Earning my MBA from The Wharton School in '99 was a transformational experience for me.  A big part of that experience were graduates returning to campus to speak to my class.  So I have returned to the school, once to twice per year (in more recent years, twice), on my own dime, ever since graduating to pay it forward to the best of my ability.  It strikes me that this isn't unlike shoppers, who we see encouraged to write their own content as they read more reviews, answers, and stories from their peers, receiving value and being motivated to pay it forward (see this study with the Keller Fay Group).

Last Thursday, I spoke from 9am-4:30pm to Dr. Stew Friedman's leadership and teamwork classes.  Stew has been a mentor for around eight years now.  He authored Total Leadership, an amazing culmination of his life's work and a book I deployed, with Stew's help (he graciously visited us in Austin twice, and our London team attended his talk there), to the entire Bazaarvoice staff last year and then this year to all of our new people.  You can read about that experience here, which The New York Times graciously covered.

Every time I return to speak to Stew's class, I reinvent my talk.  These talks come from the heart, and I prepare for them in the cab ride on the way to speak.  These are the key themes I spoke to on Thursday:

Humility. The single best leadership article that Stew pointed to me in our mentoring meetings was Level 5 Leadership by Jim Collins, author of Good to Great.  It is required reading for our executive team (and his class at Wharton), and I find myself referring to it often.  From the Wall Street meltdown, due to lack of transparency and oversight on very complex financial products (which still cannot be explained in most cases), to the hubris at AIG, we are living through a period of extraordinary transformation.

Lack of humility is a big problem in corporate America.  If you don't have it, spend some time in the real world (perhaps you should go help Dick Grace build a hospital in an impoverished area in Tibet).  Whatever it takes, get humble and reflective.  Ask the tough questions.  Don't sit comfortably with bad profits.  A lack of humility almost caused another Great Depression, but this time on a global scale.  It bankrupted an entire country (Iceland).

On the Bazaarvoice front, I believe our solution encourages humility through negative reviews.  You have nothing to be afraid of but having the data and the will to do something with it.  I have seen countless cases of initial shock to the negative, followed by the a-ha moment where the merchandiser realizes the reason they have such a high return rate with that product.  We are, after all, a digital reflection of offline word of mouth.  These are the conversations that people are having every day, like it or not (and you should like it – word of mouth drives your sales).  So have the humility to listen and do something about it.  Then have the wisdom to leverage it.

Transparency. The World Wide Web has brought us sites like Glassdoor.com, founded by Rich Barton, the founder of Expedia.  At Glassdoor.com, you have the ability to rate and review CEOs as well as report your salary information.  HR heads have reported the salary data as 90% accurate for large companies like Microsoft.  I learned about Glassdoor.com at Liberty Media's NetLeaders event last year, where Rich was a speaker (his theme: everything – people, person, place, service, product, thing – that can be rated and reviewed will be).  The Web has also brought us TheFunded.com, where you can rate and review venture capitalists (and not without an uproar).

Obama embraces transparency.  Leveraging social media, he went straight to the people for his election campaign fundraising efforts, and raised more money, in small amounts, than any other candidate in history.  And now, as President, he is bringing social media to government.  He gets his share of criticism (such as not allowing visitors to comment on some of the government sites), but my belief is that the genie is out of the bottle.  Just like his campaign is being heavily studied, and will be imitated, so will his efforts for social media in government.  No one can question that he is racing through policy discussions, from stem-cell research to reform on Wall Street.  The pace of legislation is unprecedented in modern times.

With the Web, including blogging, Facebook, Twitter, Glassdoor.com, TheFunded.com, reviews, and so many other forces, leaders will be held accountable to a higher level of transparency.  The opaqueness of poor employee satisfaction (and ethics) on Wall Street is coming to an end, quickly.  This transparency will transform leadership as we have known it.  The command-and-control style, coming out of military training, is dying.

Connectedness. My daughter, who is now 4, will literally grow up on Facebook (or something like it), with a digital lifestream of connectivity to her friends.  When she is my age, 37, she will be able to jump to a different job at a much faster pace than my generation.  She will be connected globally to friends that she has known since childhood.  If she doesn't like the company culture, her friends will know.  The level of transparency will be unlike anything we can imagine now.  As a result, the focus on leadership, management, and culture will be at a level that today we cannot imagine, as employee retention is already, today, often the most costly expense a company has.

Culture. Due to these themes, the importance of focusing on culture is greater than ever.  I'll spare you our uniqueness here, and instead provide you with this reference to all of our blog posts that have been categorized under culture – there are many.  I spend around 15% of my time focused on culture, and I believe it is largely responsible for our success as a company.

Total Leadership. Stew's book is the start of many initiatives to focus on the development of the whole person.  Although that may not directly help you sell or service more widgets (although it actually will raise performance), it will lead to greater retention, employee satisfaction, and, ultimately, productivity, in this era of transparency and connectedness.  Learn more at TotalLeadership.org (and check out TLTV).

Soul. The Corporation, a stirring documentary I watched 4 years ago, made me think hard about the soul of a corporation.  I'm a believer in karma, and the more successful we are, the more I focus on the nourishment of our company's soul.  The Bazaarvoice Foundation is a part of that nourishment, but there is much more (such as the charity CEO speaker series Tony Capasso launched this year).

After speaking all day (both exhausting and exhilarating), Stew and I had the pleasure of hosting dinner at Tequilas, my favorite interior Mexican food in Philadelphia, with Glen Senk, CEO of client Urban Outfitters; Dmitri Siegel, head of Direct at Urban Outfitters; Fiona Dias, EVP of Partner Strategy and Marketing at GSI Commerce; and Dana Lasher, an old friend from CDnow (former VP of Sales and Marketing) that helped me design Coremetrics' initial reports who is now an entrepreneur herself at get Ready girls, an affinity sportswear company.  It was a magical evening of discussion, and I passed along my endorsement of Total Leadership in the hopes of helping others.

I hope that this post encourages you to speak at your alma mater.  I have found it to be an incredibly reflective process, one of the most important leadership development activities that I do, and have really enjoyed the karma of it all.  To teach is to learn.

First, think about how any social technology will impact the prospect or customer’s “purchase momentum.” There are social technologies that create connections and communities, but the ultimate goal is driving purchases. Evaluate how salient any type of UGC or social participation is for researching, shopping, narrowing, comparing, and building confidence for prospects to buy. The closer the interaction is to a prospect’s “task,” the closer it is to helping people make their purchase decisions.

The importance of the second factor (X axis, below) is something I’ve come to realize after years of change leadership at startups, at Dell, and during the last two years seeing how the right investments in customer dialogue accelerates our clients’ social strategies. This is the depth and speed of acceptance of the proposed social initiative. I call this factor the “cultural momentum” of your initiative, and it relates to how quickly you can build excitement internally, bringing “customer oxygen” into your corporate culture! Let me explain…

Social commerce and user-generated content initiatives are new, unproven, and scary for most companies. However, I’ve seen our clients go from anxiety level “9” to hundreds of employees embracing UGC alerts, review, question, and answer reports, and actively engaging with our community managers every week. The right social initiative can create a halo effect around the whole idea of “social” for your company. If you choose the wrong initiative, though, the “social” activity becomes a fringe activity, destined to be cut.

Executives who start with ratings reviews usually start with high anxiety level, but, when they see that  85% reviews are positive, interest peaks. They start looking at the data and content. They see for the first time — perhaps because it’s now right there on their site — how customers talk about their products. It’s enlightening and relevant because it’s about the products they sell (their day-to-day jobs). The voice of the customer spreads throughout the organization and changes business decisions. It just takes one brand, category, or product manager to share a success story of how UGC changed his strategy, buying, negotiation, or merchandising. That story spreads throughout the organization, senior management applauds, and everyone jumps on board.

To evolve, you have to have this kind of momentum to get buy-in for future social initiatives and experiments. Other people in the company have to get excited about this new strategy, because as your social commerce strategy evolves it will start to tap more functions (and it should). So the first social program you enact should be one that drives this cultural momentum.

When evaluating social technologies and programs, you can plot and debate them on this simple 2×2 matrix:

What drives purchase momentum?

Write down what your customers need before they make a purchase. How do they research, shop, and evaluate? Where do they go, who do they consult, and what information do they need?

Then evaluate the social initiative on its ability to meet those shopping needs where the customer is looking. For online retailers, your customers go to shopping portals, they ask friends questions, they search Google, or they go down the purchase path of your site. Would a social network ”walled garden” on your shopping site help the majority of these customers? Would a blog? You might do those for other reasons, but they’re not in the bulls-eye of helping drive purchase momentum for the majority of customers.

Today, Ratings and Reviews are table stakes for retailers because multiple research studies have found that 70-90% of customers seek or want reviews before purchase. Customer search Google for reviews, and you want to be found. Customers use reviews to sort and filter to determine which product to buy. They need to read some level of negative reviews to feel they’ve ”vetted” the product and done their research. They need an “excuse to buy” with their spouse, and a sound bite from some reviews is as good a justification as any! Customer reviews are very aligned with purchase momentum.

What drives cultural momentum?

Three things drive cultural momentum – that internal “buzz” around social initiatives.

1) Results

The language of a business is the P&L. If your social technology can show results as close to the P&L as possible (i.e., revenue, margin, cost reduction), even the CEO will be interested. Bring your results into a senior executive meeting and they will applaud you in front of their managers and peers.

2) Data

Can you make  customer dialogue data and content useful and accessible to multiple functions in your organization? I get about four emails a week with product ideas from our clients, and the majority of them revolve around our workbench, reports, and alerts. We knew from the beginning that wide use of the customer voice and data is what would drive adoption. It’s what I’ve called the “customer oxygen” that corporations need. It drives wide interest in customer dialogue and UGC.

3) Cross-functional relevance

If you do a program that is just interesting to the online, marketing, or eCommerce teams, you’re missing a huge opportunity to engage merchants, product development, catalog, stores, customer service, training, research, and other departments. Your goal is deep and wide adoption of social marketing, so the program that has utility for other departments will accelerate cultural momentum. We see clients using answers from our Ask & Answer application for training, research, and copywriting. Reviews can be used by store managers and merchandising in email, catalogs, and advertising. The cultural momentum from these three factors increases the interest in the next investment in customer dialogue.

Where there’s ROI and high internal interest, then investment and resources follow. Simply put, that’s why you prioritize social programs that have purchase momentum and cultural momentum!

The simple fact of the matter is that not every strategy for user-generated content is going to be successful.  Partnering with a company that specializes in user-generated content is going to help you significantly because most companies don't have the needed experience in-house.  This is a very new field, after all.

However, I believe that Heinz is doing the right thing by at least trying.  The online dialogue has begun – starting with ratings and reviews, then blogging, then social networking, and now user-generated advertising.  Heinz is smart to dip their toe in the water, just as many (even earlier pioneers) are dipping their toe into the upcoming 3D Web, popularized by Second Life.  There is an opportunity cost to being too much of a laggard, just as there is an opportunity cost for being too early of a pioneer.  The balance is difficult to strike but great companies did not get great by being timid.

Perhaps instead of user-generated advertising, Heinz should have started with crowdsourcing.  Another consumer food company, Kettle Chips, selected several new user-generated flavors with their "People's Choice" campaign, as I wrote about last year around this time.

The NY Times article also reminds me of the "contrarian" (i.e., informed by decades of marketing experience) views of Dr. Peter Fader and Dr. David Reibstein of The Wharton School, as documented in my Word-of-Mouth Wisdom interview series.

I would love to hear your thoughts on this news.

Photo of the Anne Frank House Museum

Given the focus of my current business, I immediately contrasted Anne Frank's diary to our current age of citizen journalism, user-generated content, or, simply, blogging.  The main difference between a blog and a diary is that one is a public medium while the other is a private one.  However, both beg to be read although their agendas may be different.  I wonder how Anne Frank's diary would have been different had it been a blog.  Would it express the same intense human condition that made her diary so famous?  It certainly would be more widely read immediately (and commented on in real-time as the events unfolded).  How would the world have reacted to it at that time?  How would her father, who was so surprised to learn about the private side of Anne that he never knew?  Would the Holocaust have even been possible in this age of the Internet and blogging?  My guess on that last question is no – for the connected world.  But, unfortunately, for the less connected, it happens all too frequently (as we currently see in Darfur).

At the end of the tour, there are two modern exhibits which evoked a sense of community.

The first is called "Freedom2Choose" and showed controversial media from all over the world about homosexuality, public marches, freedom of the press, and other current examples of issues.  You then voted on your stance on the issue.  The community part: everyone in the room voted with you and then the results were shown in real-time and compared with all previous visitors.  On many of the issues, people were close to evenly divided and it made you realize how diverse the viewpoints were of everyone in the room.  I searched for a Web component to this (wondering how they used the votes to further educate), but haven't been able to find it yet.

The second, the Anne Frank Tree, is Web-connected.  Anne could view the chestnut tree from the attic window of the Secret Annex.  This is an interactive tree that encourages visitors of the museum to leave their leaf, as well as a video message, that they can forward to their friends and family.  Click around on the tree and you may be able to find our leaf.  When leaving a leaf, you can also subscribe to receive emails from the Anne Frank Museum.  This is a smart way to both connect visitors to the museum and also to spark word-of-mouth for others to learn about the museum.  It also is a very tasteful way to do so (for example, the email is double opt-in).

Further visiting online, I found that the Anne Frank organization has recently become very modern and connected.   Check out their photo contest, "Sources of Inspiration", with the accompanying MSN Spaces page.  I was glad to see this as young readers from around the world (read the "IM Generation") will expect this kind of interactivity, and it will encourage them to further engage and learn.

Anne Frank, who died at 15 in a concentration camp (one month before the liberation), would be amazed to see the impact her diary has had on so many millions of people.  It is currently available in over 60 languages.  I think she would also applaud the way her message is being delivered at the Museum as well as online.

"Everyone has inside of him a piece of good news.  The good news is that you don't know how great you can be!  How much you can love!  What you can accomplish!  And what your potential is!"
- Anne Frank, 1929-1945

- from "The History of Great American Turnarounds", 2929 Entertainment, aired on Jan. 5, 2025

This is probably old news to some of you, but I find it fascinating that Chevrolet is allowing consumers to create their own ads for the new Tahoe.  As you can imagine, some consumers have created some very critical ads.  However, I applaud General Motors for finally taking some risk.  I'm sure the authors of "The Cluetrain Manifesto" would also applaud this bold move.

There is no doubt in my mind that we will see more of this.  This is the start of an open and honest dialogue between General Motors and their customers.  Is the dialogue always going to positive?  Of course not.  It isn't always positive offline, but it is too easy for General Motors to ignore private customer-to-customer conversations.  It is a bit different when the conversations are out in the open, staring them in the face.

Sam Decker calls this "customer oxygen".  No matter what you call it, it is healthy.  I have long believed that a company should design its products with customers.  That may sound obvious, but it's not.  I created Coremetrics, a successful Web analytics business, based on the premise that companies like Accrue and NetGenesis had failed to do this.  And their customers defected quickly.

Then I read Ron Bloom's, the CEO of Podshow, article on "advertising 2.0".  Outside of the fact that there are too many 2.0 terms, I agree with Ron that advertising must evolve.  We are more cynical than ever about advertising because we are more educated.  If you are reading this blog, you are likely far more educated about marketing than most consumers.  And you are probably much more likely than most consumers to ignore advertising altogether – skip it with your TIVO, read news online via an RSS feed, get the straight scoop from your friends.  The question is – what form of marketing works or is going to work on you?  Is it "keeping up with The Joneses" all over again?  Only this time, you actually trust "The Joneses" more than you trust any corporation.

Every social networking, blogging, user-generated content, "authentic media", and Web 2.0 company has a common goal in mind: monetize their business model with advertising.  There are a ton of venture-capital and public-market dollars chasing this aim.  My bet is that several will evolve entirely new forms of advertising.  For some, the bets are already paying off.  Last I heard, Facebook is making over $10 million per month on advertising and the buzz is that it may be acquired for as much as $2 billion.  And you probably heard what Rupert Murdoch's #2 is publically saying about their acquisition of MySpace, "MySpace is the single biggest growth opportunity this company has".  Considering the Murdoch empire and the newness of social networking, that is a pretty mind-blowing statement.

In full disclosure, my wife, Debra, just bought a new GM SUV after trading in her Volkswagen SUV, an unfortunate lemon of lemons (it actually pains me to write that after many years of loyalty to Volkswagen).  I also bring this up because I found myself genuinely impressed with the 2007 redesign of the model she bought, and I wonder if Bob Lutz and his team are really starting to figure it out by listening.  It is the first American car that we have ever bought.  Imagine how odd it would be to read that statement if we lived in the 1950's instead of the 2000's.