Category Archives: Corporate Strategy

Thoughts from a Few Miles Above Tintern Abbey

First published August 12, 2010 in Mediapost’s Search Insider

Funny, how our brains make us hang on to things that make little sense in the new scheme of things. For as plastic as the brain is, there are worn grooves that cannot be denied. We are creatures of habit and those habits comfort us, making us feel in control of our environment. Even when there is no rationale for our recurring behaviors, habits keep things plowing along, giving us a sense of equilibrium.

Every time I cross the Atlantic, where history is the natural state of things, I gain a new appreciation for this clash of the new and the old. It creates a fascinating juxtaposition of digital efficiency and deeply carved human habits. Europe is steeped in this paradox, but somehow it seems to keep wobbling along. Traditions don’t die here; they just lift one foot and plant them on the speeding express train that is technology, hoping to maintain a tentative balance as the other foot drags along the accumulated baggage of the centuries.

Hotchkisses in the ‘Hood

Today my family and I returned to my ancestral homeland, in the shadow of the Wye Valley, a picturesque vale that separates Wales from England. This area could quite justifiably be called the cradle of tourism. When the industrial revolution created a leisure class in England, they started getting cabin fever and itchy feet. Their leisure travels started fairly close to home and the picturesque Wye Valley was an early destination. Writers, poets and painters including William Wordsworth, Robert Bloomfield, Thomas Gray, William Thackeray, Alexander Pope, Samuel Coleridge, and J.M. Turner visited the area and effectively created the very first tourism ads.

The day is come when I again repose
Here, under this dark sycamore, and view
These plots of cottage-ground, these orchard-tufts,
Which, at this season, with their unripe fruits,
Among the woods and copses lose themselves,
Nor, with their green and simple hue, disturb
The wild green landscape.

From “Lines Written a Few Miles Above Tintern Abbey,” by William Wordsworth

The Jury-Rigging of a Continent

Fast forward to today. I sit in a 200-year-old cottage a mere stone’s throw from the Abbey that inspired Wordsworth’s idyllic reverie. In fact, the cottage was probably built during Wordsworth’s lifetime. I like to think that his carriage could have passed it by on the way to his vantage point above the Abbey the day he wrote his poem. Today, the cottage has been retrofitted to keep up with the times, with a satellite dish tacked onto the front and a digital lifeline from British Telecom snaking up the outside of the white plastered walls.

This cottage isn’t the only thing that’s been jury-rigged for the future here. The Welsh Tourism Board is no stranger to the benefits of technology. They were early adopters of the Web, putting together one of the better online tourism resources and being early believers in the power of search marketing. It’s appropriate that the originators of the modern tourism industry should be one of the first to recognize the rational beauty of digital information. No wasteful resources required, global accessibility and the ability for the user to find and interact with specific information. Even a Luddite (a movement, interestingly enough, that started not too far from here about the same time Wordsworth was penning his poem) would have to grudgingly concede the benefits of virtual tourism brochures.

Old Habits Die Hard

Yet today, in the shadow of Chepstow Castle (close to the Abbey and the oldest surviving stone fortification in Britain, dating from William the Conqueror) I went to the visitor information office and left toting at least two pounds of anachronistic, impractical, highly irrational literature. Somehow, even though my family travels with a digital inventory rivaling that of the average Apple store, I felt more comfortable with a good old printed piece of paper, or rather, several hundred pieces of paper. I, of all people, should realize how stupidly wasteful this is, but I couldn’t help myself. It just felt right. And somehow, it felt even more right with the accumulated weight of the ages pressing down on me.

But all is not lost. Tomorrow night, I’ll be taking my family to see an outdoor production of “Romeo and Juliet,” which will be held at the Abbey under the stars (the Abbey has been roofless for centuries). And I’ll be booking my tickets online. As I said, clashes between old and new abound here.

White Salmon and Black Swans

First published July 22, 2010 in Mediapost’s Search Insider

The conversation started innocently enough. We were entertaining out-of-town guests at a winery and restaurant overlooking Lake Okanagan. And, as often happens when people visit B.C., they ordered salmon.

“You know, I heard that not all salmon are pink. There are actually white salmon.”

“Really, I’ve never heard of that.”

“Well, let’s see if there really are white salmon.”

So, we turned to the arbitrator of all such things: Google. If it can be found on the Web, apparently it exists. Which is an interesting behavior in itself, and a point I’ll come back to in a minute. But first, let’s talk about why the existence of white salmon is important.

A Fish by any Other Color

A white salmon is important because it’s a black swan. Or, rather, it’s a Black Swan. The capitalization is critical, because it’s not the animal I’m referring to, but the phenomenon identified by Nassim Nicholas Taleb in his book of the same name.

For all of human history, until the 17th century, it was commonly accepted that all swans were white. But in 1697, Dutch explorer Willem de Vlamingh discovered a black swan in western Australia. Why is that important? Well, for the vast majority of us, it’s not. But what if, for some reason, our world revolves around swans? What if our ability to earn a living depends on the predictably of a swan’s natural coloring? Then suddenly, it becomes vitally important.

Black Swans — and white salmon, for that matter — are outliers. And outliers are important because they cause us to change our view of the world. The normal, regular and expected allow our lives to run down predictable paths. As long as this continues, nothing changes. But the unpredicted, the unknown outlier, is an undeniable occurrence that forces us to reframe our view of things and take a new path. It was a Black Swan that changed the world.

According to Taleb, Black Swans have to have three things: they have to lie outside the realm of regular expectations, they have to carry extreme impact, and, when we discover them, they force us to alter our view of things to explain their existence. We have to change our view of the world to accommodate them. Taleb asserts that all of human history has taken a path that pivots on the discovery of Black Swans.

Discovering Black Swans

Now, back to our dinner conversation. Black Swans only become important when they were discovered. The vastness of the physical world meant that it took us a long time to find that first black swan.

But the world today is significantly different than it was in 1697. Today, Black Swans pop up all the time on YouTube or in a blog post. Every single day, somebody somewhere is googling a Black Swan. And, when they find them, Black Swans go viral because the unexpected is naturally fascinating to us. We can’t help but talk about it, and today, when we do, chances are it’s through a digital channel.

The more the world becomes digitally connected and synchronized, the faster word spreads about Black Swans. And when word spreads, we are forced once again to change our view of the world. This means that the pace of change in human history, catalyzed by Black Swan discoveries, is picking up speed. Today, you can’t step outside your door without tripping over a Black Swan.

The discovery of a Black Swan sets in motion a recurring chain of events. First, we have to acknowledge its existence. Let’s call this the Black Swan Googling stage. Then, we have to talk about it. This would be the Black Swan Twitter stage. Then, we have to rationalize its existence, creating an explanation for it — the Black Swan Wikipedia stage. Then, it becomes an accepted part of our new worldview, the new normal. What used to take centuries to filter through the civilized world now happens in the matter of days, or, at the most, weeks.

After all, when I woke up yesterday morning, I didn’t know there was such a thing as a white salmon. Today, my world has changed forever.

SEO: The Road to Strategy

First published July 8, 2010 in Mediapost’s Search Insider

I’m burnt — toasted, roasted and completely fried. I’ve just spent the last two days in stakeholder meetings with a client. In those two days I’ve met with representatives from every department imaginable — from channel sales to governance, corporate relations to analytics, corporate marketing to website design, social media to IT. In total, a dozen meetings with almost twice that many people. I’ve got about 20 pages of notes I have to sift through.

Why?

I’ll give you the same answer I gave before each meeting, in what officially became known as the “preamble”:

“You might be wondering why you’re here. For the past two years we’ve been working with your company on the organic visibility of your website. With organic optimization, there are really two things you have to think about — what you say about yourself, and what others say about you. Up to now, we’ve been focused on the first category: the content on your website, how the site is coded, the keywords customers might use to find you. That was relatively straightforward because you controlled all the things we were looking at. But now, we have to look at the second category — what others are saying about you. And that gets a lot more complicated. Now, suddenly, we need to understand what’s happening in almost every aspect of the business. What makes it even more complicated is that we have to begin to understand how all those pieces fit together.”

What became clear over the two days was that the discussions that we initiated about our SEO strategy could also have been the beginning discussions required to craft a companywide strategy. The fact is, trying to please a search engine algorithm means you have to think of your online presence in its totality. Google and Bing determine your online relevance based on nothing less than the digital footprint of your organization. And, as the boundaries continue to dissolve between the virtual realities of our businesses and the brick-and-mortar reality, who we are online is who we are, period.

This opens up an interesting challenge for organic practitioners. They have to be prepared to step out of their cozy niches, wedged somewhere between the worlds of marketing and IT, and be ready to truly “get” their clients at all levels. The best SEO practitioners have to abandon the quick fixes, like buying links, and roll up their sleeves, putting in the sweat equity required to come up with strategies that come from the very DNA of the company. SEO tactics that are grounded in the day-to-day business and the strategic objectives of the company will always outperform the “links for hire” and ghostwriter content creation that still flourishes in this business. Is it easy? Hell no. Is it worth it? I believe so, or wouldn’t have spent the last two days holed up in a nondescript meeting room across the hall from cubicle B23.

Here’s the thing. Trying to understand what is required for the next phase of SEO is imposing a discovery process and discipline that I believe will make us better vendor partners and make our clients better marketers. The same is true, by the way, for a truly authentic social media strategy. A while ago, I wrote a column in which I said that companies “get the SEO rankings they deserve.” It’s also incumbent upon us, as partners in this process, to be ready to rise to the challenge for those clients who have proven themselves ready to move beyond the quick fixes and questionable practices.

More Ways B2B Search Marketing Differs from B2C

First published July 1, 2010 in Mediapost’s Search Insider

Last week, I looked at ways that B2B search marketing is different from search campaigns aimed at consumers. I looked at how risk avoidance was an overriding concern. Also, a B2B purchase is almost always an item on someone’s to-do list, so they have little patience for being “immersed” in experiences or heading down navigational dead ends on a Web site. Today, I’ll look at two other ways that B2B buying behaviors differ from those in the consumer marketplace:

Unfamiliar Territory

In the consumer world, billions of branding dollars are spent to create a sense of familiarity not just with a product but also with a brand. Even if we’ve never bought a product before, there’s a good chance that we have some idea of the competitive landscape within the product category.  If we were looking to make a purchase for ourselves, I would venture to say there are very few things we would consider buying where we wouldn’t even know the name of the product. Yet, this is an everyday occurrence in the B2B world. Often, we’re asked to make informed purchase decisions about products and services that we hadn’t heard of yesterday.

When we strike into unfamiliar territory, we create a challenge for the B2B marketer. If we don’t even know the name of the product we’re looking to buy, how do we start looking for it? Where do we begin? It’s pretty hard to Google something when you don’t know what to call it. This makes keyword discovery one of the most challenging and important parts of any B2B search campaign.

Often B2B purchases are not only a buying decision, but also come with a steep learning curve. Buyers have to identify a potential solution, learn about the product category, identify the potential vendors, and determine decision criteria — all tasks that must be accomplished before buyers even start evaluating their alternatives.  Imagine trying to buy a car or a flat-screen TV if you had no idea what those products were — or even if they existed at all.

Decision by Committee

Sometime ago in my life, as I hung out my advertising consultant shingle, I was introduced to the joys and tribulations of committee-driven decision-making. I uncovered the sad truth behind the joke, “How do you determine the average IQ of committee? You take the lowest IQ in the group and divide it by the number of people in the committee.”

B2B purchases are often driven by committee. And, as we found in the BuyerSphere research, different members of the committee have different agendas. In high-risk, long-cycle purchases, the internal politics involved in a purchase can rival anything you’ll find on Wisteria Lane. These differing agendas mean that signals from committee members can seem to be at cross-purposes, making life exceeding difficult for the vendor.

Here’s the big challenge from a search marketing perspective: If different committee members are looking for different information (as determined by their own objectives) they will also expect distinctly different experiences. Your Web site and search campaign somehow has to be able to offer clear and compelling paths through this tangled knot of prospect behaviors. Clear segmentation options, relevant messaging, and highly intuitive navigation are three ways to guide different buyers with different objectives to the right destination.

B2B is different from B2C. It’s more complex, more challenging — and, in my opinion, much more interesting.

The Two Meanings of Engagement

Engagement: a betrothal. An exclusive commitment to another preceding marriage

Engagement: as in an engaging conversation.  Being highly involved in an interaction with something or someone.

The theme of the Business Marketing Association conference I talked about in last week’s column was “Engage.”  At the conference, the word engagement was tossed around more freely than wine and bomboniere at an Italian wedding. Unfortunately, engagement is one those buzzwords that has ceased to hold much meaning in marketing. The Advertising Research Foundation has gone as far as to try to put engagement forward as the one metric to unite all metrics in marketing, a cross-channel Holy Grail.

But what does engagement really mean? What does it mean to be “engaged?” The problem is that engagement itself is an ambiguous term. It has multiple meanings. As I pondered this and discussed with others, I realized the problem is that marketers and customers have two very different definitions of engagement. And therein lies the problem.

The Marketer’s Definition of Engagement

Marketers, whether they want to admit it or not, look at engagement in the traditional matrimonial sense. They want customers to make an exclusive commitment to them, forgoing all others. It’s a pledge of loyalty, a repulsion of other suitors, a bond of fidelity. To marketers, engagement is just another word for ownership and control.

When marketers talk about engagement, they envision prospects enthralled with their brands, hanging on every word, eager for every commercial message. They strive for a love that is blind.  Engagement ties up the customer’s intent and “share of wallet.”  Marketers talk about getting closer to the customer, but in all too many cases, it’s to keep tabs on them. For all the talk of engagement, the benefits are largely for the marketer, not the customer.

The Customer’s Definition of Engagement

Customers, on the other hand, define engagement as giving them a reason to care. They define engagement as it would relate to a conversation. Do you give me a reason to keep listening? And are you, in turn, listening to what I have to say? Is there a compelling reason for me to continue the conversation? I will be engaged with you only as long as it suits my needs to do so.  I will give you nothing you haven’t earned.

The engagement of a conversation is directly tied to how personally relevant it is. The topic has to mean something to me. If it’s mildly interesting, my attention will soon drift. But if you’re touching something that is deeply important to me, you will have my undivided attention for as long as you need it. That is engagement from the other side of the table.

So, as we talk about engagement at a marketing conference, let’s first agree on a definition of engagement. And let’s be honest about what our expectations are. Because I suspect marketers and customers are looking at different pages of the dictionary.

Marketing: Leading the Way

First published June 10, 2010 in Mediapost’s Search Insider

At last week’s national Business Marketing Association (BMA) conference in Chicago, three marketing executives from three well-known B2B brands each made an interesting comment:

“In the 3M scheme of things, marketing wasn’t even a second-tier priority. It was fourth or fifth tier at best. But in the future, marketing needs to lead 3M.” — Jeff Lavers,  Vice President of Marketing, Sales and Communications, 3M

“Emerson didn’t even have a CMO before me. They didn’t believe they needed one.”– Kathy Button Bell, CMO, Emerson

“We’re announcing a marriage at GE. We’re not sure how they’ll get along, but IT and marketing are about to become married. We’re combining the two functions.” — Beth Comstock, CMO, GE

Wow! Three iconic B2B brands, each rethinking the role of marketing within their organizations. Is this a wave?

What Marketing Should Be

The reason I love marketing, at its purest, is because it’s the connection between an organization’s business model and their customers. Marketing owns that essential bond. But that’s a responsibility that has been abdicated by many organizations, and never explicitly acknowledged by others. That connection, that reason to do business in the first place, is ignored by a startling number of companies.

Marketing should be the voice of the customer, driving product development, service delivery, operation — indeed, every aspect of the business. That’s what Lavers was hinting at in his challenge to 3M. Companies need to be driven by their customers. Marketing should be accountable for keeping the two firmly in sync. But somehow, in the past several decades, marketing has become cheapened, to the point that the function was essentially abolished in many org charts.  3M relegated it to a seat way at the back of the bus. Emerson never even bothered to put in on the corporate directory until 10 years ago. Marketing needs to be put back on the org chart, right at the top.

The excuse in the B2B world was that there was no need for marketing. The channels owned the relationships with the customers.  But the digital marketplace is re-forging relationships between manufacturers and end customers. Suddenly, brands matter. Customer feedback matters. Conversations matter. Marketing has to be the one constantly reminding everyone inside the corporate walls that those connections are vital in the future.

The Marketing – IT Connection

So that explains the import of the comments from Jeff Lavers and Kathy Button Bell. What of the impending nuptials between marketing and IT at GE? What are we to make of Beth Comstock’s BMA announcement?

This signals a fascinating shift in the practice of marketing. If marketing takes over the wheel and drives the company forward, then IT has to provide the infrastructure to help it win. This will be an uneasy shift of power. IT is used to being the control point within organizations, though marketing folks would use a different label: “bottleneck” or ” black hole” is one I regularly hear. With the shift in importance of marketing, IT dragging their heels will no longer be tolerated. In their drive to be nimble, marketing will be pushing — and pushing hard. I see no signals here that indicate potential wedded bliss. Essential? Yes. Easy? Not on your life!

If America’s iconic B2B brands are now ramping up for a new kind of marketplace, one where they take back accountability for end-to-end relationships, we are definitely dealing with a new normal. But I fear many in the C-suite ponder the prospect with the same reluctance they would have about giving the kids the keys to the Porsche.  Sure, we’ll go fast, but we will be driving off a cliff?

More Thoughts on Outside In Thinking

Before I move on to Carlota Perez and her Regime Transition Theory, i just wanted to add some additional thoughts to yesterday’s post about Outside In Perspectives.

Strangers Amongst Us

As I mentioned yesterday, sometimes a stranger in a strange land is better able to see things than the natives. For the inside group, what they see everyday ceases to become remarkable. It’s just their everyday reality. And, as I said, people in a group tend to conform to the norm of the group. Herds work much better when everyone is heading in the same direction, so we have an inherent drive to get along with our herd-mates. There are multiple ways this plays out, but in the end, our collective behaviors define our culture. However, as we conform to the norms of our group, they tend to become invisible. What strikes an outsider as a quaint custom or odd behaviors is, to the insider, simply the routine of their day. Culture dictates what is remarkable or what is numbingly normal. For example, our noses curl up at some of the dishes from other cultures (China comes to mind, with roasted scorpions on a stick) yet we think there’s nothing remarkable about wolfing down a couple of scrambled chicken fetuses on toast. We may even add a couple of fried slices of belly fat from that foul smelling animal that loves to roll in its own excrement. Normal is in the eyes of the beholder.

When I travel (as I am right now) I notice things about a culture that a native never would. I also notice that travelers from different countries tend to have different levels of tolerance for the new and novel. For example, I find Canadian tourists quicker to conform to the customs of a foreign country than Americans. Americans (and realize, I’m talking about averaged behavior here) tend to like to take a little piece of America with them. They are like cultural missionaries, transplanting the seeds of American culture to the destinations they visit. Canadians are cultural observers, taking note but leaving few traces of their home country. Of course, when it comes to hockey games, all bets are off. The maple leaf suddenly sprouts everywhere.

Canadians in Search of a Culture

McDonaldsinRomeAmericans like the world to conform to them, where as Canadians are more apt to conform to wherever they are. The sheer bulk of American culture spreads far beyond its borders, where as Canadian culture is still struggling to fill the huge empty spaces that make up Canada itself.

Why the cultural differences between Canadians and Americans? Actually, Canadians have a long history of cultural observance. Some of the most esteemed observers of American society all have Canadian roots: Marshall McLuhan, Malcolm Gladwell and Steven Pinker – to name just a few. Of course, entertainment is also about observing the foibles of our society, and Canadians have long mined this rich vein – Mike Myers, Jim Carrey, Seth Rogen, Ivan Reitman, Rick Moranis, Dan Aykroyd, John Candy, Michael J. Fox, Eugene levy, Howie Mandel, Lorne Michaels, Leslie Nielsen, Martin Short, Norman Jewison and James Cameron are all Canadians.

Why are Canadians cultural observers and conformists, while Americans are cultural imperialists? In the animal world, Canadians would be chameleons and Americans would be peacocks. I think it has to do with the vibrancy of the culture, its critical mass and also the prevailing attitudes of the inhabitants. For example, there’s a strong correlation between the military history of an nation and the aggressiveness of it’s cultural imperialism. If we look at critical mass, that presents another challenge for Canadians. The sheer size of our country means we have pockets of population spread across the landscape, rather than one contiguous community. Each pocket has unique cultures (militantly so in Quebec) so Canadians continually conform to new cultures, even as we travel within our own borders. We don’t have the same unifying cultural icons that Americans do, in their TV, their movies and obsessions with celebrities. In fact, all those things we import from the US. If you go beyond hockey and Tim Hortons, there are precious few cultural threads to stitch our nation together (and we refuse to believe that our precious Timmie’s is now owned by a US corporation – PepsiCo). Before the US, we imported our culture from our British and French founders. As Helen Gordon McPherson said, Canadians have been so busy explaining to the Americans that we aren’t British, and to the British that we aren’t Americans that we haven’t had time to become Canadians.

Carry No Assumptions

My point in this rather long aside is that the less preoccupied you are with spreading your own culture, the more observant you can be with others. Canadians seem naturally suited to this. If you are going to become an effective observer, try to go in without assumptions.

These tendencies also speak to the role of past success in clouding our judgment of the present. It has seemed to me that the more successful an organization has been in the past, the more internally myopic they are now. Indeed, internal focusing of resources is one of the contributing factors to success, but that inward focusing often comes at the expense of an external perspective. Success entrenches group “in thinking” and even when marketplace dynamics cause the once successful company to begin to struggle, the thoroughly homogenized views within the company struggle to identify the problems. They can’t objectively benchmark against the outside world because they’re blind to their own blemishes.

IDEO and Organizational Observation

IDEO actually has a few processes that rely on an outside view. Here are some examples for the IDEO Method Cards:

Rapid Ethnography: Spend as much time as you can with people relevant to the design topic. Establish their trust in order to visit and/or participate in their natural habitat and witness specific activities.

Extreme User Interviews: Identify individuals who are extremely familiar or (for my point) completely unfamiliar with the product and ask them to evaluate their experience using it.

Unfocus Group: Assemble a diverse group of individuals in a workshop to use a stimulating range of materials and create things that are relevant to your project.

These are just a few of the ways that IDEO helps companies gain an outside perspective. My suggestion would be to develop this discipline, and, as your looking for outsiders to help identify your own reality, consider hiring a Canadian. It comes naturally to us!

Nimbleness is Necessary

This is a common theme I hear all the time, and one that runs directly counter to the structure of most companies: it’s all about nimbleness.

tony-hsieh-is-zappos-ceoI’ve spent the past few days at the Silverpop Summit in Atlanta and two of the keynotes touched on this theme. Tony Hsieh from Zappos talked about how nimble their business model has been, literally redefining their core purpose 4 or 5 times in the past decade. Yes, through that time, they’ve always sold shoes, but that only really defined Zappos in the first few years of business. Since then, they’ve focused on customer service, then on HR, then on culture, and most recently, on happiness. Shoes are incidental. The evolution of the core philosophy of Zappos has been extraordinarily swift by the standards of most companies.

Then, today, Charlene Li gave us a peak at some of the central tenants of her new book, Open Leadership. Again, it’s all about creating a revolutionary managerial framework that takes advantage of more touch points with customers, faster communication lines, the ability to tap into social communities and a leadership approach that can quickly recognize and seize on opportunities, as well as identify and mitigate failures.

But it’s all about speed and the ability to change (or at least, adjust) directions quickly. It’s as if Darwin is teaching an MBA course.

This got me to wondering. It seems that when we look at the best examples of nimbleness, they’re all online companies. Amazon, Zappos, Saleforce – to name just a few. Why is this? Why can’t traditional companies compete with their online cousins when it comes to doing things quickly?

Well, I think there are a few reasons.

It’s all about the Environment

Darwinian change is driven by the environment. The more dynamic and hostile the environment, the faster the change. Nothing changes faster than online. We call it Internet Speed. Entire new business models are built from the ground up in months. And outmoded ones fade away just as quickly. If you’re slow to move in the traditional world, you’ve got plenty of company. But slow to move equals death online. It’s simply not an option.

Closer to the Customer

Online businesses live closer to the customer. They handle the customer service calls, sales, fulfillment and all aspects of the client relationship. There are no middle men clogging up the pipeline between management and the customer. Technology allows online companies to collapse distribution into a much flatter model than is found in the online world. And that means the distance between a customer and the CEO is much shorter, especially if you have a CEO that makes it a point to reach out consistently, like Hsieh at Zappos. This shorter feedback loop makes for much faster change cycles.

Flatter Organizations

Most online companies don’t have a very long corporate history. They are younger companies started by younger founders. And most of the online plays I know started with a determination to do things differently. They’re run in a much more open and transparent manner. Management tends to value culture and communication more than is typical (or possible) in the multi-layered multinational. Communications lines are shorter and more effective. And because they’re new and built on a more efficient model, they tend to be smaller as well.

Less Baggage to Carry

Finally, things that don’t work can be jettisoned much quicker online. If you launch a new site and it doesn’t work, it simply goes dark and everybody gets on with their online lives. There is no chain of empty locations across the country with for lease signs in the window. Online plays don’t have to keep resource sucking bricks and mortar locations afloat. It’s faster to invest in new opportunities online and faster to cut your losses if they don’t work.

If the corporate world now spins on the axis of nimbleness, I suspect it’s going to be hard for traditional companies to keep up with their online competition. Things are just moving too fast to keep pace, given all the odds stacked against them. In the next act of corporate evolution, I think I would have to cast the Multinationals as the dinosaurs and the online players as the mammals.

A Case for Outside In Thinking

girlzooConsulting as a business practice exists to serve two needs:

  • To provide subject matter expertise on an “as needed” basis; and,
  • To provide a fresh perspective on things.

It’s the second of these that I want to ruminate on a bit today. Why is an outside look at things so valuable for companies? Why can somebody on the outside see so quickly what is all but invisible to those on the inside? Increasingly, as my consulting career grows, I’m astounded to continually rediscover how different the view from outside-in can be from the inside-out view. Consultants look at things differently. Good consultants can translate that into insight for their clients. Great consultants combine that with their own experience and expertise to deliver what is, dollar for dollar, the best investment their clients can ever make.

Ideas from IDEO

Outside-in is a great business model. One of the masters of this, the design firm IDEO, has built an entire methodology around “design anthropology,” helping companies reimagine their products by providing a fresh look at things. They base innovation firmly on observation of real people, basically providing an outside-in view of the world. I’ve always been a huge fan of qualitative research, with ethnography in particular being an underused secret weapon. IDEO lives, breathes and eats this stuff. Better yet, they’re willing to share their secrets. You could do much, much worse than learn about more about the IDEO approach to innovation. Spend some time on the IDEO Resource page.

But why does being on the inside blind you to insights that are instantly observable to people on the inside? It’s not that the people outside an organization are so much smarter than the people on the inside. They have no special gift or source of information. They simply have a different view. Why?

Conforming to the Norm

As with most everything in life, I approach these questions from a Darwinian point of view – I seek ultimate rather than proximate answers. I suspect it’s because we humans, being herders, have a need to conform to the norm.

I’m in a unique position right now to test this theory as I’m writing this from a different culture – Germany. In the past few years, as I’ve traveled through different parts of the world, I’ve been amazed at how cultures shape behaviors. Yes, we have inherent human behaviors, but as you travel from culture to culture in Europe, the difference in national behaviors is almost palpable. Or at least, it is to an outsider. It’s probably not a coincidence that the most insightful cultural analyses have come from observers from outside the culture in question, from Alexis de Tocqueville’s (France) Democracy in America to Friedrich Engel’s (German) The Condition of the Working Class in England in 1844. Canadians actually have a long history of observing other cultures, in particular, America. I’ll touch on why that might be more in tomorrow’s post

I’ve written before about Harvard political scientist Robert Putnam, a keen observer of culturally driven behavioral traits. His book, Bowling Alone, provides a razor sharp analysis of several cultural trends in America that are altering the very nature of our social bonds. But it’s an earlier work, Making Democracy Work: Civic Traditions in Modern Italy, that shows how our social connections determine not only our culture but also the effectiveness of everything from commerce to government. Let me veer a little off track to make a point.

The Making of a Clan

Analysis of cultures from mountainous, geographically isolated regions show that they tend to evolve around the power of the clan. These incredibly strong bonds of kinship have been documented in the Scottish Highlands, the Appalachians in the US and Southern Italy and Sicily as well as other similarly geographically restricted areas. There are strong divides between in-group/out-group that hamper the creation of inter-group trade practices and formalized governments. In particular, geographic restrictions on movement of genes in and out of the collective gene pool create even stronger kin selection bonds. Putnam, in his book, documents how this prevailing tribal attitude held Southern Italy back while Northern Italy flourished. There, easy trade routes lead to mercantilism and intergroup trading, reaching a peak in the trade guilds of Florence.

The impact of geography on evolved human behavior has also been fertile ground for UCLA’s Jared Diamond. Prevailing attitudes within a tribe quickly spread, bringing behaviors towards the group norm. The more isolated the group, the more homogenous the views and attitude of the group and the more resistant they are to an outside view. Because we conform to the norm, it quickly becomes true that either the members of the inside group are blind to realities easily perceived from outside, or, if they are aware, they cannot effect change because they’re stifled by the collective influence of the group.

There are some unique corporate conditions where this internal version of restricted group-think tends to flourish. Ironically, past success is usually a good indicator of future limitations in perspective. But again, I’ll get back to that in a future post.

Jet Lagged but Still Posting!

bitburgerI’ve just spent 16 hours on various airplanes, so the mental processes are not the clearest, but I promised myself I’d do a blog post before succumbing to the pharmacological effects of mixing Ambien and German beer.

Over the next several posts, I’ll be focusing specifically on the challenges facing B2B marketers. While the previous posts this week weren’t specific to B2B, the issues of “Wow” service and returning to the Core are certainly relevant in the B2B world, perhaps more so now than ever.

The past few months have been interesting for me. Perhaps because of the release of my book, perhaps because of a resetting of strategies, perhaps just because we’ve hit the tipping point on the adoption curve – whatever the reason, I’m having a lot of conversations with a lot of people about “getting it”. Something fundamental is shifting, and I think the message has finally seeped into the C suite. Not only is the message being heard, but it’s being acted upon.

Next week, I want to explore a theory by Brazilian economist Carlota Perez – Regime Transition Theory. According to Perez, there is a massive changing of the guard in business at pretty regular intervals, driven by significant changes in the market environment. These changes are often sparked by technological innovation. And it seems we’re in the middle of one of these shifts right now.

I’ll also pick up some of the threads laid down in the original BuyerSphere and see how it might tie into this shift. In the past 3 months, I’ve been talking more and more about the business buyer of tomorrow. I’ll be taking a deeper diver there as well.

But for tonight, (because it is tonight here in Germany) I really don’t want to do too much in the way of deep thinking, because the deepest I plan to go is to the bottom of the glass of Bitburger currently sitting beside me, then it’s off to bed. Auf weidersehen!

P.S. – bummed that Canada self destructed in the World’s hockey championship. Ian (Everdell, from Enquiro) and I had bought tickets to the Gold Medal game this weekend in Cologne, hoping that Canada would be there. Oh well, it will still be good hockey!