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Transform the Way You Lead — Charlene Li on Open Leadership

June 24, 2011

Linkage’s Rich Rosier sat down with Charlene Li following her recent Thought Leader Series broadcast to discuss the impact social technologies are having on organizations nationwide. Charlene Li is founder of Altimeter Group and the author of the New York Times bestseller, Open Leadership: How Social Technology Can Transform the Ways Your Lead.

Rich Rosier: What does the future hold or where is this all going next?

Charlene Li: Well I do believe that social technologies will be like air. That they will be anywhere and everywhere that people want them to be, and I think that it fundamentally will change the relationship. One example I talked about is BestBuy and 12 Force. I actually went and used that program. I wanted to buy a smart phone with parental controls for my son. I had my location turned on, and somebody wrote back to me: “Oh I’m at your local BestBuy store. I think you should get an Android phone. Why don’t you and your son come by the local store and we can look at phones together?” That was pretty impressive, wasn’t it? What struck me is that I was pretty impressed by that too. But the fact is that in the future, that will just be normal. It would just be expected that you will know who I am…that when I walk into my grocery store, they will know who I am because my phone would have actually told them since my identity is on there. And they could give me coupons at the beginning of my shopping trip rather than at the end after I pay. This is a fantastic opportunity. I would expect that the companies will also be there with my social graph—my social network being a social entity. I think that’s the real opportunity. But that means you can’t just be focusing only on your site or on your Facebook account. You have to go where your customers are—and they are everywhere.

Rich Rosier: Now we’ve seen a lot in the media about the issues of privacy and asking how much information do we really want these companies to know about us. Where are you seeing that trend going?

Charlene Li: Make a very clear distinction between privacy and permissions. I am of the mind that the only thing that would be private in the future is what is in my head—because the minute I say it, the minute I act or do anything, it becomes public/part of the public record. I can’t walk down the street in London without every single step being recorded by a camera now. So every phone conversation because it is digitized can be recorded and archived. So, yes I will give permission to the grocery store to check that information to give me great deals, it’s worth it. People will give away private information I think for free shipping frankly. The other way to think about privacy is that our norms change very quickly. When caller ID came out people originally said; “Oh this is such a violation of privacy that people could see who was calling” remember that? And now what happens when you get an unknown caller?

Rich Rosier: You don’t answer it.

Charlene Li: You don’t answer it. It is a 180 degree flip, right? It took 8 years. And we are about maybe 4 years into the Facebook era—2 for most people. Our norms of this are just at the very beginning of what we feel comfortable sharing, and what is private and what’s public even on Facebook has shifted in those couple of years.

Open Leadership is having the confidence and humility to give up the need to be in control while inspiring commitment from people to accomplish goals. — Charlene Li

Rich Rosier: The fear of admitting failure is discussed quite a lot in the book. Did you get any direct responses from leaders about why it is so hard for them to show weaknesses and to acknowledge failure?

Charlene Li: This has been the primary reason why I wrote the book. And the failure chapter is actually my favorite part because leader after leader would come up and be like “Yeah, yeah, I know I have to do this but I don’t like this feeling in the pit of my stomach. And I tell you, every single time I post—whether it be on Facebook, Twitter, blog—I get that pit in my stomach still.” And you get used to it—you know how to push it aside—but until you develop that confidence, you don’t push that publish button very easily. But I still remember my very first blog post, very nerve racking, I felt very judged. Oh my God I’m so glad it’s over. And for executives who’ve never done this before it is absolutely terrifying.

Rich Rosier: And that’s just because you have no control about how that message is going to be received?

Charlene Li: Mm-hmm—but then you sit back and realize: “Hey this is my life.”

Rich Rosier: Yes, as long as I’m being authentic it’s me. If you were in the job market today, what questions would you ask in an interview to determine the degree of open leadership that exists in that company?

Charlene Li: I would ask about what information I will receive on a regular basis? How much communication is actually going on? Can I use these social technologies to connect with each other, to connect with customers? What’s your mindset and philosophy? Show me how assertive you want to be in terms of developing these sorts of relationships. Are they important to you or not? And then look at the decision making, who is involved? How do you decide who’s involved? Is it managed in one area? Or do I have a chance to be involved? What do I want to do? How involved do I want to be in fitting into that? So those are ways to assess the openness and you may actually have a different level of openness. Some people walk into open organizations and feel very uncomfortable. They actually want more structure than sometimes an open organization can give them.

Rich Rosier: Are you seeing this becoming an important criterion for all generations and certainly the younger generation in terms of who they want to work for?

Charlene Li: Yes definitely, especially when they walk in and one of the first questions they ask is does the company use social technologies? Do you encourage it? Because if you don’t I can’t work here. Because this is how I work, how I develop relationships and how I get things done. Now if you ban them, then I don’t know how to work.

Rich Rosier: As a follow-up to that – I can imagine as you’re saying that there’s a lot of the older generation in management seats or leadership seats saying: “Yeah but if they’re using this technology for non-business reasons how unproductive is that. How do you get that balancing act right?”

Charlene Li: Well the number one reason why people block Facebook and all these social technologies is productivity reasons. And I go: “This is not a technology problem, this is a management problem.” Then fix that issue, don’t block Facebook. That’s like saying I’m gonna take away your cell phone because you’re talking on it too much. And the reality is whenever you block these technologies inside an organization guess what people are going to do? They get smart phones, they go take long smoking breaks and they go to the bathroom a lot. So you’re not actually blocking and frankly they just do it at home anyways.

Rich Rosier: Exactly—so it goes back to the inspiration piece that managers and leaders have to have anyway if they’re going to get that discretionary effort out of folks.

Charlene Li: Exactly.

Rich Rosier: Great we have time for one last question. When you say customer centric, do any particular industries come to mind? Is retail or technology better for example, or are all companies trying to head in that very customer centric direction?

Charlene Li: It is the thing that you hear from more and more companies saying we need to become more company centric across the board. BDP, international, financial services; it doesn’t matter it is a constant refrain from every single business. And so that’s why I say LEARN is the most important objective of the four, because even if you never feel comfortable saying a single thing, you at least listen to what your customers are saying to you and it is so powerful.

Rich Rosier: And to do that without this channel leaves a big gap in the learning.

Charlene Li: You can do it—we’ve done it with surveys and focus groups but they are very expensive and they take a huge amount of time. I love focus groups, but it is 20 people for 2 hours in a room in an artificial environment. You could just go do a search on any of these technologies for free and in real time. You get responses and if you have created private communities, you can just go ask them the same questions you were asking the focus groups in real time.

Rich Rosier: Charlene, thanks so much. Thank you for sharing you insights and ideas around this very important trend.

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