 TheCube at IBM Impact 2014 is brought to you by headline sponsor IBM. Here are your hosts, John Furrier and Paul Gillan. Hey, welcome back everyone here live in Las Vegas for IBM Impact. This is theCUBE, our flagship program where we go out to the events to extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm joined by my co-host here, Paul Gillan with SiliconANGLE. Our next guest, we're excited to have Stanley Carter, GM of the Ecosystem Development a social business evangelist for IBM. Excited to have you here at theCUBE, welcome to theCUBE. Thank you, thanks for having me, I appreciate it. So we've been following your career obviously in social media for quite some time. IBM has been a big leader in social business, obviously a big part of your entire company's kind of religion now, if you think about it. Just a few short years ago, it was kind of experimental. Now social business and social media is at the heart of the value proposition. Give us an update, how's it going? Is it still pumping hard? Is big data lifting that tide or all the above? Well, I would say that social has really become embedded in the fabric of so many companies. In fact, one of the latest studies from IBM show that more companies are doing social inside their four walls now than outside their four walls, which would have been unheard of three or four years ago. And IBM still considers this a true competitive advantage. It is the future of work. It's the way that people are working today. And I'm pleased to say that IDC just named IBM for the fifth year in a row, the number one social business leader globally across the world. And Sandy, I remember attending IBM Connect, I think it was last year and hearing some of the case studies, Caterpillar and McKesson and three Ammons and huge companies. Which are there on? Yeah. That TD Bank North doing big social rollouts. What is it that makes companies successful or not successful with that kind of technology? Because certainly we have heard of the failures as well. What do these big companies do right? Well, I would say there are three things that I think are consistent across the successful deployments. And first one is about culture. So one of my favorite things is culture eats strategy for lunch. And it's not just a saying, if your culture allows for people to communicate and your employees to get out there and speak their subject matter expertise as content, then typically a company is successful. If the management team is very protective and doesn't want to share ideas and it's not invented here, then you're typically not successful. The second big thing I see as being a success criteria is the ability to articulate return on investment. So a lot of these big rollouts, we just heard from Pepsi and Petrobras this year at Connect. And they purposely went out and said, this is the process before, this is what happened after, and here's the measures of success. So they really had a strong way to demonstrate that return on investment. And I think the third thing is that they really used and leveraged engagement and influence. And I know we talked a little bit about influence earlier, but I think doing some of the gamification, so you have a leaderboard, you know who's influential. You curate your content and you get it out to them so that they help impact your customer message or your employee message as well. Those are the three things that I see consistently across those companies who are wildly successful. So I had to ask you about some of the things around social, because we're like, we love the social religion, we love the cubes live, pump it out on all channels. But the crowd is a big part of this now. Crowd sourcing is just a real part of the production. So, I mean, for the first time in business history, you can actually instrument and interact with your customer in a bi-directional production. So how is that changing some of the content development, whether it's content for the company to talk to customers to input for product development? Can you share some perspective on that? Yeah, I mean, I would say that those companies are going to be competitive in the future, have to crowd source. They have to. They have to do what you guys are doing, right? Bring in the crowd to impact what you do and how you do it and listen to the crowd and shape that as you go forward. One of the things that just came out of our IBV study is that those companies who leverage the crowd to drive their products and drive their offerings yield about 62% higher acceptance rate, which you would imagine, right? Because the crowd helped develop it. They're involved, yeah. They're involved, they're engaged, and they're part of the process. I think that whole process needs to be automated and we're seeing a lot more tools come out to automate the ranking of that crowd sourcing and ideation areas where you can vote and you can add on so that it's more automated versus haphazard or ad hoc today. IBM's C-suite study, which came out, I believe early this year, at the end of last year, found for the first time that C-level executives put direct customer involvement in the strategy of the company at the top of their list. Are you finding that this is a transition that executives are making naturally or are they having difficulty with this idea of the customers being involved in the early stage at developing and even marketing the products? You know, I think it depends upon the company, but I'll tell you a funny story. I was flying from New York up to Canada and I was on a plane, got stuck on the tarmac, sitting beside a CEO, and finally after four hours, he turned to me and he said, so what do you do? So I said, oh, we do social visits and I started telling him about all this social stuff. Halfway through my little spiel, he stopped me and he said, wait, we've opted out of social. I'm like, you've what? He said, we've opted out of social. We don't want our customers or anybody commenting on us. And I had to bite my lip so I didn't laugh like, how do you opt out of social, right? So luckily that perfect storm hit for me and I had a little dashboard where I could show him comments customers were making and it just so happened that one of the competitors had done this really funny spoof on him, the CEO of the company. And he said, how did this happen? We opted out of social. And so right there on the plane, he said, hang on a second, call the CMO. Needless to say, he's now adopted social. I think a lot of it comes down to CEOs and senior teams don't understand what social is, right? I mean, if you don't do social, it's hard to explain social, right? They think they can control it in other words. I think they can control it. They're afraid. They're afraid because they don't know what it is. So this has been some, this is a huge issue. It's a cultural thing. And it's also like, hey, you know, the future, don't turn away, stick your head in the sand, wake up because if you're not part of the conversation, it'll define you. The narrative of the conversation. But people are seeing things like the bashtagging going on. The New York City had, you saw the New York City thing where they put out the hashtag, hey, you know, share your experience with your, but people are putting the brutality and the narrative was negative. So that scares people. So how do you answer that? Is it a, do you have to build the army of crowd with you? You need protection? Is there a philosophy? Because in a way, you're out in the wild. Yeah, and here's what I think. I think that if you build up your brand army, right? If you don't just say, oh, the first thing I'm gonna do is have people talk about it, that you listen to others, that you respond, that you do that crowd sourcing ahead of time, then you go out with a campaign like that because then you have listened, you've changed and then you're more in tune with the crowd. I think that is really essential. Do you think that incident is representative of the fact that that's now a full 360 real time view of brand equity in the sense that it's not so much hiring an army, that if you have good brand equity, then it's naturally just basically people sticking up for you. Definitely not hiring an army, for sure. It's definitely building groundswell support, having those people really believe in you and your product so that they're willing to go out there and spend time talking about you as you go forward. So brand army, not for hire? Not for hire, for sure. You're not, okay, good, get that on the record. Not for hire, yeah. But the earned media is more of the philosophy then. If you earn the trust, the way you see it. Yeah, and in fact, here's the other thing I see as a big trend, is that I believe that clout or some sort of social influence score will become the new SAT for business. So let's think about that. You can think, my daughters have a 15 year old, she's gonna be applying for college. One of the elements of getting her into college will be that SAT score. And I'm starting to see companies do their hiring and really look at reference clients based on their clout or their social influence. It doesn't have to be clout, but some sort of social influence. Equivalent, clout equivalent. Some sort of clout equivalent, thank you, yes. And I think that is gonna be the way of the future, that people will look at and be measured on their digital reputation and their social influence. And I think you have to build that. That doesn't, you can't buy that, you can't hire that, you've gotta build that up. And the same thing is true for companies, right? You have to build up that social influence and then be trusted by the crowd so that when you do go out and do something like we saw in New York City, then you'll get some negative, but you're not going to get overwhelmed with negative. You mentioned engagement and influence. So that's a really amazing area I want to explore on. That's a hot topic. Engagement is the ultimate definition. The kind of engagement could be negative or positive. So the interaction is important. Do you look, what tools are out there that you look at that can value those interactions? Is there targeting information? Is there tools that are out there to help you understand the contextual relevance of the interactions? Just because someone retweets it, you don't have context to the person. And that's been some criticism of Cloud we were talking about earlier. Yeah, right. I think that to me, of course, I'm, you know, truth be told, I'm with IBM. So I use our IBM tools, of course, right? But I think that IBM has some powerful tools in the big data and analytics space, right? I mean, all the social data and chatter that's out there is big data. And you've got to use analytics to take a look at what is the sentiment? What is the engagement? What's driving the engagement? And how do you make adjustments and tweaks to increase that along the way? Interesting project that we've just done. We've taken 200 tweets, and in 200 tweets, we can determine 52 elements of a person's personality. I didn't believe it at first either, but we've now done it for 500,000 people. And it is dead on. So persona, algorithmic persona calculation. On 52 different personality traits. And the value here is that, using that big data and analytics, is that now you've got a solid way to look at the traits of a person. And then your recommendation engine is not based on, well, you bought it, you bought it, therefore I'll probably buy it too. It's based on, our personalities are the same. And therefore, so some of the pilots that we're doing, we're seeing tremendous increases in recommendation, tremendous increases in engagement because of that type of work. And of course, it's all based on IBM tools. If you know who you're talking to, you can be more engaging. Yes. That's your thesis. Yeah, you're right, you're right. Sandy, IBM could do the industry a great service by coming up with a social metric better than cloud. So I'll just put it in my vote for that. I would love that too, yeah, I'm with you. One thing I noticed this morning at the keynote was there was a lot of talk that was about cloud, about analytics, and about mobile. Social was not mentioned. And I'm wondering, of course, in every conference I've been to for the last three years involving IBM, social has been the center. Is social now simply a component of unstructured data for analytics? Is that where its home is? So here's how I would view it. You know, today we talked a lot about mobile. If you think about social, 68% of social interaction is done on mobile device. So when we talked about mobile, and many of the examples we used on stage, IQ for instance, where they have the mobile retail, it's all social, it's all social. And so I think today maybe the emphasis was on the mobile side in that particular example, but social is embedded and lives throughout it. Do you see IBM as continuing to be the advocate for social business? Absolutely. I mean, you basically coined the term and have been the evangelist for it. Is that a role that IBM will continue to fulfill? No question, absolutely. I think we'll remain number one in that space and we'll continue to do that because we do see it as such an important element of a company, right? Of its workforce and engagement. The new data sets you mentioned, Shadr is a many predictive analytics behind that. The younger workforce coming in are not necessarily used to using the telephone or it's an email, that matter. What's a telephone? They didn't even set up their, my son doesn't even set up his voicemail. I said your voicemail, no, that's what old people do. Text me, like, okay. They don't even use email anymore. And I love Snapchat. They love things that come and go fast and there's no record. So this is the new, these are new vehicles. Yeah, this is the new way we're going to be working forever. So IBM will continue to play because it is the new way to work and I think we'll continue to be the leader there. You'll hear us talk about, you know, smarter workforce, social with an employee, smarter city, social with a citizen, smarter commerce, which is social in a consumer setting. So you'll hear us talk about that as an ingredient in everything. So I'm the CMO of a big $100 million campaign we're running, we're putting all this money into social. I want closed loop. Yeah. What are you seeing there? I mean, that's the holy grail. Everyone wants a closed loop and I know it's a little bit more elusive right now but ROY is now coming onto the table. What are some of the closed loop techniques you're seeing that are working and what areas need more kind of evolution, if you will? Well, I mean, one of the things I see that I think is really important is having some sort of software behind the closed loop. I still see many companies that have a front end or a gateway and behind the scenes is all manual and that's just not going to happen with the amount of data, the number of consumers. You can't do social in a non-automated fashion. I think that's number one. I think number two is designing the campaign so that it's not a traditional funnel but that with social you're nurturing. We talked about social being a relationship and you're nurturing throughout. So it's really a perpetual campaign and therefore you've got to pick a start and a stop but it's not your normal marketing. It's not your father's or your mother's marketing. It's completely different today. It's not a media buy and you move on to the next thing. Right. Exactly. I'm going to ask you about marketing. An economist study last year found that marketing organizations about 80% of companies marketing owns social. Yet we're seeing social permeate customer service, even product development. 10 years from now will marketing still be responsible for social and who should own it? I don't believe so. Now in fact if you take a look at some of the more progressive companies we talked about earlier they have either the CEO that owns it or they have actually a digital office that owns it that reports and covers product service, purchasing, marketing, the whole nine yards because social can be embedded in every process that you have. So I think the more progressive companies don't have social owned by their marketing teams. Their marketing teams still do social, digital is still an element but it's not owned by them. In terms of IBM's role in the social ecosystem going forward obviously you have no aspirations to become Facebook. Are you going to be the plumbing company? Are you going to, do you want to put all the pieces together to help companies fully implement social throughout their interactions with customers and their constituents? Yeah I think that we will have the ingredient called social and I think again you're going to see us in smarter cities, have social for citizens, smarter commerce, social for consumers, smarter workforce, social for employees, you'll see it there. But you also saw something very significant today that is also social which is that IBM cloud marketplace. We announced that today and imagine that. That is the market voting. That is the ultimate crowdsourcing. That is the market voting on the services that will win in different areas. That is the market defining the services. That is the market collaborating together in that overall marketplace. So I think that will be another leadership position that IBM takes in social is creating these mashables where people can mash up their social application, their closed loop process, their whole EMM system will come out of that I think that marketplace. So you're the team of the ecosystem that is what you're referring to the marketplace. Is that tied to socials? Is that separate is all one big? Well it's socials embedded in it because if you think about it the marketplace has a set of services in it and the market votes if you would votes for the top services. So that's crowdsourcing right? They collaborate together to create. Gamification meets. Right, gamification. You collaborate together in a social setting to create the next thing. I mean, it's essentially socials embedded throughout that marketplace. That's an important distinction though, Sandy. And I saw your tweets about this morning, a lot of exclamation points and your tweets about the cloud marketplace. Obviously something you're very excited about. That whole aspect of sharing, I think we think of marketplace as being in the Apple mode or the Google Play mode where it's discrete apps that you grab. What you're saying is this is a different model of a marketplace? Yeah, they're actually, as someone described it, which I thought was great, is instead of doing development you're actually going to do mashing. You're going to mash up services. You're going to see ratings from others on a service. So a rating system, a recommendation system. You're going to see comments on what's needed in the marketplace so that others can maybe create or you can help create with it. I mean, it's really becoming together cloud, social, mobile in a single place. It's people-centric. Someone has used the service IFTTT, if this, then that. I'm sure you've seen it. It sounds sort of like that where people create, that people create little apps and then others use them and adapt them to their own purposes. And they can mash up and use it as an element, right? So think about, you may want price optimization for a territory. You can mash that into what you're doing in your application. It's so powerful and it's living social, right? It's social as the ingredient to drive the success. Social, it's more of a membrane. It's ongoing. It's never ending. It's constantly, it's being mature. I like that philosophy. I'll give you the final word on our segment here. Here's Sandy Carter, social media evangelist, GM of the ecosystem development. What is the, in your words, the next wave of social going to look like? If we're now kind of like, I compare to the web and when everyone's poo poo in the web in the 90s, you know, the web is the obvious thing. Webmaster was just a role, like kind of like a social media manager. Came really prominent in digital. If you believe that, we're in social and wave two is coming. What do you expect to see in wave two? Well, I expect to see a couple things. One is more gamification. I think gamification is just getting started. I think it will be embedded everywhere. I expect to see social playing a more of a role in internet of things. So if you look today at VC investment, it's happening today primarily in that internet of things and imagine all of that data and the potential for social sharing from that internet of things in healthcare and financial services. I just think it's going to be a phenomenal next step for social as we move forward. We're here live at theCUBE. Live doing our part, live social media here and the social impact lounge in the Venetian IBM Impact. This is theCUBE. Thanks for watching. We'll be right back with our next guest after this short break. Right back.