Lessons For Marketers in the NYT’s Leaked Innovation Report

The New York Times 2014 Innovation Report is an extraordinary document. Extraordinary in that it  exists at all, for one thing. But, also extraordinary for the honesty and candor in the analysis provided by the authors.

We’ve all watched the news business getting transformed over the years by blogs, the web, Google, etc. Now we can read the report from inside a pre-eminent news organization, written by a handpicked group of leaders given the mandate to tell the truth to power (well, their bosses).

But, at the same time, it’s an exceptionally useful document for marketing leaders who are struggling to thrive in a time of rapid, seismic changes. Digital, however you want to define it, is creating almost unlimited opportunities to create new growth, reach new audiences, and work in different ways. Call it creative destruction, transformational innovation, or just reinvention; we’re all going to have to deal with it. The news business is at the front of many of these changes, but eventually all business, from cars to cereal will have to deal with them. So, we can learn a lot about what to do (and what NOT to do) by reading this report carefully.

While it was unfortunate that this document was leaked, we nonetheless have it as a story of a great organization at the mid-point of a life-or-death struggle. Here are just a few lessons  brand builders can take away.

Be Honest With Yourself, First – One of the more remarkable things about this document is that it doesn’t seem to hold many punches. It calls out specific projects, departments, etc. Its a seemingly honest assessment of what’s working and not working. Not self-flagellating, but also not overly optimistic about what’s really going on. Marketing leaders should take on this kind of assessment every other year, at least. A hard look, done by trusted mid-level leaders, those with enough understanding of how things really work on the execution level but also have a broader strategic sense about what the organization can be and needs to get there.

Understanding how Disruption Works is the First Step to Disrupting Yourself - With everyone talking about innovation all the time, you’d assume everyone understands what “Innovation” really is. But, wisely, the writers spend a couple pages outlining Clay Christensen’s Disruptive Innovation process. And, they even provide a cheat sheet for their new competitors. As leaders, we should understand that disruptive innovation actually is kind of predictable and it will hit every industry at some point. Get your teams to understand this, and it’s the first step to creating the kind of innovations that disrupt the business on your terms vs. waiting for someone else to do it to you.

Reconsider What You’ve Always Taken For Granted – The report advocates a recommitment to audience development strategy, to re-examine how they are getting the news in front of people.  For generations, the Times could assume an audience existed, was reachable in a predictable way, and cared about the product. But, that audience is easily swayed, distractible, and, in the end, not so easy to reach. Now, the Times has to re-learn how to reach it’s audience, weaving a news set of skill into the newsroom. All leaders should be rethinking the parts of the model they’ve always taken for granted.

Digital First is Much More than a Buzzphrase - For the times, it’s a flip from “a newspaper that also produces a rich and impressive digital product” to “A digital publication that also produces a rich and impressive newspaper”. That’s over-simplified, but that mental model flip is one that most marketing organizations need to make if they haven’t already made. A mobile, digital way of building the brand that is amplified at scale by traditional media is  “digital first” for most marketers.

Culture Change is a Mofo - This is really a document describing wrenching culture change in slow motion. The capabilities, the technology, the tools will all be relatively easy to update. But, the talent, the leadership, the skills, the mindset needed to thrive in a digital-first world at the Times will be incredibly difficult to weave into the organization. The leaders will have to remake their culture from the inside without losing the best of what got them there.

Finally, the real story here is that the leaders of this organization recognized they were out of synch with their times and they turned to 8 trusted insiders to figure it out. That’s courage. We can all learn from them.

There are dozens and dozens of smaller nuggets in the document. It’s so rare for a business leader to get a peek into another organizations’ strategy development process that i imagine this will be a document i go back to and re-read multiple times.

Here are a couple other great writeups:

Managing Startups: Best Blog Posts of 2013 | Platforms and Networks

Managing Startups: Best Blog Posts of 2013 | Platforms and Networks.

This is about everything you need toread for the next couple weeks. Tremendous resource for anyone thinking about working in a “lean”, “agile”, “fast”, “iterative” or whatever mode.

Meta comment: Eisenmann’s blog is a great, living reminder of the power of blogs. With all the focus on shorter, faster, more ephemeral media (i’m looking at you Snapchat, instagram, Twitter), it’s very worthwhile to reflect on the core idea behind blogs, blogging, great posts and the whole concept of publishing for an audience.

 

True Big Data / The Atlantic Wins Journalism

If you want a good example of what “Big Data” really means, it’s this. “Big Data” isn’t just “shit ton of data”, it’s “amazing and proprietary insights that could only come from very creative analysis of a shit ton of data that only we can get our hands on”.  So, stop referring to your little facebook data project as “big data”.

And, for what it’s worth, the Atlantic just showed you what’s possible when you cross a curious journalist with a hacker’s mindset. So very cool.

 

Using large teams of people specially trained to watch movies, Netflix deconstructed Hollywood. They paid people to watch films and tag them with all kinds of metadata. This process is so sophisticated and precise that taggers receive a 36-page training document that teaches them how to rate movies on their sexually suggestive content, goriness, romance levels, and even narrative elements like plot conclusiveness.

They capture dozens of different movie attributes. They even rate the moral status of characters. When these tags are combined with millions of users viewing habits, they become Netflix\’s competitive advantage. The company\’s main goal as a business is to gain and retain subscribers. And the genres that it displays to people are a key part of that strategy. \”Members connect with these [genre] rows so well that we measure an increase in member retention by placing the most tailored rows higher on the page instead of lower,\” the company revealed in a 2012 blog post. The better Netflix shows that it knows you, the likelier you are to stick around.

via How Netflix Reverse Engineered Hollywood – Alexis C. Madrigal – The Atlantic.

Why Didn’t Honeywell Invent Nest? The Value of Purpose

Evidently, Nest is worth a couple billion dollars in the minds of investors. That company didn’t really exist a couple years ago, but investors see the potential and Nest is a good example of how a purpose-lead company can spark new growth by reimagining old businesses.

But there are higher risks, of course, with hardware-focused products like Nest, compared to software-only investments, due to the more costly ramp up for such products. But said one investor, “This is a company that could change how we live our everyday lives,” noting the tight integration with mobile phones was a key step in the evolution of such devices.

via Nest Raising Huge New Round From DST, Valuing Smart Home Startup at Upwards of $2 Billion | Re/code.

Why didn’t Honeywell invent Nest? There is no doubt the halls of Honeywell are filled with incredible technologists. They have installs in god knows how many homes in the US and around the globe. Is it because their business model is so heavily focused on resellers and contractors? Is it because they forgot what business they are really in (e.g. “we’re in the comfort business” vs. “we’re in the thermostat and electronics business”). Is it because the actual product would have cannibalized the rest of the line? Perhaps the actual Nest product wouldn’t have been a big enough opportunity for a 72Billion dollar company. Finally, perhaps the leaders at Honeywell have a really healthy and profitable thermostat business already in place and didn’t see a chance for a significant change in their growth curve from real innovation from their core products.

Here’s a clue,  from Nests “about us” page that reveals how purpose guides their approach: 

About_us___Nest

Simple. Beautiful. Thoughtful. They’re focused on “unloved” things. They know no one loves their thermostat.  But, their purpose is to make things you’ll reconsider and then fall in love with. It’s a design approach and a laser focus on the consumer mindset. They are an end user oriented company that has empathy as their core lens. Tech, coding, sales, marketing and everything else come afterwards. Rethinking old problems to help consumers is core to their culture.

Now, check out Honeywell’s “About us” page (actually, there are a number of Honeywell “About us” pages. This one is for their consumer products):

About_Us_-_yourhome.honeywell.com

While it’s great that they are customer focused, it’s pretty clear that their customers are NOT consumers. They’re focused on resellers, builders, etc. They are designing products they know their real customers will buy, not products consumers are going to fall in love with.

Business school students will be reading case studies about Nest for years to come. It’s going to be interesting watching Honeywell’s response. Not only do they have a product challenge, but they are going to have a business culture problem, as well. They can compete on technology, but will they be able to get over the internal cultural barriers that will make it difficult to truly put the consumer needs first? Will they be able to reconnect with their core purpose as a way to re-orient their product and marketing efforts?

A little glimpse into the Future of Brand Building

I was part of an interview that AdFed did w/GoKart Labs for their year end wrap up. I’m really excited about where this GoKart team can take brands. We’ve got the talent, the ideas, and the capability to make a real difference for brands. Should be a great 2014!

 

We are excited about modern brands that are moving beyond simple “messaging” (i.e. ads) to actually making apps, services, platforms and utilities that create deeper connections with their current fans in more useful, relevant and participatory ways. New users, new buyers, will become aware of brands and business through the things their friends do *with* these platforms and the content. These investments in useful content and services create organic growth for brands, whether its deeper loyalty, sharing or even offline word of mouth.

via AdFed – Made for those who make.

Where I’m Going Next: Unlocking Innovation for Modern Brands

Though the digital revolution really began in the early 90’s, we’re just beginning to get our arms around what’s possible for brands and marketers. Meanwhile, the future of brands, of brand building, of marketing is being invented, right now, every day.

For instance, as I write this post, the digital marketing headlines center around the founders of Snapchat turning down an acquisition offer from Facebook, holding out for a better offer.

It should be noted, they have no revenue.

Snapchat didn’t exist three years ago (and, if you are reading this in 2017, Snapchat may not exist anymore). Yet, some observers agree they may be worth more than  the rumored $3 billion dollar Facebook  offer.

Has the business world gone crazy, or is it truly possible to invent, design and grow disruptive, innovative businesses that fast?

For those of you not living in the digital space, the pace of change may seem disorienting. But trust me, it will never be slower than it is right now.

Unlocking Innovation: The Next Phase of the Digital Transformation

I’ve been involved in the digital business in one way or another since 1995 when I was teaching classes on “What is the Internet” or “Understanding the World Wide Web”. I’ve done a lot of the jobs required to bring web and mobile experiences to life, from coding and designing to advertising and promoting. I’ve lived through a couple boom and bust cycles.

I’ve seen Web 1.0, Web 2.0 and whatever Web 3.0 was supposed to be. But, based on my experiences, I believe we’re in the early stages of the most important cycle for most businesses: Accelerated innovation through new products and services.

In today’s landscape, smart business leaders see the massive opportunity for innovative products and services that weren’t possible even 5 years ago.  Bold, modern marketers are recognizing that there’s never been a better time to build brands through useful, helpful services and content.

So, they are looking for ways to reinvent, to unlock new ways to grow.

In almost every category, I’m seeing examples that should appeal to the soul of modern marketers who recognize growth can come by re-examining all aspects of their business in light of the digital transformation hitting them: their business model, their go-to-market strategy, their consumer communication model, the products, services and content they offer and their brand, overall. Just a few examples of bold innovation I’m seeing.

  • GoPro has built an incredible business and brand in a space that should have been owned by Sony, without much paid advertising (marketing model innovation)

  • RedBull has become one of the largest providers of action sports programming (media model innovation)

  • SpecialK has built and delivered a diet plan around their cereal brand (brand building innovation)

  • DollarShaveClub.com is working on disrupting the men’s grooming accessories business through price, brand and distribution (business model innovation)

Brands Need a Different Kind of Partner to Spark Innovation

To unlock real transformational growth and innovation, smart marketers need partners that aren’t satisfied merely to work on this year’s campaign materials. As a matter of fact, I’m seeing some of the most exciting ideas happening when companies work with smaller, more experimental firms at the front of the change.

Fortunately for marketing leaders, there is a growing number of great firms out there. The marketing service companies that support the brands (i.e. the ad agencies, PR shops, design shops, management consultancies) are going through their own, difficult transformations, too.

As a result, new kinds of firms are emerging, focused on dreaming up new businesses, inventing whole new products or services, or planning out alternative marketing models; Firms that are purpose-built, designed from the ground up to be agile, fast, data driven and iterative.

The agency disruption is leading to the kind of collaborators who help marketers answer that age old strategic question, “what business are you really in?” and then bring those new ideas to life, in market, to drive growth.

These new model, smaller firms are alternatives to legacy agencies which are trying to compete on strengths (scale, global network, heavy investments in “creative”) that aren’t as valuable anymore. And, in many cases, the operating models and cost structures of legacy firms make it almost impossible to move quickly and to work with the best collaborators available across the globe.

An Amazing Time to Build Brands and Businesses

Disruptive innovation is hitting just about every industry. New collaborators arising to help marketers win in a changing landscape. Has there ever been a better time to be in business?

So, marketers, we have a choice: are we going to wait and watch and react when it hits your category? Or are we going to drive the change. I don’t know about you, but I want to be a driver.

My Next Phase: GoKart Labs

I’ve recently left one of America’s great brand building companies (General Mills) to join a company not many know yet. GoKart Labs (gokartlabs.com) is a small, stealthy company that builds real businesses and drives remarkable innovation. We build our own businesses (Sophia, Kinly, a couple in the pipeline). We build them with our partners (BringMeThenews.com). And, we will use our business building chops to grow yours.

Your ad agency can’t do what GoKart does.

We’re built to invent new products and services, help you find and grow your customer base or help you generate whole new business models. We’re designed for market acceleration, not conference room creative conversations. Then, we’ll help you design, develop and deliver the digital experiences that build your brands. And, finally, our growth hackers can help you find customers through the truly agile marketing we use to grow our businesses.

Now, as I buckle up for this next phase — both mine and the web’s — I couldn’t be more excited. I’m excited to bring what I’ve learned working with some of the best marketers and brands in the world.

I’m excited to learn from the many entrepreneurs and business leaders in and around GoKart Labs. And finally, I’m excited to be part of a crew of collaborators inventing new businesses, products and innovations. I’ve got my foot on the gas and I’m ready to drive.

All Commerce is E-Commerce

“Retail has become a blur. And the blurring is 100 percent driven by technology,” says Tige Savage, a partner at AOL founder Steve Case’s investment company, Revolution, which is investing in new online retail startups. “Are you at the store? Or is the store at you? And then there’s mobile, the store is in your pocket. The game is to satisfy demand wherever and whenever it is.”

Good article from the MIT Technology Review on the pervasiveness of technology in commerce. Part of a well timed focus this month on the growth of multi-channel commerce.

 

Brands *Should* Be Publishers

With so much discussion about “content marketing“, brands are learning that they need to think and act like publishers if they want to thrive in social media. But, while brands may aspire to be like RedBull (the most well know example of Brand as publisher), there are still some real questions about whether most brands will actually be able to do it. My answer is a definitive “yes”, brands can do it. More to the point, i think the best brands *have* to adopt the mindset of publishers to win in a socially connected consumer landscape. But, brands will have to get over philosophical, business and operational barriers if they want to do what great publishers do.

At the most basic, great publishers do the following:

  • Make useful stuff: Publishers deliver useful – interesting, helpful, inspiring, entertaining – material to people who can use it. Whether it’s a magazine or a radio show, a TV network or a website, the exchange between publisher and end user has to be based on a certain level of utility
  • Build an Audience: Publishers build a reachable audience – consistent, identifiable, unique, engaged – over time around that material.

Seems pretty straightforward. Why would this be hard for brands? First, most brands today don’t have the basic service orientation. It’s just a philosophical disconnect. Brands are inherently interruptive and self-centered (“Buy me!”). They are all about using annoying TV ads and banners to deliver their own message in order to drive short term results for themselves. In order to make the transition, and build an audience that cares, brands will have to adopt “service first, message later” as a core philosophy.

Great publishers see their audience as a core asset that can be translated into revenue opportunities. An active, engaged audience that’s growing takes investment, time, and careful support. That long-term business perspective runs counter to the short term urgency most companies bring to their brand building. Brands typically see advertising media as a painful expense to minimize in the short term. To fully adopt a publisher mindset, brands will need to embrace a long-term business orientation, and see the investment in audience building as a modern way to create a valuable business asset.

Operationally, the vast majority of brands will struggle with the content production process. But, it’s going to be even more important for brands to develop a consistent and unique editorial lens. Great publishing ventures need great editors, someone who can discern what’s great for the audience and pushes the editorial agenda. Brands will struggle with any message that isn’t pushing their campaign message or product features. When faced with a decision about whether to invest scarce resources into an article that’s useful vs. one that delivers their campaign message, 99% of marketers will go with the one that “sells” more. To truly deliver on “brand as publisher”, brands will have to put their audience needs before their own.

Brands can overcome these challenges and the potential upside is significant for those willing to work at it.   But what happens to brands that don’t adapt? They won’t evolve their spending mix and will remain reliant on paid adverting too long. They won’t adapt their brand, and instead of connecting with people on a higher emotional or aspirational level, they’ll simply blast out their features and benefits, losing relevance :15 at a time. They’ll miss the chance to build assets, and keep throwing money at ads. While it may require brands to work against their long grooved instincts, those that commit will end up with a built in audience, content that drives interaction and, eventually, a valuable marketing asset.

Content Designed for Sharing

We’ve all been watching examples of great brand efforts that
resulted in a lot of sharing and discussion of brand content.  That is, content that gets shared or passed
around (like the first Man Your Man Could Smell Like or the Darth Vader VW
spot) or talked about a lot (like Old Spice WolfDog efforts or the recent Dove
work). We all get excited about the idea of this kind of content for the right
reasons:

  • Friend to friend sharing is a much more efficient way for
    your content to get reach. You don’t have to pay for the media
  • Friend to friend sharing comes with an implied endorsement,
    so it’s more likely to be received well
  • Word of mouth drives interest in the brand
  • It’s generally done digitally, so you can often see the data
    trail
  • And, when it’s digital, it can live pretty much forever in
    the Google search results (for better or worse).
  • Ultimately, it just makes your paid media work harder

 A lot of the examples we see seem like viral magic, an
alchemic reaction cooked up by a lucky wizard. But, increasingly, we’re seeing
examples that are pre-planned and pre-programmed for sharing; creative efforts
that were specifically designed and built for sharing, which is different than
how we typically approach it. We generally plan a great TV idea, then seek
something else – “surround”, social content, magic influencer dust – that gets
our stuff shared.  In the worst cases, we
try to engineer the sharing of a tv spot, something that is, by almost all
definitions, content for a passive audience. It’s doomed to fail. Except for
some edge cases, nobody cares enough about your tv ad to share it with their
friends.

 So, how do you design creative and execution specifically for
sharing? No one has the secret, but the two examples below characterize the best
of what I’m seeing when brands try to generate a lot of sharing (vs. simple
awareness) and discussion.

 Oreo
– Wonderfilled

You can almost hear the brief on this one. “the Daily Twist
worked great; we’ve got 33 million fans. How do we get people – young people -
talking about our product, preferably online?” Or, put more simply: Get as many
people as possible creating content about our brand: sharing it, talking about,
reacting to it, etc. From the very conception, this was an idea that was about
social sharing and discussion as much as it was about the product and brand.

First: What is it that they created? Is it an ad? A music
video? A song? A commercial? Social Object? All of the above?

 Second: the idea was open ended and designed for a consumer
response – “What would happen if *you* were given an oreo?” It almost
demands the consumer think about it and perhaps respond.

 Third: The execution was truly talkable. Remarkable, even.

  • Owl City is either loved or loathed, depending on who you
    are. Hipsters in Brooklyn probably moaned, but the tweens and young adults
    cheered. They all did it on social media.
  • The song is, depending on your perspective, either awesome or
    sacharine. No middle ground. Lots of debate.
  • The idea of top of the pops singer writing a love song to a
    brand
    ? Sellout! Savvy! Debatable.
  • Even the animation was discussable

 Fourth: The rollout was designed for sharing:

  • Stunt media buy: They launched it as a 90 during madmen, when
    all the ad nerds were watching, knowing it would generate discussion. Lots to
    discuss:

    • A 90! Who does those?
    • Visually, it was SO different from the show, it was
      noteworthy just by juxtaposition
    • They did a 90 so the ad skippers would  HAVE to see it and go back (“What was
      THAT?!?”)
  •  They rolled it out via their FB page (33 mm fans)
  • They had OwlCity tweet it to his fans (>1M) and Twitter
    followers (>1MM)
  • They supported it with lots of PR and events (again, to get
    the kids talking)

 In hindsight, it’s really, really clear that their goal was
to do something remarkable, in a remarkable way so that people would talk
about, giving extra reach to their efforts. TV was just the stimulus to get the
talking started.

 

REI-
Sharing as part of a Collaborative project

 REI recently launched their 1440 project with the goal of
capturing 24 hours of people doing what they loved in nature (1440 minutes).
Pictures for every minute of the day. It’s one of my favorite projects I’ve
seen. For REI, “sharing” was a way to generate both incremental reach (through
the shared content) but also a way to create a marketing asset.  For every picture contributed, REI asked the
contributor to share it to *their* networks. And, each image became part
of the overall collection, available for all future visitors. Plus, this effort
resulted in at least 1440 pieces of content that could get shared out to REI’s
network over the course of the year, and presumably each of those 1440+ images
were good enough that when published to REI’s feed, the fans/followers would
then like/retweet or favorite the images out
to their network.

 
5-15-2013 3-57-32 PM
But, to me, the best part of this project is that it comes
right from their values – celebrate being out in nature – and their core
purpose as a coop: A collective effort to help their members have their own
kind of experience, to  inspire and  celebrate others who are doing the same. This
whole project demonstrates their values perfectly.

 

Updated: Agile Methods to Solve Sticky Business Problems? We’ll Try it!

We're going to try something on a project we're kicking off here at work: "Agile" programming methodologies in the service of sticky business problems. We're not coders, but we're going to apply what we understand of the approach. We'll use "stories" to get our focus on the problems we need to crack for the marketers we work with, the stories we want to be able to tell when we've solved them. We'll have a list of these stories and work through them one at a time. We'll do that in quick (2 weeks), focused efforts (aka "sprints"). And, we'll if we don't get it right, we'll iterate through them again until we've got it right. We'll be focusing on "shipping", that is getting the project done and implemented. We'll focus less on the beauty of a comprehensive, centrally controlled process (ie. "waterfall), and more on getting working "software" (ie the tools and methods) into the hands of the teams we work with. Lastly, we're going to try to dramatically improve communication via "huddles" and may even try full team huddles to communicate with a much larger audience. The IT group will probably laugh at how we're doing it, but we're going to take a shot and get it right over time if the first efforts aren't spot on. 

Any suggestions on how to apply agile programming methods to a non-programming problem? 

Updated: 8:30 PM

Lots of good suggestions from folks around the web. For sure, check out Rohn J Millers post on the subject from last year. Lot's of good ideas in there. And, here's a pretty good overview from PJ Shrivasta. Finally, i look forward to re-reading Greg Meyers Agile Marketing Manifesto in a couple months to see how we're doing.