(en español en el post anterior)
Two topics that will undoubtedly mark most of our near future attract all my attention lately: climate change and social networks.
The more I penetrate into them, the more I understand the complexity of its management and the difficulty of its integration in the currently prevailing models , be these the global development or the marketing strategy of a brand, respectively.
In both cases, decision makers are close to have the certaincy that it is absolutely necessary, nothing less than a matter of survival in the near future, to face the topic. However negative impacts of not doing so are postponed to a great extent to the future, whereas if matters are faced, it is the present the one that will load the burden of costs and risks, leaving for the future the uncertain profits.
To put it bluntly, "if I do nothing, less risk of losing my chair" the executive thinks (but well..the one coming afterwards may find no chair and will have to manage standing up).
The topic goes beyond how to integrate innovation in the system or in a company, we really talk about a change of the model.
And what management model to adopt is key for success. Interestingly, how to face this situation both in the fields of climate change and social networks has a lot to do.
Let's explain each case briefly:
Climate change is a fact scientifically confirmed. The World Bank itself, in its 2010's development report (dedicated to climate change) agrees with generally accepted estimations saying that we have 10 years to act and prevent world's temperature not increasing more than 2ºC above the average of the preindustrial period. Otherwise it will drive us to a dangerous climate change.
Dangerous means no less than having a negative rate of development for humanity for the first time since the industrial revolution as well as making some evil effects of climate change in our environment irreversible.
In any case, there is no mitigation possible before 2050 , that is, we have climate change guaranteed for all the first half of the XXI's century. This fully affects all human development activities and of course very specially the economic activity. Therefore the institution that best represents the capitalist model decides to forget about status quo and takes the bull by the horns.
Social networks (talking in brand marketing terms) reach about two thirds of the more than 1,600 million people connected to the Internet (on a total of world's 7,000 million inhabitants).
Facebook alone has got 500 million users and it is said that twitter plans to reach 1,000 million by 2015. Among marketers it is doubtless that traditional media is each day more inefficient, costly, with less influence and less consumed by new targets.
The first place where users seek for information of a brand is not the corporate website any more but social networks instead, that have become the most influencial media and the biggest opinion maker space.
This is something that will only grow in the near future, much more if we take into account that today we are already talking about the tranfer of search based on SEO (Google) to other based on real time results and results related to my peers and my personal profile, that is, social networks' search.
In addition, social media is cheaper as a marketing tool, more efficient, measurable and allows managing many different brand aspects as diverse as brand reputation, awareness, search, investigation, traffic generation to our own media, sales, leads or internal communication among others.
Every nation leader or large business' manager knows that he/she has to integrate climate change policies as much as every marketing director knows that he/she has got to move his brand into social networks.
What is the problem then? That in the short term ROI is doubtful and in any case smaller than the one other options bring and that there is also a lot of uncertaincy and ignorance involved.
In this point is when management models come to my mind and make me think that it is necessary to change the prevailing ones and implement others better adapted to the real situation instead .
In business school I was taught that a company will always focus the bigger part of its resources to the most profitable line of business. This fact constricts innovation. That is, a new idea or a new line of business will always be discriminated and in many cases sentenced to death due to lack of resources allocated. Then the most common solution was the creation of a spin-off, that allowed developing the innovative line out of the main structure with enough resources while maintaining the property of it all (as well as controlling risks).
In addition to this, in many ocassions, competition will exist between the new and the old product, making it more reasonable to keep in separate organisations.
Nowadays there's a lot of talk about spin-offs regarding how to take out innovations and patents from universities as well as regarding ways how brick-and-mortar companies can make the digital switch.
Nevertheless, the spin-off option does not seem be in vogue in any of the two fields we talk about despite the fact that the situation seems quite similar to the school case.
In fact management models that are most debated nowadays regarding climate change are the ones focused in the robustness and consistency of results rather than those seeking to maximising profits. That is, in an environment of uncertaincy, reduce the risk and seek for the formula that gives you the best average result for all possible options. In addition to this more and more is talked about the adaptative management model. This model discounts today (integrates) variations that are known are going to happen in the future.
Management models of climate change recomended nowadays tell to integrate the climate change management into the global development policies. That is not managing it in a separate way, with different strategy and budget.
Climate change affects it all: where and how to build roads, where to increase urban development, the energetic model, the water, people's education and resilience capacity fostering, institutions to develop…etc.
It does not make any sense putting all the weight just for instance in the Ministry of Environment. It may seem obvious, but there is nothing else as complex as precisely achieving this. Tell it to the spanish minister that has gone to Brussels to ask for further financial grants for the mining sector: anachronistic, antiecological and in red numbers, that all Spaniards (and now Europeans) have to pay for.
Something similar happens to brands. They must keep on selling today. And they have to do so dedicating more resources to conventional media, getting each time less out of it and with smaller returns guaranteed. If they allocate part of this scarce money into social networks instead, they find that it is not profitable in the short term and also that there are big uncertainties about its future returns since the model is not yet clearly defined.
…what to do then? A spin-off? Speaking in brand terms, dividing it into pieces does not seem quite logical, does it?
In my opinion it is necessary to make conclusive decisions now based on today's reality that clearly bet for the future survival.
And those decisions must have global vision and reach.
Social networks are just part of the marketing activity of the brands today but they will affect every part of the business. We must take this into account. And that is how they should be managed. We have to discount today all that that we know is happening now and all is going to happen in the near future.
Now the user has got the power. He is in the centre (zhong, kernel) and we must completely turn ourselves towards him.
All processes.
It is a global innovation matter and that is how it should be implemented then. In addition this we will be able to increase the total budget dedicated to social networks, since it will not have to come out just from the digital item, but also from PR, investigation, CRM, sales…etc. thus having a smaller relative impact on each department.
If we do not want to stop selling an euro in the short term and at the same time be in the firt line of what is coming next, we need a brave new management: dynamic, adaptative, global and with vision.
And that means redefining structures. Take off dead weight and adding new talent, innovation and efficiency.
And yes, social networks' know how must be integrated into brands organizations. Do not repeat past mistakes.
And if you don't have a global strategy for your brand and business for the digital environment and for the social networks too, no doubt one or more of your competitors has, and will pass you by your leeward long before you think.
And have a look to China. Apparently it has nothing to do with it all. But if we take a close view we will find out that chinese companies have been able to succeed in the wildest environments, with huge uncertaincy meaning laws, regulations, monetary fluctuations, policies and markets changing at any time in an unpredictable way.
Bet on policies and actions that integrate climate change. Bet on marketing strategies that integrate and even are born in social networks and you will win.
Each one should adjust te model according to its own conditions, but there are no excuses anymore, we are warned and we have the resourses. Perhaps we lack determination.
Finally an anecdote someone told me the other day where a top executive of a TV network had pirate apps installed in his mobile phone where he could see all type of channels.
Clearly he has all the knowledge and the certainty of where everything is moving towards. He knows for sure that in the USA a common issue among TV execs is that the conventional TV is just watched by old people - of 40 or 50 and more mostly - (another TV exec bitterly complained that his American boss just cared about the Internet, while the money still comes from TV, in this case pay TV).
The complicated thing here is at what extent and how to make the switch without influencing your numbers.
And that is very difficult when you are facing a global change of model.
It is not just adding an innovative product in your current lines of production, distribution and marketing. Now they change them all .
