Money is the root of all evil. It is also the foundation upon which economies are built. Certainly, it's high on the list of objectives for most organizations. Hey, even not-for-profits have to cover costs.
So how do we reconcile this yearning for earning with such laudable corporate mottos as "do no evil"? Companies with good reputations generally earn them by delivering genuine value to customers. These, and others, often offset craven capitalistic endeavors by doing good works. Value and giving back are certainly admirable tactics, and I would not discourage any company from following this righteous path.
Yet while profitability is likely to remain the primary destination for most companies, focusing on the customer first is the only way to get there. The tricky part is that, in our increasingly socially mediated business world, today's customer is no longer satisfied with transaction-based systems-straight up exchanges of money for goods and services.
Today, the customer wants, even expects, to be part of the process. We have to move past our traditional transaction-based business models and instead invest in interactive ones. Keep in mind that our consumer base is increasingly peopled by the Digital Native generation, which has grown up in social networking environments. From comments on products to Facebook likes, LinkedIn Answers, and social tagging and bookmarking, this is a communal generation.
Certainly an increasing number of companies are providing visible ways to interact with customers online through such vehicles as commenting, Twitter exchanges for customer relationship management (CRM), and user-generated or user-selected marketing, advertising, videos, and slogans. Yet going forward, our very business models must be predicated on interaction.
Consider the way Digital Natives innovate on their own terms at Quirky, Inc., which was founded by a 23-year-old entrepreneur as a place for social product development. At Quirky, would-be inventors propose products, the community evaluates them, and winning products get produced and sold. Beyond demonstrating how open this generation is with its (once proprietary) knowledge, Quirky shows how these open processes help bring to market products people are actually interested in buying.
This interactive creation model can be seen in industries from clothing (Threadless) to beer (Brewtopia) and cars (American Motors). It is also making inroads into publishing. And, according to research firm Capgemini, for an increasing number of young users, content gets added value from the ability to discuss it collectively, and younger consumers actually have more confidence in peer-generated or crowdsourced content.
O'Reilly Media, Inc.'s Rough Cuts has been at the forefront of customer engagement during content creation. With its process, book buyers get to read the text as it is being written. Readers comment on the copy, which creates customer engagement and adds value to the text (and delivers ideas for future books) along the way.
Another interesting publishing example comes from two-time Pulitzer Prize winner Pro Publica, Inc., which is an independent, nonprofit newsroom that produces investigative journalism. ProPublica proactively seeks reader interaction in what some call "open source" journalism. For example, it built a news app based upon the massive U.S. Department of Education's Office of Civil Rights data set that incorporates public interaction. The result is not only engagement but also what the editor calls "an auto-story generator."
ProPublica also enlists readers to work alongside its investigative reporters to research and inform news coverage. To do this, ProPublica works with American Public Media's Public Insight Network, which connects journalists in print, online, on TV, and in radio segments with knowledgeable sources. They post queries, and registered members of the network respond with information that is provided to media partners.
Enabling readers to participate in stories--at a minimum through give-and-take comments where readers and writers communicate and by providing mechanisms for reader-uploaded photo galleries--will enhance content offerings and engagement. Tools such as these, as well as more advanced interactive content-creation mechanisms such as commenting on products as they are being created or soliciting input and submissions, will increase interaction with customers, and it is upon this interaction that future success will be based.
We hear a lot about being part of the social media conversation, but conversation is only the start of a relationship. As the Digital Native generation dominates the consumer market and the corner office, business models based upon openness and interaction will engage this generation and fuel genuine long-term relationships that will lead to bottom-line success.