Making The Case For Open Leadership Charlene Li Altimeter Group July 29,

© 2010 Altimeter Group

Create a culture of sharing

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5 It’s about relationships

© 2010 Altimeter Group Open Leadership 6 Having the confidence and humility to give up the need to be in control, while inspiring commitment from people to accomplish goals

© 2010 Altimeter Group  Conversations, not messages  Human, not corporate  Continuous, not episodic The New Normal 7

© 2010 Altimeter Group Four goals define your open strategy 8 LearnDialogSupportInnovate

© 2010 Altimeter Group Learn with basic monitoring tools 9

© 2010 Altimeter Group Understand who that person is – in real time LinkedIn in Lotus Notes 10 Service Cloud w/social

© 2010 Altimeter Group Understand the socialgraphics of your audience 11 Curating Producing Commenting Sharing Watching <1% 34% 26% 63% 78% Source: Global Wave Index Wave 2 Trendstream.net, January 2010 U.S. adults

© 2010 Altimeter Group Dialog with your community 12 LearnDialogSupportInnovate

© 2010 Altimeter Group Kohl’s has conversations on Facebook 13

© 2010 Altimeter Group DellOutlet drives sales with Twitter 14

© 2010 Altimeter Group Help your members support each other 15 LearnDialogSupportInnovate

© 2010 Altimeter Group Solarwinds uses community for call deflection and product development 16

© 2010 Altimeter Group Innovate with customer feedback 17 LearnDialogSupportInnovate

© 2010 Altimeter Group Starbucks involves 50 people around the organization 18

© 2010 Altimeter Group How Best Buy became open 19

© 2010 Altimeter Group Best Buy’s First Social Media Experts 20 Steve Bendt & Gary Koelling

© 2010 Altimeter Group Steve & Gary had an executive sponsor 21 Barry Judge CMO of Best Buy

© 2010 Altimeter Group Barry’s first post 22 “I was so relieved when it was over—it was just two sentences to get started.”

© 2010 Altimeter Group The Premier Black Fiasco million s sent instead of 1,000 test

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© 2010 Altimeter Group #1 Find and develop your open leaders 25 Cautious Tester Realist Optimist Worried Skeptic Transparent Evangelist PessimistOptimist Collaborative Independent

© 2010 Altimeter Group Examples of Realist Optimists Lionel Menchaca Dell Ed Terpening Wells Fargo Lovisa Williams US Dept. of State

© 2010 Altimeter Group 1.Respect that your customers and employees have power 2.Share constantly to build trust. 3.Nurture curiosity and humility. 4.Hold openness accountable. 5.Forgive failure. The New Rules of Open Leadership 27

© 2010 Altimeter Group #2 Align openness with strategic goals 28 Examine your 2010 goals Pick one where open and social can have an impact

© 2010 Altimeter Group 10 elements of openness 29 Explaining Updating Conversing Open Mic Crowdsourcing Platforms Information Sharing Centralized Democratic Self-managing Distributed Decision Making

© 2010 Altimeter Group Determine how open you need to be with information to meet your goals 30 Download the openness audit at

© 2010 Altimeter Group #3 Prepare your organization 31 Ideally, you should be at “4.0” for launch. Area of opportunity.

© 2010 Altimeter Group Social media triage 32 Can you add value? Evaluate the purpose Respond in kind & share Thank the person Unhappy Customer? Dedicated Complainer ? Comedian Want-to-Be? NegativePositive YesNo Do you want to respond? No Response No Yes Take reasonable action to fix issue and let customer know action taken Are the facts correct? Gently correct the facts No Yes Are the facts correct? Does customer need/deserve more info? Yes Explain what is being done to correct the issue. Yes Is the problem being fixed? Yes Let post stand and monitor. No Yes No Yes Assess the message

© 2010 Altimeter Group Prepare for new workflows Social technologies will disrupt traditional organization structures

© 2010 Altimeter Group Organizational models must match goals 34

© 2010 Altimeter Group 35 “We tend to overvalue the things we can measure, and undervalue the things we cannot.” - John Hayes, CMO of American Express #4 Understand the value

© 2010 Altimeter Group + Value of purchases -Cost of acquisition ____________________ = Customer lifetime value The new lifetime value calculation Percent that refer Size of their networks Percent of referred people who purchase Value of purchases Percent that provide support Frequency and value of the support + Value of new customers from referrals + Value of support + Value of ideas + Value of insights Spreadsheets for 15 year lifetime value calculation available at charleneli.com/resources 36

© 2010 Altimeter Group Fans Large network Refers Doesn’t refer Small network Refers Doesn’t refer Find more fans with large networks Encourage fans to make more referrals Use metrics to help make decisions 37

© 2010 Altimeter Group 38 Acknowledge that failure happens. Encourage dialog to foster trust and speed recovery. Adopt Google’s mantra: “Fail fast, fail smart” #5 Prepare for failure

© 2010 Altimeter Group 39 Create Sandbox Covenants

© 2010 Altimeter Group  Focus on relationships, not the technologies.  Align your open and social strategies with strategic goals.  Embrace failure and mistakes – you’ll be making many of them. Summary 40

© 2010 Altimeter Group 41 Thank you 41 Charlene Li charleneli.com/blog Twitter: charleneli For slides, send an to For more information & to buy the book visit open-leadership.com