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The Wall Street Journal: What Keeps Companies From Thinking Digitally?

Clara Shih, CEO and author, says the problem is often a lack of leadership

MCX110113_147Consumers are spending more and more time online and on social-media sites. Yet many companies have yet to adapt.
That’s the argument made by Clara Shih, chief executive and co-founder of Hearsay Social Inc., a maker of digital marketing software founded in 2009, and a director of Starbucks Corp. Ms. Shih – who has written a new book on the subject called “The Social Business Imperative” – argues that every company needs to accept the fact that it, too, must become a technology company.
In other words, opening a corporate Instagram account won’t cut it.
Ms. Shih spoke with The Wall Street Journal about her role at Starbucks and what’s holding larger companies back digitally. Following are edited excerpts from that conversation.
Everyone’s job
WSJ: What do you see as your role on the Starbucks board? Is it fair to say you’re a digital ambassador to the company?
MS. SHIH: My job is to be a director. You can initially start with digital ambassadors, but ultimately digital becomes so strategic that it’s everyone’s job. You can’t delegate it to a single director or small group of directors. You can’t delegate it to a social-media team or to the digital team. It really has become everyone’s job, whether you’re a CEO, chief marketing officer, front-line salesperson, customer support.
I contribute like anybody else. I ask questions. I offer specific insights. The questions and insights that I tend to volunteer often come from the Silicon Valley startup culture. I by no means am the only person who asks those types of questions, nor are those the only types of questions that I ask.
WSJ: You joined the Starbucks board in 2011 and now it’s 2016. How has the company evolved in that time?
MS. SHIH: We continue to become more technology-oriented. A number of the directors are really digitally savvy. It’s really independent of tenure and generation. I think having Kevin Johnson – having been an executive of Microsoft and Juniper – appeals to Starbucks in that this is a technology executive who really infuses that DNA into Starbucks. It’s further reinforcing that Starbucks is a technology company.
WSJ: In your book, you argue that, today, every company has to be a tech company. What does that mean?
MS. SHIH: You have to be where your customer is. If your customer begins their buyer’s journey online or if they want to complete their buyer’s journey on social, mobile and digital, of course, you have to be there too.
When I think of the store experience, it’s not just the physical merchandising and layout of the store. People are often on their devices when they’re in the store, so part of the store experience is the Wi-Fi, it’s the content we can deliver through the Wi-Fi, it’s the mobile app.
WSJ: Are companies embracing this perspective?
MS. SHIH: I think most are doing something and they’ll acknowledge that technology and digital are important – but it’s all about execution. Transformation is much more than putting up a Twitter account and training your customer-service rep or marketing team to tweet.
The need for leadership
WSJ: What’s the stumbling block?
MS. SHIH: Here’s the thing about companies: They’re made up of people. Of course, there are people within the company who view technology and innovation as imperative. But there are also a lot of people, especially in big companies and especially in regulated companies – take any of the banks that Hearsay works with – whose job it is to minimize risk. We see this with Hearsay, too, where a chief marketing officer or a head of sales will say, this is great. Then somebody in compliance looks at it and because their mandate is to reduce risk they say no. That’s why companies can’t move forward. They kind of get stuck.
Unless CEOs personally take ownership for digital and innovation, it’s not going to happen, because there’s going to be an impasse with the people that want to go forward and the people that don’t.
WSJ: Any good examples of an older company that has transformed?
MS. SHIH: I saw many, and I’ll share one such story with you and that’s John Hancock Insurance. Traditionally, [insurance] was an entirely offline experience for everything from purchase to claims. The second issue is they don’t have frequent touch points. Most of the time you buy insurance and then you never hear or want to hear from the insurance company again until there’s a claim.
Last year, John Hancock partnered with a company called Vitality [owned by South Africa-based insurance company Discovery Ltd.] and they launched this new program in the U.S., where they provide free Fitbits to their insurance customers for the purpose of encouraging them and tracking how active they are. They realized that all the actuarial tables show that the more active you are, the longer you’ll live, the healthier you’ll be. They said, instead of being this passive assessor of risk, what if we became an active coach?
WSJ: How can other companies be more digitally oriented?
MS. SHIH: Every company wants to be innovative, they want to change. That’s why they come out and do these visits in Silicon Valley and they launch these innovation labs. Most of the time, it doesn’t work out.
It’s because there are two issues. One, the company culture was established to be very risk averse. Two, which is related to culture but is more process oriented, is that it’s hard to take an idea and operationalize it. Imagine having 200,000 employees and trying to get everyone to change direction. That’s a struggle that many companies face right now.
Original article published May 30, 2016, in The Wall Street Journal.

Starbucks CEO Howard Schultz shares inspiring leadership wisdom with Hearsay Social

“Everybody must have a voice,” urged Starbucks CEO Howard Schultz to the Hearsay Social team during a surprise afternoon visit. No matter your age, seniority, or role—you play a crucial part in executing on the vision of your company. “Don’t let mediocrity become the standard.”

Starbucks CEO Howard Schultz and Hearsay Social CEO Clara Shih

Mr. Schultz encouraged the Hearsay Social team to continue fighting for the absolute best at this critical stage in our company’s growth, which he likened to the time-sensitive “imprinting” stage of a child’s growth. In addition, he proclaimed that every business from Starbucks to Hearsay Social must heed three key points to be successful today:

  1. Every business must provide a unique value proposition to the market. For Starbucks, that’s providing quality coffee and giving back to the community. For Hearsay Social, it’s empowering our customers to be highly successful social marketers.
  2. Digital and social technologies represent a tidal wave of change utterly transforming the way companies do business. A clear innovator in the Fortune 500, Starbucks asserted its commitment to understanding and embracing these new technologies when it appointed Hearsay Social CEO Clara Shih to its board of directors this past December.
  3. In the 21st century, customers only support those companies that share their values. At Starbucks, Mr. Schultz’s aim is to “manage through a lens of humanity.” Positive revenue growth at the corporation must go hand in hand with positive growth in local communities around the world to make it all worthwhile.

Thank you for all the great advice, Mr. Schultz, and we can’t wait to see you again!

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Celebrating Hearsay Social momentum

We’re two weeks away from the beginning of the new year, two months away from the first anniversary of Hearsay Social’s launch, and today I am excited to share several milestones  that highlight our astounding customer momentum.
Since our company launch 10 months ago, we’ve powered more than five million social media interactions between businesses and consumers over 16,000 social profiles and pages. The vision my co-founder Steve Garrity and I began working on three years ago has evolved into a thriving company that serves the world’s most prominent companies in the financial services, insurance, retail, restaurants, automotive, real estate, and direct selling industries.
We’re also growing our first-rate leadership team by bringing on Rob van Es as VP of Global Sales and Amy Millard as VP of Marketing, two of the most sought-after sales and marketing leaders in Silicon Valley.  Both Rob and Amy have decades of experience, respectively, at high-profile businesses like Fortify Software (acquired by HP in 2010) and Netscape.
Our continued product innovation includes recently launching as one of Google+’s first brand page partners, making Hearsay Social the only enterprise social marketing platform with full integration across every major social network. We continue to push the envelope on what’s possible for the social enterprise, as we have been from day one.
Last, some personal news.  Starbucks announced today that it has named me to their Board of Directors. I am incredibly humbled to be joining a diverse board that includes Starbucks CEO Howard Schultz, J.C. Penney CEO Myron Ullman, III, and Facebook COO Sheryl Sandberg.
Not just a top global brand respected for its ethically sourced, high-quality coffee, Starbucks has also emerged as a distinguished social media innovator in the retail industry. Joining the company’s already strong board, I hope to help guide Starbucks toward further successes in the social media sphere.
All in all, 2011 has been an amazing year for Hearsay Social. With the help of Steve and our unbeatable team in San Francisco, New York, and Chicago, Hearsay Social will only drive for bigger and better accomplishments in the coming year.
Continuous product innovation, evolving thought leadership, and endless dedication to our customers’ success–that’s the game plan for Hearsay Social, still the only provider of enterprise-class social marketing.
Read the full Hearsay Social press release.
In the news:

  • All Facebook: Facebook COO Leaves Starbucks Board, Hearsay CEO Joins
  • Forbes: Starbucks Names Hearsay Social’s Clara Shih to Board of Directors
  • Fortune: Coffee Talk with the Newest Starbucks Board Member
  • TechCrunch: Twenty-Nine-Year-Old Hearsay Social CEO Clara Shih Joins Starbucks Board Of Directors
  • AllThingsD: Hearsay CEO Clara Shih Named to Starbucks Board