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           www.ideafarm.co.za/blog
Technology, Branding & Innovation
                                                                 24 Oct 2005, Cape Town



             who am i simon de haast
    what do i do catalyst for new thinking
      lecture site www.ideafarm/blog
                                      - look for vega   category link
           QuickTime™ and a
 TIFF (Uncompressed) decompressor
    are needed to see this picture.
                                                        www.ideafarm.co.za/blog
                Trendzzz

• Are we slaves to them?
  “Trend forecasting”
  “Youth trends”
• Imply a trajectory, has a history and
  a probable future
• Danger of staying committed to a set
  of possible outcomes
  – so many variables at play that results in a
    range of unpredictable outcomes

                                  www.ideafarm.co.za/blog
         Atoms vs. Bits

• Put another way, a battle between
  the physical and digital worlds is
  raging.
• Not an either/or (awe?) issue
  – Digital technologies are massively
    disrupting the status quo
  – Incumbents are clinging desperately
    onto what they know
                            www.ideafarm.co.za/blog
                The Status Quo

“It must be considered that there is nothing more difficult to
 carry out, ... than to initiate a new order of things.
For the reformer has enemies in all those who profit by the
 old order, and only lukewarm defenders in all those who
 would profit by the new order, this lukewarmness arising
 partly from fear of their adversaries, who have the laws in
 their favour; and partly from the incredulity of mankind,
 who do not truly believe in anything new until they have
 had the actual experience of it.”
              Niccolò Machiavelli, The Prince and The Discourses, 1537
                                                www.ideafarm.co.za/blog
           Status Quo Duo

You‟ll soon see that I‟m a big fan of
 Marshall McLuhan:
“When technologies impose themselves on societies,
 long habituated to older technologies, anxieties of
 all kind result.”
So what‟s going on in the world today
 that highlights this?

                                   www.ideafarm.co.za/blog
                           Disruption Central

• Incumbent Music & Movie industries vs... P2P
  – Grokster
  – Kazaa
  – Fight for DRM / Broadcast flag / TiVO
• Incumbent Telecommunications operators
                        Ha! to retain its monopoly
   – Telkom fighting so hard Same people involved in
     position.          both disruptions.
  – VOIP legislation
                                         Watch this space...
  –          QuickTime™ and a
    TIFF (Uncompressed) decompressor
       are needed to see this picture.




                                                    www.ideafarm.co.za/blog
Honey, I shrank the cost of doing business


 • Current music industry model is toast
    – but they‟re fighting to retain the model
    – should be innovating new ways
    – music rental, DRM leasing
 • These examples illustrate the major
   problem around managing technology –
   making sense of it all, where it‟s going and
   how to ride the dragon.

                                www.ideafarm.co.za/blog
  Tools for a New Worldview

• Lenses to shift the way we see things
• To create an awareness of what‟s
  around us
• More importantly, test our assumptions
• Story time...



                          www.ideafarm.co.za/blog
       Marshall McLuhan

So, who was this guy anyway…
• Canadian professor of literature
• „Observer‟ of media
• Gave us
  “The medium is the message” and
  “Global Village” aphorisms.
• Used the tool of language probes to
  pose questions of the world around
  him to gain new understanding
                          www.ideafarm.co.za/blog
                Probes

• Back in the days of LP records:
  -Are you in the groove? That is, are you
 moving in ever-diminishing circles?
And…
 -How can children grow up in a world in
 which adults idolise youthfulness?
 -To the blind, all things are unexpected.

                            www.ideafarm.co.za/blog
         Most telling one…

• What haven‟t you noticed lately?
  – The smuggler and border guard.
• Conception vs Perception
  – Conception: Our business plans, models, how things
    are supposed to work
  – Because of this lens, unable to really perceive what is
    really going on out there because of our embedded
    lenses




                                        www.ideafarm.co.za/blog
 Questions vs Answers



Quality of the idea depends on the
      quality of the questions.




                       www.ideafarm.co.za/blog
                                           Feeshh

                            • “I’m not sure who discovered water...
                              but I’m pretty sure it wasn’t a fish!”
Tools for a New Worldview




                            • So immersed in one‟s environment
                              that it becomes invisible
                            • Media Laws: Applicable to media,
                              but equally powerful a tool to make
                              sense of the present.

                                                        www.ideafarm.co.za/blog
                            That Rear-view Mirror Again...
                            • “When faced with a totally new situation we tend to
                              attach ourselves to the objects of the most recent past.
                              We look at the present through a rear view mirror.
Tools for a New Worldview




                              We march backwards into the future.”
                            • This should tell us something about the
                              design of products, technologies and
                              media - linear design thinking
                            • The best way to „predict‟ the future is to
                              look at the present, not the past.
                                                                   www.ideafarm.co.za/blog
                                            Peter Senge

                            • Systems Thinking
                              – See the whole, synthesis vs... analyses
Tools for a New Worldview




                              – Cause and effect are seldom close in time
                                & proximity
                              – Fifth Discipline
                              – (Also read Fritjof Capra !!)

                            • Floated the idea of Component
                              Technologies
                                                               www.ideafarm.co.za/blog
                                Component Technologies

                            •   Used example of DC3 airplane
                            •   Invention (lab)  Innovation (wide adoption)
Tools for a New Worldview




                            •   Ensemble of technologies
                            •   Piecing together all these diverse
                                elements, across multiple industries
                                and domains


                                                           www.ideafarm.co.za/blog
                                         DC3 “Dakota”
                            The ensemble:
                             variable pitch propeller,
                             retractable landing gear,
Tools for a New Worldview




                             Monocoque molded body construction,
                             radial air-cooled engine, and
                             wing flaps

                            5/5 = first plane that supported itself
                              economically as well as aerodynamically
                            Plus later: jet engine & radar creates viable air-
                              travel industry               www.ideafarm.co.za/blog
“Noah!..How long can you tread water?”


• It seems all hell is breaking loose with
  technology now
• Blizzard of new stuff
• C-o-n-v-e-r-g-e-n-c-e
• Some truths to it, most of it hype
  – Unpack the lifestyle shifts behind this.
• PDA + Digicam + mp3. Oh, and a phone too...
                                 www.ideafarm.co.za/blog
       Today's ensemble

• Cheap broadband connectivity that‟s
  wireless, „mobile‟, and always on
  – distinction between nomadic (3rd place)
    and mobile (in a car/train)
• This is the possibilities foundation.
• Allows other stuff that‟s been around for
  decades to suddenly „appear‟ from
  nowhere.

                            www.ideafarm.co.za/blog
           Building Blocks

• RFID chips
• Nanotech engineering
    – cosmetics to smart-dust sensors
•   Biometric recognition systems
•   Time-shifting
•   Long Tail & Collaborative Filters
•   Digital Home


                             www.ideafarm.co.za/blog
      Stuff on the Internet
• BitTorrent
• RSS feeds & enclosures
  – way beyond ‘blogs & wikis.
• Podcasting
• Tagging - Folksonomies
  – Flickr
  – Del.icio.us
  – Technorati
• Social Software - on web, on phones
  – Urban Atmospheres project (Bluetooth)
• etc etc                        www.ideafarm.co.za/blog
del.cio.us




         www.ideafarm.co.za/blog
flickr.com




         www.ideafarm.co.za/blog
Other stuff on the radar




                www.ideafarm.co.za/blog
  Application to Branding?

• Made you aware of issues around
  tech, and offered up some lenses.
• So let‟s take a look at what some
  firms are doing with this stuff
  – some leading edge, some very creative
    use of existing technologies



                           www.ideafarm.co.za/blog
               RFID

• Baja Beach Nightclub in Barcelona
• VIP clubbers „membership card‟
• Tues. nights “implant night”




                        www.ideafarm.co.za/blog
            GPS + GSM

• Coke‟s “Unexpected Summer”
  campaign
  – You can win but you can‟t hide
• Winners of big prize big fat SUV
• 100 devices disguised as coke cans
• You find one, just follow the
  instructions on the „can‟...
• Track winners on website
                             www.ideafarm.co.za/blog
Coke adds innovation




              www.ideafarm.co.za/blog
New take on Ambush Marketing


• Maker of home irrigation accessories
  – hosepipes, connectors etc
• Setup a billboard at a train station in Germany
• Can send an SMS to a number, squirts water
  on unsuspecting passer-by
• Can also do it from a website that shows web
  cam

                                www.ideafarm.co.za/blog
I wonder if Germans have a sense of humour? :)




                              www.ideafarm.co.za/blog
Something from the future




                 www.ideafarm.co.za/blog
Some thoughts on Innovation

• A fair bit of media play lately…
• The „next big thing‟.




                           www.ideafarm.co.za/blog
      The Innovation Illusion

• New product development treadmill
  – incrementalism
  – keeping the product line fresh
• Yet market share remains the same,
  revenue growth static
• Loads of lip service to innovation
• So what‟s going on?

                               www.ideafarm.co.za/blog
           Fresh Bits

“Consumer electronics have become
 almost like produce,” says Michael
 E. Fawkes, senior vice-president of
 HP's Imaging Products Div. “They
 always have to be fresh.”




                        www.ideafarm.co.za/blog
     Real meaning of Innovation

•   Process and culture
•   Making connections between diverse stuff
•   Bringing that back into your space
•   Completely re-perceiving the status quo
•   Discovering new sources of value
    – value in the eye of the beholder...customer
• Not creativity.
                                  www.ideafarm.co.za/blog
               Creativity is...

•   A behaviour
•   A raw material to the innovation process
•   Can be „taught‟ - 4 R technique later.
•   We are ALL creative beings.
    – artistry the traditional standard
• Needs constraints


                                  www.ideafarm.co.za/blog
              Innovation as Porn

• On porn: “...but I know it when I see it...”
    Justice Potter Stewart 1964

•   Seems to be the same for Innovation.
•   No real measure, but...
•   Vital for a company‟s success
•   One view...


                                  www.ideafarm.co.za/blog
           Assessing Innovation
                                                          Source: Cap Gemini Ernst
                                                          & Young Centre for
                 Making leaps and new connections         Business Innovation, EL
                                                          Chen, K Kai-ling Ho, June
                        Creative Process                  2002




              Impact                         Distinctiveness
When significant new value created           New & different vs
from an invention, becomes an                improvement
innovation
                                              www.ideafarm.co.za/blog
      Segway

• Very creative
• Very distinctive
• How much impact?
  – now not much, but time will tell.
• May very well lead to
  significant value creation


                     www.ideafarm.co.za/blog
     Let‟s lose the theory

• Business Environment
  – short term earnings myopia/pressure
  – eye on competitors
  – cost cutting / efficiency drives
• Consumer Environment
  – empowered, informed & astute
  – short attention-span

                           www.ideafarm.co.za/blog
        Consequences

• Businesses
  – outsourcing everything
  – culling brand extensions
  – products becoming commodities
• So what‟s the impact on brand
  strategy?


                          www.ideafarm.co.za/blog
    More on Outsourcing

• Taiwan‟s Quanta Computer expects to
  churn out 16 million notebook PCs this
  year in 50 different models for buyers
  that include Dell, Apple, & Sony.
• So Sony doesn‟t make computers?
• Trend is to ODM
  – Original Design Manufacturer


                           www.ideafarm.co.za/blog
            Context....

“Given the complexities of today's
 technologies and supply chains,
 nobody can master it all.
 You have to figure out what is core
 and what is context.” Nokia CTO




                         www.ideafarm.co.za/blog
 So if we don‟t make stuff...

• ...what do we do?
• Brand
  – becomes the interface between ODM
    and insight into needs & wants of
    customer
  – but needs to figure out how to do this
    differently because...


                             www.ideafarm.co.za/blog
         It‟s broken...

• Focus groups
• Product development
• Advertising




                        www.ideafarm.co.za/blog
           Don‟t believe me?

What Americans say should be regulated:

1. Water pollution
2. Toxic waste
3. Air pollution
4. Advertising
5. Nuclear power
Source: Yankelovich Partners, 2004


                                     www.ideafarm.co.za/blog
       A Brand‟s New Role

•   Establish a dialogue with consumers
•   Create a conduit for insight
•   Create a platform for innovation
•   Deliver on promises

• Natural consequence of this is
    – loyalty, revenue growth, innovation
                               www.ideafarm.co.za/blog
       Food for thought

• What happens if...
  – Pep Stores decide to get an ODM‟d low
    cost cellphone with embedded features
    unique to it‟s customer relationship?




                           www.ideafarm.co.za/blog
   A model for innovation

• Outsource both marketing and
  innovation to your customer
• Based on two major themes
  currently getting a lot of play
  – Customer Evangelism
  – Lead-user innovation



                           www.ideafarm.co.za/blog
    Customer Evangelism

• Soft, warm fuzzies
• Really about creating conditions to
  allow customers to sing your praises
  for you
  – in an authentic manner
• How?


                             www.ideafarm.co.za/blog
      Outside - in design

• First, create a map of organisation
  – from customer‟s point of view
  – move from hierarchy to doughnut
• Find ways to completely transform
  every aspect of the customer‟s
  experience
  – Through People, Process & Product

                           www.ideafarm.co.za/blog
           Empathy Economy

“We're moving from a knowledge economy that was
  dominated by technology into an experience economy
  controlled by consumers and the corporations who
  empathise with them.” Bruce Nussbaum

The organisations that do this, will win the consumers‟
  trust and loyalty.
The reward will be very effective word-of-mouth done on
  your behalf.



                                    www.ideafarm.co.za/blog
       Open the conduit

• Created a dialogue with customers
  – based on current product experience
  – demonstrate that you‟re listening
  – put in place trust bridges
• Now in a valuable vantage point
  – watch, observe, engage customers at a
    deeper level
  – eg. call center rich source of insight

                            www.ideafarm.co.za/blog
         Essence




Innovation begins with an eye.




                     www.ideafarm.co.za/blog
      Engage Lead-users

• Co-design products and services
• Includes your suppliers
• Eric von Hippel
  – The Sources of Innovation
  – Democratising Innovation
• Customers use products for things the
  product developer never envisaged
• Look at SMS


                                www.ideafarm.co.za/blog
    Outsource Innovation
       to Lead Users
• Establish conversations with them
• Who are they
    •   Demanding
    •   Painful
    •   Troublesome
    •   Interesting, at the „edge‟
    •   Novice, new
• These guys will have the most to say.
                                     www.ideafarm.co.za/blog
Not sure you want these novices though…




                  QuickTime™ an d a
             YUV420 codec decompressor
            are need ed to see this p icture .




                                                 www.ideafarm.co.za/blog
Implications for Product Design

 • Design platforms, not products
   – allows for multiple uses beyond initial
     concept
 • Create “tinker licences”
   – a licence to hack the product to figure
     out how to do other stuff
 • Make sure your brand infrastructure
   has the ability to listen
                               www.ideafarm.co.za/blog
How design = experience




               www.ideafarm.co.za/blog
     The Apple Experience

...“insanely great” products.

 Designed by Apple in California

“Good product design starts from the
outside, and works its way inside.”

                        www.ideafarm.co.za/blog
                Unpack this

• Product features
  – Big things like laptop design
  – Small things like power cord clip
• Packaging
• Retail environment
• Service
  – Till slip

                             www.ideafarm.co.za/blog
         Good design...

• is embodied everywhere
• fosters great experiences
• which in turn gets me to tell people
  about it
• Also makes me more likely to share
  ideas, problems or opportunities
  back to Apple
• Virtuous cycle repeats itself.
                          www.ideafarm.co.za/blog
Till slip




            www.ideafarm.co.za/blog
To end, time for a podcast...

Bob Garfield - On the Media
The Chaos Scenario




                         www.ideafarm.co.za/blog
                             Ta!

• Recommended Reading
   –   Douglas Rushkoff - Coercion, The Persuaders
   –   George Lakoff on Framing / “The Word Lab”
   –   Peter Senge - The Fifth Discipline
   –   www.mcluhan.utoronto.ca

• Simon de Haast
   – 083 326 3496
   – simon@ideafarm.co.za
   – www.ideafarm.co.za/blog




                                            www.ideafarm.co.za/blog

								
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