In the last post on Agile we discussed the flaws of the traditional linear marketing process.  So what could be the alternative? This is where we can find inspiration from an unlikely source – the military. John Boyd was perhaps the most prolific fighter pilot the US has ever known. He was an unusual character, a self-described maverick with an aversion to authority, which didn’t always work in his favor in the military. His nickname was 40 seconds Boyd because he would bet any pilot $40 that he would be on their tale in 40 seconds. But he was also an intellectual, who studied the history and theory of warfare. He was one of the main architects behind the F16 which was smaller and lighter than its predecessor the F-15. It was the most agile plane of its time and agility, as Boyd had shown was all that mattered in warfare. After Boyd finished his work on the F-16 he devoted most of his time to developing a framework for agility which he called the OODA loop. OODA stands for Observe/Orient/Decide/Act and to Boyd it was more than a simple summary of the steps human beings go through to make fast intuitive decisions. He thought of it as a general framework for gaining competitive advantage. If you constantly run through your OODA loop you can outmaneuver you’re your competition by getting “inside their OODA loop”. Your decision and action become their observation and by making fast decisions you can essentially control their OODA loop.

Boyd’s concepts are surprisingly applicable to marketing. A simple variation of his loop describes how a modern marketing function can organize itself to achieve maximum agility.

Sense instead of Observe

Marketers need to keep all their senses open – not only their eyes but also their ears. In this digital world consumers are giving marketers constant cues about what they need and want. Consumers have always done this but now marketers have the ability to capture these cues at scale. This is because consumers live on platforms that generate data. They write about their needs and opinions on social networks. This is where we can learn from listening to them. They also demonstrate their needs through what they purchase and how they engage with companies. This where is simple observation can help us get to know our customers better. Marketers have a broad range of tools available that can capture all this data and analyze it. Those who keep their senses open now have the ability to get a pretty complete picture of what some have called a customer’s “digital body language”. Reading the digital body language and responding to it is what agile marketers do better than their competition.

Orient

The senses will provide you with a constant stream of raw data about what your customers do, want and need. This data needs to be processed to orient it for decision making. This happens by putting new data in the context of what we already know about the customers and what we are trying to achieve with them. This stage involves 3 main steps – Customer Insight, Content Inventory and Connection. We first develop in depth Consumer Insight through processing the data that comes in through the senses. At the same time we make sure we have a Content Inventory that lists and categorizes everything we have to offer to the customer in response to their needs. Finally we make the Connection between customer and content based on what we know they need and what we have to offer them.

Create instead of Decide

A fighter pilot’s spectrum of potential decisions is pretty limited – up, down, left, right, faster, slower – that’s about it. In marketing however things are more complicated. We not only need to decide, we also have to create. The previous stage might identify content gaps or it may expose areas where we have content but where it is not of the right quality. These issues need to be addressed in the creative process. What is different about how content is created in this agile system is how it is connected to the other stages in the loop. It is constantly informed by the information we are getting by our customers. That information can not only give us new insights that can lead to new ideas, it can also give is fast feedback on which ideas are working and which aren’t. This feedback loop can really change the creative process itself, which becomes more experimental and iterative. The agile principle of deliver today and adapt tomorrow can be applied to the creative process. Less time spent on planning and more on real time in market testing.

Interact instead of Act

The end goal is the customer interaction that drives value. These interactions can happen anywhere at any time. The explosion of marketing channels has provided marketers with 2 crucial challenges : within-channel optimization and cross-channel integration. Every time a new channel opens up, marketers need to master it to ensure the interactions are happening in the most optimal way. This is where deep expertise in search, social media, video distribution, e-mail marketing, … is crucial. Within-channel optimization requires deep specialty channel expertise and an ability to create channel specific content. The second challenge is cross channel integration. How can you make sure that all touch points are synchronized in a way that ensures a consistent customer experience across every channel. This is where marketing automation platforms can play a vital role in managing the complexity of all customer touch points.

With Sense Orient, Create and Interact the acronym might have changed to SOCI but in spirit it is still an OODA loop.

I remember the first time I showed a heatmap of a website to a client in a new business pitch a couple of years ago.  They thought it was the coolest thing  they had ever seen and I believe we won the pitch just because of it.  Nobody was doing it at the time.  We had partnered with one of the pioneers in the area and it was a big undertaking.  But it paid off.  Soon after we started using them for all of our clients.  The results were great and for a short amount of time it was a real differentiator for our team.  We even rented an eye tracking machine so we would have it on site in our office (it sounds more spectacular than it is.  It’s really just a PC monitor with a couple of sophisticated webcams).

But soon everyone started doing them and while they still have value, heat maps no longer are a differentiator.   I recently found out they have entered the final stage of commoditization – they’re given away for free.  On Tim Ash’s website http://www.attentionwizard.com you can create your own heatmaps in a matter of minutes – for free.  I gave it a go for the doublethink.  You can see the result above.  If this was an ecommerce site I would probably make a few changes … .

While the tool is pretty cool, I think the most interesting part of this whole story is how a cutting edge, highly sophisticated optimization technology got automated and completely commoditized in only a matter of years.  Change really is accelerating! 

Adapting to change is probably most important in new product development. Change and innovation live off one another. The last decade has seen a transformation in how companies approach innovation. This was drastically needed. According to the USPTO 59% of new product launches fail. These efforts accounted for 46% of all development resources. Even when products are launched, they usually aren’t optimized. 50% of all software functionality is rarely or never used. That’s a lot of wasted development efforts. The inefficiencies are everywhere. A survey among US car manufacturers in 2003 (Michael Kennedy – Product development for the lean enterprise, 2003) showed that their engineers on average only spend 20% of their time adding value. No wonder new product development teams everywhere have started to look at how they can do things differently. One of the biggest Achilles heels of the traditional production processes was that they were very rigid and linear. Very detailed plans were made at the beginning of the process and after that the focus was on delivering against the plan, on time and on budget. This process was not designed to adapt to changes that occur during the development cycle. With the acceleration of change described earlier, those changes started to occur more frequently, which meant that the plans that were designed at the start of the development process were often sub optimal halfway through the process.

More agile processes were drastically needed and the first to make that point were a group of software developers who got together in a ski resort in Utah in 2001. There the group decided to draw up the Agile Manifesto, a statement in reaction to the traditional software development methods that prevailed at most companies which they deemed too rigid to deal with the speed required to develop new software in the modern age.

Agile software development projects would focus on working software which is delivered in iterations throughout the project lifecycle. This continuous delivery of working software allows the developers to get fast customer feedback on an ongoing basis and incorporate it in future iterations of the product. The focus is on technical excellence and design, simplicity and regular adaptation to changing circumstances. Change is welcomed all the way up until the end of the development process. Agile teams are self-organized and highly collaborative. They prefer verbal communication over written process reports and tend to be made up of a combination of highly motivated business people and developers.

Since its inception hundreds of books have been written about Agile development and its principles have been adopted well beyond the software industry into broader engineering and project management disciplines. Several surveys have proven the value Agile software development has delivered versus more traditional development methods. The table below shows the results of one of the most recent studies which interviewed more than 3,000 respondents who had practiced Agile methods in some capacity within their organizations.

55% of respondents say that 90-100% of all Agile projects have been successful. Another 21% claim that 75% of projects were successful. Adoption of the Agile principles in software development is now wide spread.

Agile Marketing Principles

The acceleration of change in consumer behavior and product innovation, as well as the ability of customers to give almost instantaneous feedback to marketers through social networks and other digital platforms requires marketers to be at least as agile as their colleagues in new product development. A review of the literature and best practices around Agile reveals some general principles for Agile Marketing.

Agile Marketing is :

These principles, while very intuitive, are hard to implement. Most marketing organizations still make their marketing plans annually and maybe revise them once or twice a year. They develop a campaign calendar that becomes the backbone for most of their activities throughout the year. There have been some developments over the last decade. Digital communications have introduced shorter campaign cycles. Most companies are monitoring what is happening on social networks and are getting more customer feedback. And the cost of testing has dropped dramatically in digital which has seen more marketers adopt testing as a part of how they go to market. But for the most, these “more agile” marketing activities happen piecemeal rather than systematic. They also tend to be disconnected from everything else that goes on in the marketing organization.

This shouldn’t come as a surprise. Most marketing organizations have not fundamentally changed their marketing processes in the last decade. They may have added on some agile functionality but they still approach the market in a traditional linear fashion – they plan, design, create, launch and maybe measure if they have the time and the patience. If marketing wants to become a truly agile discipline, this process will need to change.

Technology, new product innovation, consumer behavior, the entire society is changing faster than ever. This poses significant challenges for companies who need to find ways to adapt to change and embrace it as a breeding ground for innovation rather than a nuisance that forces them to reconsider outdated plans. This has pushed a broad range of disciplines to radically change the way they work over the last decade. It happened in software development, new product development and engineering. The objective was simple – how can we change the way we work to become more agile? Marketing seems to have lagged behind in many ways. This is surprising as for most companies change tends to be driven by their customers. One would therefore expect marketing, the discipline closest to the customer, to be the most adept at changing.
In the next couple of weeks I’ll post a number of pieces related to marketing’s ability to adapt to change. I will not spend time asking why marketing hasn’t changed faster. I will instead focus on the opportunity marketing has to learn from the other disciplines who did go through a transformation over the last years.

The Acceleration of Change

Here’s an interesting statistic. If you look at the history of technological change and assume we will continue to see innovation accelerate in the future at the same rate as it has done in the past, we won’t experience 100 years of progress in the 21st century – it will be more like 20,000 years of progress. It was Kurzweil who made this observation in 2001 in his essay The Law of Accelerating Returns. He demonstrated how technology innovation is not changing in a linear way as most people assume, it changes exponentially. He demonstrates this with this graph which shows the growth of computing power over time.

He predicts that by 2045 the power of computers will exceed the collective power of all human brains combined.

It isn’t just technology which is changing rapidly. Innovation in general has been growing exponentially during the last 50 years. The graph below shows the number of patents issued by the United States Patent and Trademark Office (USPTO) over the last 50 years.

It is clear that companies have been trying to respond to the changes in society by stepping up their innovation efforts.

And consumers are doing their best to keep up with this change. One might argue that they are also driving the acceleration of change. The NYT showed this interesting visualization of the adoption rate of new technologies by consumers.

The steepness of the lines on the right shows the speed of new product adoption in the modern day. It took the telephone roughly 70 years to make it into 90% of the US households. Color TV and the cell phone did it in 15 years. Apple lovers are really pushing the boundaries of early adoption. Back in 2007, the original iPhone took 73 days to cross the million mark. The iPad managed the same feat in just 28 days, about 2½ times as fast as the first iPhone. It almost seems like early adoption is normal adoption for Apple products. Apple is the obvious example of a company that not only knows how to adapt to change, but also create changes in the marketplace.

Adaptive Skills as a Competitive Advantage

While Apple’s market sensitivity and speed makes most other companies look sluggish, there are other less obvious examples of companies who have realized that the ability to adapt to change can be their biggest competitive advantage. Coke is one of those companies. For a company of their size they have an incredible ability to adapt to change and bounce back from failures. It didn’t take them long to bounce back from one of the most famous marketing catastrophes ever, the introduction of New Coke on the 23^rd of April 1985. The production of the old Coke stopped that same week, which caused a national uproar. Coke had not just taken a product off the shelf, consumers felt it had taken away a quintessential piece of American culture. It only took Coke 2 months to reintroduce the old Coke as Coke Classic. Coke insiders referred to this as the second coming and consumers reacted accordingly. Their celebration of the return of their old favorite beverage made Coke’s sales roar. It even made some believe that Coke deliberately discontinued Coke classic for 2 months, something that has always been denied by company officials.

This is just one example of how Coke has adapted to change extremely well over the years. Other examples include the turnaround of Dasani, the acquisition of Vitamin Water and the acquisition of their bottlers in a response to a similar move by Pepsi. Other companies who excel in their ability to adapt to change include Zara with their “Just in Time” design system that allows their designs to make it from the sketch pad to the store rack in as little as 2 weeks. And there is Netflix who constantly revitalize their company by picking new enemies, be it Blockbuster and its late fees or illegal downloading, which it is fighting through strategic partnerships with new video distribution platforms such as the Xbox or Apple TV. These companies have shown how to turn their ability to adapt to and even create change into an unfair competitive advantage.  In the following posts we will explore how marketing can learn from other disciplines to become better at adapting to change.

I was talking to Andy McMains of AdWeek today who asked me if “thoughtful blogger” wasn’t an oxymoron.  I hope not.

I found Clive Thompson’s recent Wired post on “Why We Should Learn the Language of Data” thoughtful.

He argues that being “statistically illiterate” is bad for your health, and everyone else’s too.  (Shouldn’t that be  “innumerate”, talking of literacy?)  Understanding the realities of global warming, the benefits of vaccines and the fate of the economy all depend on a basic understanding of statistics.  “Statistics is the new grammar”, he posits.

This seems undeniable to me.  Statistics should be a basic requirement in high school.  I gained my shaky grasp of stats in an ad agency – surely not the best place to do so.

This is really part of a wider issue:  the attack on science.  Recently, in Kentucky, a bill was  was introduced which proposed which would encourage teaching of “the advantages and disadvantages of scientific theories,” including “evolution, the origins of life, global warming and human cloning” in schools.  Quite remarkable.

Michael Specter, the New Yorker writer, deals with this in his new book “Denialism: How Irrational Thinking Hinders Scientific Progress, Harms the Planet and Threatens our Lives”. He lashes out right and left, railing equally against global warming deniers and organic food fans.  I recently saw him give a superb talk on this, which you can see here.

Our latest Doublethink video is an interview with David Art Wales, Prime Minister at the Ministry of Culture.

I’ve known David for over a decade, and in that time he has become something of a fixture on the New York alternative research scene.  I bumped into him again at a discussion between Moby and Walt Mossberg, the Wall Street Journal technology writer, at the Lincoln Center last summer.  As I was walking in, I thought who on earth apart from me (and my friend Mike) would attend such an event.  Sure enough, there was David.

It’s typical of the kind of curiosity that he digs out.  Strange on its own, when it’s placed in a mosaic, it gives a new angle on the culture at large.

The Ministry of Culture has carved a unique niche in the space between documentary film-making and research.  David started off in television production in Australia and he sees his work more as content than fact finding.

This approach turns many research orthodoxies on their heads.  For example, in this film he talks about how, rather than using traditional recruitment to find “pure” respondents (who are usually anything but), he deliberately recruits the opinionated.

In fact, recruitment is the key to what he does.  He is a people collector and has access to an eclectic bunch of tastemakers who can inform on just about any subject.  (Check out Reverend Jen’s Lower East Side Troll Museum, which makes a brief appearance.)

Listening to David, you’ll begin to ask questions yourself about what information is and what is inspiration.  Is there a difference?