Google Goes Back to the Garage with Alphabet


When a company the size of Google makes a massive change in their structure and the way that they do business, it’s big news. Today, Google announced the formation of Alphabet, a holding company that will stable the portfolio of companies formerly known as “Google” – giving the organisation potentially a new lease on life and a new direction – or series of directions.

Constellation Research’s R ‘Ray’ Wang provides a laser sharp analysis of what the announcement means in the following video.

Given that so many organisations grow to a size which prohibits innovation, this restructuring offers an amazing live case study of an attempt to avoid the “Kodak moment”. The new, low carb version of Google – which generates the vast majority of revenues – will look vastly different and more tightly focused on digital and internet properties:

  • Search
  • Advertising
  • Maps
  • Apps
  • YouTube
  • Android

This structure effectively hives off the “business as usual”, high velocity, transactional revenue streams into a separate unit which will continue to be called “Google”. The new CEO, Sundar Pichai will be able to keep that digital focus while continuing the optimisation and incremental improvements that keep Google at the centre of our online lives.

The high potential, future-oriented remaining businesses will become separate businesses under Alphabet. Taking a portfolio investment approach to innovation, Alphabet’s stable features near and far term innovation ventures that are:

  • Inside us: Life sciences – biotech research through new company, Calico
  • Around us: Consumer home technology – internet of things hardware for the smart home through Nest
  • Connecting us: High speed internet service through Fiber
  • Moving us: X-lab – the incubator charged with developing self-driving cars and drone technology

And Google Ventures will continue its investments in early and growth stage ventures.

While the business implications for this restructure are significant – the most interesting impact is likely to be felt at the level of culture. Creating a culture of innovation – and maintaining it over the long term is extremely difficult. This is a bold move that brings Google back into the garage from where it came from. It sets a new model for tech sector innovation and has the potential to re-invigorate Google’s innovation agenda.

Who will be the fast follower – or copycat – to Google’s lead? Time will tell.

The secret lesson for corporates from the world of startups


When ANZ chief economist, Warren Hogan recently explained Australian business’ aversion to risk, it made a lot of sense. Not only are corporates concerned about project success, they are also geared and structured towards large projects which makes it more difficult to innovate in a more “agile” manner. This gives rise to several other challenges. Without flexibility, Australian corporations are subject to:

  • Unnecessary competitive disruption – smaller businesses can easily capture mindshare, momentum and a raft of unhappy customers simply because companies don’t have the agility to address emergent threats.
  • Higher levels of customer dissatisfaction – if customer experience projects are subject to this same lack of responsiveness, then customer satisfaction is more likely to quickly result in customer churn and lower NPS.
  • Market irrelevance – today’s customer is hungry for differentiated experience. Slow response to market challenges simply means that your market moves elsewhere. And they do so “at the speed of digital”.

But all is not lost. There are four key lessons that corporates can learn from the world of startups. And they can all be easily implemented, trialled and scaled with a minimal investment. I explain more here.

Fulfilling the Promise of Digital Marketing


From my first line of HTML I fell in love. Like almost everybody, I started with two simple words loaded into a browser. “hello world”. And with that I was hooked. I could sense, right here beneath my fingertips, that the world was shifting.

And again, years later, working with “Koz Community” at IBM – a system that was way ahead of its time – I could tell that those amorphous “audiences” out there were coming together. Connecting with each other and with me. Us. There was a fusing around passions and interests that was closer to performance art than marketing.

Social media turned the screw yet again. Turning the commonplace into uniqueness, transforming text into experience, image into storytelling. It put the levers of the imagination into the hands of everyday people – you and I. And we loved it. We loved the freedom of expression. The connection. The gritty humanity of it all shone through with every update.

But digital marketing – for the most part – has remained lacklustre. But it’s not for want of trying. Having been on judging panels for various awards, I can see that great work is being done. Interesting, challenging, pushing-the-envelope-type work. But the work that is possible and the expectations of clients are out of sync:

  • Client led: Where the client is leading the innovation – looking for ever-newer approaches
  • Agency led: Where the agency works to educate, engage, sell-in and deliver the “new”.

The problem is that we continue to look towards “one-offs”. We think that “strategy” is to do with plans on paper. Or Powerpoint. Or Keynote. We don’t think of it as “getting closer to our customers”. We don’t envision strategy as a process of solving problems. And we don’t see “digital marketing” as a fundamental way to transform the customer relationship.

DH - From Media to Experience (3)

Take a look at the video below. Think about the way that social, mobile, cloud (and ultimately analytics) – the SMAC – are combining to create a transformative customer experience. See how paid, owned and earned media are coming together. But what is most exciting about this is the way that “art” or an artistic sensibility – creativity – is coming into the execution. It’s the “A” in my PANDA framework for visionary marketing.

I have said it before and will say it again – experience is the currency of your brand.

And until we understand this, we won’t fulfil the promise of digital marketing.

Retail Disrupted-Consumers Get Smarter says IBM Study


I have a love-hate relationship with shopping. Actually, when I think about it, I quite like shopping as an experience. What I don’t like the way retail transforms that experience. You see, retail shopping is filled with frustration:

  • There’s no or limited stock
  • Loyalty programs are more of a burden than a benefit
  • The digital experience is out-of-kilter with the in-store experience
  • Customer service is an after thought.

And it seems I am not alone. The 2015 IBM Smarter Consumer Study: Shoppers Disrupted gauged global sentiment about consumers’ shopping behaviour. The extensive survey of 28,500 online respondents across 15 countries saw more than 1,800 Australians respond to the survey.

Some of the key findings include:

  • Australian shoppers are less loyal than ever – 10% act as advocates while 37% act as antagonists
  • 38% of 20-39 year olds prefer to shop online
  • Online shopping is up across all categories (esp consumer electronics)
  • Shoppers prefer to be in control – and that means a mobile experience.

You can register and download the full report here.

Now, much of this is not new. I have been analysing the structural, technological and strategic problems with retail for years. But Australian retail, in particular, has been slow to respond to the challenges (and opportunities) of digital disruption. And when they do respond, they often do so with the blinkered vision of incumbency. Does this leave the door open for nimble competition or does is just breed consumer mistrust and apathy? I’d love your thoughts.

The big question, of course, is when will retailers fix these problems? Those that do will reap the reward of an increasingly digitally-savvy customer base. Those that twiddle their thumbs will see their customers switch allegiances – or worse – become antagonists.


Why You Need to FOCUS – Forget Ideas, Start with Problems


In the rush to innovate, we jump to solutions, look for silver bullets. We cool hunt. Crowd source. Idea storm.

But there is a problem with ideas. Sure they are fantastic for a fledgling startup, but they are dangerous, time consuming and unproductive for most corporates. Unfortunately, one of the first responses to a “call” for more innovation is to ask for “big ideas”.

A better approach is to forget ideas and put out a call for “problems worth solving”. It’s the approach that I have been following for years and it has distinct advantages:

  • Focus on business value – there is an immediate connection between any subsequent ideas and the business value that needs to be created
  • Ownership – you can pinpoint a “business owner” who has a vested interest in the problem being solved
  • Crowd solving – it’s easier to direct structured and unstructured teams to solve the challenge
  • Understanding and articulation – working with the problem owner means that there is a clear understanding and articulation of the challenge. It means everyone is “on the same page”
  • Systems win – in the corporate world, systems win. Taking a systematic approach to solving problems rather than pursuing ideas means that business value can be retained, capacity can be sustained and velocity can be built into (or on the edge of your business).

Once you have your problem sets, you’ll find it’s much easier to get started on that next innovation.

Qantas Hackathon: Feels Like Innovation


After a busy first day of briefings and coding, the stage was set for the last, desperate rush to the midday deadline. Pitches were scheduled and rehearsed, last minute bug fixes were released and some even found time for a relaxing morning tea. But what, really could be created in a mere 24 hours. Would it be useful? Interesting? Would there be true innovation found amongst the lines of code and discarded lolly wrappers? Only time would tell. And time was the one thing that really was in short supply.

Here’s how Day 2 of the Qantas Hackathon played out.

The Inaugural Qantas Hackathon


Held over the weekend of 30-31 May, we’ve been working with Qantas to host a hackathon that brings together teams of developers from across the country. How will these innovations play out? What will the teams deliver? Only time – 24 hours to be exact – will tell. Here’s the wrap of the first day.

Why Digital Marketing Transformation is Important


I recently spent time with IBM travelling as part of their IBM Connect conference series in Auckland, Sydney and Melbourne. At each location, I hosted a panel discussion that centred on the “voice of the customer” – drawing out the experience and knowledge of panels that included ADMA’s CEO, Jodie Sangster, CIO of Tennis Australia, Samir Mahir, City of Melbourne’s Executive Manager, Commercial and Marketing, Lucan Creamer, Think Global Research’s Mark Tyler, and Twitter’s Head of Data Sales, Fred Funke.

I spent a few minutes with the IBM team to share my thoughts on why digital marketing transformation is important – and how you can use the “Marketing PANDA” to focus your efforts around customer centricity.

Decyphering Bitcoin and the Blockchain


No doubt you’ll have heard about Bitcoin by now. It’s that disruptive technology that is keeping Financial Services CEOs awake at night. JP Morgan CEO, Jamie Dimon, in his annual letter to shareholders warned investors and the banking industry that “Silicon Valley is coming” – suggesting that there are hundreds of startups focusing on the financial services technology space (“fintech”) and that traditional banking will need to double down on its innovation efforts.

[Startups] … are very good at reducing the ‘pain points’ in that they can make loans in minutes, which might take banks weeks. We are going to work hard to make our services as seamless and competitive as theirs. And we also are completely comfortable with partnering where it makes sense.

But his particular focus on next generation payments systems like PayPal and Bitcoin were called out for special attention.

Here in Australia, these new systems have been the subject of a Senate Hearing Committee investigating digital currencies.

But how does Bitcoin work? Sean Carmody, Head of Credit Risk at Westpac put together this presentation that explains the technical underpinnings of Bitcoin – the blockchain. It explains:

  • Why virtual currencies are a happening thing – the perfect match for a virtual world
  • The problem with virtual currencies – how to prevent people simply “copying” a digital currency
  • The innovation in the “blockchain”

And while the presentation does get technical, it is also eye-opening. Technology may be transforming the way that currencies can operate (now and into the future) – but TRUST remains a vital ingredient in currency transactions. And as Sean suggests, Bitcoin may not be the winner in the digital currency race – but it has fired the starter’s gun.

Why Digital Disruption Sneaks Up On You


Digital disruption is a popular theme in any business discussion. No matter whether I am speaking with technology companies, startups, industrial product manufacturers, professional service firms or pharmaceutical companies, eventually the topic arises. But it is hardly ever a direct conversation. More often than not, we approach “disruption” from the side.

You see, when we think of disruption we are thinking of some big change that temporarily suspends the way that we work – forcing us to change. But digital disruption doesn’t necessarily work this way. It’s more like wave after wave of small changes. Like a tide rolling in way past the high tide mark. But the REAL problem of disruption is that we don’t see if for what it is. Put simply:

We treat disruption’s symptoms but not its root cause.

And this means the threat of digital disruption is all the more dangerous for business.

Marketers have been at the forefront of digital disruption partly because they have (or should have) a good ear for the voice of the customer. They should understand the accelerating pace of change that consumers are adopting and incorporating into their everyday behaviours. But digital disruption is not JUST a marketing challenge. It is a challenge that faces almost every aspect of our businesses.

To understand the wide ranging impact of disruption, we put together a framework – the Five Cs of Digital Disruption. It’s a framework that we use with clients to map, understand and address digital disruption in a programmatic way. It helps us and our clients determine priorities – how to CREATE value in an age of disruption, how to CONNECT socially, engage CULTURALLY, CONDUCT business and CONSTRUCT our thinking.

5 Cs of Digital Disruption

But more than this – the Five Cs provides a focus for action. After all, if you are sitting still, you’re a sitting duck. Choose one of the Five Cs, analyse your situation and begin a PROCESS of attack (note I don’t say “plan of attack”). Don’t let digital disruption sneak up on you – act and iterate. For in a world where disruption is the new “business as usual” you really MUST find a place to start.