Minutes after the referee's controversial call, the Arsenal Football chat site was brimming with contention as team fans and foes alike cried foul!

On Feb. 13, 1999, at London's Highbury Stadium two British football teams, Arsenal and Sheffield United, were going head to head in a fifth-round match of the Football Association Cup. The score was tied at 1-1 when, 76 minutes into the game, a United player went down with an injury. United goalkeeper Alan Kelly kicked the ball out of bounds so that his teammate could be tended to. It is an unwritten rule of gentlemanly conduct in British football that in such a case, the team that kicked the ball out gets the ball back, but Arsenal's new Nigerian player, Nwankwo Kanu, was unfamiliar with this British tenet of sportsmanship. He took the ball, and passed it quickly to an Arsenal teammate who tapped it past an unsuspecting Kelly into the open goal of the stunned opposition. The referee allowed the goal to stand, sparking an ugly skirmish involving players from both teams as well as United's managers and the referees. The legendary combativeness of English soccer engulfed the stadium and security guards flooded the stands to try to curb the melee.

Within the next hour-and-a-half, the site received almost 300 messages reflecting a variety of sentiments, from support to disgust. Stefan Kerner, a partner at Designercity, the London-based Web design firm that runs the Arsenal site, reports that the press began calling to gauge fan reaction and Arsenal executives were checking out the chat groups to get a sense of the public relations mess they might have on their hands.

Online communities are probably familiar to most people as personal chat sites where people can air their opinions on topics from the safest new minivan on the market to the underlying meaning of the latest Madonna video. But corporate executives are beginning to take online communities (OLCs) seriously, no longer treating them as a trendy Web phenomenon hovering on the periphery of business respectability. Companies are harnessing the strength of those communities to manage information within the enterprise, cement relationships with business partners, expand their marketplaces and encourage product sales and brand loyalty. "In order to grow the business, you need to tap into all your intellectual assets," says Tom Brailsford, manager of knowledge leadership at Hallmark Cards of Kansas City, Mo. "You need to involve all constituencies with a stake in the [business] process." However, online communities are still the problem child of the World Wide Web. Despite their promise, it is a continuing challenge to grow and sustain OLCs as truly valuable resources for users. Communities require a great deal of work, are tough to control and have a history of biting the hand that feeds them. To have any chance of success, companies must commit to long-term investment in the community and confront the various quirks of online interaction. Before getting all fired up about community building, companies need to consider whether they are prepared to exercise the kind of tough love necessary to make it work.

What Makes a Community?

OLCs fall into three general categories: Internet communities that serve as a marketing and advertising tool, extranet communities designed to strengthen relationships with trade partners or customers, and intranet communities that facilitate knowledge sharing within an organisation. In all three types, the basic challenges of creating and sustaining a community that meets the needs of the target audience are much the same. Arthur Andersen's Next Generation Research Group in Chicago studied the three types of OLCs and how they function at 15 diverse companies (including Amoco, now BP Amoco, Ford Motor, Kaiser Permanente, Anheuser-Busch Companies and Monsanto ), covering how they form, operate and produce value for both members and corporate sponsors. In January 1999 the group released the "On-Line Communities in Business" report detailing their findings. One of the first obstacles in the research was defining the nature of community. Joseph P. Cothrel, research director with Arthur Andersen, notes that this is also one of the first challenges that most companies will face when creating an OLC. (Cothrel has since left Arthur Andersen to join Chicago-based Participate.com as vice president of Research.) "The definition can be muddy," Cothrel says. "It depends on whom you are involving and what you are trying to create." The one common definition that held true for each of the 15 companies regardless of the purpose and type of community was that a community is a group of people who are willing and able to help each other. Ironically, encouraging camaraderie and information sharing among business partners and coworkers is more difficult than nurturing those same qualities between complete strangers in an online community. OLC coordinators will have to fight the natural inclination for businesspeople to hoard information as well as the fear and anxiety that always accompanies the introduction of a new concept to well-staked-out turf in business.

Member Development

Getting to know who your customers are, how they interact and what information they are looking for is a prerequisite for planning an OLC. To achieve stickiness, the quality that keeps visitors returning to a site and attracts new visitors, companies have to be more than vendors of product; they have to be vendors of experience, a transition that many find difficult. A lot of companies look at virtual communities as an easy way to highlight a product or service-a form of interactive free advertising to their customers. But if they look no further, these companies won't reap all the benefits of an OLC. Virtual communities are composed of real people with the diverse opinions, needs and interests of an actual community. Companies may create a virtual venue for them to visit, meet others and exchange information, but its performance depends squarely upon the users. "As soon as people start participating they think [the site's] theirs," says Stacy Horn, author of Cyberville: Clicks, Culture, and the Creation of an On-line Town (Warner Books, 1998). "This is good because it means they're invested in it, but as a business person you have to realise that you can't dictate to them."

The success or failure of an OLC is usually determined by only a small percentage of the site's audience. The Arthur Andersen report found that although more than 50 per cent of the community members on average accessed the company sites studied, only 5 per cent to 15 per cent of all members contributed frequently to them. Companies should be aware of these statistics so that they can support frequent contributors and dispel the notion that low contribution numbers mean the site isn't working.

When the knowledge management (KM) team at Hallmark Cards came up with the idea of creating an intranet-based online community for the retailers at its approximately 8,000 independently owned and operated stores, its first step was to talk to potential members. Rather than take a build-it-and-they-will-come approach, the KM group contacted some of those retailers to get input about how an online community could best address some of their needs. "Retailers really appreciated that we came to them with an idea and then asked for their suggestions," says Brailsford.

After compiling feedback from a survey of retailers that indicated strong support for a knowledge-sharing forum, Hallmark identified 30 or so retailers to be early adopters of the Hallmark Knowledge Creation Community. Retailers can share success stories on the site, such as one store's innovative hiring program in which local high school students work at the store for class credit, giving the owner a chance to preview students' performance and make paying job offers to the best workers. Another retailer increased its music sales after hooking up speakers inside the store so that a CD could play continuously and be heard by consumers passing by the display. When even a small success story like this is shared with the rest of the Hallmark community, the benefit from one person's idea can be realised by the community's 30 other retailers, transforming small suggestions into big profits. Members can also offer recommendations to the management team at Hallmark's headquarters as well as preview product concepts and give timely feedback on them. The current goal for the community is to enlist 80 retailers in the short term, which could eventually expand beyond that to include consumers and Hallmark-owned subsidiaries. If necessary, Brailsford is prepared to offer incentives to attract participants to join the community, but for now he has found that the enthusiasm of the current membership is the best recruitment tool.

Value Management

"[Sometimes] focusing on what people want can take you away from your business objectives," points out Andersen's Cothrel, so it's important to strike a balance between the value that an OLC provides to its members and the strategic value gained by the company. If the balance in this equation is elusive, it may be a sign that an OLC is not a good choice for the company. Before creating online communities, companies need to think about what will constitute success for them and realise that the net effect of a virtual community on sales and marketing figures can be tough to identify.

Kaiser Permanente, the nation's largest nonprofit health maintenance organisation (HMO), piloted its extranet virtual community to 1,000 members in 1996, offering them the opportunity to get personal attention and medical information at the privacy of their computer screen. Kaiser Permanente Online offers many health-care conveniences to patients and enables plan members to do personal health risk assessments, access a health encyclopedia, get general health information from nurses and pharmacists (depending on the topic), and make appointments online. Dispensing health-care advice over the Web, however carefully worded, has the potential to be a legal minefield, but Kaiser had enough faith in its plan to risk it. The result is that the site has been a boon to frustrated HMO members. Currently, Kaiser Online has 75,000 users. (For more information on Kaiser Permanente Online, see "Preventive Medicine," CIO Section 2, May 1, 1998.) The company has also added discussion groups so that people with particular medical conditions such as HIV infection or diabetes can trade experiences and information with others who share their condition. Each discussion group has a physician, clinician or pharmacist acting as moderator. Additionally, peer moderators who are highly involved in the community and have a knack for chat are selected to steer and actively participate in the discussions. This is an important part of the program because the peer moderators often have the best understanding of the members' needs. Since the fundamental goal of the groups is to foster discussion among the members (rather than be a Q&A information service), the peer moderators are essential to developing an atmosphere of sharing and support.

"We started out knowing that we had to be able to measure [the benefits of community]," says Anna-Lisa Silvestre, general manager of Kaiser's National Member Technology Group. But unlike the rest of the site, the community discussion areas did not have tangible benefits like administrative cost-savings attached. However, Silvestre made sure that management understood that intangible benefits would also come from the site, which the community would contribute to significantly, like the improved public image of Kaiser Permanente among current and potential members. When members were asked if the site (including the community) changed their perceptions of the company for the better, 40 per cent said yes.

Moderation and Facilitation

In order to grow, communities need hosts and moderators to keep the conversation flowing and to settle disputes. Horn stresses that one of the keys is for the community coordinators to find individuals from the user base to act as hosts for discussions and online conferences. "It's like having a host at a party," says Horn. "They welcome people and tweak conversations. If sites don't have active hosts, they die. You can't just leave them unattended."

Schneider Automation (a subsidiary of Schneider Electric SA) launched an extranet online community in March 1998 for its distribution channel, which includes employees, sales channels and business partners in 130 countries, as part of a large-scale reengineering program. Schneider Electric had recently merged with Square D , and as a result, says John McElfresh, director of electronic business and communications in North Andover, Mass., "all the secret handshakes were broken." That is, the established channels through which employees got information were destroyed in the revamping; brand-new Schneider employees didn't know how to get information from headquarters, and the new corporate structure even had seasoned employees unsure of whom to go to within the organisationn with questions or requests.

One of the main purposes of the site was to connect members of the sales force in the field with the onsite product managers so that the two groups could communicate with each other more expeditiously. The hope was that this would boost sales because sales personnel could readily get extensive product information and could also query production managers on product specifics. Using technology from New York City-based Transaction Information Systems, Schneider is hoping to add functionality to its site by implementing a "human active network collaborator" that will make Web access nearly as immediate to members as a telephone call. The product will allow network administrators to actually take over users' screens upon request and guide them to the information they're looking for on the site. Currently the site has more than 3,000 users who conduct approximately 15,000 user sessions per month.

When Schneider started the community, McElfresh assigned monitors not to police the site but to ensure that users' needs were being met and to make sure that useful suggestions and conversations from the community were passed on to the individuals who could act upon them, ensuring that the discussion on the site was not just idle chatter. "There is some venting at times," he says of the dialogue that happens on the site, "but we try to use it as an opportunity to find the root cause of the problem and fix it." McElfresh identifies the company's willingness to hear criticism as one of the primary reasons the site has been so successful.

For the Arsenal Football Club, the virtual community has grown into much more than a place for fans to chat about their favorite team. It's become a strong, leveragable link between the club and its supporters. "As time goes on, the site becomes a greater part of the club's entire marketing and commercial strategy," says Kerner of Designercity. Not only has the site become a rostrum for fan opinions to the press and the club in situations like the Arsenal/Sheffield match, but it has also allowed the fans to take a more active role in supporting the team. Kerner recalls an incident that occurred when Arsenal was scheduled to travel to Greece for a match. "Greek fans started leaving awful messages on the site saying things like, 'Prepare to die,' and making open threats against some of the players." Some Arsenal fans, who had lived in Greece and knew the deeply competitive nature of many of the football fans in that country, posted messages urging the club to take the threats very seriously. The club responded by reworking the security plans that it had made for the players. The match went off without incident. Score one for the community.