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.

I've been thinking a lot about the consumer in this economy, given that consumers drive about 70% of our economy in the U.S. and a large share of the world's economy (most notably China's).  We are the world's largest shopper.  This week's article by Mr. Cooper really hit the nail on the head, leading me to believe that the recovery is going to take a lot longer than initially assumed.  This may be old news to some of you, but I have been consuming the data as it becomes available and seeing consumer saving increase so dramatically is a real turning point.

I believe that social commerce will shine in a gloomy time like this.  Consumers have always feared "buyer's remorse".  With U.S. unemployment at 7.6% and rising, in addition to the multi-trillion dollar decrease in consumer wealth, purchases will be scrutinized like never before.  And I believe customer ratings and reviews, as well as all forms of customer-generated content (and word of mouth), will be leveraged like never before.  From reducing returns to increasing sales, it is clear that social commerce reduces buyer's remorse.  This isn't just a U.S. trend, as the economic problems are global and buyer's remorse is a common human behavior, and I believe this is the driver behind Sam's recent post on UK consumers flocking to social commerce.

If you missed Sam's post in November on Amazon, I recommend you read it.  They were one of the few retailers online that recently announced stellar results during such a challenging retail season.

Our clients have been stepping up their pace of innovation with social commerce.  You can see it reflected in our many blog posts in the last two months, especially the one from Heather about the unprecented number of holiday promotions we helped drive with our Community Managers.

This will be a huge year for social commerce.  Our company is signing clients at a faster pace than ever before.  Innovation is accelerating rapidly, and not just online.  The ROI is very proven.  And I'm proud of the way we are helping our clients in such a challenging time.

Come join us from April 27-29th in Austin at our Social Commerce Summit to discuss how the best are leveraging social commerce.  We sincerely look forward to seeing you there.

Stew was my Leadership and Teamwork professor at Wharton's MBA program.  Wharton is a pretty hard-nosed school, located in a tough area in Philadelphia, with famous graduates like Steve Wynn, Donald Trump, Donny Deutsch, Charles Butt (of local fame), Leonard Lauder, Lawrence Lessig, Peter Lynch, Harold McGraw III, Michael Milken, Michael Moritz, Elon Musk, Ronald Perelman, Lewis Platt, J.D. Power III, Mortimer Zuckerman, and countless investment bankers and management consultants.  Stew actually founded the Leadership and Teamwork program at Wharton in 1991.  Hard to believe that no business school, in the U.S. at least, taught this subject until then.

Like many Wharton MBA candidates, I was skeptical of the subject.  Most of us were thinking, "why are we in this class learning this 'soft' stuff when we could be learning the 'real' stuff?" (note: Stew's class was part of the core, or required, curriculum).  However, a few years after I graduated, I wished I had paid more attention.  As an entrepreneur, I can tell you that this is the most important subject of any MBA program.  You cannot build a great company without great people.  And you cannot attract and retain great people without great leadership and teamwork.  Realizing this a few years after graduation, I contacted Stew and he has been a fantastic mentor ever since.

Stew is one of the world's foremost experts on the subject of work/life balance, pioneering in the field since 1984 (read his amazing bio).  He doesn't like the term "balance", though, as it implies tradeoffs.  So, for the last few years, he has working on a program he pioneered called "Total Leadership", which challenges the participants on the "balance" notion.  By the way, when I say working, I mean practicing in the field, as in with real companies.  This is one of the best aspects of a world-class MBA program: professors that actually learn from the field instead of inside an ivory tower.

Stew's new book, appropriately named Total Leadership, will be released on June 8.  I have been a student of leadership and teamwork for over a decade now, and I honestly think this is the single most powerful book I have read on the subject (I was an early reader, per my mentoring relationship with Stew).  So I decided to buy everyone in our company a copy of it and ask Stew to visit us in Austin and personally train us on it.  Graciously, he accepted.

Stew trained all of us on Wednesday, May 14 for the entire afternoon.  It was the most powerful moment in our culture's history, in my opinion.  Prior to his visit, I told my co-founder, Brant, that this would have a "massive impact" on our culture, and I wasn't disappointed in our company's initial response. Many employees thanked me afterwards, and the fun is only beginning (we are going through the entire program and all of its exercises over the next four months).

Culture has been a huge focus for us from the beginning, and is, I believe, the most important reason that we now lead our emerging industry.  We have tried and adopted many practices that were controversial at the time, such as:

• Testing for all new hires – many fail the test and it is frustrating when under pressure to hire, but it ensures that we make fewer mistakes and build a strong culture (without a strong foundation, building a strong culture is not possible).
• No vacation policy – we trust our employees to not abuse it and we do not want to limit them from taking personal time when they need it; for example, we had an employee take a 3-week vacation to China just two months after starting with us (and beating all of his goals at that time).
• Quarterly performance feedback (our "3/3/1" process), including "upward" feedback for the managers from their staff – to help all of our employees rapidly grow and reduce the anxiety in our organization (everyone always knows where they stand); I have been told by many of our employees and managers that they have learned more at Bazaarvoice than anywhere else they have worked.  Our feedback is balanced (the 3/3/1 is a simple email form to document the 3 things you did well that quarter, the 3 things you could have done better, and the 1 initiative you are going to focus on as a result).  The upward feedback from staff illuminates blind-spots on our management team, many of which have never been discussed with them in previous companies because the feedback process was too poor to generate intensely constructive dialogue.
• And much more (read our Culture page to learn more).

But perhaps none of these were more controversial than the roll-out of the Total Leadership program.  Why?  Because it usually results in a decrease of time spent at work.  So why take this risk when Bazaarvoice is doing so well?  Well, because I sincerely trust our employees.  Many of our cultural policies are "discovered" at our quarterly executive strategy meetings when brainstorming on how to evolve culture by treating employees with trust, like the mature adults that they are (treat others the way you want to be treated, remember?).  And I know from first-hand experience that I wasted so much time at work before the birth of my daughter, Rachel.  Once she was born I was more focused than ever before, and it led to a corresponding increase in my productivity although my work hours actually decreased.  So, I believe that the Total Leadership program will do the same.  And, sure enough, Stew's research shows that productivity/effectiveness goes up at work once employees go through the exercises in this program.

Why did I call this "an experiment"?  Well, it certainly is one for our company, with it being a new initiative.  But, as importantly, it is an experiment for Stew too.  He has never rolled out the program to an entire company – usually just to a large team at a Fortune 500.  So he is just as excited about it as I am.

To bring the power of Stew's program to the rest of the Austin community, I also hosted Leadership Austin, Bootstrap Austin, 100 attendees outside of Bazaarvoice, and Stew Friedman at our offices the evening of May 14.  I received just as many compliments from those attendees as I did from our own employees.

This is a very powerful book, and I highly recommend it to all of our clients and partners.  Roll this out to your team and you will not be disappointed.  Buy it for your friends, clients, and partners as a holiday gift.

Total Leadership is a way of life, and I have already incorporate many elements of it into my workstream.  I hope you decide to do the same.  The workplace will be a happier place if more leaders "take the leap" to trust and empower their employees to not just be a leader at work, but a leader in all aspects of their lives.  If you want to learn more, buy the book and check out Stew's website for the program (watch the videos, especially).

Finally, I have one request.  We are going to double our staff this fiscal year, and we need your help.  Please forward this post to anyone that you think may be interested in joining us, and remember that we have four offices now (Austin, London, Paris, and Singapore).  Here is our jobs page.   Your friend would not only be joining a great culture, they would be joining at an amazing time of growth, globally, in our company.

Update 5/28:
The New York Times just wrote about the Bazaarvoice Total Leadership experience.  This will be live tomorrow in their May 29 print edition and is online now.  I am very proud of this recognition, especially for Stew Friedman who has spent his entire professional career helping others become better leaders, managers, and people.  For Bazaarvoice, I am especially proud of this press hitting on the evening of the launch of our first Social Commerce Summit, which is sold-out with 230 attendees present!  I'm off to network with our clients and partners, and I hope to see you here next year if you missed it.

We’re approaching our 3-year anniversary (May 2) at Bazaarvoice, and I’ve been restless thinking about this incredibly transformational time in history.  I’m on my way back from an exhilarating week in Philly and NYC, and I’ve literally had 12 hours of sleep over the past three days.  My journey has included a $320 taxi ride from NYC to Philly at 1:30am and many other moments of craziness that I may share with you one day over beers.  Here are some of the forces of transformation I have been churning on:

1.    Civic duty: Bill Gates leaving Microsoft to focus, with his wife, on spending his mindboggling billions on the most important causes in the world.  The places where their money can affect the most impact.  Like Andy Grove recommended in High-Output Management (one of my favorite beginning management books), you should spend your time on the highest leverage activities – those that impact and empower that greatest number of people in your organization.  With Warren Buffett being one of the smartest people in history and realizing his own strengths and weaknesses, knowing that Bill and Melinda Gates would do a better job than him on impacting change through charity, entrusting them with 85% of his equally mindboggling billions – this was the most incredible personal initiative that I can think of in my lifetime.

        Civic duty is very powerful, and I believe we are in a transformational period where more people are getting involved.  From the beginning of Bazaarvoice, we have focused on charity, and this has nourished the soul of our company.  I’m convinced that our usual involvement in this area has led to faster and more profitable growth than our peers (fellow rapid-growth companies our age).  In Judaism, we call this tzedakah.  Perhaps the Web connects us and creates more accountability in this area, where a virtuous cycle of giving kicks in.

2.    Free-market regulation: I have always been a Republican.  I am also Jewish and most of my fellow Jews are not Republicans.  I am also an Austin native, where most people are Democrats.  And I am a Wharton MBA alum, where I presented all day Tuesday, on my own dime, on the subject of leadership and teamwork (teaching is giving and learning).  If there was ever a free-market focused school, it's Wharton.  This whole mortgage mess has great people, such as the Board of Directors at Shop.org, talking about free-market regulation in a way that I never heard in my professional career.  The exotic instruments created, the ignorant (or knowingly false) assumption that housing prices would climb forever, the forced sale of Bear Stearns, the sleepless nights for Paulson and Bernarke, and the near collapse of our economy.  It’s hard to sleep when I feel an obligation to study and learn from this period in history.  I grok business.  And it really has me thinking about the wisdom of unregulated capitalism.  As a result, for the first time in my life I will be voting for a Democrat in this presidential election (not my only reason for the switch).  The dot-com bubble bursting, which was personally so painful for me as an early pioneer as the founder of Coremetrics with 100 of our dot-com clients going out of business, pales in comparison to the trillions that will be lost globally as a result of our mortgage bubble.  I know from my conversations in the industry that many of us are rethinking unregulated capitalism.  I think this will mess will lead to greater consumer involvement in government, and the Web will be an extremely powerful force in that.  Just wait until everyone can vote online.

3.    The health of our planet: To be transparent with you up-front, I drive a 2008 Audi S8, which has a 10-cylinder, 450-horsepower motor.  It is an incredible machine, a real dream car for me and a reward for my entrepreneurial success, but it’s also a gas-guzzling monster.  So you can either skip this paragraph, or read on. 

        An Inconvenient Truth was just that – too inconvenient.  Hybrids haven’t really made a dent (well less than 5% of all cars sold are hybrids), and the truth is they are mostly gas-powered anyways – more of a symbolic gesture really.  The Tesla (see my previous post on them) and the Chevrolet Volt – that’s real change (but generating electricity also consumes resources).  I keep reading about the two-stroke cheap motors in China spewing massive emissions.  These small motors are even worse than huge ones. 

        Companies are moving toward green, both for attracting a new age of green-aware consumers as well as to ensure their longevity.  I have blogged about this many times over the past three years (see Aug-06, Dec-06, Jan-07 for three insightful examples).  It is a huge trend.  But I’m restless because we’re not making progress as fast as I thought we would.  I sometimes feel like we have a freight train speeding towards us, with rapid worldwide population growth not helping.  As I’ve blogged about previously, I’m ultimately hopeful that entrepreneurs will successfully affect real change by capitalizing on the multi-trillion dollar opportunities.  The venture capitalists are all over it, and that's because the entrepreneurs are all over it.  One only needs to look at the rapidly rising price of oil and commodities to realize that there are ridiculous amounts of money to be made if you can find real alternative sources of energy.  But I’m pretty sure it is going to take government regulation to get there, as my faith in unregulated capitalism has been somewhat shattered (see #2 above).        

        The implications for companies is obvious – attract green-aware consumers through their actions and affect real change to ensure their longevity (e.g., are they dependent on gasoline or other diminishing resources to survive?).

4.    The war on terrorism: This is too thorny to really dig into publicly, and I’m not educated enough about all of the issues to feel confident in my proposed solutions.  I pray that our government is.  In any case, this is a huge problem for the human race, not just the U.S., and I have no idea what happens if we stop being vigilant.  It is pretty obvious that the actions of our current President are easy to criticize in hindsight, and there has never been a costlier war.  As I travel throughout Europe, it is clear to me we need a President that will be able to repair our relationships with other countries.  I look forward to seeing solutions vigorously debated in the upcoming Presidential campaign (and I’m sure it will continue for long afterwards) and being open-minded to solutions proposed then.  I’m hopeful that the Web will bring us together, as the human race, to debate these issues and find reconciliation through understanding each other.  Given the increasingly global nature of business, this is incredibly important to businesses as well as the disruption could be exponential.

I would love to hear your perspectives on my rants above.  After almost three years in business, having much pride for what we have accomplished as a business and team, I can tell you that the best part of my job is working with our incredibly smart clients.  Thank you!

I'll post Part 2 (update: Part 2 is live now) of this trend piece soon, and I promise to make it more focused on word-of-mouth and our business.  And I'll end on a better note, too.

And now I’m going to catch up on some sleep! 

Now, I have nothing against Sprint. But I find it fascinating that in this day and age the way we consume information is so dependent upon Web search results. We spend more time consuming media online than in any other medium. If you are considering Sprint as a customer and searching for "Sprint customer service" on Google to learn about the experience you may have with them, 30% of the first ten matches are negative and 20% are about them firing high maintenance customers.

This highlights a modern day challenge. Firing bad customers deserves more consideration in today's "global village". I'm guessing that Sprint made this decision on an almost purely financial basis. Some of these customers were calling them 24 times per month. Perhaps these are just high maintenance individuals. We all know them – no matter what you do, they are never happy. If I called my mobile provider's customer service department every time I had a dropped call, I would be calling them often – maybe even 30 times per month. And some customers probably do call every time there is a dropped call. I don't know if these 1,000 customers fall into that category or not. That is why I put "bad" in quotes for the title of this post. Only Sprint knows how bad these customers truly are.

But did anyone at Sprint consider the reputation impact of this cost-cutting action in today's networked world? If not, I'm sure they will next time. This story has been everywhere. First, I heard it on the radio. Then I saw it on CNN at the gym. And now it is literally all over the Web!

One of my most memorable classes at Wharton's MBA program was Dr. Eric Clemons' class on using information as a competitive weapon. He taught us about how credit card companies had used their superior customer database systems to identify and fire their worst customers (e.g., those that would have the highest debt write-off) by enticing them to transfer their balances to competitors. As bad customers transferred in droves, it almost put their competitors out of business as they didn't have the same type of customer forecasting capabilities and therefore couldn't proactively address the issue until it was too late.

So, I think back to what I learned in Dr. Clemons' class and Sprint's recent action. Perhaps Sprint knew that high maintenance customers would tell other high maintenance customers thus sending these bad customers to other mobile providers. Perhaps they calculated the word of mouth cost of this action before taking it. Perhaps they thought that this story would actually educate high maintenance customers not to come to Sprint in the first place. But given the way Sprint seems to be playing defense with the press instead of offense, my guess is that they didn't – it was probably a purely financial decision, a cost-cutting move.

In any case, I'm sure Sprint and other companies are now thinking about how networked the customer has truly become so that future cost-cutting actions take this issues into consideration. However, you can't satisfy everyone. This logic may seem outdated – it may run counter to some of the recent word of mouth practices. But it's true. Businesses are still in business to make a profit, and not all customers are a good fit.

At Bazaarvoice, I have learned that knowing who is writing a review is sometimes as important as the actual content. Is the review written by your best customer? Your worst? This puts into context the information. Not all word of mouth will be positive. That's a given. But when you are a merchant deciding on the actions to take from either highly positive or highly negative reviews, it is important to know who those customers are. One of our clients, PETCO, proactively contacts high-value customers when they write a negative review. The bottom line: digitally-archived word of mouth will be married with the time-tested methods of information strategy taught by Dr. Clemons.

Update 7/12: One of our Community Managers sent me this story at The Consumerist. There may be more to this than Sprint's PR people were willing to speak about publicly.

WOMMA is an organization that I really believe in.  Like Shop.org (where I served on the Board of Directors for over two years), it is a non-profit dedicated to serving its rapidly growing industry well.  My co-founder, Brant, Sam, and I have all had the pleasure of speaking (teaching?) at WOMMA events.  As a matter of fact, Sam is speaking again on April 18 at WOMMA's "Word of Mouth Basic Training" conference in New Orleans, alongside people like Dr. David Weinberger, who co-authored "The Cluetrain Manifesto" (the book that inpired me to select our "unusual" company name).  Sam is a busy man and is also speaking at Forrester's Marketing Forum 2007 on April 12 in Miami.

This week, we also proudly announced that WOMMA's founder, Andy Sernovitz, joined our Board of Advisors.  Since I write this in the same post, please note that this news is unrelated to Sam joining WOMMA's Board (the election process isn't influenced by the founder, but rather a nominating committee of WOMMA members that carefully screen applications and then put their selection to the entire membership to vote).  In any case, I have known and respected Andy for many years.  We have been on parallel tracks, since both of us graduated from The Wharton School, building online businesses and organizations that we are passionate about.  Andy and I were destined to work together, and I am happy that the time has finally come.  I have no doubt that he will make a huge impact at Bazaarvoice.

It was a very busy week at Bazaarvoice.  We also announced a major partnership with our friends at Loyalty Lab.   I have known Mark Goldstein, Loyalty Lab's CEO, since he was CEO of Bluelight.com (a former Coremetrics' client).  He is an impressive entrepreneur.  Mark and his team have been great to work with, and I know we will do exciting things together.  Bridging customer loyalty and online word of mouth is a natural marriage.  As a matter of fact, customer ratings and reviews have already been proven in several studies to increase customer loyalty and satisfaction.  The latest study was put out by my friends at ForeSee Results, the original creators of the ACSI (if you don't know what the ACSI is – learn now, as it impacts the U.S. stock market in radical ways).  If you haven't seen the study, I can email you a copy or you can get it here.  Loyalty Lab will turbocharge the building of customer loyalty when combined with our solution.