The technological advances and social transformations of the last two decades considerably impact on how business, society and government interact, connect and organize themselves.
Major activities of modern life like socializing, management, marketing & advertising, education, public services and urban development have undergone major changes and at the end of 2010 it seems like we are at the beginning of a second wave of development and acceleration in these areas.
Advertsing & marketing
Consumers are increasingly in control of how they view, interact with and filter advertising in a multichannel world as they shift their attention away from linear mass broadcast media like TV and adopt ad-skipping, sharing and rating tools. Consumers have become immune to mass advertising and even to Internet banners and email newsletters and are tired and bored of intrusions of non contextual, unidirectional and one-to-many advertising. They start to control how they view and filter it and want real value and two-way communication instead.
User generated and peer delivered content combined with new ad revenue sharing models, enables everybody to create lower cost advertising content. Virtually any advertiser can reach any consumer (large or small). Advertising today thus is more about people, connections, stories and social networks. Brands and advertisers need to get in touch with their customers: pull marketing replaces push marketing where consumers decide when they ask for which type of information and knowledge about a particular product. Traditional advertising is targeted through predictions based on past behavior, demographics or interests. This rough segmentation isn’t sufficient anymore in today’s fragmented and complex media world.
Digital advertisement can present more relevant content to consumers based on their digital footprint (created via the web browsing and social media communication behavior) which will foster a new type of behavioral marketing. “Imagine an event organizer that can target a digital campaign (web & mobile, based on a combination of social, demographic and behavioral information) to those who are 25-35 years old, user their phones after 10 pm and are influential in their community.”
This also means that the media landscape has gotten more fragmented than previously and reaching consumers requires sending multiple messages through different channels.
Mobile location based and context aware advertising will also rapidly increase, with for example Mazda USA offering participation to a contest via check-ins at specific spots during a certain period of time on the geo-social platform Foursquare. The first prize is a new Mazda car which is the largest single prize yet on that platform. Starbucks is another well known pioneer in this area. Also, people won’t make a difference between smartphone & desktop Internet. For them, it’s one and the same conversation.
Advertising is only one part in a marketing strategy, and the importance of traditional advertising will shrink, whereas the conversations with customers and citizens via the new technology driven channels like social media will increase dramatically. Production & delivery of branded content that is relevant to people in their different life situations & contexts will replace existing marketing patterns (and already is doing so). More people are having their first brand interaction at a search box and more and more brands have the online channel as the primary point of contact for consumers (or the first place a consumer goes with a query).
Thus technology, community management and content editing will be the new driving forces in new marketing and happy customers are the best advertising.
As a consequence, marketing & advertising planning, selling, buying, targeting, actions and measurement will change accordingly and will be much more data driven & dynamic and non-integrated.
Social media
Social media and the Internet, combined with ever more informed, educated and demanding consumers in a constantly changing complex and more fragmented world that faces multiple challenges (social, economic, technological and environmental) are the main drivers for this change at different levels.
Social media has revolutionized people’s private life and is on its way to do the same with business, externally as much as internally.
External social media
Social media empowers customers and enables continuous and instantaneous brand (re)assessments. Knowing that recommendations between people and word-of-mouth are more important influences in peoples purchasing decisions then advertising, the viral power of networked consumers must almost be frightening to marketers. Word-of-mouth is the dominant marketing force today .
Consumers talk to each other, organizations talk to consumers & and consumers talk to organizations via social media (Twitter, Blogs, Facebook, Youtube, Foursquare…etc). Traditional CRM is more and more replaced by Social CRM.
Instead of the traditional advertising monologue and the broadcasting of unidirectional and undifferentiated messages, consumers want branded content & stories that enrich their product and service experience in specific contexts (ex: a spice producer offers recipes in a social network type website where consumers can use this info and connect and exchange with their pairs over their experiences; an airline offers a social network for it’s frequent flyers; a hotel offers nearby points of interest and connects its guests via social networks so that they can see who else is in the hotel and rate and discuss the proposed POI’s.)
There is also a lot of collective intelligence bundled in consumer’s networks that organizations should exploit through peer-to-peer support activities (consumers do know more about a product or service then the company does). The same collective intelligence can be used for process, product & service innovation, as companies get constant feedback from consumers & citizens about what works, what doesn’t work and what useful features/offerings are missing. Open innovation is thus not a strategy but a necessity for survival, imposed by consumers. “Customers are the boss”.
Organizations must also closely monitor what people are telling about their offerings, as consumers can become instant terrorists by circulating compromising and devastating information in real time that spreads in a viral fashion. Organizations should have recovery plans in case of service failure enabling them to instantly & individually address negative customer experiences, knowing that a perfect service failure recovery is generally rated higher by customers in terms of trust and overall satisfaction then a 100 % performance without failure ! For example, Delta airline employs agents that monitor Twitter for messages like “Delta sucks” in realtime, even when tweeted from within Wifi equipped airplanes and accordingly organizes actions for instant service recovery ! Social media allows you to get in touch with disappointed customers, find out what went wrong, and try to convince them to stay whilst recovering and improving your offer.
There are many other interesting examples on how to use social media as CRM: i.e. in the hotel industry and elsewhere.
Organizations face new types of reputation management challenges associated with social media. These challenges are pretty much the same for individuals that either are exposed leaders or run their own personalized freelance business or other activity.
Internal social media
The same shift is happening in internal communication, organization and knowledge management: Enterprise 2.0 technologies and concepts (microblogging, blogs, wikis, internal social networks) turn out to be more efficient than traditional Knowledge Management (too inflexible, hierarchical and process oriented) and Human Resource Management models.
Flattened hierarchies, collaborative decision making, free flow of information incorporate a huge potential to unleash & multiply employee intelligence and companies can amplify their brain capacity by connecting and empowering more people across their workforce. This unleashes a new idea ecosystem nurtured by a massive reserve of human potential, innovation and growth for corporations.
Branding
A brand is what customers think what a company represents to them and not what a company thinks it represents to customers. The customer is always right when he talks about his personal subjective experiences. It’s up to organizations to improve the experience they provide.
Brands are the most important assets that a company owns today and it is extremely difficult to have a constant and directional control over the brand. Brands are perceived by people through multiple channels and touch points (including direct product/service experience, advertising, face-to-face, communication, social media and corporate culture). Customer happiness instantly affects brand value. People associate emotions to brands which are propositions to buy into. Everything communicates, thus everything is marketing and (negative or positive) brand value. Every experience associated to a particular organization tells a story and creates a brand perception, from the first time a friend tells you something about a company you didn’t know before until you physically unpack you first purchase up to getting in touch with support when something goes wrong.
Social media brings branding back to it’s roots: reputation, truth & transparency and not image.
(Check this recent article for figures on the importance of word-of-mouth and good customer service)
What does this all mean ?
The ruling management models will dramatically change under the impression of these new & shifting socio-technological, economic and environmental realities, constraints and contexts. What applies to companies & their costumers also applies to governments & citizens as from people’s expectation point of view, public services will be under the same pressure than commercial companies.
Organizations will have to
- be more more like a marketplace (and less like corporations like in the past) and be flexible, agile and able to quickly adjust to market developments and constantly reallocate their resource according to new opportunities, challenges and threats
- be customer focused, taking the customer perspective and empathize with them, put customers at the center of the whole value creation and organizational process and offer products, services and related branded content that help customers to get their jobs done whilst providing them with a great and outstanding experience.
- be creative, innovative and inventive in an ongoing fashion and stop imitating competitors or only improving existing offerings in favor of offering many unexpected “new things”.
- abandon (internally & externally) the old 1.0 models of command-and-control, broadcasting & undisclosure to the new 2.0 models of connect-and-collaborate, dialogue, trust building and transparency.
- adapt their business models and connect with other companies to create new innovative experiences (ie. Nike’s and Apple’s collaboration on the Ipod + running shoes + social network offering combined)
- establish new corporate governance mechanisms and rules and be socially and environmentally responsible, virtues that have an ever more important impact on the perception of their brands.
This new technology driven communication & collaboration model will also produce more and more individual T-shaped freelance workers often organized in small, flexible and loose networks (The “digital nomads” ). The reasons are a dramatic decrease in the costs for personal promotion paired with an increased desire by many skilled people to be more in command of their life planning and the resulting allocation of work and leisure time. At the same time, companies will need more outside multidisciplinary intelligence in order to generate the required creativity for survival & growth.
Organizations will have to adapt to this new reality which is imposed to them via externalities that they don’t really control. Some of the best performing companies in the world have already adopted the 2.0 enterprise model. But the majority of existing companies that have a long and inherited history of 1.0 culture will have to gradually shift towards a 2.0 mindset, processes and enterprise architectures which requires important, well thought and balanced change management efforts to avoid derailments that potentially could threaten their survival.
Society, technology & urban design
These rapid changes in business structures go along with broader changes in society, technology and urban design, as all these layers are interconnected.
At the beginning of the second decade of the 21st century, we are at the starting point of a new wave of technology driven social & economic innovation, and the speed will certainly at least double if not more compared to what happened in the last 15 years. A few facts (not in order of importance):
- launch and success of the iPad (tablets as new multipurpose input, communication, entertainment and command & control devices)
- widely available smartphones (Android, Iphone, Blackberry..etc) with their new apps economies offering new types of services
- social media has already revolutionized people’s private & social life
- the Foursqaure geo-social plateform success and Facebook recently adding Facebook places
- beginning implementation of IPv6, the next generation Internet protocol allowing for almost an infinite number of IP adresses that will boost the “Internet of things” (via RFID chips and related technologies in every single object).
rapid availability of much higher bandwidths - emergence of new sales channels
- TV merging with social media
- web patterns entering the physical world (Ideo: Nine Examples of Branded Environments That Mimic the Web’s Fluidity)
- rapid growth of Telemedecine,Telemonitoring & eHealth applications & systems
- cloud computing is taking is off (Salesforce, Dropbox, Google apps….etc) making information ubiquitously available regardless of used input & reading devices (tablet, smartphone, home computer or office computer)
- changing education systems: Most of today’s public education systems rely on paradigms and needs of industrialization and are neither adapted to the globalized post-industrial information age nor to the latest findings in human sciences on how children learn best and how their natural talents can be best fostered. At the same time self & peer education becomes possible & competes with educational institutions. Without going into a deep discussion of education policy, just take 10 minutes and watch Sir Ken Robinson’s excellent talk, paired with great visual thinking illustrations, which explains it all in a way that everybody can understand.
- unprecedented social, environmental, economic & technological challenges that are changing peoples mindsets, desires & expectations.
- changing demographics: cosmopolitan structure, higher educated and environmentally & socially more responsible people, more people traveling, aging population, higher demand for public and community services, in quality & quantity..etc. This trend will continue in the future: In 1800, less then 3 % of the world population lived in cities, today half of the world population lives in cities. Humans are now urban species cramming into vast urban agglomerations.
(An extreme example is my home country, Luxembourg: 63 % foreigners living in the capital, 43 % in the country as whole. In my home town – which is the 4th biggest town in Luxembourg with 18 000 inhabitants – we have people living from over 80 different countries ! And all this happened only in the last 20 years…)
Urban design and architecture will be affected accordingly:
The Internet and technology in general will affect the way architecture and urban design and the related social interaction is thought. Everything will communicate with everything, connected devices, houses, and public infrastructures like public transport, energy delivery and traffic control will enter the social media space, requiring completely new types of interfaces, interaction patterns & metaphors and as Peter Morville puts it in his seminal blog post on Ubiquitous Service Design: “It’s an era in which information blurs the boundaries, enabling multi-channel, cross-platform, trans-media, physico-digital user experiences.”
I did only mention some examples in this post, without neither being exhaustive nor covering every possible and current application area. This purely subjective choice is only for illustrating the discussed business and societal concepts and evolutions.
So you can easily imagine the huge potential but also challenges that these new realities of interconnected, people empowered and data driven economies, societies, objects & urban landscapes represent for business, public services & urban design. We can turn these challenges into opportunities by adopting, step by step, the tools, methods and mindsets of Design Thinking and Service Design for designing tomorrow’s world, thereby creating new sustainable value and responsible growth. Taking the customer & citizen perspective (companies & public services as a whole but also every single employee), helping them to get their jobs done in various contexts of their life whilst providing them with distinctive, attractive & desirable experiences is not a nice to have anymore, it’s a necessity for an organizations’ competitiveness & survival.
