Business Insight Zone

Right off the bat, I should emphasize that South by Southwest isn’t all parties and booze — though you could be forgiven for thinking so, the way that some people approach it and talk about it. For me, SXSW is about people and ideas, and about making connections between people and ideas, whether you’ve known them for a long time, or just became acquainted with them.

Someone asked me on Twitter to give my top three observations in the span of one tweet. This is what I said:

Top 3 SXSW takeaways: 1. sidebar conversations are better than (most) panels, 2. execution trumps ideas, 3. data has awesome power.

I’ll expand on these in order.

1. Sidebar conversations are better than (most) panels. Some of the formal sessions I attended — for instance Jason Fried’s and Dan Ariely’s — were quite good because they were both (a) full of interesting and useful ideas, and (b) delivered well. But for the most part, at least in the sessions I sampled, the content of the panels wasn’t that great. Maybe I chose poorly off the menu, but I heard little that shook up my thinking or taught me something radically new.By contrast, the conversations I had in the hallways and in the bloggers’ lounge and over lunch and on barstools were excellent. These are the locations where you get a chance to connect with people one-on-one or in small groups. These are the occasions when you can laugh together, share worldviews, explore ideas, and generally get the inside dope about what professionals in the interactive space are thinking and doing.

   This reminds me of social media as a whole: when we try to be formal about it, something good could come of it, but it typically doesn’t work as well as the informal free flow of people talking back and forth.

2. Execution triumphs ideas. I’m thinking of this in two veins:First, plenty of the panels on the SXSW program might be great if they were simply delivered well — but they’re not. For our own panel, my co-conspirators and I made a point of keeping things fun, light, and highly engaging at the same time that we delivered relevant information. But my friends and I are also veteran presenters and professional communicators, so we have a leg up. Several years of attending SXSW Interactive have shown me that too many presenters are brilliant but bad at presenting, and that too many panels are potentially interesting but clumsily organized.

   Possibly the most egregious example of this came in Monday’s big keynote interview with Evan Williams, the CEO of Twitter. “Ev” is a demigod for the Interactive audience, so the organizers gave him the coveted 2 p.m timeslot, with no counter-programming to contend with. In the interview, he came across as intelligent and thoughtful, if slightly boring. But he’s an entrepreneur, not a showman. The real problem was in the choice of his interlocutor, Umair Haque. Haque is a researcher at Harvard, and his blog for the Harvard Business Review is compelling, thorny, and frequently brilliant. But he was totally miscast as Williams’ interviewer.

   In cases like this, the subject of the interview is the big audience draw, but the interviewer is actually more important for making the session run well. Great interviewers like Johnny Carson, Terri Gross, and Charlie Rose have been proving this for years, and last year’s keynote interview of Chris Anderson by Guy Kawasaki showed how it can be done at a high level for the Interactive crowd. Haque is super-duper-smart, but he came off terribly in his interview with Williams, to the point that more than one person compared him to a “lapdog” in my hearing after the session.

   Second, and more broadly, SXSW wants to roll out gee-whiz ideas to its audience, and sometimes it actually does this — as it did two years ago when Twitter hit an inflection point with the Interactive crowd. But for many of us using social media for business, the need now is to talk candidly at the case-study level — what’s working and what isn’t — rather than mooning over the newest untested idea / technology / startup / pipe-dream.

   Maybe there was more focus on business execution that I realized. Maybe I just didn’t find the panels that would have been most relevant for the way I do my job every day. But it would have been nice if more of what I saw of the formal programming had matched the level of practical, professional engagement that I came across in my hallway conversations.

3. Data has awesome power. Maybe I said this because I’ve been writing about it anyway. For certain, if I had been making this point in something longer than a tweet, I would have talked about how today’s tidal wave of data interacts with our cognitive biases. (These biases were at the core of Dan Ariely’s absorbing SXSW lecture.) But I’ll have a lot more to say about this going forward, since I believe that there is huge opportunity — untold opportunity — for companies (including, full disclosure, Hoover’s) to harness data in wayso we’re just starting to imagine. It won’t surprise me if many of the technologies for doing this — and many of the companies that do this — come to light in future iterations of SXSW Interactive.

So, that’s my take on SXSW 2010 a couple of days later. If you attended the conference this year, what did you think? And if you sat it out, what did you think from afar? Or what questions about it could I answer for you?

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Photo by dpstyles™.

If you’re at South by Southwest, feel free to get in touch on Twitter via @Hoovers. I’d love to meet as many of our customers and audience members as I can while the conference is going on.

Meanwhile, posting here is likely to remain light for the next couple of days. It’s been a great conference so far, but I’m focused on getting the most out of it in the moment (and taking plenty of notes for later), rather than documenting it publicly as I go.

Hope to see you at the Convention Center!

Have I mentioned that I’ll be at South by Southwest Interactive? And that I’m speaking there, about 165 hours from now? Oh, I have?

Well, here’s me testing out my new Flip camera, which I plan to use for all sorts of informative ribaldry during the five days of idea-gobbling madness that is SXSW. Roll tape!

(Click here if the embedded video doesn’t work.)

Future installments will be more, y’know, interesting.

And that’s where YOU come in . . . What would you like to see me video at SXSW?

A friend of mine e-mailed to let me know he’ll be attending SXSW Interactive for the first time this year. He asked if I had any advice for him. I, being lazy wanting to show the awesome power of crowdsourcing in turn, asked my friends on Twitter — and this is what they said:

• Kim Hollenshead: Sign up for more discussions and events then you think you have time for.
• Alex Jones: SXSW is all about flow and new connections. Don’t commit to anything in advance.
• Austin Kleon: Take care of yourself. Take a nap. Eat lunch. Good God, I got exhausted last year.
• Jim Storer: Drink water, nap if you can, wear comfortable shoes, bring a power strip, talk w/ strangers, be nice, drink more water.
• John McTigue: My advice to newb: be yourself. be honest and fair. do your homework. #SXSW
• Mike Neumann: Have a plan, but don’t get too attached to it. Think of it as Jazz sheet music. You know you’re going to improvise, a lot.
• Chad Northrup: I won’t be there, but the point about not looking past who you’re talking to for someone more important seems big to me.
• Pat Ramsey: Stay flexible & do not be afraid to toss your schedule out the window if a great opportunity comes up.
• Kevin Lawver: SxSW Noob Advice: Say hi to your heroes, avoid the organized parties, don’t go to panels on stuff you already know & have fun!

(Kevin, it should be noted, has been coming to SXSW Interactive as long as anybody — so he knows how to do it right.)

To all of this advice, I would add my own:

• Free up your life schedule. This may apply more to Austinites than others, since we can be called back to the office, the house, etc. But SXSW works best when you don’t have to watch the clock. Just book all the days you’ll be there as “Out of Office,” and let your workmates / loved ones know that they should treat those days as though you were on the road at a conference in, say, Minneapolis. SXSW is intense enough that you don’t want you head to be somewhere else while you’re there.

I’d also point you to two more excellent sources:

1. 10 Ways to Make the Most of SXSW — In this post, Brian Dresher of USA TODAY goes into more detail on several of the points listed above (great minds think alike!), plus several more that weren’t mentioned here.
2. How do YOU rawk SXSW? — On the SXSW Baby! discussion board, several SXSW veterans offer their best tips for getting the most out of the event.

If you’re a SXSW veteran, what’s your advice for newcomers? And if you’re a newbie, what else do you want to know?

My previous posts in this vein talked about using business information to create value for customers and moving from data to action in your use of business information. Now I’ll address why you need to get ahead on these issues now if you want to surf to business success on the world’s rising tide of data, rather than being swept away by it.

The Floodtide of Data

For years now, we’ve understood that information growth is exploding. The amount of data created and recorded digitally does not merely increase every year — it increases exponentially. Smart people are using this wealth of data in wonderful ways, for instance by bringing revolutionary changes to some fields of science.

In the business world, new social networks are creating huge flows of information, including lots of it that’s useful for commercial purposes — ranging from consumer behavioral modeling to straightforward competitive intelligence research.

On the personal front, it’s tempting to think of all of this as “information overload” and assume that being overloaded is inevitable, given the amount of information out there. But Clay Shirky has suggested that “filter failure” is the more useful term. It’s fruitless to blame the information for coming at you in waves when it’s you who signed on for it. In any event, it’s crucial that we develop better filters both personally and for our businesses, since the flow of information is only going to get larger — MUCH larger.

So we need to change our thinking instead. As individuals, we can apply better practices of information hygiene to our inboxes and the like. (Entrepreneur Ash Maurya has some good suggestions about how to do this.) As organizations, we must practice better information hygiene across larger systems, or else we’ll become victims of information overload rather than profiting from information abundance.

Using Better Systems — and Using Systems Better

The same technological revolution that unleashed all of this information on us promises to help us control it as well, but only if we’re willing to grapple with its complexities.

When I talk about complexity here, by no means do I mean only the technical details of systems run by your IT department. The technological aspect certainly is complex, because what IT implements — CRMs, ERPs, data warehouses, analytics, etc. — weaves into the operational fabric of every department in your company. Beyond that, though, it stands to affect the work (and maybe the psyche) of virtually every individual in your company. That’s serious complexity — and if you don’t get ahead of it, you’re sunk.

The easy case in point is the way that CRM systems often run aground within sales departments. If they’re not brought along the right way, sales reps will distrust CRMs, fearing that they’ll hinder rather than help them make their numbers.

The solution isn’t simply to ignore such attitudes and install a slicker CRM. Social CRMs, for example, can do a better job of using social-media information to empower your sales team. But they’re not a magic bullet, and if you don’t use your current CRM well, you can’t expect a social CRM to bail you out. Rather, you have to take on some hard managerial work to instill open communication habits, organizational discipline, and acceptance of change. Only then will you get salespeople, sales managers, and everyone else in the organization pulling in the same direction. That’s when you’ll get the most out of any technology, whether it’s the latest SCRM or pencil and paper.

The key here is to understand this:

Even the best systems can’t save you from the flood of data if you don’t use them in ways that support your business strategy and your customers’ needs.

What we have to do is to rethink all the ways that our business information systems interact with the fundamentals of our businesses, and then revise our approach to data. As CRM strategist Esteban Kolsky puts it, “All the data we are capturing is becoming too much for our antiquated models of data management to handle.” We have to bring our businesses practices around data firmly into the 21st century.

No one said it would be easy — but it’s worth it.

Marketplace Dynamics

Not only is it worth it, you may have no choice about it if you want to stay competitive. Customers and prospects have too many ways to filter you out these days, and their expectations of you are higher than ever. You need to know who they are and what they want so that you can approach them in relevant ways every time you make contact.

There is also increasing pressure from competitors. Progressive-thinking companies can get a jump on their markets if they’re early to grasp the advantages that go along with data abundance. Laggards will struggle to keep their heads above water.

What’s required of smart companies in this environment?

1. Understanding the fundamental issues: the massive growth of data, the need for better filters and systems to pick out the right data and put it to use, the consequences for early and late adopters in the marketplace.
2. Flexibility of thinking. Your future use of data — even the fundamental models for how you collect and analyze it — may not look like what came before. That’s fine — if you’re ready for it.
3. A willingness to experiment. Finding the “right” answers to all of these challenges is likely to be an ongoing journey marked by plenty of trial and error, not something you’ll hammer out in a day-long summit between IT, operations, marketing, and sales. Understand in advance that successful approaches to this new world of information and technology will be marked by failed experiments on the way, and be ready to dust yourself off and try again.

The data flood can be your friend. But you must work out how to filter, analyze, and use the abundance of good data contained in it — all in support of your company’s fundamental strategy and the value propositions that you present to customers. Otherwise, you’ll be swept away.

What are YOU doing to surf the floodtide of data?

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Image from rappensuncle, used under a CC-Share Alike license.

Great comment today from Nancy Bailey on my May 2009 post, “Twitter follow-backs: the 5-step lightning approach.” Here’s what she said:

I am fairly new to twitter so I apologize if this is a lame question. I have a company account where my staff posts job openings, news etc. We really don’t want to follow anyone but ourselves but gain lots of followers. Each of my staff has a personal account where they can follow Ashton [Kutcher] and whomever they please. Every week I go on there and find that my company account is following all sorts fo random people. Is this some sort of auto-follow? How can I stop this? Is this is even a wise approach? What would the downside be of having a company follow random people?

Lots of things to chew on there, which is why I’m discussing this in its own post rather than in the original comment thread. Let’s take them in order.

I am fairly new to twitter so I apologize if this is a lame question.

Hey, when it comes to the business use of social media, we’re all fairly new. So, no worries.

I have a company account where my staff posts job openings, news etc.

Great . . . but from looking at the Hire Profile Twitter account, I immediately wonder whether you wouldn’t get more out of Twitter by using it more interactively. You have only a handful of posts that reference other Twitter users, but in my experience (which, if I say so myself, is considerable) interacting with others on Twitter is the royal road to gaining traction there.

We really don’t want to follow anyone but ourselves but gain lots of followers.

Big Question #1: Why? Twitter is of some — but limited — use as a pure broadcast medium. Most people use it for both exposure to interesting content and interaction. If you don’t follow anyone and don’t interact, you’re missing out on a big part of the appeal — and, potentially, a big part of the benefit for your business.

Big Question #2: How? The accounts that follow few but attract many tend to be in the vein of Mashable, Conan O’Brien, and The New York Times. In other words, they have a big footprint before they ever get to Twitter. For the rest of us, following a fair number of people is one of the key ingredients in the recipe for drawing lots of followers. (By the way, this doesn’t mean you need to follow everyone who follows you — I don’t.)

Each of my staff has a personal account where they can follow Ashton and whomever they please.

You’re way ahead of some employers, who blindly prohibit employees from accessing social networks despite the value (including business value) that can be derived from them.

Every week I go on there and find that my company account is following all sorts of random people. Is this some sort of auto-follow? How can I stop this?

It does sound like you got signed on to an auto-follow program at some point, because Twitter won’t follow anyone for you automatically.

As for how to fix: go into your Twitter account — via the Twitter site — click on “Settings,” and then click on “Connections.” It will show you which applications have access to your Twitter account. From there, it’s easy to revoke access for any or all of those apps.

Is this is even a wise approach? What would the downside be of having a company follow random people?

The two big downsides would be:

1. Twitter spam, where malicious (or just obnoxious) followers send you Twitter direct messages you don’t want.
2. Wasted time. If you’re using Twitter to promote your business, it makes sense to interact with business pros who share interests with your firm.

So, Nancy, does this help? What other questions do you have?

And to the rest of you in the audience — what advice would you add for Nancy? How can she get the most out of Twitter without making it her full-time job?

There’s a useful model from the realms of information science and knowledge management known as DIKW. It can help us think better about how we use business information to succeed.

The Basics

The letters stand for the four levels of a hierarchy, like this:

You don’t have to put it into a pyramid — some people prefer a chain, flow diagram, or something else — but the basic idea is that each level builds on the one below it. Before we get to examples and how all of this relates to taking action in business, here’s the nickel tour of the four levels:

• Data can be thought of as raw facts — words, numbers, sights, sounds, and so on.
• Information arises when meaning or relevance emerges from the raw facts.
• Knowledge comes when we situate information in the context of experience, expertise, or systematic study. In other words, information helps create knowledge when it’s synthesized and related within some larger framework of thought.
• Wisdom is our judgment of (a) what knowledge means or (b) what to do about knowledge with reference to our deeper values (for example ethical or moral considerations), to our desired highest outcomes, et cetera.

Some thinkers, notably the systems theorist Russell Ackoff, sandwich another level, Understanding, between Knowledge and Wisdom. But as Gene Bellinger points out, both connectedness and understanding increase at every level as you ascend through the DIKW model.

Playing Detective

Now, I’m sure I’m going to make any information scientists or epistemologists in the audience shudder as I trample on the fine distinctions of D, I, K, and W, but here’s my informal analogy for it: I think of DIKW through the lens of a detective story.

Picture me as Hercule Poirot . . .

(Note: in real life, I’m younger, taller, thinner, less well-dressed, not Belgian, and have much more hair.)

Picture the drawing room of a country estate. Monsieur Poirot has called together all the interested parties so that he can reveal the identity of the murderer. As he speaks, there is a noise in the background. What does it mean?

• Data = the noise in the background.
• Information = realization that the noise comes from a car engine being revved.
• Knowledge = Poirot says, “Yes, it is Professor FitzGibbon in his racing Jaguar, trying to make good his escape.”
• Wisdom = When some of the party tries to run out and catch the professor, Poirot says, “Do not concern yourselves — we need not chase him. The police have blocked all the roads.”

If my philosophical precision is awry from one step to the next, the main point is still clear — you’re moving up a chain of value from raw data — which often has little use in itself — toward greater context.

• The data at hand (noises in background) becomes real information when it’s put in the context of other facts (a lifetime of hearing car engines).
• That information becomes working knowledge in the context of the larger situation and other information (Prof. FitzGibbon is my prime suspect; the noise is coming from where I saw his Jaguar parked earlier).
• My knowledge of the situation, in the context of my professional experience (decades of detective work), prior actions (coordinated a blockade with the police), and overriding goals (catch the murderer), gives me wisdom about my best course of action in the moment.

This last step not only tells me — and those listening to me — that I need not panic; it also tells me what not to do. For example, my experience tells me that if I try to stop FitzGibbon myself, he might run me down with the car, and that the surest way to stop him now is to let the police do it.

From Wisdom to Action in Business

Note that my wisdom about the situation also implies my best course of action. Some thinkers on DIKW have echoed Peter Drucker when they point out that knowledge is about knowing how to do things right, whereas wisdom is about knowing the right things to do.

Since it can never be said too much, let’s pause to emphasize this point:

In business, we should be working every minute of the day to do the right things.

So let’s take my Poirot example and translate it to a business setting:

• Data = the numbers on a spreadsheet.
• Information = the value of Customer X’s account has declined for three straight years.
• Knowledge = WHY they downgraded.
• Wisdom = what to DO about it.

I’ve been an information merchant for a long time, but I can’t know all the ins and outs of every company, every industry, every situation, so I can’t play Poirot with your personal business challenges. In other words, I can’t tell you how to win more business from Customer X in particular — and probably no one outside your own company can.

More to the point, even having the wisdom to know what to do isn’t the same thing as doing it. You have to have everything in place — personal and organizational discipline, healthy working practices, good communications, etc. — to support action . . . and then you must TAKE action.

Fostering Action at Every Point

I can, however, suggest steps to take at the lower levels of the DIKW pyramid so that you’re armed to take the best actions with every customer you serve. The overriding goal is to reduce the friction and increase the utility at each level so that you’re able to move briskly up the pyramid — and, ultimately, to act swiftly to meet customers’ needs and build your business.

Here are a few key ideas to get you started:

• You need good data, and you need it more than once. If your company has a hard time gathering and handling data — about prospects, customers, the industries you serve, market conditions, or whatever — you’ll lose time and money as you try to derive relevant, useful information from that data. Beyond that, you have to be ready to gather data more often than ever, given the pace and toughness of today’s economy.
• Your own employees might not be the best ones to collect that data. Sure, you’d expect me to say so, given that I worked for several years in Hoover’s editorial department, painstakingly collecting and organizing information on many companies. But there’s a reason customers keep coming back to us, and its the same reason that keeps other high-quality providers of business information thriving within their market niches: specialization wins. Let your sellers sell; let your accountants keep accounts; let your marketers market your wares. And find a good business information provider — whether it’s us or whoever else meets your specialized needs — to handle the data load.
• You need data organized into useful information, and information organized so that it improves your customer and industry knowledge. We can help with this, certainly, but an unavoidable part of this work will happen inside the walls of your own enterprise. If your own organization fails to look forward by coordinating how information flows from sources to users, from one department to another, you’ll end up looking back with regrets about the opportunities you missed by being haphazard. You don’t need a magic bullet — you need the hard work of good organization.
• Your tools must work in unison. This is why we (and some other forward-looking information providers) have done so much to integrate our information into popular CRM systems: it’s not enough that the information exists somewhere and that you hypothetically have access to it — you have to have it available at the point of need so that you — or your busy salespeople, marketers, researchers, et al. — can use it on the spot. But again, this isn’t about signing up for Access Hoover’s and then forgetting all your cares; as anyone who’s ever implemented a CRM system will tell you, there’s a lot of technical and change-management work that goes along with it.

In the next installment of this series, I’ll talk about why it’s more important than ever to think ahead in your use of data for business.

Meanwhile, what else would you recommend for making sure the DIKW model translates into ACTION for your organization?

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Related posts:

• Previously in this series: Does your use of business information lead you back to CUSTOMERS?
• Wikipedia’s entry on DIKW. (Warning: it’s heavy on epistemology.)
• Bellinger, Castro, and Mills on DIKW.
• Nikhil Sharma, The Origin of the “Data Information Knowledge Wisdom” Hierarchy

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Image source for David Suchet as Poirot.

After talking about how I follow up with new acquaintances when I get home from attending a conference, I got feedback from a friend of mine who manages the neat perfecta of being (a) a nifty human being, and (b) a stone-cold sales pro. She elaborated on a practice of hers that I also follow, but that I didn’t mention in the post.

Here’s what we both do:

1. As we’re talking to the new acquaintance, or shortly thereafter, we jot down something about them that’s not related to business. My friend called this “some non-business rapport-building topic I’ve discussed with the person.” I might call it “common ground.”
2. When we follow up with them later, we include some reference to this shared interest. My own follow-ups have included things like “Next time you’re in Austin, I’ll be sure to take you out for some REAL Texas barbecue” and “It’s always great to find someone who shares my affection for the Blue Ridge Mountains.”

As my friend points out — and as I’ve experienced myself — this kind of contact makes the other person feel special, and that we’ve connected on a personal level, whether or not any business arises from that connection.

I like doing business, and I like connecting with people — so why not operate in a way that satisfies both impulses at once?

So how do you make personal connections with business acquaintances?

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Image by Victor Bezrukov.