Does Your Business Have a Networking Strategy?

Written by Jim Gitney,  CEO Group50 Consulting

Every leadership team is asking questions about their networking strategies for 2011 and beyond. They wonder how Twitter, LinkedIn, Facebook, Google Buzz and others can be utilized for business development purposes.  As we have worked on The Global Leaders, we have spoken with hundreds of companies, and have found a wide disparity between their efforts and the type of business they are in.  Although not a formal study, our general findings are as follows:

1.   Media companies have the highest level of networking activity for sales and brand building.  They should, given their business model.
2. Retailers are next as they utilize networking activities as a compliment to their bricks and mortar business locations.
3. Manufacturing companies have spotty usage of networks for building brand awareness and taking advantage of their long tail.
4. Service providers utilize networks the least because they often don’t believe it will provide them with a significant advantage.

As we looked further, we found that the utilization of networks for business development is closely aligned with utilization of traditional advertising media.  Companies who have significant advertising activities [and budgets] have the most clarity around what these new networks can provide for them.   They recognize the need to continuously touch their current and potential customers with communications focused on maintaining existing relationships and building new ones.  The age old rule of thumb is that you need to touch someone 7 times to build awareness of your company and its product offerings.

Advertising has been the principal method utilized by businesses, but as the number of advertising venues has exploded in recent years, we, as consumers have learned to tune these out, fast forward through them, or just ignore them all together.  Banner ads on the internet are a classic example.  In recent years, consumers [personal and professional] have become savvy.  Although not a majority of consumers follow these steps, they soon will.  They

1.             Go online
2.       Find the product or service that best fits their needs
3.       Shop for the best price4.      
4.       Then decide to buy it online or at a bricks and mortar location.  In the case of service providers, they call the one with the best location and expertise.

Media companies and retailers get it, so what is in it for manufacturers and service providers?  There are several examples that are noteworthy.  Recently, in a company that we did work for, we noticed that they had over 3,500 stock keeping units in their product offerings.  About 700 made up 80% of the sales.   20% of their sales were made up of the other 2,800 units [their long tail] and were randomly stocked by distributors around the nation.  The cost of keeping these units in stock was very high.  The company was faced with the issue of consumers [in this case plumbers and home owners] wanting their product, but not being able to have it in stock when needed.  So we embarked on a program to create a website that offered all of their products at list price, with the appropriate networking activities to spread the word.  We found a website developer who was willing to put the site up and become the company’s web representative with a generous commission and realized an ROI of less than 10 months.  There were a large number of customers who were not aware of the company’s full product offering and the myriad of new products the company was launching. The company was able to use this new resource for introducing new products, developing a large following and routinely sold products as list price plus shipping. 

Service providers [legal firms, consultants, wealth managers, accounting firms, etc.] have a similar opportunity.  They have a product to sell and usually get the majority of their business from the services they are most known for.  In those companies, they too have a long tail and have difficulty getting the word out.  Service providers get business because of their expertise.   If you look at the large consulting and accounting firms, they are using networks extensively.  They showcase their expertise on their websites and in their blogs.  They routinely touch their contacts and gain new ones.   Through the use of these methods, The Global Leaders has grown to over 300,000 high level professionals worldwide.  Members of The Global Leaders have taken advantage of expertise, networking, events and deals with relatively little cost.   They have been able to find resources they weren’t aware of and were able to expand their business or solve problems through this network.

These are just two example of how companies can make networks work for business development.

About Group50 Consulting:  Established in 2003, Group50 Consulting provides manufacturers and distributors with resources focused on speed, quality, cost, productivity and growth.  Group50 has advised several companies on the utilization of business networks for business development.  To find out more about our services, write info@group50.com, visit our website at www.group50.com, or call (909) 949-9083.

Videos that make your creative brain say "Ahh"

You may have been introduced to RSA Animate videos during the past couple years. They are extraordinary video drawings--known by some as graphic facilitation--of provocative talks hosted by the RSA, a 250-year-old British think-tank-of-sorts (see more below).

Wishing you a Happy Thanksgiving with these animated videos for two of my favorite speakers on creativity:

1. Sir Ken Robinson speaking on education. No one captures the need for teaching creativity and changing our worldwide education system like Robinson. (If you are reading this on Facebook or from an email, click here to go directly to my blog to see the videos or here for YouTube.)



2. Dan Pink speaking on motivation, based on his most recent book, Drive. Intrinsic motivation is key for our own creativity, and the principles for increased motivation and increased creativity are quite similar. (If you are reading this on Facebook or from an email, click here to go directly to my blog for the videos or here for YouTube.)



From the RSA website: "For over 250 years the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) has been a cradle of enlightenment thinking and a force for social progress. Our approach is multi-disciplinary, politically independent and combines cutting edge research and policy development with practical action."

Making Time for Think Time and Passion Time, even at Work

"There is never a day we come in and there are only a few things we need to do," explains an Obama staffer in Newsweek's current cover story about how overwhelming presidential responsibilities have become. The story makes clear that, for the President and people working with him, there is not enough "bandwidth," not enough "time to catch your breath" during the day. "Lincoln had time to think," explains one history professor. "That kind of downtime just doesn't exist any more."

Sound familiar? We are all our own president today--each of us the President of what every 21st century career counselor will refer to as the Brand called You--more than ever stretching our personal bandwidth to meet unceasing demands to get it all done. Time to think or downtime at work have become luxuries for most, and even much of what many of us consider free time is spent just trying to keep current: Checking our email, catching up with Facebook, gulping down some news, reading a blog like this (p.s. Thanks).

But for creativity to thrive in our lives--and for innovation to reign in any organization--we need that think time and downtime, that free time and play time, even at work. More than ever at work.

"We need to reinvent free time," writes Nancy Gibbs, in her excellent essay about invention for Time Magazine this week. Read it here. In the same issue, Time features the Best Inventions of 2010, celebrating the latest innovations of the year, ranging from jetpacks to spray-on hair, highlighting the very technological breakthroughs that require the time, experimentation and play that are too often in short supply. "One thing technology can't give us," writes Gibbs, "is time for serendipitous discovery." Here's more from Gibbs:

Many of us are too busy keeping up to pause for tinkering, conceiving, concocting or devising. Technology, that bullying child of progress and prosperity, gives us ever finer tools of invention even as it denies us the time to use them. We are so wired, so networked and so well equipped that one person now does the job five people used to, thus hoisting productivity while precluding creativity.

It seems we're on the verge of getting our jet packs--but no one has yet managed the time machine. Or better yet, the time expander. So we've got to play tricks on ourselves: schedule free time, however counterintuitive that may seem. Deep immersion in a task--no distractions, no interruptions--can give the illusion that time itself is receding. We feel lighter, braver, our brains more nimble; we free ourselves to try and fail and try again. I've always envied the Google engineers their "20% time": the one day a week they are told to allocate to a kind of intellectual R&D, working on projects that aren't part of their normal job description. This speaks to one of the ironies of innovation: too much freedom makes it harder, too little makes it impossible. But if we were ordered by our bosses to spend even one hour a week brainstorming, blue-skying, free-associating, I imagine the rest of the week would become more creative as well.

Dan Pink, the ever-insightful author who just spoke at the Creativity World Forum in Oklahoma last week, tackles the issue of play in this wide-ranging Blogtalkradio segment. Having time to play, to do things for their own sake on your own time, he says (start interview at 10:58), is essential both to human motivation and to creativity itself. "People are creative in situations where they have freedom and autonomy to explore," he explains, referring to Google's "20% Time," where unofficial projects became highly profitable innovations such as GoogleNews and Gmail. This is what I call "Passion Time," where employees are empowered to pursue passions during the workday along side their other work. Pink refers to this as a "form of recess from work," like a "Spring break," which is how he describes Twitter's recent "Hack Week," which allowed employees to work on whatever they wanted. He tells the story of the 2010 Nobel Prize for Physics invention of graphene, which came outside of regular work time research during "Friday night experiments," which was more of a play time.

As Pink explains, this idea of more autonomy, having the "passion time" to pursue creative ideas at work, is an "idea that is really spreading." Think Time, Free Time, Play time or Recess--whatever you want to call it--is becoming more common in the most innovative organizations, where leaders know their most creative resource comes from the unique brains and passions of their employees.

In these days of overload, we now need to be proactive about how we spend our time, actually scheduling it into our days. So give yourself--and/or your employees and collaborators--the gift of time set aside just to think, scheme, tinker and play. Give it a name, put it on your to-do list and see what happens.

The Cloud Economics : Emerging Signals

Over the weekend, I finished reading the recently released Microsoft paper on the “Economics of the cloud”. As I head to Denver today for participating in the defrag panel on the impact of cloud computing in the enterprise irregulars track, I just wanted to share some thoughts on the theme which I want to discuss while at the conference both on and off the stage.

The Microsoft paper starts by connecting the dots between technology, economics, and disruption:

Economics are a powerful force in shaping industry transformations. Today‘s discussions on the cloud focus a great deal on technical complexities and adoption hurdles. While we acknowledge that such concerns exist and are important, historically, underlying economics have a much stronger impact on the direction and speed of disruptions, as technological challenges are resolved or overcome through the rapid innovation we‘ve grown accustomed to….

The pressures on IT & the engulfing sense of change in the IT landscape are hard to overlook. The pressures would mean more business begin to seriously look at SaaS, re-negotiating license terms, focusing on rapid adoption of virtualization etc. As part of this and beyond, internal IT would be forced more and more to show more bang for the buck and it is my view that organizations would begin to look more and more to question committed costs and begin to aggressively look at attacking them more systematically – earlier sporadic efforts marked their endeavors. This could also unlock additional resources that could potentially go towards funding new initiatives. There are enough number of enterprises going this route and their service partners are also in some cases prodding them to go this way.The emergence of cloud services is again fundamentally shifting the economics of IT. Cloud technology standardizes and pools IT resources and automates many of the maintenance tasks done manually today. Cloud architectures facilitate elastic consumption, self-service, and pay-as-you-go pricing.

The paper starts by highlighting that the basis for the economic advantage in the cloudosphere is the economy of scale available to cloud computing data centers. The paper identifies three areas of scale advantage:

1. Supply-side savings: Owing to scale, Cloud data centers have lower costs per server.

2. Demand-side aggregation: By aggregation, cloud can support an intermix of tenants and therefore directly contributing to higher server utilization rates ( this would be definitely higher than what can be achieved with single-tenant data centers).

3. Multi-tenancy efficiency: Hosting multiple tenants brings administrative cost overheads, and lowers server cost per tenant and by extension cost per data center user goes down.

On the demand side of things, the story is complementary and drives similar conclusions. By aggregating volume of compute usage, cloud service providers enable users to smooth out peaks and valleys. The contention here is that by pumping up large server volumes, corresponding increase in utilization can be achieved and this has the effect of reducing operational costs. Now extend this scenario : cloud service providers can potentially run a number of data centers while administratively support them through centralized NOCs, with the results the costs can get further spread across.

The paper notes,"public clouds are in a relatively early stage of development, so naturally critical areas like reliability and security will continue to improve. Data already suggests that public cloud email is more reliable than most on-premises implementations". In concluding the section on economies of scale, the white paper goes on to state that economies of scale are so significant that the TCO calculated server wise of a 100K server data center is 80% lower than that of a 1K server data center. While there are legitimate opportunities for a set of customers to pursue private cloud in certain periods of time in their cloud journey, strong indicators suggest that over time the cloud efforts would begin to coalesce around the public cloud given significant computing economic advantages – these need to be to be recognized, and in the process of this journey, vital concerns regarding security and reliability will get addressed (gradually melt away) thus feeding the momentum into the public cloud journey.

Clearly economics will begin to weigh its hand if the cost advantage of public cloud over the private ones are of the order of 10X as the paper seems to suggest . The paper also suggests that any SMB would be crazy to factor on-premise or private cloud into their future strategy when these options are going to cost up to 40x more than public cloud alternatives. I would love to see the complete data points on which the benefits have been quantified and inferences drawn - this will be very useful in advancing the body of knowledge and state of practice of cloud adoption inside enterprises. Lets examine from an organization standpoint : As I wrote earlier, setting up private cloud is a motherhood statement at best( in many organizational surveys, one can find setting private clouds is not in the CIO’s top three priorities – if anything virtualization finds a place-) to make this happen in a credible way means re-examining most parts of IT functioning and business –IT relationship inside enterprises. IT teams while conceptualizing private clouds are happy to retain existing architectural designs, happily propose a clasical DMZ/Perimeterized model for providing security and enabling access, too often leveraging a highly virtualized infrastructure. More often than not, it’s enabling virtualization, automation and self service and color it as private cloud. Do recognize the implicit differences in constructing a private cloud and a public cloud. Comfort with the status quo with some adjustments versus an opportunity to rethink architecture, security, privacy,compliance needs in a way summarizes the nature of thought process and expected results between the private and public clouds. Speaking more directly, public clouds present the opportunity for enterprises to review and achieve specific requirements in the areas like agility, flexibility and efficiency at optimal effort Versus a skewed , boxed implementation of private cloud setup. Taking advantage of the public cloud benefits would far outweigh the advantages of getting boxed inside with private clouds.

Most elements of the bedrock gets affected – the processes, culture, metrics, performance, funding, service levels etc. Well thought out frameworks, roadmaps need to be put in place to make this transition successful. These frameworks need to cater not only to setting up internal cloud but eventually help in embracing the public cloud over the years- not an easy task as it appears. A few of those organizations that master this transition may also look at making business out of these – so it’s a journey – that needs to be travelled onto embracing public clouds. Some business may take a staged approach and call it by private cloud, internal cloud or whatever but eventually the road may lead into public clouds!

Digging through the Innovation Awards Goodie Bag

Last week the Chicago Innovation Awards and a crowd of nearly 1000 at the Goodman Theater celebrated the innovative spirit that is indeed alive and well in the midwest. Keynoter J.B. Pritzker reminded us that many great ideas and companies like G.E., Microsoft and MTV began during recessions, and now is time for "the next generation of innovators" to step up. The evening, which included an appearance from "Visionary Award" winner and Stanley Cup champion Chicago Blackhawks owner Rocky Wirtz, honored the latest eye-opening products and services from local companies--for winner videos and more on the event, click here. There was also an overflowing goodie bag, which I'm happy to rifle through for your enjoyment.

In various ways, the award-winners reflected true innovation, which is taking the practical step of bringing creativity into the world, so let me dig in the bag to share a few with you. I'm reaching past the discount cards, freebies, magazines, promo pens and brainteaser game (thanks, John Kennedy). Now I'm briefly massaging the strawberry shortcake-flavored gum from Wrigley, the thumb-sized flashlight from Tripp-Lite, the natural sweetener from Pure Via and the noise-isolation ear buds from Molex. Not bad. Here are a couple more:

>>The Master Lock Speed Dial--Here's a sturdy lock for people who have difficulty remembering combinations (most of us?). Instead of numbers that you can easily forget, you open the lock using directional movements (like a video game joystick), so you can open the lock one-handed, without looking, based on remembering the movements you've chosen.

>>Probably the most unusual goodie-bag item I've ever gotten, here's a "Water Saving Fill Valve" from MJSI, whose HydroRight won this year's award. You actually install this one in your toilet to save water.

Innovation can be best defined as actualizing creativity in a way that provides real value or, as designer/innovator Dan Buchner recently asserted in this video (click here), "the implementation of an idea that improves someone’s life and brings meaning to their life.” Just as MJSI's innovation can make a meaningful difference, so can these other award winners whose actual products did not quite make it in the goodie bag. They include:

>Abbott Labs' recently FDA-approved HIV test, with much earlier detection ability.

>SoCore Energy's portable solar panels that can be rented and installed more easily.

>Smart Medical Technology Liftaem Patient Transfer System, which uses a cushion of air to reduce time and injury from lifting patients.

>CrowdSPRING, now the world's largest online marketplace for creative services.

>Chicago Transit Authority's Bus Tracker, an online tool to tell you exactly when your bus will arrive.

You can decide how meaningful these innovations are to you or others--and learn more about them here. But clearly the creative spirit is infusing some companies here in the midwest. If Rocky Wirtz can turn around the very recently woeful Blackhawks, miracles can indeed happen, especially if we make time for, promote and honor innovation, as these awards have aptly done again this year.

It's All about the Team

Earlier this week Giuseppe Maxia blogged about joining Continuent as Director of QA.  Creating high quality systems for distributed data management is a hard but fascinating problem.  I have been hooked on it myself for many years.  Guiseppe brings the creativity as well as humor our team needs to nail this problem completely.  I'm therefore delighted to know he will be focused on it.

That said, I'm even happier for another reason.  Beyond solving any single problem, Giuseppe strengthens an already strong team.  Ed Catmull of Pixar gave a great speech a few years ago about managing creative teams and why successful companies eventually fail.  Among other things he asked the question whether it is the idea or the people who implement it that count most.  His conclusion:  great teams implement good ideas to build great products.  But even more important, great teams can turn bad ideas into good ones, then go on to build great products from those ideas too.  Pixar has proved this many times over.

I believe strongly in the power of great teams to create great products.  Giuseppe, welcome to the team. 

Scary to be an American? Part 2

My previous blog made the point that pessimism and fear--currently irrationally amplified by our divisive politics and media--is incompatible with creativity and change. Our midterm election may be over, but the belief that it's scary to be an American right now persists. And the truth is, wherever you might plug into the American conversation, even if you tap the more reasonable, harder-to-hear-amidst-the-shouting sources of information, it's hard not to be scared, which closes down our individual and collective creative solution-making ability.

For some hope, I had turned to Time magazine's cover story last week--the positive-sounding "How to Restore the American Dream"--but found myself again shaken by the dark "realities" it outlined. Fareed Zakaria, one of the more intelligent and solution-focused media voices today, primarily made the case that our mood is bad for good reason, with many accompanying graphs "charting the decline" of what was once the land of opportunity. The rational media may not scream fear but they do supply a torrent of facts about the economy and American decline that are just as scary.

Zakaria captures this troubling reality well in this video (below)--while at the same time making clear that we need to think differently in order to restore the American Dream. This is the great challenge for us as individuals and for American organizations of all stripes: To find a new reality, a different mindset--a more optimistic belief in being, as Zakaria says, masters of our own destiny. While we may not be able to escape the current cultural narrative (though unplugging from media would help), we have to realize it's not as true as it seems. Yes, unemployment is higher and it's harder to sell my condo, but most people I know have kept their jobs and are only "sour" when they tune into our public conversation.

When it comes to offering ideas and different thinking, one could argue, especially of late, that Republicans are the main political obstacle. This from this month's Esquire: Republicans "haven't had a new idea this century. Unless you count teabags and fear, which we don't." But it definitely takes creativity to cut the budget, and, amazingly, both Democrats and Republicans find common ground on innovation. Yes, perhaps more than any other policy point, both political sides join leading commentators like Zakaria in support of "Innovation" again and again. So the great news is that we as a nation have a real opportunity to come together to support creative ideas and investment in innovation right now.

But to have some room to do that, we can't let fear and extremism rule our airwaves and infect us individually. Last weekend's Rally to Restore Sanity made an attempt to change the conversation, and Jon Stewart's "Moment of Sincerity" is well worth viewing (below). Stewart makes the point that "we live in hard times, not end times," and rightly highlights the media distortion: "If we amplify everything, we hear nothing...the press is our immune system--if it overacts to everything we actually get sicker." "The 24-hour politico pundit perpetual panic conflictonator," he explains, is not reality: "The image of Americans that is reflected back to us by our political and media process is false. It's us through a funhouse mirror."

The truth, Stewart says, is that we work together to get things done every day. We do. But real innovation--taking the time and effort to create something new and then actually implement it--is not easy. As Congressman Jared Polis of Colorado says, "It's easier to stop bad things than to pass good things." Our challenge is to shift our mindset from fear-mongering noise to another even-more-valid reality of possibility. Most often real creativity and change come after crisis, or as new California Governor Jerry Brown just said in his acceptance speech, "Breakdown paves the way for a breakthrough." How might we help each other break through?

The Global Leaders Sponsored Event: New Paradigms to Fund and Manage Product Development for Biotech, Drug Delivery and Small Pharma

Members of The Global Leaders receive a 15% discount on the $1,300 fee if registered prior to December 3, 2010. Included in this registration is a special networking event for our members at the Marine Club on the evening of January 13th, 2011.  George Bickerstaff, Chairman and Co-Founder of The Global Leaders will be the keynote speaker at the opening of the event.  Please use code TGLNP when registering to your discount.

It is more difficult than ever to secure funding to develop new products through the usual channels. With a vital need for alternative solutions, New Paradigms is the only event to help you find new sources to fund your product development, as well as develop an effective strategy to define and communicate proof of mechanism to your stakeholders.  

The conference specifically shows you how to:

• Address alternative paradigms for funding product development
• Learn what Investors, Analysts, VCs, Large Pharma and CROs are looking for in a partner
• Structure the economics of the deals
• Examine the impact of an effective strategy that defines proof of mechanism and how to communicate this to investors, board of directors and the scientific community
• Understand the role of biomarkers in product development and how they can drive value and improve success rates
• Discuss comparative effectiveness trial design and non-inferiority studies vs superiority studies for approval, targeting evidence to increase success
• Manage clinical development/outsourcing effectively   

Led by Dr Peter Milner, Co-founder of CVT, ARYx and Optivia, and Dr Sandra Garrett, Executive Chair, GRS, New Paradigms has attracted a speaking faculty of over 45 professionals, including some of the most influential leaders from the biotech, pharmaceutical and investment communities.  

As a business development conference, rather than a partnering event, this program is a wonderful complement to the JP Morgan conference. It allows you to learn in a relaxed environment from professionals who have succeeded in developing products using an alternative source of funding with excellent clinical trial planning. Biotech and investment networking is built into the conference with scheduled breaks, a luncheon and reception. 

For more information, contact Jayme Porkolab at (646) 398-8170 or go to these related links:

Overview of the conference

Conference Leadership

Speakers and Panel Discussion Members

Agenda

Who Should Attend

Venue and Link for Special Hotel Rates

Registration URL: 

 http://www.theconferenceforum.org/NewParadigms-Register.html

Cost: 

 $1,105