Last week I had the opportunity to interview Paula Drum, the VP of Marketing at H&R Block, at the Social Media Strategies Conference. Just like the last time I interviewed Paula, the conversation was rich and informative.

One topic that I found especially interesting was when Paula made recommendations on what to do in the face of reduced marketing budgets in an economic downturn. Based on her experience that traditional marketing program are more capital intensive, and social media marketing programs are more labor intensive - she recommends that you move some of the people resources which are going to free up because of the budget reductions to social media marketing programs. Now that they do not need to manage as many lead generation or brand building campaigns, have them engage in the social media world.

Of course, you could take this a step further and voluntarilly move some more budgets from traditional marketing programs to social media marketing programs. Your returns may very well justify that…

Today the book Age of Conversation 2: Why Don’t They Get It? comes out, with contributions from 237 marketers. All proceeds to to Variety: The Children’s Charity.

I contributed to the “My Marketing Tragedy” section. I passionately believe in the power of conversations to build understanding, trust and relationships — fundamentals in business. However, from much experience I realize how difficult it is for businesses to move from  “talk at” corporate and product message-speak to the much riskier and unscripted “talk with” conversations.

While much has been said about the value of social media and conversational marketing, not enough thinking has been put to HOW to help organizations change.  Earlier in my career I was totally wrapped up in the ideas and concepts, but many never saw the light of today. Today, I have a much greater appreciation of the value of helping clients overcome the obstacles — changing minds, changing behavior, changing business processes, changing legal policies.

What I’m learning is that people need to be inspired to see the possibilities so that they have the passion and energy to create change. And then they need a steady sherpa guide to navigate the formidable legal, IT and executive alpha fraidy cat objections.

I do think marketers “get it.”  The real priority is to allay the valid concerns of the people who don’t.

The greatest impact of Web 2.0 on our culture is that people expect to have a voice and input into company and organizational decisions. Sure, this has always been true to some extent, but today people are taking action when they feel that management is ignoring them. (Note to executives: while you may feel like you are communicating, that’s different from making people feel heard. How they feel is often more important than all the usual rational communications strategies.)

One example: last week nurses at a local hospital — Kent Hospital in Rhode Island — voted 290 to 214 to join the United Nurses and Allied Professionals union. The reason? The nurses said that didn’t feel like they were being heard.

In a story in the Providence Journal psychiatric nurse  Debbie Almeida said, “Over the years the whole climate has changed here. We felt we no longer had a voice in things.”

Nurse Rose Desnoyers added, “The reason I wanted to see a union here was basically for respect. Money is not the issue.”

With the community and social networking tools available, it’s much easier to open up discussions and invite employees to engage in a genuine way and in a large scale. The only obstacle is management mindset.

We’re working on one project where the senior management initially poo-poo’d our recommendation to set up an online community for employees to talk about the issues. “They hardly use email.”  “They won’t participate.” ” What if someone starts trouble.” “This is more of a working class crowd, they’re not into that Web stuff.”

Instead of taking no, we created a private community using Ning, put up some discussion forums, showed it to management and suggested we invite employees in and try it. Worse case, we close it.  The response from employees has been quite good. People are offering insightful ideas in the community. Others are talking to their friends at work not in the community and telling them that management is really trying and the community shows it.

Our only obstacle: the company’s corporate parent blocked employees from being able to access the community at work. So people have to access the community from home and use their personal emails to register. And, due to hourly employee regulations, we have had to explain to folks that the community is optional. If they felt it was mandatory for their jobs and could only access it at home, the lawyers felt that we would be liable; employees might think, they warned, that looking at the community at home was part of work and demand to be paid overtime.

Fortunately, the CEO we’re working with is a risk-taker, squarely focused on his employees and his customers. The lawyers and corporate naysayers are secondary.

We’re working with another client who has yet to embrace social media but whose employees are also being courted by unions.  This company’s lawyers, too, block employees from being able to access the corporate intranet at home due to the same fears about hourly workers. And senior management and the lawyers worry about what might happen if they open up discussions and forums. What if someone starts trouble?

Seems to me that be trouble is already in the works. The risk of not opening up and really listening to employees — and acting on their often very good suggestions or helping them understand why their thoughtful ideas can’t be implemented — is unionization. And with unionization comes management issues of another magnitude.

In reading about the nurses at Kent Hospital it’s clear to me that they love their jobs and have a passion about the hospital.  Same with our clients’ employees. Most people want to work for successful organizations and most willing to share ideas have good ideas.

So why not learn how to really listen so that people are heard?

PS — If anyone has examples of how to get around legal issues, and open up employee communities and corporate Intranets so people can access from home, please share!

I will update the site with a copy here as well, but for now you can listen the interview I did with Barry Judge over at the Marketing 2.0 Blog.

Best Buy’s CMO Barry Judge shared his views on social technology today during an interview with Francois Gossieaux for the Marketing 2.0 community. Some highlights:

Value of social media

1. Dramatic improvement in quality of work through collaboration: “It’s become real clear to me that the best ideas aren’t from any person or even a small group of people. The best ideas come from collaborating among people with multiple points of view, inside and outside the company. Social technology provides the way to scale and do this.”

2. Trust: Building trust and being trusted by consumers: “The other thing I’m real clear about is the value of being transparent and open with people and sharing freely what we know. To build trust you have to be open and transparent. What you write needs to be real.”

3. Reality check, constantly monitoring what’s being said: “I have a ticker tape like feed of what’s being said about Best Buy — good and bad. It reminds everyone that the conversations are happening out there.”

4. Help realize Best Buy’s differentiator, which is its people.  “Social media is about making yourself more interesting, vulnerable, human, open. People want  a relationship with people. Also, social media helps you have more interesting conversations that help you think about ideas differently, and engage with people with similar passions.”

Social media strategies

• Watercooler: internal forum that enables conversations on business topics
• Loop: Red Dragon like capability where ideas are put on loop and people vote on them, and can invest in them. Helps best ideas rise to top.
• Prediction Markets:  Best Buy internal stock market for ideas, e.g., Will Best Buy open a store in China this year? It’s a way to get information to flow throughout the company.
• Blue Shirt Nation:  lifestyle kind of social network for employees, like MySpace. More social, while business issues discussed on Watercooler.
• Open APIs on BestBuy.com: opened up code on bestbuy.com to developers so that they can help company build better utilities/applications for shopping at Best Buy. First large scale retailer to opne up its architecture.
• Sharing casting tapes for commercials: people can comment on commercials as they’re being developed; we get good input about what people have to say — and people get to know more about our strategy by being involved in the advertising process.

We just finished a series of in-depth interviews with companies who are deploying social media as part of their business processes. Most initiatives were marketing based - and none were focused on deploying social media as part of customer service.

What is wrong with that picture?

Customer service is a perfect place for people to use social media - people love helping others, and at some point in the customer lifecycle, most people need help.

It is also ironic to realize that the biggest brand damage often occurs through a poor customer service experience.

So why are marketers not seeing that as a fertile ground for social interactions with customers and as a way to achieve some big marketing and brand benefits? Is it because marketers have grown myopic and no longer consider customer service as part of the brand experience? It is not because marketers do not actually run customer service that they should not consider it as an important touch-point between the company, the product and the customer. When looking at companies like Zappos or Tivo, where they have turned customer service into their main customer touch point, you realize that even if what you’re after is increased word of mouth or increased sales - customer service may be your best avenue.

Maybe I am just missing something…

Or maybe not - in most companies, customer service is treated as an expense, just like marketing…

It really should be an investment!

In reading the book The Happiness Hypothesis by Jonathan Heidt I came across an important element that makes ultrasocial societies work - reciprocity.

Heidt defines ultrasociality as: living in large cooperative societies in which hundreds of thousand of individuals reap the benefits of an extensive division of labor. Only four instances of ultrasociality are in existence - among hymenoptera (ants, bees and wasps), termites, naked mole rats, and humans. In all species but humans the force that makes that possible is the genetics of kin altruism. In an ants nest or a bee nest, everybody is brother and sister, and since you have as much genes in common with your siblings as you have with your children, the evolutionary drive to leave surviving copies of your genes makes those ultrasocial communities work - shared genes equals shared interest.

In societies that are not structured like bee or ant colonies, the shared set of genes that you have with others drops off rather dramatically - while you share 50% of the genes with your children and siblings, you only share 1/8 the genes with your cousins, and 1/32 with second cousins. In a strictly Darwinian calculation, you would only spend as much energy to save 4 of your cousins as you would for 1 child or brother. That is why kin altruism explains only how groups of a few dozen, or perhaps a hundred, animals can work together. The rest would be competitors in the Darwinian sense.

So what happened to human societies? How did we get fictitious families, like the Mafia, where there is no real kinship, even though they talk about the Godfather and being part of the “family”, to work as ultrasocial societies? It’s the old fashioned “you scratch my back and I’ll scratch yours” phenomenon - which is in fact a mindless and automatic reciprocity reflex. if someone receives a favor, that person will be driven to repay that favor - not because it the proper thing to do - but because it is a built-in ethological reflex. It’s tit-for-tat, hardwired in our brains, that opens the possibility of forming cooperative relationships with strangers. Now mind you that tit-for-tat can only explain the existence of social groups up to a few hundreds. What allows larger social groups is its co-existence with vengeance, gratitude and gossip as tools that reduce the payoff to cheaters by the cost of making enemies.

Those very primitive hardwired human behaviors confirm a lot about what makes online communities work as well - the importance of reputation, the importance of self-organized possis to police communities, the importance of helping one another as a currency, and the failure of communities where reciprocity is not an integral component of the community.

What’s stopping marketing innovation?  This cartoon depicts the biggest obstacle for most big companies.

I have written about the Fiskateer community many times, and finaly got a chance to interview the people who are responsible for making this community happen.

I will extract some blog posts from the interview in the near future, but for now you can listen to interview below.

I am scheduled to travel to Belgium to visit my father who was diagnosed with two aneurisms and is facing a fairly complex and dangerous operation later this month. When he had an aneurism 17 years ago it burst and not only did he almost lose his live - he lost his business.

So I made reservations on Air France to go visit, and when I called my parents today with my itinerary I realized that I had made a mistake. I wanted to come back on the 27th and for some reason when I ordered through airfrance.com they booked me a train from Brussels to Parin on the 27th and a flight on the 28th. Now I order stuff online all the time, and if there is an overnight situation I expect the site to alert me to this. I called Air France, hoping that they would rectify the situation, as I do not want to spend a night around the Paris Airport and also need to be back in the US on the 27th. When I heard that they had plenty of room on the 27th, I thought it would be a no-brainer for them to change my reservation - and was even prepared to pay a fine for what surely was their screwed up user interface. But no, they could not change it - I begged, played nice, tried the empathy card - but the answer was no way, non, merde…you lose your ticket and buy a new one (which I did - but on Air Lingus - hoping the Irish are somewhat better).

Now my family has been using Air France ever since the Belgian Airline went out of business 6 or so years ago.

In these bad economic times, you would expect companies whose service are going to be the first to be cut from personal and business budgets to do everything they can to hold on to their customers - especially if it does not cost them a dime to accommodate the change request which would satisfy the customer, and perhaps make up for their deficient product offering.

I am flabbergasted - but should I? You could blame customer service arrogance, something that the French have been accused of, but in the end it has become an industry-wide behavioral attitude.

How do we customers give them the middle finger?