe. Our knowledge of the cosmos was neatly summarized by Einstein: 
“We still do not know one-thousandth of one percent of what nature has revealed to us.” 
Nevertheless, it was creativity that vaulted our cosmic understanding light years forward. We’re landing on comets and planning trips to Mars. That’s good progress from a moon made of cheese.
Einstein also said, “Imagination is more important than knowledge.” So, if there is room for the human arts in space, there surely must be in digital marketing. But where is the line? And how do we know we are not traveling down a 2,000-year wormhole in the wrong direction?
Digital vs. Marketing
Digital marketing is a natural paradox, starting with the name. “Digital” standing as the bulwark of science, and “marketing”carrying the flag for art in the business world. They can be dysfunctional partners on the level of congress. But it hasn’t always been this way.  
For centuries, marketing stood proudly as art’s shimmering tower in science’s sovereign territory of business. There was a respectful co-existence, if not always partnership. Like Macau or a mime on Wall Street, marketing carried on unbowed in a foreign culture. But the art of marketing was passed out on Don Draper’s couch as the digital agenda took over business. The resulting assault has been merciless. Digital has promised to mechanize marketing, leveraging its latest and greatest art killer: big data. The result, as you might expect, doesn’t smell great.  
The creative avenues in digital media are without parallel, and yet the art of digital marketing is failing. Why?  
The depth of the printed word, the audio/visual richness of any broadcast medium, and the ubiquity of radio have all been surpassed – indeed, eaten – by digital channels. I know because Marc Andreessen says so, and he’s full of wisdom. (Quick tip: Don’t contradict him on twitter if you’re interested in seeing his posts – instant block party.)  
With all of these tools to create human connection, art, by all rights, should be a dominant force in digital marketing. There is limitless opportunity to explore and celebrate the human condition, then immerse any networked human in the creation. There can be a shared experience of beauty and truth. Yet art does not dominate digital marketing. That’s because the creative media are only a portion, the face of our digital reality.
Digital isn’t just delivered to you, digital is with you. It is present, listening, watching, and absorbing everything about you. You can interact – potentially an exceptional artistic experience – but you don’t have to interact. Digital will pull things out of you whether you offer them or not.
Here is where the assault of science has stepped aggressively over the line. The more aggressive it gets, the further science, specifically data science, encroaches on the art of marketing. The results of this invasion, as you might have noticed, are huge heaps of bullshit. 
Science Parading as Art
In addition to wildly over-hyped big data promises – wherein crunching limitless pools of historical data from unending sources is supposed to provide personalization on an individual basis – marketing is also under attack from the artificial intelligence camp. This is a classic example of science parading as art.  
Our excitement with infinite memory has confused us into believing that facts and thoughts are the same thing, that information is knowledge, and that data can accurately anticipate human behavior. All wrong.  
The enterprise wants to believe these are true because those are easy problems to solve. Just throw more compute power at it. (Luckily, we have “the cloud” to solve that problem!) The reality of an empowered consumer demands more human sensibility, not more machine power. That takes heavy, constant, and human attention – not at scale, in the sense of data center volume, but at depth, in the sense of understanding your customer.
Technology will play a meaningful role to a point. It is impossible to say whether we can get to a conscious, self-aware machine or whether that is even a desirable goal. We can, however, say this with confidence: We are nowhere near it today, certainly not in a practical business context. There is no human algorithm.
The Art of Conversation
As Doc Searls and company taught us long ago, the market is a conversation. Here’s an important reminder: Conversations involve at least two willing parties. How willing is the prospect you are spying on (or using Google to spy on)?
Conversations also require the nearly lost art of listening for comprehension. Your massive data warehouse – in the cloud or in the middle of nowhere – does not go for comprehension; it’s built for storage and answering queries. Conversation is still a human art. If you are looking for science to bail you out on that responsibility, you are betting on bullshit.
A Customer-Centric World
Technology will continue to play a major role in marketing, but there are important choices to be made and examples to guide us. Apple’s Tim Cook is making a strong stand for consumer privacy, clearly differentiating his world-beating business on this basis: “At Apple, your trust means everything to us.” 
Google’s chairman famously said, “If you have something that you don’t want people to know, maybe you shouldn’t be doing it in the first place …”; he stated this on his way to explaining that Google is absolutely using all available data, effectively spying on its customers. It is unlikely he would be so cavalier about the reality of Google’s business model again, which is to extract and profit from user data.
The reality is, true customer privacy, where the service provider is transparent and restricted from profiting off customer data, would kill Google’s business. Which of these models makes more sense in the era of customer-centricity: the leader or the stalker?
The Market Cosmology
Let’s go back to cosmology for a better perspective. Your organization makes a promise to the market, its core value proposition. That molten core is the center of your planet, with layers of talented people around it that make up your celestial body. Your planet has mass. It is hurtling through space and encountering infinite volumes of customers, each a unique piece of matter on its own wildly random path.
Fortunately, your planet gives off a powerful force, which draws customers into your orbit and creates a complete atmosphere. Trust is gravity in the market cosmos. The stronger your core promise, the better you deliver on it, the more mass you have and the more customers you draw into your orbit. Lose trust and you are just one in trillions of dead rocks floating aimlessly through the infinite.  
How does bullshit suit you now?

Stop Hacking Your Customers!

Hacking used to have a negative connotation, as in cheating, abusing, deception; usually circumventing security and/or a program’s intended purpose.  The word carried a violent, threatening connotation. Somewhere down the line, hacking became cool.  Not just the white hat hackers, pointing out the vulnerabilities in an effort to improve.  Suddenly, everything that Silicon Valley favored earned the scrappy, start-uppy “Hack” badge of honor.  Witness “Growth Hacking” which is guerrilla marketing in the digital age. In other words “Our product is really good so we don’t have to buy our publicity”. A nice place to be.  But that quickly was mis-interpreted as outsmarting the market, breaking the rules and manipulating perception. This interpretation tripped us up.  Change, pace and complexity are exploding in business.  Naturally, we want to hack our way through this madness and find the simpler, faster route to success.  There must be a smarter way!  Why not hack our customers… to bits!  It turns out that’s not such a good idea.
The “magical powers” of both marketing and technology have collided in the digital era to create the myth of customer hacking: If you have the right widget, you can expose a customer’s digital persona, which is the same as knowing everything they want.   Find those that want your stuff, even if they don’t realize it, and… jackpot!  The brand is back in control.  A surprising number of marketers believe in this magic hack.  They may not say it but their behavior demonstrates this belief.  They pay huge sums of money to gather 3rd party data and bombard their prospects in the digital world.  Usually they miss the mark and often they alienate their customers and prospects in the process.  The tragic part is, the digital era does provide an excellent opportunity for brands to know their customers.  But many brands are trying to shortcut the process rather than earn the insight through the heavy lifting of customer engagement.
Customer hacking is the act of tricking your customers into a business transaction.  That doesn’t sound like a very effective long-term strategy, does it?  Regardless, this is a beloved marketing practice. Practitioners don’t see it in these terms, of course.  They think that if they can just find out enough about their customers (demographics, likes, tendencies, browsing history, buying patterns and thousands of other characteristics) by whatever means necessary, they can manipulate customers into a business transaction.  They think they can buy customer insight, even steal it without the customer’s full knowledge.  That’s how we get to the corporate espionage culture.  At the center of this mistake is the confusion between data and insight.  Data is easy (if not cheap) to obtain, insight takes considerable, ongoing effort.  I can buy customer data anywhere.  I have to change my corporate culture to effectively build customer insight through an entirely new process and approach, in willing collaboration with my customer. The customer gets to have a meaningful say in the offering and its delivery. The brand has to listen, respond and adapt quickly — sometimes radically.  To engage the customer the brand has to truly embrace the concept of customer respect and collaboration, not look for a new way to exert leverage over the customer.  That’s tough work.  There’s no hack for it.
So if “customer hacking” evokes images of a cheap Halloween slasher movie, good.  We need to stop playing the role of the stupid protagonist in those movies, worse yet the psychopaths!! The villain usually gets what they deserve in the end.

Taking a Run at It

I am not, by any measure, a great athlete.  I wasn’t the last kid picked on the playground either but, you know, good friendships.  I played like a bruising lineman.  Sadly, the game was basketball.  My trophy case is a very old shoe box.  Lots of plastic in there.  Nothing with my name on it.  So when I tell you that at 45 years old I will be running my first full marathon (@FreepMarathon Detroit) next week, note the perspective.  We come from the same planet.
One of my brothers and a close friend are hard-core runners.  Multiple marathons.  Boston.  The whole bit.  About 6 years ago, they mentioned a run they were doing for kicks.  A few miles on Belle Isle, in the Detroit river, on New Years Eve.  I probably hadn’t run a mile in 15 years.  Folks, on the box marked “pain” you’ll see those ingredients.  And I was taking them in doses higher than the recommended daily allowance.  Just four miles, 38 minutes and a chapped face later, I was hallucinating my way across the finish line.  I literally stopped a few feet short to embrace an old friend who had made a special trip to cheer me on.  Or not.  Turns out, me and a stranger in downtown Detroit shared a special moment.  No lasting bonds were formed between us.
That was the beginning though, of the best thing I have done for me since… (fill in appropriate life moments here).  Anyhow, I fell in love with running.  This year, I finally took the plunge.
I won’t wax on about all the great things running brings.  I used to get injured a lot because I am ‘big-boned’, have weird ankles and made all the typical mistakes.  We’ll skip that tedious commentary too.   Running is a metaphor for everything.  The greater truths of life are revealed.  It’s hard and rewarding.  There, I think that covers it.  Supplement with books as necessary.
Now I’ve got my gear right and training sorted.  It’s just a question of getting it done.  I’ve worked for a sub-4 hour time.  It will take my best run.  I am confident.
I’ve done several half marathons now and a bunch of shorter organized runs. I never miss New Year’s Eve on Belle Isle and have run it solo on multiple occasions (cowards).  A big race day is the thrill.  Where else does a grunt like me stand shoulder to shoulder — albeit briefly — in the same event with the elites of the sport?  Thousands of people cheering and smiling and willing everyone to success.  That’s pretty rare.  I’ll take some.
Then it comes down to you and your skimpy gear, grinding and gliding your way to the best you can do that day, whatever it takes.  Like everyone, I went through phases of gadgets that I thought would help me.  Shockingly, there’s no short cut (Just like life!  Ok.  Enough of that.)  You have music, of course.  And while you are still capable of coherent thought you find incredible meaning in all lyrics.  “…every ounce of energy, you try to give awayyayyy, as the sweat pour out your body…”  Yes Bob! Yes! I am with you! You understand me!  We are part of a greater consciousness!  Ok. Easy.  Easy.  Relax.  The medics are staring.
If I am wearing it, it better be light and it better be critical to maximizing this run.  Like all runners, I save my highest scrutiny for the shoes.  I’ve tried them all.  I don’t really care what they look like.  I will render them fashionably undesirable pretty quickly.  They must serve me well.  I am what is affectionately called a “Clydesdale” runner.  I push my shoes hard.  They serve me well.  For me, the only shoe up to the task is made by ASICS: Gel Cumulus for routine training, Gel Nimbus – yes, you can picture the Nimbus2000 carrying me along effortlessly – for the long runs.  I wear them until they are beat, then they get a serious wash and serve as my knock-around shoes.  (For the love of Jim Fixx, I wish I had them on when I stepped on that rusty nail last week.  But if that won’t stop me, and it won’t, nothing will.  All tetanus shots in order.  Thanks.)  And so, my #BRANDLOVE for ASICS – Anime Sana in Corpore Sano (Sound Mind in Sound Body) – though both are a work in progress for me.  The love is earned over years.  On October 19 as I run through Detroit, over the bridge to Canada, down the river, back through the tunnel for the only underwater mile in marathon and around good ol’ Belle Isle again, I know the love will be returned by my ASICS!  Thank you boys!
So, if I can go sub-4 hrs, it will be an amazing moment for me.  If I can subsequently convince the Boston Athletic Association that I am over 60, I will qualify for that race.  Maybe next time.  Until then, follow along if you like (@TimBWalsh) and we’ll offer each other some encouragement.  Whatever happens, my sincere appreciation to ASICS for making the shoes that make it possible.  No matter what happens on October 19, we’ll be trotting out together many times afterwards.  I love that.

Digital Transformation. Will it be Customer Engagement or Corporate Espionage?

The paradox of the digital era is this: As the power of the individual increases, so too does her vulnerability.  The business response to “digitalization” of our lives is known as Digital Transformation. Even in these early stages of the process, it is clear that some businesses are choosing to acknowledge the power of the individual customer and find ways to engage on more equal terms, while others are exploiting the customer’s vulnerability.  That is a defining choice for any business and many are getting it wrong.


First of all, what is Digital Transformation?   This is what I think Digital Transformation is, long form. Here’s a net definition: Digital Transformation is part of society’s evolution, enabled by technology, to relationships defined primarily around the individual rather than the organization.  That statement appears simple and innocuous but the implications of this change are profound.  Upheaval is occurring at a level worthy of comparison to the Industrial Revolution.  We don’t view the Industrial Revolution as a change in the way business was done, though that certainly occurred. Like its predecessor, Digital Transformation is a paradigm shift that is visible in every facet of our lives. Organizations — from store-fronts to massive multinationals to sovereign governments — that have failed to understand this change have failed to survive, much less succeed.  If that seems like an overstatement, check out Henry Kissinger’s World Order, which questions the viability of nation-states as a functional model for the future and cites technology as a major contributing factor.

It is not all about digital technology.   As the Industrial Revolution could not have happened without the steam engine, harnessed electricity and mass produced steel, Digital Transformation would not be possible without networks, mobility, micro-chips and a host of other dramatic improvements in tech.  These innovations hinge on much broader societal realities though.  Major advances in health, food production, communication, education, transportation and the global spread of democratic principles have all been critical factors contributing to a radically different global society in just the last 40 years.  With ever-increasing billions of people jamming themselves into cities, we’ve created a crucible from which new technology had to spring and was destined to thrive.  

Digital Darwinism

Hooray Everybody, We’re Digitally Transformed!
What are the implications to business?  The broader societal transformation is cultural, as the business response must be.  Changing corporate culture is as tough as it gets.  This is to say: A shiny new app or a town hall rah-rah session ain’t gonna cut it.  These token steps are very much in vogue as substitutes for transformation.  Grand visions on IT architectures, miracle product design and the much-ballyhooed but vaguely understood “customer experience” are also stand-ins.  All those things may happen as part of an enterprise digital transformation.  They are milestones and artifacts of a bigger process which, by themselves, won’t transform anything.   If you believe in Digital Darwinism — Survival not of the strongest or the smartest but those most adaptable in response to change — then you “naturally” (ahem) recognize that we should start with proper diagnosis of the changes to which we are adapting.

Start by focusing on the rising power and influence of the individual.  The center of gravity for power is descending from major national and multi-national entities to smaller, more localized groups.  Ultimately, this is the continuing rise of the individual, not just the consumer/customer.  But while the business community pays lip-service recognition to the rise of the consumer, two diametrically opposed responses have evolved; one of which embraces the change, the other fights it.  Acknowledging customer power leads down the Customer Engagement path.  Companies still seeking to find new control points over the customer have begun heading down Corporate Espionage route.  As the individual is empowered, the company / customer relationship is being defined as a person to person relationship, based on customer expectations of a ‘normal’ relationship.  Most companies aren’t skilled at interpersonal relationships; some are learning and engaging while many are pursuing the “reality TV” version of a relationship: high drama and lots of deceit.

Trust is the Foundation

Before examining market response to the empowered customer, let’s reset on the broader goal of the company / customer relationship.  Regardless of business model — B2B, B2C, B2B2C or the rising Peer to Peer (sharing) models — the provider, in order to have a sustainable business, must continually generate one foundation emotion with their customer: Trust.  The degree to which trust is established and maintained will determine the long-term value of any relationship.  Continue to provide what the company promises and the customer will continue to reciprocate.  The collective market trust in a company to deliver on its promise is its brand.  To the extent the company is consistent in delivering and exceeding the promise, customer loyalty is created.  Trust and loyalty lead to a sense of shared purpose and community among customers, together with the company.  This engenders collaboration towards a common goal: Improve the offering.  Active collaboration with the customer to improve the offering is a fine definition of Customer Engagement.  

That is a worthy and difficult goal, which takes time and effort to realize.  In other words, it is a true transformation.  But that is not the way the market is going, as a rule, which provides an excellent opportunity for businesses to differentiate themselves.

Die Hard Losers

If old habits die hard, old business models are Bruce Willis.  It has long been a standard business practice to coerce and leverage the customer into action.  Lock-in contracts, monopolistic tendencies, confusing pricing and market manipulation are all examples of business leverage over the customer.  In a brick and mortar world, it was enough to be “the only game in town”, literally.   Any and every possible advantage gets exploited.  Leverage models depend on a customer that doesn’t have choice, access or power for a variety of reasons.  Those limitations are largely removed in the digital world.   There are thousands of start-ups exposing bad business and stealing away customers.  They’re called “disruptive” and “innovative” miracles of the digital era.  For the most part they are simply doing what challenger businesses have always done to incumbent powers — exposing poor business practice (then in turn being quickly exposed themselves). Society’s digital transformation has made that easier.  The empowered customer has made it a very real threat.  Still, a mega-corp seems to stumble and fall every couple of months because they would rather stick with what they know and fail than try to make the hard changes, the transformation, required to be successful in the digital era.

Monkey See, Monkey Do (No Evil)

In the midst of this chaos, a deceptive option has emerged and been widely embraced.  On the surface it appears to empower the customer by offering desirable services.  In fact it’s a new form of the leverage tactic.  This model is best described as Data Monetization and its pioneers can be understood as big data monopolists.  They monopolize not only the network but the data it generates.  In this model, the provider goes to great lengths to extract as much data as possible about the customer, generally without the customer’s full understanding, then sells the data to 3rd parties for advertising or marketing purposes.  The lack of use awareness makes it a Corporate Espionage play.  Businesses leveraging the data generated in these networks, or trying to emulate their tactics, need to understand the risk.  This has been the basis for wildly successful companies, titans of the digital era.  But the erosion of privacy and user trust in these networks is the severe downside of playing Corporate Espionage.  (Remember, the most effective path for government to invade privacy has been to obtain personal information from big data monopolists.)  These networks consistently leverage their monopolies against users.  You want to be part of this network?  You sacrifice your privacy.  If you don’t like it, leave. That’s tough to do when there is no comparable network.  But how long will that last?  Increasingly, big data monopolists are using this power against their customers (advertisers) as well.  That’s how they make their money and it’s a classic leverage play.

Businesses eager to exploit or emulate big data monopolies need to be extremely careful.  There are two reasons for caution.  First and foremost, the model is based on deception , the antithesis of trust.  Using any and all means to gather data on unsuspecting targets often results in a skewed and inaccurate picture of the customer.  So business tends to miss its mark often.  It also unnerves the customer often, angers them more frequently and, increasingly, provokes them to legal action.  Customers need the courts to exert their power against the monopoly of a proprietary digital network.  But they can and certainly will reject the brand promise of a company exploiting a model based on deception.  Second, a proprietary digital network is controlled by its owner, not its advertisers.  Just as they leverage power over users (i.e. data providers) data monopolists routinely coerce customers (i.e. advertisers).  They will decide who sees what content, when and whether it is suitable to the larger mission of the network.  They will decide what data is available externally.  If for any reason the advertiser’s purposes are at odds with the network’s, the advertiser loses.  The relatively slow adoption of digital proprietary networks as marketing platforms, compared to say, email, can be traced to the fact that email is an open protocol, not a proprietary network.  Email follows the original Internet ethos of Peer-to-Peer , whereas proprietary digital networks are fundamentally monopolies, a model as old as business.  Proprietary digital networks also differ from traditional print and broadcast media because the later are highly regulated regarding access. Proprietary digital networks?  Not so much.  That reality is rapidly changing.  Witness the increasing government regulatory involvement in the digital domain (Net neutrality, privacy, anti-trust suits, etc).  The Data Monetization model will have to change because the empowered individual demands it and governments are acting.  So, seller beware: Exerting leverage via Data Monetization is a dangerous game, with dubious results.

Getting to Good Data

In the digital world, customer data is a critical asset to serving the customer better.  As most businesses have discovered, it’s not about having huge volumes of customer data, that’s easy.  It’s about having good data that can actually be used.  “Good” in two senses of the word.  First, it is accurate.  Second, it has been obtained in the right way.  A happy customer will share their data when you collaborate with them.  It will be accurate, trust will build and the virtuous cycle is enabled.  A deceived, coerced customer will result in “Bad” data, from both perspectives.  Initiate vicious cycle.  The way in which customer data is acquired makes all the difference between a leverage model and an engagement model.  Going forward, the choice of engagement vs espionage will determine success or failure in the digital era.  Open, collaborative exchange of information in the mutual interest of business and customer is the pinnacle of engagement.  Deceptive data monetization is at the other end of the spectrum.  That route is full of errors and recriminations (a word I choose deliberately as regulators move in).  Yes, big data monopolies will continue to be successful, at least for a time.  Do not be confused into thinking that any organization can ride those coattails.  At root are the same priorities that have mattered to customers since long before the digital era began:  Loyalty, Control and most of all Trust.

There was once a model understood as a “Funnel”, where the organization leveraged masses of customers through the AWARENESS – INTEREST – DESIRE – ACTION sequence.  That’s over.  A digitally transformed model recognizes the power of the individual customer with these milestones:  make a PROMISE, establish TRUST, build LOYALTY and foster COLLABORATION towards improvement of the offering.  That is the Customer Engagement path.  Agility and openness are the keys to Engagement. The customer follows whatever sequence they choose, using whatever means are available to them.  Fortunately for business, the digital world makes a true Customer Engagement model possible.  Now business leaders have the hard task of making it real.

Big Data: The New Big Tobacco

We are now ending the lust phase of our relationship with big data.  Thank God.  The next phase promises to be equally exciting, albeit considerably more turbulent.  Some maturity, some retribution.


For the purpose of this discussion, set aside our myriad definitions of “Big Data” the technology and focus instead on the powerful oligopoly of companies that have grown to dominance by gathering and selling data — your data.  The concept isn’t new.  Selling data has been an industry for many decades.  The Internet era exploded data.  Then some Internet companies exploited data — in a way and to a degree that we could barely conceive 20 years ago.  A concentrated group of companies, some household names, some not, have set the world on fire by acquiring and selling data about you.  Yes, you.  Call these behemoths collectively “Big Data”, because they are heading down the path blazed by the Tobacco oligopoly affectionately known as “Big Tobacco”, with potentially similar disaster in store.  We can hardly compare the damage Big Data does to the health crisis Big Tobacco provided us.  On the other hand, Big Data has no exclusive control over the addictive commodity underlying its business.  If they lose the public trust — a process well underway now — a major piece of the economy is going to have to change or die.

Doctors Smoke Camels

Doctors Smoke Camels.jpg Credit: photographer – itsnitram


Smoking is Good For You!

More data, more services… and games, phones, watches, appliances, tools, cars, rockets…everything.  It’s an amazing deal right?  Maybe.  First be sure you understand the deal.  Most people don’t.  Or maybe they don’t really want to.  Those gadgets are cool!  So, like the teenager who strikes the Joe Camel pose for the first time or the unemployed laborer who scores a zero-down adjustable rate mortgage, the relationship begins.  Sure, smoking is “bad for you”, you shouldn’t borrow more than you can repay and you should understand the license agreement before you click.   But everybody’s doing it!  They can’t ALL be wrong.  Anyhow, if it was really bad for you, the government wouldn’t allow it, right?


Then the lawsuits begin.


Let’s look back at the progression of Big Tobacco.  In 1950, the British Medical Journal published the first scientific study correlating smoking and lung cancer.  It wasn’t until 1964 that the US Surgeon General also explicitly connected smoking cigarettes to cancer.  Over subsequent decades, evidence mounted despite being routinely obfuscated by Big Tobacco.  Already in the mid-50’s however, individuals had begun to sue Big Tobacco on various grounds, mostly asserting fraud and violations of consumer protection laws.  The success of these cases?  Through 1994 — 40 years of victim vs. Big Tobacco — over 800 cases were brought in the US.  Big Tobacco didn’t lose once.  That’s power.  They knew how to win in the courts and in Congress.  That changed in the late 90’s.


Two things forced a 180 degree turn on Big Tobacco’s US fortunes. First, tobacco insiders (THE Insider — Dr Jeffrey Wigand, among others) delivered compelling evidence that not only did Big Tobacco know their product was harmful and dangerously addictive but they literally designed the product to maximize addictive effects.  “We’re a nicotine delivery business.” The truth was out and it was ugly.  Second, the government got involved when the victims could no longer be ignored.  Several States Attorneys General banded together and eventually won the biggest settlement in history against Big Tobacco in 1998.  The complaint asserted fraud, deception, negligence and public nuisance, among other things.  In the US now, smoking is pariah activity and illegal in most public spaces.  Big Tobacco knew the writing was on the wall in the US.  Long before the judgment came, they had diversified into food and other consumables.



Big Data is running down a similar path.  Deception?  Check.  Users are only now realizing on a broad basis that many companies are watching, recording and manipulating them CONSTANTLY. It’s not just what you buy. That’s primitive stuff.  Every site you visit, everything you ‘like’, every person you interact with online, every word you type in “free” email or chat service, every picture you take (yes, including those you thought were instantly deleted), every physical place you go with that mobile device, the middle of the night drunken surfing… yes, yes and yes.  And it’s not just online activity.  Remember, companies have been at this for decades.  All the publicly available information is now being tied together with your digital life to deliver an incredibly intimate picture of who you are and what you are likely to want, spend, do.   Just leave it to Big Data to make the predictions.  (What’s the best way to make an accurate prediction?  Manipulate the outcome!)  Anyone not living in a gun shack has a profile that runs to literally thousands of data elements.  You don’t need to be a Facebook addict to have a file 6 inches thick which carries your purchase history, voter registration, residence, major credit events, network of friends etc. That list is growing exponentially because now the cottage data industry has become Big Data, with limitless resources. Increasingly, Big Data isn’t even bothering to ask user consent for any of this.  As they say: “Not paying for the product?  You are the product.”  The government (US and EU) is taking notice and taking action.  Users feel deceived and governments have picked up the scent.


For a full expose, check out Aral Balkan’s Free is a Lie, scrutinizing Big Data’s business practices. (@ 8:30 it includes a great metaphor about risks to all citizens, not just Big Data customers.  “Just like exposure to second-hand smoke”!)




The Government Steps In…Slowly

Bad news for Big Data, we are accelerating through the litigation step and going straight to government intervention.  If you thought the EU ruling on ‘The Right to be Forgotten‘ was crazy, you would be shocked to know that the US Federal Trade Commission recently recommended far more radical legislation in the US.  The FTC’s somewhat unheralded publication “Data Brokers – A Call for Transparency and Accountability” is a landmark document that should be a bright, flashing red light to the entire industry of Big Data.  It’s the result of a multi-year investigation into the practices of Data Brokers (e.g. Acxiom) but it applies equally well to titans Google, Yahoo, Amazon, Facebook and others that live off user data.  Here’s a summary in the NYTimes.  The fact that Google and other Big Data players are not called out in the FTC report is incidental.  They have fundamentally the same model as the Data Brokers, although they execute it far more effectively and have considerably more influence in Washington.  The report speaks to Big Data’s billions of users (i.e. data providers), as well as their customers who buy data about the billions!  In the document, the FTC condemns deceptive practices of Data Brokers, primarily for their failure to disclose the information they are collecting on consumers or allowing them to control it. (Duh.  That’s what they sell!)  Yes, it might surprise a user to know that their frequent history of browsing sites on motorcycles could identify them in a high-risk category for an insurance company considering coverage.  Oh, did you assume all data collected about you was a current and accurate depiction?  Oops.  No, no, no.  Who knows if it’s accurate?  It’s just out there to be bought and sold.  Among other things, the FTC recommends legislation that would allow users to “opt out” of having data collected about them.  That would be interesting, to say the least.  Imagine if everyone opted out.  Suddenly the services for data for advertisement continuum screeches to a halt.  The Obama Administration has also called for a “Privacy Bill of Rights” to protect on-line consumers.  That seemed to have lost some momentum until recently.  In May, the president’s commission on the topic cited big data’s threat to civil rights.  All these recommendations walk the fine line of positioning the Big Data co’s as a potential threat on a discrimination basis, while largely ignoring dubious industry practices.  Again, this follows the Big Tobacco path:  Lobbying will sway government policy for a period of time. Ultimately, public sentiment will determine when and to what degree Government will step in.


Do we have an Insider?  Oh yeah.  However you view Edward Snowden, the great irony of his revelations is that he actually exposed the guys late to the party: federal governments.  Phone tapping strikes a chord with everyone because the tactic is so well established in the folklore of our society.  That’s how they catch gangsters!  But wait, don’t many of us reveal as much or more in email and social networks, which are richly mined by Big Data for their benefit?  Maybe more so.  Meanwhile, Google’s outrage over NSA spying on their data centers is rich.  Hey, no fair! Only we should be able to look into the intimate details of our users!  Quite true, when that is the core of your business model.



What is Big Data’s equivalent of the “nicotine delivery business”?  Simple. They are a data monetization business.  Yes the Big Data oligopoly sells advertising.  That is one, but far from the only, strategy for data monetization.  So while Big Tobacco spent billions in R&D to deliver nicotine to as many bodies as possible, as efficiently as possible, Big Data’s mission is to extract as much data as possible from as many people (or “things”) as possible, as intrusively as possible.  They are finding incredible ways to extract and monetize data, well beyond advertising.  Search was the killer app to find out what mattered to us in exchange for organizing the web.  Then it was/is social networks, which kept people connected with each other, businesses, causes, you name it (as long as we can listen in).  Need more?  There’s an app for that.  In fact, there are millions of apps for that, most of them ‘free’.  As long as you don’t mind telling us precisely where you are, who you are and what you are doing every waking second.  The new strategy is to get smaller and closer.  Enter the next big thing: Wearables.  We’ll stop messing around with games and just extract info directly from your body.  (Did you think this was about fitness?!?)  This is particularly clever.  The smartphone replaced the watch… so there’s an open spot on that arm!  There’s also an open spot on the wallin the skyon the road… If you’re not going to oblige us by walking around with our mobile device, we’ll just build something around you to watch.  Awesome investment follows.  We recently saw a glimpse of where Big Data wants to take this and it goes well beyond advertising to mood control, which has dizzying possibilities.


So what is a Big Data player to do?  Well, read the Big Tobacco playbook:  DiversifyDiversifyAt all costs, diversify.


Surgeon General’s Warning Cigarettes.jpg credit: Wikipedia


Warning: Duplicity is Harmful to Your Health

The issue here is not whether it is “right” or “wrong” to run your business this way.  There is a highly energized debate on these points which gathers more and more attention each day.  The issue is whether / how long consumers will tolerate it — and what happens if/when they don’t.  That is where the enterprise has to focus its strategic analysis.


There are two increasingly obvious conclusions to draw from this situation.  First, the Big Data model created by major brands like Google and Facebook is not sustainable in its current form.  It is a safe bet they will adapt quickly, which is their strength.  Second, enterprises that think they can copy that model are heading down the wrong path.  Now ask, How quickly can we adapt if we push hard in this direction and hit a dead-end?  Whether it is core to your business model or an important part of your customer engagement strategy, deception won’t work long term.


We learned a long time ago what the art of persuasion, and by extension the sales process, is all about.  Aristotle taught us that the three key elements to communicate with and convince your audience/customer are: Logic, Emotion and Character (as in, virtue and advocacy on the audience’s behalf).  In the profession of sales, we have placed major emphasis on the first two, increasingly at the expense of the third.


Much closer to our time (and without the need for vagaries of translation) is the wisdom of Esteban Kolsky, CRM thought leader, who points out that “Trust is the currency of engagement”.  He continues “delivering what is in the best interest of the other person in the relationship, accurately and repeatedly over time, generates trust….the trust generated is what (over time) engenders engagement.”  Esteban focuses on the brand promise as the proxy for trust from business perspective.  See full white paper here.  Whatever your brand promise may be, it seems safe to assume that deception is not part of the message you are trying to convey.  That would seem particularly true for a company whose values explicitly include “Don’t do evil.”


But Big Data continues its push.  Just like Big Tobacco tried a feint with the “safer cigarette”, Big Data is repeating its old tricks in new ways.   That is not innovation.  That is optimization.  The underlying business model is the same.  All companies stuck in optimization mode are ripe for disruption.  Don’t assume Big Data is an exception just because they have been tremendously successful in the recent past.  Remember that Henry Ford rode the Model T too long and gave up over half of his market share in the process.


Is all big data (lower case) bad?  No.  It is, however, time to discriminate the effective uses of big data.  You already know it is not a panacea.  Now that the crush is over, we all need to take a critical look at how big data can support sustainable business practices.  That includes an ethical element.




But All the Cool Kids Are Doing It!

Mainstream enterprises are trying, albeit with limited success, to copy the model that has created the Big Data oligopoly.  It started with enterprise use of data brokers (e.g. Acxiom) and moved to their full-service, modern equivalent, the aforementioned behemoths.  But there are also a huge range of tools that are popping up to make this DIY for the enterprise.  Digital marketing analytics tools offer to harvest a lot of clandestine data.  If the internet bigs are taking a short cut (by deceiving consumers into providing more data about themselves than users realize), does it make sense for enterprise to follow aggressively?  No. At least not at high scale or until we understand where the privacy pendulum will settle.  It is one thing for Google to throw some of its limitless resources to accommodate the “Right to be Forgotten” ruling — and potentially many others to follow.  That’s their core business.  It’s quite another for enterprise to do it.  A short cut on a short cut is not a smart play.  And maybe, just maybe, Big Data doesn’t have the killer model after all.  Remember that public — and legislative — sentiment is turning against this business model.


Enterprises have a much better option.  Rather than destroying trust through deception, this option develops trust and leverages it up to the engagement all enterprises seek.  But first, a quick detour to understand why this is happening.


We are in the throes of Digital Transformation as a society, a scary and exciting prospect for the enterprise.  In short, the physical, analog world — that is, everything we do — is being converted and recorded digitally.  All the traditional processes of the physical world are being redefined in the digital world, including sales.  The key tenets of this transformation are that it is entirely centered on the individual and it is evolving fast.  Very fast.  The Big Data companies are responsible in part for the incredible speed, innovation and disruption.  They can’t go fast enough, far enough.  The enterprise crowd is generally struggling to keep up.  “Go fast.  Excel at this game, even if you don’t understand it.”  (That’s a loose translation of orders from the CEO).  The situation is ripe for serious mistakes.


The enterprise, often led by the CMO for this scenario, is tasked with understanding the customer in intimate detail and creating a wonderful, completely personalized “experience” for them, each one of them.  The short cut is to join the Big Data game of harvesting infinite troves of data about the individual by whatever means necessary.  Sometimes it’s good data, sometimes it’s not.  But always the enterprise has a voracious appetite to learn more about the customer.  The deception sometimes employed in gathering this data erodes trust and ultimately defeats the purpose – to enhance the enterprise relationship with the customer through trust.  The enterprise has to go the other way:  Transparency.


Aggressive transparency can be an excellent strategy for engaging customers.  It does not involve hidden tracking or the purchase of data obtained surreptitiously.  It centers on the hard work of creating an open environment across a wide range of interaction points and finding the preferred method for customer interaction.  Each customer.  As enterprise engages the customer, it must take great care to not only listen and record but share their understanding of the customer’s interests – with the customer.  Involve the customer openly in the collaborative process of creating and maintaining the right experience consistently.  Consider the major legislative recommendations of the FTC:   Consumers should be allowed to know what you know about them, they should have the ability to correct data and the chance to opt out of data collection.  For a business model that thrives on crafty data surveillance, this is a nightmare.  For a customer-centered company that thrives on doing what their customer wants, this is practically a mission statement.  In the era of the super-empowered consumer, which model is likely to thrive long-term?


If you want true innovation, look at the Vendor Relationship Management (VRM) movement.  Harvard’s Doc Searls, who is at the forefront of this movement, positions the situation best.  If, as most would agree, the consumer is in control, why should the commercial relationship be dictated by the enterprise?  In itself, that’s not a very controversial statement. We all agree that this is a joint process that fully involves the customer.  Now add this:  The customer should own her data, be collaborative about ensuring its accuracy and share it when and where it suits her.  Oops.  That crosses the line.  The irony of the current state of CRM is that conventional wisdom recognizes the power of the customer.  But very few sales processes have evolved to the point that they embrace the customer’s power.  Many processes are trying to maintain the illusion of full enterprise control, increasingly through the use of Big Data-like tactics.  That has serious risk attached.  The VRM vision seems extreme in the context of the way business is done today (hence the disruption).  Whether it is ready for broad adoption remains to be seen.  Certainly this is a step beyond the very trendy “Customer Managed Relationship” mantra.  It is also a logical extension.  In any case, VRM clearly points the way towards a more healthy model; one that builds on our evolution to this point.


Yes, it is tough.  Consider, though, how much you already know about your customer.  The first big step in this process is not going out and seeking external data sources.  It’s gathering what you know into a logical framework that can be leveraged to properly engage your customer.  That is no short cut.  Then comes the difficult work of creating the environment of constant, heavy attention over time.  Digital channels will help simplify that.  There is no short cut.


The transparency approach is not vogue.  Deception is in, for now.  However, with the onset of major consumer upheaval and government action, transparency will have a strong case.  It very well may become mandated.  In any event, it is the inevitable path we are on.  Now is the time to ask whether you actually believe we are in a customer-centric world.  If the answer is yes, it’s a good idea to stop spying on your customers, even if you have Big Data agents do it for you.  The enterprise needs to work openly with the customer for mutual benefit.  Truly innovative companies will see this trend, without the aid of Predictive Analytics, and capitalize.  Just read the warning on the pack!

The Return of Antitrust — Digital Economy’s Biggest Threat

Once upon a time there was an incredible concentration of wealth and power around a few men and their companies because they built and controlled the infrastructure of a booming new economy.  If you think Bezos, Zuckerberg, Page/Brin et al control large portions of the economy today; you should also know that men like Carnegie, Vanderbilt, Morgan and Rockefeller dwarfed them in scope of power.  The business world has never seen the accumulation of capital to compare with the titans of the late 19th / early 20th century America.  Then it came unravelled.  Why?  They messed with the public trust.


(Joseph Keppler’s “The Bosses of the Senate”, 1889)

The parallels between the current era and the age of the “Robber Barons” are striking.

Mass industrialization completely changed society in the countries that embraced it.  Those that did not would be reduced to colonial exploitation for another 50 – 100 years.  The creation of wealth in industrialized countries was completely unprecedented in its scale and speed.  Global populations shifted, from rural to urban and subsistence to abundance.  Since everyone seemed to be benefitting regulations were few and far between.  Who knew how to regulate entire industries that had never existed in human experience?  Aggressive actors – first movers – were rewarded for their risks and they dominated everything they could get their hands on.  The individual was expected to appreciate the good things big business was doing for them and not make trouble.

Is there any part of this that DOESN’T sound like present day?  Swap the birth of the industrial economy to the digital economy and you have a close reflection of our current, equally dramatic, period of constant change. It’s moving fast and creating huge wealth.  Regulation is still very loose.  Maybe we’ll shake our heads someday in the memory of internet transactions that weren’t taxed.  Certainly the incredible innovations will all look inevitable on our path of progress, in hindsight.

But it went too far.

Around the turn of the 20th century, the biggest businesses, sometimes called ‘Trusts’, became so large they could and routinely did stifle competition through coercion or manipulation of markets that no one fully understood.  It was ultimately bad for their workers, who had practically no rights, and consumers, who had to pay whatever the monopoly dictated.  This gave rise to landmark legislation.  Most notably the Sherman Antitrust Act of 1890.  Soon, there were populist candidates and parties – most notably US President Teddy Roosevelt and the Bull Moose party – fore-runner to Tea Party and Occupy movements.  His primary platform was “Trust Busting”.  TR’s administration brought suits against scores of companies.  His hand-picked successor, William Howard Taft, would carry on the work as President and then Chief Justice of the US Supreme Court.  It was the end of an era for big business and the rise of unions, the Federal Trade Commission and countless other regulatory bodies.  Gone were the mega-powers.

We appear to be on the verge of another major correction.  Again it is targeting the big guys and again it is based on a crisis of Trust.  Too Big to Fail is the battle cry of many populist voices (or “Not Too Big to Jail” as we heard from the US Attorney General this week).  While populist outrage initially focused on Banks, the target is clearly shifting to the digital titans.  The digital economy is based on trust.  That trust has been abused in the eyes of consumers, employees and now regulatory bodies.  While there has been a great uproar over government spying on citizens, an April poll by Reason found that US citizens trust the vilified NSA more than they trust Facebook with their private information The American Psychological Associations 2014 Work and Well Being Survey found that roughly 1 in 4 employees distrust their employer, 1 in 3 say their employer is not always truthful while only half think the employer is open and honest with employees.  Seizing on this momentum, the Obama Administration has called for a consumer privacy “bill of rights”, specifically calling out big data and its potential for abuse.

These are critical warning signs for any business which depends on trust in its ecosystem, which  means every company out there.  Trust, developed through clear communication, is the centerpiece of all relationships.  Those of us focused on creating better customer relationships – oops, I meant engaging customers better to create a perfect customer experience – had better take notice.  In business, trust is created when you and I agree on what we will do for each other.  Not only do we understand the definition of the exchange (e.g. delivering a product for money… or is it a service in exchange for information?), we also have confidence in each other’s ability to execute.  Target and a dozen other high-profile security breach victims couldn’t execute.  If a company doesn’t trust a customer’s ability to pay, they put a credit card between them.  If a customer doesn’t trust a company’s ability to do what they claim to do or starts to worry that company has ulterior motives (e.g. the harvesting of data we’d rather not share) they go somewhere else.  Quickly.  There is no relationship without trust.  Maybe you get a transaction.  But what you’ve got is not trust, it’s antitrust.

Digital Transformation — The Individual Revolution


We are in the early stages of a major paradigm shift, which for now is called Digital Transformation.  What is Digital Transformation or DT?  If you have no familiarity, take heart. First, this DT is not delirium tremens, a medical condition of uncontrollable shaking.  Although there is considerable uncontrollable shaking occurring in the business world as it broaches this topic — and with good cause.  Second, you can find a great primer here by Estaban Kolsky, with help from Sameer Patel and Paul Greenberg.  Ray Wang also writes about this regularly.  All very smart guys.  I draw from them heavily, albeit on an informal basis.


This is a major change in the way we live and work.  So it has been slow to receive a common definition.


The basic realities underpinning this shift are clear to everyone.  Business is moving at a much faster pace today than it ever has.  That pace is increasing.  A recent study by CapGemini found that >70% of executives recognize pressure to digitally transform, coming from customers, competition and employees.  The same report cites a general self-assessment that enterprise the culture of innovation is inadequate; we’re too slow even though we’re moving as fast as we can.  We know that customers are more informed and empowered than ever before, so we are seeing the changes in sales and marketing first.  Customers shift allegiances quickly, based on their own understanding of the company.  Beyond this, however, we see the somewhat more muted pressures from employees and partners.  All of them demand to work with the same fluidity in which they live their digital lives.  That’s not an incremental change, that’s a transformation.


So with great respect to the more learned colleagues mentioned above, I offer a layman’s definition.  Digital Transformation is society’s evolution, enabled by technology, to relationships defined around the individual rather than the organization.


Let me break it down.


Society ” instead of “business” because this move is already well underway in our day-to-day lives and it covers much more than our business relationships.  If the majority of what you are doing – socially, commercially, even physically –  is not captured digitally today, it soon will be.  This is not limited to a demographic group; it crosses age, race, economic and geographic boundaries.  Forget the “Gen Y” distinction.  It distorts the issue.  See Constellation’s classifications of Digital.  We are all digital to some extent now, becoming much greater with time.  The fact that our lives are becoming seamlessly digital gives you the first strong inkling of why this is an imperative for the enterprise and why it is much bigger than a technology shift.  And the change doesn’t stop with us humans.  Every THING around us is participating.  Sensors, cameras, drones and an unending new array of devices are capturing the physical world in digital form.  Once it’s digital, it becomes part of the rushing river of data that drives new business models never before conceived, which are delighting customers.  Does that sound like your business?



enabled by technology ” because it is the maturity and general availability of networks, sensors, mobile devices, data stores, analytics tools and delivery via Cloud that makes it all possible.  The individual has always wanted the world on our terms.  Advances in the technology have made it possible to get it.   Has technology driven behavior change or simply caught up with our lifestyles?  Either way, the change is massive because it is happening in all facets of life.  This point should NOT be confused to mean a new technology is the answer to DT.  The tough part is the cultural, organizational change.



defined around the individual ” is the cornerstone of the paradigm shift.  This change is fundamentally about the evolution from generalized, largely static interactions to a focus on the dynamic individual; whether customer, employee, partner, stakeholder or citizen. In many respects, this is a continuation — though a radical acceleration — of a much larger societal trend we have experienced over a longer period.  For business purposes, we need to understand that models built around “B2B / B2C”, broad segmentations like “soccer mom”, Gen X, party affiliation, etc are quickly becoming outdated.  It is possible to know the individual in extreme detail, even as they change day to day.  How?  Because the individual is basically screaming their identity to the world daily.  Yes, social media is part of that.  But only a part.  A browser session leaves a trail of thousands of cookies and tags.  All our endless gadgets and services exist to define our digital identity, that’s how they get funded. Driving a car, watching TV, all of that contributes.  This is — and always has been — the premise of the Internet.  I tell you about me, you give me services that are useful to me.  (When government steps in and takes information we didn’t intend them to have, that’s a problem.)  “Who I am” is a highly fluid situation.  I am changing constantly so you better be able to move fast and stay very agile.  If your view of agility is an upgrade every 3-5 years, get ready to lose.  In this era, adaptation to the individual must be constant. That is extreme agility. (The primary driver of Cloud.) Now consider your hundreds, thousands or millions of unique customers and prospects who are also constantly changing. So, if you’re not an infrastructure provider, you have no business scaling to meet that volume on your own. (Secondary driver for Cloud)



rather than the organization ” is the reason DT is so tough.  Get used to the notion that we are in a shared process to create value.  The organization no longer dictates.  Collaboration or engagement, a model rather than a tool, is central to this process.  If you want engaged customers, you involve them in the creation of your offering.  (You develop mutual trust, a very difficult and valuable thing to do.  Go read Estaban Kolsky on this.)  This leads to extreme customization.  The organization creates the pallet of offerings based on their core differentiating value,  individual defines their particular wants/needs, organization delivers result – usually by leveraging a broader ecosystem.  Often the result is not a product but a service.  So sale of an auto becomes shared ownership or micro-renting (Zipcar et al), hotel accommodations become completely variable and peer to peer (AirBnB model), new projects are developed, funded and executed via crowdsourcing (Kickstarter and a dozen others).  Note that these may be new companies who have less baggage but they are disrupting well-established industries.  Google jsut announced the Ara phone, which will be modular to suit the customer’s preferences. Of course, the heart of the smartphone – its applications — have had nearly infinite variability since their creation.  That may be why we see smartphones as must-have devices at all economic levels with virtually 100% penetration through most markets.  A company can’t develop value as a monolith.  That’s too slow and resource intensive.  Employees, partners and customers must be fully involved in the process.  The traditional lines between customer, employee, partner and the enterprise are necessarily blurred.  Those used to a Command and Control environment or clinging to a business model based on regulation and tradition will struggle.  The benefit of established, large players is that they have extensive knowledge and experience… often locked in systems and individuals that are rapidly approaching retirement.  Without a change in culture, driven from the top, the old guard is in serious risk as Digital Transformation plays out.


The crop of companies disrupting all markets now have two common features — they are extremely agile and they revolve around their customer.  Agility can be designed but it demands a focus on core business and requires tough choices (What is core value vs what is ‘just the way we’ve always done it?) Of course, every company would like to believe they are customer-centric.  Just as every government claims to serve its people.  Nevertheless, there are despots in this world.  And while the tyrants are obvious, even among the most advanced countries we see dysfunctional government (ahem).  So it is with business.  No organization has “bloated process designed for an outdated business model” in their mission statement.  Still, that’s the hard reality of many companies today.  So just as the tyrants are getting nervous, internally-focused businesses should too.  The Individual Revolution has begun — and these people mean business.