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Editor’s Letter

Letter From The Editor Welcome to this edition of Chief Strategy Officer.

Samsung are doing to create a culture of innovation.

We are increasingly seeing high tech and online companies hitting headlines for innovative strategies and products. In this issue we are looking at the ways in which companies are either utilising new technologies or how technology companies are aligning themselves.

There is also an interview with Theresa Austin, Senior Strategic Program Manager at NetA-Porter, who discusses the success of the high fashion online retailer. This is in addition to Phil Rist, who gives us an insight into utilising Big Data using Sun Tzu’s famous art of war.

With both people and companies now increasingly living their lives online and through technology, company strategies are evolving that reflect that. Be it through the use of microblogging sites like Twitter or by keeping in contact with people wherever they are in the world through Skype.

We are also looking for new contributors, if you feel that you have a new idea that you want to spread, please get in contact at

This is why we wanted to discuss both of these companies in relation to the impact that they are having on our society today. We are lucky enough to have a contribution from Yuval Dvir, Global Head of Business Transformation at Skype discussing the company culture. In addition to this we have a report on the presentation from Josh Grau, Director, Brand Strategy, EMEA, at Twitter given at the Chief Strategy Officer Summit in London.

ghill@theiegroup.com

George Hill Managing Editor

If you are looking to put your We also look at how Cancer products in front of key decision Research is creating strategies makers, Contact Hannah at to beat cancer, how Sky News hsturgess@theiegroup.com manages to keep churning out for more details. stories 24 hours-a-day and what

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Managing Editor George Hill President Josie King Assistant Editor Simon Barton Art Director Gavin Bailey Advertising Hannah Sturgess Contributors Michaela JefferyMorrison Catherine Jackson Yuval Dvir Phil Rist General Enquiries

ghill@theiegroup.com

Advertising Enquiries hsturgess@theiegroup.com


Contents

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Contents

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Simon Barton talks to Nick Grant, Director of Strategy at Cancer Research about new strategies in fighting cancer and creating the best conditions for innovation Phil Rist talks us through the art of Big Data and how companies should be utilising it more effectively With news channels now running 24 hours a day, Catherine Jackson looks at how Sky News is keeping up with the increased demand for stories We talk to Theresa Austin, Senior Strategic Program Manager at Net-A-Porter about the international success of the online fashion retailers As Twitter continues it’s huge growth, we report on the presentation from Josh Grau, Director, Brand Strategy, EMEA at Twitter from a recent summit Samsung are now seen as one of the biggest companies currently working in technology, how have they gone beyond innovation? Yuval Dvir, Global Head of Business Transformation at Skype talks us through the culture of innovation at the company

GOT SOMETHING TO SAY?

We are always looking for new contributors, if you have an interesting idea or passion for a subject, please contact George at ghill@theiegroup.com


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Cancer Research

The Strategy To Fighting Cancer Simon Barton Assistant Editor


Cancer Research

cog in Cancer Research’s engine. There are a lot of people out there that want to give to charity, but it’s a very emotionally driven process that requires inspiration and ultimately an easy method. In that sense it’s not dissimilar to conventional consumer marketing strategy. You need to build brand awareCancer research operates in the ness and engagement, develop UK, a country where 1 in 3 peo- a product set that meets the ple will be told they have the dis- needs of your target audience, ease at some point during their and develop effective marketing lives. In fact, cancer rates there campaigns through a range of have increased since the mid- channels. 1970’s, a development that has Nick says; “At Cancer Research been fuelled by an ageing pop- UK, we are lucky enough to have ulation and in some instances, a a broad portfolio of fundraislack of education on how to de- ing “products”, from sponsored cipher the warning signs quickly. events to a retail chain of 600 Cancer Research has been with shops and this helps engage a us since 2002, making real pro- broad range of the UK populagress in the UK. They lobbied tion”. For Cancer Research long for the Smoking Ban that came term thinking is also important into effect in July 2007, which and can account for about a stopped people from smoking third of their income. Their long inside public places. The ban term approach means that conhas impacted hospitality work- versations have more gravity ers and children significantly because there is a chance in forthrough the decrease in second ty years time that the person you’re interacting with will hand smoking. leave a substantial donation I spoke to Nick Grant, Director in their will. of Strategy at Cancer Research about how strategy works in an They also operate in a organization whose importance highly cost constrained goes far and beyond profit and environment. A traditional business might loss. operate with an Going beyond the #nomake- operating margin upselfie campaign, fundraising of 5-10%. Cancontinues to be the most vital cer Research’s Cancer continues to be one of the world’s most potent diseases. Each year around the globe, 14 million people learn they have the disease and 8 million die from it. These figures pack an even harder punch when it becomes clear that a good proportion of these deaths are preventable.

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Cancer Research

fundraising division needs to operate at a margin of better than 80%, ensuring that 80p in every £1 donated goes to fund research. That’s why digital media can play such an important role for them; as it allows for interactive communication with their supporters at a fraction of the cost of traditional channels. Nick says; “We have over 8 million unique visitors to our website per year and close to a million followers on social media. We’re seeing a wide range of innovation in the sector in the digital space as charities increasingly take advantage of this” The #nomakeupselfie was an incredible but completel y unexpected phenomenon for C a n cer Research UK. It wasn’t something they initiated, but it was a trend that they spotted early, reacted to quickly, and benefited from enormously, raising over £8 million in just 6 days. Nick says; “We learnt a lot about the unpredictability of internet trends in the digital era”. Everyone now knows how important it is that you’re reactive, authentic and highly interactive with the public in response. Sadly, it’s impossible for Cancer Research to tell whether a phenomenon like this will happen again, but one

thing’s for sure, they’re set up to respond to trends like this when they happen making it as easy as possible for people to donate. Despite being a not-for-profit they interact with their audience in similar ways to for-profit organisations. They use the same media to communicate including TV and radio advertising, mail and email communications, telemarketing, face-to-face engagement and social media. However, there are two significant differences, both of which are becoming more accentuated. Firstly, they have to operate at a fraction of the cost of for-profit businesses. They do this by making extensive use of digital channels whilst also getting discounted and pro-bono rates on media placement. They also communicate through consumer facing corporate partners. For example, Tesco have been their partner for Race for Life for many years and helped them access their customer base in stores and through other channels. The second is that Cancer Research’s relationship with their audience is highly interactive. They try to engage face-to-face with their supporters and volunteers wherever possible, and social media has given them the opportunity to do this online. Any one of their posts on


Cancer Research

Facebook will receive thousands of comments in response, so as Nick says; “we can engage in a very active dialogue”. They launched their new strategy in early May, and it comes at a turning point for Cancer Research, when for the first time, 50% of people diagnosed with cancer now survive for at least 10 years. Nick expresses his goals by saying; “The ambition behind our strategy is to increase this to 75% within the next 20 years half the time that it took for us to get from 25% to 50%”. The core of this is an ambitious research strategy, which will see them increase their research effort in cancers where survival rates are very low such as lung and pancreatic cancers. Additionally, they are also investing in finding new ways to diagnose cancer earlier. “The more we understand about cancer, the more complex we realise that the disease is, but there are lots of promising areas of research underway which will continue to drive up the survival chances” expressed Nick. Thankfully, they have had a very positive response to the strategy from the public, their staff and their researchers, giving them a lot of confidence that together they’re on the right track.

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Innovation

has been a buzzword for quite some time, encompassing everything from product development to entrepreneurship. In today’s business environment, it is imperative to remain agile, improving products and services to suit the ever-changing customer demands. With the rise of the Chief Innovation Officer role, and increasing amounts of dedicated innovation management executives in the corporate world, it is apparent that innovation as a business process is taking centre stage. Following the change of social attitudes towards collaborative consumption and lean approaches, companies are starting to embrace Open Innovation. Working directly with their clients, suppliers and stakeholders, many corporations like Clorox, Eli Lilly, P&G and more have developed OI programmes to help them utilise the full potential of their networks. Entrepreneurship as the new corporate ethic is penetrating the fabric of business values. Coca-Cola is just one of the companies who actively encourage their employees to adopt an enterprising attitude, start new projects and ideas, collaborate with cross-departmental colleagues to build new ideas from the ground up.

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Another emerging approach gaining momentum fast is working with early-stage startups. As an ‘outsourcing innovation’ approach, it allows large corporations to significantly lower their R&D expenses, decrease potential risks inherent in innovation, increase their speed to market, improve the quality and quantity of new products or services, as well as contribute to the growth of their local economy by supporting young companies. Mondelez run a Mobile Futures programme, where consumer startups get an opportunity to partner with a leading brand, to deliver and scale a pilot product in 90 days. American Airlines have been partnering with startups and providing a platform to test their products and boost brand awareness through airport lounges, onboard magazines and customer feedback surveys. General Motors, and others like AB InBev, Nestle, P&G etc have set-up dedicated west coast innovation labs. From incubators and accelerators to innovation labs and garages – the methods of engagement are truly vast. Fresh innovative ideas of startups, paired with resources and delivery expertise of corporate giants really do make for a power combination. It is a win-win approach all around, and one that we can expect to grow significantly over the coming years.


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AD


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Art Of Big Data

The Art of Big Data Phil Rist EVP, Prosper Insights & Analytics


Art Of Big Data

Big Data is the cure for all that ails your business; at least that’s what the medicine man with a bottle of Big Data tonic in hand would have you believe. The promises of its capabilities are everywhere you turn. But many of the articles and webinars toting Big Data potential are either supported or funded by large digital consultancies, venture-backed Big Data firms that want to go public, or software or hardware firms looking to sell you their services and training. Regardless, all the hype is resulting in a frenzy around the

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powers of Big Data. If senior executives don’t take a rational, strategic approach they could risk losing millions and possibly their jobs. Three-Pronged Approach Big Data Success

To

Real business solutions from Big Data need to be more strategic and derived from analysis of several data sets to discover “unknown knowns” necessary for success in making business decisions. 1. Data Sourcing The first prong is data sourcing. Data, whether big or small, is not created equal. The Futurist says that Big Data is a big opportunity but warns that it is “useless” without the ability to “collect, analyze and execute on it.” Sourcing data should go beyond capturing Google trends or Twitter feeds. A narrow focus on digital data streams will provide a narrow view of your business. Often, such data is from an unverified source and requires assumptions for decision makers to use it. For the bigger picture, smart marketers tap into the large amounts of publicly available data provided directly from consumers, via governmentt


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Art Of Big Data

sources, survey data and transactional data (first party data). It’s about sourcing smart data that can be used to drive strategic solutions. 2. Skilled Human Resources The second prong is skilled human resources in both technology and marketing. Some companies may think that licensing software, along with a wish and a prayer, is enough to succeed, not realizing that the staff may not be equipped to actually implement it. They don’t have the knowledge or experience to source and analyze smart data and actual data scientists are hard to come by. Companies need to make sure that industry experts are involved in the process so that Big Data initiatives solve business problems and not create new ones. 3. Analytic Applications The third prong involved is embedding the human expertise and data sources into software, creating problem solving applications. These apps need to address identified core business problems and create outcomes useful for the business as a whole. Smart data analytics are designed to take the complexity and chaos of Big Data and turn it into clarity for decision makers. By combining these three components, business organizations can create a competitive, stra-

tegic advantage. We all know that timely and accurate business intelligence is key to winning competitive battles. Thousands of years before Big Data, renowned military strategist Sun Tzu understood the power of predictive analytics. In the chart below, I added my 2014 translation.


Art Of Big Data

Sun Tzu and the Art of Predictive Analytics “Now the elements of the art of war are first, measurement of space; second, estimation of quantities; third, calculations; fourth, comparisons; and fifth, chances of victory.” (Samuel Griffith’s translation of Sun Tzu’s Art of War, Chapter IV, verse 16) These elements can be applied to a company’s marketing plan, which essentially is the ‘battle before the battle’. Bottom line Marketers can create a strategic advantage by harnessing smart data and creating business intelligence applications that will help guide their company in battle. Don’t make the multi-million dollar mistake of building a gigantic warehouse of useless data. Focus on identifying, gathering, correlating and analyzing the right data to help your business grow. It’s not the size of the data; it’s the power of the algorithm.

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24 Hour News

How Strategies In 24 Hour News Relate To Business Catherine Jackson Director, Chief Strategy Officer Summit


24 Hour News

If you have ever stepped inside a busy press office before you’ll know there is a sense of urgency that a normal office could only hope to replicate. With stories unfolding on some of the world’s most important issues on a regular basis, snap decisions have to be made quickly, so that Sky News can guarantee the public that the news they are reading is both up to date and above all, factually accurate.

and a boardroom. “You have to operate on gut and instinct and you have to go for it”. This is one of the major differences between businesses and newsrooms, businesses are increasingly looking to move away from intuition. One of the reasons why we have seen the rise of analytics and Big Data. CEO of IBM, Ginni Rometty expressed her opinion on initiative by saying; “When we make decisions by gut instinct, we often make the wrong ones”.

Nick Herm, Chief Operating Officer at Sky News, recently spoke at The Chief Strategy Officer Summit in London, giving us a fascinating account of how he sees decision making in the newsroom and how key learning’s can be directly applied to strategic planning processes within a more traditional company. The active encouragement of inNick began by showing us a quick itiative in newsroom decisions is two-minute video where a jour- not born out of choice; it’s born nalist was risking their life to get out of necessity. Nick mentions real-time footage of a war zone. a story from 2007 where one of It showed the crushing realism of the news editors at Sky had to modern day journalism– a dan- make a snap decision regardgerous, terrifying world which is ing the status of Benazir Bhuseemingly more akin to that of a tto who had served as the 11th Prime Minister of Pakistan. With solider than a journalist. “No matter how bad your day or reports of her critical status afmeetings are going, it’s unlikely ter an attempt on her life cirsomebody is going to shoot at cling, Sky News had information you” says Nick. For him, the fast- that she had died. paced decision making demonstrated by the journalist in the video is indicative of the diverging strategic mainframes that separate that of a newsroom

The editor was left in two minds; stick, and risk being seen as a secondary source of information or twist, and be the first channel to put the content out. With

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24 Hour News

are more inclined to murder? In 2013, it was estimated that for every 100 residents in the US, there are 89 firearms which is a remarkable amount of potential One plus point is that feedback murderers, if this were the case. is quick, and in recent years has Nick recognises this, “we got the become even faster with the rise footage of him on the shootof social media. Nick explains ing range, which on one level that in a more traditional busi- showed that he loved guns but ness context; “you might make a by the same token you could strategic decision and then not say that if you got some footknow until 1 or 2 years if it was age of some young lads on a the right one” – for the members stag-do they’ll look the same - it of a news team this process can doesn’t mean they are capable be as quick as a couple of min- of murder”. It’s a very pertinent utes, a couple of minutes that- example because it shows how can make or break an editors one quick decision can shape a person’s life, and public percepcareer. Nick talked us through a number tion of whether Oscar Pistoriof different cases where the im- us is guilty of murdering Reeva p o r ta n ce Steenkamp. Ofcom often hot on their tail, releasing incorrect information brings a number of hefty financial fines and more importantly, a loss of reputation.

of quick, reliable decision making was paramount to Sky New’s reputation, and none were more topical than that of a video of Oscar Pistorius at a shooting range. They were the first organisation to run the video, but before releasing it they were facing a real dilemma of intent. Does a video like that distort reality? If you like guns does it mean you

E-mail has almost overtaken direct speech as the primary form of communication, especially in larger organisations. People like to have things ‘in-writing’ to allow for reminders and feedback loops. This isn’t always possible in a newsroom – communication is direct and face-to-face, using normal language that can be easily transferred into actions and quality, accessible content.

Despite there being real differences between the two arenas, it doesn’t mean that similarities between the two don’t exist. Much can be learnt from the quick-fire decision making processes in the newsroom. For Nick, there are “five valuable


24 Hour News

According to Nick, “Sky News is about telling stories and telling them truthfully and using the facts”. Their decision-making principles are without doubt transferable to a strategist’s world. The main point behind Nick’s presentation was to show To guard against this you need to that keeping things simple can get your facts right and use nor- be a competitive advantage mal language that keep people improving communication , deinterested and involved in what cision making and speed of you’re saying – and most impor- process throughout the organitantly keep everything succinct. sation. Nick says “when you’ve next got to present in front of an executive and you think that half an hour is too short, this is going to be difficult, think about a news correspondent that has to say everything in two minutes”. For Nick, keeping everything short and sweet makes everything more understandable. lessons from the newsroom” – all of which can help strategists make positive decisions. Firstly he says; “The average executive that you are presenting to on a strategic plan is about as impatient as a member of public that is sitting at home.”

Check and question your sources and make sure that the information you have is accurate and applicable to the strategic decision you are undertaking and never be afraid of questioning something if you are not totally confident in the source.

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Digital Strategy Innovation Summit #DigitalSF

Digital Intelligence

September 25 & 26 San Francisco, 2014

For more information contact Zain Yasin +1 415 992 53 52 zyasin@theiegroup.com theinnovationenterprise.com/summits

ie.


Net-A-Porter

Strategy In Fashion at Net-A-Porter Simon Barton Assistant Editor

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Net-A-Porter

In the early part of the 2000s London became the fashion capital for online retailers, with both ASOS and Net-A-Porter starting their journey to success in the heart of the city. Since NetA-Porter’s launch in 2000 they have become an established luxury brand, with a customer centric approach which has seen them attract 2.5 million hits per month from a predominately female demographic. Their success has meant expansion into the US and Asia with an East Coast based division opening up in 2009 to extend brand reach. For some of us 2.5 million hits is a relatively small amount, but Net-A-Porter’s success is not defined by volume, as with all luxury brands, they’re about high-margins. When compared to traditional bricks and mortar stores their level of over-

heads is relatively small, meaning that their value capture is impressive. This strong presence online has seen them become a heavyweight player that offers unrivalled customer care. If you were to log onto Net-APorter’s website you could be forgiven for mistaking them for a fashion magazine, which in a sense they are, with publications released on print and online. The print magazine, entitled ‘Porter’ was first released in March this year and gives Net-A-Porter and their customers another avenue for communication. I was lucky enough to speak to Theresa Austin, Strategic Programme Manager at Net-APorter. She has been an important cog in their team for 5 years and has been responsible for the delivery of a number of successful projects across several departments. Theresa shared with me her insights into how the company plans to grow, whilst also retaining its front-runner position in an increasingly competitive industry. As with most successful companies, Net-A-Porter has innovation at its heart. They are fully aware of the implications that avoiding change can have, and the effects this has when interacting with their customers. As Theresa says; “Our raison d’être is to develop new opportunities through disruptive techniques”. An admirable approach and


Net-A-Porter

one that has ultimately paid dividends, their initiatives are often ignited with emerging ideas and flourishing technologies. Success is very much a function of success at Net-A-Porter. Their desire to put the customer first has served them well and they see it as a fundamental philosophy for their future. This customer-centric approach is then joined by two other philosophies that serve as the basis for Net-A-Porter’s innovative culture. The workforce needs to be pushing boundaries and working to the best of its ability all the time; it can’t stay static for one moment, or the company risks losing its innovative edge. Collaboration is also key – ideas need to be shared so that employees and management get the best out of each other. This is both a competitive advantage and a challenge, but a challenge Net-A-Porter is willing to embrace. Theresa states “The real challenge is finding growth and coordination mechanisms that allow us to develop high proficiency and efficiency in foundation areas of the business, such as Operations and Customer Care, whilst supporting swift and open-minded changes in more innovation driven areas like Marketing, Data Insight and Mobile.”

The trick is to find the balance between innovation and perfection; Theresa is therefore focused on building systems that ensure both efficiency and flexibility. As a catalyst to this and to balance the disruptive nature of innovations, Net-A-Porter has implemented SCRUM and Lean processes to accelerate communication and decision-making. Net-A-Porter has an international reach, serving different cultures and expectations constantly. A one-size fits all strategy of communication just wouldn’t fit in with their philosophy as a company, meaning that strategic decisions have to be adjusted so that they’re in line with the specific customer base they are interacting with. NetA-Porter excel in this area and have had a lot of success with the prompt nature of their international deliveries. Fashion changes all the time, and for those of us who are lucky enough to travel, you’ll know that style changes from city to city and country to country. But some things remain timeless, regardless of who’s being targeted. ‘Karl Lagerfeld is Karl Lagerfeld, a red-soled shoe is a red soled shoe and great style is great style no matter where you are in the world’ says

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Net-A-Porter

to build unique sales channels, which affect the profitability of the company directly. E-commerce is an arena that is ever evolving, and one that is strategically intensive. Digital platDespite a willingness forms play an essential role in development, to create and imple- Net-A-Porter’s more so than traditional comment new strategies, boundaries still remain. panies, and as such the business Getting buy-in for new will always be in a constant state strategies comes down of change as they seek to stay to one thing for board ahead of the digital evolution level executives, ROI. curve. Their collaborative style Dollar value needs to of management opens the way be articulated against for an abundance of new, innothe strategy’s ability vative ideas that will see Net-Ato shape the compa- Porter maintain their position as ny from top to bottom. a competitive, pro-active comStrategies also have pany with a fruitful future ahead to be backed by indi- of them. viduals who are passionate about their implementation and understand how important a strategy can be to the success of the company.

Theresa. Net-A-Porter uses this to their advantage and when paired with tactical execution by regionally focused Marketing teams, topline strategies see good results.

Far from being a hindrance for Net-A-Porter, the digital landscape is their native environment, without which they would not be able to engage directly with their customers. It has allowed them


CHIEF INNOVATION OFFICER NEW MAGAZINE COMING SOON

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Strategy At Twitter

Strategy At A 160 Character Company Michaela Jeffery-Morrison Creator, Digital Strategy Innovation Summit


Strategy At Twitter

was subject to a subtle change at the turn of the year, building on the overhaul of the site in August 2013. These changes were all about the ‘feed’ and how people interact with the flow of information around them. Users are only subjected to relevant Some of the statistics picked content that strikes a chord – inout by Josh were astounding spiring them to share, comment and equally mouth-watering and favourite on posts which all for the strategists who were in contribute to a wave of relevant the room. There are 255 million information that comes crashmonthly active users on Twit- ing through your feed. ter and over a billion registered. Stanley MilJosh made reference to Twitter ligram conbeing ‘The Pulse of the Planet’ ducted an on numerous occasions, an as- experiment sertion that many could argue looking at with nowadays. Whilst many used to opt for BBC news or CNN to get ground-breaking news – Josh informed us that “over 50% of users say that Twitter gives them the latest news faster than any other source”. Twitter paints a real time POV of the worlds most colourful and dangerous events, from an angle that even the most industrious journalist would fail to deliver on. Josh explains that “Twitter creates a bridge between the pulse of the planet and what interests us most”. As the world unfolds around us, Twitter moves in real-time with it. ‘Marketing Moments’ circulate like wild fire across the channel, aptly named “the wild, wild west of the Internet’ by Josh Grau, Director of Brand Strategy at Twitter.

“Twitter is the indispensible companion for life in the moment” says Josh, and as the pulse of the planet it is open to learning new things and developing in line with its users needs. The user interface

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Strategy At Twitter

the ‘The power of the crowd’. The concept of the experiment was to see how crowds affect people and to see if individual decision-making was altered. Milligram put one person at the end of a path and got her to look up to the sky – this made 20% of passers-by follow suit. Once the crowd had increased to 5 people, 80% would stop and look up. This chain has been replicated on Twitter time after time – 1 person makes a reference to something and then it explodes as the crowd of people paying attention continually increases. The UK version of ‘The X-Factor’ was used by John to showcase how Milligram’s experiment applies to Twitter and how an obscure reference point can spark conversations. One user tweeted a comment about how she found Sharon Osborne’s laugh infectious, one of her followers then commented on it, until, as John puts it “a tsunami of activity happens”. This influences people to tune in – and for marketers these are the best moments to interact, when your show is trending and hot on people’s minds.

been the global town square for big news events” However, People often forget that Twitter isn’t just about big events like the Arab Spring and the Oscars, where users interact but rarely get that personalised sort of communication that turns their In a recent blog the people at status from ‘viewers’ to ‘particTwitter thanked their UK users ipators’. Personalisation is the for their service by saying; “From key for strategists. the Champions League Final to It’s an important distinction to the Queen’s Diamond Jubilee, make, and for strategists the the announcement of an upcom- more ‘participators’ you have, ing Royal Baby or the retirement the more likely it is that your of Sir Alex Ferguson, Twitter has customers are entwined with


Strategy At Twitter

your vision as a brand. One of John’s friends tweeted that she had lost her keys; a company that specialised in finding lost keys later targeted her with a personalised message. It’s remarkable that companies can now just surf twitter and find customers instead of waiting in their shop hoping someone near them requires their service. Josh poses the question of “How do marketers strategically find the right moments to connect?” The people at Twitter also know what their users are going to be talking about at certain times during the week. “All of us are probably guilty of proclaiming either publically or privately that we’re going to start to work out” says Josh. If you want to get back in shape then on Monday you’re likely to be fresh after the weekend and committed to a workout plan. Fast-forward four days; you’ve had a hard week at work and your enthusiasm for the running track has almost completely petered out. Twitter know this by how ‘hot’ a conversation is. On Monday feeds are awash with running talk – and this is when as strategists you need to target your consumers, as a Tweet on Friday will reap far less benefits than one earlier in the week. Instant gratification is also imperative; there is no point in responding to a Tweet that’s five months old because the interest

has gone, and often the original context in which it was sent. Josh recounts a story when he had a Tweet re-tweeted which was 6 months old. He found this strange and didn’t really care about it, as in his eyes, it was old news. “It’s a lie that just being on Twitter brings success,” says Josh. However, The World Cup in Brazil is going be huge and with Twitter’s presence on mobile the content we could see should be really exciting. Josh recounts a good example of this by saying “Arby’s took the time to see the connection between Pharell’s hat and the logo of their brand”. Pharrell’s oversized hat at the Grammy’s was a shining example of how clever, innovate tweeting can propel you as a company. Arby’s, a sandwich chain in the U.S., tweeted “Hey Pharrell, can we have our hat back? #GRAMMY’s – this in reference to the similarity between their logo and his hat. It garnered 81,752 re-tweets. This is a perfect example of how making use of real time can make you relevant in the Twitter world and I am sure there will be plenty of examples of this at the World Cup finals in Brazil.

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Strategy at Samsung

High Tech Strategies At Samsung George Hill Managing Editor

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Strategy at Samsung

When some people use the term ‘innovation’ It is often confusing. It’s become such a common utterance in the tech-world that many of us see it as some sort of code used by companies like Apple and Google when they’re coming up with ideas, or a free pass used when an official is quizzed on something that he has little knowledge on. “People are bored of the term innovation,” says Luke Mansfield, Head of Product Innovation at Samsung. Buzzwords like it, for some, have become tedious, but is its slow slide into indifference actually a result of us not opening our eyes to good innovation? Luke claims “There’s too much bad innovation that gets all the press” so perhaps it’s more that we get side tracked into believing that inno-

vation is a hindrance rather than a competitive advantage. Innovators frequently tout ‘Creative destruction’ through innovation, as an important force, but as Luke says; “Nobody wants destruction, especially if you’re the person who has to destroy a million dollar investment, you’d rather someone else does it”. Although innovators readily embrace creative destruction, they hope and pray the responsibility doesn’t fall at their feet. This is understandable, especially when consumer reports come out all the time informing us that the “world hasn’t changed that much” and that although some of the findings are noteworthy they only ever evoke interest, not a desire to go into work the


Strategy at Samsung

following day and destruct your company’s processes. Often this isn’t due to a lack of enthusiasm on behalf of the employees but because there just isn’t enough time to react. Luke says “people don’t want to destruct because according to the reports the world hasn’t changed that much, so why should I change the way I work if I don’t need to?” Experimentation is often deemed the crux of innovation, as by its very definition it’s about finding something new from experimenting with existing components. For these innovations to be enduring they must be conducted on a level p l a yi n g field where b i a s doesn’t distort reality. U n fo r t u n a t e l y, experiments that don’t distort reality are hard to come by. Luke refers to the Milgram experiments in 1963 where subject’s ability to conform to authority was tested by them administering electric shocks to people when they answered a question incorrectly. The power of these electric shocks would progressively get worse and worse until they

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reached 450 volts, a potentially fatal dosage. The findings showed that 30% of the subjects were willing to administer 450 volts – which on the face of it is shocking. Fortunately, the retro-analysis was far more interesting as it showed that by its very nature the experiment was inherently biased. Luke asked the people in the audience to put their hands up if they would have liked to have taken part in the experiment – one person puts his hand up. Luke goes on to say “You’ve basically, through the very design of your experiment, selected for sadist’s” which turns the result on its head, as it’s now actually quite surprising that only 30% administered the electric shock. These types of biases are commonplace with consumer-based research techniques. If you were to ask your next focus group how many of them had taken part in something similar, chances are most of them would put their hand up, according to Luke, this is when they cease to be useful as they’re not normal consumers, they’re on the lookout for faults and fail to see a company’s products through unbiased eyes. “In the corporate world we get one shot, in academia you can have 24” says Luke. There is no room for failure, and the notion of ‘embracing failure’ doesn’t sit well with Luke. If something fails, it can take years for it to be


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Strategy at Samsung

up for consideration again and poor research can be the catalyst for this, turning a good idea into a disaster. Getting innovation up and running in a tech company is about processes and experience. Often people get hung up on processes as they have a financial value, but for Luke experience is what counts. You need people that know and understand innovation and people who can spot it throughout a number of industries. Finding these types of people is like looking for a needle in a haystack, and incredibly expensive. That’s why the answer lies in data. “At Samsung we don’t like the term Big Data,” says Luke.

Value is not in quantity but in quality, if a dataset is large, then chances are it is not exclusive and unlikely to garner innovative responses. It’s about piecing together unique sets of DNA that offer up serious opportunities for innovators. There are now three different ways in which data is used at Samsung to foster innovation. “We’ve stopped talking about consumer research and we’ve started talking about consumer experiments” – this is done by using the tools of consumer psychology. This allows them to take the most seasoned researcher and get unbiased results – there are three methods; deprive, substitute and saturate. Chances are one of them will play havoc with their researchers lives. Take saturate for instance, you give somebody with a large family three washing machines instead of one, it’ll give them back about 20 hours per week, that’s a tangible benefit that sells products. Samsung did a similar experiment with their new smartphone, but this time using the substitution method. They took away the modern smartphone and exchanged it with a feature phone. One uniform response


Strategy at Samsung

came back; the battery life on the older models was much better. After getting these results, Samsung incorporated an “ultra power save mode” which gives you 24 hours extended battery life when there is 10% left. When testing concepts companies need to do more to walk their customers through the process and allow them to ask questions. If these questions are answered and yield a positive response, then through data, Samsung can determine where they need to improve. After a product has been launched, Samsung measure the ways people are engaging with it. There are patterns for successful products and less successful one’s. When the results of Samsung’s strategic experiments are laid out like this it makes the innovation ‘pill’ easier to swallow for investors as they have a clear indication of how the product is going to fair in the market. Samsung are looking at new ways they can use research to be innovative. They pay a lot of attention to getting unbiased results and have disrupted their research process significantly. Through the eyes of the people at Samsung ‘innovation’ is not a null point, it just needs to be reassessed and delivered differently, especially in the tech industry where change is so rife and constant. One sure thing is that innovation is still a part of tech’s leading star’s strategy.

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Strategy At Skype

Getting Technology and Strategy to work together at Skype

Yuval Dvir

Business Transformation Head, Skype


Strategy At Skype

In one of his famous quotes, Steve Jobs mentioned that you need to start with the customer experience and then work your way backwards to technology. While many business leaders would wholeheartedly agree with that strategy, getting it to actually work is the challenge facing organizations these days. This challenge stems from the multiple business and human aspects (transparency, motivation, collaboration, etc..) an organization needs to address in order to successfully and efficiently grow in harmony. And that was indeed the key challenge I faced, going into the role of Business Transformation Head at Skype. To visualize the challenge I had, I often illustrate a set of puzzle pieces. Each piece represented a key element or business principle I had to address. Some pieces were already there, some pieces needed fine-tuning and some pieces were missing altogether. In order to complete the puzzle and create a coherent organization that work well together, I needed to ensure the pieces were present and positioned in the optimal place. The change required in this process included a balancing act. Between strategy and execution, between technology and business needs, between corporate control and innovation and others. To get started, I needed to build

a team that could exemplify the vision we had for the organization and be agile and adaptive, so when the inevitable changes in the organization, strategy or market arise, we could respond swiftly and calmly. No sooner than we had started, the landscape started to shift. The acquisition and integration with Microsoft, a merged division with Lync, a functional re-org in Microsoft, the prolonged CEO search and multiple personnel moves had significant implications for us. Think about connecting those puzzle pieces while in an air force jet doing constant loops in the air. So how do you get it to work? Let’s look at Strategy first. Strategy starts with being able to be decisive and clear about the choices or bets your organization takes. Choices that have been adequately analyzed, modelled and their potential implications discussed. An important first step but not enough. The business scene is littered with the ruins of strategies that looked good on paper but failed the test of execution. To address this or VUCA, the acronym for volatility, uncertainty, complexity and ambiguity businesses are facing today, the strategy needs to be more agile and adaptive

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Strategy At Skype

Data helped us get closer to our user as with more than 300M customers worldwide, one of the With this mindset, primary ways for communicathe strategy can tion is via metrics, metrics that become more real represent value to our users. to employees and can The needle on the metric would even be leveraged to promote indicate the customer satisfacagility and strengthen this ca- tion from our product and enapability in the organization. This ble a fact based holistic view of encapsulates the evolution from the business. But data can go learning to plan, to planning to well beyond that. Properly delearn as Rita Gunther McGrath, fined metrics can enforce rigor in a Columbia Professor, states our employees to focus on value in her books. That approach adding activities, it can provide helped us instill the idea of being context to everyone on how their able to change at a moment’s work impacts the customer and notice without losing the overall the overall strategy of the firm, and with the right balance bepath of the strategy. tween risk and investment, it Now we can review the technol- can actually promote a culture ogy aspect. of innovation via experimentaTechnology is what makes many tion metrics alongside trial and people excited. Especially en- error activities. gineers. From what I’ve seen This brings us to what essentially in my career, many engineers is the glue that makes everything have a natural bias to talk first stick. Culture. about technology. In many cases that becomes the essence Organizational culture is how we of disruptive innovation. In oth- work and align as a business. er times, however, the custom- What are the social and behaver sometimes gets left out and ioral norms that are accepted in we end up with products, ser- the organization and are previces and ecosystems that are dominately present? Do peonot fully embraced and adopted ple come to meetings on time? by their intended end users. To Is strategy being followed and help bridge that gap and strike understood by the employees? the right balance we used Data. Is change embraced or unwelAn essential element that ca- come? ters to both the technology and In short, culture can be illustratthe business savvy of the group ed by where your organization is and is available and very useful placed on the different ranges of the tensions we have in the if used properly. to enable the planning and execution phase to succeed.


Strategy At Skype

business. Is it completely entrepreneurial with no structure or adherence to an overall strategy? Do people take measurable risks for innovation or prefer to remain conservative and have a business as usual mentality? To hit the right balance in the organization, to ensure that strategy and technology are symbiotic with one another, a mature culture is important. The right culture can provide the supportive business infrastructure on which great ideas, great talent and great technology can excel in and on which the future success of the organization ultimately depends on. To get there requires leadership, patience and conviction that the pieces of the puzzle will eventually connect in this journey and work together to create those products, services and ecosystems customers would love and pay for.

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Chief Technology Officer Summit 38

November

12 & 13 Miami, 2014

“Harnessing Technology, Driving Innovation�

For more information contact Sean Foreman +1 (415) 692 5514 sforeman@theiegroup.com theinnovationenterprise.com/summits


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Email dwatts@theiegroup.com for more information


Chief Strategy Officer, Issue 9