The folks at McKinsey continue to put out strong content on the impact and implications of the Web 2.0 revolution. This recent interview with MIT’s Andrew McAffee provides a timely, fresh perspective on how social media is changing the way we work. McAffee raises a number of interesting points (which I’ll get into below) but fundamentally sees Web 2.0 tools as having a positive impact on how companies operate.

Among the salient points:

• Social tools in the enterprise will continue to evolve based on employee use and preferences, as much as what CIOs dictate. There is a strong grass-roots element to the birth and evolution of these platforms.
• McAffee sees merit in both the top-down implementation approach as well as the more flexible bottom-up model, which he describes as follows: — “… deploy the tools, stop worrying about what’s going to happen, and get out of the way as the management of the company and let it percolate up from down below. Or, if you hear about a grassroots effort, encourage it, support it financially, but, again, get out of the way, let the bottom-up energy happen.”
• Even in a bottoms-up environment, it’s still very useful to have a clear sign of endorsement from leadership – and ideally active participation from senior executives.
• In many companies, it’s rarely enough to just deploy the new tools and expect change to occur quickly…it can take a major cultural shift for the tools to be fully adopted by employees. In fact, McAffee suggests getting mass adoption remains a big challenge for many organizations.
• Too many companies lack the patience to create relevance and drive traffic to the new tools, and are too quick to diagnose a slow start as a failed experiment. As McAffee puts it: “They don’t have the patience to let people migrate over to the new way of working, and they don’t invest enough time in signaling that this is actually what we want to have happen. They don’t think enough about how to encourage use.”
• Another recipe for failure is to focus too much on potential risks and downsides – which can become paralyzing and stifle any change or risk-taking.
• Using a half-hearted approach – like launching  an enterprise blog with no comment function and press-release content – will likely result in failure. Commitment must be real and robust conversation must be fostered for the effort to be credible.
• Many CIOs see their role as limiting risk, but though valid this conservative approach can be taken too far and preclude valuable progress and innovation. McAffee argues the potential security risks of Web 2.0 tools are often overblown, and this concurs with my experience where actual abuses are few and far between.
• Middle managers who see their role as gatekeepers of information will feel threatened by these changes, but progressive managers with a more holistic approach will still be relevant (face-to-face remains critical) and should see great potential in these tools.
• In terms of metrics, the companies that are successful are focusing on their specific deployment objectives rather than trying to use a generic ROI approach. McAffee states: “When I see successful companies tackling this tool kit, I see them doing a little bit of thinking upfront about what problem or opportunity they’re trying to address, then deploying an appropriate technology in response to that. They then measure progress: How much uptake are we getting? What’s the traffic look like on this? Which is very different than measuring ROI…..”
  
  

Most of McAffee’s comments ring true for me and mirror the issues and debates I’ve seen first-hand in several organizations. Perhaps the biggest lesson here is to avoid adopting Web 2.0 technology with too many preconceptions or iron-clad rules. What experience has taught us is the adoption of social media tools in the enterprise is an unpredictable process… but one that continues to have great promise.

There’s been plenty of discussion and printing dedicated to the topic of corporate reputation, with a few chestnuts emerging as common themes – such as the merits of building a “goodwill bank” and the quick and dramatic impact a crisis can have on reputation. There are also many consultants selling their respective solutions to improving or rehabilitating a tarnished reputation. In my observation many of these programs leave out the employees; too often the diagnosis and prescription is heavily (if not exclusively) focused on external stakeholders. (A popular evaluation metric used by the Reputation Institute looks at “workplace” as a key factor, but their approach is based more on perceptions of the employer brand than employee outreach or behavior.)

There are several reasons why activities related to corporate reputation need to fully involve employees:

• Companies intent on measuring and managing their reputation ideally need to follow the same steps internally they would with consumers or customers: assessment, gap analysis, prescription, outreach, progress evaluation, etc. On the assessment front…employees need to fully understand and embrace the desired reputation to effectively deliver on the brand promise, so evaluation of their opinions and ideas is critical. Making assumptions about what employees know, feel or want on any topic is a risky strategy. Employees are a key part of the opportunity (or problem) and the solution.
• Employees help form the existing reputation and need to buy into the desired reputation.  Some would argue a desired reputation that is not relevant or credible with employees cannot become reality, so any reputation program has to consider the internal gap and include appropriate solutions to move the employee needle. In short, new reputations cannot be developed in a vacuum.
• Much like in broader change efforts, the more employees are involved in defining the solution/strategy the more likely they are to be fully engaged…so companies should consider how they can engage employees in the process of defining and enhancing the corporate reputation. At minimum, companies should think about soliciting & leveraging the ideas and best practices of their teams.
• With the advent of social media, employees are more likely to help shape and drive the brand identity and reputation of companies online – employees are potentially the most credible fans and advocates, but also the most devastating critics. (This goes beyond the occasional “rogue” employee that breaks rules and ends up on YouTube, like these guys.) In the social media context individual, peer-to-peer interactions often have more traction than traditional, generic marketing activities. So any reputation program should – at minimum – have a clear roadmap for how employees can help drive the reputation through their formal and informal online activities. (FYI – the external reputation analysis can confirm how much employees drive the opinions…good or bad.) Some progressive companies have taken this a step further and developed programs to fully leverage their employees as an army of online ambassadors and fans (e.g. Dell.)
• Whatever the gap between desired and existing reputation, employees must be provided with the direction, tools and support to help achieve the ideal reputation…after all they are the ones developing/delivering relevant products and services and shaping customer interactions. This can go well beyond communication into HR programs, training, recognition, incentives and so on.
• To give credit, many companies address the direct link between their employees and their reputation in their community outreach programs, but these are often limited, choreographed initiatives where employees are encouraged to participate in specific, company sponsored programs. I would argue these programs are almost seen as a price-of-entry for any company and provide limited reputation benefit unless they are seen as particularly noteworthy. Furthermore, I know from personal experience many companies don’t explain the purpose or importance of these outreach activities to their employees. In short…not good enough.
• The inherent value of an integrated, multi-audience reputation program is it helps ensure the program is focused & aligned across various stakeholders and internal teams. Too many companies fail to make clear links between their brand, reputation, vision/values, etc. and employees are left confused, so it’s important to have a holistic approach that connects the dots.

With all the effort and spending in the area of corporate reputation, it’s time to put further thought in the critical role of employees in the development, promotion and protection of company reputation.

Progress can be a two-edged sword. On the one hand, it implies a constant stream of innovation, improvement and new options. On the other, it means inexorable change, a sustained learning curve and a ruthless natural selection process. Picking the winners – and what really matters – is a real challenge.

As an example, witness the recent launch of Salesforce.com’s new Chatter, their secure “social” enterprise application…or as they call it their Collaboration Cloud. According to most reviews – like this one by Altimeter and another here – this is an important new tool in the social media arsenal, since it provides a comprehensive, private enterprise platform replete with networking and collaboration tools but also close integration with business processes and organization workflows. The application will include profiles, real-time status updates, groups, feeds, collaboration tools and links with Twitter and Facebook. Charlene Li describes it as “a social platform that can integrate multiple inputs that will accelerate the opening up of enterprise applications.” The basic application with be available for free.

On the surface, Chatter seems like an important new addition and a viable alternative for any company looking for a social media platform. But beyond the technology, for many communication pros Chatter makes things more complicated. Many smart professionals are likely still trying to decide the merits of Jive vs. Yammer, or struggling with installation of well-known programs like Sharepoint or even trying to define their core strategy for social media. Beyond the few companies living on the cutting edge, I doubt many will jump to adopt Chatter…they’re still trying to digest last month’s innovations.

But despite all these hurdles, its critical that communication leaders become familiar with Chatter. Just like they need to know enough about other popular enterprise applications to have an intelligent discussion. To borrow a tired phrase, there is no finish line when it comes to innovation in this area. The lasting lesson for me, therefore, is that we need to refresh the job description for communication (and marketing) professionals. Beyond the core skills, I would add the following as job requirements:

• Never stop learning – What we knew several months ago is already stale, so it’s critical to keep listening and absorbing new facts and ideas. Keep your mind open and be brand and platform agnostic.
• Do your homework – Pay attention to relevant developments and do enough research to understand basic implications and opportunities. It’s no longer enough to just peruse the Wall Street Journal and trade publications and watch a few TV news programs to stay current.
• Learn basic technology – Just like a cursory knowledge of business and finances used to be the price of entry (and it still is) any self-respecting communication professional cannot be effective today without a basic understanding of IT infrastructure issues, communication applications and popular platforms.
• Avoid the silos – Relevant information, ideas and tools emerge from a wide range of disciplines, so insularity and allegiance to outdated silos is a recipe for irrelevance.
• Try it – There is no substitute for personal experience, so PR pros should do whatever they can to use (or at least sample) the various tools, applications or tactics they are recommending to their clients. And using a Blackberry is not enough!

I continue to be startled by the widening gap between companies breaking new ground in social media and others who continue to dither or resist any involvement. Recent campaigns by innovative companies like Best Buy and Coke brings this separation into even more  stark contrast.

Best Buy has long been an innovator in the area of communications, so their new holiday campaign should not be a surprise. The most interesting element is perhaps the launch of their Twelpforce Twitter account – which is staffed by 2,500 sales and support folks who are available to respond to consumer questions or comments. The Twitter team/link is being promoted on a new television campaign – replacing the website address of past years. Best But is also leveraging its Facebook page to make it easier for users to ask friends for product advice, or even send email tips to relatives of your interest in certain products. In a cool twist, the company is introducing 25 tiny URLs to encourage users to send select product tips via email and social networks. Check out this New York Times article on the Best Buy holiday campaign here.

Coke is another company trying something new. Never one to do things on a small scale, the company is launching a campaign called Expedition 206, which involves recruiting amateur “Happiness Ambassadors” to travel the world through 2010 and document their quest through videos, Tweets, blog posts and so on. The final selection is being left to consumers. Check out a summary of the campaign here. Coca-Cola is no stranger to social media and already has one of the most popular Facebook pages (which apparently was created by two users) with almost 3.9 million fans. (As a side note on Coke’s bumpy path to social media enlightenment, check out this AdWeek post. )

Gap is another company with a promising holiday campaign. They are partnering with Yahoo to encourage consumers to record and send video greetings via a mobile recording studio in NYC. The clips – complete with options for customized holiday music – can then be posted and forwarded using the full range of digital channels and social networks. Consumers will also be encouraged to rank video greetings, and the most popular will win prizes. I also noticed Sears is launching a holiday-themed networking site and using widgets and text messages to flag holiday promotions. Even a traditional retailer like Kohl’s is jumping into the fray. So this isn’t the usual high-tech cast of characters.

My point here isn’t really to argue whether these campaigns are compelling or even very creative, and we’ll have to see if they deliver on their marketing objectives. But at least these companies are trying to respond to the shift in consumer habits and fitting social media into their marketing mix. True, some of these efforts may be clumsy and even ill-advised, but better to try and fail – and learn along the way – than to stubbornly stick with outdated and dubious tactics. Nobody said progress was pretty.

A new study of U.S. consumers by Razorfish suggests that old-fashioned discounts and promotions are the key to engaging online consumers. Even more shocking, the data implies that consumers favor deals over conversation – the mantra of social media – and aren’t as passionate about brands as previously believed. Like others – including the folks at Razorfish – I was somewhat surprised by this finding, since the ethos of social media seems to shun the hard sell and emphasize authentic relationships over transactions or brand profiles. Razorfish’s analysis on the data suggests otherwise: While conventional wisdom holds that consumers don’t want brands encroaching on their social or personal lives, this is far from the truth. The myth of marketing-free social spaces is just that. The “dialogue” between brands and consumers is not only frequent, but also welcome. Check out this post here for a good discussion of the findings, and another interesting take from Neville Hobson here.

If you look beyond this headline, there are other interesting findings that all confirm the Web is dramatically transforming how consumers interact with brands:

• Consumers’ online experience has a big impact on their brand perceptions and purchase decisions – the digital experience (via branded activities) is now the message, and driving awareness or impressions is no longer sufficient
• Consumers want to interact, regardless of whether brands are willing participants: 73% have posted a product or brand review on a web site like Amazon, Yelp, Facebook, or Twitter
• The Web is not only a place to build a brand, it can also make or break it (65% of consumers report having had a digital experience that either positively or negatively changed their opinion about a brand – of those nearly all said their digital experience influenced whether or not they made a purchase)

Whether or not this survey is representative, I think the lesson here is that the rapid evolution of social media impacts not just technology or economics, but also consumer habits and norms. Communication and marketing professionals need to avoid retrenching behind dogma or cherished views and be open to new trends and ideas – even ones that may clash with tradition or prevailing wisdom. I suspect some social media pundits will attack or ignore this survey and defend the need for “pure” online conversation devoid of blatant commercial interests. That’s their right, but it would be missing the point. After all, isn’t the core power of social media that it gives consumers the power to drive online conversations and commerce? Maybe we need to listen to them a little more carefully.

The folks at McKinsey issued a timely article that brings fresh data to the quixotic search for the right formula to attract and motivate talent. [FYI - You may need to register to view the article.] Based on their own research, the authors suggest non-financial incentives are more effective at motivating employees than traditional financial incentives like salary hikes and bonuses. These findings concur with other surveys that confirm that for employees with satisfactory salaries, financial incentives offer mostly fleeting motivational benefits. But although most companies are cutting back on financial incentives due to the ongoing financial crisis, it doesn’t appear many of them are shifting to other (more effective) reward and recognition programs. For many the adjustment of incentives remains an exercise in management of costs.

According to the article, the most effective non-financial motivators are:

• Praise from direct managers
• Leadership attention (one-on-one meetings)
• Opportunity to lead projects

Anyone with management experience is likely familiar with these incentives – and understands intuitively why they would work. As the authors write: “The survey’s top three nonfinancial motivators play critical roles in making employees feel that their companies value them, take their well-being seriously, and strive to create opportunities for career growth. These themes recur constantly in most studies on ways to motivate and engage employees.”

So if all this seems logical and backed by research,  why do so few companies emphasize non-financial incentives? The McKinsey authors suggest the biggest reason is old habits are hard to break – traditional wisdom is that money talks louder than anything else. Another reason – which I’ve witnessed in my own corporate experience – is that non-financial incentives often entail more time and commitment from managers, and many companies are hesitant to juggle or stretch the agenda of their managers. Another theme woven through the article is that some companies equate basic communication (such as town hall meetings) as automatic motivators, while in reality the outcome is highly dependent on the specific information, format and occasion.

Perhaps this is another example of how some companies under strain tend to resist dramatic change or new ideas, rather than embrace the opportunity for innovation…or the inability of many leaders to seriously consider the preferences of their employees. Certainly, there is no shortage of publicity and plaudits for progressive employers who leverage a wide range of benefits to engage their employees – think Fortune’s Best Companies to Work For.  But clearly, this has not been enough to alter the core incentive programs of many employers.

Many big developments in technology seem to follow the same pattern: launch, hype, boom, more hype, backlash and, too often, bust. Or at least rumors of bust. But usually this pattern is more hyperbole than reality. Take Second Life as an example. When Second Life emerged a few years ago the hype was deafening, and a host of companies (including Dell, where I worked at the time) rushed to build virtual islands. Then the buzz gradually died down. Some companies left, disillusioned about the difficulty of generating revenue or leads through their island. Others stayed on but struggled to find value or purpose in their investments. Many just stayed away, confused by the technology. Some in the media and blogosphere suggested Second Life was heading towards the crowded bone-yard of technology.

Well, Second Life is alive and well – if you’ll pardon the pun. In terms of size and reach, Second Life shows some pretty strong numbers – though it must be said there are skeptics regarding these statistics. But beyond the crude numbers, I would argue Second Life is showing resilience and relevance through the innovation of its inhabitants. With the benefit of virtual experience, many are finding the benefits of Second Life may be more nuanced than pure marketing – for example cutting communication costs or developing new learning modules.

For a look at some of the creative uses of Second Life – ranging from e-learning to virtual meetings and collaborative design – check out these recorded sessions from the Gronstedt Group, a consulting firm that has long advocated the benefits of 3-D online environments like Second Life. [Disclosure - Anders Gronstedt is a friend and did work for me when I was at Dell.]

Perhaps the most important recent development is the announcement of Second Life’s new platform for the enterprise – which will allow companies to deploy their own, customized virtual environment behind their firewall. This beta program – set to formally launch in Q1 next year – addresses concerns about security and firewalls that have caused many organizations (including the last one I worked for) to stay away from Second Life. Check out Fast Company’s take on this development here.

As this coverage notes, the potential for companies to leverage a “closed” Second Life platform to improve and expand their internal communications is huge. The interactive, graphic and multi-media properties of SL lend themselves well to everything from virtual meetings to project collaboration and training. This particularly holds true for global companies with dispersed or telecommuting workforces. The possibilities are exciting…and endless. Yesterday I participated in a briefing in SL that featured an architecture firm that develops designs using a wiki “tree”, which allows visitors to propose and rank design additions or changes on existing projects. If companies are paying attention, I suspect some of those who avoided or left SL may take a second look. It would be well worth their time.

Communication guru Shel Israel touches on a compelling idea in a recent post on the relationship between personal brand(s) and corporate brand(s). I was particularly drawn by his comment on how people are becoming a central element of the corporate brand: “Personal brand is changing corporate and product brand in an increasing number of cases. This changes who shapes brand and why and how it is done. It changes how markets perceive brands and this is an area where little thought and conversation has emerged so far.”

Israel argues that traditional marketing messages focusing on “big brand” themes positioned through a corporate and/or homogenous voice are giving way to increasing personalization…and the humanization of corporate brands. This is being fueled by the advent of social media platforms that are based on individual participation and contributions. It’s interesting  to note Israel uses Dell as an example – which I experienced first hand as a member of the Dell social media team. Dell started to turns thing around when it started listening – really listening – to the online conversation but also because individual employees jumped into the conversation. All the platforms – both internal and external – were populated with real people who answered questions, shared ideas and tried to resolve complaints. Some of them – like Direct2Dell moderator Lionel – became key representatives of the Dell brand online.

This trend toward personalization is likely to gain momentum. After all, companies are engaging individual leaders (and sometimes employees) as blog authors, Facebook friends and Twitter voices.  Videos and podcasts feature company experts and guests in informal settings. Discussion boards are hosted by groups of company experts, some with large followings. Even websites are less impersonal, often featuring profiles and individual guides or hosts. As Israel notes, marketers are eager to leverage this movement towards the humanization of brands – since it’s inherently more credible and resonant with customers – but the very notion of diverse, individual voices makes this difficult. And that’s not a bad thing. For better or for worse, company reputations and identities will become more closely identified with the collective actions and voices of their employees, rather than paid advertising or impersonal PR campaigns.

A recent post by the folks at Melcrum in the UK provides evidence that more companies are adopting cloud-based collaboration platforms (in this case Google Apps) for their internal communications. Last week Jaguar and Land Rover announced they were also switching to Google. And Google isn’t the only big player in this emerging field: IBM recently introduced its own cloud collaboration suite.  (I haven’t even mentioned the host of new providers that offer services that go well beyond email, calendars and file-sharing – notably internal micro-blogging and networking tools.)

Anybody who has worked inside an organization is familiar with the debates that occur on this issue. For the cons, there are typically concerns about information security and integration with firewalls, while on the pro side the main motivations tend to be lower cost and a more efficient, integrated platform that is accessible through any Web connection. In  my experience, the naysayers are often in IT while proponents are employees looking for better ways to collaborate and communicate with peers. Coincidence? For many companies – slowed by balkanized email networks, weak IT governance and outdated infrastructure – going to a cloud platform is an easy way to start fresh using external resources, often at much lower cost than an infrastructure overhaul. For smaller companies, it’s almost a no-brainer. I’ve been involved in several start-ups in recent months and all of them are using cloud-based platforms for their email, file storage and collaboration needs – at no cost.

So why so much resistance? Likely a new version of the proverb that you can’t be fired for buying IBM – many prefer to play it safe. I’m certainly not a technical expert, but I suspect that the popular chestnuts about unreliable cloud networks and data risk are overblown. I’ve experienced far more problems with internal systems than the occasional blip with cloud-based applications. And is there a network anywhere that is more robust than Google? Companies should certainly do their due diligence, but when the status quo for many employees is working on creaky, inefficient systems – if they even have access to their network – there is no excuse for at least not considering the cloud.

I read a provocative article this week in BusinessWeek about a study of Boeing workers that suggests those laid-off from the company in recent years actually fared better – in terms of their morale if not pocketbook – than the so-called survivors. It’s long been accepted that after layoffs those left behind can have trouble adjusting to the staff turmoil and need careful attention to remain productive, but this study argues they often suffer more than those who are let go.

Based on my experience (which includes work for Boeing during the tumultuous years mentioned in the research) the critical factor in this equation is the workplace environment, rather than any staff changes. If the corporate environment is tense and depressing, the survivors may indeed be worse off than those who get a fresh start. And though the unemployed certainly have to face the myriad stresses that come with finding new jobs – often at lower pay – many benefit from a more positive, less stressful working environment. In effect, money and security can sometimes be outweighed by personal satisfaction and well-being.

Other factors that play a role in which side suffers most include:

• Who leaves and who’s left behind – are the layoffs perceived as a talent drain…are popular, talented stars part of the exodus?
• How are the layoffs communicated – are employees kept well informed of the process (and rationale) and given a chance to air their concerns and questions?
• Do the layoffs appear to be part of a logical, solid business strategy or a knee-jerk move to cut costs?
• Is there a transparent, credible process for determining who gets laid-off, or is the process capricious and opaque?
• Has leadership laid out a clear timetable and strategy for addressing market challenges (and reducing the need for future layoffs?)
• Can the remaining employees rally around a compelling vision and benefit from a dynamic, positive culture?

Many successful companies navigate through layoffs without long-term damage, so cutting staff is not a corporate death sentence. The key is for companies to handle staff changes in a humane, candid way and sustain their culture and employee value proposition through good times and bad.