Ted Shelton on the Crucial Attribute of Adaptability and Destroying the Culture of Secrecy
Susan Bratton

Episode 126 - Ted Shelton on the Crucial Attribute of Adaptability and Destroying the Culture of Secrecy

Join Ted Shelton, CEO of social influence consultancy, "The Conversation Group," as we talk about the importance of adaptability and behavioral flexibility at a personal and professional level.

Find out why Ted would choose Google as the place to work if he hadn't created TCG and why Open Management is the new process he's helping organizations implement to survive the next round of shake outs.

Open Management supports multi-dimensional collaboration using social platforms like socnets, open API's, prediction markets, ideagoras and other groundbreaking ways to access information assets.

Then jump "across the pond" and find out what Ted is doing with Silicon Valley Comes 2 the UK - a tour of London and Cambridge that he's working on with Sherry Coutu. And he answers Charlene Li, co-founder of Altimeter Group's question about the key differences in social media and marketing between the US and UK.

Ted answers DishyMix fan questions from Cathy Brooks, Andrew Anker, Jason Falls and Oliver Mutoh about how he differentiates his agency, social media marketing ROI, strategy vs tactics approaches with clients, common themes in social media, what next after Twitter and Facebook and what's the #1 problem global clients are facing today.

The show wraps up with a discussion of the burgeoning field of Ambient Awareness in this wide ranging interview filled with big ideas and future-is-now concepts.



Susan Bratton: Welcome to Dishy Mix. I’m your host Susan Bratton, and on today’s show you’re going to get to meet Ted Shelton. Ted is currently the CEO of a company called The Conversation Group. But he’s also an expansive thinker, which is what attracted me to Ted and why I’ve invited him on the show today, and we’re going to get into some of those things, including a new concept that he’s positing called Open Management, which I think is absolutely terrific and I want you to know about. That expansiveness of Ted’s comes from the fact that he’s had a lot of different kinds of jobs in his 20 years working in the high tech industry here in the Silicon Valley – everything from being the chief strategy officer of Borland Software, to senior vice president of sales and marketing for Who Wear. I think it’s great to have that kind of experience set when you’re thinking about next generation connections and communications, which is what he does for some very impressive companies. So lets welcome him on the show and you’ll get to meet Ted. Welcome Ted.

Ted Shelton: Thanks Susan. It’s great to be on Dishy Mix.

Susan Bratton: Hey, I’m glad you’re here. So one of the things that I was talking to you about when we were prepping for the show was if you had the opportunity to keynote any conference or event what would it be and I really loved your answer. Share your answer with us.

Ted Shelton: Well I have felt for a long time that Ted has done me a great disservice because what a fabulous conference.

Susan Bratton: And it’s named after you.

Ted Shelton: And it’s named after me, and yet they have not yet invited me to speak. I think, I mean I don’t know if I should sue them for copyright infringement or just, or just beg them to let me speak, but that would be the conference that I would be so proud to be a speaker at.

Susan Bratton: Well everybody wants to speak at Ted or at least attend it, and I have for the last five years. It’s an awesome conference, but it was the subject about what you wanted to speak, the title of your speech, that I thought was really good. Share it.

Ted Shelton: The Crucial Attributes of Adaptability.

Susan Bratton: And so tell us about that. I mean you obviously haven’t written this speech or anything, but what was it about adaptability and why is that attribute so crucial to you, because I happen to agree with you and that’s why I wanted to talk about it?

Ted Shelton: Yeah. They idea of adaptability is something that really came to me as I was, as I was working another piece – I was writing a piece about how business will change. I started thinking about the kinds of work that I’ve been doing with clients and recognizing that there was some really interesting patterns emerging about how companies are having to entirely transform what they’re doing, all of their business processes. And that some of the companies were really struggling with these changes and others were really thriving, and that there was some attribute that was common in the companies. And then I also recognized in the individuals in these companies, that was allowing them to succeed or causing them to fail, and it really being clear that it was adaptability, that it was about the ability to let go of long cherished beliefs and accept that something in their world or business had changed and how did they change themselves to be able to take that into account in their visions of the world.

Susan Bratton: It’s funny too because I had an epiphany. I’ve been studying NLP, neural linguistic programming, over the last couple of years - not super actively studying it, but just like being in it, learning about it, clicking on links, reading a couple books, getting, you know, mentoring. And we’ve been, we have a lot of experts on my podcast network who have shows, who are NLP master practitioners. One of the products that I launched is called Speak Up With Power and Influence and is based fundamentally in NLP, and I, so I’ve been learning about it. And there are these things called NLP Precepts, and one of the precepts, the fundamental constructs of the concept of NLP, is the following: “The person with the most behavioral flexibility in a given interaction will control the outcome”. And I read that and I thought absolutely; that’s absolutely right. The person with the most behavior of flexibility can win. It works well in negotiation, it works great in my marriage. I mean one of the things that I think makes my marriage great with Tim is the fact that we’ll change on a dime; given new information, we’ll just throw out everything we’ve ever thought and change our opinion. And so you saying that your title to the Ted talk would be The Crucial Attribute of Adaptability, I was like, “Right on, Ted. I’m with you.” And it was funny too because I asked you about your plan ten years from now and you were telling me a little bit about your girls, so share that with us, ‘cause I want to comment on it.

Ted Shelton: Sure. Well I’m going to… and I definitely, it’s one of those things that keeps you young and keeps you adaptable to have children, and I’m so happy to be the stepfather of two girls who are now entering their teenage years, which is always a challenge. They’re 12 and 14, and my own daughter whose now just turned six. But when you asked, “What is your plan for yourself in ten years”, I thought, we had just celebrated that sixth birthday and I was thinking, “Ten years she’ll be 16. Oh my god, Sweet 16.” You know, she’ll be right in the middle of where my stepdaughters are now, just heading into, which is this really, really tough time for parents, and I’m going to need every ounce of that adaptability to survive.

Susan Bratton: That’s what I was going to say; it’s all about adaptability. You just got to roll with it, right?

Ted Shelton: You do.

Susan Bratton: So now I’m doing a really conscious set up to having a conversation with you about open management, which is a term that you and Hayden Shaughnessy, your partner, use to describe this new process that allows companies to create this organizational responsiveness, which you think is, you know, so important, as do I. But the set up question is if you could work for another company besides The Conversation Group – you’d never give up working at your own company, I know – but which would it be, and I loved your answer for that.

Ted Shelton: Yeah. I mean there’s no question, Google is a company that is the most interesting company in the world today from an organizational management perspective – if not from other perspectives as well. You know, it’s interesting, I was talking to someone when I introduced the paper that we publish, which is available online – and I’m sure your readers, you know, provide a link for your readers – and the questions was asked to me, “You know, great, Google is doing all this innovation, but they have this cash engine from advertising. So couldn’t they do any crazy thing and it would work or not work and it really wouldn’t matter because the cash they’re generating is unconnected with those management experiments”, and the parallel is drawn to Microsoft, where Microsoft had this cash engine – well arguably it still does around the operating system. And so there are all sorts of mistakes as a company that they’ve made that were papered over because of the monopoly they hold in the operating systems business. And I don’t think that’s the case. I think actually Google is very thoughtfully trying out a variety of new management techniques. Some of them are going to work, some of them are not going to work, but the important thing is that they are very explicitly experimenting and trying to improve their business through those experiments.

Susan Bratton: Give us an example of one or two of these management techniques.

Ted Shelton: Well I mean Eric Schmidt I think does a great job of talking about this, and I relate one of the stories that he tells in my paper. And he says, “You know, smart people want to work with smart people” – and that’s true in any sort of company, it’s not just true with Google – “and smart people want to be informed.” People, in fact all people want to be informed and empowered. And so there’s a challenge in the traditional organization around the control of information, the control of decision making. What Eric prescribes as the world leader in today’s organization is instead of being the person who makes a decision – which is the way we traditionally think of hierarchical organizations and the leaders in them – the leader should be someone who facilitates the best decision being made. And so the leader makes sure that the right people are in the room, that they all have adequate information to be able to debate the issue, that the debate happens, that the right issues are being raised and conflict actually occurs so that you don’t just end up with some sort of consensus opinion that everyone can go along with; but rather you end up with the best answer through debate. And that the leaders then also has a responsibility to put a time limit on that debate because this is a business; it’s not an, you’re not in an academic environment. We’re not philosophizing for the ages, we’re trying to get business decisions made. So the leader creates the debate and puts a time limit on it so that the best decision is then made by the right people with the right information. That’s a very different idea about how organizations should make decisions.

Susan Bratton: Yeah, except that in most organizations it’s whoever is the best arguer or who talks the loudest last can win. But I, we could go on about that forever. I want to talk about open management and you have a really nice white paper about this, and it reminds me, you’re talking about how companies now must allow organizational responsiveness and innovation in growth in fast timeframes. It reminded me a lot of Sir Ken Robinson’s work reenvisioning the education system as a legacy of the industrial revolution and now a requirement that we get out of the kid factory…

Ted Shelton: Mm hmm.

Susan Bratton: and move into new ways to collaborate, communicate, innovate. You have a really nice list of some examples of platforms; these, what you call, peer-to-peer pathways for multi dimensional collaboration. I really like that. Can you give us some examples of different kinds of platforms that companies could install in their organizations to foster this open management idea?

Ted Shelton: Yeah, absolutely. So Best Buy has been a client of ours for a few years now. And one of the innovations that they introduced to their organization is something called Blue Shirt Nation. All Best Buy people on the sales floor or in the stores, you’ve been in them, you know they wear these blue shirts. So they refer to themselves as The Blue Shirts. And so they implemented this technology, which is based on Drupal; so they used office (unintelligible) source technology and built it themselves very inexpensively. But in a sense it’s Face Book for Best Buy, so any employee can get on there and have a profile, connect to other people in the organization, can share ideas, can share complaints. And, you know, in the ideal world when they introduced it they thought, “Well here’s a way that we’re going to create efficiency in the organization by servicing new ideas about fixing problems that everybody has.” So an example was, an early on example of something they actually solved was they said, “What do you not like about your job?” And somebody said, “I don’t like cleaning up at the end of the day” – ‘cause one of the things they do, they don’t have an outside cleaning service, the employees who actually work the sales floor end up having to straighten up at the end of the day. And so a manager jumped in and said, “Well what do you not like about cleaning up at the end of the day? Is there something specific?” And the employee said, “Well I hate vacuuming”, and the reason that they hated vacuuming is because was enormously time consuming because the cord for the vacuum was too short. And then all these other people started jumping in and saying, “Yeah, I hate that too. Why can’t we get vacuum cleaners with longer cords?” And the person who was in charge of purchasing, that bought those vacuum cleaners, went back to the manufacturer that they buy from to, you know, to serve the 985 stores around the U.S. that they have these in, and they got longer cords. And suddenly they turned this complaint, this bitch fest of their employees, into this collaborative process of solving a problem together and saying, “Hey, lets actually get longer cords.” That would  be impossible to do in a traditional organization. How would you ever get that idea, recognize that it’s valid, up to the person who buys the vacuum cleaners to actually solve it for 985 stores?

Susan Bratton: Well and not think that you were the only one who was cranky about it, right?

Ted Shelton: Yeah. Yeah.

Susan Bratton: There’s another one of these lists of platforms that you offer as an example. You have internal social networks, innovation platforms, prediction markets, social media tools, open data platforms. One of the ones that reminds me of Tim O’Reilly’s Government 2.0 ideology – and Tim was just recently on Dishy Mix – is your focus on opening PI’s. Do you have an examples of that yet or is that more of a new concept, kind of a….

Ted Shelton: No, it’s not a new concept at all, and we have been working with around API’s now for two years. Companies… So a better way to think about it, API sounds threatening. It sounds, oh, some….

Susan Bratton: Sound techy, yeah.

Ted Shelton: Sounds very techy. Another way to think about it is every company has a set of information assets. It’s information that they either gather and/or compute, right. So you’d say I know something about a market or a product line or a customer because of information I’m able to bring together from multiple sources and then have some deeper understanding about a problem because I am sitting at the center of where all this information comes together. A great example is in the loan business, where you know that you have some score that relates to your credit worthiness. And companies out there compute that score based on gathering a whole bunch of information. Well what if those companies provided that score in an open API so that obviously with your permission as a consumer your credit card company could write on your credit card bill when you log in to check your credit card statement, “See what your credit score is”, right there in the same interface, right. Very, very powerful idea that enables a new service for the credit card company and makes your relationship with the credit facility that you have much more transparent and open, you understand what the issues are, and yet you don’t have to go three places as a consumer to see it. You go to one place; you come to the place where you get your bill. So if you start talking about it that way instead of an API, say, “What are the information assets that you have as a company, and what are the ways that you can create more business and create more connections with your customers by releasing those information assets and putting them out into an ecosystem of partners to be used in different ways”, that becomes a real business driver as opposed to some geeky technology thing.

Susan Bratton: That’s a good one. Thank you for that. Before we go to the break I wanted to combine a couple of little things that I know about you, some mutual friends, etcetera. Sherry Coutu, who’s a Venture Angel, she sits on the University of Cambridge board, she’s part of NESTA – the National Endowments of Science Technology and the Arts – and you are putting together something called SVC2C, and I want you to talk to us about that ‘cause our mutual friend Sherry is involved in that as well and she wanted to let everyone know what you’ve been working on with this program.

Ted Shelton: Absolutely. Well and to be clear, I’m not putting it together, Sherry is putting it together and I am…

Susan Bratton: You’re participating and helping.

Ted Shelton: really a huge fan and supporter and offering all sorts of help that I can, whatever I can offer, as are a lot of other people. I mean Reid Hoffman has been involved for a number of years and helping – that’s one example of…

Susan Bratton: Founder of Linked In.

Ted Shelton: Founder of Linked In.

Susan Bratton: Mm hmm.

Ted Shelton: And there’s an array of really tremendous people that are involved. Silicon Valley Comes To The UK – SVC2UK – has actually been going on for four or five years, and the idea is that there is a set of business ideas, there’s, as one person put it, a clock rate in Silicon Valley that’s at a significantly faster pace than in other parts of the world, and there are ways of doing business here, which would be valuably absorbed by entrepreneurs and students in other places. So for a number of years now, both at Oxford and at Cambridge, we have taken a group of entrepreneurs from Silicon Valley, brought them into the classroom, and let the students actually have one on ones with people like Reid Hoffman, say “Hey, how do you start something like Linked In? How does Silicon Valley culture work? How did you get Venture financing?”, all these kinds of questions that both entrepreneurs and students in business schools have. So this year we’re doing it yet again, both in London with a bunch of entrepreneurs and in Cambridge with a group of students at the Judge Business School. It’s just, it’s so exciting to be a part of it, and Sherry’s just doing a fabulous job organizing it.

Susan Bratton: Well I love the Silicon Valley meets Silicon fan. And of course I was part of the Traveling Geeks event, you and I. You, with The Conversation Group, put together a tweet Up for us when we came over in July, and I really liked seeing all of the connective tissue that’s happening between Cambridge, Oxford, Stamford, Silicon Valley, and it’s just going to get better. They’re doing such amazing things out there. Just before we go to a break, Charlene Li – your friend and mine, whose just launched Altimeter Group – she is aware that you’re very active in Europe with TCG. And just in a nutshell, what do you see are some of the key differences in the way that social media and marketing are converging or diverging from our North American experience here?

Ted Shelton: So we’ve been watching this for over two years now, and I think the biggest lesson for us is that they are converging but at a different pace. And Europe is a hetero genius market, similarly to the way that the U.S. is a hetero genius market, but even more so. I mean we can look here at the U.S. and say, “Hey, you know, the pace at which the coasts do things is a bit different than the middle of the country and certainly stuff that happens in Silicon Valley is a little bit weird compared to, you know, from the perspective of someone that’s sitting in Washington or New York.” But in Europe you have that in even a larger way. So in the UK for example, Twitter has absolutely taken off. People are, you know, going crazy for Twitter. Twitter perhaps is more popular in London than in any other city in the U.S., including San Francisco, if you believe that. And yet in Prague, to give you a counter example of a place that I’ve been recently, people look on Twitter with great suspicion, not quite sure what this, why one would waste time with it, whether it exposes too much about us personally. And so what you see is all of the different paces at which things are being adopted across the spectrum of both social and business environments in Europe, but what we’ve also seen over two years is relentlessly those markets and people are catching up with what the U.S. is doing. Charlene has done some fantastic work both at the Altimeter Group and prior to that at Forrester, around looking at the rate of adoption of social technologies by different groups, and there are differences in age, there are differences by gender, there are differences by economic group and there are certainly differences by region, but what we see in all of those groups is that they are converging to a deeper and deeper understanding and use of these technologies, and that’s true in Europe too.

Susan Bratton: Well thank you. And we’re going to go to a break. I’d love to thank my sponsors for letting me have this fun with you. And when we come back I’ve got some questions for you from Kathy Brooks, from Andrew Anker, Jason Falls, Oliver Muoto, so some really hard hitting questions for you Ted from some of our Dishy Mix listeners about The Conversation Group and about social media agency, if you will. So lets take a break, and when we come back you’ll get to talk more with Ted Shelton, one of the founders of The Conversation Group. I’m your host Susan Bratton. We’ll be right back.

Susan Bratton: We’re back and I’m your host Susan Bratton. We’re getting to know Ted Shelton. And Ted, lets talk about The Conversation Group. Lets start with Kathy Brooks question. Kathy’s, she’s a podcaster, press evangelist and runs a company called Other Than That. And here’s her question: she says, “Today every agency promotes itself as digital, social and that they provide their clients with authentic engagement and conversation. What makes your company, The Conversation Group, any different? Why should someone go to an agency that’s focused like that when the truth is”, at least from her perspective, “that on some level every agency should be and often is providing those same services?”

Ted Shelton: Well and I hope that every agency does. I mean at the end of the day our vision is not that we’re going to do it right and everybody else is going to do it wrong, but actually that we’re going to help be a part of the whole business ecosystem, engaging with their markets in this, you know, really important new way. And I say new with a little smile on my face because it’s really not new and it really goes back to the way that human beings always existed together and exist together today in communities. But we don’t think of the business environment as being a community – or at least those of us that grew up in the 20th century don’t. We think of it as being a one way broadcast from a company telling its market what to think and what to do, and the success is the way in which you spin your message into their minds and they absorb it and then march like robots into the store to buy your products. And, you know, the best companies actually have never done that. So if you look at a company like Apple, regardless of social media Apple has always been about building a community. And Borland, when I worked there as well, Borland had this loyal following community that was cherished by Borland. Unfortunately Borland no longer exists as a company, but there is still people out there that you’ll find that will say, “What a horrible tragic end, because Borland was the most important thing in my life.” And that kind of community engagement, that kind of passion and love for the products and for the companies is what I think now every company should embrace. The change in technology from one way broadcast media – of radio, television, newspapers – to this two way engagement that’s possible now through the internet and through the web, makes it possible to really go back to an earlier day where we had to wreck relationships with the vendors that we bought things from, but do it on a global scale so that companies can, at a mass market size, really be able to have that close direction. And I hope that every agency embraces that. Far too often what I see agencies doing is saying, “Oh, social is a new channel. So I’ve got outdoor, I’ve got print, I’ve got broadcast, I’ve got…well we have to have one of those dumb websites. Now I’ve got this stupid social thing and I need to have somebody, I need to go hire a bunch of college kids to tweet for me.” And I, you know, a lot of these companies unfortunately are approaching it very cynically with their clients. And we were just talking to a company in the UK whose ad agency came in and said, “You know, we’re going to have a hundred kids tweeting messages supporting you so we can build up your social pedigree.” Well that’s horrible. That’s not having a conversation. That's not engaging transparently and honestly with your market place. That’s trying to use a tool to trick people into thinking that you care about them. So when I talk about why are we different from other agencies – and by the way, I think there are lots of good agencies out there – but we’re certainly different from that kind of agency. Because what we do is we go into a company and say, “First of all, what we want to do is enable you to do this for yourselves. We’re not going to bring a hundred kids in here to tweet for you. We’re going to try to help you understand why your employees should be empowered to be tweeting on your behalf.” And so we bring about change management more than we bring about a campaign or a program or, you know, the kinds of things that agencies traditionally make money on. One of our clients, Best Buy, Michelle Lazar there described us as “McKinsey with results”, which I thought was very flattering…

Susan Bratton: Yeah.

Ted Shelton: and so I use it all the time. But, and what she meant was that while McKinsey will come in and do a great job of helping you understand the problems that you have and how you need to change your organization and is very thoughtful, they don’t stay around and help you make that change – they say, “Here’s the report, have a nice time”, whereas we get really engaged with our clients. So we come in and we help our clients think through how they change their business processes, how they change their organizations to be able to embrace these social technologies, and we stick around and help them with the implementation. And that’s, I think, the real difference between us and a PR agency or an ad agency that now is trying to change their stripes to become a social media agency.

Susan Bratton: I’m not personally entirely convinced that that was enough a differentiation for me between an agency and what you do, so I’m still struggling with that a little bit. So let me go one level deeper in that – and I don’t mean to be insulting, but I can hear any agency saying the same thing you just did. So, and I know that it’s difficult until you can get in and actually show the fine work, so I’m appreciative of that. And I also have a funny question for you. So I want to get your opportunity to put a point on what you just said, but I have a joke that is like tagged with a joke on the end. So, Jason Falls who runs a company called Social Media Explorer – he’s a big Twitterer and he’s funny as hell – he says he would like you to explain how to approach social media strategically as opposed to tactically like everyone else does. And so I’m going to make that more specific, I’m going to say is there some high level construct that you could give us about how to strategically approach social media that we might consider, like, just some rule of thumb or something – I’m making this hard for you. But then Jason also says, “And then ask him about tantric sex and see if his head explodes.”

Ted Shelton: Hey!

Susan Bratton: And the reason he did that is because he knows that on my podcast network we have tantric sex shows, and so he was just, he’s giving me crap. But that’s what Jason does.

Ted Shelton: And it’s great link day too, so if we talk all about tantric sex then you’ll get tons of traffic. ‘Course it’s the wrong kind of traffic that your advertisers don’t want, but…

Susan Bratton: Well actually some of my advertisers do want that kind of traffic. But I had to say that, ‘cause Jason, he’s a little shit sometimes, which is what I love about him, you know. So how, if I was going to speak to a room of people and say, “Here’s the strategic approach for thinking about this”…

Ted Shelton: Mm hmm.

Susan Bratton: In a nutshell, what would you say?

Ted Shelton: Well I, it definitely is different depending on the organization and the challenges the organizations face. Let me give you one example though. Historically in companies the way that we have approached information has been everything is secret and you need a really good reason to let anybody know about the information. So making something not secret is the challenge that you have in the business in terms of communicating with a vendor or a partner or a customer. Instead if you flip that around and say everything is open and the burden now is on why do you have to keep that secret, you entirely transform the culture. So a great example is my friend Jake McGee, who is at Lego, who tells this wonderful story about wanting to publish the colors of Lego Blocks. A number of the fans were saying, “Hey, you know, we have these software design programs that allow you to design elaborate buildings out of Lego Blocks and we’d like to have the accurate colors in the program. Can we have the colors?” And so he went around and asked a bunch of people and said, “Is there any reason why I can’t publish the colors?” And the immediate reaction from his director, manager and other people in his building was, “I don’t see any reason not to. Go ahead and do it.” So he puts out on the blog, “Here are the exact colors for all of the Lego Blocks.” Well it wasn’t long after that that he got a call from headquarters telling him that he was going to be fired, that he had just disclosed absolutely confidential information. And Jake just said, “Well wait a minute here; why is this confidential information. Anyone, first of all, can just buy the blocks, so they can see the color. Why would they make this confidential?” And the woman said, “Well because we’re worried that Chinese manufacturers are knocking off our blocks and selling counterfeits and you just gave them the keys to the kingdom ‘cause now they can make perfect exact replicas.” And Jake said, “Well, if I was a Chinese manufacturer and I didn’t have this information, how would I go about making my counterfeit?” “Oh well you’d buy $150 dollar spectrometer and determine the color with the color spectrometer.” And so he said, “Okay wait a minute, we’re keeping the colors secret because we’re afraid that some company is going to buy a $150, you know, not be able to afford the $150 dollar spectrometer to steal our colors?”, and the woman hung up. But, you know, it’s a… And he didn’t get fired because it was ludicrous, right; the idea that the color of the blocks should be secret, was a part of this culture of secrecy that we’ve grown up in, and yet you can empower your market by turning that around and saying, “No actually, there’s no reason for the colors to be secret.”

Susan Bratton: So removing the culture of secrecy and make yourself more open, or as people love to say, transparent.

Ted Shelton: Yeah, transparent.

Susan Bratton: Okay.

Ted Shelton: Yeah, and so it’s, that is a great example for companies to understand why are they doing something in a way which is frustrating to their markets, and how can they change it, how can they turn it on its head, move the burden from having to argue that something should be open to the burden that something should be secret.

Susan Bratton: So Andrew Anker, who’s a mutual friend and runs Corp Dev at Six Apart, he wants to know, he thinks the big question that hangs over social media as a mark of being (unintelligible). He wants to know how we, as an industry, prove we work well; what does it take to convince marketers, you know? He says, “With the Gormet Magazine going under, old media’s looking as shaky as it ever has and the eyeballs that used to be there are moving online in droves. But, marketers have to follow, but how can we get them to be happy about it and is it by proving that social media is the ROI powerhouse that we all think it is?”

Ted Shelton: Yeah. And, you know, it’s funny, I have a lot of respect for Andrew – I’ve known him for a long time back from when he was at August – and yet I’ll have to take issue with Andrew here because I think that he’s falling into the trap that so many people fall into, which is throwing the ROI burden on this new things, social media, instead of asking what the ROI of marketing is at all. What’s the ROI of a billboard? What’s the ROI of a magazine ad in Gormet Magazine? How will we ever, as marketers, measured the effectiveness of the money that we spend? Or instead of, as someone recently told me a story about working for a large organization; you know, do you walk in the CMO’s office and say, “Hey, we’re going to do a thing for $500,000 dollars”, and he goes, “Wait, you’re not spending enough. If you don’t spend more they’ll take our budgets away.” This is an enormous challenge, right. ROI is something which we’ve made up all sorts of ways of measuring within the marketing discipline in order to justify the ideas that we have. And I’m not saying that any of them are wrong, right; running a billboard campaign in which you introduced your new logo certainly does cause some people to remember your logo and causes some of those people to walk into the store and buy your sugar water. But how do I measure that? How do I measure Pepsi sales against Pepsi billboard spend? We spent a bunch of time working with a family restaurant chain who has run television advertising for 20 years, spends a hundred million dollars a year on television advertising, and has a very clear methodology for measuring the effectiveness of that television advertising; they run specials in their stores and they advertise a special on TV and then they measure, after running an ad, how many people come in and ask for the special. And they have a graph that shows that that has become less and less effective over the last 20 years. It’s still effective, and so they keep spending the hundred million dollars, but it’s less effective. But you start punching holes in this methodology for measuring the ROI because in fact there are all sorts of ways that someone can find out about the special now. What if I tweet that there is a special at that restaurant? Well how do you capture the difference between the people who found out about it through a tweet versus the people who actually saw the television advertisement? So don’t place the ROI burden on social media; place the ROI burden on marketing and ask marketers to reevaluate the entire way that they measure what they do. And our measurement – and I think some great, great work has been done in this area the Net From Utter folks, and if you don’t know about Net From Utter go Google it, look it up – but the, you know, the shift that we have to make as marketers is from measuring attention to measuring recommendation, and recommendation will be a much more important measure of the success of marketing and ultimately an implication of ROI’s than attention ever has been.

Susan Bratton: I like it and I’m a big devotee of net promoter scores. Alright, I want to play a little game with you.

Ted Shelton: Hopefully it’s not about tantric sex.

Susan Bratton: It is. Is that okay? You wish.

Ted Shelton: I can’t even… I’m in another room in another city, so it’s not going to be a very fun game.

Susan Bratton: So well, we’ll bookmark that. We’ll come back to that later. So I like to call this Single Sentence Opinion. I have three really good questions from Oliver Muoto of Metablocks – good old long term friend of mine – and he had a ton of questions for you. I picked out three of my favorites and all I want from you is your single sentence opinion. Are you game?

Ted Shelton: I will try it.

Susan Bratton: Alright, good. Oliver wants to know, “What common themes in social media marketing do you see among your clients today?”

Ted Shelton: The common themes are provide value, provide interest and learn. And I think on that last point, if you’re not prepared as a company to be as changed by what you hear back from your customers as you hope to change them, then you’re not ready for social media.

Susan  Bratton: Hey, that was my favorite part of the show right there. I like that. Second question, “My Space, blogs, Face Book, Widgets, Twitter; what’s next?”

Ted Shelton: I think it’s twine. I think the idea of socially mediating the news reading experience is absolutely critical as the traditional media market collapses. And twine is a great example of how this is happening.

Susan Bratton: Thank you, I love that. That’s a good one. This is a fun game with you. I like it. Okay, here’s the last one: “What’s the number one problem from the perspective of your global clients that they feel they’re facing today and are looking for help solving?”

Ted Shelton: I’d say the number one problem for companies today is truly being relevant to their employees and to their companies. You can produce a product and people might need that product, but why from your company? Why are you the one that is doing good in the world or creating the most valuable product or the most valuable experience? And companies really are struggling with this next level of marketing – and by marketing I include the product and experience development, which is everybody can create a good product. Now how do you actually create one that is outstanding in some specific way? And that’s what’s really going to create that recommendation, change from attention to recommendation, is that if you are in some way creating something that is truly outstanding, then the people who use it will tell everybody else.

Susan Bratton: Nice! Hey, you’re good at this game. I like playing this with you. I want to end the show with you giving us a little tunnel into a new thing that you’re learning about. So I don’t expect you to know a lot about this, but I saw that you did a little blog post on it and you know more than I do and you probably know more than all of us do. Last question for the show is what is Ambient Awareness?

Ted Shelton: So Ambient Awareness is a phrase that sociologists have coined to talk about what happens when we’re paying attention to all of our friends on these social networks, like Face Book. And the post that you’re referring to, the thing that I talk about is Ambient Awareness Meets Business Intelligence, I’m trying to talk about why is this important, this idea of Ambient Awareness, why is it important to businesses? So Ambient Awareness is ambience – so first of all, it’s sort of out there in our environment – awareness meaning I know something about what you’re doing. So I know, in your case you might’ve said, “Hey, I’m going to go check out Ted’s tweets. Ted is actually talking about going to London tomorrow and how he’s going to have this exposition in London for one of his clients, Simbian”, and so that’s a part of my life that you’re able to pick up out of this digital environment that we both inhabit rather than actually having to ask me about what I’m doing. So that’s Ambient Awareness. Now the question is how do businesses utilize it? Why do they care about it? Well since the late 1990’s, there have been a number of researchers working in this area called Ambient Intelligence, and the idea behind that was that our built-in environment can be instrumented with sensors. So they’re, you know, common thing that we all know about roadways, they all have sensors in them so we know how fast traffic is moving, so you can look at your map and see, if your interposed over it, whether traffic is moving or not so you can pick your route. So the built-in environment is transmitting information into a data network and has a lens, the map, for letting me take that information in and make a decision about it. Well the same thing is true with this point of Ambient Awareness; there’s all this information out there - like “Ted’s going to London for a Simbian exposition” - how do you actually put a lens on that so that you can scan all of it and bring information that’s important to your business decision making processes into your organization. That to me is a critical challenge that companies don’t even realize they have. They don’t even understand how much information is out there that could be informing product development, marketing decisions, sales decisions, employee hiring processes, support issues, investor relations – every single process that a business is engaged in needs this information, needs the gathering tools and the lenses for interpreting it. So that’s this very fertile area that I’m working in right now.

Susan Bratton: I like it and I like the name, and thank you for explaining it a little better to us. That was fun. Hey Ted, you’ve been such a terrific guest. I’ve really…. I knew you’d be good, and I’ve really enjoyed everything that you’ve had to say today. Thank you so much for coming on the show.

Ted Shelton: Oh it’s my pleasure. And thank you so much for having me.

Susan Bratton: Yeah, and good luck with your trip next week. And thank you so much for listening to the Dishy Mix show with Ted Shelton, CEO and cofounder of The Conversation Group. I hope you have a great day.