Berlin School of Creative Leadership Foundation gUG (haftungsbeschrnkt)

Franklinstrasse 11 10587 Berlin Germany

Phone: +49 (0) 30 88 49 80 80 Fax +49 (0) 30 88 49 80 99

E-Mail: info@berlin-school.com www.berlin-school.com

President: Michael Conrad

Faculty Director: Prof. David Slocum

Managing Directors: Susann Schronen,

Jamshid Alamuti

Building New Strategies for Creative Excellence:

Porter vs. Porter

Berlin School of Creative Leadership White Paper June 2014

Professor David Slocum Professor Paul Verdin Berlin School of Creative Leadership Berlin School of Creative Leadership

& SBS-EM (ULB)

Executive Summary

Strategy is changing amidst volatile markets, disruptive technologies, and transformed

customer and public relationships. Contrasting some of the major tenets of traditional

strategic thinking, an analysis of the work and words of Chuck Porter enables the

mapping of several key principles of a new strategy of creative excellence. These

include 1) forming an adaptive commitment to strategic intent and ongoing public

engagement, 2) fostering communities of participation as part of generating a wider

cultural conversation of creative work, 3) building trust through imaginative, often

offbeat and interactive storytelling, and 4) moving beyond competition to highlight the

value emerging through creative breakthroughs or community-building.

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Chuck Porter is the Chief Strategist of MDC Partners, a network of independent advertising

agencies that includes Crispin Porter + Bogusky, where he is the Co-Founder and

Chairman. CP+B is a full-service, fully-integrated advertising agency operating as one

global agency with seven locations in the United States, Canada, Brazil, and Europe that

was named the Advertising Agency of the Decade by Advertising Age magazine in 2009.1

Porters presentations, like How to Start a Creative Agency, are given mostly to

industry audiences, such as at the Cannes Lions International Festival of Creativity.2 They

are neither theoretical nor grounded in conventional management discourse. Instead, they

highlight insights and key tenets of successful agency practice from a history of CP+B and

its creative work for clients. His strategic thoughts, as a result, serve as a valuable practical

resource for elaborating more systematically developed concepts and models and drawing

these together into a more integrated whole directly relevant to creative communication

industries.

As we will argue, notwithstanding their different form and context, Chucks ideas

readily connect with those of other strategic thinkers writing today, including Rita Gunther

McGrath, Greg Satell, Chris Zook and James Allen, and Niraj Dawar. In fact, his ideas not

only capture some of the same key insights as these more empirically- and theoretically-

based writers but have the advantage of nearly two decades creative work to substantiate

and illustrate them. While also sharing in their call for embrace new assumptions,

contexts, and possibilities for strategic thinking and action, Chuck has the further

1 Advertising Age, December 14, 2009 Book of Tens: Agencies of the Decade 2 Chuck Porter (2010) Chuck Porter Cannes How to Start a Creative Agency Video 1 of 2 Chuck Porter -- Cannes - How to Start a Creative Agency Video 2 of 2 Chuck Porter -- Cannes - How to Start a Creative Agency

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distinction of sharing a surname with probably the most famous and influential proponent

of traditional business strategy, Michael Porter of the Harvard Business School.

What follows, then, is a mapping of the evolution of four major strategic ideas and

priorities that Chuck Porter has proven succeed in contemporary creative agencies and a

changing marketplace. It is organized through a series of contrasts and continuities with

strategic thinking and models of the past, which are associated for the sake of argument

with, but should not be seen as exclusively as grounded in, the thinking of Michael Porter.

Our aim with Porter vs. Porter is therefore to emphasize crucial differences in strategic

thinking and action that mark a break with the past and support creative excellence

moving forward into the future.

1. Adaptive Commitment

One of the greatest debates in strategy today concerns the continuing viability and

relevance of Michael Porters idea of sustainable competitive advantage, which typically

derives from using cost leadership or differentiation to create a favorable position in a

well-defined industry. Increasingly, arguments, like Rita McGraths, have been made a

long-term, stable and sustainable competitive advantage can be outdated and even

dangerous goal in todays more volatile and fast-changing world.3

While acknowledging the need to account for flexibility and speed in decision-

making and adapting to dynamic conditions, we see a vital need for leaders and agencies to

still make commitments in their strategic thinking and allocation of resources.4 For CP+B,

3 Rita Gunther McGrath (2013) The End of Competitive Advantage, Cambridge, MA: Harvard Business Review Press, p. xi. 4 A similar call for commitment to balance transient advantage has been advanced by Cesare Mainardi, CEO of Strategy&, in Mainardi (2014) Building a Capable Company, strategy+business

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a distinctive way of interacting with customers and the market has been achieved through

the consistent strategic investment in producing the most talked about, and written about

advertising in the world. CP has thus struck a key balance: creating an initial platform for

communicating brand identity and allocating resources while allowing for further, shared

decision-making and co-creation with clients and the public.

Two of his major early collaborators at CP+B, Alex Bogusky and John Winsor,

offered a helpfully concrete description of this balance in their 2009 book, Baked In:

Businesses and their brands are built through great, innovative products. Branding

and marketing must be reconnected to the products themselves. The goal of a new

design process should be to elevate both marketing and product design at the

strategic level, fueled by the same powerful narrative. So brilliant designers and

marketers must work together to create products that are consistent in form and

story.5

EX. Burger King ads Chicken fries with NASCAR, Subservient Chicken (2004),

Whopper Virgins (2008), Whopper Sacrifice (2009)

The long-term (2004-2011) relationship between Burger King and CP+B produced a series

of campaigns committed to making the brand culturally relevant and embracing new

digital technologies and the public engagement they enabled. Subservient Chicken used 40

pre-filmed segments to create the appearance of interactivity in response to specific public

blogs, April 29, 2014; The general idea of flexible commitment as driver of continuous corporate renewal was developed in Bala Chakravarthy and Sue McEvily (2006) Knowledge Management and Corporate Renewal, in Handbook of Knowledge-based Management and Organization, eds. Kazuo Ichijo and Ikujiro Nonaka, New York: Oxford University Press. 5 Alex Bogusky and John Winsor (2009) Baked In: Creating Products and Businesses that Market Themselves, Chicago: Agate, p. 20.

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requests, for instance, and Whopper Sacrifice upended the cultural drive to add Facebook

friends by rewarding sacrificing them. Consistently experimental and sometimes bizarre,

the multiple campaigns courted controversy and made the brand part of the wider cultural

conversation.

2. Serving the Community of Participation

What is the fuller nature of that strategic investment? Marketers and advertisers have

traditionally been seen to serve one (or more) of three masters: the client, the brand, or

the customer. In that traditional scheme, advertisers become suppliers serving the client

or possibly the brand in order to benefit the customer. Traditional strategists would see

the source of value in that equation being creative differentiation of product capabilities

that is, serving the client efficiently and effectively to capture and protect a market or

segment. We see CP not only shifting from straightforward client service but making a

greater breakthrough.

Because of new brand relationships, interactivity, and social sharing, we add a

fourth area of service named by CP: the 'community of participation'.6 Bogusky and

Winsor provide a useful gloss here, too, saying customers want to participate in building a

brand they will become loyal to, generating a conversation around new ideas, and

manufacturing products that will speak to their needs. These customers back and

appreciate the brands they love.7 Recognizing how essential is the tracking of 'media

impressions' across different demographics through distinct channels to determine brand

ROI, we argue the connected community of participation has replaced, or at least

6 Chuck Porter Presidents Lecture (2013) Berlin School of Creative Leadership, July 23, 2013 7 Alex Bogusky and John Winsor (2009) Baked In: Creating Products and Businesses that Market Themselves, Chicago: Agate, p. 29.

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subsumed, clients and customers in the social and viral world. Markets, in turn, emerge

from the communities of participation with whom content-makers like CP engage in more

consistent conversation.

That conversation takes place, in his words, using new ways of interacting with

customers and keeping up your end of the conversation until it is possible to engage the

customer in what you are doing.8 Put differently, as MDC has, purchase paths which were

previously Linear, Emotional, Individual are today, Non-Linear, Info-Mational, Social.9

Strategy for creative excellence in this way becomes based less in new-product

development systems or pipelines and more in novel interactions with audiences who, in

turn, contribute social influence in creating markets.

EX. Early MINI counterfeit campaign 2004

Using a range of materials including television spots, DVD, internet and print, the MINI

Cooper campaign launched in 2001. Over succeeding four years, including the counterfeit

MINI campaign of 2004, it helped the brand to generate a new community separate from

the then dominant culture of aggressive and functional, point-to-point driving, most

associated with SUVs, and instead celebrating driving as fun and an opportunity for self-

expression. Notably, MINI USA did not provide a detailed brief to CP+B but a series of

strategic questions that the agency worked through in an iterative way.

3. Building Trust

Engaging audiences and then creating markets ultimately means building trust in the

perceived value of a brand. Building trust, particularly in the era of digital interactivity,

8 Chuck Porter Presidents Lecture (2013) Berlin School of Creative Leadership, July 23, 2013; 9 Kip Voytek (2012) Thriving on Complexity: MDCs Response to the Increasing Complexity of Selling, BMO Digital Harvest, November 8, 2012

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requires transparency and, practically, powerful storytelling. While stories that convey

meaning and stick have obviously always been important to creative work, we believe

their role is being re-set and intensified. Rather than either the promised newness or

differentiation of products or the value creation brought by efficiencies when scaling

described by Michael Porter, CPs stories are more fundamentally about active

engagement, social sharing, and trust-building across platforms in which scaling costs are

no longer a key driver of success.

We believe story is different not only when jointly owned by client and customer

but openly co-created by multiple parties in ways facilitated by the advertiser. Noting that

scale isnt what it used to be, Greg Satell has described the resulting shift in evocative

terms: competing to win in the new economy is more of a journey than a construction

project.10 That process of guiding clients and customers on their participatory journey,

which CP+B pioneered and continues to refine, is ongoing, requires trust, and often

involves facilitating the sharing and co-creation of sticky stories.11

While classical competitive advantage is finally based in an adversarial model

focusing on competitive advantage vis--vis competitors by obtaining cost efficiencies or

brand differentiation, contemporary value is created through trust-building with clients

and customers. Practically, for CP, this means feeding digital channels, growing audience

relationships, loyalty and participation in the ongoing generation of creative brands and

product solutions. Yet such loyalty and participation are not the simple result of market

intelligence or data analysis. It involves combining what Greenberg and Kates call both

10 Greg Satell (2013) The End of the Scale Economy, Digital Tonto, Sept 15, 2013 11 Creating sticky stories is a central step outlined in Eric Greenberg and Alexander Kates (2014) Marketing Strategies for a Digital World, The European Business Review; the article is excerpted from Greenberg and Kates (2013) Strategic Digital Marketing: Top Digital Experts Share The Formula for Tangible Returns on Your Marketing Investment, New York: McGraw-Hill.

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planned campaigns and unplanned virility. Crucial here is CPs belief in the

unexpectedness or surprise, a kind of creative essence or weirdness, that can invigorate

both the planned and unplanned aspects of delivering brand and business solutions.

EX. Amex Small Business Saturday (2010)

American Express Small Business Saturday was introduced in November 2010 in the

United States to counter Black Friday, traditionally the largest shopping day of the year

for big-box and, increasingly, online retailers. In 2011, working with digital agency Digitas,

CP+B transformed the program by creating a digital toolkit for small businesses. Besides

using active local engagement and storytelling to build trust and counter the seeming

advantages of scale, the creative essence of the campaign was its focus on brick and mortar

stores at a time of rapidly expanding e-commerce. Embraced by the public and politicians

alike, Small Business Saturday has become an annual event on the weekend following U.S.

Thanksgiving.

4. Accumulative Value Creation

To be able to repeat the successful generation of creative brands and product solutions

require a combination of focus and insights on relevant communities, inventive platforms

for co-creation and communication, robust feedback processes, refined measurement and

data analytics, and the capability to creatively experiment and adapt. These best practices

are evident in CPs own work and have also been outlined by Chris Zook and James Allen in

their argument for continuous improvement and enduring value creation.12 Another of

their guiding principles, of ongoing systems of learning, is likewise a central priority of

12 Chris Zook and James Allen (2012) Repeatability: Build Enduring Businesses for a World of Constant Change, Cambridge, MA: Harvard Business Review Press, p. 165.

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CP+B (and MDC), where fluency and nimbleness and an ever-evolving toolbox are

requirements.13

Repeatability is essential to delivering value creation for the customer amidst

ongoing change. Rather than traditional competitive advantage eroding as competitors

catch up, imitate, replicate, or leapfrog product or technology innovations, Niraj Dawar

describes how accumulative advantage can grow with time, experience, and accumulation

of information, e.g. network effects.14 We would go further in shifting the central strategic

intent and decision-making away from a focus on competitors over customers and

replacing the traditional term, advantage, with value creation, recognizing that value can

emerge either through the creative disruption or generation of markets or the expansion

of brand communities and participation. CP has demonstrated the capacity for both,

basing pivotal decisions on how best to grow audiences and trust while retaining

fundamental focus on, or making key adaptations to, core business and brand elements or

markets.

CPs injunction to think like a Chairman not an adman entails a commitment to

consistently adapt strategic priorities, foster growth across short-lived opportunities, and

finally accumulate created value.15 Here, the essential balance involves adaptability to

uncertain and volatile competitive environments and audiences with an assurance that

such ongoing adaptations will reinforce one another positively. We see the resulting value

achieved by CP-style strategy as not being sustainable in the traditional sense of a long-

13 Kip Voytek (2012) Thriving on Complexity: MDCs Response to the Increasing Complexity of Selling, BMO Digital Harvest, November 8, 2012 14 Niraj Dawar (2013) Tilt: Shifting Your Strategy from Products to Customers, Cambridge, MA: Harvard Business Review Press, p. 70. 15 Chuck Porter Presidents Lecture (2013) Berlin School of Creative Leadership, July 23, 2013;

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term, stable favorable position but accumulative in drawing together a series of

connections between audiences and solutions that create value for customers.16

EX. Dominos Pizza Tracker (2008)

In 2008, CP+B developed an inventive online application for customers wanting to track

every stage of their Dominos Pizza order in real time. This fully integrated campaign and,

ultimately, business solution was premised on technology that both enabled better

internal product quality control and repeatable customer interaction. Interestingly, as

evidence of the agencys openness to sourcing ideas, the core insight about the potential

technology came from CP+Bs IT department (rather than research on consumer demand)

and they then shared it with planners. The campaign eventually included sharing

unfiltered customer feedback gathered through the application, thereby underscoring

further the open commitment to building community and trust with the public.

Conclusion

The continually re-interpreted and re-validated focus of these strategic decisions

and actions is on value creation for the customer. Put differently, the more competitive the

industry, the less that industry should be the basis of analysis and positioning. This does

not depend on product or category. It does, however, depend on consistent and creative

leadership. For Zook and Allen, the leadership traits associated with sustained value

creators are also central tenets of how we at the Berlin School and others define creative

leadership: authenticity, empathy or emotional intelligence, and humility and self-

16 This formulation parallels the call to reimagine brands as accreted value in Barry Wacksman and Chris Stutzman (2014) Connected by Design: 7 Principles for Business Transformation Through Functional Integration, San Francisco: Jossey-Bass, pp. 196-209.

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awareness including a willingness to adapt as situations warrant.17 This paper has also

argued that those traits and more can be studied in the sustained leadership and strategies

for achieving creative excellence demonstrated over two decades by Chuck Porter.

17 James Allen and Chris Zook (2012) The Strategic Principles of Repeatability: How Nonnegotiables Fuel Growth, Bain & Company, p. 8.

Berlin School of Creative Leadership Foundation gUG (haftungsbeschrnkt)

Franklinstrasse 11 10587 Berlin Germany

Phone: +49 (0) 30 88 49 80 80 Fax +49 (0) 30 88 49 80 99

E-Mail: info@berlin-school.com www.berlin-school.com

President: Michael Conrad

Faculty Director: Prof. David Slocum

Managing Directors: Susann Schronen,

Jamshid Alamuti

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