Most people would agree that the Groundswell is here in full force. And while many organizations embraced it, there is still some resistance – fear, perhaps – from companies afraid to leave their comfort zone and cede control.
According to Charlene Li, social technologies are no longer ‘an alien race’ ; that bright shiny object to gawk at. But in order to adapt to the changing landscape, businesses will need to move from command and control to a culture of sharing. She calls this approach Open Leadership (the subject for her forthcoming book). The SXSW hashtag is: #openleadership.
Li contends open leadership can only happen when people have the confidence and humility to give up the need for control, yet still remain in command. It’s based on a fresh and more transparent approach to relationships and requires that new structures/processes be put in place.
She suggested five ways companies can become more open:
- Align openness with strategic goals. Start with a plan and select goals where being open and social can have an impact.
- Understand the upside. What’s the value of a relationship and can you quantify that in business terms? Right now, that’s still a challenge to measure.
- Consider a new formula for customer lifetime value (CLV). The old formula is: CLV = value of purchase – cost of acquisition. The new formula could be: CLV = value of purchase – cost of acquisition + value of new customers from referrals + value of insights + support +customer ideas.
- Develop open leadership. Leaders should be realist-optimists, who combine an openness to change with a strategic understanding of what needs to be done to make it work. Risk can be managed with ‘sandbox covenants’; a process for sharing with clear rules of engagement.
- Embrace failure. Keep a failure file in order to learn from your mistakes and move on.