Digital: Big Vision, Small Action

I’ve been a part of scores of discussions and projects around digital transformation, strategy and innovation. I’ve also been in the trenches trying to make some of this stuff actually happen. Over the years I’ve developed a strong olfactory sense of ideas that aren’t going well and those where there’s clearly a smell of success. 
 
I’ve spent many moments reflecting on these experiences. Sometimes at airport lounges by myself after day long meetings, nursing a glass of wine. At other times, in heated discussions with colleagues, locked in the deadly embrace of entrenched opinions. 
 
In a nutshell, in my experience, it boils down to a simple credo – big vision, small action. This is a viewpoint you will see reflected in a lot of contemporary writing and thinking around lean and agile models, but somehow, while thinking big comes naturally, it’s very hard for big companies to act small. But every day I see signs that the smartest companies are recognizing the value of lean teams, working on small outcomes, which create momentum and the building blocks of great change. For most others, fail-fast is something they like to talk about but it stays on the slides rather than finding its way into the program. 
 
Don’t get me wrong, big ideas are critical. They underscore the vision and direction in which we need to move. The big idea is the north star of our journey. But you cannot negotiate even half a mile of unfriendly terrain with your eyes fixed on the north star. And all too often we fall into the trap of big idea & big action. 
 
A typical idea of a big action is when a large company goes – ‘we are going to completely re-engineer the way we sell our widgets to our customers, across our 16 divisions and migrate from a direct to indirect sales network whilst improving our net promoter score and digitise our entire sales process while we’re about it’. You’ve all been there I’m sure. 
 
I’d like to highlight five very specific benefits of small action – those agile, lean projects which we love to quote but seem reticent to undertake. And why, especially in the world of digital change and transformation, they are even less useful than a hippopotamus at a barbecue. 
 
The first challenge is politics and alignment. If you want to make a big change, in large organisations, you are expecting to get the buy in of a dozen or more senior people, who may well have contradictory expectations and competing ambitions. The time taking process of consensus building is the anathema of change, and often the end product of a consensus is an unwieldy compromise which no longer has the ability to deliver the benefits anticipated. In contrast, the small action looks at creating the smallest viable version of this change, may be in one division and one product line of a less prominent business unit. But however insignificant it is, you can never argue with success or with data, and small change grows quickly on the back of data and proven success. The power of digital is that it IS possible to create successes and gather effective data on a small scale.
 
Speed is an immediate victim of the big change process. Likely timelines for getting alignment with senior teams can take months. It can even take months just to get the right people into the room, to discuss the key issues. In fact, the small change approach can deliver large transformations faster because once it gathers speed, the change rate is exponential. A few years ago, I was working on a large complex program with half a dozen workstreams, which had gone on for over a year with almost zero success. People were demotivated and change resistent. One of the little things we tried was to take one of the workstreams and just focus on making that work over an 8 week timeframe. In two months, we had a success story, and suddenly everybody wanted to be in on the journey. The entire program was completed in under 8 months. 
 
The actual implementation of a large scale program can be exponentially complex in terms of detail. This is not to say it can’t be done. If you were building a new airport terminal, you would have to take on and manage the complexity, but in the digital world the number of unknowns is also very high. It may sound simple to say “we’ll combine our CRM data with our transaction system, to create better views of customer history” but in one company where we tried it, we stumbled on firewall access, data structures, speed of response, security issues and user interface design. You can gloss over those challenges in a powerpoint presentation but not in the actual implementation. Will your grand plan survive it’s first brush with reality? In a small action approach, you can break up complexity into much more manageable chunks and solve them one at a time. Whatsapp recently announced that it had added the much awaited blue ticks for message delivery. The service has grown a lot both in features and popularity, but the first version of Whatsapp was launched in 3 months with 4 developers working. Evernote still releases a new version every other week. 
 
You see, it boils down to learning. In the large change programs, we spend a lot of time discussing with ‘experts’ and owners of expertise areas. We seek advice and inputs and then we expect armed with all that planning, that things will go as per schedule. Small change makes no such assumptions. Small action learns ‘on the job’ and consequently it learns in real time. One is a learning by talking, the other is learning by doing. I think we all know which is more effective. In my experience with digital tools & projects, nobody’s really an expert – everybody has gaps in their understanding. So learning from expertise is immediately limited. 
 
Finally, the digital landscape itself is changing. From regulatory stances on privacy (Google) or entering new markets (think Uber), to new platforms, tools, models and disruptive players, there is a high change environment in which you need to operate. Given this, the danger of the big change approach is obvious, with it’s slow and complex  approach, it may be outdated by the time the implementation has actually started. And often the fear of going back and re-negotiating the same issues, means that the program just gets shelved. This is probably the single most common outcome of large change programs in the digital environment. It gets put on the shelf and people just stop talking about it. Ultimately, it becomes a symbol in the organisation of project failure. People go ‘rememeber project Orion?’ (nudge! nudge!). The only way to address this is through the calculus of small change. Stick to small agile action which can help to absorb directional change brought about by the environment, and you never have to jettison a very large amount of work, so the risk is never too high. 
 
A couple of years ago, we were pitching some new and exciting technology led change program to  a client who are a well known Utility company. Our approach involved running programs of change, integrating complex back end systems and creating an agressive 6 month program of work. One of the seniormost execs in the room from the client organisation started the meeting by telling us how he along with a couple of his engineers had just spent the weekend ‘playing around’ with a new location based open source utility which they found to be quite interesting and had built a pilot for replacing their existing clunky routing application and were planning to roll out the change to a small set of service teams within the next 7 days. It suddenly made our 6 month change program look very glacial. 
 
Think of a snowball that you start rolling down a snowy hillside, and how it gathers pace and bulk as it moves. This is how small change works. Now think of repairing a car by a committee of people with specialised and disparate skills taking the entire car apart, and then putting it back together again. This is how big change works. In the digital world, only one of these approaches is effective. 
 
So the next time you encounter a digital transformation initiative, remember: politics, speed, learning, scaling and environmental change are the 5 reasons why it makes sense to commit to big vision but small action. 
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FT Innovate Conference, Day 2

The Government seems to be thinking the right way. Phrases like ‘strategy is showing/ delivering’ don’t normally roll off the tongues of digital tsars. Also creating a data and API repository which other public sector units can use is quite a forward step. @MTBracken

In general the UK is now emerging as a strong innovation hub. The narrative of 3-5 years ago, which was all about ‘needing to move to Silicon Valley’ has gone away, as local and US investors have stepped up to build businesses here. As would be expected, the UK leads in areas such as FinTech. With a recent track record of successful European start ups, from Spotify, to Skype, to Raspberry Pi, there is also a ripple effect as senior members from successful start ups step out to create their own businesses. There are now some nine clusters of tech across the UK, including Cambridge, Portsmouth and Birmingham, driven by talent, cost of living, and telecoms infrastructure, amongst others. @ashleyhi

At the other end of the scale, GE are positioning Predix as the OS of the industrial internet. And Marco Innunziata, Chief Economist pointed out that allowing windmills in windfarms to ‘talk to each other’, allow wind farms to reduce the costs by a factor of 6. @marcoannunziata.

One of the interesting challenges of the IOT is the blurring of blue-collar and white-collar work. This is another potential disruption and a cultural challenge. In fact Innunziata describes GE as a ‘part industrial’ and ‘part software’ company, with significant presence in the Silicon Valley.

There is still a big question mark around reaching millennials and the next generation of employees/ customers. On the one hand this is a natural order. One way or the other you will be hiring the next generation over the next 5 years. But to consider this the panacea for changing your corporate culture is misleading. How quickly will the 21 year old you hire become a part of the orthodoxy? Will he or she really understand the subsequent generation – somebody who might be 15 today? Creating an open culture in the longer term needs more than hiring a few young people. @jooteoh.

In a fast changing and unpredictable world, the value of simulations rises, and with the computing power and data at our disposal, it is now much more feasible to run simulations for all the situations which may not be easy to replicate in real life (plane evacuation on water, for example), or logistically impossible (a thousand repetitions of the plane evacuating in water with varying conditions). In the language of innovation, simulations is a very useful way of creating fast-fail models without having to repeat all of them in reality. @simudyne

A new and welcome way of thinking about diversity emerged when Belinda Parmar played up (rather than down) gender stereotypes. This goes with my personal belief that we need to celebrate inequality and use it, rather than trying to create a synthetic equality. Men and women are differently wired. People from different continents and cultures think differently. This is why diversity adds value. If we were all the same, then an all male all asian team would be no different from an ethnically diverse, gender balanced one. So the argument about women’s rights – for equal opportunities – starts to diverge from the argument about the need for gender diversity, in some ways. Belinda’s axis of empathisers vs systemisers, and building more empathy in the workplace, was an interesting one and worth thinking about. @belindaparmar.

3D Printing and prototyping is ready for primetime. With the price of 3-d printers falling to £1000-£2000, and the consumables – a roll of low cost filament which allows you print small components at under a £1 running cost, it will be increasingly possible for hardware and product prototyping to become faster, cheaper and more diy, thereby speeding up the pace of innovation. With more companies getting into specific usages around 3D scanning, this will also open up new opportunities for modelling of people, places, and things. It took about a minute for me to get a 3D scan of myself, standing on a rotating base. @3dify @ultimaker

Christie’s is a classic old world business but Steven Murphy’s session was a wonderful illustration of how businesses can evolve quite smoothly into a digital culture without having to rip the guts out of the operations. I also felt they did a great job of making the brand younger and more accessible. The results were clear – art is now democratic, global, collaborative and digital, and Christies is still at the centre of it. @christiesinc

Also fascinating was the Honest By session with Bruno Pieters. It may be a glimpse of the future, but to build a business that does not start with the objective of profit maximisation takes a very specific type of person. If trust is the new currency of the digital age, then Honest By will never fall short of working capital. #brunopieters

The PerfectPitch session was very instructive, not least, in the way crowds think. 3 Startups pitched their business, not just to the on-stage dragons, but to the audience, in a live crowdfunding model. The audience used an app to commit notional sums in real time, for each of the businesses, based on their funding need, business idea, model, and overall story. This may be a London bias, given the high leaning towards media and media studies, but I found it amazing that a room full of innovation people, were more interested in funding a magazine subscription model (Readbug) than a healthcare innovation (Pocket Anatomy). The magazine subscription model – similar to Spotify, where you pay a fixed subscription per month for unlimited access to a number of magazines is one that I personally would all but opt out of immediately. In the world of Flipboard and Zite, and about a zillion others, and trying to build a model around paid content (talk to Newscorp about this one), you would have to work very hard to convince me. On the other hand as the healthcare space opens up, an app that captures the human anatomy and allows doctors to give patients a much more visual and recordable explanation of their problem, one that can be saved for later is such a good idea. Even if the initial idea doesn’t work, there is a lot of room for flipping this business to something that does work. I would be in there in a flash. The third business was Podpoint, who do the charging stations for electric vehicles, once again, a clear growth area if it can be done well. I had to leave before this one finished.

It would be remiss of me not to mention Awabot – the little robots ambling around the rooms, talking to people. Awabots are operated by humans using controls, but provide an eye level screen for conversation. So you can actually see & talk to the other person behind the robot. Interesting idea, though in it’s infancy and a lot will depend on the dexterity of mechanical operations, and hopefully the addition of more AI into the interface. Meanwhile this little French start up is looking to make friends with you. @awabot

Overall, 2 great days spent and lot’s of ideas sparked. Got to sit in a Tesla and meet some likeminded people. I missed a couple of good sessions – half of Alberto Prado’s (Philips) session and Ron Williams (Simplest). Some of the things I didn’t see were mobile payments – spreading like wildfire as we speak, true healthcare service innovation, and perhaps the kind of 10X thinking that Larry Page keeps talking about. Something for the next year perhaps @ftlivedigital?

As always for me it’s not just about what I hear from the speakers, or speak with fellow attendees, it’s the thoughts and sparks it creates in my head that is the real takeaway of the event. After all, innovation can’t stop after the conference is over – the real work starts now!

Internet of Things – Hype & Hope

(I had the privilege of speaking about IOT at the Oxford Technology and Media forum yesterday. What follows is the gist of my session and some thoughts from the panel discussion)

The tech industry is often guilty of pushing technology solutions to consumer without focusing on the benefits, the emotions and simplicity. Invariably, businesses that get it, do better at selling tech to consumers. Apple are clearly the masters at it, but UK customers will know that after many years of ‘interactive television’ discussions, what customers bought were ‘sky plus’ and ‘red button services’. (The technology didn’t actually deliver on the promise, but that’s a different story).

So we come to the Internet of Things and I believe, we’ve swung to a different end of the pendulum. We’ve created a pithy, catchy phrase, something that everybody can relate to and not be daunted by the jargon. I would personally have preferred the internet of stuff (stuff is cooler than things). But the internet of things means (pardon the expression) bugger-all when it comes to actually buying, implementing or solving something.

Maybe I’m being harsh. It’s a catch-all word conveying a general wave of technologies much like “digital convergence” in the broadcast and comms space. But it’s a very loaded phrase and masks many layers of complexity that haven’t yet been resolved to the point where they can be implemented. Or even understood by the consumer.

The IOT includes communication between machines, between people and machines, and also between people and people via machines. It includes wearables, and all manners of sensors, and an ever increasing ocean of data, an implicit assumption of an economically viable, reliable and available network. And so far, very few standards.

After all, we’re all spoilt by the Internet – in the world of standards driven browsers, we only had to worry about the browser environment. The most complex questions in the early days of the web included ‘web safe’ colours. And later, pushing the limits of HTML. You never had to think about the OS, the device (are you viewing the website on a Dell or IBM laptop?) You didn’t have to think about whether the user was sitting or standing or walking around. And all you had to know was a URL, and the internet would find the website from over 50 million computers in a fraction of a second. Even transactions and ecommerce are now taken for granted. 

In the IOT world, all these are non-standard and have to be thought from scratch. What’s the user interface of a ‘thing’? If it’s a sensor on a coffee machine vs a door, how should we access the data, how can interact with the thing? The design challenge moves from an ‘interface’ design to an experience and even environment design. Who designs the experience of walking into a retail store which is armed with iBeacons or other sensors? Design challenge will range from fitting an antenna while managing heat dissipation, to figuring out how to retail product aesthetics while adding a bunch of tech.

Service design has been a term in vogue for a few months now, but is fundamental to the creation of IOT models. We must take a design centric view and build from there. That’s the only way we’ll get around to focusing on the right problems to solve, to ensure adoption.

As with all emerging technologies, we’re in the world of ‘compound change’ – where each layer builds on previous layers, and so it creates an exponential change curve, which is near impossible for us to predict, since we’re still very used to thinking in linear terms. What is intuitive to me, is that we’ll get entirely new companies dominating the IOT space, in the way that FB, LinkedIn and Twitter dominate the social sphere, and Google and Amazon dominate the web, Apple and Samsung dominate mobile devices and Microsoft and Intel dominated the Desktop world.

Because, this will take a whole new business model. It will shift value, destroy old models and create entirely new services. Most often, we think of new tech as better ways of doing what we do today. So the ‘better’ model leads us to thinking about how our fridge will tell us when it’s out of milk. Rather than ‘different’ models – perhaps our fridge telling us which of the foods we’re storing has the earliest use-by date, so we can modify our consumption appropriately. Or other more imaginative and useful behaviours.

Undoubtedly the way in which business models will evolve will involve adding layers of services to existing and new products. The value of the service will outstrip the value of the product. You may pay more for the service of tracking your weight and the feedback on your lifestyle and diet, than you do for the weighing scale itself. In fact asset ownership models may change, with companies willing to give you the asset for free in order to lock you into the service, or simply, follow an asset leasing model, which brings down your outlay but enables longer term revenue stream for the seller. Soon we should be able to view this information and services layer explicitly and this explicit-isation of the service and information layer may be one of the biggest sources of consumer value in the IOT. This would enable us to understand better the total cost of any product (say a sweater, or a vaccuum cleaner) and make different choices on that basis. It would also align value realisation with costs – imagine a washing machine which you lease and pay per use.

Although it’s tempting to consider just the things we acquire and own, there are all those things we use, which form the asset base for service delivery, from smart meters, to hotel rooms and railway stations to rented cars. These can all also follow the same principles of creating explicit service and information layers, so that maintenance, usage, and cost and value can all be tracked more easily. Then you have natural resource and public environments – weather, floods, pollution tracking, and more.

As has been noted, it is almost impossible to talk about IOT and emerging technology of any kind without talking about data, privacy and security. I used to think, like everybody else, about a data brokerage, or info-mediary. Now I think data-brokerage should be a feature built into every product. A data brokerage module will ensure that consumers data is stored, transacted and valued in a way that is fair to both sides, and in a transparent manner. Really, you can’t ask for more than that.

Undoubtedly the IOT is a big deal. We’re talking about billions of connected devices changing the way we live our everyday lives. The transformativer potential of this can barely be imagined. I just hope we use this to solve some of the bigger problems we face – the energy crisis, caring for an ageing population, getting supplies more efficiently to the needy, across the world. And not spending too much time debating whether our kettle should gossip with our washing machine.

Thoughts & Lessons – FT Innovate Conf Day 1

The UK is the most digital economy in the G20, measured as contribution of digital industries to GDP, as per Baroness Shields. But it faces a deficit of 750,000 digitally trained people. There are now 18 tech clusters in the UK – including Cambridge and Edinburgh for example.

Yet, according to Marianna Mazzucato, the UK also has below average R&D spends. Gross & Industrial R&D.

I’m sure that Marianna’s book sales spiked during her great talk, since at least 4 people I spoke with bought her book during her talk. I did too!

I heard the phrase “scale up” as distinct from ‘start up’ – to describe companies looking for global scale from a successful start. I think it’s a really useful phrase to keep in mind.

What is the role of the state? To create the conditions under which new businesses can thrive. What’s the balance between nation state thinking and global, post-national mindsets? As always the answer lies in between. You still need national policies to execute in specific areas such as education and infrastructure. (I’m still thinking about this one).

GPs are supposed to be able to give patients their medical data by 2015, according to PWC, and only about 1% are ready yet. I also think that about 1% of patients are actually ready to receive, and take stewardship of their medical data. 

Who owns data? Such as from Nest, or from your smart fridge? Well, you own the raw data as a user, but I would think if the data is used to create specific insights by combining it with other data and/or analysing using somebody else’s models, then the new ‘cooked’ data generated, also known as the insights or the meaning, should be the property of the provider of that insight. It’s a bit like supplying components to a manufacturer.

I learnt about the fascinating world of the slime mould. This is a one celled organism that can concatenate across multiple cells to create a single large cell like structure, with multiple nucleii. It has no brain, but is able to communicate, self organise and optimise. Given a bunch of oats laid out, the slime mould will go after the food, and then build optimal lines between the food points. This has been used to effectively create transport maps for cities.

Retailers such as the newly merged Dixons Carphone are working at a number of levels to combat the threat of Amazon. This includes creating strong digital propositions, but also improving the existing physical store operations, such as linking bonuses of store staff to customer satisfaction, and rewarding stores for digital sales from their catchment area.

To truly create an innovative culture, the leadership has to demonstrate it themselves. This includes being in the frontline, taking risks, demonstrating fast fail, and taking the responsibility for the fail, if and when it happens, as is demonstrated by Nike’s Mark Parker . This sends out the real message to employees – that it’s okay to take risks and fail occasionally. But this need to be backed by celebrating success and even rewarding failure if it’s really a fast fail – where the clear lessons are learnt and new hypotheses are set up.

5 Challenges for Marketing In the 21st Century

Attention Deficiency
 
 
First there were letters, then came emails, then text messages and twitter. Our patience for longer communication has dwindled both as senders and receivers. Newspapers and long opeds have given way to snappy blogs and bullet point memos. Videos have replaced text, and short videos have replaced the longer formats. You get the gist – we are increasingly in an attention starved economy. 
 
Attention is fragmented, fleeting, and in generally small supply. Hyperactivity has been known medical problem for ages, but it was in the 1980’s that the condition was prefixed with “attention”.  The double whammy here is that even as attention grows more precious, the volume of noise keeps going up, so finding the signal becomes even harder. So what little attention we have, we must guard zealously. 
 
This is marketings first big problem. Marketing and advertising, as we know it today, is a hundred years old. It is no longer fit for purpose. Creativity in capturing attention still gets headlines, and this won’t change, but the goalposts are shifting constantly and the new rules are yet to be written. 
 
Google adwords seemed to provide some answers, but I think that our general mistrust of marketing messages cripples the value of adwords. We have all become experts in tuning out ads. Banners on pages, full page spreads in magazines, spots on television (usually coinciding with tea-making or a trip to the toilet), or ebook ads in Kindle magazines which you flip through with barely a thought. 
 
As a marketer therefore, your first challenge is getting through the noise, the fragmentation and ephimerality of messages, and actually register on the audiences attention span, without spending a kings ransom in the process. Especially if you’re not an already established and known brand. 
 
Every once in a while I notice a piece of marketing communication for a product that I’ve never heard of. But it’s almost always in a category I’m already interested in, and often filtered via friends feeds (FB/ Twitter etc.). I signed up for Carbonite, the online data back up service after I heard their ‘ad’ on a podcast – it wasn’t a traditional ad but the host of the talk show talking through the benefits of the product in a related category to the ongoing discussion. This morning I watched an interesting and interactive Honda ad because somebody posted it on Facebook. The last time I was actually influenced by a TV ad was …  er… I don’t remember really. 
 
Wanted: Action
 
Let’s assume you’ve actually solved the first problem. So you have my attention – perhaps for 15 seconds. Perhaps even 30. The next challenge is getting to action. What are you going to motivate me to do?
 
Historically, advertising and marketing spends have fallen into clear categories – strategic or branding type communication, intended to create a longer term desire; and short term tactical spends, intended to create an immediate sales boost. The latter typically comprising offers, coupons, and other enticement to act now. 
 
The first problem here, is that in the attention deficiency model, everything is about NOW. It’s either now, or it’s gone. (I’m stretching the point here, but this is generally the trend). If I’m not in the market for a car, you’re wonderful car advert is not likely to register beyond a point. Because I know that when I do want to buy a car, all the information in the world will be available. 
 
I’ve written before about the telescoping of the AIDA cycle. Awareness, Interest, Desire, Action – the 4 stages of classic marketing & sales. I call it the “Shazaam” effect, after the app. From never having hear a song, we can now hear it, like it, identify it, want it and actually own and download it in about two minutes. This process in the past, woud require you to hearing the song on the radio, finding out the name, going to the store, deciding if you really wanted to spend money on the whole album, listening to the other tracks, and finally taking the plunge. On average that could be weeks if not months, with a high probability of dropping out of the process altogether. It’s not just digital goods, you could pass a shop window, like an item, check it out online with your phone and order it – again, the process would take a few minutes, if the retailer made it easy to do this. 
 
Most ads today do not have a compelling call to action. This doesn’t necessarily have to be an action to buy, it could be an action to save, highlight, wishlist or read later. Most digital publications allow you to do this with your content. Why not with your ads? Why can’t I click on a car ad and save it for later, because I do want to buy it next year, but this model looks interesting. Or tag the ad? All of this is for enabling future searchability. 
 
The other implication of this is that the secret sauce for advertising and marketing messages may well be getting your attention when you’re looking to buy the product. Not dissimilar to point of sale advertising, but more like point of time advertising. This is all about context. It involves being able to pick up on cues based on opt-in analytics that allow me to tell you about a cycle when you’re looking for a cycle. Sadly, what we have today is that when you search for a cycle, you are guaranteed to see cycle ads for the next 4-6 weeks, even though you bought the cycle in week 2. It’s a blunt weapon that needs a lot more finesse, though it’s probably heading in the right direction. The problem  is that I tell Google that I’m looking for a cycle, but I tend to tell Facebook about my adventures on the bike. May be sharing my ride pictures on Google plus is a good way of telling google to stop selling me cycles. 
 
Media vs The Message 
 
The media industry is probably the hardest hit by these technologies. Audience fragmentation, disintermediation and ever lower barriers to entry have caused havoc in the business. The television industry would have us believe that people still watch as much TV but I would suggest that the quality of viewing is dramatically lower, i.e. it shares your attention with your smartphone and your other chores, and in many instances has become a truly passive experience. Which is bad news for brands and advertisers looking to grab your attention. Newspapers have also down and out and the few who have successful digital editions are enjoying a new life, but advertising models continue to be experimental and much less lucrative. Google adwords have been a moderate success in terms of click throughs and paying for results, but it’s not the answer to all marketing problems. 
 
From a marketers’ perspective, the gravy train has vanished. There was a simple equation – you spent your money, you got onto the most popular TV shows or major newspapers’ front pages and you could launch a product nationally and get decent outcomes. Today’s marketing manager has to consider direct (website/ app) vs indirect channels; digital vs traditional media; multiple options within digital media including banners, innovative banners (with video, for example), ad-words, SEO, and a host of new options such as ambient screens, and digital point of sale. You also have to worry about attribution modelling and manage your spends in near real time. Agencies are starting to make money of trading desks, using algorithms not dissimilar to share trading. 
 
Increasingly the smarter brands have tried to make their message the story, rather than an interruption. Coke, Dove,  and Red Bull are brands that have tried to do this. 
 
 
Morphing Aspirations 
 
It’s also worth asking the question – how have our aspirations changed? In the increasingly global and multi-cultural world, there is a certain level of fragmentation of aspirations too. Only 44.9% of London’s population is white British. Even in 2007 there were apparently over 50 non-indegenous communities with over 10,000 population each. 
 
The implication of this is obvious – as populations go less homogenous, so their aspirations, needs, habits and buying cues. Everybody knows the story of the 2 elderly white men both rich, born in 1948 married twice, holiday in the alps and fond of dogs. One is Prince Charles, the other is Ozzy Osbourne. How then do you attract the housewife of Indian origin who loves popular psychology, with the rock climbing single hungarian girl who wants to work for the police? Both of them may be  24, female, living on in the same post code and searching for psychology in Google. 
 
The challenge is not just analysing and deciphering these ambitions, it’s the need to deal with such a vastly diverse array of ambitions. And ambitions that will themselves morph and blend in cultural melting pots. How do you sell an aspirational product when there is no consistency of aspirations, without boiling it down to economic ambition as a lowest common denominator?
 
 
Trust Erosion
 
Who do we trust? Not the government, not large enterprises, not banks or telcos, and not Google or Facebook. Yet. we trust the feedback of strangers on recommendation websites. However, you still wouldn’t trust a random stranger to provide you with broadband services, find stuff on the internet quickly, or hold your savings for you. Trust therefore has many facets. One of them is competence, another is ethical. In earlier (and perhaps more naive) times, we tended to combine them. Now, with the free flow of information we know better. 
 
Opinion may vary about the competence of banks, but you would still trust the bank with your money because they have demonstrable competence. Also because they are regulated. So while we don’t trust governments or banks, we may find that the combination provides us a trustworthy outcome. 
 
Why is this important to marketing? Well primarily because trust is the basic currency of all communication, and consequently, for brand creation. Without it, you may as well flush your money down the toilet. So the question then is do your customers trust you? And how do you establish and build this trust? And given that we live in a low-trust environment, this may be the first and most important bridge to build. 
 
 
A Quick Checklist 
  • Make the message the story. 
  • Be contextual in the positioning of your message 
  • Create actions in your messages – not just ‘buy’ actions 
  • Understand aspirations from a cross cultural perspective
  • Own your communication and include direct to customer channels 
  • Build a strong trust bridge before sending the marketing cavalry across it

The Internet Of My Things – A (Mostly) Consumer Perspective

So there’s been all this talk about the Internet of Things. What the heck is it? You may well be cautious. Especially since it’s currently perched at the peak of the Gartner Hype curve for 2014.
So I started thinking about this by listing all the ‘things’ I interact with. From my house & home to the trains I take and from the clothes I wear to the hotel room I might live in on my travel. Obviously you can get many levels in the hierarchy. The home is a complex construct, and comprises many sub-things. Example – rooms, walls, plumbing. Some of these, such as ‘heating’ may have further sub-components – radiators, boilers, etc.
The resultant picture looks something like this, at a very high level. Of course, this is hugely inadequate for detail, but you get the conceptual model.
IOT mythings
Then I started thinking about an appropriately benign and traditionally less intelligent ‘thing’ – like a window. Everybody has windows at home and they affect our everyday lives.  They have states (open/ shut), based on the environment and conditions. For example we associate safety, air-conditioning and sunlight with windows being open or closed, and based on the weather, time of day, etc.
So I drew this table of the different emotions and feelings we derive, the specific benefits they deliver, the activity or state associated with this and the conditions under which these states need to be enabled.

IOT state and benefits

At this point, I came to an important realisation. Products can be smart and controllable, they can even react to the environment, all without the help of the internet. For example, we have some Velux(TM) windows on the skylights. These windows come with a remote control, they can be opened and closed and they can also react to weather conditions and close if left open when it starts to rain. So they are actually smart, in some way, and possess the capability to communicate. They’re just not on the internet. The challenge of this model is that my ability to control these outcomes is limited to the pre-set automations and my being in close proximity – i.e. at home. (Disclaimer: I’m obviously referring to the specific models we have installed. Velux does not have any IOT proclamations on it’s website, but this is not to say that they don’t have or are planning to launch models that come with their own smart phone apps, which allow control of windows from anywhere.)
This excellent article by Michael Porter & James Heppelman posits that all products in future should have mechanical/ electrical components, but also software components and communication components. These 3 collectively make products smarter and ultimately evolve to product systems (e.g. home security) and then to a ‘system of systems’ model (e.g. connected homes) – which spans an entire problem domain, according to the authors. The kind of activities that we can perform on smart products evolves from monitoring, to control, optimisation and then to autonomy. Ultimately this leads, according to the authors about improved competitive performance via operational efficiencies and strategic positioning choices. Often, forcing the question ‘what business are we in?’
So for example the Velux windows we have installed, have a rain sensor, which allows them to automatically close if it starts to rain, they don’t have a sun-sensor, which allows them to re-open when the sun comes out again. Of course, I may not want them to open just because the sun is out. So it needs my intervention. I can only do this from home, currently, which is a constraint. Putting the Velux windows to one side, for all my windows, I would also like to be reminded if ground floor windows are left open at night or when I’m away. If I had pollen allergies, I would probably like to be alerted if the pollen count is too high, or have the windows close. I would like to be able to open all multiple windows or close them, even if I’m not at home, based on weather conditions. So you see, we have a need for state information (monitoring) as well as control. I might even have settings for ‘sunny day’ which applies a set of commands to all windows. This is the optimisation that the article above refers to. These control should extend to blinds (effectively these are a part of my window settings). This is where we consider windows as a product system, whereas currently, we tend to have completely different suppliers for these 2 products (windows and curtains/blinds). Any maker of smart windows must therefore consider blinds and curtains as a part of their product system.
Now, considering any smart and connected product, we could argue that they have sensors, which generate data, which are used by apps, which enable access and control of the product, and provide additional functions that ultimately deliver a benefit. The sensors are obviously on-board the device/ product. But the data generated could be anywhere, typically on a cloud, so that the apps and the access can take place through any connected control point (such as a mobile phone).
IOT data access function layers
This is where the internet of things really kicks in. In my previous example of the Velux window models which we have installed, the data, access, applications and controls all sit within a closed system involving the window and the remote control. You could argue therefore that a true IOT model requires a cloud based data and access model and an ability to use the data and control/ monitor the product from any device and application that is authorised.
Of course, everybody looking at the Internet of things should bear in mind Bruce Sterling’s SPIME model (derived from space + time). According to Sterling, the SPIME object has 6 facets: identification, location, data mining, computer aided design & construction, prototyping and lifecycle management. Using these, we can track the history of any object from concept to grave.
Stepping back a bit, the Internet of Things seems like a catch-all neologism to encapsulate a number of related concepts. It involves smart and connected products, multiple types of open and closed networks, robotics, cloud based access, decision analytics, and functions ranging from monitoring, control and optimisation. It can involve single products or groups of products. Many smart products today are autonomously capable of performing advanced functions which have nothing to do with the internet of anything. The Roomba vacuum cleaner is a great example of an exceptional product that doesn’t really need to connect to the Internet.
Most individual products also tend to ignore or be indifferent to the network effect, which kicks in when we consider multiple elements in the same network. For example, my windows may be rain-sensitive, but I might have other devices, products and appliances at home which may be influenced by the occurrence of rain. Does each product need to have it’s own rain sensor? In my IOT wish list, my smart windows can communicate to other appliances at home. So for example, the washing machine can run an extra spin cycle when it rains, so clothes dry in the same time, and conversely when it’s sunny, it can reduce the spin cycle to conserve energy. For this to happen, I need a network standard for my connected home network that multiple devices can connect to (i.e. my window can ‘talk’ to my washing machine). A problem that the DLNA among many others, has been seeking to solve for years.
The true value of the IOT thus seems to become clearer when we step into the details and away from buzzwords. Much like anything else really!  And the winners as always will be those businesses which are able to truly focus on design thinking, benefits and elegance of use, and marry great experiences with excellent engineering. And those companies who will be bold enough to rethink their business models and honestly answer the question ‘what business are we in?’ – allowing them to move from selling a product to delivering a composite service which may include a physical product. It might even mean changing the commercial model where the product is only ‘leased’ to the consumer who actually buys the service rather than acquire an asset.
Meanwhile I will dream about smart, connected windows which can deliver safety, sunshine, comfort to my home. As far as consumers are concerned, the I in IOT should really stand for ‘invisible technology’.