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Will ‘Social Sigma’ Help Businesses Grow?

Like six sigma, social sigma will improve products through social feedback, says George F. Colony

As against the popular CEO belief that social technologies do no good to their business, Forrester CEO, George F. Colony propagates social, saying social networks contain utility that a company can use to prosper. “Many CEOs only encounter the downside of social – the disparaging YouTube video or the irrational Twitter attack on the company’s brand or products. So it’s easy to understand the skepticism and the questioning among CEOs,” he says.

Writing in his blog – Counter Intuitive – CEO Colony believes while Six Sigma helps improve products through better processes, Social Sigma (Social technologies) does the same through social feedback.

“Trust me social networks contain utility that your company will use to get ahead,” Colony noted in his blog posting.

Colony a strong proponent of social technologies says Six Sigma helps companies gradually improve processes to enhance the quality of their products and with ‘Social Sigma’ they use feedback from social networks to improve products. “When social networks are deployed as a means for customers to continually critique, analyze, and offer suggestions about your products they’ll help in increasing the value of what you make,” Colony wrote in his blog.

According to Colony listening, soliciting feedback and marketing are the three essential elements of Social Sigma. With listening, the companies can closely monitor social channels to pick up faint and strong signals from the marketplace about their products, he says.

Zappos and JetBlue, have dedicated staff for this task, while Domino’s Pizza, and Starbucks are the perfect examples of soliciting feedback from their customers. “Credit Mutuel in France and Domino’s Pizza in the U.S. have made product leaps through programs they ran on social networks. Credit Mutuel improved their banking services, while Domino’s built a better pizza,” observes Colony.

Quoting Credit Mutuel he says: “The second largest retail bank in France, has been drafting its customers into product improvement through a program called, Si j’etais banquier – “If I was a banker.” The bank has recorded more than 50,000 suggestions, e.g., “If I was the banker, I’d explain the fees in clear terms.” and recently let customers vote on the top 30.

Similarly, GM’s Fast Lane blog also carries some amazingly straight-up conversations about GM’s cars and trucks. Bob Lutz, the company’s chief designer, used the blog to hear firsthand from customers about design, quality, and product problems.

However, all the propagation for social comes with a word of great caution from Colony, who says while social can help improve product line, “it is not for the faint of the heart and that it needs guts to pursue social.”

A badly managed social sigma, Colony says, can do more harm than it can do any good. “Social Sigma done badly will do more damage to your brand and company name than if you’d done nothing,” he asserts.

“Social Sigma is not a one-way communication like a press release. You’re initiating a continuous, real-time, fast interchange with hundreds or perhaps thousands of customers. So don’t indulge unless you’re ready to uphold your end of the conversation,” Colony says in an advisory note to CEOs pointing out that they (CEOs) should engage in Social Sigma only if they can afford staff, budget, planning, and a strategy.

According to Forrester’s research none of the CEOs of Fortune Magazine’s top 100 global corporations have a social profile. Interestingly, even none of the social CEOs – selling social technologies – themselves are truly social with many of them staying away from blogging this year.

Mark Zuckerberg of Facebook is active on his platform but doesn’t blog and infrequently visits Twitter. Evan Williams of Twitter Tweets several times per day and blogs, but hasn’t posted in 2010. Jeff Weiner, CEO of LinkedIn uses Twitter several times per week and posts to the LinkedIn corporate blog. Mike Jones, co-CEO of MySpace is on Twitter several times per week and has a blog (though no posts this year), Colony observed.

So why do CEOs shy away from social? Colony is of the opinion that CEOs are concerned about regulatory constraints. “If you’re a public company CEO with Reg. FD (Regulation Full Disclosure), every time a CEO speaks, any current or potential investor must be able to hear it. They have not yet defined whether Twitter is at Reg. FD or the blog is Reg. FD or if Facebook is Reg. FD. They have said at times it is or sometimes it isn’t – it’s still not fully defined,” Colony said recently speaking at the Forrester Marketing Forum.

Additionally, CEOs also worry their open statements might offend customers, partners and the Board of Directors, besides the apparent litigation risks they often face. “I won’t say who this is, but a very prominent CEO of a large company was told he could not become more social because he was in too many courtrooms already. So the risk of litigation is a big issue,” says Colony.

“Companies are run by people, and no CEO wants to appear vulnerable, either in public or in the internal community of the business. “The frailty of humanity is, I’m frightened to hear about me, and as long it’s my business I don’t have to,” Barry Libert, CEO of Mzinga, a Waltham, MA based social media company, told SmartBlog commenting on the CEO apprehension.

“But I think within 10 or 15 years corporate boards will look for social skills among CEOs. This will be part of the portfolio of the CEO – they’re going to have to have this kind of ongoing communication with their customers,” Colony told Mashable, a social media guide.

However, detractors of social technologies consider social as nonsense. They say listening to customers is of no use and mere waste of time. Mark Cuban, billionaire owner of the NBA basket ball team Dallas Mavericks, and chairman of HDNet, a HDTV cable network company has a similar notion on seeking feedback from customers.

In his recent blog posting at – Blog Maverick – Cuban explains why it is necessary for business leaders to ignore their customers. According to him listening to customers will result in wasteful utilization of resources and brainpower that could have been otherwise applied to “inventing the future.”

“Entrepreneurs always need to be reminded that it’s not the job of their customers to know what they don’t know. Your customers can tell you the things that are broken and how they want them to be fixed. Listen to them. Make them happy. Beyond this they can’t create the future roadmap for your product or service. That’s your job,” Cuban remarked in the blog.

About fayazuddin a. shirazi