'One Strategy, One P & L'

Great piece from John Moran on how a business should measure success. Too many agencies we work with have seperate P & Ls for every department. All the benefits of size and scale are lost as departments (TV, PR, mobile, social etc.) attempt to grow their profits at the cost of a) the work b) the agency and c) the client. 

 

"For a coherent strategy to work, then, the organization executing it must be measured as a whole, rather than as parts. In other words, if a company is to have a single strategy, it must be driven by a single P&L.

This may sound like an extreme position. Yet some of the world’s most successful companies operate this way. Apple famously has only one P&L, for which its CFO, Peter Oppenheimer, has direct responsibility. And while each of its major hardware product lines is priced to make a significant profit, it bundles in all its key software upgrades, products, services, and platforms for free. […]

It’s Apple’s single-company mindset that lets it give away industry-leading software and cannibalize its own products, which in turn has led to its unprecedented success.

For a coherent strategy to work, then, the organization executing it must be measured as a whole, rather than as parts. In other words, if a company is to have a single strategy, it must be driven by a single P&L.This may sound like an extreme position. Yet some of the world’s most successful companies operate this way. Apple famously has only one P&L, for which its CFO, Peter Oppenheimer, has direct responsibility. And while each of its major hardware product lines is priced to make a significant profit, it bundles in all its key software upgrades, products, services, and platforms for free. […]It’s Apple’s single-company mindset that lets it give away industry-leading software and cannibalize its own products, which in turn has led to its unprecedented success."

Smart stuff and a great spot from John Gruber. 

Boiling Frogs

So the myth goes, when a frog is placed in boiling water, it will jump out, but if it is placed in cold water that's slowly heated, it will not perceive the danger and will be cooked to death. In many ways it is a perfect metaphor for how businesses (music, books, newspapers, TV etc) deal with potential disruption.

Clay Shirky says it best

The people in the music industry weren't stupid… they just couldn't imagine that the old way of doing things might fail. Yet things did fail… the industry's insistence that digital distribution be as expensive and inconvenient as a trip to the record store suddenly struck millions of people as a completely terrible idea.

Once you see this pattern – with the incumbents the last to know – you see it everywhere.

First, the people running the old system don't notice the change. 

When they do, they assume it's minor. 

Then that it's a fad. 

And by the time they understand that the world has actually changed, they've squandered most of the time they had to adapt.

Disruption is often hard to spot. Your competitor comes in, works for ridiculously small profits, you laugh at them and their measly profits, and then you realise your business has croaked… 

Masters of Innovation

A presentation I put together inspired by this excellent blog post on Harvard Business Review. 12 great innovators, their key ideas and must read books. 

Master Innovators

View more presentations from Tim Sparke

How to be happy in business

From the super smart Bud Caddell.

The Internet - There's no ‘them’. It’s just an awful lot of ‘us’.

Because the Internet is so new we still don’t really understand what it is. We mistake it for a type of publishing or broadcasting, because that’s what we’re used to. So people complain that there’s a lot of rubbish online, or that it’s dominated by Americans, or that you can’t necessarily trust what you read on the web.

Imagine trying to apply any of those criticisms to what you hear on the telephone. Of course you can’t ‘trust’ what people tell you on the web anymore than you can ‘trust’ what people tell you on megaphones, postcards or in restaurants. Working out the social politics of who you can trust and why is, quite literally, what a very large part of our brain has evolved to do. For some batty reason we turn off this natural scepticism when we see things in any medium which require a lot of work or resources to work in, or in which we can’t easily answer back – like newspapers, television or granite. Hence ‘carved in stone.’

What should concern us is not that we can’t take what we read on the internet on trust – of course you can’t, it’s just people talking – but that we ever got into the dangerous habit of believing what we read in the newspapers or saw on the TV – a mistake that no one who has met an actual journalist would ever make. One of the most important things you learn from the internet is that there is no ‘them’ out there. It’s just an awful lot of ‘us’.

From the brilliant Douglas Adams. 

Steve Jobs, innovation, art and leadership

Here's a great interview with Steve Jobs from Computer World in 1995 (I've edited it down to the best bits just over 7 minutes, you can see the rest here). In it he covers:

How small companies will always challenge big (the main idea behind The Innovators Dilemma).  

How difficult starting a business is (success or failure being mostly down to perseverance).  

How San Francisco became such a hotbed of invention (his answer: music, hippies, LSD and exceptional colleges).

I've been reading Jobs' biography which is long but pretty good. What really struck me was his complete respect for artists. He  understood the hard work behind great art and creativity ("Genius: one percent inspiration and 99 percent persperation" as Edison and Michaelangelo are both meant to have said).

He often talked about Apple existing at the intersection of art and technology. As Andy Hertzfeld (who was on the original Mac team but is now at Google) says 'Jobs thought of himself as an artist, and he encouraged the design team to think of ourselves that way too. The goal was never to beat the competition, or to make lots of money. It was to do the greatest thing possible, or even a little greater.' 

He was a terrible manager, awful to work for in traditional ways (rare praise, inability to delegate, used lies and manipulation excessively) but he knew all of this. The reason he was such 'an asshole' (his words) was because he honestly believed he was facilitating people to create the best work of their lives (they almost universally agree with this).

"He would shout at a meeting, 'You asshole, you never do anything right," Debi Coleman recalled. "It was like an hourly occurrence. Yet I consider myself the absolute luckiest person in the world to have worked with him."  

Steve Jobs back in 1996

Steve Jobs in an interview with Wired (prior to his return to Apple) talking about the Web, computing and creativity. 

Wired - The Macintosh computer set the tone for 10 years. Do you think the Web may be setting the tone today?

Steve Jobs - The desktop computer industry is dead. Innovation has virtually ceased… The most exciting things happening today are objects and the Web. The Web is exciting for two reasons. One, it's ubiquitous... and anything that's ubiquitous gets interesting. Two, I don't think Microsoft will figure out a way to own it. There's going to be a lot more innovation, and that will create a place where there isn't this dark cloud of dominance.

W - If you go back five years, the Web was hardly on anybody's horizon. Maybe even three years ago, it wasn't really being taken seriously by many people. Why is the sudden rise of the Web so surprising?

SJ - Isn't it great? That's exactly what's not happening in the desktop market.

W - Why was everyone, including NeXT, surprised, though?

SJ - It's a little like the telephone. When you have two telephones, it's not very interesting. And three is not very interesting. And four. And, well, a hundred telephones perhaps becomes slightly interesting. A thousand, a little more. It's probably not until you get to around ten thousand telephones that it really gets interesting.

Many people didn't foresee, couldn't imagine, what it would be like to have a million, or a few tens of thousands of Web sites. And when there were only a hundred, or two hundred, or when they were all university ones, it just wasn't very interesting. Eventually, it went beyond this critical mass and got very interesting very fast. You could see it. And people said, "Wow! This is incredible."

The Web reminds me of the early days of the PC industry. No one really knows anything. There are no experts. All the experts have been wrong. There's a tremendous open possibility to the whole thing. And it hasn't been confined, or defined, in too many ways. That's wonderful.

There's a phrase in Buddhism, "Beginner's mind." It's wonderful to have a beginner's mind.

Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn't really do it, they just saw something. It seemed obvious to them after a while. That's because they were able to connect experiences they've had and synthesize new things. And the reason they were able to do that was that they've had more experiences or they have thought more about their experiences than other people.

You can read the rest of it here. 

Tesco Virtual Subway Store

Great use of mobile/poster interaction in South Korea. Allows you to do your shopping while waiting for the train. 

History of Marketing Channels

Useful timeline of marketing channels through the history. Probably slightly simplified but does show nicely the huge growth in marketing opportunities now...

From here.

Everything's connected

I can't remember where this is from but I really like it...

In a world where everyone is connected and constantly flowing information feeds back on itself, linear comms are becoming redundant. Brands need to be actively interesting (creating media) or useful (creating software) to be picked up and transmitted in this conversational flow. Agencies need to help brands generate a stream of marketing and retail innovations that connect with the individual passions of consumers in fluid and fragmented communities. 

Marketing has always needed media technology skills (radio, TV, film, print, etc); new digital channels and media technologies with radically different characteristics to traditional media (immersive, interactive, connected) are exploding so marketers need new skills. Agencies need to build, buy or partner to get interactive content and software development skills which can help brands be engines of culture – creating it, transforming it, constantly working with the flow of it. E.g. product placement, active sponsorship, ad-funded applications, in-game marketing, new branded media or products and services.