Disrupting Wall Street

Wall-St

I've been in Austin at SXSWi for the past few days putting on our first Google Firestarters here (more on that soon) and so have been attending some of the sessions whilst I'm here. Someone said to me before I came out that it was better to go to the smaller, off-topic (i.e. non branding/marketing/content) panels and talks rather than the more obvious, larger keynotes and they were right. In the past few days I've enjoyed talks on everything from extreme bionics (from the amazing Hugh Herr), the future of cities, the use of drones to survey for unexploded ordnance in Laos, and NASA's Head of Science speaking about the accomplishments of the Hubble telescope.

The first talk I went to though was by Brad Katsuyama, who runs IEX, the company that features in Michael Lewis' best-selling book Flash Boys (and also in this video). Brad and his colleagues realised that algorithmic, high frequency trading practices (where speed of buying and selling is everything, and which seek to capitalise on micro-second differences in trades) were creating unfair advantage and effectively meant that the markets were rigged in favour of the big Wall Street banks. So they developed a technology that nullified that edge and set up an entirely new exchange where high frequency trading would have no advantage whatsoever. Disruption is an overused word but IEX is truly disrupting the way that current exchanges (including the New York Stock exchange) are working and they are fixing institutionalised injustice with a new and fair exchange set up around the needs of investors, not banks or middlemen.

Brad talked about the continuous cycle in the industry of regulation, then companies finding loopholes in that regulation which they then exploit, resulting in scandals, which results in more regulation, more loopholes and so on. The net effect of this cycle is a drain on talent (put off by the scandals) and an impediment to innovation (through increased regulation). His point was that innovation can end the cycle in a more productive way than regulation. It's a market solution rather than a legislative one, but potentially one that is far more constructive. And for me it was a completely different and inspiring way of thinking about solutions to embedded inequity in the industry. Fascinating.


Mullet Strategy

The following is a notated version of a talk I gave last night at the APG Noisy Thinking event on 21st Century Strategy.

When the APG asked me talk about '21st Century Strategy' I’d not long before read Emily Bell’s brilliant Hugh Cudlipp lecture about the future of journalism. Emily talks in that lecture about the growing ‘tabloidisation’ (and not in an entirely negative way) of news output and specifically about (like the new breed of ‘digitally-native’ news organisation) news rooms that now feature optimisation desks, insight, analytics and data specialists, and even aggregation desks. A kind of journalism that is fully integrated with the social web:

‘Tabloid  or popular journalism is being done by the same outlets that produce the most serious chin-stroking think-pieces. In 2005 the Huffington Post pioneered this ‘mullet strategy’ for journalism, which looked neat and respectable at the front, wild and hairy at the back.’

I think there are many parallels that can be drawn between the challenges faced in the practice of journalism, and those in the craft of strategy. But I think you can’t really talk about the future of strategy or planning without talking about the future of agencies. And the context in which agencies are now operating is of-course shifting dramatically. It’s a context that threatens the very lifeblood of our clients. Work done by Professor Richard Foster at Yale University showed that the average lifespan of a company in the S & P 500 had declined from 61 years in 1958 to 18 years today.

Data from IBM has shown that the majority of marketers believe that their roles will change in the short and mid-term, and a sizeable minority believe that they need to actually reinvent their roles (yet comparatively few know how). Small wonder when technology provision in just the marketing sector alone (let alone all the other vertical functions in a business) is exploding, marketers are increasing talking about the ‘marketing technology stack’, and the most exciting things for them in both the short and longer-term are creating joined-up customer experiences and this thing called content marketing.

Could we have imagined a few years ago that a consumer electronics manufacturer (GoPro) would have already garnered over three quarters of a billion views on YouTube, a soft drinks manufacturer would have 700 people (larger than many media owners) in a building in Austria devoted to nothing but content, or that Amazon could get so adept at customisation that it is serving up different content to every one of its 250 million odd monthly active users, or that a company (Facebook) could completely transform its revenue base from a standing start in little more than two years, or that a search engine gets so good at using data that it can understand the nuanced context of how we talk about something to give us a better answer to our question.

But as I said before, the future of strategy is closely intertwined with the future of agencies. Drawing on the work I did for The Progression of Agency Value project, repurposing Gilmore and Pine’s Economic Value model gives us a good model for understanding that the future of agencies, and therefore strategy, will be about progressing from providing services toward delivering value through experiences and ultimately about helping to affect transformations or changes in the client organisation itself. We seem to ask the ‘What is Strategy?’ question a lot, and I wonder if it’s because whilst the fundamentals of what strategy is remain the same, the context for how it is deployed is always shifting. Lawrence Freedman’s definition talks about strategy as a fluid, flexible, continuous thing that responds to unforeseen situations. Noah’s thought about strategy really being about building algorithms (rules) that help drive optimal outcomes in decisions is good because it takes account of the fact that humans are critical to designing those rules, and that algorithms are constantly being updated to take account of evolving environments. So clever ways of putting people together with technology will always win.

Columbia Business professor Rita Gunther McGrath (in ‘The End of Competitive Advantage’) talks about how organisational strategy is shifting from maintaining sustainable competitive advantage to building a series of transient advantages, which in turn has implications for the fluidity with which you allocate talent, organising resources around opportunity rather than existing structures, continuous innovation, continuous experimentation and a ‘fast and roughly right’ approach. This, and the increasing convergence of strategy, innovation and transformation creates opportunity for agencies and for strategy. And if strategy is increasingly starting to look like innovation which is starting to look like transformation, then the interesting places are in the overlap between planning, service and experience design, and organisational change.

The exemplar of GAFA and their ‘vertical stack’ approach shows the possibilities of creating user-centric systems that use data to join up customer experience, taking value from interaction at one touchpoint and using it to enhance the experience at another touchpoint. So opportunity exists at the centre (optimisation, automation or augmentation through creativity, of BAU or core services and functions), and at the edges where innovation happens (emerging understanding, set-up and design of the new). But all of this, as the Cap Gemini/MIT Sloan study shows, requires us not to pursue shiny new technology for the sake of it but to always remember the value of the skills, behaviours, culture and leadership that surrounds it.

My final thought was about Sturgeon’s revelation that 90% of everything is crap. There’s a lot of crap advertising around. There’s a lot of crap content marketing. When it’s so easy and cheap to create stuff and put it out there, more than ever the role of the planner/strategist is to stop stuff being crap.  

So 'Mullet Strategy' is about being neat and respectable at the front (creating exceptional joined-up experiences and good campaigns based on great insight, strong creative ideas - and not being crap). And it’s about being wild and hairy at the back (working with clients to create continuous, responsive interactions and experimentation that might generate new learning, improve capability, and ultimately change the organisation itself - and of-course, not being crap). In this way, and in reference to Oliver Burkeman’s wonderful piece in The Guardian about how 'Everyone is totally just winging it, all the time', perhaps we just need to join with our clients in winging it a bit more.


This Week's Favourite Fraggl Links

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Here are my favourite links from this week curated by Fraggl:

And of-course you can sign up to Fraggl here.

Google Firestarters Comes to Austin

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I’m delighted to announce that Google Firestarters is coming to Austin. Firestarters has always been about combining the most compelling speakers with provocative debate around the most interesting industry issues amongst the most inquisitive and restless minds in strategy and planning. So it’s fitting that we’ll be taking that debate to the most well known interactive conference of them all.

Working with Ben Malbon and his team at Google we’ll be running an event on Saturday March 14th themed on ‘Engineering Strategy’. Firestarters is a key part of the focus that Ben’s team has to deepen relationships between Google and the planning community in North America, and for this event in Austin we’re putting the spotlight on the intersection between UX and strategy, building on the successful events we’ve already held in New York on The New Operating System for Agencies, and Creativity in a Constrained World.

As more and more products and services become digitised we are creating a new context for innovation in which exceptional user experience is increasingly critical, highly desired, yet often poorly executed or misunderstood entirely. As clients build out in-house UX capability, as banks, IT firms, and big management consultancies aqui-hire design and UX talent, and as VCs bring in influential names in experience design are we witnessing a sea change in how strategy and UX need to work together? Where is the cross-over? What can one learn from the other? How should they work together in agencies? Can they sit comfortably together or will one dominate at the expense of another?

As always we have some brilliant speakers from both UX and Strategy to give us some exceptional provocation on the theme:

Oonie Chase - Director of Experience at Wieden & Kennedy

Russell Davies - Creative Director, UK Government Digital Service

Chloe Gottlieb - SVP Exec Creative Director, R/GA

Ian Spalter - UX Lead at YouTube

Ben is hosting the event at the Google Fiber Space in Austin, and I’ll be moderating on the night. I can't wait. The event kicks off at 5.00pm on Saturday 14th March and is invite only but as usual I have some guest passes to give away to readers of this blog. So if you’ll be in town and would like one do leave a comment below or drop me a line.