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Fear Factor is my piece of work i have done as thesis on berlin school of creative leadership in 2009 about brands and their fear to differentiate. Majority of brands today are mediocre, lacking clear …

Fear Factor is my piece of work i have done as thesis on berlin school of creative leadership in 2009 about brands and their fear to differentiate. Majority of brands today are mediocre, lacking clear diferentiation. What the hell is hapening? My hypotesis is that the ultimate reason is fear from differention - the fear factor, that lets this happen. read on...or go to

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  • 1. Fear Factor Master’s Thesis FEAR FACTOR Fear to Differentiate Lucia Tarbajovská 1
  • 2. Fear Factor 2
  • 3. Fear Factor Master’s Thesis FEAR FACTOR Fear to Differentiate Lucia Tarbajovská Master of Business Administration Creative Leadership Class of 2008 - 2009 1. Supervising Tutor: Dough Guthrie 2. 2.Supervsing Tutor: David Slocum 3
  • 4. Fear Factor Statement of Authorship: This dissertation is the result of my own work. Material from the published or unpublished work of others, which is referred to in the dissertation, is credited to the author in the text. Prague, 06.06.2009 Lucia Tarbajovská 4
  • 5. Fear Factor The oldest and strongest emotion of mankind is fear. HOWARD PHILLIPS LOVECRAFT 5
  • 6. Fear Factor Shadows Shadows are the shy souls Of what matters to sun The walks of slow move Pretention in the trees And those who worry Those who loathe novelty Those who find richness in familiar Dare not to find pleasure in them To them fear is the master 26th June 2009, Lucia Tarbajovska Note: As I was researching the Fear Factor, I wrote a poem that is relevant to the same topic. I thought I include it here to open the paper in a poetic way. 6
  • 7. Fear Factor Contents List of illustrations & tables 9 List of abbreviations 10 Inspiration to write this thesis 11 Hypothesis 12 - 13 Understanding fear factor 13 - 42 Quotes 13 Fear defined 14 Scientific context 15 Smell of fear 15 - 17 Fear of novelty 17 Fearless leaders 17 - 20 Safe decisions 20 - 22 Leadership is about overcoming fears 22 - 23 Courage 23 - 25 Differentiation 25 - 28 Mediocre brands 28 - 29 Leading suppliers and partners 29 - 30 Testing 30 - 32 KPI’s 33 Brand prostitutes 33 -35 Reactiveness to competition 35 Communication 35 - 37 Organizational culture 37 Organizational structure 38 - 39 Fear factor and financial crisis 39 - 42 Research 42 - 99 Methodology 42 Research findings - Qualitative research findings 44 - 78 - Quantitative research findings Appendix #2 Research analysis - Qualitative research analysis 44 - 77 7
  • 8. Fear Factor - Quantitative research analysis 78 - 99 Conclusion & recommendations 105 - 109 10 freedoms from fear 109 Bibliography 112 - 113 Appendices Research questionnaire Research findings Beef magazine article Fear factor Note: When talking about creativity in this paper, I talk about being able to create something new, being able to innovate, and differentiation as such belongs under this as well – because differentiation is about new things, novelty, innovation, new ways, new directions, reinvention etc. 8
  • 9. Fear Factor List of illustrations & tables Illustrations Skinner box, Nina Leen/Time-Life Pictures/Getty Images The smell of fear, iStockphoto/Joshua Blake Martin Luther King, Nelson Mandela,, Getty Images Aung Suu Kyi, Steve Jobs, Richard Branson, 99 Fears, Nedko Solakov Analysis paralysis, Tom Fishburne, Sticker by Peter Saville, This is not a brothel, Four freedoms of DDB ( Strategic vs. creative thinking, The Brand Gap, visual presentation of Marty Nemeier, Neutronllc Google home page, Method multi-surface cleaner, Tables Best global brand 2008, Interbrand, 9
  • 10. Fear Factor List of abbreviations IPO – Initial public offering ROI – Return on investment KPI’s – Key performance indicators ARPU – Average revenue per user EBITDA – Expenses before interest, taxes, depreciation and amortization OFCF – Operating free cash flow CAPEX – Capital expenses OPEX – Operating expenses MVNO – Mobile virtual network operator CFO – Chief financial officer NFC – Near field communications (mobile payments through mobile phones) 10
  • 11. Fear Factor Inspiration to write this thesis During the past 10 years, I have been working for a number of corporations, to name a few – Globtel GSM (Orange Slovakia as of today), Samsung Gulf Electronics in the MENA region, Bang & Olufsen Middle East, Montblanc, Vodafone Czech Republic and T-Mobile Czech Republic. I have always worked in the area of marketing, whether it was brand, communications, retail or business development. I am fascinated by strong brands, well-positioned and differentiated brands. All brands reach a point in their growth when they start to loose out on their differentiation and become mediocre. They loose their courage and grow into fearful creatures. These are the symptoms for a vast majority of corporations. There are very few strong, clearly differentiated brands among such large organizations. I believe, this is due to fear to differentiate (the fear stemming from various reasons), which I call the FEAR FACTOR. This is what I aim to discuss in this paper. Paul Arden, author of the book “It’s not how good you are, it’s how good you want to be.” proposes this question: “Why do we strive for excellence, when mediocrity is required?” I absolutely agree, that a success of a brand is a reflection of their ambition. If you dream big, you fly high… My mission is to help organizations, brands to be different, stand out, be bold, to tell a unique story in their market. I am seeking some poetry or art in business. Not art for the sake of creating something different or shocking without a reason, but because I strongly believe each brand is a unique story with a unique character that you may fall in love with, even if they are not pretty. 11
  • 12. Fear Factor Hypothesis There are many drivers of fear, but there is one important consequence of it. “Fear to differentiate is the primary driver of mediocrity for brands in the market. I feel there are a lot of average and mediocre brands out in the market today. There are a lot of drivers of fear that experience brands, but there is one ultimate consequence of it – fear to differentiate, fear to stand out from the mass. It seems, brands have lost guts and courage to stand out. They end up standing for nothing, which means people do not know why they should choose them. They do not stand for something crisp, edgy, well defined and that again means that customers do not know why they should choose them, what those brands are promising to them, and ultimately they become irrelevant to them. As Sir John Hegarty, CEO of BBH said in a Q&A session after his speech “10 reasons why is it good to be in advertising” in London, May 2009, the biggest fear for the agency is to become irrelevant. I believe lots of companies do not know who they are, what their clear vision is, what their brand story is, what their core values are, for whom their products are, who are the right people to work for them etc. If the basic isn’t fixed and defined – if the brand vision, positioning and personality are not fixed, it will show in every part of the organization – e.g. innovation, hiring, decision making etc. Of course it is not only about definitions in brand books and presentations, but more importantly it is in the everyday business, in the life of the company. Apple is a great example of a brand, which knows exactly who they are, what they stand for, what their brand story is, for whom their products are etc. This copy from “Think different” campaign of Apple Computer shows it beautifully: “Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can praise them, disagree with them, quote them, disbelieve them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They invent. They imagine. They heal. They explore. They create. They inspire. They push the human race forward. Maybe they have to be crazy. How else can you stare at an empty canvas and see a work of art? Or sit in silence and hear a song that's never been written? Or gaze at a red planet and see a laboratory on wheels? We 12
  • 13. Fear Factor make tools for these kinds of people. While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.” On the other hand, there are companies who don’t know this at all or have a slight idea of these basics – they do not know who they are, what they stand for... I remember one management group meeting discussion about importance of leadership in our company. I asked management what kind of leaders do they want us to be? I thought (and still think) we should be different than leaders of other companies. I would assume we should have different values than leaders of other companies. The management of the company was unable to answer my question at that time. What does this mean? If a company doesn’t know what kind of leaders they should have, what values they should have, this means they actually do not know whom to hire. Who are then the people such companies bring on board and expect them to win the game in the market? I believe differentiation needs courage, conviction, belief and passion. And companies which do not dare to differentiate, thinking they are there for everyone are there actually for no one in the same time. They want to connect with every potential customer, because there is revenue potential in them, but they end up being very generic and irrelevant. Of course differentiation isn’t a solution for everything. There are other elements to a success of a company. There are of course many cases when companies know who they are at the beginning, when they decide to establish their company, they know what they stand for and yet they get lost on their way, for example when a company is growing bigger (the bigger the company the bigger the responsibility and risk, when decision making is made in a collective consensus etc.) With globalization and current economic crisis, handling the Fear factor - fear to differentiation - becomes even more important. The world of sameness and mediocrity is readily available around the globe, accessible to everyone. Attention of consumers is won only by brands that are dramatically different. And the economic crisis adds to it because they are more careful about their expenses. 13
  • 14. Fear Factor Understanding the fear factor Quotes To warm you up, I collected a few quotes from famous people, which I found interesting and relevant to the topic of Fear factor. There is a certain degree of satisfaction in having the courage to admit one's errors. It not only clears up the air of guilt and defensiveness, but often helps solve the problem created by the error. - Dale Carnegie Great spirits have always encountered violent opposition from mediocre minds. The mediocre mind is incapable of understanding the man who refuses to bow blindly to conventional prejudices and chooses instead to express his opinions courageously and honestly. - Albert Einstein Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or nothing. - Helen Keller I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear. - Nelson Mandela We are taught to understand, correctly, that courage is not the absence of fear, but the capacity for action despite our fears. - John McCain Fear defined Wikipedia defines fear as an emotional response to threats and danger. It is a basic survival mechanism occurring in response to a specific stimulus, such as pain or the threat of pain. Psychologists John B. Watson, Robert Plutchik, and Paul Ekman have suggested that fear is one of a small set of basic or innate emotions. This set also includes such emotions as joy, sadness, and anger. Fear should be distinguished from the related emotional state of anxiety, which typically occurs without any external threat. Additionally, fear is related to the specific behaviors of escape and avoidance, whereas anxiety is the result of threats, which are perceived to be uncontrollable or unavoidable. 14
  • 15. Fear Factor Scientific context Gregory Berns, M.D., Ph.D., from the Center for Neuropolicy at Emory University, made a parallel between work and Skinner box. He said that work is feeling more and more like a Skinner box today. Nina Leen/Time-Life Pictures — Getty Images The Skinner box was invented by experimental psychologist B. F. Skinner in 1950’s, to train laboratory rats to associate flashing lights and levers with rewards and punishment. If the light flashes green when the rat pushes the right button, it is rewarded with food. When the light flashes red, it is punished by electric shock. A rat can soon associate flashing lights with rewards and punishments. As he said, even though the workplace isn’t quite an electrified cage, he would prefer little kicks of electricity over the intermittent shocks of watching the blinking red arrows of the stock market or the jolts of continuous cutbacks done by businesses. Fear of punishment, as in the economic downturn, can alter humans’ decision-making. The smell of fear We often say, after we experience a difficult situation, that we could see it coming. We smelled something in the air. We knew something is going to happen. How many times have you seen a person thinking heavily about something, trying to solve a difficult situation, rubbing his or her nose? Many times, right? 15
  • 16. Fear Factor iStockphoto/Joshua Blake Referring to an article I read online from Sarah Hewitt of University of Calgary, about the smell of fear, we not only scream or yell when we get into a dangerous situation, but we have other, more subtle ways how we show the fear. There are so called alert pheromones and in mammals they are linked with emergency behaviors such as freezing, attacking or scattering. A recent study from Julien Brechbühl, Magali Klaey and Marie Broillet from University of Lausanne, published in Science in August 2008, confirms the presence of such alarm center and alarm pheromones in the olfactory system of a mouse. Right at the tip of the nose, there is the so called Grueneberg ganglion that contains olfactory neurons with some specialized chemosensory functions. Using calcium imaging techniques and behavioral analyses, the investigators took the alert pheromones of one mouse and found out they respond to pheromones released from another mouse. In the behavioral experiments they disabled the neuronal projections in the Grueneberg ganglion. Normally, the alert pheromones would cause alert behavior such as freezing or so. But because the alert pheromones were not produced, the animals in experiment continued exploring without any sense of danger. ScienceDaily from March 2009, reports about many animals under threat releasing some kind f chemicals that functions as a warning signal for their species and those take action to avoid the danger Research by Rice University psychologist Denise Chen suggests a similar phenomenon occurs in humans. 16
  • 17. Fear Factor So, perhaps, the tip of our nose really can signal danger and can help us deal with fear. Fear of novelty The first time a fox saw a lion, he was so terrified, he almost died of fright. When he saw him again, he was still afraid, but hid his fear. But when he met him the third time, he was so brave, he began to talk to him as though they were old friends. Familiarity breeds contempt. Aesop’s Fables, “The Fox and the Lion.” The evolutionary concepts of novelty and familiarity, discussed in the book of Glenn D. Walters, Beyond behavior, Construction of an overarching psychological theory of lifestyles, confirm that human infants are attracted to novel stimuli for the first months of their lives and later on, as they experience different stimuli, they start showing fear for the novel things and a growing preference of familiar things. This fear of novelty is then, under certain social circumstances - if they have a caregiver they are emotionally attached to, if they feel secure in their environment, if someone encourages them to explore the new etc., replaced again by a growing interest in novel stimuli as the child matures and makes sense of the world around them. I think it is very important to understand this interrelationship between fear, novelty and familiarity. This is something that goes with us throughout our private as well as business lives (for this paper the business life is the focus but the latter rests on the first) and we may find some important parallels and learning coming from our childhood and relationship to novelty in our business life – specially influencing our decision making and management of fear when venturing into new things such as differentiation. Fearless leaders Some people choose the road that is more difficult to take, with more traps and dangers on the way. Why wouldn’t they take the easier, far less dangerous one, if they can choose? There aren’t many of those in the history and even lesser in the business world. Is it because they never got anything easily in life and they do not believe something should fall into their arms just like that, or is that they can smell 17
  • 18. Fear Factor the fear, the dangers in roads that seem to be invitingly easy to take and thus could be taken by everyone? Let’s take examples of few extraordinary fearless leaders from the history (from the Gordon Brown book of Courage, where he describes 8 portraits of outstanding leaders of the 20th century) and from business today. Martin Luther King, Martin Luther King – courageous leader in the African-American civil rights movement and today still frequently referenced as one of the most important human rights icons in the history. Most of us remember him thanks to his “I have a dream” speech that he delivered in 1963 in Washington and that raised public consciousness of the civil rights movement. This speech established him as one of the greatest orators in U.S. history. Nelson Mandela,, Getty Images 18
  • 19. Fear Factor Nelson Mandela, the heroic leader of South Africa’s struggle to liberate itself from apartheid, he considers great courage over a long period against daunting odds. Aung Suu Kyi, Life of Aung San Suu Kyi, who for 20 years – much of that time under house arrest in Rangoon – has led her country’s democratic opposition to military dictatorship, and continues to do so today. Jobs holding a MacBook Air at Macworld Conference & Expo 2008, source: 19
  • 20. Fear Factor Steve Jobs, the cofounder of Apple, finding a smart way back to Apple, actually bringing the company to its flourish and commercial peak. In 2007 he was listed as Fortune Magazine's Most Powerful Businessman and is considered to be the idiosyncratic, individualistic Silicon Valley entrepreneur. He goes on emphasizing the importance of design and aesthetics to the appeal of people. He strives for function and elegance, he shakes up old business models present in the market, he enters new categories... Richard Branson is known for his opportunistic approach to business – he can sniff out great deals and opportunities and does not hesitate to explore them unlike others most probably would. He has the guts and no fear to venture into new things and therefore there was never before a single brand that has been so successfully distributed across such a diverse range of products and services. What does it take to take a tougher road? What does it take to be a fearless leader - a leader with guts in politics or in business – it doesn’t matter where? These qestions rise, as well as many others because there are as few courageous leaders as there are courageous brands in the market. So, are the leaders determinant of a bold brand that isn’t a victim of the fear to differentiate – the fear factor? I believe so. Safe decisions Today, most of the companies are led by CEO’s who have graduated from a good business school, they are masters of business administration. The name itself – business administration – says it – they are expected to administer the 20
  • 21. Fear Factor business rather than creatively cultivate the business. And they are not administering it alone. Their right hands are the CFO’s and consultants. The business decisions made by leaders are mostly calculated, logical and therefore safe. Every decision rests on some kind of calculation – calculated business case, forecast of usage or spending pattern, tested revenue potential. Marty Neumeier describes this in his book the „Brand Gap“. He says that if there is no room for new and untried, therefore unsafe, there is no room for creativity, therefore no room for innovation. And therefore, from the point of view of this paper – there is no room for differentiation. In paradox, if you ask the same executives where they see future competitive advantage of their company, they will tell you that of course, it is in innovation. Something is wrong here, don’t you think? I never get the accountants in before I start up a business. It's done on gut feeling, especially if I can see that they are taking the mickey out of the consumer. - Richard Branson It all starts with a great new idea and a strong belief in it. A new idea is something that comes to your mind as a verse, as a methapor and only then you are trying to rationalize whether the idea will fly, fly today or only tomorrow or it won’t ever fly. If a leader is worried about an idea, it is good, it seems it is new, ground- breaking, it doesn‘t mean it needs testing by consumer who is unprepared, scared of something new, never thought of. New ideas need courage, need no fear, need openness to failure. And if you as a leader give no space for that by inviting and calling upon finance people and consultants, you might be locking yourself and your business to an already calculated equation, a linear system of thought and decision and end up not doing anything new. Vladas Griskevicius of the University of Minnesota and his colleagues, U.S. researchers say, that being afraid leads people to go along with the crowd, activating a "safety-in-numbers" psychology, compared to lust that motivates people to go alone. "Feeling scared or amorous can greatly change the way people make decisions," Griskevicius said in a statement. During an experiment they made, they had people watch a short clip from a frightening or a romantic film and then let them view commercials for making a 21
  • 22. Fear Factor trip to Las Vegas. The ads used persuasive appeals either rooted in conformity such as "over a million sold" or rooted in uniqueness such as "stand out from the crowd." The study, published in the Journal of Marketing Research, found that after watching the scary clip, people were especially persuaded by conformity-based appeals that presented the trip as a popular option. In contrast, after people watched the romantic clip, they were not only less persuaded by the same conformity-based appeal, but such appeals were counter-persuasive. People in a romantic state were much more persuaded by appeals that presented the trip as a unique, unusual or exotic choice that others might not make. I’m not interested in building a boutique, but to have the courage to do what I think is right, as opposed to what I think will facilitate a good meeting. And I want to work with people that challenge what we do. I don’t think agencies challenge themselves as much. - David Droga Leadership is about overcoming fears Leadership is all about confronting fears and overcoming them. Furthermore, it is not only about overcoming their own fears but fears of people around them, all stakeholders - people they lead directly and the entire employee base, partners, suppliers, shareholders, public etc. And not only that, it is about overcoming the systems that we live in – the structures, the norms, the templates, the processes, the hierarchies, the rules, the guides etc. Since we are born, we are shaped by the system – parents, education, religion, sport, work (culture, process, hierarchy, media plan to name a few examples), law etc. We are trying to match the expectation defined by the process. We improve in that and we are rewarded for that. So why would we do something against that well built and perfected system? Why is advertising experiencing such crisis. Because we learnt how to do it the right way over the past 30 years and now we are unable to unlearn. And learn something new again? It seems the averege is a big trap in itself. Most leaders are under a constant pressure of fear of failure that ultimately locks them in a routine and pushes them to comfort zones, to consensus, to mediocre decisions. Very often, leaders are avoiding tough calls. It stems from a fear to make a wrong decision. This fear brings along other fears - What if the decision 22
  • 23. Fear Factor causes losses? Will I lose my face in front of management, in front of employees, in front of my family and friends? Will I lose my position? Will i get my bonuses? Can I continue to pay mortgage? How can I maintain my current life style? Much of the messy advertising you see on television today is the product of committees. Committees can criticize advertisements, but they should never be allowed to create them. - David Ogilvy Leaders are exposed and they have to make decisions. But what we see very often is that they avoid decision-making. Whether they make decisions or not, whether their decisions are good or wrong, they stand exposed, their deeds are seen by everyone. I think, people can respect a leader that makes a wrong decision too. Personally, I would rather respect a leader that sometimes makes a wrong and radical decision. But I cannot stand a boss that sometimes makes mediocre or weak decision. Courage A business environment like this one requires managers to be courageous. I suggest taking it a step further by adopting courage as a key value of your organization and injecting it into your organizational culture. The courage to listen, act, make mistakes, admit failure – or rather promote it as learning, and most importantly stay the courage is essential to survival in times like these – the times of economic crisis and separates successful businesses from the rest in more stable times. At the World Effie Festival 2008 Sir John Hegarty, founder, chairman, and worldwide creative director for BBH, talked about irreverence and courage. “When I look at the history of advertising, and I look at the things that have sustained over time, they have had irreverence at their foundation, because they challenge. I think great communication is about challenging,” he says. “What irreverence offers us is a more stimulating way to create and capture people’s imagination and attention.” However, Hegarty warns, irreverence must be constructive. Not only must it lead people to question, but it must also create value. He points to Benetton’s shock advertising as having failed in that regard. “Yes, it shocked me to gain my attention - showing somebody dying of AIDS. It is profoundly irreverent, but, ultimately, I’m left feeling hollow … What are you saying and do you believe it? If not, your vision becomes empty and meaningless.” 23
  • 24. Fear Factor Quoting from “Living the Brand”, brands have increasing difficulty in differentiating themselves. The only way they can create a realizable competitive advantage is by having a distinctive point of view. However stepping outside of the norms is highly risky. There is safety in being in the pack. Courage means confronting the anxiety that goes with difficult choices and then committing to the ideas that ensue.” If we look at the top brands in the brand value rankings, all the brands have been consistently courageous. Take Google with the 43% change in their brand value. What have they done? Those guys have been expanding, innovating, launching one new service after another (Google Mobile, Google Docs & Spreadsheets and Google Book Search, launch of G1 – the open platform Android mobile phone etc.). They are unquestionably the ruling king of the internet. Their innovation extends their role they play in customers’ lifestyles. They change the rules in many new businesses and industries such as telecommunications, media, or advertising, to name a few. And soon might overtake those and others. Are they afraid or shall other be? Best global brand 2008, Interbrand , In the Brand Gap, Marty Neumeier describes a zig-zag road of smart companies, companies that want to stand out and make a difference – very much depending on courage in their decision-making. It takes guts to be different. It is much easier to keep head down because it is more likely it will stay attached to the body. 24
  • 25. Fear Factor Opposite to the would-be leaders, those who follow cannot be the leaders. Of course it is human nature to go with the group, to have approval of our peers, be in the familiar environment. However, creativity and differentiation require companies to abandon the learnt, the done before, the approved by social group, to leave the habit and the routine. On the other hand, it requires carving out new shape, space and direction. It is about the road not taken yet or never taken before. There is trick in this though. Because the measure of novelty in creativity or in differentiation is the fact that it scares the hell out of people. There are many companies, many brands that are so afraid to do anything that would stand out, they would not zig-zag their road in the market, they would chose linear road, easily read, easily followed, easily learnt, easily predictable. This is where Marty Neumeier sees the biggest gap – the gap between strategic thinking and creative thinking. vs. Strategic vs. creative thinking (The Brand Gap, visual presentation of Marty Neumeier, Neutronllc) Differentiation When buying a product, customers look first for something that is functional and relevant to their needs. Only then they look for differentiation – how different this is from other products, what the product is and what is it not in terms of looks, function, image etc. As Nicholas Ind says in the book “Living the Brand”: “Strong brands tend to be opinionated. They clearly stand for something and provide a 25
  • 26. Fear Factor positive reason of choice. Many brands do not have this clarity.” The most important criteria are its functionality, relevance and differentiation. It is not only differentiation that makes a strong brand. We hear such statements as the famous “Differentiate or die” of Jack Trout, or others “Differentiation is critical”, “It is not a brand if it is not differentiated, the brand equals differentiation” and the likes. Yes, differentiation is absolutely critical and without it nothing happens – your brand will not get noticed, you will be one of the fish in the shovel, one sheep in the herd. “If you are standing in a pack of penguins, it takes something more than a black and white suite and two step shuffle to get noticed.” I do hire people to my team quite often. I always ask the candidates one question: “Could you describe mobile operators in the Czech market using some personality attributes that best explain who they are?” There are three major players in our market. The majority of candidates start describing one of our competitors’ brands – one or the other, and only then, as last they come to our brand, they place in the middle of those two, and with no attributes mentioned. They are not able to describe our brand at all. The absence of differentiation leads to price competition and low margins, ultimately to commoditization. Although differentiation is critical, it is not a complete solution. It needs continuous innovation and relevance. Differentiated features, so called preference drivers, must be relevant to customers and offer them benefits and utility. There are some brands that know what differentiation is today. For example Google, with no advertising. Or how they did their IPO (initial public offering) in a completely different way to others advice. They did not follow the crowd on a business model and developed a new one, stayed simple and resisted making the site busy. From the launch of the site in 1998 they didn’t change it much – it remained very simple, very focused. 26
  • 27. Fear Factor This is more or less how the site looks like since its launch. Or take IKEA. They developed furniture you had to put together yourself. And not ony that, they called it strange Swedish names that nobody can pronounce nor remember. They built stores where you had to walk through the whole store to get out. They did everything against the best marketing advice in the world. Another example is Toyota with their Prius – the first mass-produced hybrid vehicle. They built electric cars when the whole rest of the industry said it would be a waste of money. Method – the fastest growing private company in the U.S. producing cleaning products with no toxins in them. Unlike other cleaning products, they clean with natural ingredients. Other cleaning products kill the dirt with toxins – they clean their own home by killing everything outside of their home. People do not have to hide their products under their sinks. They changed their category of detergents to something I would call „responsible cleaning cosmetics for home“. 27
  • 28. Fear Factor Method multisurface cleaner, To build a courageous brand, as Nicholas Ind says in his book „Living the Brand“, the brand in itself must contain tension. If the brand values are expressing what the organization does well, there is little motivation for experimentation and trying new things. But if the brand values are stretching and pulling the organization to sharper ends, there is a sense of dynamics that drives the brand to deliver on those definitions. The question is whether we are prepared to live with this anxiety that is the pre-requisite for building a strong fearless brand. Mediocre brands I think we live in time when we experience a dramatic crisis in differentiation. In 2000, two research companies in US made a study about how well brands are differentiated in a diverse set of categories. They analyzed 46 product/service categories and found that the leading brands in 40 of these were becoming less differentiated in the minds of consumers – as Bruce Tait writes in his article about How marketing science undermines brands at Tait Subler. According to “The Commoditization of Brands and Its Implications for Marketers," by Copernicus Marketing Consulting, most products and services are becoming more similar than different. The study proves that despite billions of dollars are 28
  • 29. Fear Factor spent on marketing and branding every year, most companies have commoditized their product and service brands. None of the 51 product and service categories analyzed in the brand trends study are becoming more differentiated over time and 90 percent are declining in differentiation, with banks, bookstores, bottled water, credit cards, discount stores, and fast food restaurants taking the lead in becoming much more similar and having the least brand differentiation. By "commoditized," Copernicus means a company's products and services are amazingly similar to competitor products and services in features, advertising, and price. It is true. If we look into the category of mobile operators, the products, the services are very similar if not the same. Price as differentiator doesn’t last long. If one operator launches price promotion one week, the others would do so in a week or two later. Almost every operator claims to enrich life of people or bringing them closer, connecting them… And not only operators, all brands around the world picked up on the community jargon. They became all alike. If you look at their positioning statements, you would understand where the trouble is. Words that are sharp, clear, polarizing, will never be on the map of mass brands. Just the word mass brand defines the lack of identity and courage. Leading suppliers and partners Agencies are under pressure of losing their clients at all times. And clients keep distance from their agencies. Clients do not allow agencies being part of their strategic planning and thus end up feeling and doing the „packaging“ only for their clients‘ products and services. Yes, there are exceptions to this – there are some agencies that have their team sitting directly at the clients‘ offices, there are some clients that call upon their agencies to come in when they work on future strategy. But these are rather rare examples. Most clients consider creative agencies as mere suppliers of communication solution and if it sucks, they suck the agency and they take a new one on board until they suck the blood out of them once again. In the globalized world, the reality usually is that a global client has a global agency. Two corporations trying to find creative solutions? Instead of one „polishing“ system – creativity killing system, you have two? I have never seen something good coming out of such equation. Everything takes ages, every creative idea is embracing everything and embracing nothing in the same time, 29
  • 30. Fear Factor everything is applicable for each market and therefore very generic in order to be able to communicate various products under it. It is meant to cost less but it turns out to be more expensive. It is meant to sell and in the end it doesn’t. It is meant to build the brand (consistency and integration) and in the end it doesn’t, people do not like it nor hate it. If creative work doesn’t create opinions and conversations, then it is not creative at all. So in the end client isn’t happy, the agency isn’t happy, they both would like to get rid of the other and yet they stay living in the terrible marriage for long – they do not talk openly, there is no trust in that relationship, they do not love each other anymore, they do not find solutions but problems and issues, clients find ways how to work with other agencies, they punish each other if the contract allows them to. And the fear cloud is hanging above this all. Clients tend to do tenders for communication needs they have. They want to collect the best possible creative ideas at all times and do not care much about developing a relationship of trust, respect, openess and no fear among them and their agencies. Most agencies run scared, most of the time... Frightened people are powerless to produce good advertising...If I were a client, I would do everything in my power to emancipate my agencies from fear, even to the extent of giving them long-term contracts. - David Ogilvy Testing To eliminate risk and fear in corporations, they test everything. People are afraid of their failure – they may fail to deliver business results or fulfill their KPI’s, they are afraid of professional failure, therefore it is very handy to cover their back with data from researches. They first search for insights, study consumer needs, lifestyles, business potential, ask people about the product, whether they would need it, how would they use it, when, how much would they be willing to pay for it etc. They calculate business cases for everything they do, pilot it, pretest creative work - communication concets for the same, sometimes multiple times... Before they launch anything, the product idea goes through so many stages of checks. However creative the initial idea might be, the creativity is burnt in all these „polishing“ stages. 30
  • 31. Fear Factor Source: 99 Fears by Nedko Solakov I notice increasing reluctance on the part of marketing executives to use judgment; they are coming to rely too much on research, and they use it as a drunkard uses a lamp post for support, rather than for illumination. - David Ogilvy As Marty Neumeier writes in the Brand Gap, often the first thing companies do when faced with a big decision they order up a massive study – the bigger the better. He says that if you want to cover your butt, go for a big stack of quantitative data. They are impressive and can lead to analysis paralysis when companies try to turn them into meaningful initiatives. All those numbers cause people to focus on small, incremental improvements that do not require any real courage and in the end do not make much difference either. He proposes to go for quick and dirty studies because they save time and money, plus they focus on one problem at a time. 31
  • 32. Fear Factor Analysis paralysis, Tom Fishburne, There are many studies that show decline in brand differentiation. Marketing consultant Bruce Tait writes about how marketing science undermines brands by fostering me-too strategies. The disappearing differentiation forces brands to compete merely on price. He explains why in his article for AdMap in 2004: “If brands are to succeed they need to be based on differentiated, unfamiliar brand strategies. Unfortunately, these are the exact same ideas that people initially dislike. That’s why quantitative testing of alternative positioning ideas will likely systematically kill the more original ideas, and people will prefer the ones that are closest to what they already know.” He goes on explaining how managers cover their backs with results from researches: “Brand building is dangerous to your career if you don’t cover yourself with research. The market place is a complex and ever-changing environment. Things can go wrong. But if you do all the right testing beforehand and if you get a good test score, who could really blame you? Everyone involved in a failure can point at the test scores and ask, ‘Who could’ve known?” 32
  • 33. Fear Factor KPI’S Most companies, especially those listed in the international stock exchanges focus on short-term results. The company is under huge pressure of their financial KPI’s (ARPU, EBITDA, OFCF, CAPEX, OPEX etc.) and every decision that is made in such company is mainly resting on financial basis. Long-term orientation is usually missing. It is rather secondary or tertiary. Long-term goals are soft, usually emotional – e.g. build love mark, become most fair and transparent, best service provider, best customer service or treatment etc. All these goals are too soft and not easy to embrace by management. Brand prostitutes Majority of brands go where the cash is. They go anywhere where they see a positive business case. They do not care whether it would fulfill their vision – do they have one and are they true to it? They do not care about their strategy, whether this belongs to their brand personality or whether this continues telling their brand story, whether this is for that customer whose need they aim to fulfill. Instead, they go where they can fill their pockets, where a new revenue potential is, where the business case is, they do not question themselves beyond financials and capacity (revenue, capital expenses, technical or time capacity)…they claim they are for everyone, but who are they and if so, are they the same to everyone or different to different people? I an interview with Beef magazine I called this phenomenon as “brand prostitution”. This means that you do not care to whom you sell your brand, your products and services, you offer them to all, merely taking care about the money you get from them. Below is a sticker designed by Peter Savillle, great English visual communications designer, created as an expression of anger over the professional prostitution (can we call it professional if it is prostitution?) of people working in the visual communications. Agencies, designers do work for everyone, they do not chose with whom they work and whom they would never work with as clients. What is the value of their work then? Has creative work become a commodity too? Is there no differentiation in it? Do designers go where the cash is, opposed to where the opportunity for creative expression is? 33
  • 34. Fear Factor Sticker by Peter Saville, This is not a brothel, In an interview with Kjell NORDSTRÖM, author of the book Funky Business ( 2000) and one of Europe’s leading business gurus, he talks about differentiation, and how companies should differentiate themselves “ The starting point must be a neat niche, a funky few, a global tribe. You need to understand your particular tribe better than anyone else. You must know what makes them tick, what scares them, what gets them out of bed in the morning, what turns them on. The tribe is the basic unit of business. If you don’t know who your tribe is or anything about them, you are not going to stand out from the crowd. The good news is that there are a lot of tribes out there – and some are enormous. It’s just a question of identifying them, understanding them and meeting their needs better than anyone else. We recently came upon a great example of this in financial services. The American Steve Dunlap was refused a loan to build a resort for homosexuals. So he decided to establish the Gay & Lesbian Internet Bank. The basic idea is to target the 21 million or so American gays and lesbians – a group with a combined annual budget of some $800 billion. Tribes come in a variety of shapes and forms. Pilgrims create tribes. Every year, 75,000 Chevrolet Suburban vans are sold in Saudi Arabia as the pilgrims who visit Mecca are only allowed to enter the city in a vehicle with specific measurements. The only car that fits the specs happens to be the Chevrolet Suburban. If you focus your energy on creating and then exploiting an extremely narrow niche you can make a lot of money. The tribe may consist of one-legged, 34
  • 35. Fear Factor homosexual, dentists. It may be lawyers who race pigeons. But if you manage to capture these customers globally, you can make a lot of money. There are riches in niches.” Reactiveness to competition Many brands are too reactive to their competition, rather than being proactive in fulfilling their own brand vision. Instead of what they should be doing, they act on their competition. I think it is a result of a, not knowing who the brand is, what it stands for and what their strategy is and b, the brand is a victim of short-term results delivery that most publicly traded companies are. As a result of those, brands tend to fall into a trap of being too reactive to their competition and they end up doing what their competition is doing or they are trying to do it differently for the sake of differentiating themselves from them. I ask myself a question – are those brands afraid of their competitors or of their own selves? I give you an example. Brand B, main competitor of brand A, introduces a 30% promo on a service. Company A, reacts in no time and does the same or even better – it offers a 50% promo on the same or similar service. Where does this lead? For a brand, price or product is usually not the point of difference anymore. What is it then? From products, to services, brands should concentrate on delivering unique experiences (unique for their brand) in every contact with their customers. It isn’t easy, because experiences are intangible and emotional. Communication In terms of communication, we are locked in an old system, in silos of the past – agencies as well as clients. We talk and act in ATL and BTL. In the same time, most of us already understand that the boundaries between ATL and BTL are blurred or vanished completely. What was ATL yesterday is BTL today and vice versa. It very much depends on the business and communication objectives and what the role of or expectation from each medium is. Imagine drawing ATL and BTL media on a 3D map today, you would have to shake the map entirely according to the new realities on the market. We are still sitting in those traditional boxes though, we still measure classical media because there are the biggest budgets behind them. We remunerate agencies for what? For ATL 35
  • 36. Fear Factor mainly. I think the biggest disaster is that big corporations attract each other – a client - corporation works with an agency – corporation and they both have become victims of the large perfected norm and mediocrity. The process does not allow them to deliver something extraordinary and original. Growing into this, clients ask for large-scale campaigns to find cost-efficiencies, relying on economies of scale and consistency of their brand look across all markets they operate, however this brings along with itself lack of courageous and venturous creative ideas, approaches etc. Economies of scale applied on creativity? Each agency is aware that their clients will reject a too bald idea in order not to upset their customers. The agency works with this fear of not being able to present the best ideas to their clients or to their headquarters before even showing it to the client. So many times I sit in creative presentations where local agency shows us something they shouldn’t be showing us because international agency or international client did not approve this to be shown to us locally. Or, even worse, international client stops local agency and local client developing local creative completely. I always thought more creative ideas on table equals more choice. In terms of media, specially now when not only the new media landscape but also the financial crisis puts pressure on communication industry, we all talk about trying out new means of communication, reallocating budgets to other media than the classical mix, measuring other media than just TV or print. But then if you look into the numbers, not much has changed in the end. A study of top companies’ chief marketing officers conducted by an industry trade group found that in 2009 the top advertisers are planning to spend only 10% of their budgets on digital media, which is not much of a difference from 2008. Data from TNS Media Intelligence show remarkable steadiness in the list of the top TV advertisers for 2007 and 2008 and only confirm that no big company will change their rules and spend their ad dollars in radical ways. As Jon Fire discusses in his article “Why advertising isn’t dead yet” in the Business Week from 30th of April 2009: “And who in charge of ad budgets will try radical moves today, when a failure will cost them their jobs? This is a comfort- food environment, and no ad form is more familiar to a chief marketing officer than the good old 30-second spot. No one was ever fired for buying a prime-time TV ad. Multiply a rush to the familiar throughout a marketplace, and the result is higher prices. Which brings us to fear - fear of trying a new approach in a difficult time. Fear of missing out on getting your ads on the hottest shows and losing out to your top competitor because they stepped up at the upfronts and you didn’t.” 36
  • 37. Fear Factor Is it just talking, considering, but actually being afraid to do it, to take that decision and make it happen? Why for example mobile operators do not use as the only or as a primary media channel that they own - the mobile phone? Who else should and why is there so much fear in that? Why do they sell it to other companies? To find new sources of revenue? On the other hand, clients avoid to chose courageous creative work, because they are afraid that their product or service might not be accepted, as reason of being too different, provoking, edgy, polarizing, and ultimately ending with scaring off, putting off or upsetting people – damaging their brand, not delivering expected sales figures, losing their faces, bonuses or jobs. When you find out in your advertising scores that a character was not liked or your ad does not fit your brand, what would you do as a brand manager? Would you change the character or would you ask people whether your ad is what they would expect of your brand next time? Or would you rather interpret it this way – it is great, the main hero brought attention of people, it made our ad standing out from the ad break, he as a type was new to them, and you created clear opinions about your brand via the ad – you know which people loved your ad and which clearly did not like it in the same time. What usually happens is the first case, after finding out these issues in their advertising researches, clients make their ads safer and agencies bring safer ideas to the creative presentations next time. Where is the courage and fun gone from our business? 37
  • 38. Fear Factor Organizational culture Organizational culture plays a key role in building a company, business that is self-confident, clear in direction, with defined edges, personality etc. and not the opposite of it, a company full of fear, ultimately a company that is afraid to differentiate. It is important to built failure-allowing culture in an organization. Look at DDB for example. They built culture resting on four main pillars, four main values. They call them four freedoms - Freedom from fear, Freedom to fail, Freedom from chaos, Freedom to be. Because talent is the ultimate resource of any creative enterprise, an organization committed to creative Four freedoms of DDB ( achievement must first be an organization committed to the identification and nurturing of talent. Talent is rare, hard to identify, and only moderately useful in its raw state. To realize its full potential, those responsible for the success of the organization must provide talent with an environment that encourages OrganizationalThe most important element of such a talent-friendly environment is the presence of creative pursuits. structure freedom. Organizational structure influences the way decisions are made, at how many Therefore, the managers of DDB Worldwide all strive to provide, within each agency’s structure, four freedoms levels, they influence responsibility, accountability of people, empowerment, to each individual. speed of implementation, change management etc. Organizational structure is important factorFEAR FREEDOM FROM influencing the fear to differentiate. If a company reaches certain Talent freezes in the grip of fear. The creative mind shuts down, constricting the natural flow of ideas. Fear is size and itbeyondrigid complex processes and levels of decision-making, it slows paralyzing has reason. downnot the what’s even fear. Fearitresults from not opportunity toFear is created by motivesedgy, It is and truth that people worse kills every knowing the truth. deliver something that are suspect, by decisions made in secret for which the basis is not fully disclosed, and by the arbitrary use of courageous and differentiating. power by those who control an idea’s destiny. Fear is created by intimidation. Management by intimidation has no place in our organization. Large organizations ultimately grow too big to bend and move. There is a point in time when TO company reaches certain size and it starts showing similar FREEDOM a FAIL symptoms – symptoms of talent to venture beyond the known — to poke into the unheard of — to pick It is in the very nature of creative corporations. through scary places untrod by conventional minds. Because there are no assurances that such creative forays will succeed, the explorers must be granted the freedom to fail in order to sustain their desire to venture forth again. A lot of corporations are obsessed by their size of organs and organizations. It It is the job of management to first point talented people in the right direction, then judge the value of their seems that But if the quest for the new is responsible and and powerful, yet more arrogant, discoveries. size makes them more important intelligent, talent must not be criticized for daring to fail. self-involved, locked, disintegrated, slow and ineffective. Virgin Group, on the other hand, tries to keep it small in spite of growing bigger and effectively maximize entrepreneurial spirit of its employees and minimize bureaucracy of its systems. 38
  • 39. Fear Factor Google for example, with its 20,000 employees is still relatively small, yet is starts to show the first corporate symptoms – e.g. lots of their designers leave due to rigid testing of everything, they feel they have lost the playground they were used to have. The recent reorganization that is going on now is a proof of it too – Google has grown to a certain size and struggles with silos and disintegration. As Richard Branson explains: “Every time a business gets too big, we start a new one. Keeping things small, means keeping things personal. Keeping things personal means keeping people that really matter.” Suppliers, such as advertising or media agencies, they talk to only communication counterparts at the client side. Their position is so vulnerable and frustrating. They cannot influence strategy, vision, what kind of services the brand will launch etc. and the more it increases when large agencies produce international solutions – one solution for all markets and their products become more and more irrelevant to the specific markets. They are trying to save rather than trying to grow deeper into the organizations/clients to become invaluable. It looks like they were afraid or already gave up on trying to change the game. Fear factor and financial crisis Fear in organizations is even bigger during the times of financial crisis. As we are currently all coping with this issue, I find it appropriate to spend some time talking about implications of fear during this period of time. If a company doesn’t know what it stands for, what its clear positioning is, what its differentiator is, what its core values are, what its value proposition is, what it should do, how and for whom, it will show during crisis more than ever before. The basics are at question during crisis. Most companies start saving on everything and realize later they save for nothing. No company has grown from saving, saving overall adds to shrinking of a company. Most companies make a mistake of not saving for what might have been important. It is because they do not know what is important for their brand and mainly for their customers. Financial crisis, as we experience it now, is a period of panic, period when fear has grown out of control in a company and it ultimately touches everything in the company business context - each bit of business and each stakeholder. 39
  • 40. Fear Factor Employees are paralyzed. They do not know whether they will have their jobs tomorrow. Managers don’t know how to motivate their people, their objectives change all the time or are set to be not fulfilled in order to meet budgets for bonuses. Budgets are cut – budgets for everything – marketing spend, education, travel, wages, rewards etc., bad news is the news. Activities are cut. Things nice to have are gone. The things that have been experimental are gone. The playground is gone. The company saves on everything, it is ill and needs a remedy. What is it? Shareholders want more dividends. Because future revenue is at risk, they want more money now. Suppliers have lesser briefs, lesser jobs, less profit. Customers feel company is playing new tricks with them - they come up with new pricing plans, they change terms and conditions, communication towards them changes to one topic only – wanting more money from them. It is the chopping, cutting, saving, squeezing, snip snap time. The question is - what do those companies save for? Is it just saving everywhere because there is a need to save? Is it saving for shareholders asking for more dividends or is it saving for compensation of financial loss in some other business in the corporate group? Or, on the other hand, is it saving for something that is strategic, some new business opportunity? Is it saving on some areas of business in order to grow other more important areas of business that might not be important today but will become important tomorrow? The latter one has a big potential in motivating people too instead of scaring the shit out of them by the saving mode applied on everything. The crisis is time of clear and also radical decisions. Management not able to make these kinds of decisions only adds to the destructive effects of fear during crisis. Managers who were unable to make decisions before, those who always relied on consensus or made the “not to annoy anyone” decisions, will not give a clear message to everyone in the company now. This will not mobilize company’s energy to where it is needed. All employees will swim in fear and resign on their performance, for they will not be able to motivate themselves when aims, goals, targets are not made tangible to them. What is better – to be lost in the dark of a tunnel or to see the light at the end of that tunnel? Gregory Berns, M.D., Ph.D., from the Center for Neuropolicy at Emory University, talks about impacts of fear on decision making and preference of people to chose their time for punishment themselves rather than waiting for it in time they would not be prepared for it. “Everyone I know is scared. Workers’ fear has generalized 40
  • 41. Fear Factor to their workplace and everything associated with work and money. We are caught in a spiral in which we are so scared of losing our jobs, or our savings, that fear overtakes our brains. And while fear is a deep-seated and adaptive evolutionary drive for self-preservation, it makes it impossible to concentrate on anything but saving our skin by getting out of the box intact. Ultimately, no good can come from this type of decision-making. Fear prompts retreat. It is the antipode to progress. Just when we need new ideas most, everyone is seized up in fear, trying to prevent losing what we have left.” He is a neuroeconomist, which means that he uses brain-scanning technologies like magnetic resonance imaging to decode the decision-making systems of the human mind. He and his colleagues conducted a brain-imaging experiment with their own version of a Skinner box. Instead of a box, the participants were inside an M.R.I. scanner. Instead of using an electrified floor, they attached electrodes to the tops of their feet. Although not unbearably painful, the shocks were designed to be unpleasant enough that the individual would prefer to avoid them altogether. The trick was that they had to wait for the shocks. Every trial began with a statement of how big the shock would be and how long they would have to wait for it: a range of one to almost 30 seconds. For many people, the waiting for the shock was worse than the shock itself. Given a choice, almost everyone preferred to expedite the shock rather than wait for it. Nearly a third feared waiting so much that, when given the chance, they preferred getting a bigger shock right away to waiting for a smaller shock later. It sounds illogical, but fear — whether of pain or of losing a job — does strange things to decision-making. Some people showed strong fear conditioning. Their brains, all their neural resources were fully occupied in dealing with the impending shock. This worrying consumed a lot of energy of the respondents, which lead them to having less available neural processing power to deal with other tasks. This is important because it has to do with so called “endowment effect,” which Berns describes as the innate tendency to value things we own more highly than everyone else does. Furthermore, a recent brain imaging study showed that the same parts of the brain they observed in this experiment are also active when people must sell something they are attached to. The implication is that when our brains sense 41
  • 42. Fear Factor pain, or anticipate loss, we tend to hold onto what we have. When everyone does this at once, the result is a downward economic spiral. When the fear system of the brain is active, exploratory activity and risk-taking are turned off. The first order of business, then, is to neutralize that system. The question is how to do that. Berns suggests avoiding people who are overly pessimistic about the economy or tuning out media that fan emotional flames e.g. closing the Web page with the market ticker. It does mean being prepared, but not being a hyper-vigilant, everyone-in-the-bunker type. He doesn’t care what business it is we are in, but if we think our business will eventually come back to what it was (from the bumpy times to the calm times), our brain is in the grips of the fear-based endowment effect. That is why Berns is always looking for new opportunities. Personally, I find a lot of opportunities in the crisis. It offers new solutions, that haven’t been thought of or yet didn’t dare to be taken by the management. Since all financial tricks and moves from here to there, pricing tactics, promos, changes of conditions to use a service and the likes have run out of the repertoar of CFOs, the time has come to seek new alternatives. Crisis brings clarity to things. Strategy is clarified. Product roadmaps are simplified. Communication is made more effective. Companies do less but with more impact. And those who only look for their own enrichment will die early. Research Methodology I have chosen few types of approaches because each of them offered me a different set of data, richness, depth, openness of respondents and further references for researching this topic. Quantitative research First, I started with a quantitative research. I created a questionnaire at the in order to be able to collect and analyze data easily (See Appendix 1). I found out that my first attempt to send out questionnaires in MS Word via email was a failure – in terms of user-friendliness, distribution, speed, response rate and analysis. I realized this early enough and almost in no 42
  • 43. Fear Factor time I have switched everything to online version of questionnaire at I sent out the questionnaire to my international professional contacts (approximately 400 people) including respondents from various industries, in different management levels, with various job profiles, men and women. The collection of data took few weeks. The first weeks had the best response rate than the later ones. The response rate to the questionnaire was 14%, this means the final sample size of respondents was 56. The gender distribution of the sample was the following: Qualitative research Answers on LinkedIn I have asked a question of my interest at a professional networking site LinkedIn, in order to get a fast but quality answers from professionals in my network as well as outside my professional network. I got more than 50 responses in 2 weeks. See the Answers at 5250193&goback=.ahp.avq_432422_15250193_0_*2.ahp 43
  • 44. Fear Factor In this case, it doesn’t make much sense to talk about response rate, since the responses I got were from within my network and outside of my network, so I actually did not have any control over the reach of the question I asked initially. This is the beauty of the social networking. The final number of respondents is 55. Interviews In addition, I planned to make few interviews, to be able to dive into the topic of Fear factor more deeply. First interview, I planned to do with Google, with Tatana Le Moigne, leader of Google Czech republic. Why Google? I believe, they are one of the most often mentioned brands today and have grown quite big in a short period of time to show symptoms of corporations (the fear to differentiate), and they have some sort of magnetism to their brand without really trying hard and chasing it. Second, I planned to do interview with Richard Branson of Virgin Atlantic, but social networks did not work me through that far to be able to connect with him directly, in spite of having few sparks of almost being connected. Third, I wanted to interview the author of Brand Gap, Mr. Marty Neumeier, the president of Neutron LLC, San Francisco based company specializing in brand collaboration. Unfortunately I got only this differentiating out of office response until this date “Neutron will be closed from June 15 until August 31 for vacation and "strategic remodeling." I'll be answering my emails periodically.” I guess they are busy differentiating themselves and hopefully will answer after they are done for some time again. Finally, I made interview “only” with Google – Tatiana Le Moigne, General Manager for Czech republic. Self-study Last, but not least, I have done a lot of self-study, researching in books and on Internet over the past 10 months. All of my resources you will find referenced in the bibliography. Research findings 1, Research findings – Quantitative research 44
  • 45. Fear Factor See complete research data in the appendix (Appendix #2). I could not format this from Internet the way it would be legible, therefore I have chosen this alternative that makes it user-friendly for every reader. 2, Research findings – Qualitative research I have asked a question in LinkedIn (social networking tool connecting professionals all over the world) and these are the answers I got within 2 weeks. I list them out as they were submitted. I summarize my comments in the end. My question: Do you think companies, brands suffer from fear to differentiate? I feel there is a lot of average and mediocre brands around today. As if brands lost their guts and courage to stand out and stand for something crisp. I would like to get your opinion about this, do you think this is caused by fear and what are its sources or drivers? Craig Markus, Executive Creative Director/EVP at McCann Erickson & Tag Ideation/NY I don't think the fear that is hurting them is a fear to differentiate. I think most brands want to differentiate themselves and still try. But i think the fear of failing businesses, not making numbers, losing share, not making test scores, etc is forcing the managers of brands to fall back to behavior that is not innovative or relevant. They are retreating to what is 'comfortable' for them and not what is going to be interesting to today's consumers. Most marketers are not trained to understand how to connect with people who now have so much power to turn them off, etc. Plus the distribution system of messaging is so confusing to them, i find most paralyzed. Advertisers are sued to taking time to bring messages to consumers. But digital is so quick and responsive. Some brands are standing out, but it's coming form agencies that are expert at doing this, like Crispin. Clients that go there, go there seeking and wanting it. Geoff Fletcher, Independent Civil Engineering Professional From a marketing perspective I would say that business must suffer if differentiation is lacking since all that's left for customers to choose is price, and they won't want to pay more for the same thing. So, if differentiation is the key to start effective marketing (ie. to make money and grow business) then I wouldn't say that fear holds it back but probably ignorance, lack of skill or even laziness. The beauty of differentiation at all levels - right up to the peak where 45
  • 46. Fear Factor difference can be protected via patent - is that it reduces direct competition and increases scope for perception & adding of value, and is more furtile ground for growing customer relationships. Renato Geribello, Experienced Branding, Sports Marketing Executive Probably so! Mainly because corporations, and those who run them, are afraid to “lose” face in front of the competition (externally and internally). Brands are basically people, which represent them on a day to day basis, and like anybody in this planet they are also afraid. Economic downturn moments, like todays, are the exact pinpoint where brands should try to differentiate themselves from the crowd. The era of mass marketing is at an end, being replaced very rapidly by individual marketing and this new scenario will enforce on brands, the necessity to be present on a totally new level with a totally new type of commitment. Eileen Burick, Creator of High-End Marketing Collateral Materials and Visually Distinctive Design for the Web Connecting with the hearts and minds of consumers to make a brand truly relevant, different and engaging is challenging and risky and requires an investment in exploring options that are outside the proverbial box. Most companies would rather be "safe" - focusing on product features and rational sales arguments - rather than risk the unknown with an innovative, emotionally connective communication concept and design solution. They look only at the numbers and not the opportunity, which results in the watering down of design, concept and true connection. Branding "differentiation" is a function of design - conceptual and visual design components that work together to infuse a brand with emotion, relevance and impact. And, providing for the customer to interactively participate in the brand experience. Micah Jayne, Director, Producer, Viral strategizer, maker of video stuff There are a few different ways to look at your question, it seems to me, since brands are, themselves, passive constructs. Brand building and brand perception 46
  • 47. Fear Factor may seem to lack "guts" or courage mainly because of process. We all know that fairy tale about the "one man/woman agency" - no matter how hard everyone works, it's still creativity by committee in 99.9% of cases. The more levels of direct or indirect management that get stacked up on top of the creative process, the less crisp the executions are going to seem because of all the filters. It takes an exceptionally bold or desperate client to open the floodgates, so to speak - to radically alter perception or to move outside proscribed corporate guidelines for brand management. Smaller companies would be better situated to avoid this trap, but then, they don't have the budgets that big multinationals do, so people are less likely to be exposed to their efforts. You never hear of a company that tries NOT to differentiate its products or services, but why is that? Is "just another mobile operator" going to get my business if the price point is right? Probably. Why not, if it works? Could someone convince me that a particular brand's offer is more desirable, despite the concrete offers? Maybe, if they're exceptionally clever. Maybe the problem is that there's just not enough clever around to do the job for every widget and dingus on the market. Maybe consumers are OD'ing on clever and are starting to see through the parade of latest/greatest. In terms of products, "store brand" or generic products make up a massive part of profits in supermarkets and grocery chains. The Tescos of the world have quietly realized that there are only so many ways you can differentiate washing powder before the price difference just seems absurd. Maybe some companies fear to "not differentiate" themselves because the pursuit of designer cachet has bled out of the designer arena and come to be such an anticipated part of consumer AND corporate culture. It seems like an underlying problem might be that products and services - not brands - have lost their "guts" (true innovation and novelty). I'm not sure what role fear has to play in any of this, to be honest. Most people want to keep their jobs, and when the bottom line is the determining factor, it doesn't leave many people with too much wiggle room. One of my clients took a BIG chance on a project we did together and it ended up working out for him. I can't say that it was particularly "courageous", but it required clarity, confidence and an extremely grounded, considered approach to the whole project on his part. It's not something most people in his position have the patience or aptitude to deal with. It wasn't a big chance in terms of budget spent, but the potential 47
  • 48. Fear Factor effects on image were serious. This is someone representing a very large company with a very staid brand perception and tight controls. In the end, the only people who criticized him were lateral colleagues who were probably just jealous that they hadn't taken a similar chance themselves. Tim Joseph, Digital Retail Specialist I think we see many brands that are stale right now because there has been a dominance of big business controlling the market's product offerings for too long of a period. Typically it is small business owners that find the innovation in the marketplace, but their ability to bring their products to market has been stifled by the monopolization of the big brand. That being said, I think right now we are experiencing a shift. Big businesses are failing because they became to complacent with their stable brands and ignored innovation. The big unknown is whether or not the small business inventors will revive the marketplace with new ideas and the next big thing. Brian Beasley, CPWA(SM), Servant Leader, Partner In financial services, it certainly is the case. Broker-dealers tend to be VERY cautious about differentiating their services, especially their research methods and investment recommendations. Just look at how many investment houses say the same/similar things. As a result, commoditization sets in, leaving "relationship" as the sole differentiator. There is such opportunity for those who ACTUALLY choose to offer something unique! Stephen Blanchette, Partner, Senior Consultant at Chemistry (Europe), a unit of Hans Feldhaeuser GmbH Success breeds fear and resistance to change. Once a company reaches a certain size and level of success, it is very common for fear to creep into the mindset of senior management - "we wouldn't want to do anything that might upset our current customers..." is a common reaction. The trouble with this thinking is that it encourages stagnation and allows a once-differentiated brand to be immitated and challenged. Eventually, this leads to parity and apathy among 48
  • 49. Fear Factor customers. On the contrary, a continued focus on evolution will keep a brand fresh and differentiated over time. Grahame Maher, former CEO of Vodafone Czech republic, current CEO of Vodafone Qatar Absolutely. Great brands are loved or hated but never mediocre. Most brands are mediocre as they focus on being safe rather than standing for what they really belive in! I believe the cause is that leaders in businesses think they should conform to social norms and standards rather than what they believe in. Vodafone Czech republic, for example, dared to be different and not give new customers better deals than existing ones at Christmas. You and the marketing teams work and the best campaign ever in Czech! So Oskar and Vodafone Czech have done this and it is the secret to success of a brand. BE BRAVE to be different and real for your customers. Hiroshi Marras (dreamin' Doha), Online Sales & Marketing Manager at Tiscali There is also another side of the moon. Often the management is so busy taking care of numbers and regulation and lose the sense of the market and the importance of the brand, which is the first step into suicide, in my honest opinion. There is also the ignorance elements on the table. I mean, how many CEOs are aware about the relevance that viral marketing is getting into built and sustain the brand and the relationship with the customers? In very few words, the change must be accepted (the dream is proposed) from the head of management. And it is not free at all. Tomas Otradovec, CEO & founder, Uncle Propaganda Management I agree, absolutely. We can observe total lack of guts to stand out and be unique. Our culture today is a result of massive levelling processes that us people in brands & marketing had started in 80's and 90's. 2009's common practice: Make a statement. Get as many people as you can to agree with it. Spread it around & publish it. Get cash. Being mediocre pays off. I guess that fear to be different is as old as humankind itself. Therefore the most 49
  • 50. Fear Factor successful brands today are the ones who can attract / dictate masses. The masses love conformity. And uniforms. Vicente García, Founder at Kardumen. Planner & Creative Director 1. Choosing to stand for something means saying NO to everything else ... and that's what, I have the feeling, companies are afraid of. 2. It is the company top management, which decisions really have an impact in the organization & market, who should be extremely involve in the branding & brand communication. In most companies, they are not involve and in others these guys don't have the expertise (they are finance people, ...). 3. Even when companies have well defined what they stand for, people in the company do not understand the role and mission of these values and soon they become like and empty and boring litany. And then, a similar phenomenon as with bad advertising occurs ... company people don't see or listen to them anymore. The back to basics and a real understanding of the values and their mission are always good recos. In others words, being committed to what your brand stands for and truly living your/its values is the best way to turn it into a crispy positioning. 4. And finally, when you are an innovative leader that creates new categories, you are in an advantageous position to own the "logic, popular and more attractive" positioning ... when you arrive later, it is more difficult and risky to bet for something different ... how can we expect risk averse attitudes in companies that have not the guts to innovate in the first place? Radovan Grežo, copywriter, Publicis Vienna Sure, there's few brands that really stand out. But was it ever different? Maybe. Maybe it's just the ratio that went down because of the overwhelming number of brands out there these days. I'd blame the "consulting-disease". Too many brand leaders are caught up in endless semiotics games provided in complicated powerpoint presentations (by consultants of any kind these days). We're trying to find small differences, instead of making a huge leap as a result. 50
  • 51. Fear Factor Let me give you an example: Cosmetics. I've seen a branding document by Dove. Dove's about real beauty. Not about being beautiful in the first place, but about being whatever you are and saying "It's fine, I'm not ashamed". Then there's L'Oreal. Those guys stick to their 100 years old guns in the form of perfectly photoshopped supermodels. "Beautiful is only the real beautiful. Try to be like them" kind of thinking. Now, here's the surprise: I say they're both ok and have a strong brand identity. Now, let me tell you about a brand positioning presentation of Nivea I've been subjected to a year ago. "Nivea believes it is ok to be natural, yourself, but you should be pretty" something like that. It was unbearable to listen to them, so I don't remember it exactly. Anyway, they were "in the middle". "Schoenheit ist..." and fill in anything you like. They had a lovely presentation with loads of pictures and graphs and bullet points. I'm sure all that crap was carefully designed by a consultant of some sort, supported with bulletproof research and it was really incredibly impossible to understand what the point was. so They spent all that time, energy and money on semantics. Like trying to own the word "pretty" opposed to "beautiful" which isn't Nivea anymore. Brands should take more responsibility for their life. Admit that they can't please everyone and maybe they'll be just a minory brand. But that minority can love them then. Being for everyone = loved by noone. That's the problem. I'd rather see a brand that says "yeah, a lot of people will hate us for what we are but a lot of people will love us, even beyond reason. Robert Janasek, Marketing manager, Lenovo Is your product up for the job? You can build a good brand around an average product, but you want a great brand that stands out. Does your product stand out? Is your communication agency up for the job? Is you account manager just a fresh graduate from university with no real experience? What about creative teams? Does the agency have time and resources? (I have seen total amateurism even in the biggest network agencies.) 51
  • 52. Fear Factor Do you dare to build a big brand? Great brand is not build on average decisions are you prepared to back up your vision/strategy totally and bear responsibility? Or will you panic after first sight of problems? To wrap up: If you aim high, you may fall low. Is your company ready for that? Gerry Scullion, Interim Project Manager Great question and I generally agree. As with the stated values of competing mainstream political parties, are more brands not now being created by market research based on the most popular beliefs, in contrast to using research to test fresh creative thinking? Research is therefore driving brands, so the initial causation is simply going the other way towards a safer ROI (return on investment). Rodrigo Mesquita, Co-founder and CEO of FDM Latin America In my opinion, the executives of the largest companies, with the strongest budget and because of that more visibility, are the ones with most fear. They are always taking their actions only based on research, or common sense, afraid to loose their jobs (I know that this is important too, but not only this). They forgot their feelings, their guts as you said, they don´t take chances or oppotunities, that´s why their brands look all the same. I know it is easier to say, but we have to think about it. Until when their brands will stand with this kind of attitude? Josef Havelka, Regional Director of Strategic Planning, Ogilvy Group CEE Don't forget differentiation doesn't start with the brand. Differentiation comes into life from the choice of activities and how they are performed. It is a matter of business strategy to seek (and achieve) competitive advantage through differentiation: in a nut shell, you can either perform different activities (as your competitor) or you can do the same thing differently. One of the root causes for the increasing "similarity of things" was nicely described by two Swedish business school professors: “The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, working in similar jobs, coming upwith similar ideas, producing similar things, with similar prices and similar quality.” Kjell Nordström and Jonas Ridderstråle, funky 52
  • 53. Fear Factor business. Good brands come to life through solid differentiating business strategy. Otherwise they are doomed to remain pseudo-brands: weak and undifferentiated. Shantanu Sengupta, Strategic Planner; Advertising and Marcom Specialist; I feel it's not the fear... primarily it's the failure and lethargy to identify a differentiator that: - truly falls in line with the short-term and long-term profit objectives of the company - succeeds in convincing the decision makers that it's an "opportunity" worth exploring - gives them an understanding / courage that it has a sustainable competitive advantage Additionally majority of the companies who are in a particular product / service category, have a tendency to have a "herd" mentality - "everyone is going that way - they could not be wrong!". In short they tend to embrace mediocrity, if this gives them short term gains or saves them the hassles of taking risks. In today's ever-changing business / economic battleground, you'd rarely find a Bill Gates and Richard Branson who stick to their guns / dreams or who are not bothered about short term results as long as keeps their long-term goals intact. Kathryn Korostoff, Founder, President at Research Rockstar Yes, I think fear to be outstanding, different, to challenge the status quo is common. Sure, notable exceptions exist - but too few. I see this manifest itself with some of my clients (I help companies acquire, manage, and apply market research). You would think more folks would use the primary market research they invest in to fuel bold decisions? Take action on discovered opportunities for positioning? Seize first mover advantage in identified emerging trends? OK, that's my rant. Your question is what are the sources/drivers of such fear. I see 2 recurring themes: 1. Fear of doing anything that will turn off the existing, highly-valued customer base. Some bold moves could mean a change in brand personality, product roadmap, etc. - things that could impact current client relationships. And 53
  • 54. Fear Factor that is scary (though options for managing it are obviously available). 2. Fear of doing anything that could have implications for sales/distribution. Companies put so much blood and sweat into their sales and distribution processes/people/channels, that any bold move that would require notable change in this area is met with huge resistance. For example, I once did a study with a client where we learned that some of its best target customer groups wanted to buy direct - not through channel partners. Technically, this would have been feasible, even desirable from a margin standpoint. But concerns about channel conflict etc. were overwhelming. Eventually, some competitors started to move in that direction, and then my client did too. When it was safe. Nick Good, Business Intelligence Principal / Business Development Manager at Business & Decision I think that fundamentally the answer is yes and for a number of reasons. When defining product direction, it is very easy to be led by whatever your competition is doing and simply follow a me-too strategy. This satsifies a number of product management pre-conceptions: 1. If the competition are doing it and they are right - then we'd better do it too. 2. If the competition are doing it and they are wrong - then at least we'll be no worse off then them. 3. If more than one competitor is doing it - then they can‘t be wrong and we can‘t be left behind. It is much more difficult to justify a direction that diverges from the norm as there is more risk. However, the lack of ability to undertake a significantly new position means that either a) there are simply not enough guts around to make the move, b) the market is not understood well enough, or c) the market has reached a level of commoditisation where innovation is therefore limited. Miroslav Steinbach, CEO, GPS Media Technology Differentiation comes into life from the choice of activities and how they are performed. I think a shortage of differentiation is caused by a short life cycle of corporate marketing managers in their particular positions and even in their particular companies. Only few of them are ready to take a risk and promote their products differently comparing to a market average. Performing with no risk, 54
  • 55. Fear Factor and, consequently, with no fault is usually more rewarded in corporations than promoting odd ideas with 50-60% chance to succeed. Everything depends on strength of manager's personality and ability to take a challenge. Is a fear behind that or just a kind of prudence coming from an experience? Stuart Dixon, Director Euro*MBA I don't know if there is a lack of diversity in products today compared to, let's say, 10 years ago.If anything, we consume more and have a wider choice than ever. Nevertheless, if a brand differentiates, surely it becomes a different brand? A brand in itself is differentiation. If you cannot differentiate, then how can you create a brand? Sarah Hamilton, Senior Professional - IT Product Marketing and Inbound Marketing This is a thought-inspiring question. Of course, the answer could vary by company, industry, given that level of customer touch/brand affinity that is required for success differs across these elements. In general, companies that focus too strongly on following the competition and not enough on solving the problems of their current customers and prospective future customers - often times, problems that customers do not fully articulate - will risk growing stale in their offerings. And stale offerings are difficult to market authentically. In today's challenging economic times, it is possible that many companies face the need to balance innovation with the reality of the customer's budgeting situation. Some may retract their marketing efforts due to fear (fear of not understanding their changing markets in a tough economy; fear of investing dollars and people time in marketing; fear of breaking away from the competition and standing out, etc), however, I have seen many companies seize the opportunity to step up their marketing and stand out further, using crisp messaging to highlight their benefits. Of course, this messaging must take on the customer perspective as it is today, rather than under ideal market conditions. Stanislav Rejthar, Senior Head of Product Management at T-Mobile Czech Republic a.s. Great brand has to be supported by a superior product (line) that really satisfies customer. However, products nowadays are usually optimized to raise just a right level of perceived satisfaction for the limited product lifetime. Customers get what 55
  • 56. Fear Factor they pay for but it is not 100% quality product what they get. To name few mediocre brands: KIKA – ok furniture, but the bolts loosen – yes, it offers fast mail but compromises on security T-Mobile MDA by HTC – yes, it works, but it is sooo slooow Baťa – shoes look fine, but do not last Andy Polzl, Account Executive at OgilvyOne worldwide Absolutely brands fear to differentiate themselves. This is a result of them always trying to do the "tried, tested and true" techniques from their competition. The fear comes from the unknown. They feel moderate success now, but don't realize their true potential. They are happy to be second best or even one of the top 10 brands in their area. A company that knows how to develop a full brand strategy, integrate it internally and externally will see the value of being differentiated; more profit, productive employees and loyal customers that become advocates. Sources of Fear include: - Lack of knowledge and understanding of integrated branding. - Investment required to clearly differentiate a brand or change existing perception. - Lack of market research, fear of not knowing the outcome of what to expect. - Fear of losing current customer base. Often when a company attempts a rebranding excercise, they lose some of their customers because the emotional connection gets watered down with the new brand. - Differentiation is next to impossible when you don't understand the brand identity and essence. - Company is complacent and doesn't feel or see the need to change. Think of the companies that have experience success from being fully integrated and different. - Virgin, Apple, etc. Dallas J. Moore, Branding Specialist, Marketer, Communication fiend and Social Media Believer 56
  • 57. Fear Factor I think many companies see what others are doing and the results and go the short way around. Some people forget, just because you have a great idea, doesn't mean someone else couldn't do it better. They can with the right plan, money and message. I think one main reason companies fear being different is because you hit a point where you can't be anything else, what you are. They have spend money and time creating a solid brand. As the times change they want to rebrand themselves and create a different culture. Many companies today are doing that, with slogans, branding colors, logos, even their target markets sometimes. People fear it because its change. They know they are top of the food chain where they are or are headed that way. If they change they could loos everything they worked to get and everything could be lost. Other companies can't be different because they have more money and don't have to be different. They can take someone else's idea, re write it, re package it and spend more money pushing it. Also in a book I'm reading "Groundswell" Charlene Li and Josh Bernoff I think said it best. " Your brand is whatever your customer says it is". I agree, its very true. Sometimes you don't have a choice what your brand is, its build by the people. Petr Fridrich, Senior Business Development Manager at Mediaresearch a.s. Most of our fears have no basis in fact it´s only our internal representation of the outter world, typical for it are phobias. People fear things over which they have no control. In corporate world can affect specific fears of company leaders’ whole company culture. It´s not fear of companies or brands it´s about fears of concrete people with concrete influence. If the company (social system) is based on "control and punish" principles there will be high resistance to make any changes and high level of fear to make failure. Those principles are probably set by leaders who have fear of losing control and presupposition that they only know what is right and other people don´t know and generally think that is necessary to keep people under control because they tend to do bad things. Contrary companies who are open to change, challenge their people and create "open source" culture. Those will attract people who want to make changes, take risks and support differentiation because "be different" is in their mindset. Where and how you focus there goes the „energy“. If the company leaders (and owners) focus on culture creation based on - not making or avoiding failure and eliminate risks, detail rules and hierarchies it creates different outcomes in the company than focus on inspiring, creative and innovative, based on “frames” and open ended culture. There is still in my mind 57
  • 58. Fear Factor Oskar´s – Challenge Conventions, Personal Experience, and Be One which is great “frame” for any company culture to adapt. Overcome fear and change the company/brand stereotypes are like with bad habits. People know that what they do is not good for them but they are still doing it (worst situation is if they don´t know). It´s safer and more indolent to keep your bad habit than taking risk challenge yourself and change the habit. Usual sentence we can hear is: “It has functioned in that way for a long time, it´s not necessary to change it”. Fear of unsafe and new situation is stronger than keeping some bad habits. Therefore easier strategy is keeping bad habit. Another point of view is that today’s market is very dynamic and to keep highly innovative culture in today’s world insist on continuous, quick and complex development. What was innovative and different today will be "mediocre" tomorrow. Not everybody is ready to “play” with those rules. It needs to have open, complex and ready for risk mindset completely different to safety and closed mindset. I just read some interesting review about book Risk: Why We Fear the Things We Shouldn't - and Put Ourselves in Greater Danger written by Dan Gardner which could be interesting for your theme. Tsufit *, Author, Step Into The Spotlight! It's kinda ironic. The goal is to stand out and get noticed, as long as you don't, well - stand out... Maybe it's 'cause in the marketing departments of corporate America what can get you the corner office can also, if it doesn't go as planned, get you fired. Sitting on the fence is safer. I love how Al Ries and Laura Ries put it: "What's a Chevrolet? A large, small, cheap, expensive car...or truck." Brad Mumbrue, Market Strategy and Planning Professional Many companies these days have lost sight of what their brand is, and what the company stands for. And most companies measure themselves against the competition, but have little sense of how they rate with their customers. Or even who their customers are, or should be. Today's economy demands an increased focus on a target market and a thorough understanding of how to excel at meeting that market's demands. It's 58
  • 59. Fear Factor no longer enough to be big, a company has to be best. The trick (not an easy one!) is to identify and leverage what the company is truly great at. Are car companies really best at designing cars or are they better at assembling them? Are wireless phone companies merely networks, or are they content providers and mobile commerce platforms? Once a company fails to differentiate and the value of the brand slips it's difficult to win it back. The company turns itself, and its products and services, into Pavel Jantac, CEO at Elevator Good, but tough questions. I believe there are primarily those sources: - Brands life period manifold overlive their brand builders (except brands of "family companies"). That results to frequent strategy changes, I would rather say shakes or shocks. There is not then enough space to let survive an outstanding concept and let it fight its battle on the marketplace - It is hard to take risk and brand builders do not take responsibility that often or are not allowed under pressure of operative goals. - Trade or retail estimations on the side of companies management triumphs on brandbuilding. - We can often see exceptional and outstanding experiments in brand building, some of them lead to bad results and that limits courage of brand builders manifold again On the other hand: there are definitely courageous brands, which exploit the market situation (as predators do so) and have the edge on those less crisp. That is life. Winner (sensitive positioning) takes all. WOM/social networking tools often suggests good receipts and feedbacks for sensitive decisions. Kim LaSalle, Owner, Kim LaSalle Marketing and Public Relations I've worked in B2B for some time now. Many of my clients find themselves marketing "commodities" for the first time. Products that were new, different, innovative, etc. a few years ago aren't any of those things today. And these clients are struggling to survive in customer-driven markets using tired, worn out models of business operation and product development. My best clients (the ones I continue to work with) understand branding at its most critical level - business architecture and operations design, superior customer service, research-driven product/service development and 59
  • 60. Fear Factor employee relations that ultimately differentiate a brand. Companies that don't get this are the ones that I see suffering - but I don't think fear is the culprit. I agree with Geoff that the culprits are typically ignorance, lack of skill and, yes, to a great extent, sheer laziness. It takes work to respond to customer needs; to develop a product that responds to market demands; and to build a company that people want to work for or work with. It seems to me that there are number of companies that simply aren't up to the task of "differentiation." And every few years we see these companies eliminated by recessions like the one we're now experiencing. Patrick Stasolla, President, German Valley Foods LLC Excellent question with no true single answer. I believe that most marketers truly believe that their brands are unique enough to stand out from their respective crowd for any number of reasons, or attributes: such as effectiveness, price, flavor profile, customer service, actual or percieved name it. I do not think companies or brand marketers fear to differentiate or be creative. I think they fear the consequences of change or a difference....they fear that consumers will not readily embrace a difference, real or percieved. For example, Tropicana Orange Juice recently changed thier package to be a simpler, probably cheaper to produce label/print on their cartons. This failed miserably as it confused consumers...thus Tropicana is scrambling to change back as I type. My position on change has always been, evolution, not revolution should be practiced at the pace from which your brand is always percieved as a leader. Just keep in mind that the scenery never changes for those 2nd in line and backward. Josef Piska, eBusiness specialist in CEE at Barum Continental I’d agree that there are loads of mediocre brands indeed. Lots of them started their "life" hard with successful campaigns and gradually they started to lose the drive to be different. Only very few brands have managed to keep their brisk and progressive attitude. I’d say it is so partly because of the particular brand marketing itself and also because of the agencies working for them. Take for example Oskar/Vodafone. They (Oskar) entered the market with such an overwhelming power and as we can see now (Vodafone), they have slipped 60
  • 61. Fear Factor into traditional methods and average campaigns making the brand vapid as lots of other global brands. Once the marketing of a particular company deals more with profits than with customer-brand relationship it is inevitable that we get mediocrity and vapidity. I’d agree that making profit is the main goal, however it is very difficult to combine it. Jack Trytten, President at Insight Direction, Inc., Management / Marketing Consulting Brands, by definition, must stand out. If a brand doesn't stand out it's not much of a brand. I'm not sure where fear comes in as I'm not sure what evokes the fear. I think the problem of mediocre brands is multi-faceted. 1. Many really don't understand that the essence of a brand is the promise it carries and the stronger the promise, the more it resonates with the consumer, the more powerful the brand. 2. An amazing number of marketers haven't a clue about what their consumers really value, what emotionally resonates with them. There is no way to effectively create and maintain a brand over time without this knowledge. (And this is what's put bread on my table for years.) 3. Brands, once established, need to be nurtured. The character of the brand needs to grow. Markets, by definition, change. Constantly. Your brand must adapt to the changes. This does not necessarily mean rejecting the promise while adopting a new one. Consider Coke. The basic brand promise has stayed the same for about 90 years. Yet how it's expressed changes continually. 4. Finally, branding takes discipline and vigilance. Someone always wants to add their interpretation, their twist, their own personal view to the brand. The only view that matters is the consumers'. Keep your hands off the logo, the colors, and above all, the promise. You may have created them but if they are to provide value, their real ownership is by the consumer. Greg Robertson, Principal+Creative Director, PowerFlite Communications It isn't a lack of being different that brands suffer from, it's a lack of being genuine, particularly in the eyes of customers. When brands try too hard to 61
  • 62. Fear Factor control the brand image, they lose the trust of customers by spinning complaints into excuses. Earn your customers' trust by doing what's right for them and showing that you will listen openly when they don't like something. Then fears will go away. Amy Bartle, Director, Brand Management at LQ Management, LLC I think the lack of differentiation is not due to fear, but rather lack of true unique position. Your industry, like mine (hotels and travel), offers many companies offering essentially the same products/services with a guest experience completely dependent on front-line, hourly employees. Since nothing in our industries can't be copied fairly quickly (even the iPhone phenomenon - there's a core of BB users who are rejoicing over the Storm), differentiation on a platform that consumers actually care about and recognize as a point of difference is difficult at best. You can extrapolate that to almost any consumer product - do you really believe there's any major difference between the 8 types of Crest toothpaste I saw today at Super Target OR between Crest and the 17 types of toothpaste offered by their competition? I would argue only Tom's of Maine and Listerine have a differentiation established and they have minimal market share. Sowmyan Tirumurti, Engineering Outsourcing Facilitator How many differentiated brands can be there in a category? Do people associate differentiation by association with one attribute as giving up on the rest of the territory? Do these products measure up in filling a unique user need. Perceptions of association of the brand with this need can follow. Sandra Johnson, PowerPoint MVP, Owner, Presentation Wiz, Inc. - PowerPoint Design & Strategy Consultant I think too many companies focus too much on what their competitors are doing. Don't get me wrong, but if you keep trying to do everything your competitors are doing you start LOOKING like your competitors. To quote Greg Krauska, CEO of the Change Agent Group, "In the process they stop being remarkable. Worse yet, their competitors find their strategic moves to be more and more predictable. With no way to stand out from their competitors, they are forced to cut their price." You can't win when you compete on price. It's about creating exceptional value. 62
  • 63. Fear Factor Josh Kamler, Creative Director and Principal at Language in Common, llc Straightforward answer: Yes. Because you can't predict how culture will respond to a thing that hasn't been seen before. And most companies operate too close to the bottom line to take the risk of failure. Which is kind of a bummer and the very thing that keeps brands from doing or saying anything that really matters. BJ Birtwell, The Armory Marketing Group: Helping Brands Reach, Connect, and Sell to Gen Y You're right. There are too many mediocre brands around today. There is also so much convolution between many of today's value propositions that it drives commodity-like lazy thinking. If fear is the ultimate factor, I'd venture to say that it's the fear of finding a true value proposition that credibly differentiates your brand from the competition. If you don't have that to begin with, trouble may be around the corner. With that said, the brand still has to have an image that relevantly connects with it's target audience. More importantly, deeper inside that target audience is the most important consumer...a niche that either credibilizes what you say and stand for, or virally negates it. Kevin Waldvogel, Account Executive at Image Systems a Consolidated Graphics Company I think their is more of fear right now to push it too far and that is where the fear to do anything is a little risky. You won't see companies pushing it until the economy gets better becaue marketing pros are fearful of loosing their heads for a bad campaign. I think the only twist you might get on this is that brands will take it a little further on the humor and take things a little less serious. Ron Hansen, Owner, RHSB,Inc I'm one of those guys who design brands every day. A unique one out of this bunch. Fear is a big factor. Another is lack of unique vision from the CEO. We also find most want to just copy the big guy. This is big in the drink business. A bunch of copy cats. Another driver is the lack of talent by the design firm. Another. Budget. They pay a lawyer thousands of dollars for creating "maybe it might happen fears". But try to cheapen the design fee. 63
  • 64. Fear Factor The consumer is right most of the time. They are open to new ideas and love new products. Only if they improve life and create real value. Money dudes are not open and should be thrown out of the creative process. Walt Disney never let them run the show. Standing out. Do we dare? Is it the nail that stands out gets hit first. Or is it the first nail that gets used? I do use T-Mobile. Boring brand. Nice ads. Colors. 80's. Ad message. Needs more WOW. Apple does this well. I choose them because the staff are nice to my wife. Brand or service? Would a 26 year old buy a beer named Spank Monkey or named BAM. Guess which one got picked by the bean counters. Preston True, Helping technical professionals earn what they're truly worth Your brand is your people. If they're scared about anything (personal, professional, money, job, etc), the fear will rub off on the clients you serve which will likely result in tarnishing your brand. Your clients are likely scared in this economy... why would they want to do business with a company full of visibly scared folks? There's nothing wrong with being scared, but they're likely looking to work with someone who's got their fear handled. So now what? You're likely saying "Thanks for the uplifting answer Preston." :-) Here are a few suggestions: 1) Create an outlet for your employees fear. Group gripe sessions, one to one conversations or other environments in which your team can voice their fears. This is very powerful and supportive - the only thing fear wants to do is get out so why try to hide it? With appropriate supervision and clear expectations, this can work to move folks beyond their fear simply by getting it out. 2) Create a structure so folks can take a break. Maybe it's a day off, half day off, sharing job functions, brown-bag lunches, etc. Allow folks to get a breather from the day-to-day and make it fun and full of connection. 3) Bring in professional coaches. Business and leadership coaching is an excellent structure to put in place when progress is impeded by fear. Coaches know how to support leaders and teams in moving forward even in the face of fear. Visit the International Coach Federation for more information and referrals to qualified coaching organizations. 64
  • 65. Fear Factor Neil Smith, Territory Manager at Caterpillar Inc It's not about fear it's about being realistic. Guts and courage don't pay the bills if you screw with a succesful brand. If the brand is already selling to a mass market, why would you differentiate your brand to suit a smaller market and alienate previously happy customers? Marketing messages and brands have a lifecycle of their own, and there are times to be different, and times to be safe. "Guts and courage" are required to get an unknown brand known, to launch something new, and to get in the public mind. Once you have a place in the market's mind, you need to change from "hunter" to "farmer" - this is the time to make money from the product, and don't risk your market share with anything silly. Remember that marketing is a means to sell product, it is not an end in itself. Gianluigi Cuccureddu, Web Marketing Strategist, Consultant @ Traffic4u You mean when a brand already has positioned itself, it then wants/needs to redefine its positioning by differentiation? If so, than it's a delicate process to remain 'the same' in the core-perception by the target group, but change the propositions by the brand. If a brand diverts too much, the existing target group might get suspicious, less bonding, if the brand diverts not as much, then the effects might not be those that are wished for. Then there is the human aspect, already pointed out by some other answers above. If targets are not being met, the brand loses recognition, awereness and whatsoever, the responsible one is going to lose face, 'suffer' the consequences. Robert Killen, Founder, Chief Everything Officer at Apex Development Network I would place a large share of the blame not on fear but rather on success. Here's why... Once upon a time there was a boy who loved baseball. As he grew up he practiced constantly to improve his skills. But, when he finally got to play he found that, with every swing of the bat, he hit home runs. Nothing mattered. His stance could be off. His swing could be lazy. He didn't even need to watch the ball. From 2003 into 2007 everything was gravy. He couldn't miss! How much time do we think he spent working on the fundamentals? None. Why would he bother? 65
  • 66. Fear Factor Sadly, the magic disappeared for our boy and for all the other boys and girls who played with it. And now we're all left wondering "What do I have that makes me special?" But "special" is rarely a discovery. Instead it is the result of a process. A process we set aside for those glory years. Differentiation is a business fundamental which takes time and effort: Time to discover and refine the attributes which make a Brand "special" and Effort to market those attributes. After the easy success of past several years, most brands have forgotten how to do this and are now either (1) starting from scratch, or perhaps (2) just scratching. Jeff Louis, Experienced Senior Media Planner and Buyer Without going into to the gritty details, it is my opinion that you are on-track that there are a lot of mediocre brands that are clouding the marketing landscape. I worked for a progressive branding agency that was led by young talent (30s to 40s) that realized that standing out as a brand was the most important brand characteristic. We lived by the credo of "Differntiate, or Die.“ Advertising textbooks are filled with brands that are no longer around - they were strong for several years, and then went by the wayside. It is my opinion that once "most" brands that make it to the top by being different become conservative once they get there due to fear of losing their position. I can think of Starbucks recently...they once were dominant, the top luxury coffee brand. After losing marketshare and taking hits from the likes of McDonalds and Dunkin' Donuts, Starbucks is actually trying to "unbrand" themselves into "just another" coffee shop. The loyal customers they have retained are now complaining...not as many varieties of coffee, an instant coffee that tastes like crap, and "value" meal deals. They have narrowed the view of what their brand represents, and the loss of business has clouded their vision. Once the economic downturn is over, people will go back to spending money on luxury items. Unfortunately, Starbucks has become afraid, and being afraid, they have weakened their brand. Possibly, after this campaign has finished, killing it. Prashant Saxena, Area Sales Manager at Redington India Ltd Organization get carried away in creating the differentiation. One should always remember under promise over delivery meet your offerings. Your commitment towards your offering will be your differentiation, no need to create it. 66
  • 67. Fear Factor Brian Gillard, Consumer-centric marketer that helps companies to market TO consumers rather than AT them I think it's both fear of differentiating and simply not knowing how to differentiate. Since I think it's more of the latter, I'll focus on that. Contrary to what a lot of people believe, branding starts with product or service development. If you have a crappy product or service, no branding strategy in the world can save it. This is what I think the true problem is - a lack of remarkable products and services. There are too many "me-too" things out there that try to capitalize off of the success of brands that have done all of the tough work in developing a strong offering. The "me-toos" try to capitalize off of the creativity and sweat of the original to become successful. The usually aren't successful because they aren't being remarkable even if they're the second one in a new category. They aren't spending the time and effort to speak to consumers, find a new niche or a void in the marketplace, and craft a better product or service. Summary of qualitative research The qualitative research confirms importance of fear factor in multiple ways. Many respondents discussed differentiation. Lack of differentiation. All products and services are becoming the same and this forces companies to compete on price. On the other hand, why customers should pay more for the same? In the banking or telco industries, look at how many banks or telco service providers say the same or very similar things. In service industries, as the commoditization spreads like a fire in a pine forrest, the relationship building remains as the only differentiator that is left. And even that, being very intangible and requiring long-term consistency and also making difficult decisions in order to convert arrogant marketing strategies and tactics (robbing customers and thinking of them as thiefs in the same time) into mutual partnership and lasting relationship. I think it was in Brand Gap that i read one great line: When a man is talking to himself, people say he is crazy. But if a company talks to itself, it is called marketing. So this is exactly what happens to large corporations, they talk to themselves and they grow so tall and big, they think there is noone around but them. Not only they cannot move, they cannot bend nor can they walk. Ah, don‘t even think of running. And today’s world requires a sprint. They stress importance of differentiation during economic crisis. I believe this crisis or any crisis shows the best whether a company is differentiated or not and 67
  • 68. Fear Factor whether it is standing behind what it claims to be, specially in such tough times. Customers want companies to be what they were in good times and even more they rely on those companies in the tough times. One of big sources of fear driving the fear factor is the fear of failure – not delivering business results, not making the numbers in budgets, loosing market share, not fulfilling test scores etc. Due to these warnings and potential punishments (job loss, no bonus, salary cut, loss of reputation...), managers are falling back to their comfort zones, they retreat to what is comfortable and safe. They stop innovating, they stop taking risk, they stop making tough calls. Leaders are containers of fear. They are the ones with most fear and the biggest power to bring it under control - executives of the largest companies, with the biggest budget, with the most visibility, with great positions, salaries, highest goals to achieve and limited time period that they will be holding that position. The lifecycle of corporate executives in marketing is quite short. They do everything to preserve the comforts and benefits of being in that seat and they do nothing to jeopardize this. There is little probability they will chose the harder road – of innovation (not incremental), risk, failures and tough choices. Actually why, if failures are not rewarded but safety is? As one of the respondents said: „Maybe it is because in the marketing departments of corporate America what can get you the corner office can also, if it doesn’t go as planned, get you fired.“ A lot of respondents talk about playng it safe, rather than taking risk, doing something innovative. One of the reasons why brands are missing guts and courage is the process in which all novelty is killed. Conformity, acceptance and approval of others has been discussed quite a lot too. Leaders in business think they should conform to social norms and standards rather than what they believe in. We have a herd mentality. We follow the crowd. Followers are not leaders! Differentiated brands are leaders and need leaders to build them and nurture them. The size of a company is one of the pre-requisites for differentiation – small businesses have sharper edges, more courage and guts, they bring new ideas. Opposed to large organizations that became too complacent and ignored innovation for a long time. And those are the ones which are in trouble when it comes to winning their tribes. 68
  • 69. Fear Factor Related to the size of a company, is the size of its customer base. The trap here is, that the larger the customer base, the larget the fear, the larger the risk of loosing those customers when doing something new. This thinking leads to safe decision making, stagnation, lack of innovation and thus once differentiated company starts loosing out by being immitated and challenged by others and by customers loosing a continuously new reason to prefer that brand compared to the others. Great brands polarize opinions. People either love them or hate them. For such brands – being in the middle means being in trouble. Great brands are opinionated. They have their own point of view. The tough part is to accept (and make decisions reflecting that), that a differentiated brand cannot please everyone. It cannot serve all customers at once. If it is for everyone, it is for noone at the same time. A mass brand, mediocre brand can, but how long it will be able to do that? We know where this leads – to price competition and eventually commoditization. Most brands that make it to the top by being different eventually become conservative and start playing it safe because they are afraid to loose their position, loose market share, loose their customers, hurt their image and reputation. Hopefully brands realize the need for differentiation, continuous differentiation. It seems, most brands though are in a vicious circle of differentiation – commoditization – differentiation – comoditization... The message is: „Differentiate or die.“ Time is evil to brand differentiation. Gradually, as the brands mature, they start to loose the drive to be different. Brands need to keep on reinventing themselves. Brands, once established, have to be nurtured. Brands, once established with differentiated position, have to be constantly nurtured with new attributes, new values in order to reflect the changing market realities. Character of the brand must grow. Consumers and markets change continuously and faster then ever now. Brands should be touched too. Committment of management to brand values, to what the brand stands for (differentiation) is crucial. In many companies brand is something that is managed by a brand manager. Top management rarely comes in contact with the brand department. The problem is, the executives do not know what brand is, what its contribution is, it is intangible to them, emotional, subjective and thus nothing they can easily understand, solve, plan for as they are used to in financial decisions. They are actually avoiding it because they do not know how to manage it. 69
  • 70. Fear Factor Another thing that causes fear is „Saying No“ to things that defocus your brand or dillute your brands‘ point of view. Many leaders are unable to say no to many opportunities, yet some of them are completely undermining what their brand stands for. Need for similarity/familiarity is another driver of fear preventing us from choosing new paths, products, employees, creative concepts etc. We search for familiar because it is our nature, we are social animals, we want to be surrounded by people we know and like, we go to work the same road every day because we know we make it on time. The problem with this is, that when a brand falls into the similarity mode, it will stop innovating, it will try to match their competition. In no time it will become as other brands in the market and thus loose out their competitive advantage. It is easy to be led by what others do, the mee-too strategies we can see almost everywhere, in each industry, in each category. As one of the respondents put it: „Fear of unsafe and new is stronger than keeping a bad habit.“ Interviews Originally, I planned to do two interviews – with Google, Tatana Le Moigne and Virgin Atlantic, Richard Branson. In the end, I was able to meet only with one of them. Google Czech Republic, Tatana Le Moigne, General Manager Tatana speaks about Google as a company that is defined by passion, passion for technology. Previously she worked 10 years for Microsoft. She compared Google to Microsoft in the context of culture, Microsoft traded the passion for technology, for passion for business. She can see millions of emotions, but no fear in the company. Innovation is the core component of their DNA. She talks about trust in their values, in their product. In Czech republic they launched 35 services in 35 months – every month a new product. She speaks about risk taking within the company and the risk level is high as the company expands to new markets, with new challenges and with the aim to not do evil but rather improve quality of life in those countries, in those markets, it is a big responsibility and this needs courage to stand for those values. The only fear that she is talking about is the fear on ethical level. As an example she mentioned their expansion to China and she describes it as a compromise to 70
  • 71. Fear Factor their values, with open worries about what this incident means for future to the company. Where is the line that they will not cross? She said they would do less harm being in the Chinese market than not being there and this was the rationale for entering China. In the same time, she spends a lot of time talking about morale, ethics and importance to the company. She says, that at Google they have a strong feeling and ambition to change the world, they strive for making it better. She goes on talking about Microsoft, giving it as an example of a company driven by short-term goals. She said, at Google they are not driven by short-term revenues and gains, they look into long-term perspectives and therefore have no fear to deliver quarterly results or act under pressure of short-term KPI’s. From customer point of view, she says they have a great fear fighter in their pricing model based on auction, where client pays only as much as is delivered to him. The client decides how much he will spend, for impression or click-through or conversion. This might cause fears on the traditional media agency side though, since they are remunerated based on the discount they deliver to their clients and not based on efficiency of online advertising. And Google doesn’t give any discounts to agencies. Research Analysis Quantitative research analysis First let me start with a short comment on one imortant questionnaire limitation that i dicovered while analyzing the results. Of course, there are other limitations to the research method chosen as well as my questionnaire could allways been better (shorter and less subjective), but i am not mentioning them here. Because the topic of fear is ambiguous, and i didn’t want to miss out on understanding this ambiguity as well as other things, the construction of the questionnaire was done in that way, that it asked separately about positive and negtive impacts of fear. But because fear is so ambiguous, and people have mixed feelings about it, they filled in their answers and opinions in only one of the options – positive or negative. This caused that in „Others“ I found a lot of comments related to the problems of the questionnaire. I will allways mentioned this problem when talking more specifically. Is fear important factor influencing creativity? 71
  • 72. Fear Factor First I wanted to understand whether fear as such is an important factor that influences our creatvity, decision making etc. Illustration below clearly demonstrates importance of fear in the creative process. Almost 90% of respondents confirm that fear influences creativity. There were only 12,7% of respondents who did not think fear has something to do with creativity. „I do not think fear plays a role. Creativity comes from feeling insipred and free to talk out loud and the desire to change the way things are in order to make things better.“ This confirms a clear importance of fear in the creative process which is closely related to differentiation. We come to that later when analyzing reasons why and how fear influences this process. Doeas fear impact creativity positively or negatively? Majority of respondents (81.8%) confirm that fear influences their creativity negatively and only 50.9% think it also has positive impacts on their creativity. It seems there is certain amount of ambiguity in fear having a positive as well as negative impact on creativity. This double impact is actually very interesting, because it confirms that fear isn’t just a killer of creative ideas but alos a stimulator of creative ideas. It is important to understand that fear has positive impacts too and on the base of the majority that is aware of fear influencing creativity negatively, allowing for it, find ways how to benefit from the positive impacts of fear. 72
  • 73. Fear Factor Positive impacts of fear There were respondents who thought fear influences fear positively. Let us look at this in more details. What might be the reasons why they find fear as positively impacting their creativity? Fear of failure drives one to work for the best, creative solution. Fear of failure or loss is a driver of human behavior and is a motivator. Fear can be the driver of new ideas as people can become more resource-full as the pressure grows. The fear or pressure of deadlines for creative people has a positive impact on creativity. As one of the respondents put it “I think that many creative people have a deep connection to their work, and feel incredibly vulnerable to criticism of that work -- they can't distinguish between the work and their own selves. The creative process can be like a difficult birth sometimes -- and without deadlines, many creative personalities will procrastinate rather than subjecting themselves to that difficulty. 73
  • 74. Fear Factor Almost 42% of respondents agree that fear creates pressure that can drive creativity. Another strong parameter was in “Others”. While analyzing this I discovered that this was actually showing only error answers due to a problem in the questionnaire. This is therefore misleading and it is not important to pay attention to this result. Simply ignore the blue bar in the above graph. Furthermore, fear makes people try harder (30.9%), find more alternatives (29.1%) and new creative ideas to the table (27.3%). For details see the graph above or detailed research findings. Negative impacts of fear There were respondents who were clearly on the side of fear being a negative factor influencing our creativity. They see fear as a block to their creativity that keeps creative juices and forces repressed. Fear doesnʼt allow them to unfold their full creative potential. When there is fear – internal, psychological or external - wherever it comes from, it effects the physiology in the body – amygdala turns on – adrenal rush happens and there may be initial creativity but it cannot be sustained over the long haul. Stress on the adrenal function, when body is in flight or fight, doesn’t work for long in creativity. “Fear paralyses and prevents us from thinking creatively or logically. Creativity 74
  • 75. Fear Factor needs a high positive energy, the ability to go beyond normal and that cannot exist when you are fearful.” More of respondents talk about what happens with our brains and bodies under attack of fear. The fear actually pushes brain into an extreme situation and all the hormones are stimulating brains activity. Although it may also cause to do already tried and base reactions on basic instincts, thus prevent creativity at all. Perhaps an appropriate level of fear stimulates creativity, but too much of it kills it. If there is a fear, people cannot be 100% creative. One of the respondents gave an example, that if there are worries while being creative, they won't be able to even sell the results of their creativity. There were respondents that mentioned the fear from others, from their social environment that can come into play - Fear of social acceptance - fear from the reaction of customers or clients being too conservative, colleagues, superiors, family, who might dislike your product, idea, decision etc. There was one interesting fear mentioned - fear of others "hijacking" a creative idea. I believe this happens in creative industries quite often when people steel ideas from others, they present them as theirs or they put them on to their CVs when applying for a job etc. Some respondents mentioned fear having a negative impact on decision-making. When there is fear, people tend to make safe decisions and this leads to repetition, monotony and ultimately a dead end. Decisions involving risk can break the mould. Even if they finish with a failure, they are invaluable learning for the future decisions. A lot of opinions were related to the corporate world and its specific or rather clearly legible culture. In most companies, company culture does not support creativity. The only important thing is the bottom line. This is usually associated with short-term behaviors, which actually limit creativity. Creativity for most companies is rather re-active behavior than pro-active. Another opinion was related to creativity being subjective, which consequently means that the creative mind is a target for personal blame, contrary to the normal administration and navigation via standard operational procedures. 75
  • 76. Fear Factor “Fear of taking responsibility is a key element of employees and managers in the corporate world.” “Especially in state/political driven companies. "Go with the flow" is rule rather than to be in news headlines.” “Fear, particularly, in large corporations is driven by risk management. Everything new involves risk (and some fear) and therefore becomes less likely.” When studying negative impacts of fear we have few stronger drivers compared when we talked about positive impacts of fear. It seems people have stronger opinions about this or the fit of questions was better in this question. Both are just assumptions. The fear of acceptance is significant here. 60% of respondents agree they would skip ideas because they would not be accepted by others – by managers, clients, customers. 58.2% of respondents would adjust their ideas to fit expectations of others, 54.4% respondents would make their ideas less sharp and courageous etc. I think this is an important implication for fear factor (fear to differentiate), because if there is a strong need to be accepted – have ideas, jobs, task accepted by others (whoever they are, usually when they approve, decide, reward, promote etc.), there is a fear that prevents people from bringing new 76
  • 77. Fear Factor ideas to the table and acting upon them. For details see the graph above or the research findings. Positive as well as negative impact of fear Almost 51% of respondents both agree that fear has positive as well as negative impacts on creativity. The answers of respondents usually repeat themselves when answering questions about positive or negative impacts of fear on creativity. Or, the answers are quite generic and we do not get to know anything new. What is interesting is, that respondents start talking about negative impacts first spontaneously and they have stronger opinions about them as well. During analysis of the sources of fear, I found that 72,7% of respondents have the need to fullfil expectations of others – management, clients, public, basically all stakeholders depending on which one is relevant to them in a specific situation. 70.9% of respondents are afraid of failure or a mistake that can cost them their reward, recognition, image and esteem, job etc. Other 61.8% of respondents feel fear from delivering business results – fullfiling their key performance indicators, measures such as EBITDA, revenues, sales numbers, success rates and others, specially relevant to corporations. Other 56,4% of respondents confirm the need to make safe decisions. They are asked to make 77
  • 78. Fear Factor safe decisions, they are not allowed to risk, or they are safe-players as individuals. 45,5% of respondents say that creativity is risky and express need for understanding. Creative ideas have higher probability not to be understood and therefore usually rejected. 40% of respondents confirm that management isn’t able to deal with creative ideas, they do not understand them, they do not feel safe in them. They feel rather safe in numbers, business potentials, volumes, margins etc. For them creative ideas are risky and therefore they prefer to chose the calculated avenues. 40% of respondents confirm that they go for ideas that can be executed, that happen. Creative ideas are usually too risky, too new and therefore they may not be produced, executed or accepted by the clients or management. What is interesting is that 30.9% again show the need for acceptance, which we mentioned earlier too. Only 10.9% of respondents agreed that they are not creative or that creativity is an unknown are for them. Maybe because they are from other areas of business such as finance or others and they leave out these functions to the creative experts. If only 10.9% said they are not creative, this means almost 90% of respondents are creative, in the same time the fear factors prevent them from delivering the best of their creative potential. Among „Other“ answers there is one opinion that is important to the fear factor (fear to differentiate). It is about creativity being risky. Therefore, it is often difficult to be the first one to an idea and then have to defend that idea from such an exposed position. New ideas make people exposed, visible, usually alone, daring and thus an easy target for criticism, doubts, negative opinions, reasons why it is not possible, arguments to kill the idea, lack of support, rejection etc. It is hard to convince others to try something new and untested. People are not warm to changes especially, if it is not initiated by them. Influence of fear on leader I assumed that fear as such influences the leader, the way he leads his people, his team/s, whether he leads by fear, or allows failure, gives space for creativity 78
  • 79. Fear Factor nurtures creativity, allows new things to be tried and allows for failures, stands behind his people in good times as well as bad times, he backs them up, empowers them etc. In this qualitative research i was able to only get basic data to what extent resondents agree or disagree with the statements. I was not able to dig deeper, in getting their personal opinions. This question explores influence of fear on the leader from internal perspective – leader and his leadership style and the way he leads internal stakeholders – subordinates, projects within a company. This is demonstrated by the following two pie charts. The results are comparable in both questions and becuase they are closely related to each other, i analyze them together. 79
  • 80. Fear Factor Majority of respondents think that leaders are influenced by fear – 67.3% agree and 34.5% disgree with the statement that leaders individually are influenced by fear. In the same time, 67.3% of respondents said fear influences leaders in the way how they lead their coworkers, colleagues, employees and 36.4% said it does not influence them. I find this as important finding, because, and again this is based on my interpretation of this result, this means that majority of leaders are worried, afraid to make tough decisions, they may lack courage, innovation etc. or it may be the case that they are lead by fear or lead other by fear, being aware of its positive and negative impacts and turning it into benefits. On the other hand, the 34.5% of leaders might be either the courageous leaders or the fear is not relevant in this context and does not influence leaders. This should not be neglected, for leaders make those kind of decisions that may influence differentiation of brands and if majority of respondents subscribes to the fear as being important factor influencing leaders, we should pay attention to this. 80
  • 81. Fear Factor When exploring influence of fear on leadership in external context – this means when leading clients, partners, all external stakeholders. The results are very similar to previous question, it seems that majority of respondents (67.3%) find fear as influencing leaders in the way how they deal with external stakeholders and 40% of respondents would disagree with this. There are similar comments to be made about what this could mean – whether this 67.3% of respondents think that the fear in leading external stakeholders is positive or negative, and on the other hand, whether those 40% of respondents who think that fear is not influencing the way leaders lead external stakeholders, think that it is not relevant or the fear is not present in this context. In the client – agency relationships, there are a lot of instance where fear is one of the tools leaders use in leading the agencies. A lot of clients – leaders, lead from the position of being the decision-maker, the one who can allways pitch for a new agency or for new creative ideas among more agencies. Which of course causes fear on the agency side, rather than building a partnership that is lasting and both client and agency get to know each others needs so well, they can build the busines together. 81
  • 82. Fear Factor Or imagine leaders from finance, e.g. procurement, the way they deal with suppliers, is based on pressure on price, less or complete lack of care about quality (e.g. creativity) and that is also very much defined by fear. Influence of fear on company This results show the importance of fear in an organization, how deep and wide the imlications of fear might be. My assumption was that fear reaches very far and influence the entire company – its company culture, processes, systems, ethics, atmosphere, performance, synergies and alignment across the company. The results show that 80% of responndents agree to fear influencing the entire company, its culture, processes, performance etc. On the other hand, only 21.8% disagree with this statement. This means fear is n important factor in defining the basics in a company and should be handled with care and definitely paid attention to when definig culture, processes, goals, motivation of people etc. Influence of fear on vision I wanted to understand whether fear has impact on vision. I didn’t ask separate questions for vision setting and execution of the vision, which i would find very 82
  • 83. Fear Factor usefull now but the sake of keeping the questionnaire reasonably long, i haven’t done that. The results show, that 56,4% of respondents agree that fear influences vision and 45.5% disagree with this statement. I assumed the difference between those who agree and disagree would be bigger. I though there will be more respondents agreeing to the fact that fear influences vision. My assumption here is, it may be because vision setting is the dreaming phase, the ambition of the company and the fear is more relevant to the execution of the vision. How many times I have seen big visions of companies in strategic presentations. Such as „be the best service provider“ (and what is the best service?), „be the most transparent brand“, „be the most innovative“, „be the simplest“, „be the most courageous“ and then if you look into the market, into the implementation of those visions, where has the courage, simplicity, transparency, service, innovation gone? Where are all those brands? Raising the bar 83
  • 84. Fear Factor This questions meant to explore the willingness of people to try the new, untried, going for the best standard, pushing the bar up. I was looking for some answers for how differentiating or mediocre brands are. What thinking is behind their decisions that support this topic in respect to fear. For simplicity reasons, and for better affinity to the statements, I focus in this short analysis only on the strong statements – „strongly agree“ and „strongly disagree“. From the results we can see that only 20% of respondents strongly agree with the statement that they would go for something new, never tried before. Only 20% strongly agree with the statement that they always want to change their industry and 18.2% wants to always create a trend. 49.1% compare themselves with market best and 5.5% only with market average benchmarks. This brings me to an assumption that most companies are trying to be the followers – the smart followers as they call themselves – because to be the first has its price. In spite of the fact that 5.5% said they compare themselves with market average benchmarks, 0% of respondents said that they would choose a middle way and 18.2% of respondents would strongly disagree going the middle way. 84
  • 85. Fear Factor 32.7% of respondents is never satisfied with their products and services and allways explores ways how to improve them. 0% strongly disagreed with the statement. Only minority of respondents agree (9.1%) or disagree (3.6%) with the statement that they have done a lot of improvements in their business, products, services etc. and now they continue in them as they are. This means thay actually agree to the fact that they are sitting and enjoying the results of the past and sooner or later they will realize that they might be overtaken by competitors or become a commodity. Only 3.6% of respondents would strongly agree that they would usually go for the already accepted and 12.7% would strongly disagree with the statement. In other words, 3.6% would be happy with average work, product and services and only 12.7% would not. If you would like to look into detailed data sheets (percentages and absolute values) for this graph, please see the appendix I. Fear and testing First i looked into advertising and then into products and services. In this section I was trying to understand whether respondets are testing creative work or their products and service and if so what are the most important criteria – all that with respect to fear factor (fear to differentiate). Therefore I would be looking for things such as originality, polarization of opinions, business cases and the likes. My assumption was that the more testing is involved, the less sace for creativity, innovation will be left. 85
  • 86. Fear Factor The results show that majority of respondents (63.6%) sometimes test their creative work, 56.4% their products and services, the same share (18.2%) always or never test their creative work, whereas there is a bit more of those who always test their products than never test their products and services compared to 86
  • 87. Fear Factor creative work. I would assign this difference to the difference between a creative idea and a product. The results show that majority of respondents is testing creative work and products and services and that brings along compromises based on customer opinions – believing or not believing that customers can tell us something new – specially on the originality, innovativeness side of things. Of course this is very much dependent on the right interpretation of results of the research and also stage in which we test – the creatives or the products, specially the products (as ideas or as product samples) and what are we actually testing (functionality, usage, errors). The results show that 36,4% of resondents strongly agree and ony 1.8% strongly disagree that originality is important when testing creative work. 10.9% of respondents strongly agree that the creative work should not annoy anyone, whereas 14.5% strongly disagree with this – which means they would be open to approve creative work that may annoy someone. My assumption was that more respondents will be strongly agreeing to creative work that is not annoying anyone, therefore playing it safe, being afraid to stand out. But if we look, how many of respondents agree in or cannot decide, it completely changes the picture. Taking this into account, 30% would agree to go for creative work not 87
  • 88. Fear Factor annoying anyone and other 30.9% would not be able to decide. I think, it needs courage to express a strong opinion about mediocre work. Therefore I think respondents would not allow themselves to chose obviously an answer that would let them feel about themselves. We can clearly see that differentiation is not getting the most scores. It is the opposite, brands are looking to launch products and services that would deliver the potential usage (61.8%), which is closely related to the returns to the company. If the product or service is not used, the return on investment (ROI) will not happen or not happen that fast as expected. Second most important is the fit to their clients needs (58.2%), followed by positive reaction of customer (52.7%) – the not annoy anyone but rather please everyone approach. And of course potential revenues make up for 47.3% of our respondents. The “Others” included few other criteria, such as that there would be some potential for necessary changes for the final product or that there might be some specific client's request to test, or whether the product is technically workable. The rest was again the error in the questionnaire, therefore the percentage value is misleading again. Only 3 answers were relevant responses, the rest was errors. 88
  • 89. Fear Factor From the chart above it is clear that potential usage and potential revenues are very important criteria for a launch of a new product or service. So how many companies actually care for business case and would they go for positive only business case or would they dare to go for a negative business case because there is something more important, such as differentiation - fullfilment of their brand story, that they pursue via this product or service? We can see that majority of companies (58.2%) would always calculate business 89
  • 90. Fear Factor case for a new product or service. 27.3% do measure business case sometimes. And only a minority of 5.5% that would never do that. I assume it is because they know clearly what product or service they want to launch because of their clear strategy, clear brand story. Reading from the pie chart, we can clearly see that 36.4% of respondents would always go for positive business case, whereas 63.6% would not always chose so. The „Other“ answer in the bar chart should cover other metrics companies use to evaluate their products and services, meaning they do not use business case at all. 9.1% of respondents answered to this with their opinions rather than with listing out some other metrics for evaluation of their new products or services. I will list some of them as they were written down and add my comments where i feel it is appropriate, because they make a lot of sense and they are interesting compliment to the overall results. : „We make also image projects with low ROI.“ „Sometimes company chooses to go for project with loss with respect to scoring points on reputation.“ „In our business projects with fast ROI are just part of scope of services we provide to our clients.„ I find this very interesting, a company must have fast ROI products and services to be able to provide others that fullfil their brand story, that make them stand out and differentiate themselves from the rest. I believe companies exist not just to create cash and milk the cow, they are supposed to create value for customers and other stakeholders, not just few of them - shareholders and then maybe employees in terms of dividens or bonuses! „Sometimes, for consulting clients, we are trying to rescue an old model. There is no choice but to try something new.“ „A small company needs to remain revenue positive, but also needs to take chances in order to help to differentiate its products and services.“ „Case history is important but not the only tool for us.“ 90
  • 91. Fear Factor „When we go for innovation, new businesses, we are willing to accept neutral or slightly negative business case. We accept the fact, that innovations can have a long-term impact on brand and this cannot be easily quantifiable.“ „Sometimes launching a product depends on the Group and is not a local decision.“ Yes, abslutely, this is so relevant for large corporations, but again, these services prescribed by the Group, might not have business case in all markets. „Some projects are not about money, but they can bring big success (awards, interest of people, bring new business etc).“ „Besides the positive financial impact, we work on projects that have high creative value and without any charge to our clients.“ „There are a lot of other criterias: (1) importance in terms of reference - PARIS HILTON client; (2) important in terms of experience and learning curves - HUMMEL client; (3) importance in terms of network or other interests - WAREMA client.“ „Sometimes a business case on paper looks promising by numbers, but is light years away from market reality. We have ventured into products that are very successful in foreign markets, but have no comparable product/service on the Czech market. Questions that cannot be measured do come up: why hasn't someone else done it already? Is the market ready for a service like this, etc.? High and fast return on investment is an important criteria that has to be matched with sustainability and the the mid and long run feasibility.“ „I make video, so this is a real stretch, but I will pick projects that have potential to be market-changing, even if there isn't any great financial return projected for me or my partners. We do this to help shift the market a bit, make it more fun. „ Fear and its influence on industry I was interested to know whether the industry as such is influenced by fear and if so what the implications might be. This data was collected in the time when crisis was not paralysing the global market and every industry, so this might be a reflection of non-crisis perceptions, in spite of that the results are quite shocking. 91
  • 92. Fear Factor The results show that 80% of respondents think fear does influence their industry and only 20% do not think so. It seems our industry is full of fear. Summary of the quantitative research Fear is an important factor influencing creativity. Almost 90% of respondents confirm it. Majority of respondents (almost 82%) confirm spontaneously that fear has rather negative impacts on creativity and almost 51% of respondents say that it has positive impacts on creativity. However, we have found that the fear factor is somehow ambiguous - its impacts on creativity are both positive and negative at the same time. Spontaneously, people tend to first say it has rather negative impacts, which is natural. They said they would ski ideas because they would not be accepted or they would adjust ideas to fit expectations of others, they would soften sharp ideas. They also confirmed that fear factor kills creative ideas. We can see a pattern of acceptance that people seek when creating something new, which is a trouble in itself, because what is new is usually not easily accepted. There are first people who would kill the new idea, because it is not familiar to them and therefore evil. On the other hand there were respondents that observe fear having positive impacts on creativity. Those aid that fear factor creates necessary pressure 92
  • 93. Fear Factor which can lead to producing new ideas. Fear factor makes them try harder. If forces them to try finding new ways and alternatives, not rely just on one and therefore have more assurance that one of those ideas will be accepted by others. The major criteria defining the fear factor and its impacts on creativity were fullfilment of management’s expectations, or expectations of others (peers, colleagues, family, friends etc.), potential failure or mistake that can ruin their career, image, reputation, trust etc. Or the need to deliver results, fullfil their kpi’s and therefore need to make safe decisions in order to secure those results and fullfil those expectations. Majority of respondents (67.3%) confirmed that the fear factor influences them as leaders. The fear factor influences leaders as people – the way they lead, their leadership style, the way they lead themselves and others, colleagues, co- workers, supliers and partners – internally and externally. This is good news, because this confirms that leaders can actually influence the impact of fear factor quite a lot. What is also interesting to know is, that 80% of respondents agree to the fear factor influencing the entire company, its culture, processes, structure, systems, ethics, atmosphere, performance, synergies and alignment across the company. When studying the impacts of fear factor on vision setting and innovation, the answer was a bit surprising to me. My assumption was that a majority of respondents would agree that fear influences vision and innovation. The results show that 56.4% agree and 45.5% disagree with the statement. While trying to understand how companies go about improving, perfecting and raising the bar in their business, I have found that 49.1% of companies compare themselves, their products and services, with market best benchmarks and only a minority of 5.5% compare themselves with market average benchmarks. This means companies are comparing themselves to already existing products and services and therefore can come up only with incrementaly better product or service. Terefore, this will not make much difference in the market. This means they would launch a product or service a little better or a little worse then the market best benchmark. Sad, isn’t it? And if this is not enough to raise the alarming hand for lack of guts, ambition and innovation, the research confirms 93
  • 94. Fear Factor that only 12.7% of companies would never be happy with average work – with average product or service. The rest could let this happen? On the other hand , when launching a new product or service, there are only 18.2% of companies that are always trying to create a trend and 20% that what ever they do they always want to make a mark in their industry. When analysing imapcts of fear, I have found that almost 64% of companies test creative work (designs, campaigns, ideas...) and only 18.2% never test their creative work. In addition, 56.4% of companies always test their products and services and only 16.4% never test them. This is quite important for understanding what the role of testing is in the process, whether testing stops companies from bringing innovation and novelty in products, services or creative work. Is it a safety belt for making tough decisions? Is it polishing those parts that are disliked, critisized, that are standing out etc.? There are so many easy traps with researches and the way they are misused, smetimes abused and misinterpreted. When testing campaigns 36.4% of respondents strongly agreed that originality is very important criteria for evaluation of creative work. When testing products 34.5% of respondents confirm differentiation as being imortant criteria for evaluation of a product or service. It is important to say that differentiation isn’t the most important factor for evaluation. The most important criteria were potential usage (almost 62%), customer need fit (amost 59%), positive reaction of customers (almost 53%) and potential revenue (47.3%). From these results we can say that only one third of companies has the ambition of creating something original – wether it is product, service or creative piece as campaign, piece of design etc. Interesting is that from those companies that calculate business cases for their products and services, 36.4% would always go for a positive business case, whereas almost 64% would sometimes choose a negative business case – in cases of innovation, new business with a long-term impact on brand. Finding out that 80% of companies confirm that the fear factor influnces their industry and only 20% do not think fear impacts their industry. Taking into account that this research was done in time when financial crisis was not so felt and present as it is now, I think it is absolutely correct to say that we are doing 94
  • 95. Fear Factor business in a market place full of fear. Knowing this, we should find ways how to deal with it to our benefits - to benefits of our brands and businesses. Conclusion & recommendations Fear to differentiate is a crucial factor influencing success of brands. It very much depends on strong leaders to build and nurture brands. Leaders should be aware of fear being present everywhere in the organization and they can actually manage it and use it to their advantage, opposed to paralyzing growth. Leaders are very much responsible for the culture in their organizations. It can be a culture of fear or a culture free of fear. It is their call! Their decisions define the culture. Their decisions give a direction to employee behavior – freedom of expression, innovation, risk-taking, empowerment, decision-making etc. Creating a culture free from fear is important for building a successful strong brand. Instead of punishing for mistakes and failures, allow and encourage empoyees to try new things and make mistakes. What if we stopped rewarding for safe decisions, safe results – rewarding for stagnation and started rewarding for making mistakes, thus rewarding learning, instead. If leaders demonstrate fear, fear to differentiate themselves, noone can expect someone else fixing it. The courage goes from top to down and then back. Most leaders are worried, by making a wrong decision, they endanger their position and benefits related to that position. Since their period on that position is limited, they try to preserve it by making safe decisions. Safe decisions with safe results are commonly rewarded in corporations. Why should they make a difference, if mediocrity is required? Not only the lifecycle of leaders in their positions is short. Also comanies as such are focused on short-term result fulfillment. Most companies, especially those listed in the international stock exchanges focus on short-term results. They are under huge pressure of delivering financial KPI’s. All decisions are judged through financial lenses with no space for creativity, courage what so ever. If it doesn’t deliver the returns, it will go off the radar. But what if those types of activities would prevent you from commoditization and would secure your brand a strong differentiated position. Leaders should balance short-term and long-term focus. Milking cow without growing new land leaves you with no cow. 95
  • 96. Fear Factor Differentiation, clear position of a brand needs to be defined and executed. Most companies have beautiful brand books with brand positioning, brand values, brand personality attributed, tone of voice etc. But how the brand comes to life through everything what the company does is a different thing. The edgier the brand definition is, the tougher is to stand behind it. The fear factor in this is big. If you define your brand so it can fit everyone e.g. open, social, reliable – this will not make the brand to stand out and it will most probably not be a focus filter for the company activities either. But if you defined your brand as courageous, witty and transparent, you would have to stretch many activities and decisions and question each and every activity, product, service, campaign, shop, website – every touchpoint and customer experience, whether it is perceived as courageous, witty and transparent. It needs courage to deliver on a differentiated brand promise. What we see most of the time is leaders making compromises and exceptions (and most of the time these are not exceptions but routine decisons not paying attention to brand and differentiation) when it comes to confrontation of what a company could earn versus whether it belongs to its brand, how it will be perceived etc. At other times, differentiation is confused with differentiating their brand from its competitors. To compare a brand with its competiton is very dangerous because it may lead to burning down the differences between brands and lead to no differenciation and commoditization. Such companies usually compete on price and the market is destroyed quite fast. Customers pay premium for things that are different and because they choose that difference being important to them. Leaders fall into this trap quite easily. Instead of perfecting their brands point of view via products and services, campaigns, story on their shops or other touchpoints, they go on chasing each and every activity of their competition and then end up launching it too because they think they might miss out on revenue, loose customers etc. Fear overpowers many brands. Fear controls brands, specially when their reach the top, when they feel the taste of success. The fear kick in in the times of celebrating harvest. A successful company grows. Eventually it may grow so big, it will lose the differentiation muscles, the courage, the flexibility, the freedom, the change spirit, the risk-taking, enterpreneurship, non-predictability etc. In telco industry, we are in a stage where mobility isn’t a new value to our customers. They got used to it. The question is what is the next value proposition we offer to them to keep our position? We are in the middle of the battle field of 96
  • 97. Fear Factor commoditization, with prices slacking down our margins, customers floating from one operator to the other. Ultimately our room for experimenting is getting smaller and smaller, our market is shrinking and we are sitting and waiting for goddess of differentiation to rescue us. Instead of doing some disruptive move that our competitors would not expect, nor we would think of in the good times. We should start thinking about brand extentions or stand-alone brands that would be well positioned and that would prevent us from other market entrants that might steal our market share because our mass brand could not relevantly reach these specific audiences – these tribes of customers. I can imagine we create our own MVNO or MVNOs to be able to target niches, to be able to differentiate. We should not wait for other companies coming to us with MVNO offers. We could easily launch for example a gay & lesbian operator and create love brand with high value customer base, high affinity, high loyalty with almost nor churn, with high usage and spending per user and high ambassadorship thanks to thegay pride, being able to charge premium. After all is it such a tough call? The fear to differentiate creeps in and we use our brand inertia to overlook how our business is shrinking. As Jonathan Ford writes in his article on The future for brands: „Brands of all sizes need to watch who is rising up in the challenger entrepreneurial stakes - these are the people who are taking risks with their ideas and this is where brave and fearless thinking takes place, gets noticed, is written about, and is taken to the heart of people.“ Other trap is in differentiation not being a one time event but a never-ending process. A brand can be differentiated at the beginning, at its launch but it doesnt mean it will remain differentiated for ever. Brand needs continuous nurturing, reinventing, redefining, change in its expression etc. It is not that now differentiation is done, and we can do other things. Differentiation is the key optics for company activities. Most of the time it is not. Leaders are afraid letting pass everything they do through such filter. It would mean they would have to do difficult decision that would sometimes also cost more then the others and maybe would bring smaller return in a longer time. Leaders are afraid to say NO to a lot of things. It is crucial to look at brands with this optic though. It helps customers to understand who your brand is, why they choose you and why they do not choose others, it helps the brand to tell a unique story in a market – via its products, services, communication, shops, infoline, internet pages etc. If a brand 97
  • 98. Fear Factor doesn’t have such optics, it runs to all directions. Would you send your soldiers to win a battle to all directions? Majority of brands go where the cash is. They go anywhere where they see a positive business case. They go where they can fill their pockets, where a new revenue potential is, where the business case is, they do not question themselves beyond financials and technical capacity. They claim they are for everyone, but who are they and if so, are they the same to everyone or different to different people? In an interview with Beef magazine I called this phenomenon as “brand prostitution”. This means that you do not care to whom you sell your brand, your products and services, you offer them to all, merely taking care about the money you get from them. The fear factor in brand prostitution is clear – the returns drive the company, and not its unique story. It is possible to calculate/ estimate returns but it is impossible to calculate perception, opinion and emotion of your customers or employees. The analysis by analysis covers the fear to make decisions and take responsibility for them. The first thing companies do when facing a big decision, they choose to order a big research that should enlighten them. The data from researches usually serve as butt covers – the cushions for lazy worried butts – who tremble for their seat. The data from those researches are impressive and are good at paralyzing others. Because the research says, the companies turn the results into meaningful initiatives. In the end they only focus on incremental improvements, which do not make much difference and do not require any courage either. Great leaders can smell the fear . They can discover the traps in which fear is. The trap is in the process. We learn it, we perfect it, we benchmark our activities, we follow rules, guidelines, stages, launch plans, we try to meet kpi’s. There are so many norms and templates we are trying to fit creative – out of the box – out of the ordinary – thinking. The fear is in the novelty opposed to the familiar and similar. If you are in a herd, be the black sheep, rather than one among the thousand white sheeps. Of course it is human nature to go with the group, to have approval of our peers, be in the familiar environment. However, creativity and differentiation require companies to abandon the learnt, the done before, the approved by social group, to leave the habit and the routine. On the other hand, it requires carving out new 98
  • 99. Fear Factor space for a brand. It is about the road not taken yet or never taken before. The problem is that novelty (in creativity or in differentiation) scares the hell out of people. There are many brands that are so afraid to do anything that would make them stand out. They chose linear road, easily read, easily followed, easily learnt, easily predictable, rather than choosing the opposite owning the value of being truly differentiated – higher profits, customers as ambassadors and motivated employees. Be aware of the gap between logic and creativity – one is calculated and safe the other not calculated and entirely unsafe. 10 Freedoms from fear Keep it low. Low key, low tech, low hierarchy, low process. Create culture free from fear. Allow, make & reward mistakes. Find your own tribe/s. Find new audiences with high affinity and loyalty. Stop the brand prostitution. Don’t try to be everything to everyone. Your brand must have a distinctive point of view. Deliver on it. Use your nose to smell the fear. Sniff it out, don’t avoid/hide it. Do you really need to test? Tests paralyze and kill the new. Middle is trouble. Great brands polarize opinions. Linear thinking is predictable. It can be easily immitated. Familiar is dangerous. If an idea doesn’t scare the hell out of you, most probably it is not new. Skip it. Have no set rules. Avoid rules, they kill creativity. 99
  • 100. Fear Factor Qualitative research analysis There are some respondents that agree and support the argument that brands suffer from fear to differentiate and some against. For simplicity reasons I have chosen to add my point of view directly to the answers that i got in the Answers at LinkedIn. Please go back to qualitative research findings. My comments will be market in blue colour at the end of each answer. 100
  • 101. Fear Factor Appendices Appendix #1 – research questionnaire Apendix #2 - research findings Appendix #3 – Beef 4th December 2008, Fear Factor by Bijan Peymani Note: All appendices are sent as separate pdf documents. 101
  • 102. Fear Factor Bibliography Fear definition, Wikipedia, Gregory Berns, M.D., Ph.D., directs the Center for Neuropolicy at Emory University,, December 6, 2008 Gordon Brown, Courage, Eight portraits, Bloomsbury Publishing, 2007 Marty Neumeier, The Brand Gap, How to bridge the distance between business strategy and design, 2006 Fear, romance affect decision- making, Health News, 21, April 2009, making/UPI-84461240288003/ Better Branding, The McKinsey Quarterly, 2003, Number 4 Paul Arden, It’s not how good you are, it’s how good you want to be, Phaidon Business the Richard Branson Way, Third Edition by Des Dearlove, 10 secrets of the world’s greatest brand builder Glenn D. Walters, Beyond behavior, Construction of an overarching psychological theory of lifestyles, Greenwood Publishing, 2000 John Gerzema and Ed Lebar, The Brand Bubble, The looming crisis in brand value and how to avoid it, Jossey-Bass, A Wiley Imprint, 2008 Nicholas Ind, Living the brand: How to Transform Every Member of Your Organization Into a Brand Champion, 2007, Kogan Page Ltd Lucia Tarbajovska, Interview for Beef Magazine, 4th December 2008, Fear Factor by Bijan Peymani Kjell NORDSTRÖM, interview at 102
  • 103. Fear Factor Keith Reinhard, 4 freedoms, Bijan Peymani, Beef 4th December 2008, Horizont and Die Zeit. Heading, „Mother courage encounters Godfather Death“ Sarah Hewitt, University of Calgary, Journal of experimental biology, 2008, Research by Julien Brechbühl, Magali Klaey and Marie Broillet from University of Lausanne, published in Science in August 2008 Jon Fine, Business Week, Why TV Advertising isn’t dead yet, April 30, 2009 Bruce Tait, How marketing science undermines brands, Tait Subler, Copernicus Marketing Consulting, Copernicus Reports, Brand Study Results: Most Products and Service Becoming More Similar Than Different, January 1, 2001, Newton, Massachusetts, Des Dearlove, Business the Richard Branson way, 10 secrets of the world’s greatest rand builder Jonathan Ford, Fear & Risk: Designing for brands in a scary future,, September 2006 103