A LOADED Comment - The Impact of Culture and Technology on Each Other in the Realm of Social Business

Mitch Lieberman, a VP at SugarCRM is a living proof of concept - vendors can contribute serious thinking to the ongoing discussion around how to create and apply business strategies to customers. Despite the cynical thinking of many out there. He recently did a presentation using the Prezi online cool tool (for some things) to describe his thinking on how Social CRM is perhaps the most significant pathway to the accomplishment of Social Business. Its well worth checking out and, thinking about. But, that's not what I want to address. There was a comment by someone with the handle munishgand on Mitch's post which reminded me of something that I not only have been mulling over for a long time but meaning to write about. Munish and Mitch inspired me to pen this thing. Here's the part of Munish's comment that I want address:

"To me, the picture “Old Organization + New Technology = Expensive Old Organization” (http://grab.by/grabs/f614c734bb56ed20df7f93b81fc5f74e.png) says it all. There is a big shift in culture required for a social business to thrive in the new environment. Else, why pave the cow paths? What I am wondering is the following. Changes in culture are notoriously difficult to accomplish. Should a company stop trying to get the tools in if it cannot make the cultural shift? Sometimes, an exposure to the technology provokes the cultural shifts needed."

Thanks for that, Munish. Its a good insight and, when it comes to the relationship of Social CRM and the more traditional forms of CRM, a very important question - because there is a distinct difference between how technology needs to be treated a.k.a. thought about in Social CRM then it was in traditional CRM.

Sometimes Mantras are Made to Be Interrupted

Probably the most irritating though significant discussion that's gone on in CRM since day one was "is CRM a technology or a strategy?" or its corollary "is CRM a technology or a strategy - first?" Those in the same camp as me have argued that CRM is a strategy and program that uses technology as an enabler. My original definition of CRM from CRM Magazine 2003 reflects that thinking.

"CRM is a philosophy and a business strategy, supported by a system and a technology, designed to improve human interactions in a business environment."

What this reflects is that CRM has always been the program for development and execution of customer strategy - what are the things that you actually do to see that customers relationships to companies are always meeting the expectations (if not exceeding the expectations) of those customers. Traditional CRM was more about managing the relationships - which practically translated meant providing more automated processes and interpreting more data so that the company both understood the customer in a way that was useful to them - and at the same time, the customers received at least the minimum of what they needed to handle their relationship to the company. Accomplishing this would be a traditional CRM success, but traditional CRM was embedded in a business ecosystem that was still owned by the company. From almost the first day of CRM (which is mythic at this point), there was a fight to overcome the popular perception - among the practitioner companies that CRM was a technology that you bought. Despite the best efforts of the "CRM is a strategy first" camp, the technology persists as the "prime mover" of CRM to this day. That meant that when you were developing a CRM strategy you were implementing a CRM system not developing a CRM program. I was among the folks that pushed the idea that CRM was a strategy and program first and technology choice was the last facet of developing that program - as an enabler - not the primary focus nor the driver of a CRM strategy at a company. Regardless of what I or anyone else thought, the popular view of CRM was and still is that it is a technology and system first. That has been adopted at many many organizations as just that. The practical implications for this particular approach have been almost staggering in consequence. As a result of the technology system, not program outlook, hundreds or even thousands of organizations implemented CRM systems from multiple vendors without a clear vision of what they wanted to do at the company when it came to their customers or what it meant to have a customer-centric culture. The implementation was the thing. The sequence was:

"We want to be customer centric. Let's go out and buy a CRM system and put it in. We want the CRM system to have this feature A, and do this function B and we in the future could use this feature/function C. That will make us customer-centric."

Keep in mind, we're not talking about stupid companies with no plan. But their plan was geared toward what they wanted from the technology, given what they thought they needed to do with their customers. It wasn't what they wanted from their company given what they needed to do with their company. It was a system, not a program. While that's better than thinking that they don't have to be customer-centric, its still a real problem, because of two things:

1. it doesn't take into account the impact of being customer centric on the culture of a company - especially given that the likelihood of the company having been customer-centric is about zero so there is no cultural precedence for that customer-centric perspective or program;
2. the technology's success or failure became the foundation of the company's success or failure in CRM rather than merely an aspect of it.

The result of this was that even when the technology was technically proficient, the ultimate customer-centric perspective that the company needed to embrace wasn't. Does this mean that traditional CRM was a failure? Hardly. But what determined success was delimited by the capabilities of the software. It also meant that while the culture wasn't impacted by the software, the software was impacted by the culture - meaning that the existing culture wasn't changed and thus made adoption of the software far more difficult, because, no matter what the theory - software as a driver or an enabler - it still was, in practical terms, an enabler only, which meant, as CRM software, it was supporting an idea or outlook that wasn't part of the company's actual outlook. A square peg in a round hole. The early numbers surrounding the software adoption supported this. The primary reason for lack of adoption was the lack of involvement of the user from the beginning of the process (47% of respondents in an IDC survey on CRM user adoption in 2003). Why the lack of involvement? Because the cultures of the companies hadn't changed to understand that the user, and the customer drove the requirements, not the other way around. This also led to the higher failure rates of the earlier days - because the expectations of the results around CRM were driven by the software, not by a CRM program that used the software as a tool.

Ommmm. Ommmmm. Owwww. The Mantra Is Broken

But then along comes the social customer in 2003-2004. What does this social customer do that his more traditional brethren didn't? He communicates outside the corporate firewall with those he or she trusts the most - his or her peers. He uses what to communicate? Tools that AREN'T traditional CRM tools but are easily available social software, hardware and channels. That would be cell phones and now smartphones. That would be social networks (66.8%) even more than email(65.1%) (see Nielsen's Global Marketing Insight survey of March 2009). That would be Skype, (521 million), Facebook (400 million), Twitter (100 million), and hundreds of other channels not behind the corporate firewall. From 2004 on, people seized control of how they communicated 24/7. What devices they used, what tools they used, what channels they used, when they communicated, what they expected as a result of that communication, what kind of response they got, all shifted into the hands of the individual. In the world of business, communications about a company no longer needed some company venue to occur. For a communication or array of communications to affect a company, it didn't have to occur with the company's acquiescence. Even more telling, it could occur without the company's knowledge. This meant that the company no longer controlled its own destiny in regard to its customers, though it, of course, continued to control its own operations. (the fact that the company still needs to run itself is one of the things at the core of the difference between Social CRM and almost anything else with the word "social" in it) The conversation passed into the hands of the customers - meaning they could damage, grow. or affect somewhere in between, a company without the company having much to say about it. So what did this do to CRM?

Traditional CRM To Social: The Transition of Technology

The customer's ability to communicate outside the firewall and still affect the company, was of course noticed early on. From Dell Hell in 2005 to the recent Nestle's fiasco which took a minor incident of a snot-nosed customer service rep's arrogance and ended up with Greenpeace driven major viral damage due to Nestle's alleged use of Palm Oil from XXXXX, proves the point in spades. There was(and continues to be) a material effect on the fortunes of companies when the customer commands the storyline. CRM thinkers and doers began to realize that they had to open up channels from the corporation to the customer in order to minimally contain or capture the conversation going on outside their realm and optimally to interact (listen and act) with their customer in a way that supported the benefit of both. What did this take? The technology to do so. But that wasn't the only trend. In parallel with the growth of this social customer, Gen Y was entering the workforce and bringing the tools that they wanted to use to that workplace despite the rules of the enterprise that they worked for (52% of them were happy to ignore the corporate regulations to do so). Additionally, technology was becoming not just a utilitarian choice that one made, but a lifestyle choice and this too was penetrating the workplace. It was no coincidence that RIM released the Pearl in 2006, thus ending the era of high functioning but butt-ugly mobile devices. Thus, much of the technology that the CRM-morphing-to-Social-CRM thinkers/doers were considering in their efforts to open channels were the same consumer-driven technologies that their newly younger workforce were using. Also, it was the same technologies and channels that they (the decision makers among others) were using outside the workplace. Its no coincidence that Marc Benioff and salesforce.com actively trumpet their reliance on and adaptation of Facebook and Twitter for not only their new Chatter "cloud" (their term, most definitely not mine), but also for its impact on Service Cloud 2 and Sales Cloud 2. This isn't just marketing (though that certainly is a part of it); its actually the case. What makes this significant is that the penetration of consumer thinking and the use of consumer technologies in the enterprise has been in part a driver of the cultural change that the most advanced companies are embracing and the less advanced companies are reluctantly acknowledging. Yes, a driver, not just an enabler. This is something I NEVER thought that I'd be saying, but hey, what good are we if we can't change?

How Does The Technology Drive It?

The mere fact that the technology is being brought into the workplace and used despite the rules attacks the company's culture. The carriers (Gen Y workers, many of the Gen Xers and a few savvy baby boomers - the catchall term is often "Gen C.") are also showing the value of the technology. - Thus, breaking the rules either forces the company to get rid of what is a productive workforce doing something demonstrably valuable or it adapts to the new circumstances - which forces the company to change its own behaviors, institute a new set of rules and at the same time empower a whole new layer of the workforce. For example, wikis in companies have often had the same effect. The most famous Enterprise 2.0 wiki case study, DkW, (thank you Andrew McAfee) showed how the introduction of the technology and the organic growth of its user base to 1200 dramatically altered the company's culture - making it collaborative and open where it hadn't been and with measurable productivity increases. The technology itself, the wiki, had been introduced to solve a practical knowledge-driven problem. The culture was transformed. This is becoming a more widespread phenomenon. After all, remember, what you use at home, if you're using it at work, is simply you using technology to function the way you are comfortable functioning as a human being. Not a customer, not an employee; a human being. How it gets realized is determined by what kind of interactions you have with specific kinds of institutions - social, economic, or business for example. But its more than just what I've said so far. Keep in mind, one of the key pieces in a Social CRM program is that the company provide channels for the customer to communicate in an easily usable/navigable bidirectional fashion. That means that the tools the customers use and that the company provides are either familiar to the customer and the company employees or become familiar easily. That's why you see the adoption of Twitter and Facebook as initial service (and marketing) channels for companies when it comes to that company-customer engagement. The company is recognizing that those customers are using the tools that they enjoy using and the company is then going to those customers with those tools so that the communication occur in a way that's familiar to both. Its no coincidence that Frank Eliason has been the reason for the success of Comcast on Twitter. He understood the tool/channel and its impact on both employees and customers. But Comcast is also an example of what happens when the cultural change isn't successful in this environment. Each year Bruce Temkin, Forrester's customer experience guru, puts out his customer service experience index on how big companies are doing. For example, companies like USAA get it - they are in the top 5. But Comcast is 126 of 133 in 2010. Know why? Because they think that what Frank is doing is great PR. Not a paradigm for how to treat customers. Great PR. They'd be 133/133 without Frank. What this says is that the technology as a driver isn't always successful. By itself, it probably never is successful. But in the world of Social CRM, because of the penetration of consumer technology and the importance of the tools in the transformation of communication, they are no longer, as they were in traditional CRM, just enablers; they now can both drive and enable.

What are the Practical Implications?

Actually, there are some very specific practical implications when it comes to the programmatic part of Social CRM. In the past, I would recommend almost universally and uniformly, that technology selection be the final stage of CRM programmatic efforts. Wait until you had a solid strategy, understood every process, had determined what you had to do and not, developed a program, and sufficiently transformed your culture, before you made your technology selection. Not that anyone listened to me that much. Though often enough, I guess, they did. Now, I think that parts of the technology selection can be made without a full blown "everything." For example, if you're developing a customer service strategy and it involves the development of a multimillion dollar contact center, you still can implement an alternate service channel using Twitter or perhaps Get Satisfaction, while the effort to build a contemporary contact center continues. What still has to be clear is that as the alternate channels are implemented by a company and used by customers, they will impact your culture and thus have an effect on the outcome of the development of the contact center (in this example). For example, where in your original contact center strategy, your agents were traditional help desk agents, perhaps due to the success of your alternate service channel, you expand the role of some of the agents to community facilitators who participate in some way in your alternate channel. In any case, while just one example, you get the picture. The impact of the use of technology for dealing with the social customer could (not necessarily will) change the culture of your company - unlike the older traditional CRM systems which, if the culture hadn't changed, were simply not used. Life in a company is a lot different now - or should be - and Social CRM has to reflect that. I just figured I'd try and shake out some more dust in at least my own thinking - and I hope yours. Let me know what you think. While I'm fully aware (and I hope you know this) that there are far more factors than technology driving change in a company's culture, the very fact its one of them - whether the most powerful or not (its not) - is a change unto itself between CRM and its baby kinder Social CRM.

Comments

[Technology Details]

You are absolutely right, Ultimately it is very hard for technology to deliver an ROI by itself, since it tends to be dumb and agnostic by nature and how its used is what would (or wouldn't) deliver the ROI.

Technology Details

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Tamara

[Muchiri]

Practically speaking, strategy allows the organisation to frame the context within which the CRM is being implemented; what business goals does the program enable and what needs to change for the program to work. Without strategy in place FIRST, it becomes difficult for a CRM or sCRM project to 'take'.

Because sometimes technology does trigger the cultural change, 'decoupling' certain portions of the social CRM can be very helpful. Like the contact center using Twitter and GetSatisfaction. The next step becomes how to integrate these 'natural' tools with the enterprise apps the business relies on and isn't willing to upgrade to '2.0' versions. The cultural change happens but the management will to invest further is left lagging behind, usually because ROI in the traditional sense could not be demonstrated.

But even introducing these 'decoupled' or unbundled technologies when rolling out the program may not trigger cultural transformation. As Munish asks, does the company then dump the program and find something else to do? Like Frank at Comcast, is it possible to still use the tools and let management call them what they want (PR instead of CRM) until the transformation does happen? Sounds sneaky doesn't it :)?

[Paul G.]

You are absolutely right, Ultimately it is very hard for technology to deliver an ROI by itself, since it tends to be dumb and agnostic by nature and how its used is what would (or wouldn't) deliver the ROI.
Even though SCRM is a new discipline for the most part, its governed and plagued by the many of the same issues that most enterprise deployments of CRM are - in addition to a few new ones, of course.

[Ram]

Thinking about the (S)CRM-as-technology-vs-strategy discussion, a simple test would be to see if the new-tech-on-the-block can deliver substantial ROI by itself.

With the SCRM issue on hand, an enterprise can listen in on social interactions to its heart's content, establish an elaborate social presence and so on. But without the strategizing part, all this could end up blowing up on its (or the internal scrm protagonist's) face like the latest Nestle episode. That clearly says that if you deploy the technology without the overall strategy, you are wasting an opportunity or maybe even taking a big risk!

That said, strategy and technology have gotten that much closer especially with SCRM. Key to remember is that there are very few enterprise technologies which have delivered sustainable ROI all by themselves.

Culture is a well-known aspect of strategy. "Start small" (like Comcast) has usually worked well to build initial success stories.

Overall, (not to douse the enthusiasm towards SCRM), similar challenges exist in enterprises uptaking SCRM but maybe to varying degrees.