2018 – Trends and Predictions for a Turbulent Year in Marketing

A new year begins, and we all can have a fresh start. Now is the time to revise what we achieved last year. It is also the perfect time to take a look ahead and see what is on the horizon of marketing. There are many trends in online marketing right now. Artificial Intelligence, Marketing Automation, Organic Reach, Social Media, and Influencers are only some of those big lines coming up.

As digital marketers, we know that our industry is fast-paced and always changing. What is true today will already be old and wrong tomorrow. Effective marketing tactics underlie an increasingly short life cycle. That is the reason why we are reading all these blogs. We have to keep up with the latest trends to leverage the fantastic features of the digital technologies built by the startups and tech leaders.

2018 will be a turbulent year for online marketers. AI will challenge our jobs, new distribution platforms will arise, and with the GDPR, legislation will be causing a headache for all of us. Let’s take a look at what is coming up on the horizon for this year. Here are ten trends and predictions for a turbulent year in marketing.

Trend #1: Funnel Marketing

Prediction: Specialized automated tools will make the customer journey accessible

Marketing funnels have always been a thing. 2018 will be the year when funnel marketing will actually become a discipline. It has never been easier to measure marketing performance throughout the whole funnel—the awareness and retention stages will have a particularly significant impact on this trend. There will be specialized tools and startups entering the market to address this need. By the end of the year, every marketer will have a funnel visualization on the daily dashboard.

The one link you should visit: Search requests on Google.com for the term “Marketing Funnel”

Trend #2: Attribution 2.0

Prediction: Machine learning applications will disrupt our understanding of marketing efficiency

Attribution will make significant improvements thanks to machine learning applications. Finally, we will see promising approaches to in-depth analyses of mass media campaigns. We will not be ready to measure the impact of branding broken down to the single Dollar spent yet. But we will see this ultimate goal on the horizon of upcoming AI-powered reporting tools. Measuring and scoring marketing tactics will continue to grow in importance. Unmeasurable marketing tactics will face turbulent times.

The one link you should visit: Google keynote on Attribution innovations powered by machine learning

Trend #3: Data Nerds

Prediction: The market for marketing reporting specialists will skyrocket

Data-centricity has been elementary for the success of digital companies for quite some time. In 2018, marketing reporting will grow up. With whole new levels of insights offered on the predominant analytics platforms, there will be a growing need for specialists to implement proper tracking. Creating insightful reports and dashboards for a wide range of employees will be one of the most significant challenges in many companies. If you are a specialist in tracking and reporting solutions, you are facing a successful year this 2018.

The one link you should visit: Search for the term “Analytics Consultant” and check the CPCs

Trend #4: Online Education Platforms

Prediction: One player will become an authority for online marketing education and certification

Online marketing always suffered from a lack of proper education. The fast-paced environment makes it almost impossible for universities to offer meaningful degrees in this field. What is good practice in online marketing today may already be outdated by next year. The ever-changing field of online marketing is hard to seize in a traditional educational context. With digital education on the rise, in 2018, there will be one digital education player filling this gap. Someone will be taking over the status of a widely accepted authority in certification and education for online marketing. This player may be a startup or one of the existing companies on the market.

The one link you should visit: Check out the metrics of the search term “Online Marketing Certificate”

Trend #5: YouTube Renaissance

Prediction: YouTube will enter the battlefield of interactive social media and challenge Instagram

2018 will be the year when YouTube enters the battleground of social media. Although YouTube has always been a social network, its perception in the market was different. People recognized it more as a media distribution platform. At most end users, it was less known for its social features as commenting or liking. With significant changes to the mobile app, YouTube will enter into direct competition with Instagram. Short-form video sharing will become even more a thing in 2018, and YouTube will demonstrate its dominance in video as a media format.

The one link you should visit: Follow the YouTube blog and keep up with the news

Trend #6: Facebook Groups

Prediction: Facebook Groups will explode and become the most important source of organic reach

Last year, Facebook showed in some experiments that it would pursue a path of killing organic reach for businesses completely. We have seen a decrease in organic reach for years; now we have to face the challenge of finding alternative ways to distribute our content organically. The massive acceptance of Facebook Groups on the user side is offering excellent opportunities for marketers. This channel has been underrated for too long. In 2018, social media marketing will focus a lot on it.

The one link you should visit: TNW on the experiments of Facebook in Slovakia

Trend #7: Data Privacy

Prediction: The European Union’s GDPR will reward the best marketers above average

This year, the much-discussed GDPR will enter into force. Every digital marketer will feel its impact on her daily work. Customer data based marketing activities like remarketing, marketing automation, or newsletters will be affected widely. This is the chance for top-performing marketers to stand out. The ones who are the most creative and knowledgeable about their marketing channels will be rewarded above average. Poorly set up campaigns will start to fail and be blocked by data privacy mechanisms coming into effect.

The one link you should visit: HubSpot on the GDPR and the implications for the marketing industry

Trend #8: Marketing Automation

Prediction: Marketing Automation will take over the lower end of the industry

Marketing Automation will be directly competing with smaller agencies and freelancers on the lower end of the industry. Specialized automation tools are growing in the market. They are taking over smaller tasks in performance marketing, CRM, and social media. Already today, the owner of an online shop does not need marketing consultation anymore to do okayish marketing. In 2018, this trend will grow steadily. If you are a consultant in online marketing, it may be smart to ask yourself if your job – theoretically – could be done by a bot. If the answer is yes, do not lose time! Specialize further and identify something that you can be an expert in!

The one link you should visit: See how Kit is automating marketing for Shopify store owners

Trend #9: Chatbots

Prediction: Facebook Messenger will become the prevalent channel for interaction-based sales

The Facebook Messenger had already seen significant growth as a customer support channel last year. Many online shops are using it to communicate with their existing customers. Although Facebook Messenger chatbots are nothing new anymore, 2018 will be the year of heavy investing in interaction-based sales. More and more online shops will adopt this trend and implement Facebook Messenger chatbots in top-of-the-funnel activities.

The one link you should visit: Explore Facebook Messenger sales bot templates

Trend #10: Smart Assistants

Prediction: The platform battle of smart assistants will take off

The battle for platform dominance in smart assistants has already heated up in 2017. It is no secret that those assistants will evolve as the probably most important marketing channel in the upcoming years. Amazon’s Alexa seemed to lead the pack, although other players like Apple’s Siri were out there earlier. In 2018, Google’s Assistant platform will grow massively as result of smart hardware partnerships and multi-device integrations. All signs show that Google is lined up to replicate the success and platform dominance of Android. The platform battle between Amazon and Google will be one of the most heated discussions in 2018 to follow.

The one thing you should do about this trend: take your smartphone, open your Google Assistant or Amazon Alexa and become an expert in this field! As a marketer, you will be required to master this technology very soon.

Trend #11: B2B Marketing Revolution

Prediction: LinkedIn will become the buzz topic in B2B Marketing 2018

Influencer Marketing and Content Marketing have been there for quite some time, especially in a B2C context. In 2018, there will be a new form of B2B marketing taking off. Influencer Marketing agencies are entering the B2B market and will demonstrate how successful their marketing tactics can be in this field. LinkedIn will be the most important platform for this new format of B2B marketing. As marketers, we will read many articles on how to maximize reach on LinkedIn. Video as a post format on LinkedIn will also get more attention.

The one link you should visit: Go to Google Scholar and read a scientific article on B2B influencer marketing

Before you go…

Thanks for reading the ten trends and predictions for 2018. We do not know what is coming up or what will challenge us this year. But we do know that some obvious trends are heading our way. Let us face those challenges and plan for success in 2018. Make it a memorable year in marketing!

9 Questions to Get Early Traction for Your Startup

Every entrepreneur and startup founder raises the same question in the beginning: “How can I get traction?” The feeling of experiencing traction in the early phase of a startup can arise from many things: it may be numbers that express your rapid growth, customers who give you great feedback, accomplishing a first round of pre-seed financing, or making a big deal with your most important vendor. Traction can have many faces but in the end, it means the market starts to adopt your product or service. Through this adoption, your idea turns into an innovation.

So how can you generate this traction for a startup in the early days? What can you do to bring your solution into the market? How can you boost adoption and turn on the growth engine? Raise these 9 questions to generate early traction for your startup.

#1 How can I change lives?

The first thing you want to feel certain of is your startup’s vision. What is it that gets you out of bed every morning? Which problem are you addressing? How will you change the future of people? Talk with as many people as possible about your vision and refine it until you can convince people within 30 seconds. If you cannot explain your vision in a short soundbite, then you have to spend more time getting to understand it. Break it down, keep it simple, and make sure it is understandable.

#2 Whom will I help?

Knowing your target market is essential for generating traction. As a startup, you will initially target a small niche. Try not to only define your target market as a group of people, outlined by demographics. Imagine how your product or service is going to be utilized out there. In which moments does this happen? What is your target customer experiencing? Why is there a need for your solution? What attributes outline this moment when somebody checks in and needs your help? (Who? When? Why?)

#3 What makes me unique?

Your clear USP (unique selling proposition) helps you to stand out in the market. What is it that makes you different from the other solutions your target market currently utilizes? Do you have some exclusive new features on board? Do you save the customer time or money? Focus on creating unique awesomeness: build a really great product that incorporates at least one thing that nobody else provides.

[Tweet ““As a startup, you have to create unique awesomeness with your product.””]

#4 Who can help me to build my solution?

A typical behavior of us entrepreneurs is to try to do too many things by ourselves. We want to do it better and therefore we want to have our hands on it. That might not always be the best solution. Try to find partners and vendors for your product development. Aggregate the services of others, connect them in a unique way, and build something totally new out of this collaboration. This will help you to run on a healthy budget.

#5 Who can help me to spread the word?

Nowadays we can simply create a new product, build a small website, send out a few posts on Facebook and our sales will happen automatically. Right? No. Do not underestimate the effort it takes to make sure your target market really adopts what you have to offer. Partners and influencers can help a lot as they spread your message in a trustworthy way. A good network of partners will provide valuable support by leveraging your marketing efforts.

#6 Why should anybody trust me?

When people make a buy decision, trust plays an important role. Why should anybody trust your solution or you as the provider? Influencers, referrals, testimonials do a great job in building trust. What can you do beyond this to demonstrate that you are trustworthy? In a B2C setting, you may ask: Am I responding fast enough in customer service? In a B2B environment, you may ask a different question: Am I reliable in my business relations?

#7 How can I have more conversations?

In the early days of each startup, interaction is really what brings you up to the next level. Do not stay in your garage to tinker on your product for ages. Go out and talk to people! Actionable advice: create a simple landing page, mockup your solution, ask them to join an early access email list, and spread the word. Build your list of early adopters to connect and engage with. These contacts will help you in product development and marketing.

#8 Am I doing the right thing?

The further the progress in your path of launching a successful startup, the more decisions you will have to take. How shall you ensure that your decisions are the right ones? Also, you will often face times where you question if you are doing the right thing. Notably, the road to success is a turbulent one. Leverage your list of contacts to have as many conversations as possible. Ask for feedback and let them help you to make better decisions!

#9 How can I measure traction?

There is no success if you do not measure what you do. Define your relevant KPIs and have an understanding of what numbers mean ‘traction’ to your startup. Which are the key things to focus on and to measure your success? Set yourself goals and measure everything. The more numbers you collect, the better they can support your decision making in the long term.

5 Simple Rules for More Productive Meetings

Meetings waste too much time in our modern business world. Do you know that feeling of leaving a meeting without having accomplished a single thing? We meet way too often with too many people for too long, all while speaking about too broad topics.

Meetings have huge power. Being together in person helps us to push topics forward faster than any other way of communication could ever do. Especially in modern approaches of organizing a firm that aims to supplant bureaucracy with conversation, getting together in person is more important than ever before. The problem arises when we approach meetings without structure. Here are 5 simple rules that will help to boost productivity for your meetings.

#1 Stick to the plan

To run an efficient meeting first of all requires being prepared. Create an agenda and spend twice as much time on it as you normally would. If you then have your plan, stick to it. An efficient meeting requires a single facilitator who owns the meeting and the discussion. Do not allow people to wander too much away from the subject. Instead, refocus to the agenda and the topic. Also, do not allow people to hide behind their laptop.

#2 Plan outcomes

Preparing the meeting includes not only agenda creation but also a plan for specific outcomes. What do you want to achieve with this meeting? Which decisions have to be made? The more detailed you plan your desired outcomes, the more efficient you can structure your meeting. Build the agenda in a way that supports the generation of outcomes. When reviewing your desired meeting outcomes, you will also be able to review the purpose of the meeting. This is the right moment to question if you really need a meeting for solving this issue.

#3 Small wins

Many meetings simply involve too many people. The more people you invite to your meeting, the less productive it will be. This is simply caused by the fact that more people will join the discussion and more ideas will be in the room. This can be fine if you want to validate your ideas or need some brainstorming input. In other cases, you will just bust your efficiency. So simply reduce the number of attendees.

#4 Break the routine

If you do regular meetings like status updates or management weeklies, you will know that over time there evolves some routine. Every single time you go through the same agenda, you sit in the same room, and you see the same faces. This routine can be a real downer to your productivity as it kills your creativity. At some point, you will stop spending attention to the details, as everything is familiar to you. Try to break out of this routine by moving to different rooms, switching times, or bringing in some unexpected agenda item.

#5 Time matters

Setting a tight timeline will help to speed your meeting up. Keep it as short as possible, most things can be discussed in 10-25 minutes. Also, be timely and do not start your meeting 1 second late. Show respect to the calendar of others and again: stick to the plan. Take control over your meeting time and you will automatically start to approach meetings in a more structured way.

11 Questions to Boost Your Video Content Marketing

In content marketing, we want to create value. The magic happens when we start to publish pieces of content that do more than simply propagate our sales. In the end, it is about generating loyal fans who come back to what we create. These fans are a great source of inspiration for more content and they will also help to spread the word.

YouTube does a lot to help video creators to create better content. One of these efforts is the ‘10 fundamentals of a creative strategy.’ Below you’ll find these fundamentals made actionable and see that they are enriched by a new one. These rules apply not only to content marketing on Google’s video platform, but they also help to optimize your efforts in video content marketing strategy.

#1 How will anybody share this video?

A central part of success in content marketing is the power of word of mouth. By creating real value, you want to cut marketing dollars spent. Therefore, your content has to be optimized for sharing. Why should people share this piece of content? Do you provide them with the needed tools, e.g., share buttons? Do you proactively ask them for a share? What comments will people add when they share your clip?

#2 How do I talk to my audience?

A video is also a way to communicate. You as the sender communicate with a viewer, the receiver. Oftentimes we tend to use one-too-many (‘I speak to a group’) or even many-too-many (‘We speak to a group’) language in marketing. This kind of language will not make your viewer feel connected. Think more in a one-to-one conversation. Talk as directly as possible to individual viewers.

#3 Why should a viewer take action?

Shares, comments, conversations with viewers, likes – this is what really drives your video content marketing. When publishing a new piece of content, ask yourself the question: Why should the viewer take one of these actions? Why would anybody write a comment? Did you ask them to provide input? Do you interact with your audience in your video?

#4 What defines my content brand?

In video content marketing consistency is essential. You’ll want your viewers to build some trust in what you do next. Also having guidelines for what kind of content you want to create in what way will help to create a unique brand. Recurring elements can be titles, a strong show format, a regular upload schedule, and a consistent personality.

#5 Whom do I talk to?

When we create content, we usually start from what we are able to do first. As a company, you can only do authentic content marketing if you talk about what defines your brand. On the other hand, this oftentimes misleads us to forget to define a target group for our content output. Develop an understanding of who comes to your channel and watches your shows. This will help to provide inspiration for further videos.

#6 How can I do more of this?

In video content marketing, we usually spend a lot of time in creating many videos of average success. Once we have found a ‘hit show,’ we’ll want to replicate that. Therefore, it is important to be able to create sustainable content. A single massively expensive longform video is great but will not be the basis of your regular, routinized video content marketing strategy.

#7 Where does anybody discover this video?

We all have the dream of creating a piece of content, uploading it, and suddenly word of mouth drives millions of views to it. This will not happen. People somehow have to discover your video. Analyze search trends, optimize your video title, create content that can be found – because it is relevant to somebody now and here. Don’t stick to only one platform but chose your social networks according to your target audience.

#8 Who can understand this?

Especially in expert content, there is a tendency to forget that not everybody accessing your content is an expert. Without providing context, your viewers will feel lost. Make your videos accessible. Provide value to a new viewer in every single video. Do not require them to watch a full series in advance. It is all about grabbing their attention very fast. You can do this only by letting them understand what they see.

#9 Who can help me?

Too often we see our content strategy as unmated output. Why not collaborate with some other brands in order to see network effects boost your reach? Who could you ask to promote your videos? Who could you invite to provide some content for your show? Create a network of online brands in order to increase your visibility and create more valuable content.

#10 What inspires me?

Content marketing is a creative process. For creativity you need inspiration. Even if you have a great show idea today, at some point you will have to evolve. Keep your eyes open, search for inspiration, iterate on your existing content, and avoid creating videos only for the reason of a potential high click rate. Love what you do and your video content strategy will be authentic, provide real value, and own a high chance to be a success.

#11 How can I track my success?

Comments, likes, shares, retweets, sales, revenue, ROI… no matter what your KPIs are, it is important to have them in place. Without a clear tracking strategy, you will be unable to allocate budget efficiently. Also in content marketing, being data driven is indispensable. Define your KPIs, set goals, and develop an action plan.

What are your most important KPIs in content marketing? How do you put them together? Do you use a dashboard?

7 Questions to Shape an Effective Innovation Team

When managing any innovation project, organizing your team is one of the most important challenges you will face. No matter if you found a startup or drive innovation in an enterprise environment, it is always about orchestrating the talent of your team members in order to generate growth. The perfect organization of any innovation team is lean and simple. It does not block progress but unleashes productivity. Innovation never loves being constrained by too many rules. There are so many ways to organize your team, from controlling to participating, from autocracy to anarchy, from hierarchy to holacracy. This article aims to provide you with some key questions to raise in the process of developing your ideal form of organization. Answer the following 7 questions to shape an effective innovation team.

What is our ‘why’ and what is our ‘how’?

For an innovation team it is essential to share a vision. Without this common idea of a better future, there is a lack of orientation. In innovation we have to run many tests, we experiment with our ideas, and we pivot regularly. Oftentimes we spend days or weeks in creating something only to trash it in the end. This can be very discouraging if you do not know why you are doing what you do.

Based on the foundation of a shared vision, core values that are openly discussed will boost the productivity of every team. Just imagine a situation where you share a coworking space with a potential competitor. Imagine your teams sit together every day, share lunch from time to time, and of course, you are also exchanging information about your businesses. How do you act in terms of transparency in this situation? Does your team share knowledge or do you hide? Do you proactively help your competitor or do you only try to grab the best of their ideas? In this case, having defined a team value (e.g., ‘transparency and borderless collaboration’) will help your team to have a common understanding of how to act in complex situations.

Who owns the decision-making process?

Unclear decision-making processes are frustrating. You have an idea and it gets lost as nobody decides to realize it. You give your best for a whole day and in the evening, your team lead trashes all of your work. You are running a small innovation project and suddenly it turns out that you missed an opportunity to ask for feedback from some core decision-makers.

[Tweet “In an innovation team, it is important to have clear decision-rules that run fast.”]

In an innovation team, it is important to have clear decision-rules that run fast. You want to decide within minutes, not in days. Speed in execution is essential for innovation. The team wants to know who to ask for what. Decisions have to be consistent. Ultimately, your team wants to be involved and take some ownership of the decisions. Nobody likes to be bossed, especially the ones with an entrepreneurial spirit. If you want to run a truly effective innovation team, a transparent and participative decision-making process is inevitable.

What are the domains each team member owns?

Have you ever worked in a team where the manager decided on every single detail of your work? You had to get approval for irrelevant things and were not able to decide on your own? If yes, you will know that this kills your motivation and your productivity. On the other hand, a team where nobody is ‘the boss’ soon gets out of control. Things are done duplicate, you decide again and again on the same things, and in times of failure nobody feels responsible.

Giving people ownership of their domains will change everything. Let them decide and suddenly they are involved. This will not only help to raise motivation but also to speed up decisions. At the same time, somebody is finally responsible. You can set goals, clear expectations, and you know who to talk to, if things go wrong.

How do we structure our meetings?

Who does not know these regular boring get-togethers where you achieve almost nothing. What a waste of time! We tend to set up too many meetings that are too long and involve too many people. In the end, most of the time is wasted in discussions that are not related to  the original purpose of this meeting.

There are simple rules that will help to boost your meeting productivity. Keep meetings small, set a clear structure that focuses on decision-making, and have a facilitator who restrains irrelevant speeches. Try to always leave a meeting with a clear outcome, e.g., an action plan or a decision protocol.

How to give feedback?

Everybody loves to work in a harmonious team but at some point, differing viewpoints will arise. Oftentimes teams neglect to utilize the power of dissonance. In discussions and feedback situations, we focus on the good things and avoid speaking out on the bad ones. Over time, this will intoxicate our team. There will be a growing number of things that are left under the table. Furthermore, situations of conflict hold a massive power for innovation. If we always agree, we will never invite something new. Only in disagreement and developing tradeoffs will we find new solutions. A formalized feedback process can prove a great asset to your team. Give feedback and ask for it. Encourage people to give negative feedback in a setting where they can feel safe.

What boosts our motivation?

Being motivated as a team is not only a question of bringing the right people together, not only of talent or skills. It is also a question of how we organize our work. Much too often we formulize vague projects with unspecified tasks. Procrastination evolves, projects seem to get stuck, and in the end we are demotivated. With some simple mechanisms, we can create motivation boosters: break down projects into actionable tasks and somehow visualize progress (e.g., with Kanban). If we constantly see progress, every small task that is executed transforms into a small win.

Also, the atmosphere in which we work will transform. We feel that we are achieving something. This creates the breeding ground for a motivating environment that fosters innovation.

[Tweet “Organizing for many small wins will create a motivating environment that fosters innovation.”]

How do we manage ideas?

If you set the right atmosphere and encourage people to express their ideas, you also have to ensure that these ideas are valued. Too often we conduct brainstorming meetings and create a bunch of great ideas, just to see them fade away, written down on some piece of paper that is lost in your drawer. Idea management includes not only the idea generation process but also the mechanisms to evaluate, test, and realize those sparks of innovation. Tools like a Post-it wall or a Trello board can do magic.

What questions do you ask to bring your team to the next level?

Organize for Innovation

Most organizations fail to drive successful change. In the end, an inability to adapt to change usually means failure at some point. If you can’t innovate, the market will sooner or later kill your business. This does not always happen because your company is unable to identify pain points and new business opportunities; it is  just that you are not able to execute full innovation.

Innovation is not only about generating creative ideas. It is not only about brainstorming workshops, learning about Design Thinking, and setting up an idea-management process. Innovation is also about packaging your idea into a great product. It is about UX design, product architecture, and business modeling. Ultimately, innovation is about marketing, generating momentum, and convincing the market to adopt your product.

Innovation has many stakeholders

Just in these few sentences, we have touched on many disciplines and departments of a modern company. This leads to the question: How we can successfully foster innovation when it means driving change in every department and among different enterprise stakeholders? A company with a high innovative capacity will not only try to bring new products to market, but also to innovate from within by renewing its processes, rules, and organizational structure.

Organizations are typically built to withstand change. In the typical corporate development lifecycle, we want to increase efficiency. Therefore we build hierarchies, develop processes and systemize tasks. These hierarchies are not made to drive innovation or accelerate change. We can even describe the creation of hierarchies as the opposing force of rule-breaking innovation. If we need both forces in modern companies, how can we organize them? How can we organize for sustainable efficiency and innovative capacity the same time?

Two organizational structures form one organization

In his book “Accelerate”, John P. Kotter proposes a twofold organizational structure; with hierarchy on one hand, and a network system on the other. He compares the network system with the natural system which occurs when entrepreneurs launch a new company. In this system, there is less structure. It allows for speed, flexibility, and agility in corporate development. Over time, companies shift from this organic organizational structure to a more formal hierarchy. From an innovator’s perspective this may sound “wrong”, but a hierarchy has clear advantages that cannot be denied: it formalizes processes, allows repetitive tasks to be accomplished faster, introduces measurability and accountability, increases efficiency, ensures continuous quality, and strengthens the company in terms of developing a robust business system. A network system, on the other hand, allows for rapid change, is flexible, and focusses on people’s responsibility instead of safeguarding the system (e.g., by enforcing quality guidelines).

The organizational form of a hierarchy…

  • Increases efficiency and reliability
  • Is based on metrics: introduces measurability and accountability
  • Allows quality assurance
  • Allow incremental change
  • Is budget-driven
  • Is based on clear job descriptions
  • Allows forecasting and the prediction of business numbers.

The organizational form of a network system…

  • Increases agility, flexibility and speed
  • Allows for radical change
  • Fosters innovative capacity
  • Is based on visions and goals
  • Focusses on people’s responsibility
  • Is opportunity-driven.

Two systems that are two opposing forces

The two organizational systems can operate at the same time while they drive opposing forces: the hierarchy creates structures and formalizes processes, while the network exits structures and recombines resources. A sustainable and innovative operating business needs both of these activities and, therefore, both of these organizational structures. The one structure, hierarchy, allows predictable growth, sets up a robust and efficient business system, and provides the ability to scale. The network system fosters innovative capacity and allows your company to become competitive in steadily and rapidly evolving markets.

The challenge arises when we try to combine these two systems. Both compete for resources, and usually people in one of the two systems will not want to support the other way of doing business. Kotter proposes the use of highly motivated volunteers for network-system tasks. Another approach is to set up a dedicated new business unit with allocated resources.

A volunteer workforce for innovating your company

In Kotter’s approach – attracting volunteers to accelerate your innovation project – it is essential to generate urgency around something Kotter calls “Big Opportunity”. This Big Opportunity is not only a vision, but a clear, realistic, emotionally compelling, urgent and memorable objective. For example, the weakness of a competitor in a certain market at a certain time could be such an opportunity. Around this chance you create a primary goal and formulize strategic initiatives aligned with the overall objective.

An innovation project around such an opportunity that uses a volunteer workforce needs well-aligned project management to keep participants engaged. The traditional project management approach typically inflates innovation projects and makes you forget about your underlying goal. You start to make your project bigger and bigger, and soon everybody involved is dissatisfied. The project feels “stuck”. If you work with volunteers, such behavior will kill your project. You need to keep everybody highly motivated and as you work with volunteers, and you usually you cannot do this by using financial incentives. Therefore, it is crucial to focus on quick wins, continuously. Breaking down the project into small tasks that generate small wins and celebrating each of them is a great way to keep your team’s motivation high and attract even more volunteers to the innovation project.

Have you been in this situation when two systems came together in one company? Have you ever tried to run an innovation project with volunteers? I look forward to reading your thoughts and experiences!

Trapped by Success

Introduction

“For many companies, there is often a huge difference between what’s in their business plans and the market’s expectations for growth. This growth gap comes from the fact that companies are still pouring money into what made their success in the past, namely developing technology breakthrough in their R&D labs, instead of working to understand what the customer wants and then using that understanding to drive innovation.”

I pulled this quote from the Linkedin Pulse article by Stefan Lindegaard (@lindegaard) you will be guided to in the Twitter post below. The article mentions an upcoming presentation of Jean-Claude Junqua from Panasonic at this year’s Chief Innovation Officer Summit in San Francisco. The quote itself is pulled from the description for the upcoming talk.

Meet a company trapped by success.

When I was younger, I was addicted to McDonald’s. Back then, nothing could replace the taste of a mouth-watering Big Mac together with some delicious fries (that had been so much better than those from Burger King) and a fresh Coke. Today, over a decade later, I’m reading articles on the problems faced by McDonald’s and its economic decline. It appears their fries include ingredients of all but potatoes. In response millennials seem to avoid the restaurant in preference of healthier and more sustainable alternatives. Various strategies on how McDonald’s could innovate its business to succeed again (e.g. hiking wages) are also appearing in the press. Sounds as if there was a lot of disturbance in the fairway of the former star company. The need for a transition is presaged and not everybody involved is happy about it.

But what has happened these past years? Why did the traditional model of McDonald’s operations that lifted it to top rankings in the world’s most successful companies lose its traction? The answer is change, and humans, by habit, face change with incremental (smaller degree of novelty) innovation first. McDonald’s has always been a fast food restaurant. Fast food, by definition, means fast and cheap. Previously, these two attributes have been positively connected with economic progress. In the past, “fast and cheap” has been translated with “instantly more” by large parts of the society, and that marked something “good”. Today, “fast and cheap” is likely to be translated with “low quality crap”, and that marks something “bad”. The former strengths of McDonald’s, its core values, and unique selling proposition as a fast food restaurant, are no strengths anymore, but weaknesses. For a company of this size, and with such a strong brand value, it’s not possible to suddenly switch strategy, once the rising need for a change is recognized. McDonald’s got trapped by its own success.

Can you get trapped?

Just think about yourself. Image you are a medical scientist specialized in AIDS research. You spent your entire life collecting knowledge in this special field of expertise and became a well-known and respected expert. One day, someone invents the perfect anti-AIDS cure. And the best part of the story: this cure is instantly available worldwide and it’s free as it works with a super-high-tech tonal sound method that can be downloaded via the internet. In just one day, you lost both your personal assignment and your daily duty. No one needs you anymore. Maybe you previously earned enough money and have the freedom to live a great life, but nobody likes to be obsolete. We’re all in pursuit of a mission and are motivated by the need to earn money.

Sounds like a crazy story, but it isn’t. This kind of change happens every single day. Sometimes in smaller dimensions and sometimes in a disruptive way. Think of names like MySpace, AOL or Lycos. Think of the milkman and McDonald’s. Read about the example of Frederic Tudor and the ice trade industry. In all these examples, workers’ skills became obsolete, economic flows changed, and a former winner had to move away for some kind of successor. If you are working in the digital economy, you may have your own story about established dedicated skills in an area that later became obsolete (if so, I’d be glad read about it in the comments or by mail!). If you are not able to adequately face change in these moments, release former behaviors, and start to build new skills, you will no longer be compatible with the value-creating mechanisms of your environment. Soon enough, you will be out of business.

Hammer your Holy Grail!

A paradox in this context of innovation is marked by the factor that your previously attained skills may be the reason for your failure to execute change effectively. If you experience success with a method, a product, or anything you do, you will likely stick to this in times of change. Psychologist Abraham Maslow described this situation with the so-called Maslow’s Hammer: “If you are a hammer for you everything looks like a nail.” (paraphrased)

“If you are a hammer for you everything looks like a nail.” (Maslow)

Additionally, the larger your success, the bigger the chance you are going to fail in an upcoming change. The bigger and more beautiful your hammer has been, the more you will lose the ability to solve problems with totally different tools. What has previously been your personal Holy Grail cannot be that wrong, can it? It can. If you operated the fastest and cheapest restaurant twenty years ago, you might have owned a very successful business. Today, the same restaurant probably struggles to draw competitive profits.

Even in other fields of management theory and outside innovation literature, we find similar indications. For instance, in the context of leadership, Michael D. Watkins (@watkinsmichael) states in his bestseller The First 90 Days that one of the biggest challenges entering a new job lies in avoiding the assumption that what made you successful in the past will continue to work in the future.

How can we access this problem? How can we find out if our knowledge, skills and previous successes are making us stick to something harmful? Being able to answer these questions might depict one of the future’s most important core competences every company needs to develop. If we were able to investigate and rate previously adapted behaviors, skills, and knowledge in a reliable way, we might have already developed a powerful tool for innovation.

In upcoming articles I’m going to discuss how this kind of investigation can be done and how the toolset of business model innovation might facilitate exploitable findings. Without innovation, every organization, no matter how competitive and dominant today, might be challenged by new companies in the future. This gets us to the point where Startups, and the people building them, the entrepreneurs, come in. Maybe the way Startups think and approach innovation, helps us to understand, how to avoid the trap.

The Basic Functionality of Branding

Introduction

I attended several conferences these past few weeks here in Berlin where I had the chance to listen to some great speeches. Many speakers talked about branding and tried to highlight the value of it. I received the impression there’s still no common understanding of what branding really means and how to approach it. Personally, the discussion seemed to imply that branding is a choice. Below, I will discuss if there is really a question of whether to build a brand and if you should do it yourself or let others build your brand for you.

What is the basic functionality behind branding?

Gabler Wirtschaftslexikon defines a brand as the “sum of all images a brand name or a brand mark induces or shall induce at customers in order to differentiate goods or services of an organization from the ones of other organizations” (paraphrased from German source). Condensed, Gabler highlights the role of customers and their view on goods or services and differentiation from the competing market.

With a rough picture of what a brand is, we can start to talk about the process of building a brand: branding. I infer from gathered knowledge that in order to understand the full range of functionality behind branding, you need to understand what “information” is, how its content becomes manipulated under various influences, and how reception in our brains work. Don’t worry: there’s an easy way to explain the basic functionality behind it.

Imagine

Imagine three people are looking at the sea. The first person says, “Look at this great deep blue water!” The second person says, “Blue? That’s turquoise!” The third person adds, “You talk about the color of the water? I love the great sunset!” In this simple example, we see the basic problem of information reception: we don’t experience life as one reality but only an individual image of it. Every one of us experiences life from his or her perspective, and these perspectives are manipulated perceptions of reality as they’re always relative to situational influences and prior experiences, knowledge, and feelings. If we want to approximate ourselves to reality, we need to consult as many people as possible to include as many perspectives as possible. Reality – or “the truth” – is always multidimensional. You can find the essence of this coherency exemplarily in the way science works, market research, and the concept of open innovation.

What does this mean?

The logical conclusion for branding: people don’t see you and your product or service through your eyes but through theirs. They don’t respond in the way you do; they implement you into their perspectives on reality. As every person has had different experiences in his or her life, possesses different knowledge, and comes in contact with you in different situations, the perception of you will be different. No matter if you want it or not, a new perception of you and your product or service comes to life every single time you are in contact with someone. Every single time people will draw their own picture. Every single time people will connect attributes with you. That’s the birth and the evolving engine of your brand.

Being aware of this coherency is your choice: put yourself in front of a mirror and reflect on what you are, actively work with this gathered information, and promote yourself using corresponding attributes people can use in their communication. Either that or let people find these attributes for you. Depending on your resources, you don’t always have to actively run into branding. Sometimes it’s enough to stay focused on what you’re good at, as good work tends to immediately be expressed as positive attributes and further forms a positive image. It won’t hurt, however, if you’re aware of the fact that people are continuously connecting attributes to you, enabling you to control what these attributes are or could be.

Following this line of argumentation, we can depict the basic functionality behind branding as the connection of attributes with a product or service, originating from different persons and different perspectives.

Prospects

Having understood this functionality, new questions arise.

  • How is it possible to find the right attributes for your communication?
  • Is it really possible to control the attributes people are connecting to you?
  • How do you define a brand strategy if everyone looks at you from a different perspective?

I’d love to discuss these questions with you in the comments below or by mail.