Discontinuity

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When the Trend is Not Your Friend

Tuesday, February 7, 2012 Social Media on the Super Bowl telecast - Disappointing but a few winnersAfter viewing all 75 commercials on Sunday's Super Bowl telecast, I was generally underwhelmed by the sophisticaiton ofmost marketers'efforts. Coke and Chevy Sonic pulled off the interplay masterfully, but most others failed miserably. Most notable failure: GE's ad about their Appliance City plant creating jobs in Louisville, concluding with a link to a refridgerator sales pitch on GE.com. See my CMO.com article for more:

http://www.cmo.com/social-media/winning-advertisers-social-super-bowl

Posted byJimSingerat11:59 AMNo comments: Sunday, February 5, 2012 Will we see a discontinuity in TV-social media marketing in tonight's Super Bowl?The Super Bowl. Not just a contest for football supremacy, but in recent years a national celebration of commercial advertising. Television remains a great medium for telling a story, and with 125 million U.S. viewers predicted for tonight's Super Bowl XLVI, it offers unprecedented reach. Less certain is how well branders will integrate social media into their TV advertising, or whether such integraiton even makes sense. Little has worked thus far in previous Super Bowls, but this may be the year for a discontinuity.

I am covering this topic for CMO.comand would welcome your feedback on which advertisers seem to have pulled off the TV-social integration:

http://www.cmo.com/social-media/super-bowl-social-media

Posted byJimSingerat12:01 PMNo comments: Tuesday, March 9, 2010 Percy's RadarA totally true tale informs us of the need for rewarding unconventional thinking: In 1945 the Raytheon Company faced a tremendous demand for magnetron tubes, to power the new technique of radar which was used to detect enemy aircraft. One day when a Raytheon engineer named Percy L. Spencer stepped too close to a magnetron tube, he noticed that the chocolate bar in his pocket melted.Other engineers had noticed the same thing. Thinking in a conventional manner, they sought ways to shield or insulate the unit so as to minimize this undesirable side effect: after all, radar was supposed to search for enemy aircraft, not melt food in its operators pockets. But Percy, despite having only a grammar-school education, had an intense curiosity and an open mind. He tried placing some popcorn kernels in front of the tubeand a few minutes later, for the first time since cave-dwellers tamed fire, human beings cooked food in a new way.A year earlier, anyone might have laughed at the idea of Raytheon selling ovens driven by magnetrons to restaurants and (eventually) households. Absurd! Ridiculous! Guys, were in the defense business! But the Raytheon organization listened to Percy Spencer. He wasnt just a resident weirdo providing comic reliefon the contrary, Percys input was constantly solicited, and he eventually served as a senior member of Raytheons board. In this case, his idea was rewarded with a shift in production, and within two years, the company took the first RadarRange(R)to the market.History books rightly credit Percy Spencer with inventing the microwave oven. But in fact his story also includes dozens of unsung heroes, starting with members of Raytheons management. Theyd hired and promoted Percy despite his lack of education. They didnt chastise him for playing with his food in the middle of a serious engineering laboratory. They listened to him and built the Radarangeand then they searched within that market for new discontinuities.Raytheon tried licensing the technology to other companies, such as Tappan Stove. (Its $3,000 refrigerator-sized microwave ovens were sold to outfits like ocean linersgigantic commercial kitchens that had to heat a lot of food quickly.) Raytheon then tried purchasing its own domestic-appliance distributor, Amana Refrigeration, in 1965. And Raytheon continually encouraged engineers to noodle around with the magnetrons. Finally they figured out than an expensive, military-grade magnetron unit was a bit over-engineered for the task of thawing frozen steaks and popping popcorn. They developed a smaller, cheaper, simpler, safer, more reliable oven for household use.Amanas first countertop microwave oven sold for $495 in 1967, represented a serious discontinuity in household kitchen behavior. So Amana sent trainers to Chicago-area homes to help cook each familys first microwave meal. Those lucky families had the trainers (and a serviceman, guaranteed to show up within an hour) on 24-hour call for a year.Obviously these programs required Raytheon and Amana to set up some unique rewards and incentives. But the result was that Raytheon and Amana were uniquely prepared to take advantage of the huge societal discontinuities of the 1960s: urbanization, women entering the workforce, and families devoting less time to meal preparation. Again, it seems obvious in retrospect, as we consider the situation today: cheap and ubiquitous ovens, microwaveable food categories representing $75 billion in annual sales, and new retail channels of hypermarkets and warehouse clubs based on the premise of quickly thawing food. But at the time, the discontinuous mindset at Raytheon and Amana gave them long-term dominance in the home microwave oven business.There are plenty of other examples of unconventional thinkers thriving within traditional companies: Art Fry and Spencer Silver invented the Post-it note while working at 3M, and teams at Apple, amazon.com, and General Foods invented the iPhone, Kindle, and Tang, respectively. But there are also plenty of examples of people like A.P. Gianninimavericks and free spirits who made their fortunes as entrepreneurs because they were not rewarded in traditional organizations. To encourage a discontinuous mindset, companies must have the proper reward structure to make the mavericks lives fulfilling.Even today, although many companies claim to encourage creativity and innovation, their measurement and reward systems rarely work that way. Creativity is messy. It leads to mistakes. (In Raytheons case, it took nearly 20 years of mistakes and not-quite-enoughs before the microwaves big payout.) But measuring results, rather than effortand rewarding certainty, rather than potentialforces out the unconventional thinkers. It promotes folks with modest aspirations, slow and plodding. Reward mediocrity and you never exceed the mediocre.Posted byJimSingerat4:48 PMNo comments: Thursday, December 3, 2009 Marcel Bich, Discontinuous Thinking ... and the Myth of CannibalizationIn the late 1930s Hungarian journalist László Biro invented the ballpoint pen, and suddenly writing no longer had to be the messy process it had been when fountain pens were the state of the art. The ballpoint pen quickly became a discontinuous blockbuster; in 1946, Macy's launched the pen in October, selling out their 10,000 units in a few hours at a price of U.S.$12.50 apiece (thats $148 today!).
But Marcel Bich, a Paris entrepreneur, had a far different notion of what a ballpoint pen could do. Taking a license from Biro, Bich looked at the pen-making equation and decided to solve it for lowest cost. In 1950 he produced the first Bic disposable pensselling for 19 cents apiece. Since then Bic has sold more than 100 billion pens, and paved the way for entire categories of other disposable products.
But can you imagine Marcel Bich making that suggestion in one of todays typical planning meetings? You know the type: they begin with free-wheeling ideation, thinking out loud, and writing down all sorts of crazy ideas. But then the list of ideas gets reduced as the group searches for consensusand the winning ideas are rarely the best, the brightest, the most innovative, or the most potentially transformational. Instead the winning ideas are the ones with so little actual content that nobody in the room can attack them. Gee, Marcel, thats a creative idea, but why should we sell pens for 19 cents apiece when people are emptying their bank accounts to buy them at $12.50? Gosh, Marcel, factories are at full capacity already, how could we meet increased demand? Marcel, thanks for expanding our horizons, but we have to remember the core business were in. Marcel, wouldnt your cheap disposables erode the lofty status of a ballpoint penand isnt status the main reason people buy ballpoints?

In short, if Marcel had been working for a traditional company, the ideation process would have discarded his idea with plenty of seemingly logical backward-looking rationale. As an entrepreneur, Marcel didnt have to suffer through such indignities. But if a big company wants to find a new big idea, harness the power of entrepreneurialism, and adopt a discontinuous mindset, then it needs to disturb the traditional ideation process.

A discontinuous mindset celebrates unconventional thinking. A successfully creative ideation process doesnt automatically eliminate outliersthe organization may even run an oddball audit to search them out. Of course, unconventional thinkers can have plenty of bad ideas, too, so the process needs a structure that can keep them on a short leashoften cut off, but still rewarded for their input. Because, as the next section examines, their perspectives need to stay in the organization.
Posted byJimSingerat7:03 PMNo comments: Saturday, November 21, 2009 Rock Me, Amadeo - Keeping an Open MindAmedeo Peter Giannini had many gifts, none more important than an open mind: a willingness to examine ideas out of the mainstream, to unlearn the conventional wisdom, and ponder how new ideas might lead to new opportunities. Hed first shown his open mind when he established the Bank of Italy in the North Beach section of San Francisco in 1905. Bucking conventional wisdom of the day, Giannini lent directly to working class tradesman who other bankers judged unworthy of credit.
In 1906, San Francisco experienced a dramatic discontinuity an earthquake and firestorm that killed 3,000 people and left 75 percent of the citys population homeless. It also paralyzed the citys bankers, who fearing another quake kept their funds sitting securely in their vaults. This was how conventional bankers thought in 1906 be prudent, secure your assets. But the city was filled with independent merchants and businessmen eager to resume their vocations. Because no public assistance was available, demand for private funds was immediate. Once again, Gianninis open mind saw immediate opportunity. Although his building was destroyed, Giannini set-up shop in the street, offering hand-shake credit to local tradesmen. While every other bank was closed, the Bank of Italy was putting its assets to work. Business boomed in the months following the quake. All the loans were repaid, Giannini later recalled, and this sparked the growth of his bank to where, several years and a few acquisitions later, it became known as Bank of America.
If Gianni were at the helm of B of A today, one cannot help wonder how he would have found prosperity from the current economic crisis.
Posted byJimSingerat10:10 PMNo comments: Saturday, August 8, 2009 DiscontinuitiesI'll be using this blog as a locus for my thoughts and observations, mostly from my journeys as a management consultant in the world of global business.

How often are major companieseven your companyovertaken by unforeseen events? Even today, the rise of Web 2.0, food scares, and worldwide recession have profoundly changed our business environments. Sometimes these changes have been for the better, sometimes for the worse, but often they seem to have occurred independent of the sophisticated analytical models we use to monitor trends and plan for our business future. We study trends, follow trends, believe in trendsbut the trend is almost never our friend. It has failed us over and over again.

The events that alter trends are discontinuities: breaks in established patterns. Discontinuities may be acts of God or nature, such as a hurricane or an epidemic illness. They may be inventions or breakthrough technologies. They may arise out of acts of an individual (such as a trendsetting celebrity or a dictating ruler) or socioeconomic forces (financial crises, civil wars, etc.). Because most of us typically view the future as an extrapolation of todays trends, the full impact of discontinuities usually catch us by surprise.

Sadly most conventional businessfolks miss discontinuities. They think the future is merely an extrapolation of recent trends. But the Trend if Not Your Friend. Fortunes are made - and industries created -- by those who can ignore the trend and "operate with a discontinuous mindset". In future posts, I will discuss some of these discontinuous thinkers whom I have seen or studied.

Thanks!Posted byJimSingerat7:14 PMNo comments: HomeSubscribe to:Posts (Atom)
About MeJimSingerThroughout my career as a management consultant, I have been fascinated by the future, and how it has been viewed throughout the ages. I have also been amazed at the inability of most decision makers to look to the future without learning from the mistakes of history. My blog will attempt to look to lessons of the past to help us better understand the future.View my complete profile
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