Behavioral Innovation

A fantastic talk by Umair Haque, Director of Havas Media Lab on Behavioral innovation and the Great Compression.

He gave this talk at the Brite (Brand Innovation and Technology) Conference.

Umair’s key message was that for business to survive they need to redefine how they treat  innovation. We have a global crisis where the economy underestimates costs and overstates benefits. A company wants to maximize profits by making consumers worse off. Consumers are being sold things they do not need. (e.g. mortgages)

He argues that the value businesses are creating today is inauthentic, brittle and unsustainable.  Many industries today are unable to survive the global crisis.

To get past this we must re-conceive value creation. Value creation is done through innovation.

Innovation is normally addressed with strategic output likes launching better products, shifting from products to services, redesigning value chain, managing resources more efficiently, profit centers etc…. all management innovation.

The problem with this is that it has companies acting strategically and strategic behavior does not spawn the type of innovation we need now. We need innovation that allows a company to reinvent itself yesterday for tomorrow’s challenges.

An example he provided was Google- they think beyond strategy and always have. He compared it to Microsoft where the strategy has made them very rich, but they are unable to grapple with challenge of re-invention required for today’s economy.

He suggests that we move away for strategic behavior (dominance, control, brand, differentiation) and use 5 paths of behavioral innovation to unlock new sources of advantage.

5 paths to Behavior Innovation

Stewardship

  • Is about not exploiting resources to point of depletion.
  • Think about advertising- it has been over done.  The cost to advertise got too high, there were too many ads and now consumers don’t want to see ads anymore. Now the media industry is struggling with reinvention.

Trusteeship

  • Is about the good, always playing on a level playing field.
  • Not manipulating people.

Guardianship

  • Is about the common good.
  • Nobody is looking for the common good when everyone behaving strategically.

Leadership

  • Is about challenge.
  • Having willingness to disrupt yourself.
  • Challenge the status quo in your company and industry.
  • Doing things in a different way.

Partnership

  • Is about outcomes.
  • Focuses on people’s outcomes.
  • Making people better off in some way. (e.g current food industry does not see people as partners- the obesity epidemic).

Definitely worth watching..

Umair Haque at BRITE ’09 conference from BRITE Conference on Vimeo.

We’re not a Family, we are a Pro Sports Team

Netflix’s reference guide to their business values and culture is fantastic.

One slide that resonated with me was slide 27  “We’re not a Family, we are a Pro Sports Team

Growing up I loved playing on sport teams. My favourite team was probably my middle school basketball team.

The school was made up of grade 8, 9 and 10.

Grade 8’s had their own team that almost everyone who wanted to play got to be on it. It was fun, not very competitive, and we were never any good. However, the school varsity team of grade 9s and 10s was a whole other story. They were good, really good and it was cut throat to be on it. You now had twice as many girls vying for the 15 positions and everyone wanted it.

I always knew I wanted to be on this team– it just meant so much to me and I knew it wasn’t going to be easy, so I trained, I trained a lot. The summer before grade 9 I played basketball as much as I could. Luckily, I had a basketball hoop at the end of my driveway where I would play my dad or brothers any time they would. I normally lost, but losing was okay as long as I was practicing.

I also went to basketball camp where I spent a week training harder then I ever had before. When I wasn’t  putting band-aids on my blisters, I was running lines, working on on my free throws, learning to do left handed layups and playing game after game.

What kept me going when every bone in my body hurt was the all consuming feeling that I wanted to make the team in September.  I knew I was at a disadvantage because the team the year before had been made up of primarily girls in grade 9, who would probably just float back into their position. This meant there were only a few open spots from the grade 10 girls who had moved onto high school.

This was cut throat, we now had the entire grade 8 team +  the returning grade 9s + anyone else who had failed to make the teams all wanting to play- every tryout was going to count.

Every day after school for 2 weeks we’d meet the coach in the gym where we would be taken through numerous skills tests, pick up games, and 2km time trial runs.

You’d go home every night exhausted with a pit of nerves in your stomach and every morning you walk up to the gym door to see if your name was still on the list.

For a 14 year old this was stress, this was passion.

I made the team and I had never been so excited and proud. Not only was it a testament to hard work and determination, but having gone through such a difficult trial process had set a tone for the team. Everyone wanted to be there and everyone wanted to be successful.

This made the season an incredible experience. We trained hard, we practiced hard, we supported each other, and we loved playing together. There was no room for indifference, apathy, or slackers.

Now back to Netlfix- absolutely, I think a company with a true sports team culture would be incredible. A team made of people with the same passion, commitment, and drive that I experienced  with a group of 14 and 15 years playing basketball.

Netflix Presentation

Culture

View more presentations from reed2001.

Develop a holistic customer experience if you want your business to succeed

Yes, a recent business week article is reminding us how important it is to give your customer an experience that will give you their ongoing loyalty.

Key takeaways:

  • Consumers are looking for companies to give their allegiance to
  • Consumers are looking for experiences that cater to their deep-seated desires
  • This type of engagement requires much more than the latest technological breakthrough: It requires emotional engagement
  • The product or service itself does not have value, but the way in which it is experienced makes it fresh. That means you can even charge a premium for it.
  • Creating a meaningful experience requires thoughtful attention to your customers at every point of contact
  • Know where you are in the innovation cycle. There are three areas of innovation: technology, product, and experience.
  • Know your DNA. The only way to attract your true tribe is to authentically be yourself
  • Make emotional connections. Understand your customer well enough to know the difference between what they need and what they desire
  • Design for the complete experience- this covers all channels, off and online engagement

My Starbucks Idea

In the similar fashion of  Dell’s Ideastorm,  yet with a softer and what I think it is a more accessible design for non techy people is— My Starbucks idea. 

The concept was paned at their annual meeting, but it appears that the new site has received thousands of comments/ votes since launching.

The number of comments and the success of this is probably due to Starbucks huge market share and the fact that the site is one big suggestion box where anything seems to go. But, it seems to be acheiveing its goals of getting traffic, giving customers an open platform and getting “ideas”.

However, the true success of this concept will come if Starbucks is able show that they are listening. To do this they need to implement the suggestions and then feedback back what they’ve done to the MyStarbucksIdea.com audience.

Evolution of Marketing

I just read an interesting email newsletter from Forrester Research about the evolution of marketing. Historically, marketing was a one way street where companies pushed everything to consumers; this was done on and offline.  Now as the online experience evolves consumers and marketers begin to develope “relationships”.  These relationships grow as consumers actively engage with a companies brand .

As I can’t provide a link to the newsletter—here is a cut and paste of the content:

Direct marketers and market researchers unearth deep client needs. Leading direct marketers already combine Web clicks with purchase and loyalty data to unearth a consumer’s interaction with the brand. But BrandIntel went a step further and recorded the content that users generated and other consumers read. It could then analyze what its customers really wanted and why one production flopped — Snakes on a Plane — and another succeeded — Heroes. Direct marketers will also use this data to find brand ambassadors and pamper them.

eCommerce professionals drive online sales with personalization. More than a third of Web visitors will make a purchase after seeing a personalized recommendation. eCommerce professionals can boost online sales with one-to-one personalization, such as individual homepages at Amazon.com, or one-to-many personalization, such as Virgin’s mobile offers based on someone’s home address. These firms base personalization on engagement — how the consumer behaves on their site.

Customer experience professionals innovate the brand. Whirlpool observed people at home and used the results to develop a new sub-brand — Gladiator — with fridges for men in their garages. To meet these uncovered needs, customer experience professionals will develop a disruptive strategy, simplifying the interaction, amplifying the service elements, and repositioning the brand overall.

Interactive marketers drive a better online experience. With 80% of consumers visiting manufacturers’ sites to learn about products and services, a firm’s online presence is the ideal starting point for repositioning. Firms can improve their online engagement with their customers, inviting them to offer input for brand values and product strategies in an online community, as Lego and Dell have done.

Marketing leaders steer based on hard data. Measuring engagement will take the guesswork out of budget allocation.  Engagement can drive awareness, transactions, brand preference, and loyalty. But each of these objectives requires a different approach and investment in people, processes, and technology. Marketing leaders from firms like CompUSA and BMW prioritized one goal, chose a very specific set of tools and vendors, and successfully moved the needle on transactions and loyalty, respectively.

Delivering an Extraordinary Customer Experience

Awhile ago I read an interesting article with Scott Griffith , CEO of Zipcar.com in an Adaptive Path newsletter.

The most interesting part was about Zipcars’ approach to user experience being ingrained in the brand ideals of the organisation. These ideals start at the website and then they are interwoven into the lifetime experience of the customer.

From interview

Question: In terms of the design of that service — you’ve got a lot of components — a web site, mobile (I don’t know if it’s SMS), you’ve got the cars themselves, and a call center. How explicit is the design of the service? How planned is it? What does Zipcar’s blueprint look like? Is it really refined and detailed, or is it a bit more organic?

Answer: Well, we have one. We have a culture that we’ve tried to develop that, we hope, matches the brand that we deliver; and that’s all around self-service. The design is meant to be simple in nature, elegant, and self-service focused. It starts in the company’s culture and in the DNA of our brand. We’re very serious about keeping all of our user systems very simple, but we have a group internally that we call our product group.

They focus on the lifetime experience that a member has with our service, from the first time they go to our web site through the last time they ever use one of our cars and decide not to be a member any more. They map that cycle and follow it; we’re constantly trying to refine and improve that map, that architecture. That timeline, by the way, lasts for typically four or five years, our members stay with us for multiple years.

We think about that whole experience as they use the cars for the first time or review their online billing for the first time. They might have a problem on the side of the road, to refuel the car, get into an accident; these are all experiences that we have to deal with, because we’re treating these cars very much like car ownership, but you’re just buying it one hour at a time.”

I love the idea that to truly deliver an extraordinary customer experience, it needs to start with a careful definition of what that is; then ingrain the solution into the companies brand and culture. Give the customer a full experience that starts with marketing/sales material and then seamlessly embed it into every interaction that the customer has with the company over time.

What’s a widget worth?

According to (Business week- Jan 2008), the view/usage of widgets has doubled from July to November 2007 with an estimated 586 million unique views. This is primarily due to the explosion of Facebook.

In the same time, the dollar spend by advertising companies on social networking websites is expected to rise to $1.56 billion in 2008. But is this good value for money for the advertisers?

Do we know what a Facebook user is worth? I suppose it gets to the heart of what is a user is doing on a social website? What are their behaviour patterns, do we fully understand how users currently engage within these social communities? Do they even see the advertisements or have the widget ads long faded into the backdrop like the mighty banner ads of 2003?

To combat the users desire to not click on ads, I sometimes wonder if marketers are banking on the effectiveness of subliminal messages.

2008 is going to be interesting year while widget makers and social marketing website will have to “show us the numbers” if they want continue to demand high premiums for their advertising space.

As a side, I always enjoyed this video on the Power of Subliminal Advertising.

Influencer’s Theory

A long, but interesting read of Duncan Watt disputing Malcolm Gladwell’s influencer’s theory.

“If society is ready to embrace a trend, almost anyone can start one–and if it isn’t, then almost no one can,” Watts concludes. To succeed with a new product, it’s less a matter of finding the perfect hipster to infect and more a matter of gauging the public’s mood. Sure, there’ll always be a first mover in a trend. But since she generally stumbles into that role by chance, she is, in Watts’s terminology, an “accidental Influential.”

http://www.fastcompany.com/magazine/122/is-the-tipping-point-toast.html

I’d be curious to hear thoughts—I think a key missing element with the Madonna theory is that the influencer’s in that situation may have been media (MTV or radio) that played something over and over again until became a hit. How does the media powerhouse influence trends?