A conversation with the founder of the Altimeter Group.
Question: How has social media altered the business landscape?
Charlene Li: The fact that social media has become more of a mainstream activity means that businesses need to take it very seriously. The days when you could actually ignore it, kind of put it to the side are long gone. We’re at that point now where more people are using Facebook than are using Yahoo and Facebook is rapidly catching up to Google in terms of the number of people using it, so I think when it comes to business it is no longer a way to think about this is sort of a nice to have activity that your teenagers are using. This is a place where you can actually build real relationships with real people and in fact, if you don’t do it you are in peril of being overrun by them. So I think the biggest impact that social media has had is that it is bringing people together. It’s actually crafting new relationships and allowing people to create those relationships where they never existed before. [00:01:26.02]
Question: What guidelines should managers create for employees’ soical-media behavior?
Charlene Li: One of the paradoxes of giving up control is that you actually have to work harder at being open than being closed, so what I mean by that is when you are open, again, you cannot be completely open. You have to put some limits on it, so the guidelines and the processes, the policies that have to be in place are very specific. For example, you could have a social media policy. You can have commenting and community guidelines and what I call these are I call them sandbox covenants. They’re actually sandboxes that you define. They have walls that you clearly state where they are defining how open you can be and inside of those walls you have rules of engagement. The rules of play basically, what can people do without any hindrance whatsoever as long as they stand and play inside of those walls and then you also have consequences. What happens if you step outside of those walls because you really can’t be there? Now over time what you find with organizations is that they feel more and more comfortable with the sandbox that they have. They do an evaluation again about how open they need to be, determine they need to be more open and they redefine that sandbox. They actually open it up even further. So I think one of the key things to think about when you’re trying to manage risk and this sense of being out of control actually create the semblance of control again by putting in place these sandbox covenants defining for people how open they can be and writing those guidelines out so it’s very clear and also laying out the processes of what happens when things go wrong. [00:29:10.03]
Question: What’s the single most important part of a social media strategy?
Charlene Li: The single more important thing when it comes to looking at all of these social technologies is that you can’t have a strategy around a technology. In the end it’s not about having a Facebook strategy or a Twitter strategy or a blogging strategy. Those are tools. Strategies are built around goals and I would ask you instead of thinking about the technologies think about the relationships that you can enable and the goals that you can accomplish. Every organization, every leader has a finite set of goals that they have prioritized. Think about those goals first and then think about how can these social technologies help me accomplish those goals and do what they really do best, which is to strengthen, to create or deepen the relationships that are at the center of all of those goals. When you look at business it fundamentally comes down to relationships and when you look at social technologies it’s also about relationships, so I would encourage that if you take nothing else away to focus on the relationships and not the technologies.
Question: What are the key elements of an open business strategy?
Charlene Li: When you’re thinking about an open strategy it’s very much determined by the goals that you can actually achieve and I layout four different goals. They are to learn from being open. You can have a dialogue. You can also support in a better and most cost effective way and you can also innovate. So learning is by being more open to what people are actually saying, putting in place the tools and also the structure internally to get the learnings from all these people who are saying things about your organization, positive, negative, constructive, ideas. All of these comments are being just shared out there and it’s an opportunity for an organization to have a strategy around how you learn more effectively from all of that sharing. Having a dialogue with people is also a very specific goal and strategy that you can pursue. You now have the opportunity to use all of these tools to have a two-way conversation with your customers, with your employees that you could never really do before at scale. You can also support more effectively, not just directly, but by also empowering and enabling your customers or in your employees to deploy very broadly and to be able to provide that support. And then finally around innovation, innovation is the lifeblood of any business and its future. So where are the new ideas going to come from? By having an open strategy of being able to tap into again, employees, your partners, your customers and having a way to process and prioritize those ideas, being open in how you develop them and then also deploy them is a again the final goal and strategy you can have in an open strategy.
Question: Will social networks continue to be pervasive?
Charlene Li: I say that social networks, in particular all things that pertain to your social life will be like air meaning in particular that we are social creatures and we don’t want to be locked down into just one social network like Facebook or Twitter and in fact, what we’re seeing is that the relationships, the profiles, the activities that you do are really escaping the bounds of those places. So take for example, Facebook. I have a nice social life on Facebook. I share pictures and updates with people, but most of my friends aren’t actually on Facebook and in fact I don’t want to interact with them just only on Facebook. I want to see them for example on Amazon. I want to be able to read the reviews that my friends put up on Amazon because some of them are really good book friends of mine. We talk about books, but what are their favorite books? What are they reading? What are they buying? To be able to see that expressed on one of the most popular book site, Amazon, would be a huge benefit for me to be able to see that aspect things and we’re getting to that point where we can actually see ratings and reviews from friends on places like Yelp, on Amazon to some extent, on places like Good Reads where it is a social network on top of book reviews. We can see it actually in the relationships that we have inside of businesses where if I email somebody I can see their profile on LinkedIn now for example, if I use Lotus Notes. Being able to understand the entire social life and social interactions that somebody has just because I know what the email is. I can see their activities on Facebook, on LinkedIn, on Twitter, on blogs and discussion groups all in one place. So having at my fingertips that network, that information of how I’m related to people or finding people who are like me so that I can make better decisions is what I mean by I really see this future where social will be like air.
Question: What comes after social media?
Charlene Li: I think when it comes to really groundbreaking ways of reaching people I think social has so many more legs still to go. We are like just at the beginning of this. Like again, if you take the idea of social being like air we are just beginning to understand how mobile context can really change that. There are new services like Four Square that allow me to quote, check in to a restaurant and that creates a history of where I’ve been, but also where my friends have been, the recommendations that people have for each other, a social roadmap of a geographic location. It also helps people understand where I am, my network to understand the context of what my comments are by knowing exactly what I’m doing and where I’m doing this. That is just mobile. Think about shopping. Think about entertainment, all the different aspects of your life that can be impacted because of the social context that you have. What is next beyond that? I wish I knew because frankly if I did I wouldn’t probably be sitting here talking about this. I’d be doing it and making my billions, but I do know this. That this is a space that never stands still in that the one thing that has been translated through all the major shifts, everywhere from individual computing to client server, to the internet, to now again social have been things that have enabled connections between people and those connections are the things that you have to look for in the next big thing. How do things change in terms of that relationship? And I think that is the way to recognize whether it’s a seismic shift, a technology you need to pay attention to or more of a feature set that attaches to the things that you’re doing. Things that change relationships fundamentally, that have power shifts involved are the things that you really need to pay attention to because those are the things that matter, things that change that relationship and therefore change the way that you have to run and act in your business.
Recorded June 23, 2010
