Davis ThinkingEach period of business history has its own representative corporate type. The 1960s were the age of the conglomerate. In more recent decades, the startup has achieved iconic status. But the kind of organization that marks our own historical moment is, arguably, the turnaround company.
Here's a thought: 21st century organizations need not just half a brain — but a whole, full, complete brain, where both halves work in unison and harmony. Let me explain, by way of an example. It hurts your eyes to look at it. It's making designers world-wide recoil in amazement and horror. The latest installment of Aliens vs Predator? Nope — it's the Gap's new logo.
When part of my garden fence fell down this week, my dog was delighted, my neighbor exposed, my wife mortified and my impatiens completely flattened. After spending a couple of hours jerry-rigging the crumbling wood back into place, I realized this experience was a convenient if not appropriate metaphor for the challenge marketers face in dealing with social media within their organizations. Like a dog with a bone, consumers are thrilled with the tumbling divide between themselves and the brands they choose to engage with. Unfortunately, big companies do not necessarily share this enthusiasm, treating social media as yet another channel to be managed by an existing department like marketing or corporate communications and, in doing so, limiting the opportunity for a truly new approach.
Struggling companies all share something in common. Their sales and marketing efforts are at odds. Sometimes, they are even at war. The marketing team lectures the sales department, saying that if only the salespeople would follow their advice, their problems would be solved. Meanwhile, the sales department always says it needs something else from marketing. The salespeople are clamoring for the silver bullet that will convince the most ardent skeptic to buy. The root cause of this situation is that sales and marketing have different views of the world.
Last week I heard this in a meeting: "We're in the middle of tremendous change. The organization is going through the biggest transition in its history." The line is usually delivered with a mix of desperation, a touch of helplessness and an apologetic tone. The admission comes, with the predictability of a carefully timed script, as I'm trying to assess where companies are in terms of their digital marketing maturity. Just a few years ago there was a lot of brash boasting about how cutting-edge companies were, but it's been a long time since I've heard that confidence. Even former dot-com rock stars are realizing that they have a lot to learn. They know things are messed up and they think it's their fault. Somehow things have gotten fouled up in the execution machinery of their company. They're not smart enough, nimble enough or gutsy enough.
I’ve been mulling over a debate for the past few weeks and haven’t been able to resolve it, so I thought I’d share it here and get your input. The issue is whether marketers should try to increase the marketing function in the organization or whether they should try to increase the marketing capability of the entire organization. The debate was prompted by an op-ed written by Larry Light, marketing guru and former McDonald’s CMO, in Forbes a few weeks ago.
To change an organization from within, it helps to understand four basic circulatory systems, analogous to the channels of communication in a living body.
Author Peter Drucker’s adage that a business enterprise has two basic functions—marketing and innovation—certainly resonates in the quick-service industry today. Marketing and innovation serve as critical drivers of growth at a time when the limits of cost cutting have been reached. While the innovation function is steady across all chains, marketing strategies vary greatly.
In a comment to last week's post on what (worries you) and why, Dan Naden writes: I am concerned about effectively managing my time. Focusing on the important sometimes gets shoved aside for the 'urgent'. This is an issue we're all more all less wrestling with to one degree or another. Thank you, Dan for surfacing it for us. People often ask me how I manage to produce so much content and to be (seemingly) everywhere, will holding a full time job. I have no life. Seriously, though, let's take a look at definitions and go from here:
Are companies, with all their good intentions, getting the most from open innovation? We suspect that the initial successes, encouraging as they are, represent only the beginning. What if open innovation were defined more broadly and more ambitiously? Could even greater value be realized? If so, what would the next wave of open innovation look like?
Some have asked, Where does social media live? Is it marketing? Is it public relations? Is it IT or corporate? Is it a combination of multiple business units and functions, and if so, who leads the efforts and how does an organization choose partners? These are valid and complex questions, currently with no simple answers. Social media is still emerging and being defined in real time. There's a question missing from that litany, one that organizations or individuals rarely ask themselves: Do you live social? Many organizations simply skip this question because they assume that they themselves don't have to be social (open and collaborative) to reap the rewards (cost savings, marketing ROI, effective reputation management, and search engine juice) they think they might get from social media.
From a holistic perspective, we talk about the need for organizations to become more socially calibrated—able to adapt and respond to changes both externally and internally. The three areas where emergent outcomes can manifest are, participation with your customers, collaboration between your employees and optimization in the interactions/transactions between your business and its partners. Digging into customer participation, it’s clear that in a networked economy customers demand engagement, information, support and ultimately, value and ecosystems such as Twitter are beginning to deliver here.
Think about your organization and ask yourself these two questions: Are external social media sites restricted or blocked while at work? Is the use of social media in the workplace inhibited or frowned upon? If you answered yes, then your organization is one of the majority of firms with over 100 employees that have yet to embrace the use of social media in the workplace for the average worker. In a study conducted by Robert Half Technology entitled "Whistle But Don't Tweet At Work," many organizations are struggling with how to integrate social media into the workplace.
Heeding the wisdom of Peter Drucker might have helped us avoid—and will help us solve—numerous challenges plaguing communities around the world: restoring trust in business in the wake of accounting scandals and the global financial crisis; attracting and motivating the best talent without creating crippling financial commitments; addressing societal problems such as climate change, health care, and public education; dealing with trouble spots in central Asia and the Middle East. If Peter Drucker were here today, what would he have to say about such pressing matters?
When thinking of any Social Business Design problem, it's important to realize that there are three areas which will define all of the challenges which will need to be resolves in order to move any business toward a more open, collaborative model which benefits all constituents (employees, customers, partners). These areas are: People Process Technology Right now the industry is focused on technology, which is understandable since advances in it have enabled us to do so much more with less. However, I wanted to focus this short post around a subset of people. It's a thing commonly referred to as "corporate culture".
When asked about the efficacy of your latest marketing efforts, do you have an elevator pitch? I know the conventional wisdom is that you need some punchy, data-rich, confident spiel to throw at all those questions you get from nosy fellow C-suiters, but I have a contrarian thought for you: You risk sounding like an idiot.
How Big Blue is forging cutting-edge partnerships around the world.
When A.G. Lafley was named CEO of Procter & Gamble during the summer of 2000, the task of turning the organization around looked overwhelming. The price of a share in the consumer packaged goods giant had declined by nearly 55% in just two months. The company was missing revenue and profit targets as it learned to grapple with the Internet and new global competitors. To remain the world's preeminent maker of useful stuff for the house, P&G needed to make a lot of changes very quickly. Lafley saw design as being central to P&G's transformation. Design promised to unleash the creativity of the organization and find new ways to unlock value that a marketing-driven company might not have discovered.
Deciding whether to adopt a customer-centric orientation is a significant decision for organizations, not to be made casually. It results in debates defining customer centricity, often with the question, "How customer-centric do we need to be?" Inevitably, it means organizing around the customer and the further proliferation of the types of marketing needed to do so effectively. The many companies that have embraced a customer-centric orientation have experienced some real and often unexpected challenges. At the center of these challenges is the role of the chief marketing officer -- the person who needs to deliver thought leadership, lead the strategy debate and reorganization, and then integrate the various marketing types into a company-wide, customer-centric orientation.
Up until a year ago, innovation was the toast of the business world. Companies around the world were investing heavily in design, launching new products, and even building virtual retail stores in Second Life. Then the financial crisis erupted, destroying shareholder value, corporate budgets, and family income alike. In the wake of that disaster, it's entirely legitimate to wonder: is innovation relevant anymore?
North of the Arctic Circle, a top priority for fishermen is to catch and dry enough char to last the winter. Fishermen near the equator race to market before insects and bacteria spoil their catch. Climate is the driving factor shaping these vastly different fishing practices. In many corporations, the same is true for marketing and IT departments.
I am an early adopter of social media and set up my listening post 5 years ago to scan for people, trends, and ideas related to social media and nonprofits. Listening and engaging with people has been critical to any success I’ve achieved as a social media practitioner – whether I’m blogging or fundraising for Cambodian children. For the past five years, I’ve been teaching social media workshops for nonprofits and lately doing deeper dives on the techniques of listening both for nonprofits and in my role as Visiting Scholar in Residence at the Packard Foundation. This is a four-part series about listening for nonprofit organizations summarizes the insights I’ve learned about listening.
India's Tata Group has made innovation part of its DNA, setting up a way for handling new ideas and making creative thinking a performance criterion.
A few years ago, we were asked by a regional coffee roaster to redefine the coffee experience for fine dining. We knew that Americans drank coffee after dinner for functional purposes (to wake/sober up), but we wanted to understand how we could create a more emotional experience. We grabbed our notepads, went into the field, drank a lot of coffee, studied coffee rituals from different cultures and ultimately crafted a compelling coffee experience that could have resurrected the after dinner coffee ritual in America. The client loved it, but never brought it to market. Why?
A recent survey conducted by Proofpoint found that 8% of companies had terminated employees due to social media usage (common causes including sharing sensitive information on a network). And while the statistic seems significant, it only underscores one of several upcoming challenges nearly every organization will face as changes in people, process and technology fueled by the collective movement we call social media begin to transform business. Here are a few challenges that every organization should be planning for right now. If you aren't you will be.
It all started with Pedro the Dog. Early in 2008, Pepsi marketers were still figuring out their new top executive, Massimo d'Amore, recently named head of PepsiCo Americas Beverages. But they quickly got a taste of what was to come as Mr. d'Amore did an end run around the brand's marketing team and then-Gatorade agency Element 79 by working with Peter Arnell to create a Super Bowl ad. The spot, which consisted of little more than a big, black dog lapping Gatorade from a bowl, was widely criticized. Since then, an exodus of key marketing and brand executives has plagued a company once known for incubating top talent.
Conventional wisdom says that to be successful, our ideas—be they designs, strategies, products, performances, or services—must be concrete, complete, and certain. And when it comes to managing a company big or small, we need organizations to be highly ordered, with a strong and well-defined structure. But what if that’s wrong?
In 1999, Whirlpool's (WHR) then-Chief Executive David R. Whitwam set a goal: He wanted the leading maker of big-ticket appliances to be No. 1 in innovation as well. Whitwam's pronouncement kicked off a flurry of ideas. Not all of them were sensible. "There were some wacky ones—bicycles, tennis shoes," recalls Moises Norena, director of global innovation. Whirlpool needed a system to evaluate and screen ideas, advancing promising concepts and culling out those that were better forgotten.
Starbucks Corp. built its business as the anti-fast-food joint. Now, the recession and growing competition are forcing the coffeehouse giant to see the virtues of behaving more like its streamlined competitors. Under a new initiative being put into practice at its more than 11,000 U.S. stores, there will be no more bending over to scoop coffee from below the counter, no more idle moments waiting for expired coffee to drain and no more dillydallying at the pastry case.
Umair Haque yet again demonstrates thinking that's pushing the envelope with regards to strategy and economy. Umair's presentation centers around the problem with corporations that generate value by exploiting resources in an unsustainable manner.
After months in development, the new product is ready for worldwide launch. The product manager tells the creative team to use a picture of a globe. "But our brand is about what we do for people. Our brand guidelines specify images of humanity," the designer pleads. "I don't care. Use the globe," the product manager demands. Unfortunately, there's always the need to balance business objectives with branding goals. Says the VP of Global Branding for a major commercial information data base company, "It's not that product managers ignore branding. They don't understand how to leverage it."
When what you teach and develop every day has the title “Innovation” attached to it, you reach a point where you tire of hearing about Apple. Without question, nearly everyone believes the equation Apple = Innovation is a fundamental truth. Discover what makes them different.
Two items in the Wall Street Journal caught my eye today. Both show us the American corporation as it struggles to divine the mysteries of American culture.
A new role is gaining prominence in the C-suite, as companies increasingly are hiring chief commercial officers to oversee sales, marketing and innovation. That's the finding detailed in a new white paper from executive-search firm Heidrick & Struggles. According to the firm, 56 companies appointed CCOs in 2008, up from just five in 2001. And already in the first half of this year, 36 companies have appointed CCOs.
With all the news coverage today on financial mismanagement, I can tell you from first-hand experience about a company that continues to prosper amid all the chaos. And I think it is worth trying to understand why.
Things are changing at a pill-popping rate in today's marketplace. Marketing messages are mushrooming (try saying that three times fast) and people's preferences are changing rapidly, which turns today's peacock into tomorrow's feather duster. And that's really why branding is today's most powerful business concept.
It has become almost a cliché to say that cross-disciplinary teams are a key component for successful innovation. If certain problems are beyond the scope of any individual—and most of them are—the way to address them is with a team with complementary skills and a common language in which they can all communicate. But useful guidance starts to dry up rather quickly beyond that. Since there is no reliable secret formula that can be used by a hiring manager or someone trying to build up appropriate skill sets, I thought that I would share a way of thinking that I have found really useful.
I've been working with companies on SEO for over a decade now, and there's one thing I've noticed: all things being equal, healthy companies with great cultures seem to do much better in organic search results. And by organic success, I mean the good, white-hat, Matt Cutts-approved kind of success. I bet that if you found the companies that do well in organic search, you'd also find companies that Jim Collins (author of "Built to Last" and "Good to Great") would be proud of. This correlation can't be coincidence, so I've outlined some reasons why this might be so.
The pressure to cut costs is stronger than ever, leading more and more marketing organizations, both advertiser and agency, to talk about how to reconfigure their marketing processes with one goal in mind: reducing costs. Typically the cuts focus on cutting the marketing/media budget, headcount and nonessential expenses by a certain percentage. Instead, companies and agencies need to take a close look at how their marketing organizations are structured as well as their processes for getting things done.
Recently, the CEO of a leading financial institution asked us, "How do we kick-start innovation throughout the organization and how do I make it self-sustaining?" This CEO seemed to be 'done' with hiring companies or consultants to do one-off innovation projects only to find that the momentum stopped the day they walked out of the door. And clearly she did not believe that one specific outside company could change the corporate culture by themselves.
It would be profoundly reassuring to view the current economic crisis as simply another rough spell that we need to get through. Unfortunately, though, today’s mix of urgency, high stakes, and uncertainty will continue as the norm even after the recession ends. Economies cannot erect a firewall against intensifying global competition, energy constraints, climate change, and political instability. The immediate crisis—which we will get through, with the help of policy makers’ expert technical adjustments—merely sets the stage for a sustained or even permanent crisis of serious and unfamiliar challenges.
I recently spoke at and attended the Conversational Marketing Summit in NYC. On day two, I heard something from Brian Wallace of Blackberry that echoed thoughts I've been preaching for a while. He said "I was selling in the idea that social media is free, until the community manager headcount came in."
Brands do not die natural deaths. However, brands can be murdered through mismanagement. Some brands are beyond hope -- but others can be revitalized.
If you want to understand why some companies lack innovative ideas, think about the man who can’t find his car keys. His friend asks him why he’s looking for the keys under the lamppost when he dropped them over on the lawn. “Because there’s more light over here,” the man explains. For too many companies, that describes their search for new ideas, and it pretty much guarantees they won’t go anywhere fast. While such a company can marginally improve what it’s already good at, it misses out on the breakthroughs—those eureka moments when a new concept pops up, as if from nowhere, and changes a company’s fortunes forever.
Times are tough. People are hurting. Your mission to help people is critically important. But please don't confuse "mission" with "strategy."
Ask any businessperson what marketing is about and they’ll answer with clichés about satisfying customer needs or “world class” service. Eventually they’ll get around to the 4 Ps, advertising, USPs, viral and social marketing, and a plethora of brand distinctions like: brand promise, brand identity, brand image, brand religion, brand essence, brand personality, and on and on.
Paul Polman is the only senior executive to have worked at each of the three biggest consumer-product marketers on Earth in the past five years -- Procter & Gamble Co., Nestlé and Unilever. As such, he's seen a variety of takes on how to run global marketing, and his unique perspective is this: No single solution will work universally, even within the same company.
In my last post I identified three things that can turn leaders into laggards: the practical difficulties of sustaining above-average performance, the natural obsolescence of once-vital strategies, and the corrosive impact of discontinuous change. Now let me add a fourth: success corrupts.
In all my years in the brand business I have yet to run into a company that doesn't have a set of brand guidelines. You know, the carefully crafted criteria for tone and manner, the graphic standards--colors, logo typeface, and the like. Some even include terminology, the voice and verbiage required for use in ad copy, speeches and collateral material. While this is all well and good, it's not nearly good enough at a time when "who" is increasingly trumping "what" as a crucial factor in brand success.
Designer Dustin Curtis was so disgusted with the American Airlines Web site that he redesigned it, and posted the results as an open letter to the company. Guess what? One of AA's designers responded with a long defense about why better design dies a slow death at places like AA.
"How should i change my marketing organization?" That's the most frequently asked question of members of the Association of National Advertisers. These are large, sophisticated companies. They're supposed to know what they are doing. So why are they asking the question?
Designers often wonder or whine about how their work is not recognized, accepted or even respected in their organization. What many designers don’t realize is how they or their designs are treated has to do with how the discipline of design is viewed within their organization. While most of the time I reference organizations that have in-house design teams, most of the topics of our discussion today can also apply to consultancies looking to service organizations that buy design services. There are many levels of how Design is viewed or integrated within an organization. This is what I like to call “The Design Functionality Axis” as illustrated above. The Axis stretches from a low level Supplier relationship at the base of the triangle to a Strategic Design Leadership relationship
Procter & Gamble Co. is giving its beauty and grooming division a dramatic makeover. As sales falter in its $27.8 billion global division, P&G plans to restructure the unit to make a greater play for men and could develop new products for high-end retailers, salons and spas, according to an internal company memo reviewed by The Wall Street Journal.
U.S. News & World Report’s interview with Susan Docherty, North American Vice President for General Motors provided some valuable insight into the troubled car company. Her comments made it clear that GM is operating from a reactive, backward looking stance.
I've been thinking a lot about issues of scale and units of measure. Many businesses that are in trouble are in trouble for a simple reason: they're the wrong size.
Algorithms in business appear to be magical, because they allow you to be smart about problems you haven't seen before. The 'angry customer' algorithm or the 'promote a book' algorithm don't always work, but they are approaches that work on a huge range of problems. All of which is a long way to wish Charles Darwin a happy birthday. The simple algorithm he described is often misunderstood but is robust and flexible and powerful, and it works for ideas and businesses as well as fruit flies and turtles.
The Postal Service has withstood challenges from the telegraph and telephone. It has adapted to stagecoaches, railroads, airplanes and other innovations that quickened the pace of American life; however, the economic crunch and digital mail may be forcing the postal service to change its operations.
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