Study Tour Digital Leadership – Day 1
November 1, 2016
3…2…1… Welcome to the 1st Day at the Silicon Valley Tour of the CAS Digital Leadership 2016-2 group. Florence Leemann; Thierry Kellerhals and Massimo Erroi reported from this intense and interesting first day.
From High Tech to Industry Disruption Location
After a quick introduction from Joanna (our host), the session kicked off with Mark Zawacki, who spoke about the topic from High Tech to Industry Disruption. His goals were simple – to educate, entertain, and shock us. He truly held up to his promise.
The presentation started with an overview of the history of the Silicon Valley and the dawn of its next reinvention
Picture 1: Hystory
As seen on the above picture, the Silicon Valley has made a big shift. Nowadays (2016) it basically has shifted form a tech supplier to the mercenary, which helps companies to compete with other businesses on a global scale. This is being achieved by disruptive business models and out-of-the-box thinking. Big IT players like HP, Oracle, and Microsoft represent the old style (left side) whereas the Apple, Google, Uber, AirBnB represent the new style (right side). It has been recognized by the later companies that the software channel accounts for the main revenue.
Mark claims that as a CEO your most current fear is that a new entrant comes into your market, rethinks your business, and pulls away the most profitable customers. According to a McKinsey report 40% of the financials profits will be gone. Likewise Marc Andreessen, founder of Netscape, claims in his book ‘Software Is Eating the World’.
Lot of people might be interested in knowing why Silicon Valley is so valuable. Mark explained that this is mostly due to three-tier layer:
The Base Layer consists of multinational companies, which have created outpost in the Silicon Valley (e.g. VISA, Axa etc.) The Middle Layer contains mostly of startups, which disrupt a particular industry (e.g. stellar, coupa, wealthfront etc.). The Top Layer depicts traditional companies which shifting their focus in a particular sector (e.g. ApplePay). These three different layers give a unique advantage and a massive sharing opportunity to every company in that area because they can engage with companies from another layer very easily. This allows them to cultivate on a solution for an existing problem. Mark referred to “Ideas Having Sex”.
Picture2: Ideas having sex
These players here share much more of their ideas with each other’s than in any other countries or cultures. This sharing culture, Mark believes, cannot easily copy as it grew organically over time in the Silicon Valley. This is considered one of the USP. Statesmen of other countries don’t understand that and spend millions of dollars in start-ups to replicate the San Francisco’s success story – although they would better spend that money into the digital transformation culture.
The one question becomes unmistakable clear, independent of being a manager, consultant or a like – Why is Silicon Valley printing so many successful companies year over year? Mark’s answer is five words ‘COLTS’, which represents:
- Culture
- Organization
- Leadership
- Talent
- Skills
Summarized from Mark’s presentation are the most crucial success factors:
- They create Platforms, not Apps: Hackathons Won’t Get You There
- Amalgamation: Focus on Combinations of Old (and New) Things
- Open Organization: Relentlessly Open Innovation
- Disruptive Hypothesis: Challenge Conventional Assumptions
- Learn: Pilots & Prototypes >> Pilots slow down a company! A better way is to experiment by failing fast and learn forward
- Asset Light: Leverage Assets of Others! Rent don’t own assets, people, resources
- Math: Become World Class at Data Science (Old School: Qualitative / New School: Quantitative) and build a talent pipeline
- Customers Lead with User Experience (UX)
- (Legally) Exploit Ageism: Leverage the Under-35’s as they are having a much higher risk tolerance
- Motivation: Overtly Design Meaningful Work
- New Archetypes: Hire More Weirdos, Misfits, Renegades, Outliers and Pirates
In the words of Mark: “be the pimp or be pimped out!”
What is Silicon Valley?
Professor Chuck Darrah started his lesson with the question: “What comes to mind, when you think of Silicon Valley. “
Our answers were all about the same:
- Insights, inspiration
- Deeper understanding of the spirit.
- To learn about technology. Everything is happening here.
Apparently we learned these were the typical answers. Everybody thinks he knows Silicon Valley but do they really?
An anthropologist like Chuck Darrah wants to see behind the walls and is interested in people and what people say. About technology can be learned around the world – just google it – but not how people interact with each other.
What is Silicon Valley?
When most people think of Silicon Valley they think of a fairytale tech bubble where everything is an experiment and therefore possible. It sounds like a geographically located laboratory for experiments. There is a narrow Industrial Sector e.g. semiconductor machinery, computers, bioscience defense, software, innovation services and professional services. Plus Broad Industrial Sectors. It has a long relationship with experiments in these sectors on daily live and convincing people. There is no „the Silicon Valley“view. It depends on every individual that makes a part of the puzzle.
The mentality is David against Goliath, who is the next disruptor?
There is a high concentration of high tech jobs and a huge cultural diversity. But what this doesn’t show is how many people come and go. When companies come to Silicon Valley they talk to the winners of the system, but every coin has two sides.
The other face to the myth
The best paying companies are tech companies. That is where most of the money is. What people don’t see is that people from other industries or average incomes are forced out of the system. They often return to their home countries as charity cases. So the valley just „outsources“its problems. Sadly enough the system still works because there is always someone who fills this spot of a drop out. Some of the best educated person worldwide wants to come here. Over 14‘000 people a year come to Silicon Valley and try to get lucky.
What is so special and why people do still come here?
The magic of the region comes through physical proximity that is hard to plan. Someone bumps into interesting people at every corner. They want to see the reaction of their design and thoughts immediately and not wait for a test phase. It starts in front of every doorstep. That is also why a cooling off of the situation will not come any time soon. To afford to be here you need to take risk and celebrate failure. Failure is accepted. People are changing jobs every two to three years in order to change their mindset.
Silicon Valley is a flow of people, money, capital and ideas. The biggest fear was at 9:11 2003 when the US government closed the boarders, because they rely on this flow. This makes Silicon Valley a job producing factory.
If you ask a Person in the Silicon Valley there are no politics, just technical problems that can be solved. The key to survive is having a network. Not working for a company. Because they come and go. There is no business meeting or lunch, where some things are decided without having a network in the back. At the end it is not the technic it is the human connection that counts.
Lithium Technologies
The company was founded in 2001 and is headquartered in San Francisco. They have offices in Austin; New York; London; Paris; Singapore; Sydney; Bangalore and Zurich. On February 2014, Lithium agreed to buy Klout for $200 million. With this acquisition their number of worldwide employees grew up to 500.
Picture 3: Lithium Office, San Francisco
The Lithium platform helps brands connect, engage with, and understand customers by enabling them to respond on social networks and foster engagement. With the power of Klout included in the Lithium platform, brands also get a 360o understanding of their customers and improve the customer experiences.
Lithium has an impressive list of customer references and since 2008 they grew their business 3x. In the financial sector, they could grow their customer base even by 11x. Even Forbes nominated Lithium as one of the next Billion Dollar Startups.
Picture 4: References
Platform
The Lithium platform comprises a complete set of solutions for social customer support, digital marketing and crowdsourced innovation that allows listening, responding and acting with their customers. Creating a deeper customer relationship and developing brand loyalty and advocacy is their primary goal.
Picture 5: Platform
The software was built to meet enterprise customers requirements like:
| One Social Platform | Deliver a seamless customer experience across social networks, websites, and mobile devices. |
| Integrated | Connect customers to the business through a single social layer. |
| True SaaS | Monthly releases, performance SLAs, and no upgrade headaches. |
Their solution received important recognitions Gartner nominated Lithum as Visionary in the Magic Quadrant for the CRM Customer Engagement Center in 2016 and IDC as well as Forrester nominated them in 2015 as Major Player for Media Management and Marketing respectively as Leader for Social Depth Platforms.
Social Media Listening
Also, known as social media monitoring, the process of identifying and assessing what is being said about a company, individual, product or brand on the Internet.
Conversations on the Internet produce massive amounts of unstructured data. Therefore, it’s crucial to define what the goals are for a social media listening initiative. Depending on the goal, the right tool might be a series of free Google Alerts or an expensive software suite that includes ad hoc analysis and full integration with legacy customer relationship management (CRM) applications.
Social media listening is becoming an important customer intelligence tool. There are several ways to use social media to gain insight, including monitoring online customer support forums, using software tools to gather comments from social outlets such as Facebook and Twitter and encouraging customers to suggest new product features and vote on their favorites.
State of social engagement
A research made by Lithium investigated about the state of social media engagement in 2016. According to this 95% of companies respectively brands are stuck in broadcast mode, less than 2% of brands consistently respond to their customers’ online posts and less than 40% ever ask questions of their followers or engage with follower content. But of course there are also companies that are performing on social like Pfizer, AT&T, Starbucks, Microsoft and others. What is remarkable is -that according Lithium- Google and Apple are not in the list of these top performing brands.
MetaDesign
Andy Giles, VP Client Engagement, from MetaDesign wrapped up the interesting day by introducing MetaDesign and their stack in the market as a digital agency. MetaDesign offers a variety of services such as:
- Research & insights
- Brand positioning
- Naming
- Brand Identity
- Messaging
- and other services
THE BEST BRANDS MAKE IT LOOK EASY. IT ISN’T.
As they above statement indicates it is a very tedious way to create a sustaining branding and requires a strong and interdisciplinary team. He illustrated MetaDesign’s strong capabilities by introducing four different industry examples and how they tackled the customer’s challenges. Usually they follow a standardized process called the MetaDesing-Process:
- Discover
- Position
- Create
- Implement
In the Discovery phase, they interact in an interdisciplinary team very close with the customer in order to understand their pain points. Once 1) they understood the challenge of their clients they started 2) to develop a positioning of their brand identity. This usually occurs in small iteration by conducting several interviews. Once they have agreed an alignment they usually 3) create several options on the brand perception until they have reached a common understanding. As a last step 4) the implementation is carried out in a structured way to ensure continuity and recognition of the customer’s brand.
A few thoughts that are relevant in MetaDesign’s culture and to survive the high competing tech environment in SF are the following:
- You need to speak the language of tech
- It’s a culture based on collaboration and partnership
- Be ready to use the client’s preferred communication
- Smaller stakeholder teams, speedy feedback and approvals
- Time, time, tigbe
- Always have digital in mind
- Messaging is equally important as strategy and design
- Leave your time @home
Overwhelmed with this deep and variety of inputs we left the MetaDesign headquarters to enjoy some delicious SF dinner.