Santa Clara University


RCME Presents


Charlene Li 210Charlene Li

Transforming Leadership with Social Technology

by Debra Black 

If your customers are using social technology, and you're not, what does that say about your ability to meet them and reach them?

On October 24, Charlene Li brought strategic advice about social technologies to members of the Retail Consortium for Management Education (RCME). Li is the founder of the Altimeter Group, a research-based advisory firm, and the author of Open Leadership: How Social Technology Can Transform The Way You Lead.

From the start, Li acknowledged that it is impossible, even as an analyst, to stay on top of all the social technologies out there.

"When it comes to your strategy, you have to prioritize," she said. "The pace of technology change gives us a feeling of being out of control. This is the biggest issue many people in business have. You are trained to manage things, reduce the risk, make sure that things come out a certain way. Yet the reality is that we are very much not in control of so many new technologies."

Li reminded RCME members how recent all of these social technologies really are. It was in January 2007 that the iPhone came out, transforming the way we use social and mobile technologies.

Today, people can say anything they want about your brand online. How can companies get rid of negative comments? "You can't," says Li. "You can do your best to prevent them, but inevitably they will become a part of life."

She gave the example of Dell's "flaming notebook" and lithium battery problem of five years ago. Rather than trying to ignore the issue, Dell engaged customers via its new blog and responded to each posting, updating customers on how the company was solving the problem.

"How many of you work for a company that would do this? Have we really advanced in the way we talk with customers?" asked Li.

Social media helps brands listen and respond. But companies still need to work on really connecting with their customers and employees to reach out and build trust, said Li. And at the center of this, is the realization that you are not in control.

Li talked about creating an open strategy, changes in organization and leadership, and getting prepared.


The key thing is to have a very clear strategic goal in mind when using social technologies. Companies need to align their social media strategy with their key business goals.

Li discussed four goals that define an "open strategy" and how social media can support those goals.

Learn: Take what you hear online and take some action. Companies vary in terms of their maturity in monitoring tools. Some companies use simple tracking with Twitter Search or Google Search, looking for brand mentions. Other companies are doing deeper monitoring, and very advanced companies are now using sophisticated predictive analytics to anticipate demand and make nearly real-time course corrections.

Dialog: In most companies, communication is still based on the way traditional advertising works: creating a message, launching it, and shouting it out. This obviously doesn't work anymore, because people don't like being messaged to. The best kind of dialog happens when it's interactive. The new way to think: it is about conversations, not about the messages.

"This is hard for marketing departments, particularly. Because everything inside the marketing department is geared toward creating messages. The new normal is human, not corporate. So that voice that you have in the dialog is very important. It also needs to be very continuous, not episodic. Because this is a relationship that doesn't end, hopefully," said Li.

Support: By giving a human voice to your company, you can save relationships with customers who have problems. Responding to comments on Twitter shows a commitment to making sure these conversations take place. Some companies think of their online communities strategically to gain ideas, share best practices, and help with problem solving.

Innovate: Over 100 ideas have been implemented at Starbucks based on innovations suggested by customers. P&G has made outside-in innovation a priority. Anyone can submit an innovation, browse through what the company needs, or repurpose unused technologies. A company called ModCloth lets customers comment on new products to gain insight into their marketing potential.


Li defines leadership as "having the confidence and humility to give up the need to be in control, while inspiring commitment from people to accomplish goals."

"When it comes to social media, we have followers in terms of Facebook and Twitter.And the requirement here is having the confidence to be able to write posts like "Flaming Notebook" and the humility to understand that you aren't in control, fundamentally.

"There are two traits of (open) leaders that I think are important: authenticity and transparency. Authenticity is not what you are; it is how you are perceived. You've got to develop that relationship where authenticity can come through. Transparency is the other side of this. I'm not saying you have to be 100 percent transparent; no company can be. So how transparent do you need to be in order to build that relationship?"

Once you understand how open you are, you can then figure out how open you need to be to achieve your goals.

"If somebody were standing right here, how would you talk to them? And how would you treat them? And it should be the same way when it comes to social media. What kind of relationship do you really want? Do you just want me as a Twitter follower, or do you really care about me and want a real conversation?" said Li.

Encourage dialog inside the company with enterprise social networking tools to get connected as a company and break down silos, said Li. These tools bring on new definitions of leadership.

"Leadership is not about your title, where you sit in terms of the hierarchy, the people you manage or the budget you manage. It is simply the fact that people follow you," she said. "It's a new skill and it's going to be extremely valuable to the point where I believe companies who harness this, will have a significant competitive advantage over companies who can't."


The most important thing is to create a culture of sharing. Sharing builds relationships. If you don't have a culture of sharing inside your organization, you must build it. And make it a daily habit. "In most companies, our sharing muscles are very, very flabby. We don't know how to share," said Li.

Discipline is needed to succeed. If your relationships inside social media are important, then you need to have the same kind of discipline that you apply to other channels. It's important enough now that it can't just be ad hoc anymore.

Ask the right questions about value.Fundamentally, relationships are really, really hard to measure. How do you measure relationships inside your organization? Using social media, you can actually measure a tremendous amount.

Prepare for failure. The strength of a relationship is based on how resilient it is in the face of problems. Is there trust? Is there depth? It's not about avoiding all those negative comments. "When those rough times come, are we prepared enough, are we strong enough, do we trust enough in each other to be able to move forward? Or is it so fragile and brittle that the minute somebody else shows up with a better deal, or the minute something goes wrong, I'm going to leave you?"

When faced with a new technology, ask: How does it help us accomplish our goals? How does it help us build better and deeper relationships with our customers or employees?

"In the end, I do believe it is not about the technology. It is about the relationships. Technologies are changing very quickly; there's new ones constantly coming along. But if you keep at the center that it's about relationships, then you can form a really strong strategy. "

Printer-friendly format
© 2014 Santa Clara University | | Leavey School of Business | Retail Management Institute
Lucas Hall 111 | Contact Retail Management Institute | 500 El Camino Real | Santa Clara, California 95053 | 408-554-4960 |Technical issues? Contact the Business School Web Manager
Other SCU Information