Social Sigma

Under Six Sigma, companies gradually improve process to enhance the quality of their products. With Social Sigma they use feedback from social networks to improve products.

Two great examples.

1) Credit Mutuel, 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.

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

Product design and R&D will become much more of a continuous conversation -- not a black box, "Here it is!" process. Products will be revised under much tighter schedules, with obvious product errors corrected in new versions.

Why does Social Sigma work? Because the social network for a company is trusted and interested -- they have a stake in improved services and products and have built-in incentive to contribute time and ideas to the cause.

Companies who fail at Social Sigma will claim to be listening but will fail to incorporate ideas from the social network into its products. They will be faking it -- and customers will figure that out quickly.

The biggest hurdle for companies that want to engage in Social Sigma will be the CEO and other high-level executives who will cringe at the brutal criticism. But that's how customers feel -- and the company should use this knowledge to its advantage.

What are the final benefits? 1) More speed, 2) more ideas, 3) better products, 4) cheaper development.


re: Social Sigma

Not to sound cynical, far too many companies are paying lip service to what you call Social Sigma as an inexpensive marketing ploy (I think you need a new term because it is too close to Social Stigma).While companies have always had ways to gather customer feedback, far too many don't employ the techniques or utilize the results. While I can see that Social Sigma used in the way you describe can increase immediacy, transparency, and commitment, ultimately how many people are going to create videos, post to a blog, or give feedback without an incentive? You are touching on the much larger issues of incentives to contribute and the relative value of user- and expert-generated content.Although you don't claim to be personally using Social Sigma, I am curious if your post is self-referential and you read your comments.Great poem!

re: Social Sigma

You're right about executives cringing away from brutal feedback. Whenever I think about this pervasive problem, I remember one of my favorite lines from The Godfather:"Mr. Corleone insists on hearing bad news immediately."Everyone in business *ought* to take this approach -- and embrace social media, insofar as it promotes "hearing bad news." But we're human, and most of us don't actually like to hear the bad news, especially when we feel that it reflects badly upon ourselves and our past actions and decisions.

re: Social Sigma

Lisa:When consumers or business buyers acquire a service or a product, their investment becomes their incentive to improve that product. Switching banks or changing a power plant's steam-fitted parts is expensive -- therefore customers will engage in Social Sigma to optimize their investments.

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Tim:Social Sigma's power to quickly improve products and services or generate new ideas will far outweigh the shame of "bad news." If Credit Mutuel gains market share, or GM builds better cars and trucks as a result of their Social Sigma efforts, their competitors will quickly follow. Positive economics can be a fast cure for embarrassment.

re: Social Sigma

George, Credit Mutuel's story is in our book Groundswell. My question is -- is this going to change the company, or is it just a short-term program. Check back in a year.

re: Social Sigma

As the Zen Master often states: "We will see..."

re: Social Sigma

You're really onto something here George. They way I envision this movement is that customers, using "social media" will be an overlay to the entire product life cycle.I did my own analysis on this long before I was invited to join your company. see some companies doing bits and pieces of this, but very few are carrying this along the entire product life cycle.There's quite a few insights (and criticisms) to that model in the comments, feel free to chime in.

re: Social Sigma

Recently I read a book called Exit , Voice and Loyalty by Albert Hirschman and I felt it definitely does point to the fact"Switching banks or changing a power plant's steam-fitted parts is expensive -- therefore customers will engage in Social Sigma to optimize their investments."Depending on the nature of the products and services customers do engage in the voice option before they look for exit.Regards,Vivek Nath