Phoenix Pheathers

Creating Value from Innovation and the Role of Alliances

Innovation takes many forms.  We often focus on innovation as technological breakthroughs and indeed those are important to fuel corporate growth.  But there are other forms of innovation which can be just as powerful and just as disruptive to the status quo in creating strategic competitive advantage.  Innovation in operations, in business processes and in business models can have transformational benefit for the companies that successfully implement these new ways of doing business. 

Partnerships and alliances are among those transformational business model innovations.  Yes, partnerships are not hardly new, but there are always interesting ways in which to combine two entities to create innovation and new value. Think peanut butter and chocolate.   Innovation often springs up when you have differences in thinking, differences in business processes, differences in technology.  This implies that partnerships and alliances are a natural breeding ground for innovation.

 Differences often result in conflict and tension. This is true in alliances where conflict is resolved through mutual agreement and not through fiat.

Yet, it is a mistake to assume that all conflict is bad. It is an insightful alliance manager that understands that diversity is an opportunity to create value. When members of an alliance are invited to contribute their knowledge, their perspectives, their unique expertise, some amazing innovation can happen. 

The Starfish Alliance is and example of business model and business process innovation. Starfish is a consortium of five logistics suppliers and Rolls Royce.  Rolls Royce, jet engine division, took a radical approach to optimizing their global supply chain in 2003.  They sought to partner.  They invited their logistics suppliers to collaborate to increase value to the customer and to increase the value in their business relationship with not only Rolls but with each other.   This was radical in that these suppliers had been locked into the traditional vendor/supplier relationship, where by the vendor relentlessly pressures suppliers for greater price concessions. They had also become locked into very hostile competition with each other, each hoping to gain a bigger piece of the logistics pie. But this model had become a game of inches.  Pricing concessions could only yield incremental cost savings of a few percent a year.

What was needed was a different way of working together that would shift the focus of optimizing each silo of operation to optimizing the end result.  The Starfish Alliance was met with distrust at first.  A key operating principle for the alliance was that there was no limit to profit. In other words, Rolls was not in this to transfer margin from their partners’ balance sheet to theirs but to create greater profitability for everyone, even the customer. They began to see results in their collaboration by optimizing and automating their end to end business processes.  Customer delivery rose to 99% on time.  Costs were reduced 20% across the operations.  The value of the alliance became a competitive differentiator and other customers began to take interest in forming similar operating alliances.

The very premise of alliances is to create new value that could not be achieved independently.  In this sense alliances are a natural incubator for collaborative innovation. 

 

To learn more please join the December 10, 9:00 am Pacific  worldwide webcast:

Collaborative Innovation & Value Creation

Harnessing the diversity of alliances to create innovative value

 Register: http://www.acteva.com/booking.cfm?bevaid=193215

PhoenixCG guests can take advantage of the ASAP member pricing of $25 for this 1-1/2 hour instructional session.  The webinar will be recorded and will be made available to registrants. So no worries if you have a schedule conflict, you will be able to view the recording at your convenience.

 

 

 

Collaborative Capability

Certification assures Collaborative Capability: Taking Partnering to the Next Level

 

I was fortunate to be featured in an interview for the Marketing Thought Leadership series with Linda Popky, Marketing Master and recently named one of Silicon Valley's Top 100 Women of Influence.  In this podcast interview, I was asked to speak about the growing recognition of collaboration as a strategic competency. Business rely more and more on partners to execute business strategy and grow stakeholder value. Certification sets a bar for collaborative capability ensuring partner managers have the skills for success.

 

To Listen to the Podcast:

http://marketingthoughtleadership.wordpress.com/2009/10/17/professional-certification-for-partner-managers-taking-partnering-to-the-next-level/

Learn more about certification

http://www.strategic-alliances.org/chapter/svnorcal/certificationprepinfo/

Social Media at Your Service

One area in which social media is gaining traction is support services.  When you combine partners in an interactive forum they become a self-help community.  When you add customers to the mix, your partners become very competitive in demonstrating their expertise to the customer base.  The result is very organic but very effective way of providing support services.

Lithium www.lithium.com, a social networking CRM company, has carved out a niche among vendors supporting large developer communities.  Lithium in particular has documented the ROI of community support and service. By leveraging the on-line expertise of the community, costs are offloaded from the enterprise support system and responses are typically much faster than traditional call centers.

One respondent noted that a 5 minute service call costs $100. Since most customer inquiries can be answered in just a few minutes, support costs are dramatically reduced and customer satisfaction is dramatically increased through the rapid response of a community-based support model.

 

A few organizations advocated integrating Twitter into service and support operations.  One organization reporting that they have a 5-minute response goal from the time a complaint is tweeted to when someone from the company responds with an offer of assistance.

Comcast has become a model case of how customer complaints can be proactively addressed through Twitter. Comcast Corporation is the largest cable television company and the second-largest Internet service provider. Its broadband Internet service reaches about 13 million subscribers.  Comcast has been notorious for poor customer service, spawning anti-fan websites, and it won the dubious honor of being voted Worst Company in America by on-line subscribers of The Consumerist magazine.  In mid 2008, Comcast began to use Twitter to monitor subscriber sentiment and to respond to customer complaints within minutes.  Too soon to tell if they have rehabilitated their poor reputation overall, but it is clear that those individuals who receive a proactive and unsolicited offer of assistance were impressed. Comcast has received business press attention including the following article in BusinessWeek for their innovation.

 

Comcast's Twitter Man http://www.businessweek.com/managing/content/jan2009/ca20090113_373506.htm

Managing Communities and Ecosystems with Social Media

Findings from a Survey Conducted by Phoenix Consulting Group, June 2009

Social media is gaining presence within partner ecosystems. These are natural communities and naturally lend themselves to these media.  There has been a trend for some time by large vendor companies to position themselves as the hub in a vendor-centric partner ecosystem. Most have built partner directories on their websites so that customers may search and find partners that meet geographic and technical needs. Some have invested heavily to enable partners to find each other, to collaborate and to build more integrated solutions. Social media facilitates this trend. Where vendor companies once invested in proprietary software to create communities, companies may now leverage open social media networks. Public networks are still quite new to facilitating these activities, but there are an emerging host of enterprise social networking platforms that incorporate many aspects of the public networks or integrate with them.

 

Spontaneous communities are a good indicator of this natural affinity. There are, for example, several Microsoft partner groups on LinkedIn; these are not owned or sponsored by Microsoft.  They arose through the initiative of partners who wanted a place to exchange information and insights on how to work effectively with Microsoft.  Example: http://www.linkedin.com/groups?home=&gid=82575&trk=anet_ug_hml

“Breadcrumbing” was mentioned as a technique to tie these spontaneous and independent communities together. This technique entails leaving a trail of links or breadcrumbs back to the company site. Company employees might address a question or complaint and lead back to the company website by posting links where questions or concerns could be addressed in more detail.  Monitoring posts to these sites and proactively responding can be an effective means of fostering loyalty and keeping a pulse on partner sentiment.  While there are use cases for this activity among the consumer brands, only a few of the interviewees offered that they were proactively monitoring partner or public sentiment this consistently.

Partnerpedia  www.partnerpedia.com is a free social networking forum intended for partner recruitment, connection and collaboration.  It provides a mechanism to find new partners and to contact them for potential  collaboration.  Partnerpedia offers a private network option for sale that a vendor can adopt  to provide a social networking forum and community management platform  specific to their partner ecosystem.

 

Incorporating customers into the ecosystem is a powerful trend. Citrix pioneered the concept of a Community Verified network which has eclipsed their traditional partner certification program.  Alternatively to rigorous lab testing, products are subjected to the scrutiny of the user community.  Users vote or recommend whether these partner products are compatible. Released in October of 2008, the Community Verified community consists of 1,500 products supported by 9,000 verifications as opposed to 800 traditionally certified products. Furthermore, customers can reference the product reviews and they put more stock in the community verified products.

Citrix is on the leading edge of adoption of social media within their partner community. There is extensive use of public social media and extending to these communities strategic partner portals. For example, there are sub communities for Dell, HP, Intel, Microsoft, NetApp, Oracle and SAP. These strategic partner networks integrate many social networking links, RSS feeds for related product and company blogs, YouTube product demos and video tutorials and Twitter streams as well as featuring the community verified products of these partners.

It is clear that social media is becoming deeply integrated into these natural communities and becoming inseparable with the business processes in communicating and collaborating within these ecosystems. 

Contact the author normaw@phoenixcg.com for the full white paper of the research findings.

Is Social Media Crossing the Chasm in Partner Management?

Findings from a Survey Conducted by Phoenix Consulting Group, June 2009

Well, arguably yes and no.  Some technologies that might be labeled early Web 2.0 were in pretty widespread usage. Others such as Twitter are caught up in the tornado. Some, such as MySpace, already seem to be in decline.

Blogs, wikis, and web meeting technology are plausibly across the chasm. There is widespread adoption of these technologies beyond the IT industry as internal and external mediums for collaboration and communication.  Most interviewees followed blogs but did not personally or professionally blog themselves, though those in partner marketing did promote company blogs to their partners.  Wikis were more commonly utilized behind the firewall and by technical groups for networked collaboration.

 

Strongest adoption of social media was within the marketing organizations and was prevalent in many partner marketing activities, marketing to partners, marketing with partners, and marketing to recruit partners, etc.

Citrix described their recent social media campaign surrounding Citrix Synergy in which social media was integrated with traditional event marketing. The event included many of Citrix’s strategic partners who were featured in the event promotions. The event and the keynote speaker had Facebook pages with links to Citrix TV videos.  Event news was tweeted real time to the customer and partner base which were registered as fans on the Facebook pages or following through Twitter twibes. The following link goes to the Synergy website, but the media quicklinks are visible and easily accessible .   

http://www.citrixsynergy.com/

Social media has transformed traditional press relations.  Cisco now has media releases instead of press releases, recognizing multiple means of communications in an on-line world.  Another partner marketing manager remarked that the rules are different as well. For example, their experience has been that bloggers do not always honor news embargos, so their release strategy has been adapted accordingly.

Virtual tradeshow pavilions were pointed out by several partner marketing managers, most notably Cisco.  These on-line tradeshows had an exhibit hall where many of their partners had ‘booth’ space at the virtual tradeshow.  One of the interviewees (a Cisco partner) had to cut short our discussion so she could go ‘man’ the virtual booth.  Presentations and keynotes were scheduled throughout the day and available via webcast in real-time with on-line question and answer sessions.  Keynotes were also archived for later viewing. https://www.ciscopartnerspace.com/

Public social media was gaining ground within partner ecosystems. Partner managers responsible for a portfolio of partners were using many of these tools personally to keep in touch with their partners. Partner marketing organizations are formalizing their strategies to adopt and integrate social media into ecosystem communications and marketing.  More about this in the next blog installment.

For the complete study, contact the author: normaw@phoenixcg.com.

Social Media and Partnering: What's working?

Findings from a Survey Conducted by Phoenix Consulting Group

Of the 20 partner managers we interviewed, most were realizing productive benefits from the use of social media.  Benefits were described in terms of strengthening relationships versus the hard metrics of generating leads and revenue.  Yet as many of the activities were integrated into the process of doing business, the bottom line impact may be real but subtle and less easily measured.  Functional benefits included:

 

Communicate – Many partner managers stressed that social media is a different mode of communication.  Social media forums are more “two-way and more interactive, organic.”  This is both the appeal and the fear.  Once you’ve let this genie out there is no turning back.  You need to be prepared for what you get back from the community. You also need to be prepared that the traditional notion of authorized company spokesperson is no longer relevant.  Everyone in the company is empowered to be heard whether at work or in their personal on-line activity.

 

Build Loyalty – A primary attraction of social media is the development of communities.  Communities naturally foster a sense of belonging, of loyalty.  All the technology companies interviewed had private partner communities on their portals and were using many of the social media tools to foster dialog within their partner ecosystems. These took the form of networks on their password protected portals and public sites such as Facebook and Twitter. Beyond these planned communities, we see a trend toward spontaneous communities, such as on-line user groups.   Some organizations are actively fostering these external communities and finding new ways to bring value to their partner ecosystems.

 

Listen – A very powerful opportunity is leveraging social media as a means of collecting business intelligence.  Some companies are actively using these media to understand the issues and trends within their customer and partner communities. Both customers and partners are often present within the same communities in social media. One developer used the twittersphere to reference a partner, checking to see how the reviews were trending. In this instance, the trend was not good and the partner in question was not actively monitoring and managing their on-line reputation.   

 

Collaborate – On public social media, Twitter and Facebook for example, collaboration was very tactical and ad hoc. It amounted to answering questions or addressing support issues.  More structured collaboration did not suit the public media.  We found that within the context of strategic alliances, for example, collaboration platforms such as Lotus Notes, Sharepoint, WebEx Connect or in some cases proprietary platforms served this need more effectively, especially where protected IP was involved and controlled access security was required.

 

Branding – Where consumer companies often describe their brand as an emotional response and relationship with their customers, it is not a far stretch to comprehend how social media can be used to enhance a company brand and online reputation.  Managing and projecting a company’s online brand is visible to the partner community and to partners’ customer community.  We also saw that companies were using social media to build personal brands for their top executives. 

Contact the author at normaw@phoenixcg.com for the full white paper on this research.

How are Partner Managers using Social Media?

Findings from a Survey Conducted by Phoenix Consulting Group

We asked twenty partner managers “What is social media?”  By far the most common response was “Good Question!”  After a thoughtful pause, we heard social media were tools that enabled users “to communicate’, ‘to build loyalty’, ‘to collaborate’ and ‘to listen’.

“It’s an opportunity to have communities of like minds and interests.”

“It’s a way of on-line communication that allows expansion of personal and business network and sharing of information between people and groups.”

There is a general recognition that social media is still early in terms of adoption and application, and still changing.  Even those who purport to be experts acknowledge that “we don’t know all the ways these new forums can be used.”

While there are hundreds, maybe even thousands of social media sites on the worldwide web, the most widely discussed were the Big Four public forms of social media: Facebook, LinkedIn, YouTube and Twitter.

LinkedIn was widely used by partner managers to recruit new partners and to preview the profiles of colleagues working within their partner's organizations.  LinkedIn Groups have spontaneously emerged around partner communities, for example, a Microsoft Partner Group, hosted and moderated independently of Microsoft.  Members share insights and information regarding how to partner with Microsoft.

Facebook was used most frequently in partner marketing activities.  Fan pages are created around events where attendees both partners and customers can be friended to follow event coverage in real time.   We also found that companies were maintaining facebook pages to build visibility and a personal brand for key company executives.

Twitter was again most frequently used in partner marketing activities and to communicate to partners, a kind of micro-newsletter.  However, some companies are recognizing the value of twitter to monitor partner sentiments about their company and products.  This in an opportunity proactively manage your online reputation among both partners and customers.

YouTube was a public library for product demos and other company news and messaging. Videos were commonly linked to company Facebook pages and LinkedIn profiles.  

Proprietary social networking platforms were also in evidence in managing partner ecosystems, these would often have many features of the public forums or integrated them into the platform.

Other tools and platforms were also part of the on-line experience in partner collaboration including webconferencing such as WebEx and GotoMeeting as were wikis and blogs.  

Collaborative platforms such as Sharepoint, WebEx Connect and Lotus  were also in use and were the preferred technology for strategic alliances.  One interesting aspect of these platforms is they were moving to integrate many collaboration tools into a single environment and even some of the social media functions.

As earlier stated, we don't know all the ways these technologies can be used.  There are quite a few intrepid innovators using these media in creative ways.  Our next blog will explore some of the benefits that these pioneers are experiencing. 

If you would like the full white paper on the study or to discuss the implications for your partner organization, please contact PhoenixCG at normaw@phoenixcg.com.

Social Media and Partnering

Social media hype is everywhere. We are deluged with it on-line. We see it on TV. Our kids are absorbed by Facebook. The  State department even requests that Twitter delays maintenance to ensure continuity in the information flow from civil unrest in Iran.

Even as we are coming to grips with Social media - socially, we are becoming aware of how this new media is infiltrating all aspects of human interaction.  As the Iran elections show and indeed in President Obama's campaign would indicate, social media has become a political media.  Businesses are now adopting these forums to manage and monitor customer relationships.  As a business that focuses on collaborative B2B relationships, PhoenixCG conducted an informal study by interviewing 20 partner management professionals to understand how partner managers are leveraging Web2.0 and social media in building partner relationships. 

We wanted to get beyond the basics of what's a tweet and how often do you tweet?  We wanted to understand how partner organizations were deriving business value from the use of social media. Most of the individuals we spoke to were in the technology sector. Though we did speak to two who were not - a control group if you will. These two were in the pharma sector. 

What did we learn?  While there is huge momentum and adoption, as a business tool, we still don't know all the ways in which social media can be used.  There are few proven practices on how to optimize and measure impact especially in enhancing business relationships. Yet many of those we interviewed are using these new tools for productive use if not clearly measurable use. It is fair to say that we are still in the early adoption phase, where the first entrants are engaged in a process of invention and creation in developing applications for these media. 

Only one of the respondents had developed a social media strategy and metrics for optimization and they had not yet deployed. The others, even those who characterized themselves as leading edge users, were at various stages of trying formalize their use of social media, making the transformation from experimental to strategic use. 

Since a single blog is not going to cover the ah-has of twenty interviews, we will be posting our findings, observations, and recommendations in a series of blogs.  If you would like to contact us directly for a copy of the white paper of our findings or a more in-depth discussion, please contact me at normaw@phoenixcg.com or info@phoenixcg.com. 

To learn more about Phoenix Consulting Group, www.phoenixcg.com

 

Two new, emerging best practices in alliance management

The ASAP 2009 State of Alliance Management Report looked at thirty-six commonly recognized best practices of alliance management and benchmarked them across the community of respondents representing 431 companies. This year the researchers looked a bit deeper into innovation alliances and identified two new emerging best practices. While innovation alliances were found to be more treacherous in terms of likelihood for success than other types of alliance, these two practices yielded up to 15% more sales for those companies that employed them.  How do these practices generate more productive value?

 

First, a practice termed Specialization.   It was found that “companies that have a large variety of alliance functions generate more sales from products that are both new to the market and new to the firm than companies that do not have such a variety.” In Specialization, it was assumed that by bringing together different functional perspectives, a broader set of skills were brought to focus on bringing innovation to market.

 

The second, called Hierarchy referred to a practice that “centralized decision making power with regard to alliances.” These companies also “generate more sales from products that are new to the firm than companies that do not centralize decision making.”  This applied to decisions affecting partner portfolios rather than day to day, operational decisions within a partnership.  By looking across a portfolio, alliance executives could make investment decisions that allocated resources to high value partnerships and to disinvest in lower value ones.  It also allowed a look across alliance valuation across multiple functions, business units, or product lines, creating greater synergy in optimizing alliance value.

 

We look forward to hearing more detail on these best practices as research continues.

The full report is available in the member’s library of the Association of Strategic Alliance Professionals. www.strategic-alliances.org

Serving our Customers thru better Partnering: Doing More with Less

Certainly in this economy doing more with less is an imperative we all face.  It is also the fundamental premise of partnering and in these times Partner Managers are pressed even harder to do even more with even less. 

A few weeks ago I was asked to moderate a gathering of senior alliance executives by the Association of Strategic Alliance Professionals to discuss this very challenge but with a perspective of what changes had they made in their partnering practices. How were they managing their portfolios, targeting market initiatives, stretching what's left of their budgets and headcount?

The event was comprised of Silicon Valley notables: Cisco, Apple, Citrix, Symantec, eBay/PayPal, Intel and IBM, the host. Some key takeaways from this illustrious group of Silicon Valleys tech leaders:

• Alliance activity is increasing but with a "ruthless focus on sales".

•  Scarce resources was forcing  more internal collaboration, more internal alignment on the big plays, and more pooling of resources.

• Placing bets to incubate new business opportunities - stimulating the stimulus

• Unusual partner combinations due to M&A activities that were disrupting partner ecosystems, an example is the Oracle acquisition of Sun.  Long time partner HP is now a competitor.

• Convergence of technologies were also causing new alignments.  Cisco going into the server business straining the relationship with longtime partner HP who is now aligning more closely than ever with Microsoft on Unified Communications.

Alliance executives also voiced a sense cautious optimism that maybe the worst was behind us, but there was also a recognition that recovery was not linear and not evenly spread across sectors.  They were reacting to this  by tuning their portfolios to follow the money.

•  Cost take out was a major opportunity for industries that have been consolidating through mergers and acquisitions.  Large data centers needed to be consolidated and management systems integrated.These were critical spends for the companies involved since they were counting on the consolidations to liberate operational costs that could be used to restructure.

• Alignment with Stimulus spending was a frequent refrain and recruiting partners that could enable them to better pursue those funds and the opportunities they were expected to spawn.  Many mentioned healthcare and green/clean technologies such as the green grid.

There was a recognition that disruptive innovation and disruptive business models often take root or take off during times of crisis.  The event closed with a discussion of some these technologies and business models i.e. SAAS, Mobile applications, Web 2.0 that offered opportunities for continued growth and new partners.

Innovation lights the way to prosperity.