This morning's Fraggl email had a link to this video from Dropbox describing what it's like to work there. I talk a fair bit about 'digitally-native' culture in organisations and this is a lovely way of expressing it.
"A lot of the most interesting people in the industry are leaving the traditional walls of the industry, yet they’re exactly the people that the industry needs". Great thoughts from Heidi Hackemer on setting up her own business
When I did the research for the work behind what became the Econsultancy Best Practice Guide to Insourcing and Outsourcing it became clear pretty quickly that the dynamic of what companies choose to do in-house and what they outsourced to third parties is a continually shifting one. There were disciplines that were increasingly being migrated towards being tasked out to third party agencies and suppliers, and there were others that were being brought in-house. The benefit of the former being improved specialist expertise, flexibility and/or scalability, and perhaps better cost efficiences. The advantage of the latter being potential gains in control, agility, efficiency, integration.
Technology is of-course impacting widely on this balance. As owned assets become more important many organisations are investing more in things like CRM, analytics, content management, conversion and optimisation tools.
One way in which we might position the relationship that organisations have with the insourcing and outsourcing of technology and capability is about value at the centre, and value at the edges. This is a concept that Hagel, Seeley and Brown talk about a lot in their book The Power Of Pull. The centre of the organisation is about efficiency, incremental gain, business as usual. The edges are where innovation happens, where connected employees bring fresh thinking and ideas into a company. Enterprise is porous, value comes increasingly from the edges, and from the flow of knwoledge rather than just the stocks of knowledge an organisation has.
I think this is a lot like the value in technology. At the centre this is all about efficiency, scalability, control, optimisation and automation (helping a company do what it currently does but better). But just as interesting is the role that technology can play at the edges - in creating and enabling new, emergent capability (so this is about set-up, design, creating, understanding and deriving value). A more sophistcated approach to insourcing and outsourcing takes account not only of what might be done to improve core capabilities, but what capabilities will be critical to success in the future, and helps build both whilst understanding that you should never outsource the future.
Clay Christesen gives the example of Dell in this context. In the early 90s they were a disruptive force in part because they able to outsource key capabilities to Asus in Taiwan. As time went on, and spurred on by Wall St who smelled greater efficiences, Dell expanded their outsourcing programme to more critical parts of their business including the management of its supply chain and the design of the computer. By 2005 Asus had got so good at so many parts of Dell's business that they were able to create their own brand of computer. Over the years, says Christensen, Dell had "slowly outsourced its way to mediocrity in the consumer business". Ouch.
In the latest a16z podcastChris Dixon (who now sits on the board of BuzzFeed following Andreessen Horowitz’s recent $50m investment) interviews Buzzfeed's founder, Jonah Peretti. One of the things that interests me most about Buzzfeed is that (in common with a new breed of media upstarts including Quartz, Circa, Medium, Vice) they are building a media company from scratch and so don't view what they do through the lens of a legacy business.
There's some good nuggets in the interview, including how Buzzfeed approach the distribution of content ('social networks are the new cable operators'), some interesting points on mobile video consumption (out of last months' 400m video views around half were on mobile, and the average consumption time on mobile for one of their 6,000 word pieces was 22 minutes), and the sophisticated way in which they use data (taking a nuanced, sceptical view on what the data is telling them, focusing on meaningful metrics, not just clicks).
Dixon describes Buzzfeed as a 'full stack' startup. He's said before now that he believes that we are in the deployment phase of the internet: "The most interesting tech companies aren’t trying to sell software to other companies. They are trying to reshape industries from top to bottom". So Buzzfeed is a media company in the same way that Netflix is a streaming movie company, or Uber a taxi comany, or Tesla a car company. They have technology at their core.
Buzzfeed has followed the classic path of disruptive technologies - coming in at the low end of the market, being initially dismissed by many as insignificant, but then moving steadily up market. BuzzFeed now reaches over 150 million people each month, is forecast to generate triple digit millions in revenues this year, and is consistently profitable. We under-estimate newcomers like this at our peril.
We all know how much of a challenge the ceaseless tide and pressure of email can be. A recent McKinsey Global Institute paper found that Email consumes an average of 13 hours, or 28% of the average working week. Quartz calculated that this meant on average that “the time spent on reading and answering email costs a company $20,990 per worker per year.”
An unpublished Harvard Business School survey found that managers and workers across the US, Europe and Asia reported that they were either working or monitoring work while being accessible for between 80-90 hours a week.
Whilst there may be many factors surrounding this (not least the fact that many of us are working significant amounts of unpaid out-of-hours overtime as a norm), it is clear that email is less than a perfect tool and is ripe for disruption. Plus the opportunity for the successful disruptor has to be huge, so no surprise perhaps that a number of start-ups are trying to tackle it.
And yet email is embedded in not only organisational culture and process, but also individual habit, making it an extremely challenging behaviour to change. Slack, which I blogged about earlier this year, is perhaps one of the better attempts since it is a messaging app that initiates messages as chats before converting them to email when someone isn't available. So rather than try to replace email directly, it is subverting it instead by unifying the many fragmented ways in which we communicate (email being one) into one stream, and it's focus on search as the defining organisational structure is really interesting.
Something else which really interests me around this theme - after I blogged about Stripe recently, James pointed me at this interesting post from them, talking about their approach to email transparency. All email at Stripe is internally public and searchable. The orginal motivation behind this was efficiency - managing the volume of communication whilst keeping everyone up to date, meaning less meetings, more fluid co-ordination. But interestingly, this policy has now expanded into an expression of the philosophy of the company: 'We don’t just want Stripe to be a successful product and company. We also want to try to optimize the experience of working here. And as we’ve grown, we’ve come to realize that open email can help.'
An open email policy, they say, can support autonomy, less hierarchy, and more rigourous, informed debate: '...our experience has been that an ambiently open flow of information helps to provide people with the context they need to choose useful things to work on. It doesn’t eliminate the need for other kinds of structure, but it does make emergent coordination much easier and more likely'. It's also interesting that they talk about how the policy circumvents internal politics and accidental surprises, promotes curiousity, and counteracts conflict-avoidance tendencies.
The post goes on to describe the tools they use, and how they've set them up to ensure everyone has clarity on how to best manage email, avoid unecessary communication, and make it as efficient as possible across the company. They say that email transparency is something that staff consistently identify as one of the best parts of Stripe’s structure and culture, and (in true startup style) they are focused on how best to scale something that is working very well at its current size. Another digitally-minded company working in interesting ways, and from which we can all perhaps learn something.
I've mentioned Rita McGrath's discovery driven planningbefore now. It's a useful concept that forces you to identify a desired outcome, and then ask what needs to be true in order for that outcome to happen. It can reveal some previously hidden (or toxic perhaps) assumptions. Conventional planning is based on a premise that future results can be accurately extrapolated from the predictable platform of past results and so may be useful in a stable, incremental or known scenario. Discovery-driven planning however, focuses on establishing the key truths that are needed for an outcome to be achieved and so is much more useful for those ventures that are new, more unknown, or characterised by a greater degree of uncertainty.
There's a great case study that McGrath uses to illustrate the folly of using conventional planning techniques for a new venture - the launch of Euro Disney (what is now DisneyLand Paris). The launch in 1992 was something of a disaster, with numbers of visitor-days falling far short of expectations. Two years after launch it had accumulated losses of more than $1 billion and only achieved its target of 11 million admissions after a drastic drop in ticket prices.
In the planning process Disney had used assumptions based on their extensive knowledge derived from their experience running parks in other parts of the world (US and Japan). There were some pretty big assumptions around the admissions price that punters would be prepared to pay, how European customers would want to eat, and the type of merchandise they would buy. But the really punishing assumption was that (based on their experience in other markets) they had assumed that people would stay an average of four days in the park’s hotels. And yet the average stay in the early days was only two days. Euro Disney opened with only 15 rides, compared with 45 at Disney World. People could do all the rides in a single day and so had little reason to stay longer.
"The Long and Short will tell stories of innovation that are thoughtful, hopeful and questioning. We will attempt to give people new vantage points on how the world is changing and how they can make a difference". Looks good.
The intersection of product innovation and agency culture and practice is a theme that has generated considerable debate in our industry and one that has been put forward by several Google Firestarters regulars as one that we should run an event on. So on Wednesday we did just that, with a packed house and three excellent provocations to help us navigate this fascinating topic.
I've long been an admirier of the work of ustwo, the digital product studio who originated the amazing Monument Valley as well as work for clients like Tesco, Sony and Channel 4 ("we launch valuable products, services and companies that make a measurable difference to the world"). So it was great to have Brett MacFarlane (whose background has been in network agencies) from the studio talk about their philosophy, and what he called the ustwo 'experiment'.
Nobody, says Brett, should own creativity or innovation but everyone does ideas:
Innovation is not one dimensional and may be incremental (refine), evolutionary (refresh), or revolutionary (re-imagine). One of the key questions in thinking about agencies and product innovation however lies in the difference between demand generation (which still has lots of value - advertising works) and value creation, which is more challenging for agencies than the former.
ustwo are focused on maintaining the right balance between client work, games and new ventures, and actively pursue diversity in both their staff and in what they do. Independence gives them the freedom to explore new revenue models and career paths for their people, so staff can really work on what they care about ("the founders didn't set out to run an agency and that's the point").
Brett also talked about the importance of the ustwo environment - an adaptive space, a sometimes chaotic setting, little rigid process ("rather than a process, we have a starting point and approaches"), a focus on employee wellness, time for invention, commercials that focus on the long-term and on value, and equity for employees.
Along their journey they've had significant failures (including a messaging app where they waited too long before bringing to market), but also huge successes like the one below, successful apps for financial institutions that focus their design on how it makes people feel, and new ventures including the just launched DICE ("the ticketing platform for fans, not fees").
Brett finished with some thoughts on three key elements of ustwo culture: Collaboration ("we believe that the best work is accomplished by team members creating together and solving problems together"), Value ("we believe our job is to find the quickest route from idea to digital product because that's where the business value is"), and Learning ("in the complex marketplace, we believe future success belongs to those who learn the fastest"). In the end, he said, mindset eats organisation and evidence beats opinion, but it's all about the team ("only that team, at that time, in that way, makes that thing"). Perhaps the ustwo experiment is about breaking down the one last silo - the individual employee.
I've long wanted to have Andy Whitlock, product strategy lead at MadeByMany, speak at Firestarters and he didn't disappoint. Andy's smart, witty talk started with his own journey from ad agency to product lead and the quite profound differences involved within each, not least in the relationship with clients and where value is placed. With advertising the launch day is everything, with product innovation if the launch day is your biggest response you're in trouble.
Advertising is about earning a reaction. Product innovation is about earning a role ("Life's too short to make things no-one wants" - Ash Maurya). With advertising some degree of success is likely, but with product innovation total failure is a real possibility. In fact, there's a whole series of differences that need to be accounted for between marketing and advertising and product innovation. With the former ideas are the most valuable thing, strategies are sold in, attention can be bought, deliverables are clear, budget is fixed, and it may be separate from the business. With the latter ideas are just hypotheses, strategies are adjustable, users can't be bought, deliverables and costs are unknown, and it must integrate with the business.
MadeByMany keep their development loops very tight so that they never go too far down a particular road before developing a learning, and thereby minimising risk:
Yet perhaps the interesting place is where these things can meet. Marketing can learn from user-centred development and product people still need marketing of-course (they are often not good at it: "no marketing needs to stop becoming a badge of honour for product people"). Andy's final summary captured three points about making useful things, and telling good stories with them:
Differentaiate the service before the brand
Spend less time guessing
Great products lead to good stories but not necessarily good storytelling
Our final talk from BBH Zag featured four speakers: Adam Arnold (Managing Partner), Richard Davies (Creative Director), Aran Potkin (Strategist) and Alex Matthews (Head of Creative Technology), and was interesting in that it was from an agency that was actually creating products. Zag describe themselves as a "brand consultancy that ventures". Adam spoke of how being an active shareholder in a venture changes the relationship you have with a client quite fundamentally. It aligns interest better than anything, and puts you in a position where you really do need to keep on adding value ('the saga continues after the product ships"). The team described the learnings they'd had from developing and working with (amongst others) Autographer (the world's first intelligent wearable camera), Money Dashboard (online money management tool) and Beakle (which enables people to connect to audio streaming for outdoor digital screens).
The talks were fascinating and diverse in equal measure, and we had three very instructive but different perspectives on the subject.
There may be no "new agency model" but their is a cohort of believers who expect better, are making better. Welcome friends. #firestarters
My thanks to our inspiring speakers, to all those who came, and to Google for hosting of-course. You can see a Storify of the event here. Our next event will be in November. If you'd like to ensure you get notified of when registration opens you can sign up for my newsletter for more news of that.
Just about every large organisation thinks of itself as customer-centric. Many have this laudable objective as one of their strategic pillars. Yet it never ceases to amaze me that those same organisations seem to want to put as many barriers in the way of great customer service as possible. So here’s my version of what customer centricity is not:
If you are organised in ways that make sense for the business but not for the customer then you are not customer-centric If your resourcing priorities are focused on business efficiency over customer satisfaction then you are not customer-centric If the functional silos in your business unnecessarily impair a joined up customer experience then you are not customer-centric If your customers are at all frustrated by the use of automation, inflexible rules and systems then you are not customer centric If your staff use scripts then you are not customer-centric If you charge your customers to talk to you then you are not customer centric If you create demand for customer service by failure to deliver on promises that you have made you are not customer centric If you make it hard for customers to find out how to talk to you then you are not customer-centric If your representatives use language that makes sense inside the company but not to customers then you are not customer-centric If your public proclamations to customers don’t match your actions then you are not customer centric
Saying you are something doesn’t make it so. And people can see that.