Aug 6, 2012 | Management, Marketing, Social Media, Strategy
The term exponential is routinely used in engineering, maths, and the sciences, meaning, in lay terms, that the rate of increase in the derivative of a factor increases faster than the increase in the factor itself. “Gobbldy Gook” to most marketers.
Moore’s law is perhaps the most widely known use of this equation, but is only one of many.
Futurist Ray Kurzweil cited many others in a fascinating TED talk a few years ago, in which he points out that exponential growth is a common feature of technological growth, we just have to recognise it when we see it.
Mitch Joels great blog got me thinking.
The growth of complexity in the practice of marketing; new channels, social media, blogs enabling anyone to be a published writer, 100 TV channels at the end of a remote, new industries, the emerging models of collaboration, and all the rest are not linear growth, they are growing by leveraging the principals of exponential maths. The first one is hard, and takes years, the next is much easier and doesn’t take much time, then there is an explosion.
The way we generally think about marketing, and certainly the way the senior management of most large corporations think about it, is still in the linear mode, when the explosion in the opportunities presented by marketing to communicate and connect is an exponential change.
Competitive advantage will accrue to those enterprises that are capable of recognising that marketing into the future will operate in a different dimension if you like, to the C20 notion of accountability dominated by financial measures. Measuring performance by a P&L and Balance sheet mentality that counts what has happened, rather than assessing what will happen, and recognising the opportunities presented by exponential marketing will be leaving huge opportunities on the table.
Jul 5, 2012 | Lean, Management, Marketing, Social Media
It has always been so.
The father of the modern manufacturing revolution, W. Edwards Deeming probably said it first in a management setting, that led to lean, the TPS, 6 sigma, and a host of management articles, cliches, and learned papers, but it has been said before, in many ways. It is also a core component of the Balanced Scorecard.
Measuring advertising has always presented a challenge, throw an ad schedule on the box, and hope it works, has been the dominant method for many years.
Now we have the net , and a whole new set of measurement possibilities across websites and social media platforms. Like anything, simplicity is the gold standard, finding a few measures that get to the heart of the performance is a real challenge for management, as differing measures for differing platforms, differing markets, and platform/market/interest dynamics are always required, there is no pro forma to be used here.
Avinash Kaushik‘s great blog Occum’s Razor concentrates on measurement of digital performance, this entry on the measurement of social media, which should engage the minds of all marketers.
Jul 1, 2012 | Management, Personal Rant
If Australia was a company, it would be a case study for the need for a coherent strategy as the basis for commercial sustainability. As it is, the place is a shambles, the Directors are held in contempt, clearly they are not listening to management, and have no ideas themselves beyond short term self preservation, and are simply wasting the proceeds of our collective good fortune.
Lets consider some of the characteristics of an enterprise that is successfully meeting the needs of its stakeholders, while building the foundations of long term prosperity.
- The board has articulated a clear, simple purpose for the business to exist, and a strategy that is well understood throughout the business, and by outside stakeholders. Where individuals, or groups have a divergent view, they see that there has been a transparent “due process” undertaken, so they do not feel, as if their voice is irrelevant, or unheard. Contrast that to Australia’s current “board” in Canberra. There is no coherent articulation of the values we hold dear, but when it suits, hypocrisy and expediency with the truth are paraded out as virtues.
- In a corporation, available resources are allocated across a portfolio of needs, from overheads necessary to keep the place running to projects that will build the foundations for continuing prosperity, and those that are needed to address more short term challenges. Contrast that to the poll driven expediency of our current board, and total lack of any management skill, project or otherwise.
- In a corporation, once priorities have been agreed, resultant activities are driven by the desire for simplicity and consistency in the manner in which the contributions to the outcomes are measured and equated. Consider the inconsistency of the introduction today of the carbon tax. The objective is to, supposedly, make a start to a carbon neutral future, give a fillip to carbon reduction technology, and so on, but at the same time subsidies are being given to the Aluminum smelter in Geelong to keep 600 jobs, while the smelter continues to take 15% of the electricity consumed in Victoria, generated from brown coal. Inconsistent??? If the logic holds, Fairfax and News Corp should be in line for massive assistance. After all, they are semi redundant industries laying off 2,000 workers, so they must warrant assistance, right? Hell might freeze over.
- In a corporation we would get the best people we could to head the functional responsibilities, and they would faced the discipline of the bottom line, and delivery of objectives. Here we get, with a few notable exceptions on both sides, political hacks, deal-doers, and “operators” who have served their time in parties whose membership is small enough to fit in a phone box, and who will do and say anything with impunity, if their skin is thick enough. As a result, Australians have lost faith in their integrity, and ability to deliver anything of value.
- Oh, and by the way, we can put directors who lie to shareholders in gaol, although they usually just get a whopping fine, and are banned from being a director again. This is not just a shot at the current prime Ministers whopper about carbon imposition of a tax, but at the whole body politic who seem to be impervious to the truth, use data in highly selective and misleading ways, and squirm at any notion of transparency and accountability. The same lot however, will legislate to outlaw their behavior when others copy them. Is it any wonder that we have lost all respect for them
Jun 15, 2012 | Management, Operations, Small business, Strategy
This is a term coined by Peter Drucker when talking about contract management, particularly in relation to older contractors who bring a wealth of experience and hard won wisdom to the table.
Using contractors, particularly high level ones brings a number of huge benefits:
- Turns a fixed cost of an employee into a variable, project specific cost.
- Easier to impose specific performance measures, as the responsibility of the contractor is to the task, and less to the cultural environment.
- They bring immediate resources to projects otherwise difficult to staff
- Offers the flexibility for enterprises to bring in specific skills from time to time, that they do not need all the time.
- Generalists, and those with a wide experience, are better at seeing how logically unrelated pieces may fit together, they are less concerned with ambiguity, than specialists, and less likely to “anchor” an analysis in their specialty, and narrow perspective.
Our economy is undergoing structural change, management productivity is under scrutiny, so it makes sense for businesses, from start-ups to huge multinationals, to take advantage of the big pool of highly experienced, mobile, and motivated older contractors.
Jun 13, 2012 | Change, Customers, Management, Marketing, retail
Data mining as it is evolving in retail is a fascinating exercise in identifying behavior characteristics that apply to very small percentages of the shopper population, and doing something with them. Progressively retailers are getting better at leveraging the data, and as the penetration of cards increases past a critical mass, so will the effectiveness of the marketing and promotional programs. Of course, consumers are well aware of this, and have well developed “relevance meters” built in.
Consider the category management of potatoes. Pretty dull stuff? no, fascinating stuff. I am making these numbers up to illustrate the point, but consider, of 100 customers using their cards at the checkout, perhaps 10% have potatoes in their trolleys, and 10% of that 10% have a particular variety, and of that 10% (now down to 0.1%), they also have sour cream and chives in their trolley. Pretty reasonable guess that the potatoes will be cooked in their jackets, with sour cream and chives garnish, particularly if the shopper is single, no kids, and also buys steak. An opportunity to offer the consumer a deal on a bottle of red wine on her way out of the shop, or in the associated retailer across the way? Multiply that by 5 or 6 million cards, and you have a pile of data to mine.
The gold standard of retailer card data mining is Dunhumby, now owned by UK retailer Tesco. They did such a great job in the development stages of the Tesco loyalty card, that the retailer bought them to keep their competitors away from them. In a move that recognises the future, Dunhumby is now crowdsourcing ideas via Kaggle, a fascinating startup that turns data mining into a competition for data nerds.
This is Category Management on steroids, and represents a monumental change in the skills needed by FMCG suppliers deal with dominant retailers. In the Australian context, very few FMCG suppliers have any idea of the power of the data tsunami coming at them, and how this will impact on their brand marketing strategies. It is also the realisation of the vision of category management the few of us who were playing with this stuff 30 years ago had when the data was warehouse withdrawals, we had a bit of U&A consumer research, and managed it all with calculators.
Jun 11, 2012 | Branding, Change, Communication, Management, Marketing
Today in Sydney has been about as miserable as it gets. Rainy, cold, grey, just plain shitty, and not fair for a public holiday.
What a relief it was to find a distracting way to spend the afternoon.
After watching the replay of the unfinished French Open final, assiduously avoiding any media when I “rose” so I did not know the score, I started to clean up the hard drive of my laptop, removing some of the stuff that had accumulated to clog it up.
Amongst the “random savings”, were quite a number of advertisements I had accumulated from various sites, all of which had the common element of having struck me at some time as being enormously creative, funny, engaging, delivering a serious message, or just sufficiently different to really cut through, when flogging stuff from cars and fashion to condoms and computers. They all, in one way or another, rang my creative bell.
It also struck me that we are in the middle of a huge confluence of two enormously powerful forces, technical development, and creativity, that is changing everything. Hardly an original insight.
The technical advances of the last 15 years have reduced the costs of technology, and the distribution of content to relatively miniscule proportions, which has opened up huge new opportunities for creativity to be seen. However, the digital media has become so clogged with content, from the great to the absolutely inane, that being seen is still the greatest challenge, so creativity remains an essential element of all successful communication. It has also offered up the opportunity to focus laser-like on a very small group of individuals, delivering a compelling message that they would have been unlikely to get in the old mass communication days.
I cannot finish without offering my pick as the best ad of all time, at least the best I have seen. Perhaps surprisingly, it comes from my childhood, so is a very old ad, but is a very simple execution delivering a powerful message in unequivocal terms. Pity the companies management was not up to same standard as their communications people.
The term exponential is routinely used in engineering, maths, and the sciences, meaning, in lay terms, that the rate of increase in the derivative of a factor increases faster than the increase in the factor itself. “Gobbldy Gook” to most marketers.