Archives for posts with tag: Transformation

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Since the beginning of marketing time, the ultimate objective was always a transaction. You give me a A, I’ll give you B. Transactions have become even more important throughout the emergence of digital marketing. You can track customers through the purchase funnel, explore why they didn’t transact and create less friction to improve transaction effectiveness.

Why transformations are more important than transactions.

While driving by a lively Apple Store, I was thinking about Best Buy, a brand that’s on a sharp decline. Best Buy was a pure transactional company. The sales associates weren’t very helpful, just focusing on the sale and their extended warranty. The moment I declined the warranty, the interest level of the sales person dropped dramatically and I was herded into finalizing the transaction. Apple stores are transformational experiences. Flying with United Airlines is a transaction, flying with Virgin America a transformation.

A transformational experience: It’s not what you say. It’s not even what you do.

It’s how you leave them feeling when it’s all over.

When they walk out of the store, with your product in a bag – how do they feel?

When they see the email-receipt – how do they feel?

When you provide a transformational experience, you start a self-perpetuating loyalty loop. That good feeling about you will linger on, will be shared, stored in your synapses.

When you just provide a transaction, you need to continue spending a lot of money to get them back into your circles of influence.

Are you transacting or transforming?

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Since the financial crisis of 2008, the whole world is focused on muddling through it. Just ask the Eurozone, proposing new rescue packages almost every other day. Or the US government, tinkering here and there and everywhere. People are muddling through their lives, their careers, their daily life.

Are we muddling through because we’re stuck in the now?

All of us have become so caught up in the now that we’re forgetting important lessons from the past and losing the ability to develop long-term visions to work towards in the future. The constant documenting of the now, keeps us hand-cuffed to THIS moment, not the moment that passed or the moment we envision. In 2009 we said: “This is so 2008.” In 2012 we say: “This was so 2 minutes ago.”

What will we say in 2015: “That was so one second ago?”

The commercial is ridiculous because the benefits for having information 10 seconds earlier than others seem so trivial. But at the core of this commercial is one important insight: People value the “I said/heard it/wrote about it first” mentality. We are more focused on being the first to say something about the last 10 minutes that we are forgetting any lessons to be learned from the last 5,000 years.

We tend to forget that human nature hasn’t changed that much, just the way we communicate now and in the future is undergoing a dramatic transformation. Much of the financial crisis was caused by the focus on making millions today and not thinking about how to build wealth for the long term. CMOs have now 1-2 years to make a mark – why would they focus on long-term strategies?

We need to focus less on the short term and incremental changes. Instead, we need to be focused on building things for the long term. We need to implement important, business-driving measurements and be accountable to doing what is right and setting those BIG, HAIRY, AUDACIOUS GOALS. More importantly: We need to become better partners with our clients to move the business forward, not  just going through the motions.

We can accomplish so much more if we continue learning from the past and thinking past tomorrow for where we want things to go.

Muddling through or figuring it out just keeps us stuck in the now. Time to get unstuck.

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You hear and read it everywhere: Social Media is overhyped. Social Media experts will soon be applying for jobs at Burger King. In the end, the bubble will burst and Social Media will be Second Life 2. Or Zune 3.

Even in the Social Media echo chamber, we can feel the skepticism and defeatism when discussing the future of Social Media. The big agencies and brand will take over and ruin everything. Again. (Cue the Kleenex box.) Brands don’t get it. (Fist against the wall.) Money ruins everything. (Head against the wall.)

And we thought Social Media would change the world.

Let me burst the first bubble: Social Media won’t change the world. Stop drinking that Kool-Aid, it’s not good for you. Technology has changed everything: Transforming people from consumers to producers. Changed human behavior. Redefining human relationships. Transforming how we live. Transforming companies how they do business. Transforming institutions. Changing everything.

Social Media is just one expression of that change. Nothing else. It’s more than another channel to broadcast your messages. But it’s not the messiah that will miraculously change the world.

We wanted to change the world and all we got was Lolcats.

The essence of human beings didn’t change because we have new technologies. Silliness is just another expression of human creativity. But we see people helping each other by using these technologies. On a small scale. On a big scale. I can send my kid every night a good night story while 7,000 miles away and share a video of my experiences in Tokyo with my wife, feeling a connection to my girls. I can meet the woman of my dreams online. I can have meaningful discussions with people all over the world without ever meeting them. Or finally meeting them. And that’s the just bottom of the first inning of a long game. I would argue, this is the bottom of the first inning of a Best of 7 World Series. Soon, you’ll be able to own your own data, share it on your own terms, issue personal RFP’s and revolutionize everything: healthcare, politics, marketing, enterprises – you name it. And that might be bottom of the second inning. Who knows what will happen in Game 7, bottom of the 9th?

So, let’s burst the bubble of the Social bubble.

If you define social as Facebook pages, Twitter feeds or a fancy application: That bubble will burst. I totally agree with you. And you should be cheering for it. Most of these initiatives are just applying the old broadcast strategies, tactics and metrics to a new way of interacting with people.

Social isn’t a beauty contest, a chase to add your follower counts or another popularity contest. These are the LolCats of social. What social is really about is trust, connection and community. Social is about rewiring human beings, communities, societies, business and the world.

So stop whining, stop being afraid of the Twitter/Facebook bubble to burst. Just keep on moving foward. We’ve barely begun.

“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan “press on” has solved and always will solve the problems of the human race.” – Clavin Coolidge

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Image: Courtesy of donttouchmymoleskin

We’re going to change programming for the next  2 weeks and publish a guide how to navigate business challenges and transform your business in today’s market reality. This is a 10-part series that will help you create a more effective internal system and employ a flexible structure that will minimize the need for future restructuring. Ultimately, our goal is to help executives find and implement the system best suited to meet their organizational goals.

Let’s get started.

Systems Thinking

We all feel it. We all discuss it. We all experience it: Something is rotten in the state of Denmark. BP, Fannie Mae, Great Recession – you name it. We continue to apply our old way of thinking to new problems that were created by our old way of thinking. While resistance is strong to adopt a new way of thinking, new ideas are emerging that will help us guide through the dramatic changes that are about to take place.

Before we further discuss systems thinking, we need to understand the nature of systems. A very simple definition of system:

A system is an ecosystem that can’t be separated into independent parts without loss of its essential properties or functions.

This doesn’t seem that complex but its implications are fairly revolutionary. During my tenure at business school, I learned everything I need to learn about marketing. We received cursory insights into finances, personnel, production, sales, etc. but we almost never discussed the interdependencies between each division. It’s fairly obvious that a failure in one division will dramatically impact the performance of all other divisions. Management was seen as handling specific levers to improve performance of your division. That’s an Industrial Age thought pattern that should have been discarded a long time ago.

As mentioned above, it’s hard to change thought patterns but the failures of old thinking leads us to this new perspective:

No part of any system should be adjusted without a deep understanding how this change will impact the whole ecosystem and clearly analyze if this change is beneficial to the whole system. That expands the role of management to

a) Manage all interactions of their employees

b) Manage interactions between all internal divisions

c) Manage interactions between all stakeholders

Efficiency vs. Effectiveness

Think about Search Engine Marketing: Google is very efficient in delivering good search results. But they have to calibrate their results to be as effective as possible to help their bottom line. Imagine Google would deliver the perfect search results each time you’re using the service. They would be very efficient as a tool but not very effective as a money-making machine since nobody would click on paid results anymore. On the other hand, Google would go out of business within a short period of time if their organic results would deliver a sub-par experience while the only value is through paid ads.

Businesses always need to calibrate the two dimensions of efficiency and effectiveness. The advertising industry is a good example where everything has become much more efficient but not very effective. We’re doing things right in advertising but we’re doing the wrong thing. Meaning: we’re getting better at doing the wrong thing. Most industries would benefit from focusing on effectiveness first before they deploy efficiency strategies. No matter how efficient you become doing the wrong thing, you just become better at being wrong.

Analysis vs. Synthesis

Many companies employ business analysts, rely heavily on thinking that takes systems apart and looks at each part separately. Synthesis, on the other hand, looks at systems as part of bigger systems: industry, society, the whole planet.

This analytical thinking and constant disassembling of parts has crept into each part of our private life: Businesses are designed for work, not play or learning. (Let’s not even talk about inspiration). Schools are for learning but not for play or work. Yet, we know that certain school models (Waldorf comes to mind.) integrate each important aspect of our lives into one package. People don’t just want to work when they head out to their jobs. They want to learn, be inspired and play. We are beginning to understand that we can’t be effective carrying out any important functions if not all aspects of our lives are integrated.

Problem Resolution vs Paradigm Change

A few years back, I had to deal with severe back pain. I’m in pretty good shape, run quite a lot and my back has always been problematic. The first physician I saw just gave me Vicodine. He ignored the real problem, just hoped the pills would make my pain go away. The second doctor wanted to fuse my spine. He wanted to resolve the situation by bringing out the big guns. The third physician prescribed physical therapy. His idea was to optimize my back, make it more capable of adjusting and less prone to pain.

I decided to follow the fourth doctor: myself. I started to observe when I tend to have back pain, look at the triggers. In addition, I experimented with different forms of exercises: Yoga, abdominal exercises, swimming. I lost weight, I changed my diet. I changed routines. Basically, I looked at myself as a system, not a myriad of symptoms. And my goal was to optimize the system; to find out the right things to do to improve my health and then optimizing my system over time.

Let’s just have a quick look at the advertising industry: It was never cheaper to deliver impressions to people. I can buy 1,000 impressions for under $1. And the whole industry is busy delivering even more efficient impressions: Brands are cutting commissions of their agencies, holding companies are building huge data centers to deliver cheaper impressions, sites carry up to 20 impressions on one page. More. Faster. Cheaper. Unfortunately, the whole industry is answering the wrong question right. More efficiency is not at the core of the problem. Declining effectiveness is the real problem.

Because the advertising business has problems connecting with people and delivering valuable results to companies, this problem is categorized as an “advertising” problem and thereby retained and not solved in the advertising department. I would argue, the best place to treat a problem is not necessarily where it appears. Advertising is just one part of the system and its challenges shouldn’t be discussed by that discipline alone. Advertising is a cultural pillar and its decline needs to be discussed with sociologists, technologists, futurists, psychologists, anthropologists – you name it.

There are many ways of looking at a problem, the most productive way of dealing with a problem is seldom obvious. For that reason, problems should be viewed from as many different perspectives as possible through collaboration of multiple points of view.

In Part 2, we will discuss different types of systems, their effects on organizations and the way they are managed.