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The Total Image Group   ...Business Alchemists

A regularly updated resource of information and news items.

Posts Tagged ‘Innovation’

Using Design to Drive Innovation

Posted Friday, December 11th, 2009

Designers must deliver the orchestration of the total experience with a brand, product, or service or face irrelevancy

Businessweek, June 29 2009

In a previous era, all the talk was of strategy, strategy, strategy. More recently, it’s been innovation, innovation, innovation. As design thinking seems poised to sweep away some of today’s celebrated innovation practices, we must be wondering what new provocation is on the horizon. Relax, I’m not planning to conjure one up.

For those of us on the design consulting side of the business, it has not exactly been a smooth ride lately. But then again, I can’t say that I ever remember it being all that smooth, even when the demand for all forms of basic design and new production capability was sky-high.

Having lived one career on the corporate design side of the consumer-products industry and now a good part of another on the consulting side, I’ve seen the ascendancy of design as a profession and the movement of design toward business competency. At the outset, designers were about style and the creation of bright shiny objects, and we dutifully manned our post at the last decoration station on the way to the marketplace.

Today, there are arguably two design strategies in the marketplace. You either succeed as the low-cost producer, or you successfully differentiate your offering by design in a relevant, meaningful way that is valued by shoppers, consumers, and sellers. As such, the theoretical role of design in business is relatively uncomplicated and straightforward.

Design in Business
The complications come with these two questions: Where does the core idea around a differentiated, relevant, valued offering come from? And what is its relationship to this thing we used to call design? You know—the bright shiny objects.

In our practice, we refer to the former as innovation strategy, and to the latter as design strategy. Somewhere in between resides the opportunity for brand strategy, and we hope to create a system in which there is a seamless flow from ideas to brand meaning and, finally, to how that brand or product or service is expressed and communicated.

Putting all three aspects of this brand-building practice together provides validity in thinking about design as one of the primary idea generators for the creation of viable business platforms. Assuming that the manifestation of a business offering is realized in the context of a brand, that brand requires meaning, a defined expression, and then, given some success, a plan for continued opportunity development that sustains and grows the business.

How to Innovate
True innovation requires the adoption of a belief system that sometimes must prevail in the face of other data metrics. Read up on the great inventions and business wins and you will note that at the core of most of them lie belief, dedication, and the passion to succeed.

Today’s business leaders are often too afraid to move ideas forward without ironclad data proofs that they will be successful. All too often, they are the losers. Use your head, listen to your heart, and feel what’s in your gut.

As long as the human spirit and the marketplace lives on, I’m sure we will be inventing and innovating. Innovation is the commercial side of discovery and invention. Change is a huge driver of both discovery and invention. The world changes around us and we discover new things and we observe change and invent new things to deal with change.

If designers are content to function as purveyors of bright shiny objects, they will likely fade into obscurity. On the other hand, if they step forward and deliver the orchestration of the total experience with a brand, product, or service in the context of our changing environment, their future, too, looks bright.


Coca-Cola Lays Out Its Vision for the Future at 2010 Meeting

Posted Friday, November 27th, 2009

AdAge.com, November 22 2009

Amid some 200 analysts, investors and media last week, Coca-Cola CEO Muhtar Kent made a confession.

“There was a period when our company did lose its way,” he said. “We were too internally focused and not focused enough on the changes taking place with our consumers and customers. In essence, we were too busy looking at the dashboard and were not sufficiently paying attention to the world outside of our windshield.”

We live in an ‘ADD economy,’ said Joe Tripodi, chief marketing and commercial officer, Coca-Cola, at a 2020Vision meeting last week. While Coca-Cola remains the dominant beverage company in the world, and controls nearly 51% of the global carbonated soft-drink business compared to Pepsi‘s 22%, according to Beverage Digest figures, it had, perhaps, been too focused on soft drinks at a time when other beverage categories were on the rise, said Bill Pecoriello, CEO at ConsumerEdge Research. “They were too inward thinking and missed a lot of trends that were happening,” he said. “There was a shift away from certain beverages and needs being filled by alternative beverages.”

Certainly, soft drinks remain a key focus for the company, but now it has also established dairy beverages as a global platform, with brands such as Vio and Minute Maid Pulpy Super Milky, and has set juice as its top priority after sparkling beverages. It’s also put more emphasis on innovation, with its venturing and emerging brands group, of which brands such as Zico, Honest Tea and Illy are a part.

Globally, Coca-Cola says it leads in sparkling, juice and juice drinks, ready-to-drink coffee, tea and active lifestyle, or enhanced waters. It is No. 2 in sports drinks and No. 3 in packaged water, which includes plain bottled water and bulk water, categories where there is stiff competition from the likes of Gatorade and Nestle Waters.

John Sicher, editor and publisher of Beverage Digest, also points out that between 2000 and 2004, when former CEO Neville Isdell arrived, the company struggled with management changes and simply wasn’t functioning well. “Today, in my view, Coke is really back to functioning at a high level again,” he said. “Relations with bottlers are good. There’s good morale inside the company. They’re recruiting good people and not losing people anymore. They’re really now focusing on the business and the brands.”

Multicultural plans
But the most significant changes appear to be in the multicultural space, which Ms. Bayne said will be a core focus for the company in the U.S. by 2020. Already, multicultural consumers account for 33% of all of Coca-Cola‘s U.S. volume, and given the population growth occurring in this country, by 2020, those consumers will make up 40% of U.S. volume.

“Our multicultural plans are now 12-month plans. It is no longer Hispanic heritage month followed by Cinco de Mayo,” Ms. Bayne said. “We have a deep connection through the World Cup with Hispanic males and through the novelas with Hispanic females.”

The company is also embracing a 12-month strategy for African-American consumers. “We’re really focusing on moms. Moms lead the decisions in this segment of the population, even more than others, so we’re really focusing on her,” Ms. Bayne said. “Also, [we’re] celebrating the historically black colleges and universities, Black History Month and connecting over music.”

The brand is also recognizing the power of consumer-generated content and social media. “Among Coca-Cola‘s most powerful differentiators are the stories only our brand can tell,” said Ms. Clark. “But we’re not the only ones that can tell our story. Much of our content comes from our consumers. It’s the phenomenon of social media. Consumers remind us daily that Coca-Cola is actually their brand, not our brand.” To that end, the company is launching Expedition 206, an ambitious global social-media push.

While it’s not entirely clear what the return on the program will be, Adam Brown, director-digital communications and social media, said the company will be monitoring fan participation and online share of voice, as well as increases in friends or followers. “One of the great things about digital and social-media programs is the ability to measure just about everything. This is critical for us to demonstrate ROI on an exciting and, in a way, experimental project like this,” he said. “I also think content sharing is a critical metric to watch. … That third-party credibility is magic.”


Social networking for business is next big thing

Posted Thursday, September 17th, 2009

Social sites like Facebook, MySpace and LinkedIn feed the craving people have to find one another, exchange information, catch up and solve problems.

Commercial Appeal, June 8, 2008

But there’s more, and for business, this matters. In the back-and-forth of ordinary conversation, ideas pop up.

They may be about your product or ways you could do things better … or new products your customers could use if you were hearing what they had to say.

“Those conversations are going on online anyway, believe me. You want them going on in your foyer,” Barger said.

The idea, of course, is that if people are talking in your presence, you’re the first to hear what is being said.

And if it’s said on your site, the exchange can be cataloged and stored, giving you a tidy archive of correspondence.

Barger, president and chief executive of LunaWeb Inc. — a Memphis company that does Web design and Internet marketing — is speaking Wednesday on social networking at the Public Relations Society of America meeting at the University of Memphis Holiday Inn.

“It has gotten to be such an important part of a PR person’s job right now,” said Bob Phillips, chapter president and Thompson & Berry Public Relations account exec. “Listen, business is so competitive. Everyone wants to know as much as they can find out.”

Barger is likely to start his talk by reminding the audience that “business used to be a faceless entity behind a security guard at the corporate gate.

“A perfect corporation was a business entity that could be perfected with mass production and quality assurance. It was all mechanized, and not human,” he said.

Now, with the push to put a face on the corporation, companies are using professional photos of employees on their Web sites, for instance, and finding employees, such as Don Dodge at Microsoft, to blog in voices that are credible and, well, folksy.

Blogging opened up a dialogue that social networks expanded. Today, there are more than 200 social sites, excluding niche networks — sometimes called vertical sites — tailored to specific audiences.

LinkedIn is one of the best for connecting professionals. In Memphis, about 100,000 people have Facebook pages. Two years ago, the population was probably closer to 40,000, Barger said.

Everything changed last fall, when Facebook broadened its membership beyond its college core, and the universe changed overnight.

“Now all of sudden, Facebook is saying, ‘Business, we welcome you. Here is how you set up shop; here’s how you engage your client base,'” he said.

“Businesses tapping into social networks to expand customer base need to have a clear idea of what they want to achieve,” said Chelsea Dubey, account executive at RedRover.

“You need success metrics, such as: How many people use the site? How many prospect leads are generated?

Social networking just for the sake of social networking isn’t always a good investment. It needs to connect to other elements of your sales and marketing strategy,” she said.

When FedEx Corp. created NetFace in 2006, a social networking site for employees only, it did no promotion but sat back to see how quickly a community would form, said Nicole Heckman, manager of innovation research.

“We found it was much more viral than we expected,” Heckman said. “Over several months, we had 2,000 active users.”

People into social networking use the word “viral” to describe how quickly networks form and spread.

Some companies build in viral functions, giving users gifts for telling friends.

“One of the things I found was that it really did give employees a way to have a personal identity within a large organization,” Heckman said.

People were soon connecting in and outside work to talk with people who had worked on similar projects or simply to play flag football.

“It really doesn’t have to be a huge investment,” Heckman said. “We accomplished FaceNet with a team you could count on one hand. You do obviously have to have someone manage it, but it wasn’t someone’s full-time job.”

For people who think the networks are just for kids, the average new Facebook enrollee is in the mid-30s.

“Many of my friends that are older and less tech savvy could care less,” said Gwin Scott, president of business incubator EmergeMemphis.

For him and the startups he works with, social networking is a chance to attract like-minded people, plus it gives business a way to tap into audiences that aren’t watching as much TV or paying as much attention to other traditional media.

Memphis Light, Gas and Water Division rolled out a blog in January, frankly as damage control after the utility was rocked with leadership scandals and contributions to its Plus-1 charity fell to record lows.

“We had to look at taking a more creative approach to communicating with our customers,” said Glen Thomas, head of the utility’s public relations. “We had to take the blinders off to look at the different ways to reach our customers, interact with them and respond to them.”

When looking over the staff for a potential blogger, Thomas suggests someone already passionate about the subject area.

“The woman writing our blog would chastise us if someone had a plastic bottle in trash,” he said.

Oh, he also suggests frequent views of the blogs that tend to break news in Memphis so you’re not caught off guard when the media come calling.


Recession: The Mother of Innovation?

Posted Thursday, September 3rd, 2009

Our special report looks at innovative ways businesses can turn the troubled economy to their advantage

BusinessWeek, July 22, 2009

Necessity may be the mother of invention. But could a recession be the mother of innovation? After all, many of the world’s enduring, multibillion-dollar corporations, from Disney (DIS) to Microsoft (MSFT), were founded during economic downturns. Generally speaking, operating costs tend to be cheaper in a recession. Talent is easier to find because of widespread layoffs. And competition is usually less fierce because, frankly, many players are taken out of the game.

Recessions can also help executives figure out how to improve products, services, and processes internally and for customers. Ideally, the creative thinking that’s needed to weather the storm of an economic downturn can lead to new markets and revenue streams. “Innovation originates from challenges,” says Vineet Nayar, CEO of HCL Technologies, a Noida (India)-based global IT services company.

HCL recently partnered with Xerox (XRX) to provide tech support for corporate customers using Xerox systems meant to reduce the amount of wasted paper. The systems themselves were inspired by the dual challenges of helping to save the environment and the need to slash office expenses during the downturn.

Inventing cost-effective and time-saving processes becomes a priority in a downturn, and it’s an area of interest for companies and organizations in a variety of fields, from high tech to health care. “In a recession, you can innovate to be more efficient,” says John Kao, author of the book Innovation Nation and the head of Deloitte’s Institute for Large Scale Innovation.

Lessons to Be Learned
Sure, there have been some signs lately that the economy might be picking up—Apple‘s (AAPL) quarterly profits jumped 15%, for instance. But a recent survey by consulting firm Bain & Co. found that 60% of 1,430 global executives polled expect the current recession to last through 2010.

And smart companies will continue to apply the innovation lessons learned during today’s tough times even when things pick up. The innovative processes, products, and services that hatch now can help executives understand how to curb costs or take risks on fresh ideas when the economy rebounds.


How design can help your business perform more strongly

Posted Friday, August 7th, 2009

When times are tough and revenues are falling there may be a temptation for business to cut ‘discretionary’ budgets – money allocated to activities such as design, perhaps.

But design is a powerful tool in a downturn.

Design Council
Our research shows that more than half of the UK’s businesses:

  • …are looking to design their way out of downturn
    Over half (54%) of the firms in our survey thought design would contribute to a large or great extent in helping maintain their competitive edge in the current economic climate.
  • …think design is more important now
    Similarly, 53% thought that design had become more important in helping the firm to achieve its business objectives over the last three years.
  • …think design is integral to the economic performance of the UK
    The same number agreed or strongly agreed that design is integral to the country’s future economic performance.

Fortunes can change for any business – large or small – sending a once successful and thriving operation into decline. Shifts in the economy, in consumer sentiment or changes in the marketplace are just a few of the factors that might leave a company in trouble and unsure how to get back on track. Even mighty corporations such as McDonald’s or entire industries like the Swiss watch industry have fallen foul of changes in the market, but both responded through an investment in design and innovation which helped to turn their fortunes around.

What can design do?

There are many ways design can help your business perform more strongly, from improving your image (internally and externally), innovating your products or services, through to enhancing your overall efficiency and saving you money.

Companies of different sizes and from different sectors have worked with designers to improve their performance during challenging conditions.

Castle Rock Brewery
Competing in the competitive real ales market is tough. Castle Rock Brewery in Nottingham brought in designers The Workroom to give its communications and graphics a more professional edge. Demand is now outstripping supply and the company’s barrel sales growth has doubled.

Thistle Hotels
The rise of value chains has meant that hotel groups in the traditional mid-market have suffered. Thistle Hotels is using an image overhaul by designers Navyblue to spearhead a multimillion-pound refurbishment and service improvement programme, and visitor numbers are already rising.

McCain’s
Frozen food company McCain suffered badly following a backlash against poor diets and rising obesity, so it worked with designers Elmwood to rethink the way its packaging speaks to shoppers in supermarkets, promoting the product’s natural ingredients and low fat. Sales have since blossomed to record levels.

HMV
High street music specialist HMV has had to react to massive changes in the way its customers buy music and video titles since the arrival of digital files and the internet. It used design to create a next generation store and whole new brand proposition. Sales at a trial store jumped by 25 per cent.

Ian Macleod Distillers
Scotch whisky drinking is in decline. So family company Ian Macleod Distillers employed designers to create packaging for its new Smokehead whisky aimed at bringing younger consumers to the whisky market. Sales have doubled since launch in 2006.

Design beats the blues

During hard times investment in design can give a business a competitive edge over rivals who are reining in their design and innovation budgets in order to save money. As American Express chief executive Ken Chenault told Fortune Magazine: ‘A difficult economic environment argues for the need to innovate more, not to pull back.’ Similarly, in September 2008 following a crisis in the global financial markets and in the face of an impending worldwide recession, Intel‘s chairman Craig Barrett told Reuters that investment in the company’s products and innovation remained very much on track. ‘We’ve always had the attitude that you have to make that investment in good times and bad,’ he is quoted as saying.

While American Express and Intel are global businesses, with dedicated R&D and marketing functions, the same wisdom applies to a business of any size: when times are tough it is change, dynamism and vitality – not hunkering down quietly – which are the keys to success. And this is exactly where design can help.

As you can see in the case studies above, companies big and small are rising to the challenge of hard times through a conscious investment in design. Their decision to innovate – to rethink and regenerate their products, operations and image – can be taken by a company of any size and in any area. Design and brand strategy can help elevate a firm or its products from the ordinary, the tired or the predictable, demonstrating that the business is alive, dynamic and responsive. And in a declining market that just might make the difference between growth and collapse.

Famed for precision timekeeping since the late 16th century, Switzerland’s watch industry nevertheless ran into crisis during the mid-1970s when Asian companies began to take over the market with quartz crystal technologies. Battling recession at the same time, Swatch (then known as SSIH) became insolvent, forcing its creditor banks to take control. Eventually, in the mid-1980s, CEO Nicolas Hayek took the company private and started a design revolution which was to save the business and put Switzerland back in the vanguard of watch manufacturing.

Design was instrumental in this reinvention. A combination of product aesthetics and reengineering (which reduced costs) gave Swatch the edge, leading it to become the largest watch company in the world, rescued from the jaws of collapse. Launched in 1983, the first Swatch wristwatch was a slim model using only 51 components (versus a typical 91 or more) and was marketed at an affordable price with contemporary design and styling. According to Swatch, the product has gone on to become the most successful wristwatch of all time.

Swatch‘s gross sales reached approximately £3 billion in 2007, but Hayek also claims that the design strategies he developed for Swatch in the early 1980s led to the rebirth of the entire Swiss watch industry, regaining its leading position worldwide since 1984. Data bear this out, with Swiss watch exports growing from around £2 billion in 1986 to £7 billion in 2006, according to the Federation of the Swiss Watch Industry.

While the creation of luxury power boats for a global market may represent design for a wealthy minority, Sunseeker International’s success results from a dedication to design from the smallest beginnings, undertaken in the face of the decline of British shipbuilding.

Formed in the 1960s by brothers Robert and John Braithwaite in a single industrial unit in Poole Harbour, Sunseeker was initially a distributor of Scandinavian boats. But Robert Braithwaite believed there was a potential UK market and so designed and built his first boat. From that start, the company has doggedly maintained a priority focus on design, design management, technology innovation and bespoke building. This combination has helped Sunseeker grow from its single unit to encompass seven sites and a million square feet of production space.

Believing that design is a vitally important part of this success, Sunseeker employs exterior and interior designers to work alongside engineering design, yacht styling and production teams, as well as with customers. It reinvests around 6 per cent of turnover in research and development. This has led to truly global success from a UK base: designed and manufactured in Poole, around 99 per cent of Sunseeker’s boats are now sold to the export market.


Claire Beale on Advertising: Whisper it, but it looks like we might survive

Posted Wednesday, July 15th, 2009

The Independent,  13th July 2009

Eavesdrop on any adland lunch table chat right now and you’ll find that confidence is creeping back onto the menu. We’ve hit recession‘s rock bottom and now we’re on the (slow) bounce. And it’s not just wishful thinking. We have facts.

OK… not facts exactly, but forecasts. And for an industry built on flimsy research, that’s good enough. A new report predicts that the ad industry will enjoy “mild global recovery” in 2010. Whisper it, but it looks like we might survive. Of course, this year will be a bloodbath. According to the new ZenithOptimedia study, worldwide advertising spend will slump by 8.5 per cent in 2009, and that’s worse than Zenith was predicting just a few months ago.

But the medium-term prognosis is better. By 2010 we’ll be revelling in a 1.6 per cent upturn. Yes, that’s 1.6 per cent against this year’s disastrous crash, but still we’re bottoming out. And 2011 is expected to be another 4.3 per cent up. It seems that although advertisers in the finance, automotive and business travel sectors slashed spend, retail and FMCG advertising (particularly at the value-for-money end of these markets) has held up better than expected.

But are we ready to capitalise on these first fragile signs of recovery?

Are we ready to remind the international advertising world that Britain is the place to come for first-class creative work, production facilities and strategic thinking? Some help driving that message home would be nice. Perhaps London‘s mayor Boris Johnson could take a lead from New York‘s Michael Bloomberg. Recognising the economic value of New York‘s communications businesses, he is on a mission to give his media industry all the help he can.

Here’s what Bloomberg‘s doing; listen up Boris. He’s launching a Media and Tech Fellowship to help fund new businesses and new innovations. Then he’s introducing tax exempt bonds to help companies invest in new technological, research and production facilities. He’s creating a New York City Media Lab to help the city’s businesses and universities collaborate on research and insight and to provide a space for lectures, debates and networking events.

There’s more. A new training programme will help equip people for jobs in new media, and in lower Manhattan, a building is being prepared as a centre for media freelancers, with workstations, conference space and news facilities. Bloomberg is now scouring the globe to encourage businesses in the communications industry to locate to New York.

It reminds me of a story I heard recently from a Canadian ad firm looking to expand into Europe. Should they choose Amsterdam or London for their HQ? In Amsterdam the city grandees threw a party to introduce the agency to other businesses there, prepared a bespoke start-up pack jammed with invaluable advice for a company new in town and pledged plenty of practical support if the agency decided to move in. The agency found no such welcome in London.

Amsterdam, you see, wants to be a global centre for creative excellence. So guess which city the agency chose for its European base, guess where it’s now creating jobs, spending money, making great advertising. Not London. Johnson’s office is apparently doing a sector analysis of all major industries in the capital so it can work out how best to support them. Hmm. And there have been a few mutterings from the Government about the need to push “Creative Britain“. But advertising and the wider creative industries need practical and financial support right now.

Britain is clinging to its reputation as one of the globe’s leading ad markets, and it’s still a hotbed of talent, innovation and creative excellence. But with our rivals upping their pitch, our grip is slipping. Without more government support, our little green shoots will remain just that while the world’s other leading ad markets invest their way to recovery.

Best in Show: Hula Hoops (Publicis)
Often the best ads are the ones that take a real brand truth and do something funny or surprising with it. Take Hula Hoops. Don’t deny you do that thing of putting them on your fingers.

Well, now Hula Hoops’ ad agency, Publicis, has launched a campaign showing people doing just that, and turning their Hoops into little puppets. In one ad these puppets are the Village People, dancing to YMCA, in another they are a DJ with a mixing deck. Make your own Hoop puppet film, post it on the website and try to win a trip to Hollywood. Or you could just eat them.


Mercedes Campaign Focuses on Image, Not Recession

Posted Friday, June 19th, 2009

Car companies like Hyundai and Ford have been showing solidarity with consumers recently, running ads promising that the companies will help them should they lose their jobs.

The New York Times, June 18th 2009

Mercedes-Benz USA is trying a different way to get customers to buy cars as it introduces its updated E-Class Series. The ad campaign for the midsize car, available as a sedan or a coupe, is the company’s biggest in two years, estimated at $75 million. It does not talk about great value or good deals. Instead, it focuses on the cars‘ technology and heritage, a somewhat standard approach for the brand.

“Everyone has that trigger that’s going to get them out there in the marketplace again, assuming that they have the means and they’re just choosing not to spend it,” said Alex Gellert, the chief executive of Merkley & Partners, part of the Omnicom Group, which created the Mercedes print and television ads.

The E-Class update is meant to turn around an alarming sales slide for Mercedes, which is owned by Daimler. Its United States sales have declined 28.7 percent this year from the same time in 2008, according to the company. May sales were even further off, falling 33.4 percent from May 2008. The United States turned in the worst showing of any geographic region in May.

Even given the sales challenge, Steve Cannon, the vice president of marketing for Mercedes-Benz USA, decided not to echo the recession-conscious marketing that other car manufacturers have used. Hyundai promised to help customers pay for their cars if they lost their jobs, an offer Ford and General Motors soon matched. A recent spate of ads for Honda‘s Insight described it as “designed and priced for us all.”

“I’d rather tell our brand story, our innovation story, our value story, than join the chorus of everyone else that’s screaming ‘sale’ – that’s about the only message that’s out there right now,” Mr. Cannon said. “Customers have told us, ‘we know there are deals out there,’ so just getting on television with an expensive media plan and shouting, ‘there’s a sale,’ they already know that.”

Although Mercedes wanted to avoid emphasizing sale prices, it did place the starting price for the cars at the end of each television spot and in the print ads. At $48,600, it is almost 9 percent less than the starting price for the last set of E-Class cars, from the 2003 model year. The ads give just the price, though, not the discount. “For Mercedes-Benz customers, $48,600 is a huge value story, and those people know it, so I don’t have to go out and say, ‘value, value’ — that’s not appropriate for our brand,” Mr. Cannon said. “The folks that are looking for a midsize luxury sedan kind of understand the price points.”

For his customers, “I think there’s a level of crisis fatigue and recession fatigue out there, marketing down to, ‘we feel your pain. We’re all in this together,’ versus, ‘this is who we are,’ ” Mr. Cannon said. “All the things that mattered to them before the recession, it still matters to them. But we have to work harder to break through, because the system has been shocked significantly.”


How to… be innovative in the workplace

Posted Wednesday, June 3rd, 2009

Make innovation a priority

The Times, March 11th, 2009

1. “In this environment, innovation is a real challenge,” Penny de Valk, chief executive of the Institute of Leadership and Management, says. “We are seeing a number of organisations hunkering down.” Such behaviour is dangerous: companies that generate 80 per cent of their revenue from new products typically double their market capitalisation over a five-year period, she says.

Take risks and embrace failure

2. Ms de Valk defines innovation as “the successful exploitation of new ideas”. But to innovate requires many ideas that are unsuccessful. “You have to give people the freedom to fail and to fail fast,” she says. “That’s a real challenge in a risk-averse culture.”

Jaideep Prabhu, of the Judge Business School, Cambridge, says that the rule in pharmaceuticals – one in five molecules makes it to market – applies to other sectors. “Even then, one in three products is likely to fail after launch,” he says.

Eyes on the future

3. “Employees are so busy firefighting that they are blinkered,” Professor Prabhu says. “Step outside your situation and look to future opportunities and threats. Who will be your competitors and customers?” A study of internet banking in the United States looked at chief executives’ letters to shareholders between 1991 and 1995. Those with the highest percentage of sentences about the future introduced new technology the fastest. “What made you successful in the past is not going to make you successful in the future,” Ms de Valk says.

Foster creativity at all levels

4. Jonathan Feinstein, of the Yale School of Management and author of The Nature of Creative Development, says: “Put yourself in the position where ‘light-bulb moments’ can happen. Give people freedom to define their creative interests and help to explore them.” Matt Brittin, the UK country director for Google, says that 20 per cent of employees’ time is spent on individual projects. This practice enabled an engineer to notice that patterns in search terms could be used to track flu outbreaks. Ms de Valk says: “Don’t just create a ‘good ideas’ culture, but decide which ones to put resources behind.”

Break the rules

5. Tamsin Davies, the head of innovation for Fallon, an advertising agency, says: “Think outside categories and be subversive. A clash of genres makes for different ideas. For the Cadbury’s ‘eyebrows’ adverts we didn’t think about chocolate but about ‘what produces joy’.”

Collaborate across boundaries

6. Professor Feinstein says: “Get clients in a room with engineers or product managers.” Professor Prabhu advises getting divisions to compete: “Internal competition is a way of bringing the discipline of the market in-house.” Google involves users. Mr Brittin says: “Open-source software allows us to tap into a worldwide base of millions of software developers who help to improve the product.”

Think global

7. We are in a new “innovation world” where the US no longer dominates, John Kao, chairman of the Institute for Large Scale Innovation, writes in the Harvard Business Review. “High-tech start-ups can be ‘born global’ by availing themselves of talent, capital, R&D tax credits, regulatory relief and specialised facilities in such innovation hot-spots as Helsinki, Singapore and Shanghai.”

Act fast and keep refining

8. “We have a philosophy of trying to launch things early then get feedback,” Mr Brittin says. Although Google‘s search page may look the same, the company is constantly modifying its algorithms, he adds.

Cannibalise your own products

9. “Even when firms spot an opportunity, they may not seize it because it threatens the success of their own products and services,” Professor Prabhu says. Sony had the technical expertise to introduce MP3 players but was afraid of jeopardising the venerable Walkman, allowing Apple to get there first, he says, and Starbucks’ venture into the instant-coffee market exemplifies a company turning cannibal.

Be ambitious

10. Innovation should focus on “making the competition irrelevant”, Ms de Valk says. She credits Cirque du Soleil, the acrobatic troupe, with reinventing the circus. Google never wanted to be “just a search engine” but to “organise the web”, allowing it to apply its technology broadly, Mr Brittin says.

World-beating innovators

1. Team Obama: turned an outside candidate into a “national brand”

2. Google: Search engine

3. Hulu: Video-streaming website

4. Apple: IT company

5. Cisco Systems: Designer and supplier of networking technology

6. Intel: Producer of silicon chip microprocessors for computers

7. Pure Digital Technologies: Makes simple digital camcorders

8. WuXi PharmaTech: A Chinese pharmaceutical research company

9. Amazon: Online shopping store

10. Ideo: Design consultancy

Source: Fortune, March 2009


Global Brands

Posted Tuesday, May 12th, 2009

BusinessWeek/Interbrand rank the companies that best built their images – and made them stick.

Advertisers who want to reach the Bublitz family of Montgomery, Ohio, have to leap a lot of hurdles. Telemarketing? Forget it – the family of five has Caller ID. The Internet? No way – they long ago installed spam and pop-up ad blockers on their three home computers. Radio? Rudy Bublitz, 47, has noncommercial satellite radio in his car and in the home. Television? Not likely – the family records its favorite shows on TiVo and skips most ads. “The real beauty is that if we choose to shut advertising out, we can,” Rudy says. “We call the shots with advertisers today.”

BusinessWeek, August 1, 2005

The Bublitzes and other ad-zapping consumers like them pose an enormous challenge these days to marketers trying to build new brands and nurture old ones. To get a reading on which brands are succeeding – and which aren’t – take a look at the fifth annual BusinessWeek/Interbrand ranking of the 100 most valuable global brands. The names that gained the most in value focus ruthlessly on every detail of their brands, honing simple, cohesive identities that are consistent in every product, in every market around the world, and in every contact with consumers. (In the ranking, which is compiled in partnership with brand consultancy Interbrand Corp., a dollar value is calculated for each brand using publicly available data, projected profits, and variables such as market leadership.)

The best brand builders are also intensely creative in getting their message out. Many of the biggest and most established brands, from Coke to Marlboro, achieved their global heft decades ago by helping to pioneer the 30-second TV commercial. But it’s a different world now. The monolithic TV networks have splintered into scores of cable channels, and mass-market publications have given way to special-interest magazines aimed at smaller groups. Given that fragmentation, it’s not surprising that there’s a new generation of brands, including Amazon.com, eBay, and Starbucks, that have amassed huge global value with little traditional advertising. They’ve discovered new ways to captivate and intrigue consumers. Now the more mature brands are going to school on the achievements of the upstarts and adapting the new techniques for themselves.

So how do you build a brand in a world in which consumers are increasingly in control of the media? The brands that rose to the top of our ranking all had widely varied marketing arsenals and were able to unleash different campaigns for different consumers in varied media almost simultaneously. They wove messages over multiple media channels and blurred the lines between ads and entertainment. As a result, these brands can be found in a host of new venues: the Web, live events, cell phones, and handheld computers. An intrepid few have even infiltrated digital videorecorders, devices that are feared throughout the marketing world as the ultimate tool for enabling consumers to block unwanted TV ads.

Some marketers have worked to make their brand messages so enjoyable that consumers might see them as entertainment instead of an intrusion. When leading brands are seen on TV they’re apt to have their own co-starring roles – as No. 9 Toyota Motor Corp. did in reality show The Contender – rather than just lending support during the commercial breaks. All are trying to create a stronger bond with the consumer. Take No. 41 Apple Computer Corp., which last fall launched a special iPod MP3 player in partnership with band U2. Not only did the “U2 iPod” say “U2” on the front and have band signatures etched into the back, but the band starred in a TV ad and buyers got $50 off a download of 400 U2 songs. No. 8 McDonald‘s Corp.’s sponsorship of a tour by R&B group Destiny’s Child means that fans who want access to exclusive video and news content about the band have to click first on the company’s Web site. “It’s hard here to tell where the brand message ends and where the entertainment and content begins,” says Ryan Barker, director of brand strategy at consultancy The Knowledge Group.

It’s no accident that most of the companies with the biggest increases in brand value in the 2005 ranking operate as single brands everywhere in the world. Global marketing used to mean crafting a new name and identity for each local market. America’s No. 1 laundry detergent, Tide, is called Ariel in Europe, for example. The goal today for many, though, is to create consistency and impact, both of which are a lot easier to manage with a single worldwide identity. It’s also a more efficient approach, since the same strategy can be used everywhere. An eBay shopper in Paris, France, sees the same screen as someone logging in from Paris, Texas. Only the language is different. Global banks HSBC, No. 29, which posted a 20% increase in brand value, and No. 44 UBS, up 16%, use the same advertising pitches around the world. “Given how hard the consumer is to reach today, a strong and unified brand message is increasingly becoming the only way to break through,” says Jan Lindemann, Interbrand’s managing director, who directed the Top 100 Brands ranking.

Possibly no brand has done a better job of mining the potential of these new brand-building principles than Korean consumer electronics manufacturer Samsung Electronics Co. Less than a decade ago, it was a maker of lower-end consumer electronics under a handful of brand names including Wiseview, Tantus, and Yepp, none of which meant much to consumers. Figuring that its only shot at moving up the value chain was to build a stronger identity, the company ditched its other brands to put all its resources behind the Samsung name. Then it focused on building a more upscale image through better quality, design, and innovation.

Beginning in 2001, the newly defined Samsung came out with a line of top-notch mobile phones and digital TVs, products that showed off the company’s technical prowess. By vaulting the quality of its offerings above the competition in those areas, Samsung figured it could boost the overall perception of the brand. Besides, consumers form especially strong bonds with cell phones and TVs. Most people carry their mobile phones with them everywhere, while their TV is the centre of the family room. “We wanted the brand in users’ presence 24/7,” says Peter Weedfald, head of Samsung‘s North American marketing and consumer electronics unit.

Now that strategy is paying off. Over the past five years, No. 20 Samsung has posted the biggest gain in value of any Global 100 brand, with a 186% surge. Even sweeter, last year Samsung surpassed No. 28 Sony, a far more entrenched rival that once owned the electronics category, in overall brand value. Now, in a nod to Samsung, Korean electronics concern LG Electronics Inc. has followed its rival’s playbook. Cracking this year’s global list for the first time at No. 97, LG has also sought to elevate its product under a single brand led by phones and TVs.

Some of the older brands in our ranking are clearly struggling to remake their marketing and product mix for a more complex world. This year’s biggest losers in brand value include Sony (down 16%), Volkswagen (down 12%), and Levi’s (down 11%). VW acknowledges its brand value slippage. “Volkswagen is well aware of the current deficiencies,” says VW brand chief Wolfgang Bernhard. Sony, which disputes that it is losing brand value, has suffered from an innovation drought. The electronics giant pioneered the Walkman, but left Apple to revolutionize portable MP3 players, as well as digital downloading and organizing of music. Meanwhile, Sony‘s moves into films and music put it into areas where its brand adds no value. Worse, those acquisitions made Sony a competitor with other content providers. That, notes Samsung‘s Weedfald, gives his company an advantage in linking to the hottest music and movies. Samsung, for example, is lead sponsor of this summer’s much-hyped movie, Fantastic Four, in which a variety of Samsung gadgets play a part. VW faces different problems. It has attempted to move upmarket with the luxury Touareg sport-utility vehicle and Phaeton sedan models; but that has left car buyers, who associate VW with zippy, affordable cars, confused. Similarly, Levi’s introduction of its less pricey Levi’s Signature line in discount stores means it now competes on price at the low end, while trying to fend off rivals like Diesel at the upper end with its core “red tab” brand.

Of course, defining the essence of a brand is only part of the battle. Communicating it to the consumer is the other. On this front, there has clearly been a divide between newer brands that use traditional advertising as just one tool in an overall marketing plan and older ones that grew up with it. Sony, for example, far outspends Samsung on traditional advertising in the U.S. on electronics products. (Samsung advertises on TV only during the last six months of the year, its peak sales period.) Many young brands that scored big gains in value, like Google, Yahoo!, and eBay, depend on their own interactive Web sites to shout about their brands.

Now some older brands, like Coke, ranked No. 1 in overall brand value, and McDonald‘s are decreasing traditional ad spending. In the past four years, McDonald‘s has cut TV advertising from 80% of its ad budget to 50%. Most of the shift has gone to online advertising. What’s evolving, then, is a model in which most brand builders use a variety of marketing channels. HSBC has branded taxis to carry customers for free. And although eBay spends most of its marketing budget on Internet advertising, it also relies on TV to some extent to boost simple brand awareness. “With fragmentation and ad evasion, you can’t count on one medium,” says Tom Cotton, president of Conductor, a branding strategy firm.

Marketers who do turn to TV are trying to make brand messages as engrossing as the programming. Last year Toyota, whose brand value rose 10%, paid $16 million to have its vehicles be part of the storyline on NBC reality show The Contender, about small-time boxers competing for a nationally televised bout. The grand prize: a million dollars and a Toyota truck. Rival Nissan, up 13%, has been parking its Titan pickups on Wisteria Lane in hit ABC show Desperate Housewives. The trucks will also ride into the new Dukes of Hazzard movie this month.

Nor are TV and movies the only target. No. 1 Coke, McDonald‘s, No. 88 Smirnoff, No. 16 BMW, No. 23 Pepsi, and No. 61 KFC are among brands striking deals to plant their brands in video games and even song lyrics. Deborah Wahl-Meyer, who headed Toyota marketing until recently moving to the company’s Lexus division, says both divisions attempt to seed magazine and newspaper articles with vehicle references and pictures. “We have to be more a part of what people are watching and reading instead of being in between what people are watching and reading,” Meyer says.

In an echo of Procter & Gamble Co.’s creation of the soap opera on radio and then TV, some brand builders are taking control of the programming themselves and creating content that tries to draw in ad-allergic consumers. BMW, whose brand value rose 8% over the past year, turned out a series of popular short films on the Internet starting in 2001. The seven-to-ten minute films starred BMW cars and were produced by A-list Hollywood directors like John Woo. The German auto maker has moved onto comic books based on the films aimed at Bimmer-aspiring teens and adults alike. “It’s imperative to create media destinations that don’t look like advertising,” says James McDowell, who headed marketing for the BMW brand before recently taking over as chief of the parent company’s MINI USA business. BMW has also embraced the enemy, TiVo, the television-top gadget that consumers use to skip ads altogether. Since last year, BMW has produced short films and long-form ads accessible through TiVo’s main menu page. BMW fans are alerted to the films in the on-demand video menu when a BMW ad runs.

Such old-line brands as No. 14 American Express Co. are heading down the entertainment path, too. Tipping its hat to BMW, AmEx ran long-form Internet ads/films starring Jerry Seinfeld last year that succeeded in drawing consumers to its Web site and Webcasted concerts. AmEx Chief Marketing Officer John Hayes says flatly: “Brands are not being built on [traditional] advertising.”

Still, none of these marketing ploys are sure bets in a world where old-school advertising means less. That’s why more marketers are investing in design as a fundamental way to distinguish their brands and to stay on the leading edge of technology. “Design isn’t just the promise of a brand, like TV advertising – it’s the reality of it,” says Marc Gobe, chief executive of design consultancy Desgrippes Gobe. Samsung has tripled its global design staff to 400 over the past five years. No. 73 Motorola, whose brand value rose 11%, and No. 53 Philips Electronics have boosted design spending. The move sparked the launch of Motorola‘s hot-selling Razr phone, the thinnest flip phone ever made. No. 85 Nissan gained 13% last year on a wave of bold designs, like its curvy Murano SUV and Altima sedan, as the Japanese company differentiates itself from Toyota and Honda through design rather than quality.

Good design implies more than just good looks. It’s also about ease of use. Apple demonstrated this with its iPod. Users can pick songs or download music from the iTunes music bank with the swipe of a finger. That’s blunted sales of Sony‘s Walkman MP3 player, which has been criticized as too cumbersome. Design can also mean sound. Samsung insists that all its products make the same reassuring tone when turned on. The Samsung tone is even being used in some advertising. “We want to have the same sound, look, and feel throughout our products so it all works toward one Samsung brand,” says Gregory Lee, Samsung‘s global marketing chief.

The era of building brands namely through mass media advertising is over. The predominant thinking of the world’s most successful brand builders these days is not so much the old game of reach (how many consumers see my ad) and frequency (how often do they see it), but rather finding ways to get consumers to invite brands into their lives. The mass media won’t disappear as a tool. But smart companies see the game today as making bold statements in design and wooing consumers by integrating messages so closely into entertainment that the two are all but indistinguishable.


Without limits: The weird and wonderful world of fantastical one-off design

Posted Tuesday, May 12th, 2009

What happens when top designers are given the freedom to create whatever they want? Something weird and wonderful, says Sophie Lovell
The Independent, Saturday, 25 April 2009

What we need is obvious, says the great German industrial designer Dieter Rams: “Less but Better” – less junk, less pollution, less waste, fewer “things” altogether and in their place, better, more refined, essential tools for living. And of course he is right. So why do we need new chairs that we can’t sit on, conceptual artefacts that serve no obvious purpose and strange remixes and hybrids? In order to find new solutions designers need to experiment. Now, more than ever, they need to question every given, test every avenue and challenge all our preconceptions if they are to help find new ways of moving forward.

The realm of design, like many other disciplines, is now challenged to fulfil an increasing number of roles: to keep up with new materials; to facilitate our increasing technological dependence; to help make the world a better and more sustainable place, yet also balance all that out with the demand for the trophies of conspicuous consumption and an unquenchable desire for novelty.

Many designers think of themselves as explorers, testing the boundaries of materials, processes and mediums. They are committed to experimentation, and a growing band of gallerists, patrons and curators are nurturing these experiments in the form of one-offs, prototypes or limited editions. Thus the most fascinating innovations in design are now coming from an unexpected quarter: where it brushes against… the realm of art, and of conceptual art in particular. These pioneering individuals are asking some big questions. What is design? What does it mean to call oneself a designer? What are the roles of objects and products? If design is to provide so many solutions, where does it have to go to find new answers?


 
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