(Re-posted from the Collaborative Innovation Community) It was a pleasure to interview Steve Shapiro about his latest book – Best Practices Are Stupid. I love the title, although for reasons that are slightly different from the reasons that Steve gives in his book. For him, implementing best practices is copying what others have already done and therefore not the best way to innovate. For me, best practices are so context sensitive, that it is really hard to recreate them within a different organization. Companies are better off understanding worst practices and avoid those rather than recreate best practices – no matter how you look at it.

Many companies try to innovate by asking customers and employees for ideas – not a good practice when it comes to innovation. As Steve explains, when you ask people for ideas you end up with a whole bunch of really bad ideas. The signal to noise ratio in open ended idea generation campaigns is typically very low. The sheer volume of ideas that needs to be sifted through to find the good ones would stretch the organizational capabilities of most innovation departments – creating frustration among those who have to manage the process. Not only that, but the low number of ideas that typically gets implemented also frustrates the idea submitting community, who feel like they are not being listened to. So frustration all around and poor results – maybe it’s time for companies to STOP asking for ideas.

Instead what companies should do is focus on giving employees and customers business challenges – problems for which you are actively seeking solutions. A good example of that is when Netflix launched its $1M Netflix prize to get outside teams to help them refine their recommendation engine by 10%. Not only did they only pay for results, they also outsourced the failures that are typical with the serial trial and error nature of  innovation processes. In the podcast we discussed the differences between innovation tournaments and innovation bounty campaigns and when to use one over the other or when to set them up as competitive challenges versus collaborative challenges.

We also talked about the power of the crowds in innovation, and how crowds are notoriously bad at helping you find the good ideas among a mountain of ideas. If you use the simple voting up and down system, like the ones that are very popular in crowd-sourced innovation programs, you often end up with the most popular idea – not the best one. A better use of the crowd is to have them help you identify the duds – something they do really well.

It is amazing to realize that the main reason for new product and service failure is still “not meeting customer expectations.” While companies are getting better at doing market research, most need to change as their “market research really sucks.”  Instead of asking people questions that make their conscious part of the brain find an answer, which is not the part of the brain that makes buying decisions, companies should use anthropological techniques and metaphor based methods to uncover people’s unconscious needs. They also need to get out there and talk to non-customers instead on blindly focusing on their in-house customer data.

Motivators are another important factor to understand when managing innovation – and companies should understand the limitations of monetary incentives to stimulate proper behavior.

Steve closed the conversation by talking about USAA and how they found a way, through an innovation center for excellence and innovation ambassadors within the business units, to make innovation part of their DNA. This should be the ultimate goal of companies looking to change their practices. As an organization, you need to create an adaptability to change that will match the rate of change that is happening outside your corporate walls.

Other things we talked about include:

• How companies who are 2nd or 3rd in their markets need to change the game in which they are playing rather than to play by the rules of the leader
• VC like boards in innovation management initiatives
• How Innovation Centers and giving people 15 or 20% of their time to innovate outside of their area of responsibility is better for recruiting purposes than for actual innovation
• How measurements can kill your innovation initiative
• How you need constraints to foster innovation
• How expertise and innate cognitive biases can kill innovation
• The importance of culture in innovation

You can listen to this podcast on the Collaborative Innovation Community.

My CMO 2.0 Conversation with Tom Nightingale, the CMO at Con-way, a $5B publicly traded transportation and logistics company, was very enlightening to say the least. When I spoke with Tom, he had been the CMO at Con-way for 5 years, where he overlooks public relations, web and digital marketing, product marketing, lead generation, events, direct marketing, new product development, customer satisfaction and voice of the customer – generally what you would expect the responsibilities of a CMO to be. He is also responsible for internal communications and enterprise sales management. One of the things that was intriguing, and that I think we will see more of as part of a CMO’s responsibility in the future, is that he is responsible for recruitment marketing, a major effort as they recruit over 6,000 drivers a year at Con-way (Note: we will be launching a research project on recruitment marketing in partnership with Monster.com — more on that later, email me if you have an interest in participating).

When Tom talks about being in charge of recruitment marketing, he talks about having the responsibility to fill the funnel, which then gets processed by his partners in HR. His role is to bring in quality candidates who align with the Con-way brand and their employment value proposition. Being in charge of employee communications means he communicates with employees from the day after they process through the HR funnel till the day that they leave.

Like most CMO’s, Tom has seen some big changes in marketing over the past few years, with the two most notable being the rise of social media and the decline in effectiveness of TV and print advertising. Another big change is the increase of content curration across all channels.

As in most industries, word-of-mouth is an important vehicle to reach customers, prospects, and prospective employees. At Con-way they make sure that the content they create can easily travel and be used when friends recommend them as a potential vendor or employer. A good example of that is how they share their job feed on their Facebook page for others to see and share with friends.

As said earlier, social media has made a big difference in Tom’s job over the past couple of years. While on the commercial side of their business the use of social media is still in the early stages, they see it playing an increasing role in customer service related inquiries as well as in requests for proposals and quotes. They also use social media internally, one example being the use of twitter to connect truckers with their load boards.

An interesting challenge facing Con-way marketing is that they have thousands of customers with whom they have a pretty shallow relationship, in essence moving freight for them from point A to point B, and which differ from one another on a regional basis. They also have several hundred customers with whom they have very deep relationships – those that outsource their entire supply chain to Con-way, and who have needs that are different based on industry. Tom is convinced that the latter group presents a bigger opportunity to connect customers with one another using social media or social CRM – ensuring that the collective becomes smarter than the individuals. When he thinks about a community for those customers, he also envisions hyper-local and face-to-face components – which is the right way of looking at customer communities when you have that opportunity.

We also talked about accountability and metrics – a topic that is top of mind for many marketers. At Con-way, marketing is accountable for three things – reducing the cost to acquire and retain customers, attracting and retaining the best and brightest employees, and positioning the company for growth. All metrics that are being used at Con-way support those three overarching goals.

The conversation then switched to the role of culture in a services company like Con-way. Con-way has a simple set of values that they truly live by – integrity, commitment, safety, and excellence. With a business where the brand is impacted by lot’s of employees who interact with customers, it’s critical to  the brand to have simple values that everyone can live by.  That is also why the employee brand and the customer brand have to be the same – if employees are the ones that will influence the brand promise in customers’ minds, they need to live that brand promise. The values at Con-way are so important that they are discussed every day during pre-work meetings with 8,000 drivers who interact with an average of 25 customers every day.

We closed the conversation by talking about innovation. At Con-way, they make a distinction between process innovation and product innovation. Process innovation is key when you have to constantly increase efficiency in a low margin industry to maintain profitability, while maintaining very high levels of customer service. Product innovation at Con-way is based partly  on Voice of the Customer and partly on trend spotting to see where the industry is headed. Launching new products in a service company like Con-way can be a tricky proposition. Unlike with product companies, where they can launch a product that is 80% complete and fix it later, in a services company the product has to be 100% perfect when you launch it.

It’s really interesting to see how the issues of a CMO in a more traditional business are not all that different from those in more recent industries, like for example the high tech space.

Other things that we discussed include:

• The importance of alumni  in marketing and new employee training
• More detailed conversation on how the overarching goals drive metrics
• The integration between sales and marketing
• Marketing content co-creation with sales
• The use of social media for internal communications
• The importance of content curration and thought leadership
• How you need to adjust your business practices to the local culture
• The differences in employment marketing in different cultures

CMO 2.0 Conversation Tom Nightingale [ 55:51 ] Play Now | Play in Popup | Download (1226)

I truly enjoyed my CMO 2.0 conversation with Karen Quintos, the CMO at Dell. Karen has somewhat of an unusual background for a CMO at a high tech company. She spent almost half her career in the pharmaceutical industry and did a stint in the financial services industry before landing at Dell 11 years ago – a rich background that was clearly reflected in the conversation. Karen also has a passion for being close to the customer – a good trait for any CMO.

We first talked about social media, a topic we had discussed at length with Erin Nelson, the previous CMO at Dell, and Manish Mehta, the VP of social media and communities, during an earlier CMO 2.0 Conversation. Karen confirmed that social media absolutely has to be built into the fabric of the company and that the (social) customer has to be at the core of everything. In fact, Karen believes that customer centricity is key to win in the marketplace. At Dell, they leverage social media as part of everything they do – product development, sales, marketing, HR, IT, finance, and service and support.

Karen then described the evolution of IdeaStorm, the Dell innovation communities, and how they now include Storm Session – focused and directed customer feedback sessions bound in time. Examples of successful Storm Sessions included discussions with CIO’s around virtualization, sustainability, and data center-type solutions – where customers could discuss how they think about ROI and total cost of ownership rather than just talk about technology deployment issues.

The Dell Social Monitoring Command Center, which was launched last year, is set up for employees to monitor, respond, and trend the conversations that are going on about Dell all over the world. On any given day they get upwards of 25,000 different conversations about Dell. A small team of people triage the conversations  by coding them red, orange or green, and feed them into processes like product development. Karen made the point that when it comes to social media monitoring companies need to realize that it should not be about hearing, but about listening and making sense.

“Leveraging social media cannot be a bolt-on strategy,” said Karen, “it has to be built into the culture…it cannot be someone’s second job, it cannot be something that they think of once a week. It has to be something that’s integrated into their day-to-day operations.” Right on! But amazing to hear that and then realize that more than 60% of those companies that participate in our Tribalization of Business Study (co-sponsored with Deloitte and the Society for New Communications Research) have 1 or less than a full time person associated with these efforts. Those companies need to wake up and listen to truly Hyper-Social organizations like Dell.

There are of course risks associated with social media. One of the early risks that Dell identified was to react too quickly – either latching on to negative comments first or latching on to proposed product ideas that very few people want. Sounds a lot like not giving in to the “tyranny of the minority” and instead reacting to real trends. Another risk they identified early on was around transparency – especially when eager employees don’t disclose that they work for Dell. Karen believes that many of the risks can be mitigated through training and education.

As many other CMO’s at successful Hyper-Social Organizations, Karen pointed to the importance of having simple values to ensure consistency across the multiple employee touch-points that they have with their customers – in their case be open, be transparent, be simple, and be caring.

Next we switched to the topic of culture, which Karen believes is, if not the most important, one of the most important elements in a company’s success. She considers Dell’s culture fairly young at 27 years old, but truly believes that is what guides behavior and brand. She also believes that it is extremely important to link your own culture(s) with that of your customers – especially in the B2B and public sector space, which make up 80% of Dell’s business.

An important part of culture is the culture of innovation. Over the last two years, Dell has fueled innovation not just from within but also through acquisitions. Interestingly enough, but not surprising (the world is not flat after all), Dell sees aquisitions from major innovation centers like Silicon Valley as being totally key to continue to bring the spirit of innovation within the company.

We closed the conversation by talking about a super-cool program that Dell is doing in partnership with the University of Texas – the Dell Social Innovation Competition. It’s open to higher education students around the world who have a passion for taking a social issue that they see within their community and coming up with a plan to address it. They submit ideas, business plans and videos which get voted on. The best ones get to travel to Austin where a finalist gets selected. With kids from India, Nigeria, France and the United States competing with one another, they are able to create a cauldron of diversity of thought necessary for innovation that would be hard to create in any corporate environment.

That is definitely something I would want to tell my 16 year old son about!

Other things we talked about include:

• The recommendation for companies to listen and engage with the both the good and the bad in social media, and how the sooner you engage the more successful you will be
• How Dell has training programs in place to teach people (9,000 people trained so far) how to listen and how to engage
• How to ensure that the proper experts get involved in deeply technical discussions
• The importance of trusting employees to do the right thing
• The importance of being able to trend conversations and launch more in-depth discussions with customers about important topics
• The importance of hiring people with a passion to win
• The importance of tying compensation and rewards to a set of behaviors – not just “what” behaviors, but also “how” behaviors
• The importance of social rewards in fostering the right culture
• The importance of employee rotational programs to foster innovation

CMO 2.0 Conversation with Karen Quintos [ 52:02 ] Play Now | Play in Popup | Download (2310)

If you want to meet a truly insightful CMO 2.0, meet Ted Smyth, the Executive Vice President, Corporate Affairs at the McGraw-Hill Companies. Ted has a really interesting background that started with a 15 year long  career as a senior Irish diplomat. He then switched over to the world of business by joining Heinz, where he spent 20 years before joining McGraw-Hill 2 years ago. One of the main lessons learned from this diverse background is that companies have to embrace performance with purpose – you don’t want to achieve profit goals at the exclusion of what’s good for society. Young people especially, will not want to leave their persona’s at the company’s front door, they will want to continue to do good for society while being at work. Another obvious benefit of mixing do-good with company performance  is that as a company you will increase the passion of your employees in the context of their work – which is clearly a win-win proposition.

We quickly delved into the topic of innovation, a hot topic at McGraw-Hill, where many of the industries in which they operate are undergoing tectonic shifts, and many of their businesses are going through the classic innovator’s dilemma. Innovation and customer focus are two major initiatives at McGraw-Hill. They strive to delight customers and prospects, and seek out people who are brilliant, courageous, curious, competitive and driven to do so – both inside and outside the organization. Innovation at McGraw-Hill is both a grass roots as well as a top down initiative, and celebrating wins, benchmarking themselves against other innovators, and developing an understanding of societal needs is all part of their culture of innovation. Ted is a firm believer that innovation needs to be structured and attached to people’s work routine. It needs to be disciplined to succeed and you always have to be on the lookout to not just innovate according to your capabilities, realizing that sometimes you need to upgrade your capabilities to develop what customers want.

Next we talked about education and learning, an important part of McGraw-Hill’s business, and a perfect example of what Ted meant when he talked about achieving business success while also doing good for society. Learning and education are clearly becoming digital activities that can help fix the current system, which is failing our kids – with kids who are slower than average falling behind and those who are faster than average getting bored. Digital courseware helps alleviate these problems. In digital environments, teachers and educators are freed up to become coaches with the ability to provide one-on-one help for the kids. While digital learning can remove some of the social barriers that sometimes inhibit learning (e.g., humiliation for not getting it), digital learning needs to be a very social/collaborative activity in order to succeed.

We then talked about the changes in how people consume content and where they get their buying recommendations from, and how that impacts marketing. The way McGraw-Hill thinks about marketing and advertising has obviously changed, with much more activity shifting towards  thought leadership and relevance in social media. Just like other Hyper-Social Organizations, McGraw-Hill realizes that you can only ensure consistency across all the different touch points that you have with your customers by living your mission and values. They have a very clear mission - need for knowledge, need for capital, need for transparency -, and a set of values that are easy to live by – objectivity, integrity, candor, diversity (especially of thought), and independence.  These simple concepts unite all employees across all divisions and help drive consistent decision-making across different markets with different customers.

Ted finished the conversation with two words of wisdom for marketers – we need to introduce more humor and emotions in communications and better articulate great societal causes. In closing he quoted some lines from an Irish poem by Nobel Laureate Seamus Heaney from the Canon of Expectation that got recited at a St. Patrick’s Day event he attended the day before our interview: “I yearn for hammerblows on clinkered planks, the uncompromised report of driven thole-pins, to know there is one among us who never swerved from all his instincts told him was right action,who stood his ground in the indicative, whose boat will lift when the cloudburst happens.” That is where we as individuals, communities and companies need to be, we need to stand our ground in the indicative, and our boat will lift when the cloudburst happen. We need firmness of purpose and be able to express it emotionally, poetically and humorously – that is where communications needs to be in order to be effective in this cluttered world.

What a great way to close a conversation with a truly great human being. Thank you Ted!

Other topics we touched on:

• The importance of the fundamentals of conflict resolution in business
• The role of training in fostering innovation
• The balance between understanding unmet needs and prospects vs existing customers needs
• The importance of serendipity in innovation
• The lessons that can be learned from game designers in education
• The need to bring down silos in stimulating innovation and learning, both in education and businesses, and the importance of social networking in doing so
• Generational differences in learning
• The importance of content curation in the publishing industry
• The dynamics of the current knowledge economy

CMO 2.0 Conversation with Ted Smyth [ 58:26 ] Play Now | Play in Popup | Download (3186)

Today’s CMO 2.0 Conversation with GE’s CMO Beth Comstock was packed with interesting insights. On a personal note it was certainly neat to get a one hour personal marketing tutorial from the CMO of one the largest companies in the world. By working in a real marketer’s laboratory, Beth must be one of the luckiest marketers around.

We touched on three main topics: the role of a corporate marketing group in a large diversified company with strong operating companies, how to foster innovation at GE, and general changes in marketing.

As a central corporate marketing group, Beth’s team is responsible for sales growth, innovation, and the GE brand platform. Even though the company has very diverse operating companies, her team has also been able to find opportunities for developing a customer platform (i.e., cross-sell accross business units), as well as product platforms (i.e., ecoimagination, the GE green platform, and a cross-operating-business battery project).

On the innovation side of things we touched on the importance of having a robust pipeline of innovations and on the need to have the right resources deployed across the right portfolio of innovations. We also discussed the need to kill ideas faster and the opportunity to create an innovation marketplace for ideas that may not be a good fit for the company. Beth described GE’s robust innovation process, and how they have both a formal process that very much resembles an in-house venture process as well as an online imagination network that relies much more on the wisdom of the crowd – in this case their employees. Other innovation related topics we covered include:

• how they use outside coaches and customer discovery sessions to bring outside insights into their innovation process
• the importance of including detractors in the innovation process
• how innovation is not just about technology innovation, but also about commercial innovations – and how they are constantly looking for new ideas around product, space, and business model
• the cultural changes required for fast-paced innovations and the creative tensions between being a process-driven organization and the inherent messiness and chaotic nature of innovation
• how in some cases you need to step away from traditional metrics to measure progress and success of ideas that are being incubated

We also talked about the changes afoot in marketing and how the new marketing challenge is in fact a knowledge management challenge – knowing enough about your customers so you can feed them data that will make them smarter.

On the need for new marketing skills Beth listed what she is looking for in marketers – people with new world skills, people who can simplify things and engage in customer communities, and people who can curate an experience for the customer. She also described how they set up a team of “rogue marketers” within the company, whose job it is to come up with rogue marketing techniques. It would be really interesting if at some point they would publish their findings in rogue marketing innovations.

You can listen to the podcast below, in the near future we will also post the transcript from the interview.

CMO 2.0 Conversation with Beth Comstock, CMO at GE [ 57:42 ] Play Now | Play in Popup | Download (11761)