For the last two weeks I’ve been toting around a copy of Charlene Li’s Open Leadership: How Social Technology Can Transform The Way You Lead. This is a book I received an advance review copy of but would have happily paid for because I admire Li.
She’s the co-author of the 2008 book, Groundswell: Winning in a World Transformed by Social Technologies. Her firm Altimeter Group provides high-value thought leadership on digital strategies, including some research we refer to in our Rock The Boat Marketing workshops.
I was certain that I was going to love Li’s book. But I read it with the asset management industry in mind and, well, it's made me agitated about the work to be done.
Li believes that “opening up” is inevitable. “In the past, organizational leaders had the luxury of remaining ensconced in their executive suites, opening up only when they felt the need to. Today there is information leakage everywhere, with company miscues and missteps spreading all over the Internet in seconds. And all involved—from employees and customers to business partners—feel entitled to give their opinions and get upset when their ideas are not implemented…The fundamental rules that govern how relationships work are being re-written, because of easy, no cost-information sharing.”
In offering her book as a resource for how to re-define the relationships, Li provides case studies, action plans, assessments and social media guidelines, principles and checklists designed to bring “new rigor” to an organization planning to be open. It’s a seductive read. To get completely carried away, start with Chapter 10 and read how Best Buy, Dell, Cisco, the State Bank of India and the U.S. Department of State have transformed themselves in just the last few years.
Li quotes Best Buy’s Michele Azar after attending a Web 2.0 Expo in 2007: “I saw the whole world transforming and we were not even talking about it within our company.” So Azar got down to business and, with a team, did something about it, including the Twelpforce and Remix, Best Buy’s open API.
How Does An Entire Industry Become More Open?
The essence of Li’s work is to facilitate information-sharing through openness as mandated and nurtured by an organization’s leader. Nothing less. Of course it’s inspirational and instructive for an individual firm, but here’s what I get stuck on for asset managers: How does an entire industry shift toward openness and sharing as a business value?
I spend most of my time online. I’m checking in on what financial advisors are saying on Twitter or in the blogs or videos they’re publishing or linking to. I'm weighing in where I can add value. And I spend a lot of time on media sites, including reading the comments posted by investors. There’s no shortage of voices but none are from you, investment providers.
The value of active management, buy and hold as an investment discipline, the costs of owning a mutual fund—all are hot online topics referring to your business. (And your Web sites offer white papers on them.) These topics are being discussed in communities online without you. By not contributing, your firms are passing up an opportunity to step from behind the messaging and actually explain yourselves with the goal of aiding understanding on both sides.
Is non-engagement a long-term sustainable position, I find myself wondering. Is there really no way to marshal the resources (Legal/Compliance, customer service, systems, staffing) to participate online? Notwithstanding the documented successes enjoyed by open organizations, can this industry thrive without?
Or, is the industry due for a mindset change? Do we need to expect more of ourselves, to think bigger, to draw on works like Li’s when pushing through resistance? Is the resistance just from regulators who may not fully get what’s at stake? Or is the skepticism and resistance from within, too, where we have not adequately or strenuously made the case for open engagement? Are we trying to introduce social media under the radar as opposed to securing full buy-in from the top?
Or, Is Investment Communicating Different?
Some believe that investment communicating is different. A few weeks ago I wrote an AdvisorTweets blog post commenting on the fact that the exchanges used Twitter for marketing announcements only on May 6, the day of the flash crash. The NYSE, for example, didn’t go to Twitter to distribute updates, as other authorities have when dealing with other types of crises.
No one seemed to care. "No, the NYSE isn't going to do that," one financial advisor said to me. "It doesn't matter, we have other sources." In an earlier AdvisorTweets post, I’d asked if there was anything asset managers could have provided that would have helped on May 6. I had seen advisors in the tweet stream asking one another for information. But again, no one could think of anything they’d need from an asset manager.
The interest and need are high but expectations of investment companies are low. Asset managers as information providers are being counted out, underestimated. Are we happy with this? Or would you prefer your firm to be considered vital, a go-to information source at the very moment when information is being sought? If so, there’s some ground to re-gain.
Li’s book is about social media transforming the exchange of information. Yet what we see is asset manager social media strategy work producing tighter clamps on information-sharing. LinkedIn profiles are getting taken down and Twitter accounts deleted. We understand the origins and that Compliance needs to get a handle on what’s going on. But, as Li reports, this is out of step with what’s happening elsewhere as others are encouraging employees to tweet, blog, engage, etc. Our hope is that these measures are temporary—no doubt it will be up to business people to advocate for their reduction, repeal and replacement with a strategy designed to enable openness.
Read Li’s book for inspiration and fortitude as you plan to wage the good fight, and:
- If you’re just finding the time now to focus on social media and feel as if you have some catching up to do, Open Leadership discusses some of the more prominent incidents in the last few years (e.g., United breaks guitars, the Motrin Moms, Ford Fiesta campaign). It’s a good grounding for you.
- You will gain an understanding of “openness” from a bona fide authority who’s done the quantitative and qualitative research, including interviews with everyone from the captain of the nuclear aircraft carrier USS Nimitz to Cisco Systems’ CEO John Chambers to Ford social media head Scott Monty. Wells Fargo and SunTrust are mentioned and Johnson & Johnson is included as an example of a company whose products are regulated.
- Based on the questions we’re fielding and we hear you asking in various Webinars (How do we organize? How do we budget for it? How much staff?), you’re going to especially like the Crafting Your Open Strategy section.But with all due respect, the questions that are being asked all go to execution. We subscribe to the Think Big, Move Fast, Act Small school of thought. Act small if you need to (as many asset managers on Twitter, Facebook and YouTube have today), but be sure that you’re working against a plan that dreams big enough to have a transformative effect on your business and your organization.