Interview Transcript, Jeremiah Owyang

Welcome to an Talent Acquisition Channel special feature on TotalPicture Radio, recorded at the SelectMinds Annual Client Conference in New York City.

SelectMinds enables companies to revolutionize the way they acquire talent by leveraging the social networks their current and former employees have already built to generate high quality referral and re-hire candidates.

The SelectMinds product suite, alumni connect and talent vine leverage an organization’s most valuable asset – their people. With SelectMinds technology, companies can recruit top talent not only from within their employees’ social networks but also from their own private secure employee and alumni networks. These referral-based environments drive recruitment, new business development, brand evangelism, and ultimately business growth.

Welcome to a special Talent Acquisition Channel podcast on TotalPicture Radio. This is Peter Clayton reporting from the SelectMinds Annual Customer Conference in New York City. Joining us today is Jeremiah Owyang, a partner focused on customer’s strategy at the Altimeter Group and author of the popular blog Web Strategy, which focuses on how corporations connect with their customers using web technologies.

Hailing from web enterprise management, Jeremiah is an industry analyst that consults and speaks on the topics of disrupted technologies for brand related customers strategies.

The topic of Jeremiah’s keynote here at the SelectMinds Conference - The Impacts of Social Technology on Recruiting.

Peter: Jeremiah, welcome to TotalPicture Radio.

Jeremiah: My pleasure.

Peter: Disruptive technologies – what is disruptive this year? What’s going to be disruptive next year?

Jeremiah: We’re still reeling from the impacts of the simple sharing and publishing features like social technologies have brought. It seems very child-like at first impression, but it’s actually caused a shift in power. So whoever is using these tools, have the power. Now we’re seeing people that didn’t have power use these tools and then there’s a power shift – customers, citizens, employees.

Peter: You had talked in your presentation today about you really were a pioneering this whole social media space and you started your career out with Hitachi. Tell us a little bit about your background and the kinds of things that you were with them and trying to engage with the social media sphere when you started your career.

Jeremiah: Thanks. I started out with Social Media in corporate, as part of my job which I called BFB (before Facebook). Five years ago, I deployed the social media program at Hitachi Data Systems. We had a very limited tool set back then. There’s blogs, forums, RSS, podcasts. But you know what; it’s really not about the tools or technologies. It’s around how do you change your behavior to act just like consumers or your employees, who are already having those conversations.

Let me tell you Peter, that is so foreign to corporations, because they use to have one way broadcast messages being like a large media or advertising.

I started off early and I started writing this blog called Web Strategy. This kind of grew and grew. It went to Forrester Research where I started to do research and analysis. Now I’m at Altimeter and I’m continuing the research as an industry analyst.

Peter: You know you’re so right in that corporations are just having this huge struggle with the Facebook, the Twitter, the LinkedIns – engaging in a conversation, unlike the push technologies; the ad agency stuff, the commercials that they’ve been engaged in for 50 years. When you out and you consult with your clients, what are some of the things that they are saying to you and some of the reasons that they’re giving you for blocking all of these technologies behind their firewall?

Jeremiah: Not all of the companies block it from the firewall, so it’s hard to stop it anyway. Any worker can use their mobile device even if it’s blocked by their firewalls. The majority companies that I do hear and speak with, it’s not blocked. Even if it is, they use it after hours at home.

The real challenge that companies are having is this is a foreign behavior, and the second thing is it doesn’t scale. That’s right. Social media doesn’t scale and you heard this in my keynote.

Social history media is often about this one to one conversation or a few people having real authentic discussions with each other. Corporations aren’t staffed up. A lot of them may have thousands of employees. Only a few people actually are running the social media programs, and they’re not staffed up to participate in this. There’s a real conundrum here, Peter, because the more you tell your customers to contact us on these social channels, the more you’re propagating that behavior, and brands didn’t realized this. They must have a “Facebook strategy” now, right, and you see so many brands pointing to their facebook.com/brand on their TV ads. They’re sending people to the Facebook right now. Mark Zuckerberg is very happy for that.

Peter: Absolutely.

Jeremiah: He thanks you on behalf of Mark. But companies have jumped into this without even the ability thinking about what are the ramifications and what are the resources required? That’s what I’m seeing right now at the end of 2010 and going into 2011. They can’t scale.

Peter: One of the things I’m seeing a lot of Jeremiah, is this new role within organizations called Community Manager. Are you seeing this as well? What kinds of skills are these people trying to bring in to these roles? Do they have any power? You’ll hear a lot about let’s go hire a kid to do what Twitter feed or something.

Jeremiah: I just did a research report in my body of work for research here on the career path of the corporate social strategist.

Peter: Right, and this is on your blog.

Jeremiah: This is on the blog and it’s flying all over the internet. We interviewed over 51 folks in the role or those that are serving them and surveyed over 140 enterprise corporations to find out what’s happening. So we got the budget size. We can talk about all this stuff. I have all the data.

There are two roles. Yes, there is the Community Manager role. That role is not as strategic as the Corporate Social Strategist. There’s two different roles. Let me define them so you know.

The Community Manager is mainly externally facing and talking to customers using these tools. They’re the face of the company in these particular situations. They could come from the community or they understand the community. No matter what it is, they’re trusted by the community and they know how to use these tools correctly.

That’s more of a tactical role. They may not like me saying that, but it is.

The strategist role however, is the decision maker within corporations. They’re primarily a program manager and then mainly internally facing. They’re not externally as much. Their job is to develop the strategy and ultimately responsible for the resources. This role often sits in marketing – let me help you paint the profile of that persona – is often in marketing or corporate communications has a degree in marketing or communications, has been working for just about 13 years. So it’s very early in their career. They probably about my age (mid 30s), and they understand these technologies and likely adopted web early on in the days as well. So they’re early adopters.

Peter: One presentation that blew me away today was from Aon Hewitt – a young gentleman who is virtually running their entire career portal and is developing all kinds of really cool applications on iPad for going out to the college campuses.

Jeremiah: He’s very innovative.

Peter: One thing that I found fascinating is it seems like they’ve really given him the tools and also the bandwidth to go out and develop these things without him having to go back every 10 minutes and say, you know, “is this okay?”

Jeremiah: I think what he’s been granted the most important thing is empowerment. He’s a younger gentleman, I would guess he is in his 20’s.

Peter: Yeah.

Jeremiah: It’s rare that you do find younger folks that deploy social media in a strategic way, because they just rely on the way they behave in the past. But he’s definitely doing some things that are meeting business needs, which is good.

Let’s go back to your point about giving the program to young Gen Ys. That’s definitely the wrong approach. You need to have requirements for it. These are people that are going to have relationships with your customers. You need to set what are the business requirements for this role first. Do they understand the tools? Do they understand business requirements? Do they understand the changes in the medium? That should be the requirement, not age.

Peter: I agree with you. It seems like a lot of the people in the executive suites who are making these decisions sort of arbitrarily – alright, “I guess we need a Twitter feed because I keep hearing about this thing” – really don’t understand the social impact that these tools have today. Do you agree?

Jeremiah: Yeah, that’s right. I like what Cisco has done. What they’ve done, and this is interesting which applies to careers, is reverse mentoring. They’ve paired up a generation Y with a senior executive – a gray haired. What they did is they’re teaching each other. The Gen Y is teaching executive about social media and these technologies, and then executive is teaching them business.

Peter: Right. I think that’s really bright.

Jeremiah: That’s the right mirroring and then you’re getting that cross cultural - its two different cultures – cross cultural understanding and then hopefully the deployment will be stronger.

Peter: A lot of the conversation here at the SelectMinds event obviously is around alumni networks and of course they have a tool that you can use to build an alumni network. I know you came out of Forrester, which has a Linkedln alumni network. I guess that’s where a lot of these alumni’s trying to connect with one another really began on Linkedln.

Jeremiah: That’s happening in the organic way in this case. There’s only a couple dozen corporations here today, but that’s a small percentage of thousands of corporations out there that have alumni programs. These folks here are cutting edge. Most corporations don’t have a formalized alumni program, let alone, their own dedicated online community for this. Most people are connecting to each other in alumni programs on their own organically.

Peter: On your website, you wrote about the different ways corporations use it and try to respond to what’s going on with social media. You referred to one being a Hub and Spoke Model. Can you expand on that concept?

Jeremiah: Sure. This is really how do companies organize internally for social media and how they respond. One caveat, this is not about work models, this is not about your organization chart. This is how the company starts to form around information. There’s five formations. The first one is called distributed. It basically means anybody does anything they want at any given time. There is no coordination. That one doesn’t scale because it’s uncoordinated.

The second one is called centralized. Typically a group within a company likely corporate communications says all social media comes through this one particular group.

The downsides with that are that it may not look authentic to the market, especially if it comes from a traditional marketing mindset, and (2) it doesn’ scale, because you can’t run all the Facebook campaigns and programs for every single business unit.

The one thing to remember in a regulated environment, this centralized model makes a lot of sense. Each of these models has upsides and downsides.

The third model is what we call Coordinated or Hub and Spoke, where there’s a cross functional group in a hub that serves the rest of the enterprise, the rest of the corporation on all the different business unit. So imagine an axel with a different spokes around a bicycle tire. The bigger corporations tend to evolve what looks like multiple Hub and Spoke, where each of those business units, those spokes start to develop their own spokes. That’s been affectionately been referred to as a dandelion, and you can imagine what that looks like. Big corporations start to look like that.

The last model, which is the most rare one, is less than 1.5% in our findings, is what is called holistic. Everybody in the corporation is using social media in a safe consistent way and we found very few cases – Zappos and Best Buys’ salesforce program and the BlueShirt Nation are doing that.

So those are the five models. Which one is most successful and which one is the right one? There really isn’t a right one, it depends on your company, but some of them scale better than others. I’m all focused on scale right now and how do companies scale. So Hub and Spoke, and multiple Hub and Spoke (#3 and 4) scale really well. Most companies can never achieve #5, holistic as their culture isn’t right for it. Right now, the majority of companies are Hub and Spoke or centralized. That’s second model. This will change over the next few years and I’ll be measuring it.

Peter: Certainly when you look at Zappos and Tony Hsieh, his whole corporation, one of the reasons he got so involved in that is he wanted the right culture to be put in place and a very open culture put in place from day 1. So he has a really unique business model.

Jeremiah: You don’t find in the rest of corporate America. When you look carefully, Tony is in customer support.

Peter: Right, exactly. So it doesn’t matter if he’s selling shoes or selling airline tickets, he could sell anything, right?

Jeremiah: Essentially, yes. It’s a good point.

Peter: You had some statistics today from Edelman – the Trust Barometer, which I found very scary to be honest with you. Can you kind of relate what some of those were and what you think the impact of those are going into 2011.

Jeremiah: Edelman does annual research on trust and it’s the best out there. You can just Google and find that full report. They measure it every year to find out who do people trust, who do consumers trust. Consistently analysts score towards the top, but the same level of trust as often found by consumers, people like me, people at my peers, my friends, are people that have similar attributes to me, maybe I don’t know them. That’s consistent across all types of trust research that I’ve seen, even the stuff we did at Forrester. There’s definitely a common theme throughout all the methodologies.

What’s also consistent is that, corporations and executives or corporate communications, typically are trusted less across all of these. Was there really any surprise?

Peter: No, especially when you look at things like what happened in the Gulf this summer, right?

Jeremiah: Well not even that. Even before corporations, reputations were tarnished or the financial fiasco, corporations only say one thing and sales people only say one thing – how great we are. It’s a biased opinion. So now with these social technologies, people can have those honest and open conversations and this has really created that disruption which we’re focusing our research on.

Peter: One of the words I’ve hear a lot at the conferences I’ve gone to this year in recruiting and HR is integration. That was a big part of your presentation. You presented what you called Rings of Social Recruitment around this hub of guarding out at HR and expanding out. Can you tell us a little bit about that and some of your thoughts around that?

Jeremiah: That’s right. So this is a framework which is designed to help people understand how to approach this space. Imagine that there is a series of concentric circles.

• In the very center is the HR ring.
• The next one outside of that is the recruiter ring.
• The third one outside of that is your employee ring.
• The fourth one out of that is your alumni ring.
• The fifth one out of that is just the open market prospects candidates, everybody.

The thing when it comes to developing your social strategy for recruitment is you have to understand how do you use each of the rings. You use all of them. You have to integrate them and understand the different plays they use.

So you have your tool box, which are all of technologies available to you. But the true business strategist has to understand all of five of those rings and understand how do you make them interplay against each other.

Now, the interesting thing about that framework, Peter, is the closer you are into that ring towards the HR, that center part, you have more control but there’s often less trust. The further you go out, there’s more trust, but less control.

There’s also a thing around costing. If you are able to recruit form those outside rings, the cost of getting those referrals decreases significantly. In many cases, it can be free. When you recruit from inside, you’re using your own employees, your recruiters, the cost goes up. So that’s how you have to understand how to use that framework. It’s not that you use one ring at a time, you use all of them, but you have to know when.

Peter: I guess integration really is the key concept and key message here. And you’re right, because so many organizations, they’re siloed. Marketing is over here, sales is over here, HR is over here, and they don’t talk to one another, right?

Jeremiah: This is true. The interesting thing about this is, with all with these different business units talking to potential candidates that you might hire or even customers, they see all these different touch points. You know what, Peter, customers don’t care which department you’re in; they just want their answers fixed or they want their issues solved. This has created a conundrum within corporations. Everybody is doing marketing and support now.

Peter: I think one of the things that corporations are really having the struggle with this whole social media thing. If you look at Facebook with 600 million users now, and you look at Twitter, and you have that one chart (in your presentation) with the hockey stick with the number of tweets going out today, the speed of adoption is just beyond what anybody has ever seen. It’s faster than what Google was at… It’s faster than anything that’s ever happened.

Jeremiah: It’s one of the fastest adoptions when you look at other forms of media, whether it’s TV or newspaper, or the printing press, or radio, this adoption speed is incredible. A majority of the world is already on the social networks that are online already. It’s everywhere.

Peter: Facebook and Linkedln know more about your employees than you do.

Jeremiah: That’s right. I would even say that Facebook knows more about Generation Y than the United States government.

Peter: A lot of governments are getting a little bit concerned about that.

Jeremiah: That’s right. So they definitely do know way more about than what we do. The interesting thing is that data is opted in and likely potentially… I don’t know if it’s more accurate because sometimes people are aspirational, but yes, there’s a lot of information there.

Peter: Jeremiah, one of the things you wrote about on web strategy recently that I found really interesting is the issue around metrics and the different kinds of metrics. There is business metrics, there is social marketing analytics, and there is engagement metrics. Oftentimes, especially when an organization is just starting to implement a social media strategy or are getting involved in social media, they only look at perhaps engagement metrics. Can you step through those and talk a little bit about that?

Jeremiah: Yeah, just to start off with in the survey research we found that measurement and ROI is the top thing that companies are struggling within internally. They don’t know how to measure because it’s very hard. Because engagement, which is the interaction in social media often doesn’t – you can’t see the connection between the closing of a sale or often of a job candidate, whatever it is, because it can happen in different places, it could be disparate. So that’s number one.

Also the reason why measurement is so challenging is there’s a disparate forms of data and new data appearing and they’re all inconsistent. New social networks. They’re all very different. Those things make it very challenging to measure and especially with something so new, they have to prove it? This is the top challenge of the industry.

What I recommend is companies think of what this framework which I call the ROI Pyramid. There’s three particular levels of that pyramid. At the very highest level, that part of the pyramid is for executives. The second level down, Peter, is what we call for the strategists or for the business stakeholders. At the very bottom level which we already went over this role, is for the community managers.

It’s very important you deliver the right metrics to the right level in this pyramid. Companies screw up over and over and over because they deliver the wrong metrics to the wrong side.

What type of metrics for each level? Let’s just start at the very highest level. For the executives, you have to deliver business metrics. Do not deliver them engagement metrics. Fans, friends, followers, tweets, re-tweets – the worst thing you could do is deliver that to an executive first. Only deliver that to them if they require follow up. Instead, deliver the metrics how this has helped customer satisfaction, generated leads, improve sales, reduce support time, you give them business metrics.

The middle layer is where you give social analytics. This could be like things that add up to create those business metrics such as, share a voice or the number of questions that were answered within community. Those become the variables that create those business metrics. See how these formulas work together?

At the very, very bottom level, for the community managers, those that are participating in social media, those are the folks that need the friends, fans, likes, influence or numbers, because those metrics create those that next tier up that we just talked about.

If you understand the ROI pyramid, deliver the right types, three different metrics to the three different groups, you’ll be much more successful.

Peter: What have been some of your take a ways from this conference here in New York?

Jeremiah: I definitely think that the attendees here are advanced more so than what I would see on the industry. They’re already deploying. This is like a vertical in social media, right? The HR track, I see it in auto, I go to finance, I go all over the place. So this group of folks is far more sophisticated and they’re tapping into these things. The fact that they’re already willing to invest in communities for the alumni, most corporations are not hip enough to do that, but they need to tap into this – you know, 40% of the workforce is leaving, the boomer generation – tap into that nasent talent pool now. So, all of these folks are thinking ahead. It’s an impressive group.

Peter: I think you’re right and they are certainly going to have a competitive edge in 2011-2012 when the economy really starts turning around, and there’s a real war for talent out there.

Jeremiah: That’s right. Now they have this unpaid army around them of trusted alumni folks and now they can tap it to them and their employees for recruitment. They will have an edge: reduce cost, get better talent. This is a strategic opportunity for them.

Peter: One last question Jeremiah. What didn’t I ask you that you think is important for this audience to know?

Jeremiah: Let’s talk about this role of that social strategist because they are appearing and maybe the folks that are listening want that role, have that role, are going to hire for that role. It’s really important that, when you hire this role, they understand the business needs first and you don’t want to hire anybody that brags about how many Twitter followers they have. The tools of technology are less important than outlining these programs against the business unit.

The second thing I look for in this role is that they understand their program managers and will serve the entire corporation. But they, thirdly, have to be proactive and get ahead of those requests by developing proactive social media programs that can scale.

If you just start with those three things, that will help the corporation because that role, that corporate social strategist, will also serve HR, will also serve executives and also serve customers. That’s a very strategic role within the corporation.

Peter: Great. Jeremiah, thank you very much for taking time to speak with us.

Jeremiah: My pleasure. I had a lot of fun. Thank you.