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Innovation Blog

WHAT WOMEN WANT

Shifting Consumer Mindset:

Are You Tracking It?  Part II

Oct. 31/2009

 

   Boston Consulting Group  expert Michael Silverstein and colleague, who head BCG’s global consumer practice, recently ran a web-based survey of some 25,000 women worldwide.  They published their results in a recent book  What Women Want.  The results are important and revealing. They show a rapidly developing and changing market, based on women who are increasingly stressed and pressed for time, and whose needs are not being fully met.  There is much room here for innovation.   If innovation is largely managed, led and conducted by men,  perhaps it is time to enlist women — unless men can suddenly become massively empathetic to the needs of half the world that has XX chromosomes.  The female economy, we learn, is a quiet economic and social revolution.   

 

   Here is a brief summary, taken from Singapore’s Business Times, Oct. 29, written by BCG principals in Southeast Asia:

 

      We are on the brink of a major business revolution. Over the next five years, women will have US$5 trillion in incremental earnings to spend and we see this as a commercial opportunity bigger than the rise of the consumer economies of China and India combined, and an economic stimulus far larger than any government bailout package.    Women control US$12 trillion of the overall US$18.4 trillion in global discretionary consumer spending, and they will have an even bigger share in the coming years. These women increasingly earn a substantial portion of the household income and control up to 65 per cent of household spending.   Taken from What Women Want – a Boston Consulting Group (BCG) global consumerism survey of more than 12,000 women in 22 countries around the world – these figures and survey analysis  highlight  their focus — the [need to] understand and serve this female economy.

 

     Much of the research from the survey findings shows that women are dissatisfied with the products and services available to them.   Companies fail to answer women’s needs and misunderstand the overwhelming demands placed on their time and the challenges they face when dealing with the myriad roles they typically play – as wives, mothers, sisters, daughters, partners, professionals, friends and colleagues.   These dissatisfactions need to be addressed by businesses in many industries before they can truly win the trust and consistent purchasing power of women.

  Specifically, companies fail to:

¨ address women’s need for time-saving solutions;

¨ design and customise products specifically for women;

¨avoid condescending and clumsy sales and marketing efforts;

¨align with women’s values or develop community; and,

¨increase their social initiatives and give back to society in more meaningful ways.

  The women surveyed in Women Want More indicated they are most dissatisfied with financial services (73 per cent), health care (71 per cent) and consumer durables (up to 47 per cent).

Of the three, financial services is the industry that frustrates women most. In general, women indicated they don’t have a desire to accumulate money for its own sake or experiment with complicated financial instruments.   A majority of the women value money as a means for caring for their families and themselves, improving their lives and assuring long-term security. Many indicated they want advisers and services that recognise their need for short-term simplicity and long-term stability.

  For the most part, women aren’t getting the financial management solutions they want. Instead, many experience a lack of respect, poor advice, contradictory policies and an obstacle course of red tape and paperwork.   Of the companies studied, very few understand the significance of the female economy to their business. If they respond to this economy at all, they do so by making small adjustments to their product line or to their organisations.

    To better understand the female audience, companies must reconsider how they do research, how they develop products, how they sell and merchandise and how they add services to their value proposition.   Companies must rethink how they segment the female audience and how these segments react to changes in consumer bahaviour.   To facilitate broader analysis of what women want, we created six key female consumer segments –

¨ fast-tracker, ¨  pressure cooker, ¨ relationship-focused, ¨  managing on her own, ¨ fulfilled empty nester and¨ making ends meet.

Each archetype is defined by income, age and stage of life. Such segmentation proved useful for our research and is now successfully informing the development and marketing of offerings to women.

Understanding what women want can be done through a four-R approach –

¨ recognise, ¨ research, ¨ respond and ¨refine. 

¨ Recognise the opportunity;

¨ research how a product or service is being consumed; and respond with new disruptive innovations that create new categories, new segments, or entirely new sources of products and services; and,

¨refine ideas in a way that creates lasting relationships with female consumers, builds connections and continually improves the offering to strengthen those relationships.

 Balancing ‘work at work’ and ‘work at home’ :  Women earn a substantial portion of the household income and yet they still do the bulk of the housework and home management. As a result, it is not surprising that women in every corner of the world are starved for time and many are stretched.

 BCG’s research has shown that women are struggling to balance the ‘work at work’ with the ‘work at home’. At the same time, they have high standards and even higher expectations of themselves.

These expectations – combined with the responsibilities women shoulder for caring about good nutrition, education, health care and making money for the family – create tremendous stress.

  Women hold approximately 50 per cent of university places throughout the world. Apart from the number of graduates entering the workforce, there is a global increase in the number of women going to work in full-time and part-time positions.

 The facts cannot be ignored, and increase in significance as companies recognise the importance of the female economy.  By systematically targeting this market and understanding women’s dissatisfactions, companies can holistically, rather than incrementally, participate in and profit from one of the most important commercial opportunities of the century. Women will benefit from and appreciate the outcomes too.

 

 

Source:   Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

 

 

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Global Crisis Blog

Shifting Consumer Mindset:

Are You Tracking It?

Oct. 30/2009

 

     Geophysicists tell us the earth is built on tectonic plates, that shift and slide — imperceptibly, only at the rate that fingernails grow, but, sometimes, when these plates collide, earthquakes and tsunamis result.

     Consumers are similar.  Their preferences change, often imperceptibly, but the changes add up to major shifts and trends — and unless we track them closely, we miss the boat.

     Consider this.  Singapore, the country, acts like Singapore Inc.  Its leaders track the country’s global rankings carefully and at the first sign of slippage, react and act.  For example, Singapore ranked only 17th recently in the World Economic Forum Global Rankings for “consumer satisfaction”.  So Singapore initiated a large-scale survey of customer satisfaction (tourists and residents) across several industries. 

    The results are reported in the Straits Times, the leading Singapore newspaper, on Wed. Oct. 28.  The results:

 “Consumer Satisfaction Drops Again!”    Across-the-board declines in consumer satisfaction in transportation, retailing, tourist services, etc. 

      Is this truly the case?  In a country squeaky-clean with faultless customer service and Asian politeness,  has customer service suddenly deteriorated — at a time when businesses know that in a shrinking market and global downturn, they must redouble their efforts to please their customers?

       What has happened, I believe, is on the customer side, not the business side.  In a global downturn, which has impacted Singapore too,  people have new respect for money, even the wealthy, and demand greater value-for-money.  Unless businesses work hard to create the perception that they are delivering more value,  consumer satisfaction declines.  What worked in 2007 and 2008 may not work in 2009.

      The story is told of an old married couple…the wife complains, dear, we used to sit so close together in the car!  The husband (driver) replies:  Sweetheart — I haven’t moved.  

       Businesses haven’t “moved” in the way they treat customers. But the customers have.  Businesses should have moved in response — marketing, advertising, packaging, product design, pricing,   everything to build and strengthen the ‘value for money’ proposition, which has gained new importance in the downturn.   This is the real message of Singapore’s survey.

 

Innovation Blog

2 Million Women Suffer — Who Cares?

The Terrible Shame of Fistula

By Shlomo Maital

Oct. 27/2009

   If two million American, French, British or German  women suffered from a life-destroying humiliating and unbearable condition — how many thousands of innovators and billions of R&D dollars would be devoted to finding a rapid solution?

   But, fear not, it is only African, Asian and Arab women.  So, who cares?

   The condition is fistula.  It is horrendous just to read about it.  And despite a global campaign launched by that powerful, effective and efficient body called the United Nations, little progress has been made.  We have excuses rather than results.  It is a true disgrace, and a dark blot on the alleged humankindness of the wealthy half of the world.  

    The cost of curing the 2 million African, Asian and Arab women who suffer from the condition is $600 m., or $300 per woman,   a sum equal to about 12 hours’ worth of crude oil production, or 0.1 per cent of what the world spends annually on advertising. 

 

    According to the UN:

 

 Obstetric fistula is a hole in the birth canal caused by prolonged labour without prompt medical intervention, usually a Caesarean section. The woman is left with chronic incontinence and, in most cases, a stillborn baby.  The smell of leaking urine or faeces, or both, is constant and humiliating, often driving loved ones away. Left untreated, fistula can lead to chronic medical problems, including ulcerations, kidney disease, and nerve damage in the legs.  A simple surgery can normally repair the injury, with success rates as high as 90 per cent for experienced surgeons. The average cost of fistula treatment and post-operative care is just US $300. Sadly, most women with the condition do not know that treatment is available, or they cannot afford it.   Like maternal mortality, fistula is almost entirely preventable. But at least 2 million women in Africa, Asia and the Arab region are living with the condition, and some 50,000 to 100,000 new cases develop each year. The persistence of fistula is a signal that health systems are failing to meet the needs of women.

 

 

    If philanthropy is absent, where is creativity — a cheap effective solution poor women can afford?  Where are the world’s creative gynecologists? What about a mass-production ‘assembly line’ surgical unit, portable, that can do hundreds of such operations, for example?  What about enlisting 3,000 gynecologists  and surgeons to donate a month a year curing fistula?    

 

   In 2003, UNFPA spearheaded the global Campaign to End Fistula, “a collaborative initiative to prevent fistula and restore the health and dignity of those living with its consequences.” What a relief.  Rather — what a joke. 

      Perhaps we need a campaign to end the Campaign to End Fistula, and get down to some real action.  I don’t see how we wealthy people sleep at night when so many people are suffering so badly, and so needlessly.

Postscript:   Nicholas Kristof wrote his Sunday Oct. 31  NYT column on this subject — a topic he has been writing about since 2002.  Here are the first paragraphs…

October 31, 2009, 10:10 pm

<!– — Updated: 8:48 am –>A Heroic Doctor, a Global Scourge

By Nicholas Kristof

My Sunday column is about obstetric fistula, a horrendous childbirth injury that rarely gets attention or treatment because the victims are the most voiceless of the voiceless. Dr. Lewis Wall, the hero of the column, taught me about fistulas years ago, and so I’ve been writing about them periodically since my first column on the topic back in 2002.

For years, I’ve watched with admiration as Dr. Wall has persevered to try to build a fistula hospital in West Africa — and I’m thrilled that he is now fulfilling his dream. Those who want to help his Niger hospital can support his organization, the Worldwide Fistula Fund; tax-deductible donations to the hospital are possible right on the site, so please don’t send any money in my direction. For now the surgeries in Niger will be done in the existing leprosy hospital there, and he still needs significant sums to construct the new fistula wing beside it.

There’s another great fistula organization, the Fistula Foundation, that supports the Addis Ababa hospital and other places such as the remarkable Edna Adan maternity hospital in Somaliland.

Above all, I hope that we go even further and eradicate fistula globally. In the column, I mention Dr. Wall’s careful 12-year $1.5 billion proposal (written with Michael Horowitz of the Hudson Institute) to eradicate fistula. It’s also an effort to tackle maternal mortality; my sense is that fistula may be the best way to get traction for maternal health

 

 

Global Crisis Blog

China Gets It; America Doesn’t.

By Shlomo Maital

Oct. 26/2009

    Nobel Laureate, and NY Times columnist,  Paul Krugman once said that if you matched 100 top economists against 100 senior managers,  the managers would be far far smarter.   As an economist who works with managers, I agree totally.

    But suppose you matched 100 Chinese political leaders against 100 American counterparts?  Who would be smarter, more effective, more capable?  

    Hands down, the Chinese.  China and its leaders get it.  America is out to lunch.

    America spent $1.2 trillion on its fiscal stimulus and bailout package.  A great deal of it was wasted, going to banks and financial companies who today thumb their noses at American taxpayers  by paying obscene bonuses á la 2001-6, and who kept bailout cash rather than lend it.  America is now left with an enormous debt hangover and little to show for it.

    China spent $586 b. on its stimulus package (less in absolute terms, but almost the same in proportion to GDP) and it worked beautifully.   Some went to building a superb fast-train rail network across China. Some went to stimulate consumer spending on cars and ‘white goods’. Chinese banks increased their lending by 150 percent year-to-year.  Why? Because the political leaders told them to, and  because the banks are mainly state-owned. 

    As a result, China’s GDP will grow by 8 per cent this year.  The latest quarter’s growth rate was a torried 8.9 per cent!  China will soon replace Germany as the world’s largest exporter, and will soon replace Japan as the world’s second largest economy.  China has $2 trillion in dollar assets and is using them cleverly to buy up real assets (companies, resources) all over the world, during a time when these assets’ prices are at bargain levels.  Next year, China will produce over 10 million vehicles, surpassing America.

     In contrast, America’s “recovery” is weak.  While GDP growth is above water, job growth is anemic and unemployment remains high.   But the major flaw in America’s business model is still unrecognized.  It is this.  American owners of capital made fortunes by sending their companies’ industrial plants to China.  In doing so, they screwed American workers, by destroying millions of well-paying industrial jobs.  And they also screwed themselves. Because, make no mistake, China’s business model is not based on “cheap labor”, as so many in the West seem to believe.  Instead, it is based on replacing America and Europe at the top of the innovation food chain.  “Created in China”, not just “Made in China”, is the goal.   As China’s engineers invent their own great new products, China is able to produce them in state-of-the-art plants.  They thus enjoy a double competitive advantage:  Innovation, and cost.  

    Can anyone cite an Obama speech, or a House or Senate initiative, to take immediate effective measures to bring America’s manufacturing home from Asia? 

     Does anyone believe America can sustain its middle class with low-paying service jobs at McDonald’s and Wal-Mart? 

     Does anyone see any signs that America “gets it”?    

 

Footnote:   Perhaps my own blog opinions carry little weight.  But those of America’s greatest economist alive or dead, MIT Professor Paul Samuelson, do.  Here is what Samuelson, now 89, wrote in The New York Times on Oct. 24: 

      We begin now a new era in which China will increasingly make obsolete America’s 1950-2009 world leadership. Your children and my grandchildren will live in this new and challenging era.   We’ll see China catch up and pass Japan as the economy second in total G.D.P. to the United States. Then, unless China’s one-party leadership explodes, the day will come when China’s total real G.D.P. will exceed America’s. Boohoo. But that’s the realistic expectation.    However, don’t expect smooth and quiet rotation of the globe pace-setters. More likely, within the coming decade, there will be a massive run against the U.S. dollar. Why? Because ever since the year 1000 A.D., export-led growth has been the rule whenever an educatable low-wage population has begun to imitate the technology of a more advanced nation, and thus out-compete the industries of the affluent regions.  So it was and so it will always be. Whenever a low-wage, educatable population can imitate the technology of a more advanced nation, it will do so.

 

Innovation Blog

The ABCDE’s of Innovation:

Remembering Albert Ellis

By Shlomo Maital

Oct. 21/2009

 

   Psychologist Albert Ellis died on July 24, 2007, age 93. He singlehandedly led a revolution in psychotherapy toward cognitive therapy, as opposed to Freudian approaches.  He was active and vigorous to the end of his life, and will be remembered in particular for his lively exchanges with friend and sometimes opponent Aaron Beck at APA (American Psychological Association) meetings. 

   Ellis pioneered focused results-oriented RETP Rational Emotive Behavioral Therapy.  He opposed Freudian psychotherapy that could drag on for years, without measurable results.  Ellis’ key precept:  We ourselves are responsible for how we interpret events — we can either turn them into emotional disasters or into uplifting constructive actions.

   Here is an example of Ellis’ A B C D E approach (from personal-development.com):   

My son returns from work or school and goes to his room without saying anything.

This is ‘A,’ the ACTIVATING event. Listed below are five thoughts I may have, depending on my BELIEFS. Next to the thoughts are emotions that are linked to them.

1. “After all I’ve done for him, he doesn’t have the common courtesy to say hello.” Feeling angry.
2. “Something must have upset him.” Feeling concerned about his welfare.
3. “He must be angry with me.” Feeling worried.
4. “He must be upset because this morning I told him he was late for work again.” Feeling hurt.
5. “He must be lost in thought.”  Feeling compassionate and understanding — no loss of happiness.

In thought #1, I believe my son is rude and I feel angry, the CONSEQUENCE of which may be an argument with him. But what if he was innocent? The happiness of two people are jeopardized by my irrational thought (distorted thinking). On the other hand, what if I DISPUTED the thought before flying off the handle? As soon as I felt the anger, I could have paused and asked myself some questions such as, “Am I jumping to conclusions? Can there be an alternative explanation for his silence? Am I unfairly judging him? Since I am his father and not a child, why don’t I take the initiative by greeting him and starting a conversation to learn why he was so quiet?”

Can you see the powerful EFFECT of changing my thought? Doesn’t it also change my behavior and its CONSEQUENCE? The point to remember is that it is not the ACTIVATING EVENT that determines our actions or behavior, but our interpretation of that event. You can practice the ABCDE steps with the other four example thoughts. Once you’re comfortable doing so, practice with your own thoughts and watch you change your life!

 

    Can we develop a Rational Emotive A B C D E  approach to innovation?   Consider the following:

 

Activating Event:   An observation of something unusual, out of the ordinary, that catches your attention.   This requires empathy; seeing things others may not observe.

Belief:   The thoughts and emotions that A creates.   Empathy:  I detect that someone is unhappy, has a need or want that is unsatisfied.

Consequences:  What you do with those thoughts and emotions.  How can I satisfy that need?

Dispute:  Challenge the conventional way of thinking about C;  see it differently,  turn it upside down, reverse it, use “what if?”      Add on more features to an existing product?   Or — remove some features.   Create a completely new product. 

Effect:  Use A B C D to create a powerful innovative business idea, one that others locked into conventional ABCD paths cannot and will not see.  

 

   Ellis sought to help people with deep emotional problems and distress.  And he did. Moreover he trained several generations of psychologists in his methods, and they in turn helped countless people.   With his innovation, he changed the world.  Indeed, a survey ranked Ellis as the second-most influential psychologist in history.  First was  Carl Rogers; third was… Sigmund Freud.  

   I regret I will not have the chance to ask Ellis if he thought Rational Emotive therapy could also become a technique for innovation.

Innovation Blog

Where the Wild Innovators Are:

What Innovators Can Learn from Maurice Sendak

By Shlomo Maital

Oct. 20/2009

 

    The animated movie Where the Wild Things Are, directed by Spike Jonze, has opened to critical praise and grossed $32 m. in its first days.  Where the Wild Things Are is a children’s book by illustrator Maurice Sendak.  Sendak was the son of Polish Jewish immigrants.  He decided to become an illustrator after watching Disney’s Fantasia.   Sendak published Wild Things in 1963.  For the few who have not read it to their children, it is about Max:

      ….Max, who one evening,  plays around his home, “making mischief” in a wolf costume. As punishment, his mother sends him to bed without supper. In his room, a mysterious, wild forest and sea grows out of his imagination, and Max sails to the land of the Wild Things. The Wild Things are fearsome-looking monsters, but Max conquers them “by staring into their yellow eyes without blinking once”, and he is made “the King of all Wild Things”, dancing with the monsters in a “wild rumpus”. However, he soon finds himself lonely and homesick, and he returns home to his bedroom, where he finds his supper waiting for him, still hot.

 

      Break the Rules:   Sendak’s book was controversial, because some experts felt it was too frightening for kids.  But all parents know children have massive fears and confront them head on (unlike adults, who repress and deny them).  Moreover, kids like to be frightened, when they know the fright will dissipate as ‘good night’ and warm supper and warm covers.    

    Initially the monsters were supposed to be horses. But Sendak’s publisher found that Sendak could not draw horses.  So he suggested Sendak draw ‘things’.  Sendak could draw ‘things’ — he based the monsters in his book, who are truly frightening, on dinner guests to his parents’ home, especially, his aunts.   (Innovators:  Adapt, adjust.  Use what you have, not what you need or want.)

      Seven years later, Sendak wrote and drew In the Night Kitchen, about a young boy prancing naked in the kitchen.   This book caused a far greater controversy and several states banned it, because of the nudity.  It remains banned in several states. 

      Sendak broke the rules for kids’ books, because he had an idea and was unafraid to implement it.  The result was two true classics.  The lesson for innovators is parallel to that in the world of sport, writing, music, or research. 

        · Never look over your shoulder for the critics/experts, while innovating.   If you innovate to please them, if you innovate while thinking about what they will say, you are doomed.  In American football, a wide receiver who thinks about the defender coming up to nail him, rather than focus on the ball, will miss the catch.  Innovate according to your inner voice, like Sendak.  Never ever think about what others will say. 

      This, of course,  seems  to defy the true-blue rule of “listen to your customers” or “fulfill a proven need”.  In fact, it doesn’t.  Sendak thought about the kids who would read his book. He wrote and drew for them — only for them. 

      Innovators create, for those whose lives they wish to change.  And only for them — based on a deep true understand of who they are, what they want and what they need.   If you shape your business idea according to what you think venture capitalists or investors may wish to hear,  I think you are navigating by ‘radar’ rather than by your own internal ‘compass’.   If so, you’re going to get lost.      

                                               wild things

Innovation Blog

Innovative Ideas Start with a Mantra

By Shlomo Maital

Oct. 17/2009

 

   In Indian religions, a mantra is a sound, syllable, word, or group of words that are considered capable of “creating transformation”.

   According to Wikipedia:

    The Sanskrit word mantra- (m. मन्त्रः, also n. मन्त्रं) consists of the root man- “to think” (also in manas “mind”) and the suffix -tra meaning, tool, hence a literal translation would be “instrument of thought”.

 

  Generally, innovators create new products and services,  then  at a much later stage, hire creative people to market them.  Creative departments in advertising agencies seek powerful mantras that change, or even transform,  people’s perceptions of the product.   Great businesses can emerge from powerful mantras.  Mantras can help communicate a powerful vision not only to clients, but also to managers and workers; they can align behavior with strategy.

     · “Just do it!”.  Not only has Nike built its business around this mantra,  many people claim it has changed their lives by self-empowerment.   I am one of them.

    ·  I © NY.  This mantra, marketing New York City, appears everywhere.  It is a powerful example of how a complex message can be compressed into almost zero space, with instant comprehension. 

    ·  Think Different.   Differentiation is a key element of successful innovation.  Apple’s products are different.   Their mantra communicates this powerfully, and everyone in the Apple organization seeks to apply it, including industrial designers (Apple products look different – they have to, if they looked the same, this would be inconsistent with the mantra).

 

  “Everything we do and the way we do it, everything we say and the way we say it, sends a message”, says Nicolas Hayek, founding CEO of Swatch.      

    Sends WHAT message?  The mantra message.

   Start with an idea.  Build a mantra.  Then move forward.  The mantra, if it is powerful, will transform your clients and your workers.   The mantra will ensure that everyone, everywhere, ‘gets’ your product’s message.  It will ensure you you yourself understand the message your idea conveys, the perception you wish to create and the need or want you seek to satisfy.

    Mantras are indeed an ‘instrument of thought’.  They will help everyone in your organization think in a clear and focused manner on the product, what it does, how it looks, who uses it — and how it will transform the world. 

    Do you have a great mantra?  Can you create one?

Innovation Blog

“It’s the Avon Lady!”  

By Shlomo Maital

Oct. 16/2009

    There are two management functions that are consistently undervalued, even in organizations of excellence. 

    One is HR – human resources.  HR managers are often first to be fired, first to have training and development budgets slashed, and often do not have a seat at the table where company strategy is made.   When HR executives have training exclusively in organizational development, they are often not sufficiently intimate with company products, strategy and operations, to merit membership in the strategy brain trust.  This is regrettable, because few strategies can be successfully implemented without well-aligned human capital elements.

    A second is sales.  Most companies have Marketing VP’s, but many lack Sales VP’s, or combine Marketing and Sales (a mistake: they are often oil and water), or put the head of Sales under the Marketing VP.   Sales personnel have a wealth of information about clients and markets. But because they are in the field, rather than at headquarters,  they are often not sufficiently consulted.  I have given workshops to large numbers of senior managers, and, in a group of, say, 150, find there are no sales managers present at all or perhaps one or two.

    How the sales force is organized and managed can be a powerful source of innovation and competitive advantage.  Avon,  one of the three largest global cosmetics firms, is a good example.  Avon has 5.8 million direct-sale “Avon ladies”.  Avon (will not sell its products in stores, in order not to compete with them.  In the global downturn, Avon’s dynamic CEO Andrea Jung has recruited 200,000 more Avon ladies in the U.S. alone; when jobs are scarce, selling Avon products door-to-door becomes attractive. 

    According to CEO Jung, one of the world’s highest-paid female executives ($19 m. last year):[1]

   ” We’ve been successful at gaining representatives and consumers during these tough economic times. This confirms our belief in the inherent advantage of our direct-selling business model. As women around the globe are seeking income and smart value products, Avon is there to meet their needs.    We’re offering women an opportunity when times are tough and unemployment is high. Women are turning to us for additional income for their families. In the emerging world, women are coming into a socio-economic status where they’re wanting to earn. We’re one of the largest micro-lenders in the world, because every time a representative joins us, we give her a small loan by supplying her with her initial products up front.  With credit drying up in the world, we have more money lent to women than any other business.    This year, Avon responded to the recession by launching the biggest recruitment drive in its history to hire new door-to-door agents in 44 markets.  It increased its agent headcount by 200,000 in the US alone in the first quarter of 2009 and  lots more are signing up in the UK too.

     “What keeps [my job]  meaningful and purposeful is that it’s about doing good, not just doing well: making some kind of difference.    On a bad day I go out and meet our Avon representatives and they really do inspire me because they’ll tell you stories about how from nothing this company has given them an opportunity to change their lives. I meet people from villages all over the world who say they have been able to send their son or daughter to the UK or US for education. No matter what kind of day I’m having, that’s a hugely satisfying and gratifying thing.”

     Jung understands the opportunities inherent in the downturn.  She says:

   “My philosophy was ‘let’s go on the offence, not the defence’.    It’s easy in these kinds of times to hunker down, cut everything and wait for sunnier days. But if you study businesses in the worst economic periods, that’s when heroes can be made. More market share can be lost or gained in tough economic times than in other periods.    Our bold strategies to counter the recession are working.” 

     Imagine having 5.8 million energized sales personnel in the field, in 44 countries, reporting back on market reactions and suggesting new product ideas, at a time when the success of those ideas directly imply higher sales and incomes for each of them, and at a time when the global downturn is causing rapid change in customer preferences.     This innovation function of a sales force is, I believe, often underutilized and neglected. 

    

 


[1]  “Avon boss on the offensive”, London Sunday   Telegraph 10 Oct 2009, p. 10

Innovation Blog

Art and Copy:

What Innovators Can Learn from Advertising, or:

Why No Company Should Do “R&D” 

By Shlomo Maital

Oct. 15/2009

    A brilliant documentary about advertising is called Art and Copy. It is now playing at theaters across the U.S.  Here is a brief synopsis:

ART & COPY describes  advertising’s “creative revolution” of the 1960s —  artists and writers who  all brought a surprisingly rebellious spirit to their work in a business more often associated with mediocrity or manipulation: George Lois, Mary Wells, Dan Wieden, Lee Clow, Hal Riney and others featured in ART & COPY were responsible for “Just Do It,” “I Love NY,” “Where’s the Beef?,” “Got Milk,” “Think Different,” and brilliant campaigns for everything from cars to presidents. 

    Innovators can learn a lot from this 85-minute film.    I often think that startups should BEGIN by creating the advertising for their product.  If you cannot produce an exciting ad for it, why bother? 

    The film explains that in the 1960s and 1970s, the key people at ad agencies were account executives. The creative department was valued at less than zero.  Then a revolution occurred.  Creativity, not account managers, created order-of-magnitude changes in revenues and profits for Wendy’s (Where’s the Beef?), iPod, Apple, New York City, Nike,  milk producers — and votes for Barak Obama.   The creative department faced the risk aversion of senior managers and their wives, who a priori rejected brilliant but unconventional ad campaigns — and had to come up with new campaign ideas when their original ones were rejected, after weeks and months of round-the-clock work. 

    Two small memorable episodes from the film:

     ·  Nike’s Just Do It campaign was inspired by a newspaper headline.  In Utah, a convict about to be executed by firing squad said to the executioners:  “Let’s Do It!”.   An ad agency executive read the story — and came up with the legendary mantra for Nike.

    ·  The ambience of the ad agency is crucial; all the truly creative agencies shown had spaces that were open, sunlit, comfortable, spacious, unusual — the exact opposite of design-by-committee.  On the wall of one agency was a sign, made with 100,000 clear plastic push pins:  Fail harder!  A great sign.  The unusual part of the sign:  Rather than write the words:  Fail Harder! with the push pins, as most people would do,  the creator made the sign the hard way by filling all the spaces in the sign with push pins, leaving the words Fail Harder! only where there were no pins — far far harder and more time consuming but — far more striking.  Take the hard way, the sign says.  Don’t take the easy obvious way.   

     ·   Seize the opportunity!  Nike brought in a Latin dance expert, to help pose models for still photos, for the iPod ad campaign.  The expert, though not told to do so,  took the model’s hand — and they did a torrid salsa dance.  It was his way of showing the model how to pose.  The creativity department watched in awe.  At the end of the dance, everyone in the department agreed:  This is our ad!   That is how the famous iPod salsa ad was born — dancing figures, in black shadow, with the white iPod earphone cords.

    In watching this film, Art and Copy,  I reached the following rather wild conclusion.  For what it is worth, here it is:

     No company should do R&D, have an R&D department, or appoint a VP (R&D).  There IS NO SUCH THING as R&D.  Companies do not do research.  Universities, labs, scholars do research.  Companies do development.  But there are different flavors of development.

    Every organization should have a VP (Creativity). Every organization needs a Creative Dept., just like that in ad agencies, whose goal is to come up with wild unconventional ideas.    In his or her creative department, there will be three reports:   head of product (or service) creativity;  head of process creativity (dealing with the company’s business model, every aspect of it, including sales, marketing , advertising, supply chain, pricing, and HR);  and head of innovation scouting, or imitative creativity — benchmarking other industries to bring home new ideas, to adapt and adopt.  (BT has a head of innovation scouting, for example).    These three senior managers should work closely together, travel together, meet face-to-face frequently to exchange information, and should embrace the principles of Applied Creativity (head in the clouds, feet on the ground).[1]  

    Call a spade a spade.  R&D?  Why?  If the goal is creativity, call the function just that.  You will then staff the creativity group with creative people, by definition.   The truly great ad agencies were created by creative people who were chewed up and spit out of conventional bureaucratic ad agencies.  How many creative people are out there,  crushed within bureaucratic organizations, just waiting for a chance to join a truly creative organization unafraid to call its R&D by that precise word.    

       

 


[1] The concept of head-in-the-clouds, feet-on-the-ground was first taught to me by former Intel executive Avinoam Kolodny, now in the EE faculty at Technion-Israel Institute of Technology.

   “Cognitive dissonance” is a concept built by social psychologist Leon Festinger, defined as the discomfort we feel when we entertain two conflicting ideas or notions.   For example, in Aesop’s Fables, the tale of the fox and the grapes, the fox fails to reach the grapes, and then concludes, “they were probably sour anyway”.  (a) “I want the grapes”  (b) I cannot have them  (dissonance) —à resolution –  I don’t want them, because they are sour.  (This tale is the origin of the expression: “sour grapes”.).     or:  “I am a good person”,   and “I just did a bad thing”,    resolution:   rationalization, I had to do it because….

       Festinger studied a UFO (unidentified flying object) cult, and wrote a book on it,  When Prophecy Fails.  The cult predicted the end of the world. When it did not happen, rather than dissolve, the cult grew stronger, as members recruited other members;  they resolved the dissonance between “the world will end” and “the world did not end” by concluding: “the world did not end because our cult saved it”. 

     Cognitive dissonance causes discomfort.  The human mind, apparently, does not like ideas that clash with one another and works very hard and very rapidly to eliminate the clash. 

      Creative people, however, are known to be very good at holding dissonant ideas in their minds for long periods of time,  using the clash of ideas to create totally new concepts or inventions.  For instance,  Einstein thought that time was not constant but in fact variable;  yet he looked at his pocket watch 10 times a day and saw that it was perfectly regular and constant.   He held this dissonance, until he developed the special and general theories of relativity.  

      I believe that part of what we mean by “moving out of our comfort zone” is precisely this  —  creating dissonances that are uncomfortable, and holding on to them rather than artificially and superficially resolving them.    Practice holding two clashing ideas in your mind, without seeking compromise or resolution.  

     * I am a good person;  I am a bad person.

    *  Simple designs are beautiful; complex designs are beautiful.

    *  creativity is thinking out of the box; creativity is thinking within the bounds of realistic constraints.

….    Be careful not to “turn gray”.  In other words, holding “black” and “white” in your mind simultaneously does not mean to turn them into one color, gray.  This is the opposite of creativity.  It means seeing black, seeing white,  feeling strongly the clash — and not seeking to resolve or eliminate it, but rather holding it, holding the tension, exploring the tension and letting it guide you toward new ideas.    To do this, you need to welcome the discomfort (often extreme) that cognitive dissonance generates. 

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
October 2009
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