Nilofer Merchant speaking at Ted.

Nilofer Merchant speaking at Ted.

Nilofer Merchant (who I think is a smart and savvy systems thinker) wrote a piece for HBR recently titled When Ted Lost Control of Its Crowd.

It’s a good synopsis of how Ted diluted it’s brand by creating licensed TedX events around the world with little or no control as to the quality and content of the speakers at those events. Then she explains the steps Ted took to address it.

You can avoid this same mistake in your own business by thinking through how to manage/engage “with the crowd” without causing a catastrophe failure to the brand (as almost happened and could still happen to Ted).

The goal of the model I’m going to share is to clarify what should remain “closed” and proprietary to the system and what should be “open” and have more freedom and autonomy.

Here’s what you do. Draw a horizontal arrow with the words “open/autonomy” on the left and “close/protect” on the right:

“Open/Autonomy” <-------------------------------------------------------------> “Close/Protect”

Next, list the functions of your organization (i.e., sales, engineering, marketing, strategy, product development, finance, admin, operations, etc.) and place those functions on a continuum following these rules:

1) Functions that can cause systemic harm should be placed on the right side of the arrow. I.e., the greater the systemic risk, the farther to the right they get placed and the more centralized control is placed on them.

2) Functions that are closest to the customer and require flexibility/adaptability to thrive should be placed on the left side of the arrow. I.e., the “closer” to the customer, the farther left they get placed and the more decentralized autonomy they have.

For example, the function of Strategic Marketing (the act developing new markets, and developing and protecting the brand) should be placed more to the right. That’s easy to understand because if a company was to choose the wrong market strategy or engage in activities that harm it’s brand, it’s a systemic risk. The business can quickly lose everything.

But a function like Community Engagement (the act of engaging with and listening to it’s brand constituents) should be placed more to the left. Why? Because this function is very close to the customer. If you try to control this messaging, you get Corporate PR Gobbleygook that doesn’t serve the brand. You put up to many obstacles that prevent the company from actively listening and responding to the market in an authentic way. Different functions. Different placement on the continuum of control vs openness.

Now to TedX. Where TedX got off track is that it treated Strategic Marketing like an open/autonomous function when it should be treated like a closed/protected function. Then, to compensate, it treated Community Engagement like a closed/protected function (blathering PR corporate speak) when it should be an open/autonomous function.

As Nilofer’s article points out, Ted finally got ahead of the problem when they started to treat Strategic Marketing like the closed/protected function it should be (i.e., they rolled out a manifesto and rules to protect the brand) and they started treating Community Engagement like the open/autonomous function it should be (i.e, they allowed a voice of authority to speak authentically with the community and “listen loudly.”)

However, unless Ted wants to have more brand diffusion in the future, they’ll want to put a more structured vetting process in place on all Ted events, including TedX. Otherwise, the same brand diffusion will begin to occur after the current dust storm as settled.

This doesn’t have to be onerous, and if it’s designed right, it could be a catalyst for a new energy and a revitalized Ted brand. For example, The Ted vetting process could be done by crowd sourcing from active Ted/Tedx participants (further engaging the community) but with final approval from centralized Ted Marketing Strategy function. I.e., the crowd votes on the topics and speakers they want to hear from at TedX and Ted, while Ted has ultimate veto power but would use it only judiciously and to defend the brand or to guide its strategic direction.

In any case, you can avoid these problems in your own business by taking the time to think through which functions should have more openness/autonomy and which functions should have more control/protection.

There are other rules to follow of organizational structure and design and if you’re interested in learning them, you can do so here: “The 5 Classic Mistakes in Organizational Structure; Or, How to Design Your Organization the Right Way.