Open Leadership

Charlene Li: Well when people think of social technology they usually think of big sites like Facebook or Twitter or LinkedIn, but it also encompasses new technology such as blogs and discussion forums, which have been around for many, many years now, and there are all sorts of new technologies that are coming along. The way I think about this broad term though, of social technology, is exactly that, technology that allows us to be social with each other, and more so than just on a one-to-one basis. For example, things like chat or emails, which are more communication tools, it really allows us to form groups, to have social dynamics, to be able to communicate but also share and create a culture and relationships with each other.

Rachel Salaman: And your book is about how leaders specifically can use this technology in order to become more open, so why would they want to become more open?

Charlene Li: Well I think first of all they actually, fundamentally, don't want to be open because they fear it, they in many ways don't necessarily see the advantages, which is why I wrote the book, but I think there's one fundamental change, and that is their customers and their employees are now demanding that the businesses they do business with and also that they work for, be more open because they themselves are more open in their lives. So what we're seeing now is this cultural shift, a shift where people are becoming more comfortable with the sharing, and they're expecting that the organizations and businesses in their lives also become more adept at sharing and also see it as something that really helps to benefit the organization. So leaders oftentimes will see this pressure to be more open as a threat, but once they cross the threshold and change their mindset and actually see what the opportunities are and also the advantages and the value it can build in the relationships with customers and employees, then they go running towards it, the leaders see that difference that it can make by being more open, and changing and redefining the relationships they have. It fundamentally comes from the demand that is forcing businesses to be more open, and the ones who acknowledge it and embrace it are the ones who actually, not fearing it, and actually going towards it.

Rachel Salaman: Well you've worked in this area for many years, can you give some examples of the right level of openness in your view, what leaders should be aiming for? Is it possible to define that?

Charlene Li: Yeah, and that's the fundamental reason why I wrote the book, because when I was going around and talking to people about the first book, "Groundswell," they were saying "Okay, I get that I need to use these new technologies, but fundamentally how open do I need to be?," and that was a great question. I think it's a question of needing to be open first of all, how open do you want to be? Not too open, but open enough to get things done, and I think that goes back to again the people you're trying to be open with, what do they need to be able to do business with you and to work with you, but also I think it's not a fundamental constant, it is something that changes over time, and it's different for different organizations even inside the same industry. I think again, depending on what your strategy and what your goals are, the level of openness is going to be very different. I'll take for example a company like Best Buy, who I feature in the book; their culture has, for a very long time now, been very entrepreneurial, and even though they're a very large retailer of electronics they realized that their employees were embracing these tools, and so they started more than four years ago allowing them to use these things and gradually became more and more open. They were not open overnight. Take a different example of a company like Apple, which historically has been very closed, very secretive, but that matches their strategy. In the book I have a small section called the Apple Factor, and I think that's a great example of saying it makes sense for Apple as a company, their strategy and their products, that probably is not going to work for most companies because their products don't have a fan base and the excellence in terms of the design and the production of their products as most companies have.

Rachel Salaman: So part of opening up is figuring out what the right level of openness is for your organization?

Charlene Li: That's right, and one of the things I do in the book is to do an openness audit. You want to figure out how open you actually are today so that you can then figure out "Well from that basis what is our strategy, how open do we need to be?," and that gap between where you are today and where you need to be is your strategy and your road map for becoming more open.

Rachel Salaman: Now how expensive is it to become more open in this way in terms of training staff or hiring new people, or even dedicating existing staff time to, let's say, monitor social media for example?

Charlene Li: Well it can be very expensive if you go out there and decide to hire an entire team, but I think that's fairly dangerous because, again, as I say, its hard to become open overnight because there are cultural issues, there are dynamics internally and externally in how you create and craft those relationships. So I encourage people to take small steps, and the small steps could be as simple as taking somebody who is already doing market research and having them use new tools, new ways to listen to what people are saying, and in that way becoming more open to new voices and new methodologies and then sharing that information internally, so there are small incremental ways that you can become more open internally, and then also externally too. I go again to companies who are really experiencing this, and some of them open up overnight with big programs, lots of staff, other ones I think are really taking it incrementally, realizing that this is going to take a couple of years, that this is a change management program, not something that the technology has put in place but change in fundamentally the way you do this, and that takes time.

Rachel Salaman: Well say you're an organization with a minimal amount of money to put towards this, is it possible to say which social technologies will deliver the best results for a minimal investment?

Charlene Li: Well I think again it depends on your goal. I think the best thing they can do, the best return investment initially, and frankly the thing you have to do first is to listen and to learn from all the people who are already sharing and having conversations about your company, your product, your services, the people inside your organization. Listening has a tremendous pay-back because it enables not just the small people in market research to learn and understand what customers are thinking, but for the entire organization to become a learning organization. They basically have the ability now to bring a customer and have them sit right next to you as you are trying to make decisions about your business; what are people saying, what are their biggest problems, what do they think about a new product, are they happy, are they sad? You can reach out and actually talk to them now, they've raised their hands and said "I have bought your product," and they are thrilled in many cases to hear from you. So that doesn't take a lot of training, it doesn't take a lot of skill, you basically can use basic search engines, on Google or on Twitter, to understand what people are saying ,and the investment on that, well let me put it this way, if somebody can get just two percent a little bit more focused on the customer by understanding what that person is doing, and you can have that two percent amplified across the entire organization and you have a two percent increase in productivity, or two percent faster in terms of getting a product to market, that's tremendous value being created by simply listening and learning.

Rachel Salaman: Well in the book you identify 10 open elements, which you divide broadly into two categories; one is information sharing, and the other is decision making. What are the advantages of being more open with information first of all?

Charlene Li: Well I think that the biggest advantage, frankly, is that the information flows faster, you get more of it, and you get some more in different directions, in particular, being able to have that sharing coming from the front lines directly all the way up to the top. One example that I talk about in the book is how an organization, SunGard, which is in financial services, they provide technology to financial service companies. They put in place technology internally to the organization, somewhat like a Twitter, and people can give updates and share information, and the CEO was sharing with me recently that he really enjoyed hearing the updates from an engineer in Europe, and being able to understand what that person was thinking and saying and insights that he could get from the front line all the way up into the suite and not having to have a filter through six or seven different layers of management was extremely enlightening for him. He wants to be close to the employees, close to the customers, and this is a great new listening and learning tool for him. So that type of information sharing, up and down through the chain, and also across different departments, can get better and faster, and can facilitate people getting work done.

Rachel Salaman: But are there any pitfalls to implementing that kind of technology? One that immediately springs to mind is perhaps people wasting time.

Charlene Li: Well I think there are quite a few in terms of wasting time. It's the same as, in many ways, the instances where people are taking long lunches or smoking or shopping on Amazon or eBay. So this is not so much a technology issue, the fact that there it becomes much more appealing, but it's really a management and productivity management issue in particular. The problem is that the managers themselves don't have necessarily the knowledge and the training to be able to say and recognize that they're doing this. Frankly, more than half the companies in the US at least have blocked a lot of these social technologies, and guess what people do? Well they go outside, take a smoke break where they go into the kitchen, and they take their phone with them and they're accessing the same sites through their mobile phones that the company can't control. So I think typically this is not a technology problem, this is more of a management and education issue. It needs to be managed, but I think the benefits again can really be felt if people are given the knowledge and training of how to use this for the benefits of the organization. The other pitfall is, frankly, in a company like SunGard, think about what happens when an engineer in the front line skips going through six or seven layers of management and he can talk directly to the CEO? What happens with managers, they're sitting there thinking "What is my role now, what is my role in the past?" which was really being that filter, being that trusted advisor to the next level up.

Rachel Salaman: What happens to those managers?

Charlene Li: Well those people would have to become more facilitators, and again managers of prioritizing what the goals are rather than safeguarders of that information. Again, I think there can still be filters, and there's always an issue around having too much noise coming from the front end, the CEO can't read all the updates from everybody, so he's going to depend on those layers still to provide that insight, but it doesn't preclude his ability to go out there and reach directly out to people, and he needs to reassure those people in the middle and also redefine what their jobs and responsibilities are. So this is all worry about relationships, and these social technologies will allow people like that CEO and engineer to form new relationships, but it also changes the nature of the relationships of all the people in between. So that CEO invited that engineer to come the next time he was in New York, to come to his office, have a coffee with him, sit down and they could talk. Now imagine how everyone in the rest of the organization thinks and feels about that, so that CEO needs to think. He thought long and hard about what the implications culturally it would send, the message it would send to the rest of the organization when he does things like this. So you've got to think a couple of steps ahead, thinking about how this will change relationships and how it will change the culture of your organization, and also relationships with your customers.

Rachel Salaman: So that's on the information sharing side, what about decision making, why should a leader consider becoming more open in their decision making processes?

Charlene Li: And it's a great question because, especially from our prior discussion around information sharing, the two go hand in hand. So if you have better information now, you can probably make better and faster decisions too because you have more information available, you have greater confidence in doing that, and the natural and next step of that is to say "Could I actually push that decision making responsibility down further into the ranks of the organization so that its with people who have greater knowledge, are closer to the customer, but at the same time they also have better information and connection with what the organization is trying to do?" So a company I profiled in the book, Cisco, has been going through a multi-tier process, they've been doing this for about seven or eight years now in terms of pushing that decision making down, especially as they have been very aggressive in building the company with acquisitions, but John Chambers has done something very interesting. In the past two years, when they put in information sharing collaboration tools, he was able to push decision making down into the organization much faster, much more effectively, because people had the confidence now, they have the information at their fingertips, they knew what everybody was doing, and that better and faster decision making with greater confidence allows them to accomplish so much in such a smaller amount of time and create tremendous leverage, that I think many organizations are just stunned by what Cisco is able to do.

Rachel Salaman: And what social technology did they use to do that?

Charlene Li: They use a lot of video conferencing, just being able to talk with each other, that's what they do, but they also put in intranets and blogs, they put in Wikis, they put in discussion groups and internal Twitter, again Yammer-type discussion areas, they put in tagging. John Chambers himself started blogging, but he didn't write his blog, he actually videotaped his blogs. As he likes to say, he can talk 200 words a minute, so he's much more effective and much more passionate and convincing to the internal employees doing a video blog than he would ever be trying to write something out. I find that's an interesting thing I do with executives and with other leaders, is I give them a flip camera or some sort of other recording device or just a recorder, and I have them carry it around and have them turn it upon themselves and record themselves, and say "What would you share with your employees, with your executive team, if you could at this particular point?" So trying to create in them a habit of sharing becomes an essential first step.

Rachel Salaman: And what potential problems exist with trying to be more open in decision making?

Charlene Li: I think the biggest concern is "How do we get started?," but then also "What are the minefields that I'm opening up?" Again, I talk about the new types of relationships you have to form, the new types of skills you have to develop, and I think the biggest problems are not knowing what's on the other side, so people tend to err on the side of caution. They also are fearful of that first big mistake, "What's going to happen when something goes wrong because I'm not in control of these things?," because they are relationships and relationships are never perfect. So the potential problems are everything from somebody may take offense with something that you've shared, or it may not be completely clear, or they may disagree with you and disagree with you in a public forum rather than an email that is fairly private. So these are all, quote, problems that come up in the chorus of conversations and of sharing, and you have to be ready for that. We can look at them as problems or we can look at it as „This is the rough and tumble of relationships', these are the places where strong relationships are formed through the discourse that you have. So you can look at it as you can anticipate it, be ready to talk about these things, or you can look at it as problems that need to be managed out, in which case I think the value of the dialog wouldn't be as great.

Rachel Salaman: One thing that might put some leaders off being more open is the difficulty of actually measuring the return on investment, whatever the investment was, but in your book you have some really interesting examples that show that the benefits can actually be calculated in dollar terms. Could you just talk us through how to do that?

Charlene Li: Yes. Again, I talk about the value that's created through these social technologies, and I go back to this recurring theme, which is that it changes and adds value to the relationships that you have. So let's talk about one of the goals that often people have, which is about having a dialog and having a conversation with somebody, building a relationship; how do you value that relationship today? So let's say you're a B2B business, you will go out and its multi-person, multi-channel and multi-month decision making process with somebody, but if you're able to connect with them and all the network of people internally because of these technologies, if you could move that faster and close that lead just 10 percent faster, would be able to understand what was going on a little bit better, to understand what your customer's thinking about because of these uses of specific technologies, there's value in that. So it's identifying where that value is created and then assigning dollars to that. Now, as you know, in the sales process you can't always say "What's the value of, for example, having a face-to-face meeting, flying out, spending the time and the money, the resources to have a face-to-face meeting?" It's hard to evaluate and derive directly of that, but if you're able to do it through other channels that you're using, other resources like events, advertising, marketing, to say how that moves that relationship along, then use those same basics and ideas to apply that to social technology. So that's what I do in one of the chapters, is I go through and say "What are the benefits of learning more deeply?" Well I know what the cost of a focus group is and I know basically some of the insights, could I relate the same sort of benefits to better listening and learning techniques through social technologies, can I provide better support or innovate faster or have a better dialog with people because of these technologies? And I use very familiar metrics that companies are already using today to be able to evaluate that. So there's no set formula, its going through and saying "What is the value being created and how do I think about that value in dollars and cents?" There are lots of spreadsheets and examples inside the book and online, that people can see very concrete examples of how we do that in the book.

Rachel Salaman: Well another off-putting element for some leaders is the idea that they may be opening up a Pandora's Box by letting go of some of their control, and in your book you have a very useful chapter on guidelines, you touched on this a bit earlier, both for internal and external people. So first of all what should employee guidelines for the use of social media look like?

Charlene Li: Well I think in many ways the reason why people are so afraid of being open is that it feels so boundary-less, and in many ways, by defining how open you will be, is defining what I call a sandbox, and then putting the guidelines or the covenants in place, so the sandbox covenants are extremely important to put in place. I do believe you have to be really disciplined about being open, and that is putting in place these guidelines, the prophesies, the goals of what you want to do with being open. So, for example, with employee guidelines, social media policies, many companies don't have them, and yet every company has employees who use social media, at any point any of them can go out and write a blog or put up a Twitter account that could be using the company's brands and talking about the products. So its important to lay out for your employees what they can do, what they can't do, how they should do it, and so acknowledging that they use it, acknowledge that they can do some really good things, but also acknowledge that you know there are some things that you have to be aware of so that you don't cause problems for yourself and for the company. Fundamentally this is not about having a long list of do's and don'ts, it's about laying out some general principles and then asking people to exercise their judgment. There's a lot of black and white, but there's also a lot of gray in between, and helping people understand how to use their judgment to figure out what they should be doing I think is a key part of what those guidelines are being used for.

Rachel Salaman: What about guidelines for external audiences like customers, can a business leader really expect to be able to influence what customers say in social media?

Charlene Li: I just want to take that word "influence," because I think in the end what they want to do is to control what people say, and fundamentally I really ask people "What do you want in your relationship with customers? I mean, do you really want a relationship with give and take and they can tell you honestly what they like and don't like in the spirit of trying to improve the product for themselves and for you, or do you need to hear only positive things?" So it goes back to what that relationship is that you fundamentally want with them, and if your customers really want that honest dialog I think it's a very precious opportunity that businesses should really take advantage of, because that doesn't happen all the time where you have somebody willing to give in that way, to have that open relationship with you. By all means embrace it, but you can't control it, you can't tell them. You can't have it both ways where you get the honest feedback but then you don't want to share it because of the channels that these are in. So I think in the end what the guidelines are for external customers is really about how they provide that dialog, what that relationship looks like, and you can have broad dialogs, "We're going to ask you, if you're going to engage with us, to be polite, to be respectful of us and also of each other, that given our form here we do or do not use certain types of words and expressions, or that we will acknowledge and support each other rather than cutting people down." So I think that kind of setting expectations about what kind of relationship you want is extremely important, because then customers know how to approach you, when to approach you, what they can expect as well.

Rachel Salaman: And what legal issues do leaders need to be aware of in the area of social technology?

Charlene Li: The number one legal issue is that if you are in an industry that has compliance or if you're public, understanding what are the responsibilities of, for example, reporting adverse effects if you're a pharmaceutical company, providing financial advice if you're in financial services, or if you're public understanding when you cannot talk about certain things during a quiet period in the run up to earnings reports. So those things are fairly straightforward in many ways, they're clearly made out. A lot of companies would say "Well we can't do this because of these regulations," well there are companies in every industry who are using these tools and technologies very successfully because they look at those compliance requirements, the regulation requirements, and they figure out what they can and cannot do. So I think the biggest legal issues primarily are around the traditional areas of libel, slander, copyright infringement that you have around publishing, but then the social dynamics, especially around privacy of people's content, of their data, having clear ideas and controls in place, again those guidelines in place of what you can and cannot do are the best ways to do this. Legal departments in some cases just want all of this social technology to just go away. Well they'll come to the realization that this is not going away, and so it's really about putting in place the right guidelines of how to do this so that you can move forward. One of my favorite examples is a bank was trying to figure out how they could have a Twitter feed, and the legal person said "I have to approve every single Tweet," and usually people would say "Well that's ridiculous, you can't do it." Well the social media manager there, the director, who was also in charge of innovation, he said "Okay, I'll let you approve every single Tweet, I will be in your office three times a day with a stack of Tweets for you to approve, because we need to do this timely," and after a couple of days the legal person realized "You know, I don't need to approve these things, let's just put some guidelines together so that I only have to approve certain types." But its really educating them again about what it is, and in this case the person out-processed the process and made sure that the guidelines were followed, compliance was being met, but it took him saying "OK, I'll do what you're asking for" to bring that person into thinking about how to create the right guidelines that are appropriate for this medium.

Rachel Salaman: Well you devote a whole chapter to what you call "The Failure Imperative," what can go wrong for people as they start out on this track?

Charlene Li: Yes, the reason why I talk about failure is because the big elephant in the room is that people, the reason why they feel so fearful of giving up control, being more open, is because they're afraid of failure, and I think in business, to be successful, one of the most important things to do is to be able to embrace and to anticipate, be able to recovery and have resilience in the face of failure. This is especially true because these technologies just set you up for failure in so many ways, mistakes happen all the time. Anybody who's been in this space for any period of time has scar tissue from all the mistakes that they've made, and it's really about embracing it and having the right mindset to be able to do this. So what can go wrong? You may go out there and put out a blog post or a status update on a Facebook page or a Twitter update, and people will just take offense with it, they just think it's inappropriate, they don't like it, they amplify it all throughout the internet, so it can go really badly wrong sometimes. That happened recently with Nestle, where they were being targeted for using palm oil in their chocolates, and KitKat in particular, and the person who was running their Facebook page didn't respond very well to some of the negative criticism, basically saying "This is my page, we own it, get off it if you don't want to play by our rules." So that wasn't the best kind of tone and the way to build a relationship, so they had a hard time recovering from that. Anticipating things like that and planning for them, having employees, and I think, frankly, somebody a little more senior who has the experience to be able to say "You know, I hear you, let's have a dialog about this, let's resolve this issue" rather than dismissing it was probably a better approach. And even after it happened, for them to acknowledge the mistake, come back, try to repair that relationship would have been the right thing to do.

Rachel Salaman: These technologies have crept up on us in the last 10 years or so, what do you think the future of social media will look like, looking ahead five or 10 years?

Charlene Li: Well I think the future in many ways has become much more visible just in the past year. One of the things I've talked about in the past is the fact that this will be everywhere, that these social technologies will not be locked into sites like Twitter or LinkedIn or Facebook, and you see that especially with Facebook now where there are little "like" buttons is becoming very ubiquitous, to have a program called Facebook Connect that allows companies to tap into the social network, on Facebook, on your own site. So a company like Levi's who make jeans will actually change the merchandising and the inventory on a site based, if you were signed in with Facebook, on what your friends have liked, so you'll be able to see different things that are more popular with your friends and they will recommend those things to you, with the idea that if your friends like these things probably you will like them too as well. So the fact that these social technologies, and more importantly the people who are important to your life in terms of making decisions or connecting with them, can be anywhere and everywhere you want them to be. Its kind of a different way of thinking about things, so you think about all the times when you could use advice or tap into things, or just share a picture or an idea or a thought with somebody, having that ability, that freedom to be able to do that is, I think, in many ways, what the future will bring.

Rachel Salaman: Charlene Li, thanks very much for joining us.

Charlene Li: Thank you very much for having me.

Rachel Salaman: The name of Charlene's book again is "Open Leadership: How Social Technology Can Transform the Way You Lead," and there's a website to go with it, www.open-leadership.com.

I'll be back in a few weeks with another Expert Interview. Until then, goodbye.