Marketing as Innovation Leader

“My centre is giving way, my right is retreating. Impossible to manoeuvre. Situation excellent, I shall attack”General Foch, 1st Battle of Marne 1914

“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 …

… 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

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%)

The Opportunity for Marketing

• Marketing has no automatic right to lead

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

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

The spirit of collective action

A culture of collaboration

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”

Collaborative Journalism

“mutualisation” = “getting readers to care about, inform and enhance our coverage” Meg Pickard

Collaborative Government?

Collaborative Causes

Collaboration as Change Agent

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

Evolution of Crowdsourcing

Customising

Contributing

Creating

Solving

Collaborating

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

Collaborative Business Models

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

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

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

When Collaboration WorksLessons 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

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

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

A New Generation

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

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”

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

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

Heightened Expectationsof 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)

Corporate ResponseTheory 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

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

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

Ireland joining rest of worldin addiction to Facebook

Ireland developing a Twitter habit

Ireland yet to embrace blogging

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

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

Smart campaigning … with social media at its heart

Smart customer service … with social media at its heart

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)

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

Beware Fixation with Shiny Stuff

Boring is good

"Tools don't get socially interesting until they get technologically boring.“Clay Shirky

Don’t get so carried away by unlimited possibilities of social media

… that you lose sight of real business objectives

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

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

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

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

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

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

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

Mavericks Wanted

• Innovation driven by intuition + passion rather than ‘marketing science’

• True breakthroughs ignore consumer’s declared needsi.e. the antithesis of ‘good’ marketingMarketers need to think more like

designers or inventors

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

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

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