Companies are losing control. What happens on Wall Street no longer stays on Wall Street. What happens in Vegas ends up on YouTube. (Laughter) Reputations are volatile. Loyalties are fickle. Management teams seem increasingly disconnected from their staff. (Laughter) A recent survey said that 27 percent of bosses believe their employees are inspired by their firm. However, in the same survey, only four percent of employees agreed. Companies are losing control of their customers and their employees. But are they really?
I'm a marketer, and as a marketer, I know that I've never really been in control. Your brand is what other people say about you when you're not in the room, the saying goes. Hyperconnectivity and transparency allow companies to be in that room now, 24/7. They can listen and join the conversation. In fact, they have more control over the loss of control than ever before. They can design for it. But how?
First of all, they can give employees and customers more control. They can collaborate with them on the creation of ideas, knowledge, content, designs and product. They can give them more control over pricing, which is what the band Radiohead did with its pay-as-you-like online release of its album "In Rainbows." Buyers could determine the price, but the offer was exclusive, and only stood for a limited period of time. The album sold more copies than previous releases of the band. The Danish chocolate company Anthon Berg opened a so-called "generous store" in Copenhagen. It asked customers to purchase chocolate with the promise of good deeds towards loved ones. It turned transactions into interactions, and generosity into a currency. Companies can even give control to hackers. When Microsoft Kinect came out, the motion-controlled add-on to its Xbox gaming console, it immediately drew the attention of hackers. Microsoft first fought off the hacks, but then shifted course when it realized that actively supporting the community came with benefits. The sense of co-ownership, the free publicity, the added value, all helped drive sales.
The ultimate empowerment of customers is to ask them not to buy. Outdoor clothier Patagonia encouraged prospective buyers to check out eBay for its used products and to resole their shoes before purchasing new ones. In an even more radical stance against consumerism, the company placed a "Don't Buy This Jacket" advertisement during the peak of shopping season. It may have jeopardized short-term sales, but it builds lasting, long-term loyalty based on shared values.
Research has shown that giving employees more control over their work makes them happier and more productive. The Brazilian company Semco Group famously lets employees set their own work schedules and even their salaries. Hulu and Netflix, among other companies, have open vacation policies.
Companies can give people more control, but they can also give them less control. Traditional business wisdom holds that trust is earned by predictable behavior, but when everything is consistent and standardized, how do you create meaningful experiences? Giving people less control might be a wonderful way to counter the abundance of choice and make them happier. Take the travel service Nextpedition. Nextpedition turns the trip into a game, with surprising twists and turns along the way. It does not tell the traveler where she's going until the very last minute, and information is provided just in time. Similarly, Dutch airline KLM launched a surprise campaign, seemingly randomly handing out small gifts to travelers en route to their destination. U.K.-based Interflora monitored Twitter for users who were having a bad day, and then sent them a free bouquet of flowers.
Is there anything companies can do to make their employees feel less pressed for time? Yes. Force them to help others. A recent study suggests that having employees complete occasional altruistic tasks throughout the day increases their sense of overall productivity. At Frog, the company I work for, we hold internal speed meet sessions that connect old and new employees, helping them get to know each other fast. By applying a strict process, we give them less control, less choice, but we enable more and richer social interactions.
Companies are the makers of their fortunes, and like all of us, they are utterly exposed to serendipity. That should make them more humble, more vulnerable and more human. At the end of the day, as hyperconnectivity and transparency expose companies' behavior in broad daylight, staying true to their true selves is the only sustainable value proposition. Or as the ballet dancer Alonzo King said, "What's interesting about you is you." For the true selves of companies to come through, openness is paramount, but radical openness is not a solution, because when everything is open, nothing is open. "A smile is a door that is half open and half closed," the author Jennifer Egan wrote. Companies can give their employees and customers more control or less. They can worry about how much openness is good for them, and what needs to stay closed. Or they can simply smile, and remain open to all possibilities. Thank you. (Applause) (Applause)