Marketing Innovation (Ireland 2010)


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Presentation to Irish Marketing Institute on 3rd Nov 2010 on role of marketing in driving innovation

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  • Graham Greene was highly praised for his 'cuckoo clock' speech that he wrote for Lime's character, a monologue expressing the notion that peace never leads to artistic evolution, and citing that Switzerland's only contribution to the world was the cuckoo clock. Not only was this speech actually improvised by Welles himself, but it resulted in the towering actor being bombarded with letters from angry Swiss residents disagreeing with this throw-away claim
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  • Pulse of nation = 18,000 consumer panel
    Aisle Spy = blog & web cams & video
    Bright Ideas = money saving (5% of savings)
  • Pulse of nation = 18,000 consumer panel
    Aisle Spy = blog & web cams & video
    Bright Ideas = money saving (5% of savings)
  • Pulse of nation = 18,000 consumer panel
    Aisle Spy = blog & web cams & video
    Bright Ideas = money saving (5% of savings)
  • Design thinking = solving problems like a designer; combining sound observational and analytical skills with the ability to make intuitive leaps
    Dan Pink has even suggested that businesses should start valuing a Master of Fine Arts (MFA) qualification as much as they do an MBA, because the type of right-brain thinking coming out of the leading design schools has the ability to give businesses a genuine competitive advantage.
  • Marketing Innovation (Ireland 2010)

    1. 1. Marketing as Innovation Leader
    2. 2. “My centre is giving way, my right is retreating. Impossible to manoeuvre. Situation excellent, I shall attack” General Foch, 1st Battle of Marne 1914
    3. 3. “In Italy for thirty years under the Borgias they had warfare, terror, murder, bloodshed - they produced Michelangelo, Leonardo da Vinci & the Renaissance. In Switzerland they had brotherly love, five hundred years of democracy and peace, & what did they produce? The cuckoo clock!” Orson Welles, The Third Man Out of chaos …
    4. 4. … Comes Opportunity “Recessions don't produce record numbers of new companies, but they do seem to mark a turning point in the formation of new businesses.” BusinessWeek, 13th February 2009
    5. 5. Innovation at top of Agenda • End of era of introspection, rationalisation & incrementalism • Organic growth & innovation back at top of corporate agenda – BCG/BusinessWeek Global Innovation Study 2010 • 72% of execs consider innovation = top priority in (up from 64% in 2009) • 84% say innovation = important/extremely important lever to reap benefits from economic recovery • 61% say companies will boost innovation spending (26% by >10%)
    6. 6. The Opportunity for Marketing • Marketing has no automatic right to lead
    7. 7. Perceptional Barriers Facing Marketing • Spenders rather than generators of money • Myopic … disinterested in sources of growth/ innovation beyond marketing function • Short-term/incrementalist – Focused on today’s customer needs rather than future needs – “Senior management is increasingly on the lookout for marketers who don’t merely do things better, but reinvent how they go about things” Scott M. Davis, Chief Growth Officer, Prophet * McKinsey 2010
    8. 8. How Marketing Can Grab Hold of Innovation Agenda 1. Harness people’s collaborative impulse 2. Meet expectations & leverage enthusiasms of new generation 3. Exploit new tech … especially social media 4. Loosen up & embrace the chaos
    9. 9. The spirit of collective action
    10. 10. A culture of collaboration
    11. 11. Economic altruism “people like to create & wish to share. A surprising amount of useful, creative or expressive activity is generated without any financial incentive at all”
    12. 12. Collaborative Journalism “mutualisation” = “getting readers to care about, inform and enhance our coverage” Meg Pickard
    13. 13. Collaborative Government?
    14. 14. Collaborative Causes
    15. 15. Collaboration as Change Agent
    16. 16. Collaboration as Disruptive Force • Organisation without organisation – No permanent office – No paid employees • Armed with a sophisticated understanding of new technology & an army of enthusiasts
    17. 17. Evolution of Crowdsourcing Customising Contributing Creating Solving Collaborating
    18. 18. Numbers are Compelling • 70% of companies regularly create value through use of web-based communities • Using customer communities to solve customer problems costs 10% of traditional call centres • Product revenues +200% * McKinsey 2010
    19. 19. Collaborative Business Models
    20. 20. Community Commerce  Self-sustaining creative community  Members submit designs => 80,000+ submissions • Opportunity to pre test beta versions  Community votes => 800+ designs  Designers receive $2,500 + marketing advice + retain IP  No professional designers, no salesforce, no distribution, no market research, no advertising => $30m revenues … high margins
    21. 21. Community Commerce  People-powered mobile network (from O2)  Members receive points for recruiting new people, making suggestions & solving problems, which are converted into cash  20% actively involved  Aim that 25% of members will get half of cost of calls returned to them for contribution to community  Plans to involve community in pricing & marketing decisions  Not reliant on call centres, expensive marketing & product support
    22. 22. Community Commerce  “Where technology meets chocolate”  Apply software development model to chocolate  Issue beta versions of new products  Provides immediate customer feedback - from real people consuming product in real environments and in close to real time  Helping fine-tune products without the need to invest in expensive product testing research  Flatters the egos of its most important customers, who think of themselves as co-creators or collaborators
    23. 23. When Collaboration Works Lessons from the Software Industry  Cathedral = traditional, tightly controlled innovation model  Bazaar = loose, open source approach, harnessing the skills of the wider developer community  Not particularly effective at originating concepts, which still rely on the spark of individual genius to make them happen  Very effective at testing and improving them
    24. 24. Formula for Collaborative Success  Ensuring strategic focus  Publicity as bi-product not sole objective  Planning – who, what & how?  Obama’s 100  Devolving control to community  Continuous feedback loops  Anticipating subversion  Bieber in North Korea  Managing IP rights
    25. 25. 1. Harness people’s collaborative impulse 2. Meet expectations & leverage enthusiasms of new generation 3. Exploit new tech … especially social media 4. Loosen up & embrace the chaos How Marketing Can Grab Hold of Innovation Agenda
    26. 26. A New Generation
    27. 27. Culture of Narcissism • Self importance • Self entitlement • Confidence in unique abilities “A world that constantly reflects back to you your own wishes, through a computer that seems to be your friend will inevitably enhance your sense of self and the unwarranted belief that your views have weight & authority” Tim Adams, the Observer, 6th December 2009
    28. 28. Generation Me* • 57% of young people in US agreed that “people in my generation use social networking sites for self promotion, narcissism & attention seeking” • 40% agreed that “being self- promoting, narcissistic, overconfident & attention seeking is helping for succeeding in a competitive world”
    29. 29. Heightened Expectations • Speed & responsiveness “The trouble with McDonald’s is it’s too bloody slow” Instant access, instant response, instant gratification “living life through shortcuts” MTV
    30. 30. Why many institutions struggle • Not configured to work in real time, in terms of speed or resources One hourOne hour Ten MinutesTen Minutes * Critical response time for responding to negative comments
    31. 31. Heightened Expectations of Work • Flexible working – 85% of Gen Y want to spend 30-70% of time working from home • Other priorities – Work/Life balance – Personal development – Exciting job – Motivational management … not afraid to ask for them & not afraid to walk away * TalentSmoothie: Generation Y: What they want from work (2008)
    32. 32. Corporate Response Theory Y meets Gen Y • Emphasis on freedom & trust • Encouragement of creativity & individual responsibility “We’re giving people the latitude to go off & do their own thing. We trust them to do their regular jobs & to experiment, innovate & have fun” Microsoft Snr Mgr, quoted in Business Strategy Review
    33. 33. How Marketing Can Grab Hold of Innovation Agenda 1. Harness people’s collaborative impulse 2. Meet expectations & leverage enthusiasms of new generation 3. Exploit new tech … especially social media 4. Loosen up & embrace the chaos
    34. 34. Inexorable Rise of Social Media • Penetration growth of social media across all demographics & markets • Increased expectation among stakeholders that they should be able to debate issues & share ideas with institutions across social media platforms • Rapid adoption of social media by activist community as a means of rallying support & generating publicity • Increased client confidence in ability to deliver communications objectives through social media channels … supported by accumulation of successful case studies
    35. 35. Ireland joining rest of world in addiction to Facebook
    36. 36. Ireland developing a Twitter habit
    37. 37. Ireland yet to embrace blogging
    38. 38. Observations • Irish public’s use of social media does not mirror Ireland’s broadband/digital sophistication • Private & public sector in Ireland has vested interest in promoting use of social media – Reduce costs – Enhance public/customer engagement – Open up new business opportunities – Drive innovation
    39. 39. Role of Social Media  Track sentiment & provide advance warning  Rally supporters & mobilise/inspire internal audience  Supercharge customer relations Engage critics Facilitate stakeholder involvement in product, policy or service development Sustain impact of other marcoms Drive SEO performance Measure effectiveness of/response to other comms
    40. 40. Smart campaigning … with social media at its heart
    41. 41. Smart customer service … with social media at its heart
    42. 42. Social Media-Powered Innovation • PowerBrand Facebook game lets potential employees play at being company execs (from marketing exec => global president) • 21.8k Facebook fans, 161,000 monthly active users • One of top 1k games on Facebook (out of 89k)
    43. 43. Building Incredibly Valuable Customer Communities RS Components built community of 17,000+ electronics design engineers from 139 countries in only 3 months 36,000 members (lawyers) from 160 countries
    44. 44. Beware Fixation with Shiny Stuff
    45. 45. Boring is good "Tools don't get socially interesting until they get technologically boring.“ Clay Shirky
    46. 46. Don’t get so carried away by unlimited possibilities of social media … that you lose sight of real business objectives
    47. 47. How Marketing Can Grab Hold of Innovation Agenda 1. Harness people’s collaborative impulse 2. Meet expectations & leverage enthusiasms of new generation 3. Exploit new tech … especially social media 4. Loosen up & embrace the chaos
    48. 48. Theory of Loose Parts* • “In any environment, both the degree of inventiveness and creativity, and the possibility of discovery, are directly proportional to the number and kind of variable in it.” • I.E. We all have potential to be creative, but that this creativity is empowered in a looser, unstructured environment & constrained by tight, highly structured, controlled processes and environments * Theory of Loose Parts, Simon Nicholson
    49. 49. Environment for Innovation • Reinvigorated innovation process: – Devolved decision making power from small group of senior execs to network of cross-functional councils & boards = “a distributed idea engine where leadership emerges organically, unfettered by a central command” Fast Company – Focus on agility & speed “all the windows of opportunities I’ve missed – areas that got ahead of us that we couldn’t get back into without doing big acquisitions or something – have been when I’ve moved too slow” Cisco Systems, CEO John Chambers • Business plans that used to take six months to develop and approve, can now be put together in a week
    50. 50. Environment for Innovation • Granted 2,000+ worldwide patents • “The most innovative company in America” Fast Company • Consistently ranked as one of the best places to work • No job titles, formal hierarchy or organisational charts • Teams self organise around specific projects
    51. 51. Willing to Fail “We avoid failure at all costs and cling to ideals like ‘order’ and ‘efficiency.’ But we must embrace failure, we must glory in the very murk and muck and mess that yield true innovation” Re-imagine, Tom Peters “Remember, we celebrate our failures. This is a company where it’s absolutely OK to try something that’s very hard, have it not be successful, and take the learning from that.” Eric Schmidt
    52. 52. Beware Over Reliance on Marketing Science “Trying to research new category ideas is pretty near impossible since people are notoriously bad at predicting whether they will adopt new behaviours in the future & generally reject such changes as alien & odd” John Kearon, CEO BrainJuicer
    53. 53. Beware Over Reliance on Marketing Science “The biggest brand of them all, Coke, was built not from market analysis but by a potty pharmacist brewing medicinal tonic in his back yard using nothing more than instinct and a three-legged brass kettle.” Mark Ritson, Marketing magazine, 20th May 2009
    54. 54. Mavericks Wanted • Innovation driven by intuition + passion rather than ‘marketing science’ • True breakthroughs ignore consumer’s declared needs i.e. the antithesis of ‘good’ marketing Marketers need to think more like designers or inventors
    55. 55. Thinking like a Designer • “In a global economy, elegant design is becoming a critical competitive advantage. Trouble is, most business folks don't think like designers” Professor Roger Martin, Rotman School of Management • Design Thinking – Observation + Analysis + Intuition • MFA more valuable than MBA
    56. 56. The Irish Advantage • Innovation more likely to come from small units … away from corporate HQ • Commitment from Irish Government to make Ireland a global innovation hub” • Structural advantages – Favourable demographics = a Generation Y economy – High educational standards – English/American language & literary heritage – Diaspora – Technological sophistication
    57. 57. #crowdsurfing