Wednesday, December 17, 2008
As the news remain pretty negative, business and consumer confidence stays in the basement and incompetent senior managers get away with the consequences of past poor decisions by blaming it all on the crisis.
The string of recent bad news from several sectors of the world economy is fast becoming the latest great excuse in companies that are in dire straits for reasons wholly unrelated to the macroeconomic context. Sectors that are still considered to be at least unaffected if not outright favored by the recession, e.g. online and interactive marketing, have their casualties too and it does seem odd that the credit crisis should be invoked to explain lay-offs. In many cases the current difficulties can be better explained by yesterday's lack of foresight, excessive increase of fixed costs, careless allocation of financial and human resources and most likely by insufficient profit margins in the core of the business. So in many cases even though managers blame it on the crisis they'd better take a long hard look at the objective reality 'cause you may blame it on the crisis but in ain't so Joe!
Monday, December 8, 2008
- Freeing up cash from operations
- Maintaining the customer experience
- Upgrading talent
- Managing IT spending
Then there's another point here which I believe is important: cash should be managed carefully regardless the situation of the economy and what you don't want to do is spend it unwisely in perfectly useless assets. Some companies tend to do that, painting their walls, buying expensive furniture (nope I didn't say anything about the famous Aeron chair...), painting walls, travelling around the globe well beyond the needs of their business or acquiring tools and means that are not high priority... Usually, with unwise use of cash comes an increase in the fixed costs of a business, which makes break-even more challenging to reach. Another phenomenon that comes with lack of thinking through the allocation of cash resources is an increase of the cash tied into assets that are not directly productive... and you don't want that under any circumstances, let alone those in which we are today.
So be careful in dealing with the crisis so as to avoid throwing the baby with the bath water...
Wednesday, December 3, 2008
Here's an interesting set of slides to provide an overview of how the credit crisis was caused, even though there is a little something that is missing: the role of rating agencies that failed their mission more than ever before...
Sunday, November 23, 2008
The latest figures of the IAB show that Q3/2008 Internet advertising revenue for Internet advertising rose by over 11% compared to the same period of 2007. While some people feel that this is a "proof" showing earlier assertions that interactive and online marketing would not suffer and possibly benefit from the ongoing economic crisis, the question is open as to the sustainability of what appears to be a healthy situation. My take is that:
- advertisers are going to seriously reduce their spending at least for some time if not for reasons of substance at least to achieve cosmetic impacts on their quarterly figures and send a message to their employees;
- the commercial efforts required for agencies to sell their services will increase very substantially making life very difficult for ad agencies that do not have ciritcal mass whether in terms of finances or in terms of personnel;
- advertisers are poised to become much more demanding when it comes to getting verifiable and measurable impacts resulting from any interactive initiative, something that basically makes it even more relevant today to have adequate infrastructure and personnel for reliable and consistent web analytics
Let's see what happens.
Friday, November 14, 2008
That's the tag line for Windows. Does Microsoft really think that it's smart to be speaking of a life without walls at a time when many Americans are not sure to be able to keep a roof over their heads? This is almost as bad as the campaign Fortis had launched in the midst of its recent woes with the red sinus curve and a message saying something like "in life there are ups and downs and Fortis supports you in both"... well these days Fortis and many other financial institutions are indeed experts in the lows...
I'am in New York and about to take my flight back to Europe. This trip to North America has been an interesting one mainly because of the stuff I learned as part of my current efforts to understand a bit better business performance measurement in a number of fields. It's also been a good opportunity to meet business contacts and friends. Anyhow, here are a few reasons why I am currently so interested in performance measurement:
- the seemingly unending financial crisis is in part the result of inadequate measurement of the actual business performance of quoted companies in general and banks more specifically. The rating agencies messed up, the regulators messed up, the quants messed up, senior management was caught off-guard and crucially the "financial reality" of the stock exchanges had been increasingly divergent from the reality of real businesses out there, especially when it came to measuring value creation. Now the question is to find out whether or not we will be capable of measuring properly the rescue programs and that starts with proper definition of objectives in the first place, which is far from "mission accomplished";
- I've had yet another couple of opportunities recently to witness the very material consequences ill-focused performance metrics can have, from misguided sales efforts to chaotic software development. Of course the trouble gets compounded usually since a company that fails to focus on what matters to the successful development of its "system" will mess up all facets of its business operations;
- for the past couple of years, working in the field of online and interactive marketing, I came across situations in which advertisers were demanding "return on investment" and in 99% of those situations they had no specific idea of what that concept actually meant, but they were complaining about the actual impact of viral or buzz campaigns. Now, the issue here was even more basic: they did not know what their marketing objectives were in the first place, something that I think is attributable to the fact that they were carrying out their first major online initiatives... which means that as the market becomes more educated it will also become more demanding and that's not necessarily good news for new agencies that emerged out of the blue thesepast few years, unless they considerably improve their discipline. So I took the opportunity of my trip to attend a training seminar of 2 days with the American Management Association on the topic of ROI (more in a separate post);
- the issues of the environment and the imperative to change our ways of dealing with the planet show how critical it is to actually measure the performance of companies by integrating into the performance measurement model the impacts of each company on the environment and on local communities... which calls for expanding the scope of business performance measurement to include "systems of companies" and "systems of systems of companies"... which means that the approach that characterized financial analysts' meetings on Wall Street is dead wrong and misleading;
- I have a little project on which I am currently working that will need a different framework for assessing performance because it is aimed at making a contribution to durable development... but I'll tell you about that later :)
Wednesday, November 5, 2008
What a day and what a night! Today, the nefarious potency of incompetence is not diminished, but incompetence is no longer in power at least for some time. Barack Obama's win is the most beautiful piece of news in a very long time!
There is considerable value in a coherent approach to any venture as I wrote on this blog inspired by the US Primaries... That is true today perhaps as never before, especially as we see the collapse of ways of running businesses that subject people, their dreams and hopes, their craft and their daily work to the tyranny of a profoundly distorted conception of finance and figures. Pretty much like for a Presidential election, in business the figures are merely the reflection of something much more important: how the job is done, how the craftsman works day in day out, how the customer is served, how the product is built and the service delivered... Therefore the purpose of business is not to produce numbers for investors, even though when the job is done with passion and professionalism profits reward investors.
Anyway, let me give you some pictures from the US Elections Night that was organized by The Bulletin in Brussels at a hotel and bar which must have broken their all-time records of turnover. Again, the figures are merely the reflection of something much more important going on, not the result of bean-counters or little business dictators running around and bullying people into "producing the figures".
Monday, October 6, 2008
An excellent slideshow providing an overview of the radical transformation of the media, marketing & communication landscape. These are the trends on which many start-ups have been able to thrive in Europe over the recent years. Now of course, as the game is becoming much more serious and the economic context gets tougher I expect there will be quite a few casualties...
Wednesday, July 30, 2008
Friday, July 25, 2008
Friday, June 13, 2008
"The enemy of my enemy is my friend" seems to be the rule at Yahoo! even when that means striking a stunning alliance with old-time rival Google. According to French news agency AFP and to CNN Money, the two companies came to an agreement for the US and Canadian markets, whereby Google would be able to sell advertising space on Yahoo's search pages. Aside from being an admission that Yahoo! stands no chance to compete head to head with Google in this space, the agreement is interesting in that it contains a provision saying that should Yahoo!'s ownership status change by way of an acquisition or other operation within the coming two years, the company would have to pay Google 250 million dollars.
That provision could be seen as an attempt to ward off any attempts to acquire Yahoo! for the next 24 months even though when a company like Microsoft is willing to pay over 45 billion USD to acquire Yahoo! I doubt 250 million would make a difference even if paid to archrival Google. I would personally focus my interest much more on the time horizon of the said provision because in my opinion it speaks volumes about the internal expectations of Yahoo! as to the time when its future strategic direction will have matured and started to deliver the first results. Microsoft's takeover bid most certainly was a wake-up call for top execs at Yahoo! Now of course, the question that remains to be sorted out is whether activist investors like Carl Icahn will give Yahoo! two years.
Wednesday, April 23, 2008
Effective on the 26 of May 2008 certain activities will become a criminal offense when the Consumer Protection from Unfair Trading Regulations becomes effective.
Monday, April 21, 2008
clipped from www.marketingpilgrim.com
clipped from www.marketingpilgrim.com
Business Quests is an advanced business advisory firm whose primary goal is to help you as a Client achieve your goals by providing no nonsense advice, facilitation and intervention. By acting as a sounding board to founders, family owners, senior executives and high-potential employees, Business Quests provides peace of mind and helps you move forward and achieve tangible results.
Ultimately, at Business Quests we believe that "people's quests drive business value".
For more about Business Quests, please contact firstname.lastname@example.org
Thursday, April 17, 2008
Today's inspiration from me. Dr Pausch's presentation contains a message for those of my customers who complain when I tell them what they need to know instead of what they'd like to hear: "your critics are the ones telling you they love you and care... when you're doing a bad job and nobody points it out to you, that's when they've given up on you". Enjoy.
The full lecture given at Carnegie Mellon University is below. Be sure to take the hour and a quarter needed to watch it because it's worth it. Every slice of it.
Tuesday, April 15, 2008
So emails may be flying around showing how great a working environment Google is, but nobody should infer it's a corporate version of Club Med. And judging from their ambitious cooperation with SalesForce , these guys are going for a cut of every significant business transaction they facilitate. That is some business quest!
Tuesday, April 8, 2008
Writing while in the train getting back to Brussels after a couple of days in Paris for Ad:Tech. Yes while in the train. That is really cool. What's less cool is the amount of over-engineering Thalys seems to have put in designing this service: resources like Gmail, Google documents, Network solutions webmail and Google Apps are simply not usable because some stupid piece of junkware that runs on the Thalys WiFi network considers those to be forbidden resources. Even the sites of Le Monde and CNN are not accessible. So what gives? Is Thalys developing a new concept of a hyperlocal web? Are they trying to revolutionize the web by severly limiting connectivity? Is this a censorship experiment for the Chinese government?
None of these exciting avenues I'm afraid. It only seems that somebody felt it important to implement an extremely stringent security policy, which, in the end, voids of most of its value the great promise of WiFi aboard high-speed trains. I'm sure they'll fix this someday, but what does it say about cost of opportunity in terms of revenue to the company? What untellable stories of wasted service design resources does this case convey? Is there anyone to doubt that product / service design will be a strategic competency for companies in the coming years?
In the end, it all boils down to common sense and a structured albeit flexible approach to product ownership. Something that does seem to be a common thread to methods like scrum, agile development, permanent beta, Toyota's continuous improvement through the kaizen approach or NLP... They all accept a degree of chaos that characterizes the real world. Realism, common sense, perseverance, patience, continuous and relentless improvement, continuous quest for evolution, no nonsense and a thirst for feedback are some of the characteristics of approaches that work.
Now on the positive side of things the idiot design does not prevent Thalys travelers from accessing Wikipedia, Barack Obama's web site or the Business Quests blog :-) as you will see in the screen-shots.
Currently attending a great presentation by P&G's Michel Lambert who is telling us about challenges and achievements in interactive and digital marketing. With an experience of 20 years in marketing 9 of which at pan-European level, a strong background in direct marketing, having gone through the great school called P&G and basically a combination of analytical capability and common sense, he's got a contribution to make.
In fact I was lucky to meet him yesterday and I was impressed with the stuff he told me about how P&G is clearly putting a great emphasis on interactive and digital factors throughout their organization, not only in the field of marketing. He clearly gets the transformative power of information technologies in the field of communication as well as in all the processes of any company that wants to be successful in the coming century. Michel does have a good and no-nonsense grasp of the ways in which organizations need to transforms their structure, practices, approaches, ways of assessing success versus failure, recruiting, building relationships... In fact it's quite impressive. While I prefer to respect a degree of confidentiality, I think the presentation of today reflects very well the state of play at P&G's end and this presentation certainly looked like a call to agencies to finally start offering stuff that make business sense rather than just surfing on the latest online fad and fashion.
Michel has a non nonsense approach: "is my brand prospect and brand customer online? Sure. But what do they actually do there? how can I understand them better?". His take is that the consumer, the person that is potentially a customer, the complex individual should be at the center of every single thought people have about interactive and digital marketing. Platforms, tools, communities, practices, plugins, widgets... will proliferate and they are not really relevant if one does not understand the consumer.
Here are some of the very interesting things Michel shared with the audience today:
- understanding the on-line behaviour in fine detail: motivations, participation, influencers, self-expression, context rlevancy, how they search, what are their expectations from search, why are they searching, where are they searching...
- take a more strategic view on things: define roles and make choices. Here key performance indicators are key of course since they eventually feed back into the formulation and execution of strategy
- how do you actually build valuable and intense relationships with people: the magic of relationship marketing
- generate content or leverage existing content?
- we compete for an audience, for the attention of people. So our competitive set includes media and entertainment
- calls for production of higher quality of conten
- why don't I invest in mobile marketing? There is no usable content!"
- Risk taking
- culture of data and measurement. Gut feeling is not really the core
strength of P&G: if an ad does not test well in pre-release it will
not be aired. Online things are considerably more difficult and require
- risk taking needs to be managed in new ways and in particular by doing more iterations and working on shorter cycles (one year is an eternity online)
- culture of data and measurement. Gut feeling is not really the core
- Cost of reach is too high right now.
- There is no way in the
world P&G will invest crazy amounts to go full steam ahead with a
pan-European campaign without understanding the ROI and how the
campaign fits into a broader five-year strategy
- clear directions, reach goals and glide path: it may be possible to
achieve results in year one simply because there was nothing before,
but results in future years come only at the price of having a
disciplined approach, not by throwing good money after bad. Back to
- There is no way in the
- the challenge of mass individuals
- consumers are in control
- consumers want proximity and a relationship with the brand
- segmented advertising vs one-size-fits-all even though offering a
relationship on an individual basis is not an option because it costs
too much and drives ROI down the drain
- agencies should support brands in achieving mass customization in
the relationship with their consumers and prospective customers
- the sweet spot of balance between tools and approaches
with the consumer and drive scale from them, not from tools: e.g. in
search and keyword advertising if I don't understand my consumer I end
up translating ad keywords on a global basis on various platforms!
- growing importance of retailers as media
- retailers are
increasingly building relationships with consumers in particular by
exploiting their huge databases and by developing content
- P&G could develop a relationship with retailers considering
them as media, but they need to develop missing capabilities in
particular to assess the financial value of each contact
- out of 25 retailers surveyed only one had proper online
capabilities to achieve that. Quite frankly this is a shell-shocking
picture! That's some potential business quest for someone in the field
and with access to the decision makers of top retailers.
- retailers are
- the need for constant optimization
- in traditional media: concept
test, develop content, pretest, go on air, wait to get results, plan
for next year. The cycle is therefore one year. In the digital world,
the cycle is much shorter and analytical skills are in very short
- transform pre-test into post-optimization: a complete shift in the
mindset and probably one of the biggest challenges P&G is facing
- in traditional media: concept
- how do we integrate different platforms and media? how does the mix work together?
- understand the relative ROI because the budget will not increase;
in fact, it might even decrease. If there are more ways to execute a
marketing strategy, then the money must be shifted from somewhere. New
media need to prove the case and a better collaboration between online
and traditional, between search and influence, between interactive and
non-interactive... That's a key challenge
Michel also mentioned education of people inside P&G as being a major area of focus today because marketers need to reassess many of the practices they used to consider as world-class. Furthermore the relative differences between markets makes it necessary to have a decentralized approach and in that respect the world is very far from being as flat as Friedman tends to suggest. The world has changed in a major way.
Monday, April 7, 2008
Currently attending a very interesting presentation about the way neurosciences are being exploited for marketing purposes. The presenter is Olivier Oullier, a Professor in neurophysiology in France and also an active partner at a company called neuroeco, that does seem to be very much in stealth mode since its web site redirects to the page of Prof. Oullier.
- tools are too rational
- lack of innovation in methods and tools used to understand and anticipate human behavior
- inference of future patterns from past statistics
- media instability, like for example the radical transformation of a the TV experience with TiVo
- excessive creativity in ads
Today's marketers project their own (mostly rational) thoughts as being the logical behavior of the consumer. However, the fatc is that they are not the consumer and the consumer is not only rational, which may be why the most successful marketers are those individuals who dare to use more than jusrt their rational capabilities. Intuition is important as Steve Jobs, the creators of Cirque du Soleil or people at IDEO would most certainly agree.
Professor Oullier researches brain activity and bodily activity of humans as they are exposed to various stimuli. His quest is to establish models and correlations between activity inside the human brain and the (economic) behavior of a person. To do that they now use large magnetic resonance equipment, and I guess that their goal is to bring their methods to market. I only hope we don't end up with a world like Minority Report since theoretically attributes of people could be used to "predict" their behavior and the temptation will be there for people to try to prevent certain behaviors. The question being how much of those predictions will actually be self-fulfilling prophecies, something that is relevant not only in the field of tomorrow's marketing.
Interestingly all stimuli but smells go through the thalamus and that may actually explain why there is so muc work being done on olfactive marketing,a subset of sensory and environmental marketing. In neurosciences terms, the effect of an ad on someone paying attention is to trigger the production of dopamine in their brain, which makes them feel good and therefore create a positive association between the product and the consumer. At the end of the day, this elaborate scheme shows how Pavlovian animals we humans can be. Today consumer neuroscience is a topic of great interest in the greatest of universities.
Let's add an element. In certain circumstances and for certain stimuli (e.g. in a situation of immediate danger) the message in the brain will not go through the upper layer (neocortex), which is the part of the brain that manages those thought processes of which we are conscious. So I guess that the name of the game is to trigger stimuli that will generate an unconscious positive association with a commercial offering, such as to create strong unconscious motivation to buy a product or a service. Back to Minority Report or to Brave New World.
Just attended a splendid presentation of the way Lego has been actively seeking to and succeeding in involving passionate users in the life of the Mindstorms product line. Lego's people noticed that Mindstorms was generating a lot of passionate contributions and involvement by the community of users, many of whom were absolutely not kids but male adults. The product seems to have been outrageously successful in the Silicon Valley, where the local tech enthusiasts seem to be the typical customers. The product was being hacked and transformed in all sorts of ways... So Lego's people decided to really engage in a very intense interaction with their customers and to let them influence the life of the product to a very large degree. They set a few very simple rules to manage the community of carefully screened engaged users: respect, positive contribution and giving Lego a veto right on how the product would evolve... Today, it's one of the best known examples of how powerful a genuine engagement with customers can be to drive buzz, word of mouth and basically to make it possible for a lovemark to emerge. There's even the case of famous author Chris Anderson who went on to build a drone using a Mindstorms NXT control module...
Here's a nice little video about Mindstorms:
I met Michel Kleindl and discovered Wunderloop at AlwaysOnMedia NYC in 2007. He was kind enough to spend some time with me and to give an interview to this blog. Since then, Wunderloop seems to have been very successful in making its case for behavioral targeting, womething that was not that obvious back when I first heard about them. Some of the trends were clear, but not everyone agreed that behavioral was the way to go or that it would be feasible and accepted by people online. That's a good example of a business quest that is pursued with succcess by someone who gladly calls himself an "fossil" and a "dinosaur" because he's been working in the field of online marketing wince 1994 (Gosh, that does sound like prehistoric times!).
Today, Michael is here to speak about what he calls six megatrends in the industry and his views should be worth listening to. Here are his trends:
- Internet going very strong: Internet adoption has strong momentum, broadband fixed and mobile connexions are the norm and the average amount o time we all spend online is growing, which leads advertisers to allocate a larger share of their budgets online to reach more than 20% by 2010 according to the IAA. Young people are spending more time online than in front of traditional TV sets, while e-commerce is finally becoming big business. Online ad sepnd in Europe will be 15 billion euros this year and grow to 20 billion euros in 2009 and 25 billion by 2010 according to ZenithOptimedia. That's just huge and for anyone who is looking at figures, that's nothing new under the sun.
- Eyeball aggregation: business models are moving to being consumer driven instead of property driven. Portals are dead because the audience is increasingly fragmented and autonomous. Ad networks will play a central role in securing necessary aggregation for advertisers to achieve reach in a world that will be essentially people centric and mass-customized. That's a great insight and it has huge implications for some of my customers.
- Multiplatform business: no longer just web pages: online brochures and static sites are clearly not relevant in today's environment essentially because they provide no interactivity and therefore no feedback loops for brands to build a better understanding of their markets. Between February 2006 and February 2007 the reach of the top ten German portals dropped from 28% of the online population to a paltry 14%. The web in now really enabled for multimedia and therefore brands need to have an integrated and coordinated approach to the various platforms (blogs, social networks, video platforms, online on-demand TV programs as enabled by companies like like Move Networks, interactive TV schemes like Joost, mobile...) where their customers may be active.
- Global / Pan-European scale of business: advertising budgets are becoming pan-European and pan-European budgets are growing much faster than the industry average (+89% between 2005 and 2006 and + 71% between a year later, with growth in 2008 likely to be even greater according to IAA). The implication of this trend is enormous in terms of minimal critical mass necessary for a business to grow and probably one of the strategic justification for various forms of consolidation from industry driven M&A to purely financial roll-up schemes.
- Video advertising will be big with Jupiter Research expecting video advertising to exceed 1 billion US dollars by 2011 representing over 5% of total display advertising. That's big
- Targeting: targeting is the crux according to Kleindl (well, to be fair I would not expect him to say ant less, but that's fair game and the logic is impeccable). Kleindl believes this is a paradigm shift where advertisers who were accustomed to buy space (context oriented) will have to learn to focus on people's behaviors ("it's about people, not pages"). Reflecting about the empowerment of an ever more fragmented consumer population AOL's Ron Grant says "we need a way for advertisers to take advantage of that fragmentation" and of course Kleindl adds "targeting simply works". More importantly he makes a powerful point in saying that "there is no reason why any campaign should not be targeted". Aside from Michael's vested interest in the point, I think it is extremely valid and you'd better bet on it. Now of course, the business and legal environment is likely to become more difficult especially in Europe as governments become increasingly interested in new marketing methods and tools chiefly because of their focus on privacy. A huge contradiction: people spend 5% of the time searching and 40% on content and yet advertisers spend 40% of their budgets on search versus 30% on sites with online content. There's an opportunity stemming from a major inefficiency of the market! According to figures from GroupM, in B2B if you buy untargeted bulk ads, CPM costs 1 to 2 euros, while CPM for very well targeted places the cost is 50 to 150 euros. This is also an inconsistency, because content does not necessarily mean much in terms of the individual visitor's attributes and preferences as expressed through their behavior. Michael's conclusion of course is that Wunderloop has a very bright future, something I tend to believe. In 1995, 94% of ad euros web to only ten top destinations online and it's been dropping very significantly ever since, even though metrics are difficult in that field. That means big fragmentation and also a big opportunity to reach users on a variety of place, with, I suppose, big value being derived from a consolidated understanding of behavioral patterns, but I don't know whether Michael would go that far in the reasoning.
Again some very interesting insights by a great insider of the industry, who seems like a very agile dinosaur indeed IMHO.
Got to Ad:Tech this morning. The usual suspects are around, but it's always interesting to keep tabs on how the market is evolving. One interesting surprise though: efficient frontier, an interesting SEM company. It's a company whose founder combined his experience with stock market systems (hence the name derived from modern financial theory) with his knowledge of how search engines work to create a platform helping advertisers optimize their marketing investments online. To them an AdWord is like a stock and the words an advertiser buys are very much like stocks in a portfolio. Thus provided one captures sufficient relevant information from search engines and can put them through an algorithmic process, it is conceivably possible to define the risk / return combination of each word and each possible combination of words, which in turn means that it is possible to define an optimal combination of words to be bought. Extremely interesting in my very humble opinion.
Saturday, April 5, 2008
While doing some research I cam across a test that will help you determine who you would be in The Matrix. It's fun and it does remind me of more or less weird exercises often used in branding and communications workshops to facilitate the emergence and definition of a brand personality. That's based on patterns that we humans seem to have more or less hardwired into our systems. Carl Jung called them archetypes. Here's my result for what it's worth with a link to the site where you too can discover who your Martix character would be.
Friday, April 4, 2008
Here's a great interview from Kevin Roberts' the iconic CEO of Saatchi& Saatchi and influential creator of the concept of lovemark. Roberts' intelligent insights show that established agencies have
caught up on the core issues of today's marketing and communications,
something that will increasingly be a true competitive challenge to the
new palyers who emerged during the past 5-8 years. In fact, these new
players emerged as a result of radical change in the business
environment and for many of them success was predicated on their
ability to get to the future first. That was easy because they had no
legacy practices, but that is no longer the case and hence their
survival is entirely dependent on their ability to reach critical mass
or to remain on the "bleeding edge" of innovation in marketing and
- consumer is king and an empowered one, which has led to a dramatic shift in the power balance between brands and consumers. To me that echoes my belief in the primacy of people in business, one of the central tenets of Business Quests' approach.
- there are three critical dimensions to lovemarks, none of which is discussed in MBA programs as Roberts correctly points out: mystery, sensuality and intimacy
- agencies need to move closer to consumers on an individual basis rather than in the traditional "mass market" kind of way. In doing that they will need to combine "right brain" and "left brain" thinking: analytical insight into the ways individuals "operate" and creative foresight to actually understand the consumer's behavior. "If you want to know about lions you have to go to the jungle, not to the zoo", says Roberts;
- we are in the screen age: people spend an incredible proportion in front of screens that are increasingly networked, interactive and mobile;
- 85% of consumer decisions are made in store and in an age when differences in product quality is less and less significant the emotional connection between an individual and a brand will actually tilt the balance of consumer decisions;
- "it's all about getting to the future first".
Roberts' also made a point about access to information and knowledge no longer being limited to the chosen few and therefore access alone is not a competitive edge as it used to be. To me, this means that the life of service providers like big name consulting companies, well-known agencies and other advisors has become considerably more complex. Their success hinges more on how they'll use knowledge rather than on how much access they have to it. That does create an interesting world.
Thursday, April 3, 2008
Tuesday, April 1, 2008
The recent training on scrum has been an interesting inspiration for me. Even more importantly, it opened up new perspectives on the best way to carry out product management work and provided a framework that helps me understand a bit better things that went particularly well in past projects and by contrast why other projects were such drags.
Thinking about the pains of getting customers to feel happy with a product, I realized that product management is one of the most critical areas that is broken in many companies. In fact in many cases it's stalled and needs kick starting. So, I structured a workshop using scrum artifacts to run it in combination with other tools and disciplines. The purpose is to have participants exposed to scrum artifacts while working to get product management moving again so as to create a positive exposure and to generate motivation to use scrum once product development is reorganized to be agile. In the workshop there is a short introduction to scrum focusing mainly on the way scrum works rather than on the origins and history of it and to run that section of the workshop the excellent introduction slides by Black Marble will be used.
The structure of the workshop is in the following slides. Feel free to use this stuff: it's under BY-SA-NC Creative Commons license... In fact, I will likely run such a workshop pretty soon in one of my projects, but given the nature of the exercise I won't disclose anything about it and it will be yet another situation about which blogging is not an option... Anyway, I hope this will be useful to you and as ever I am really eager to get some feedback about this stuff, especially if there are "stories from the field" :-)
Great news for my friends at OpenSpime who got the nod from Joi Ito who joined their Board of Advisors. That's just a dream asset to have for their team. Getting the right advice from the right early supports is one of the most powerful ways I know for a start-up to take off beautifully. Here's their announcement.
These guys are clearly embarked on something that fits very well my definition of a business quest and they do seem to be able to attract top talent to guide them in the uncharted waters ahead.
Thursday, March 27, 2008
I came across a presentation of Paul Isakson who explores the future of marketing and advertising. It contains some pretty interesting views about the future and that is very much in line with a number of the conclusions of our strategic analysis at Vanksen Group. However, there are a few specific points that I think are worth discussing here. But first the deck of slides:
A few thoughts on the contents of the presentation:
- stating that advertising is terminally ill and about to disappear completely may be rushing to an extreme conclusion. Advertising and brand communications are undergoing a radical transformation and as a result they will not be what they used to, but I don't think they'll just disappear and here are a couple of the impacts I see:
- in today's world despite the substantial increase of ways for marketers to spend (a lot of) money, it becomes increasingly easy to identify which half of the marketing budget is wasted and that puts a lot of pressure on all intermediaries and service providers (e.g. agencies, creative consultants, ad networks, PR agencies...) some of whom used to make a very handsome living on the inefficiencies and lack of transparency of the market;
- with consumers being completely empowered and able to make themselves heard, no brand can afford the centralized one-to-many communication model and on top of that brand owners are now confronted with a completely new class of missions having to do with the way their brands are protected from an ever increasing number and sorts of abuse and practices that lead to either a decrease of brand equity (for a definition I recommend this site - search the page for "brand equity") or a reduction of return on the existing brand equity (loss of transactions, theft, counterfeit...)
- for all of the fuss about online conversations, interactions, communities and generally speaking all of the latest fads surrounding viral campaigns, word of mouth and other practices of influence, the point is that these phenomena do not occur just like that by miracle. A brand does need specialized service providers to initiate, feed, amplify, dampen and monitor the process. In that sense, advertising and brand communications don't simply go away, but they are radically transformed and the truth is that no established agency is well prepared to deal with these new requirements of the market;
- advertising in its first form may be less and less relevant in today's interconnected world of empowered individuals and communities, yet advertising remains extremely powerful when it becomes a service to the intended audience. When one thinks about the conditions of future success for advertising and brand communications without paying too much attention to the viability of their current forms or to what will become of current intermediaries and service providers, it does seem that they boil down to love, care and respect:
- successful successor forms should love people enough to be wanting only the very best for them, to reach out to them only with extremely relevant high-quality offerings. In that respect Paul Isakson's assertion that "the product is the marketing" is super relevant;
- successful successor forms should care for the relationship between a human person and an offering. In other words care for the experience of the "user" with the "product" for as long as the relationship goes. That is especially relevant in a world where one doesn't simply air an ad and then there's nothing: in today's world every single piece of communication has some degree of remanence (it remains accessible over a period of time at least online, even after a "campaign" is over) and successive communications have a cumulative effect;
- successful successor forms should respect people who collectively form an audience (they're not just "targets") and thus never assume that they are owed attention, brain time and engagement. They must earn them through a balanced relationship, not by trying to high-jack the attention of a person who is really just trying to watch a soccer game or a movie and is compelled to go through a quarter of an hours of advertising carpet bombing. That's not respect and that's not balanced. That's manipulation and a fundamental violation of free choice, even though one of the benefits of the mechanism may be for the consumer to be paying a newspaper 25% of the price it would cost without any advertising revenues: that's just the nice manipulative excuse and besides it's not relevant in a world where publication is no longer a privilege of the few...
- in a couple of his slides Paul shows the contrast between "old world" and "modern marketing", which he seems to sum-up in the change of flow from product-to-consumer to consumer-to-product. I suppose his point is that the consumer is a whole lot more empowered to influence products today, yet at the same time existing tools and practices for involving consumers / users in the design of products seem extremely inadequate and ineffective (see Steve Jobs' quote). I think this ties back to the fact that in a whole array of fields of economic activity the means and tools of production inherited from the industrial revolution need to be (re)imagined as Tom Peters would say.To make it more specific with examples starting with the field of product design and software development:
- traditional methodologies had "determinism" as their philosophical foundation, which is why it was assumed that a good product could not be designed unless the right amount of expertise was invested upfront in planning, engineering and design. It was assumed that the more effort would go into studying a product, specifying it in the greatest of details and then moving to execute in a rigorous, martial and rigid manner was the safest way to delivering something that met the needs of a market. In the field of IT the way this took form was a development methodology called waterfall: it's based on the premise that if one analyzes and captures exactly all of the requirements of a user then the outcome of the development process can be nothing but success. Alas (fortunately as far as I am concerned), the world is a chaotic and messy place and determinism does not work very well as shown by the scientists of chaos theory and by those working in the field of complex adaptive systems. Hence rigid waterfall-like approaches mean guaranteed failure of product design at very high-cost, which then creates incentives to invest a lot of money in advertising and communications to salvage the initial investment. That's why we see more fluid ways of doing emerge, and that's one of the things I was looking for by attending my recent scrum master training in Paris. So no wonder focus groups don't work very well and if all "modern" marketing does is invert the flow by giving the initiative to the consumer without changing the "layers" between the consumer and the product, then it's bound for failure. Marketing and product design ought to learn from the field of complex adaptive systems and agile software development. That's where the future of marketing lies and large collaborative open-source projects provide ample evidence to back that claim.
- a second example of the inadequacy of tools and practices inherited from the industrial age would have to do with the way many companies are organized and run, especially in France. They're set-up as collections of pyramids walled and fenced from each other with "importance" being given to the guys at the top of the pyramid who get more or less absolute powers through the command-and-control paradigm of management, which leads people working under their "supervision" to fight and compete to get to the top instead of cooperating to achieve business results. Usually in such organizations there is also an unspoken assumption that is tyranny both for the teams and for the "bosses": "the boss knows better". That's what is stifling initiative, innovation and movement, while killing productivity in a major way. There's no flow in this form of organization and the time it needs to adapt to an ever changing market is just not an option today. Again, managers ought to learn from complex adaptive systems, focus on hiring the right people and then let them self-organize to achieve results.
- traditionally there's been a sort of back and forth movement in the field of marketing and communications with fads like "customer-centric marketing", "ego marketing", "brand-centric marketing", "lovebrands"... All the authors and researchers who have been involved in identifying, formalizing, teaching and practicing these things have something in common: a fascination for the occurrences of high-quality interactions between one or more human persons (the consumer or the buyer) and a (branded) product. It's what Tom Peters calls the WOW effect. Now, I think it is relevant to note that this WOW effect is not the result of some unique characteristic of either party to the relationship (the consumer or the product / service): you don't get people WOWed only because there is something exceptional in the product or service, but you do get the RIGHT people WOWed with the finely targeted product attributes that exactly match their "secret" needs, those they cannot express in a focus group or interview. In that sense, Paul's point about the relevance of emergent digital ethnography and collaboration do make great sense. In a certain way this is a great instance of real-world application of some of the stuff discussed by Robert Pirsig in Zen and the Art of Motorcylce Maintenance, a book that was recommended to me in the mid-nineties by my good friend Roberto Ostinelli, the CTO of OpenSpime. So of course, since current advertising is in essence a hired gun for wealthy brands who seek to manipulate the masses and talk them into buying more of their stuff, its does not really qualify for a world in which the balance has been shifting dramatically to become refocused on the quality of experience and hence on the relationship, on the way a product or service "meets" the people who will use it to achieve something of importance to them. There is simply a clash of values between the old form of advertising and communications and today's world.
Wednesday, March 26, 2008
Well, I guess it's done in the fullest sense of the word: the scrum master training is over and it's been an exciting couple of days with Jeff Sutherland and great participants. There was theory, there were facts (many) and there was also practice, where I got an opportunity to play with nice fun people like Nicolas and to benefit from the creative ideas of Denis, two team mates in a practice sequence that we blew away. One of the missions was to build a four story house of cards (that's where Denis creative use of post-its came in). Great fun. Here are the pictures.
The team's achievement (OK, the fourth level of the house is minimalistic, but on the other hand that was the description of the requirement in the story point, so why go beyond and take the risk of send everything crumbling down?) with Denis trying to hide behind a bottle of water ;-)
Nicolas, who's given us a great tip to properly achieve estimates: make sure you are absolutely clear about what "done" means... and that makes a world of difference both in terms of quality of estimates and in terms of making the interaction between team members really productive and uplifting:
The team's achievement with Laurent at the right hand side in the background. Laurent works for CRP Henri Tudor, Luxembourg's public research center, which means that Luxembourg had some serious proportion of the audience in this session of scrum master (there were 4 people from Vanksen Group, Laurent and myself - I count at least 50% from Luxembourg given the amount of time I spend there!).