The Brand Activism Workshop

Why are leading brands turning to progressive Brand Activism? 

How do brands align their values with the values of their customers, their employees, and society at large? 

LOCATION
We offer the workshop in two locations:
(1) in Sarasota, Florida (workshop led by Professor Philip Kotler and Christian Sarkar)
(2) on your company’s premises (workshop led by Christian Sarkar)

WHO SHOULD ATTEND
Senior executives responsible for company/brand strategy and direction

CONTENT
The workshop introduces executives to the strategic power of Brand Activism done right.

  • What is Brand Activism?
  • How are leading companies stepping up? (NIKE, PUMA, Microsoft, Google, Unilever, Patagonia, The Body Shop, Kenneth Cole, and more)
  • The role of Trust: local, national, and global
  • What are the existing models for Brand Activism?
  • An introduction to the Sarkar-Kotler Brand Activism Framework
  • Understanding Brand Activism strategy
  • The CEO as Brand Activist
  • How do you find your authentic Brand Activism story?
  • What could possibly go wrong?
  • Aligning values and building movements
  • Measuring the impact of Brand Activism (Return on Trust)
  • Discussion
  • Follow-up

TOOLS

  • Brand Activism Mapping
  • The Brand Activism Canvas

Contact us to learn more via our ActivistBrands website >>

Are over 50% of the accounts on Facebook fake?

According to PlainSite, Facebook has been lying to the public about the scale of its problem with fake accounts, which likely exceed 50% of its network. Its official metrics–many of which it has stopped reporting quarterly–are self-contradictory and even farcical. The company has lost control of its own product.

Fake accounts affect Facebook at its core in numerous ways:

  • Its customers purchase advertising on Facebook based on the fact that it can supposedly target advertisements at more than 2 billion real human beings. To the extent that users aren’t real, companies are throwing their money down the drain.
  • Fake accounts click on advertising at random, or “like” pages, to throw off anti-fraud algorithms. Fake accounts look real if they do not follow a clear pattern. This kind of activity defrauds advertisers, but rewards Facebook with revenue.
  •  Fake accounts often defraud other users on Facebook, through scams, fake news, extortion, and other forms of deception. Often, they can involve governments.
Download the report here >>

A Defense of Philip Kotler

Recently, my dear friend and mentor – Professor Philip Kotler (yes, that Kotler!) got entangled in a squabble between Narendra Modi, the Prime Minister of India, and Rahul Gandhi, the dynastic leader of the Congress party.

The fun began when Professor Kotler presented the Prime Minister with the inaugural Philip Kotler Presidential Award, an award that recognizes Shri Narendra Modi’s leadership qualities on the global stage.

Because his physician had advised him not to travel, Professor Kotler chose his friend Professor Jagdish Sheth, an eminent marketer in his own right, to present the award on his behalf.

The award was presented by a delegation led by Professor Sheth on January 14, 2019. Also part of the delegation were representatives of the World Marketing Summit which had held a conference in Delhi in December of 2018.

modikotleraward.jpg

The Reaction

The next day, this tweet from Rahul Gandhi poked fun at the award, seeking to undermine not just the PM, but, more importantly for me, the integrity of Professor Kotler as well:

Almost immediately, the comments inspired by the post fell into two categories – insults and praise; insults from Rahul Gandhi followers and praise from PM Modi supporters.  The tone of these comments was shrill, with many attacking Professor Kotler directly.

Professor Kotler and I were shocked.  The article questioning the award was written by a leftist outlet which casts doubt on the award:

The government’s press release makes no mention of jury members, nor the exact organisation behind the new award.

The media pounced on the story and added to the controversy:

Even one of my literary heroes – Shashi Tharoor – piled on, going so far as to call the award a fake.

Questions & Answers

As questions were raised, I decided to collect and answer them:

Is the award real? (“…little information has been shared about the provenance of the latest award, or the organisation presenting it.”)

Yes, it is real.  And why would people like Tharoor assume it was fake? The “journalists” in Rahul Gandhi’s tweet did not follow the first rule of journalism which is – check your facts with the source.  How easy it would have been to Google Philip Kotler and contact him through his Northwestern faculty page.

Who is Philip Kotler?  What qualifies him to give this award?

Along with Peter Drucker, Professor Philip Kotler is considered to be one of our greatest management thinkers. Who is the leading business scientist in history? According to the Hirsch-Index its Philip Kotler with an h-index of 163, followed by Michael Porter with 159.

Ask any MBA student anywhere in the world, and you will find that they have studied Professor Kotler’s books. He has received 22 honorary degrees from around the world, and published over 70 books. His 50+ years of work with the Kellogg School of Management has resulted in building the #1 Marketing department in the world.

Professor Kotler is a man with great integrity and openness. He is also one of the smartest thinkers to grace the planet. He is in the Thinkers50 Hall of Fame (2013), and is featured as a “guru” in the Economist.

Who chose the award? Why is there no jury?

Professor Philip Kotler made the final decision after a committee for the World Marketing Summit came up with a list of possible candidates.

Professor Kotler explains via a letter published on his blog:

lettertopmmodi_small.jpgWhy is Kotler’s twitter account not verified?

Because Twitter has stopped verifying accounts, and Prof. Kotler never thought to ask. I messaged Jack Dorsey to ask him if he could make an exception for Professor Kotler.

Why was there no mention of the award on the Kotler website?

Professor Kotler’s site is not updated often. When the Indian press started questioning the authenticity of the Award, Professor Kotler tweeted about it:

Why was the Indian site for the World Marketing Summit taken down?

After an event is over, often times the microsite that’s used to describe the event and/or register participants is usually taken down.  The global site for the World Marketing Summit, Kotler Impact and Kotler Awards are still running.

What could Professor Philip Kotler possibly know about India?  

Professor Kotler is not just the “father of modern marketing.” He is an economist and studied with some the greatest Economics teachers on the planet.  His involvement with India began in 1955, when he spent a year working on his PhD thesis in India. If the journalists bothered to read My Adventures in Marketing, they might have known that. Since then he has visited India often to teach and speak.

What could Professor Philip Kotler possibly know about democracy?

Professor Kotler has published books and written numerous articles on capitalism and democracy.  See: Democracy in Decline and Confronting Capitalism.

How to Argue 

Bottom line, I’m disgusted with the trash-talking that I see from the left-leaning Indian journalists and social media participants.

Too many of our disagreements fall in the bottom two layers of Paul Graham’s Hierarchy of Disagreement:

Graham's_Hierarchy_of_Disagreement.jpg

If someone wants to question PM Modi’s track record, they would do far better through Refutation rather than Ad Hominem and Name-Calling.  Let that be a lesson for you, young Rahul, and for all who would seek to look childish: focus on the substance instead.

Professor Kotler, please excuse the mess caused by this controversy. 

DISCLOSURE: I have worked and continue to work with Professor Philip Kotler on several projects, including The Marketing Journal, ActivistBrands.com, and FIXCapitalism. We’ve written a book together titled Brand Activism: From Purpose to Action (the print version is forthcoming).  No one asked me or paid me (in India, as elsewhere, paid-journalism is a thing) to write this.  I simply felt compelled to stand up for a learned man of great integrity. 

Brand Activism: From Purpose to Action

Professor Philip Kotler – the “father of modern marketing” – and I have co-authored a book: Brand Activism: From Purpose to Action

Brand activism is driven by a fundamental concern for the biggest and most urgent problems facing society. The main idea here is that when government fails to do its job, business has a civic responsibility to stand up for the public interest. It’s what a good citizen does.  

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available in the following countries

US UK DE FR ES IT NL JP BR CA MX AU IN

The book introduces the reader to regressive and progressive Brand Activism, and shows how the best businesses are making the world a better place because their activism is a differentiator – for customers, for employees, and for society at large.  We also examine the role of the CEO.  

Here’s a look at the table of contents:

Screen Shot 2018-11-22 at 5.54.07 PM.pngThe book includes the Sarkar-Kotler Brand Activism Framework, a toolkit for business leaders looking to transform their companies and institutions.  

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The book also includes interviews with leaders from various fields:

  • Scott Galloway
  • John Elkington
  • Raj Sisodia
  • John Ehrenreich
  • Christopher Davis
  • Stephen M. R. Covey
  • Hennie Botes
  • Stuart L. Hart
  • David “Dread” Hinds
  • Clark Fox

and 

Philip Kotler

Finally, we’ve launched a separate website to help individuals who want to learn more – www.activistbrands.com.  We hope you find it useful.

How Marketing Guru Phil Kotler Stepped Up to Confront Capitalism

The Founding Fathers didn’t envision corporate personhood, or Citizen’s United.

In fact, I wonder what they’d think about capitalism as an enemy of democracy and a grave threat to the very survival of life on Earth.

Is democracy doomed?

What must we do to save capitalism from itself?

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Enter Phil Kotler. The legendary marketing guru is marketing a new sort of product these days. He is trying to fix Capitalism, a system he believes has helped create more wealth for more people than any other economic model.

Says the esteemed Professor Kotler (he’s taught at Northwestern for 50 years!) >>

“Capitalism must evolve to serve the needs of all citizens, not just the very affluent. Our goal is to discuss the 14 Shortcomings of Capitalism and systematically analyze the problems and potential solutions. We want to gather opinions and recommendations from everyone – and begin the process of saving capitalism from itself.”

It’s great to see one of the greatest capitalist minds working on reforming capitalism with a capital C.

According to Kotler, the current state of capitalism is falling short because it:

1. Proposes little or no solution to persistent poverty

2. Generates a growing level of income inequality

3. Fails to pay a living wage to billions of workers

4. Doesn’t create enough human jobs in the face of growing automation

5. Doesn’t charge businesses with the full social costs of their activities

6. Exploits the environment and natural resources in the absence of regulation

7. Creates business cycles and economic instability

8. Emphasizes individualism and self-interest at the expense of community and the commons

9. Encourages high consumer debt and leads to a growing financially-driven rather than producer-driven economy

10. Lets politicians and business interests collaborate to subvert the economic interests of the majority of citizens

11. Favors short-run profit planning over long-run investment planning

12. Should have regulations regarding product quality, safety, truth in advertising, and anti-competitive behavior

13. Tends to focus narrowly on GDP growth

14. Needs to bring social values and happiness into the market equation.

So that’s my latest project – helping Kotler and friends get the word out and make a difference.

Like the $300 House Project, I’m helping build an “ecosystem of concerned folks” to face the challenge.

We began by enlisting the Huffington Post as our media partner. 

We now have a FIXCapitalism channel; we’re slowly beginning to get some attention with these articles:

Check out our FIXCapitalism website, read the book, like our FIXCapitalism Facebook page, and follow us on Twitter.

The future is too important to leave in the hands of the corporations and their paid stooges – the politricksters in D.C.!

Can you help? Connect us to others who are interested – who may have a point of view they want to share – and can help move the conversation forward. Join us!

Help spread the word!

IT Still Doesn’t Matter: Why aren’t CIOs influencing business strategy?

In McKinsey‘s latest survey on business technology, few executives say their IT leaders are closely involved in helping shape the strategic agenda, and confidence in IT’s ability to support growth and other business goals is waning.  Furthermore, “executives’ current perceptions of IT performance are decidedly negative.”

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This sort of criticism of IT is not new.  

In fact, it goes all the way back to Nick Carr‘s 2003 IT Doesn’t Matter article in Harvard Business Review. At the time, Carr managed to infuriate the CEOs of numerous IT companies, including Craig Barrett, Intel’s CEO, along with Bill Gates and Larry Ellison.

“My point, however, is that it (IT) is no longer a source of advantage at the firm level – it doesn’t enable individual companies to distinguish themselves in a meaningful way from their competitors. Essential to competitiveness but inconsequential to strategic advantage: that’s why IT is best viewed (and managed) as a commodity.”

Nicholas Carr

At the time, there were numerous rebuttals to Carr’s view, but none more powerful than the one from John Hagel and John Seely Brown.  They argued:

  • Extracting business value from IT requires innovations in business practices. In many respects, we believe Carr attacks a red herring – few people would argue that IT alone provides any significant business value or strategic advantage.
  • The economic impact from IT comes from incremental innovations, rather than “big bang” initiatives. A process of rapid incrementalism enhances learning potential and creates opportunities for further innovations.
  • The strategic impact of IT investment comes from the cumulative effect of sustained initiatives to innovate business practices in the near-term. The strategic differentiation emerges over time, based less on any one specific innovation in business practice and much more on the capability to continuously innovate around the evolving capabilities of IT.

According to JH3 and JSB: far from believing that the potential for strategic differentiation through IT is diminishing, we would maintain that the potential is increasing, given the growing gap between IT potential and realized business value.

So how does IT become more strategic?  

The Wall Street Journal‘s Rachael King recommends:

CIOs also need to bring some transparency to their operations by sitting down with business leaders and going over the budget and setting priorities together. The CIO needs to also actively market how the IT department is driving value in terms that business can understand. For example, Intel CIO Kim Stevenson recently published an annual IT report where she detailed how her department implemented advanced data analytics that helped drive $351 million in revenue for the company.  

The ability for Ms. Stevenson to demonstrate the value of her organization’s work in dollars and cents is changing how IT is perceived in the company. It changes the relationship from that of a service provider, a department that helps people set up servers or configure PCs, to one that uses technology to solve business problems.

CIOs must demonstrate and quantify the business value of IT.

What does this mean for the sales people of IT company’s trying to sell to CIOs?  It means that the role of the CIO is often supplanted by business executives.  (In my discussions with our clients, I often emphasize this point.)

IT is so strategic, one could argue, that it is no longer left to IT.  Often it is CMOs and other non-IT business executives who are actively pursuing the mobile, social, and analytics strategies that are creating the organizational pull for new approaches to rapid application development, and as a by-product, the cloud services offerings needed to enable those strategies.

The new generation of IT will support new business strategies. This means that any vendor selling IT solutions will have to speak the language of business strategy.  And most importantly, the vendor will have to show the client how to achieve the “promised” benefits of IT.

So here’s the takeaway: CIOs must work on getting a place at the strategy table.  When they do, they are viewed as effective business partners.  What must the CIO do to be viewed as a strategic partner?

Ask:

– Does your company have a clear view of how advances in IT (Big Data, AI, IoT, Cloud Computing) is likely to reshape your relevant markets over the next five years?

– What areas of business growth can IT contribute to?

– Does your company have an equally clear view of the implications for the changes you will need to make to continue to create value?

– Are these views shared effectively among your senior managers across the organization?

– Does senior management recognize the risks and uncertainties as part of the decision-making process?

– Has your company been sufficiently aggressive in using IT to improve strategic areas of your operations?

– Are there opportunities to use IT to improve operations around existing products and services?

– Are their opportunities to use IT to significantly reduce costs and cycle time in existing work processes?

– What are the data sources? How will you monitor them? How do you trigger events based on the intelligence gathered from the data? Is there a profit or cost-savings optimization opportunity?

FURTHER READING

Why CIOs should be business-strategy partners
Feb 2015, McKinsey

Most CIOs are Not Seen as Influencing Corporate Strategy: Report
, Feb 2015, Wall Street Journal

Public Cloud a first choice for minority of projects: Gartner CIO survey
, March 2015, ARN

The Search for the Sources of Innovation

How does innovation happen? Most company’s struggle to understand how innovation works, often confusing creativity with innovation. In today’s tacit, knowledge-based creative economy, innovation and differentiation rarely come from one distinct source. Rather, innovation evolves from:

  • new ways of thinking,
  • new business models,
  • new processes,
  • new organizations (or new collaborative inside/outside team structures),
  • and new products (offerings including services)

Screen Shot 2015-05-11 at 7.46.08 AM.png

In his classic book – Innovation and Entrepreneurship, the late Peter Drucker found seven sources of innovation. The first four sources were internal, inside the enterprise, whereas the last three are external, outside of the company.
1. The Unexpected
2. Incongruities
3. Process Needs
4. Shifts In Industry And Market Structure
5. Demographic Changes
6. Changes In Perception
7. New Knowledge
A good description of the seven sources is here. Unfortunately, not everyone stumbles into innovation like the legendary 3M Post-It notes, or the unexpected discovery of Aspartame, but innovation can, and should be pursued in a systematic way.
Larry Keeley‘s Ten Types of Innovation: The Discipline of Building Breakthroughs gives us a glimpse into how that might be:
Screen Shot 2015-05-11 at 7.46.19 AM.png
Here is an added insight from Keeley and friends: the things we love in the world–the services and systems we value and use–are the ones that make it easy to do hard things.
What does all of this have to do with business results?
Clearly there is plenty of room for innovation when it comes to designing superior, differentiated experiences for customers.  Every interaction with your customer can be differentiated, integrated with the purpose of the customer.  Make it easy to do business with you, said Jakob Nielsen, the web usability expert, many years ago.
What about the power of ecosystems?  At the individual level, ecosystem thinking can help you create better ideas. it’s all about disorganization.
Ideas need to be sloshing around or crashing in to one another to produce breakthroughs:
  • Research shows that the volume of ideas bouncing about make large cities disproportionately more creative than smaller towns.
  • Having multiple hobbies allows your brain to subconsciously compare and contrast problems and solutions, forming new connections at the margins of each.
  • Similarly, reading multiple books at the same time vs serially lets your brain juxtapose new ideas and develop new connections.
  • Wandering minds are more creative.
  • Studying a field “too much” doesn’t limit creativity — it does the opposite. More ideas banging about just produces even more ideas.
  • The “accept everything” mantra of brainstorming doesn’t work. Debate is far more effective. Let those ideas fight.
  • ADD and bipolar disorder are both associated with greater creativity. When you’re drunk or exhausted your brain is poised for breakthroughs.
  • Even with teams, it’s better to mix up experience levels, familiarity with one another and other factors to keep things rough around the edges.
And at the organizational level, there’s ecosystem strategy.  That’s a post unto itself…
Ask:
– How do you make it easy for the customer to do business with you?
– What outcomes do you want to see?
– What is required to achieve those outcomes?
– What must be done? What needs to change?
– How do we make innovation a embedded process?

Brand Resuscitation: Can TESCO be Saved?

There’s plenty of advice out there for UK-based TESCO’ s new CEO Dave Lewis as pledges to return to the core of Tesco’s business, “in price, availability and service.”  

For me, there’s a critical question: what one change will deliver an 80% difference in results?

I think I know.  I spent 6 months visiting TESCO at least twice a week when I was in Hertford, and all I can say is “wow.” If you just view TESCO with the eyes of a typical US customer, it’s obvious what that 80% difference is. 

There really aren’t as many difficult calls as it seems.  

So, what’s the one thing TESCO has to focus on?  Restocking shelves to meet demand during and after peak traffic.  

Every evening, right after after-work traffic died down, here’s what the TESCO produce section would look like:

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Seriously.

And that’s not all, their soft drinks are not replenished either. So if you go buy a Dr. Pepper in the morning, and then come in the next day – guess what?  No availability.  

This was a problem all over England.

Dave Lewis, just fix it.  Whatever it is they do here in the US to keep stocks replenished, copy it.

That’s it. The one thing that will save TESCO.

Seeing Differently: A Theory of Art for Our Times

T.S. Eliot had his “social function of poetry” and we have social media – YouTube, Twitter, Facebook, etc. etc.

Could it be that what we celebrate as the art of our times is not Art at all? If so, What is Art? 

At best, our culture has relegated Art to the dubious field of “entertainment” – hijacked from its true purpose, left to serve as a decoration on the public walls of high society museums and the private walls of wealthy collectors. At best, art is fashion.

Wait, wait, wait.

John Seely Brown’s latest newsletter takes us to task by raising an important point: 

Artists are not included in our debate on how we build
the economy for the future. They’re excluded in our nation’s emphasis on innovation which has been left to the STEM crowd. We’re not thinking about designing for emergence. Innovation is about seeing the world differently. Who is better at helping us see the world differently than the artists?”

Why is this? I can think of three reasons:

1) The “art” made by “artists” is irrelevant

2) The “artists” are not Artists

3) Art is generally devalued in a society polarized by Science, Fashion, and Politics

Alright, I’m being a bit silly, but here is someone who’s not:  Ben Davis and his 9.5 Theses on Art and Class (h/t Doug Smith) serve as both an indictment and a wake-up call for artists everywhere. Have a look at this excerpt:

2.0 Today, the ruling class, which is capitalist, dominates
the sphere of the visual arts

2.1 It is part of the definition of a ruling class that it
controls the material resources of society 

2.2 The ruling ideologies, which serve to reproduce this material situation, also represent the interests of the ruling class

2.3 The dominant values given to art, therefore, will be
ones that serve the interests of the current ruling class

2.4 Concretely, within the sphere of the contemporary visual
arts, the agents whose interests determine the dominant values of art are: large corporations, including auction houses and corporate collectors; art investors, private collectors and patrons; trustees and administrators of large cultural institutions and universities

2.5 One role for art, therefore, is as a luxury good, whose
superior craftsmanship or intellectual prestige indicates superior social status

2.6 Another role for art is to serve as financial instrument
or tradable repository of value

2.7 Another role for art is as sign of “giving back” to the
community, to whitewash ill-gotten gains

2.8 Another role for art is symbolic escape valve for
radical impulses, to serve as a place to isolate and contain social energy that runs counter to the dominant ideology

2.9 A final role for art is the self-replication of
ruling-class ideology about art itself–the dominant values given to art serve not only to enact ruling-class values directly, but also to subjugate, within the sphere of the arts, other possible values of art

OK. But why are artists banished from the Republic? 

One can argue (via Ben Franklin) that the last artist was Jesus and before him Socrates. I’d add folks like Gandhi, Malcolm X, Mandela, Marley… The artist sees differently. Not just paintings on a wall, but society itself. Who paints our vision for society today? Lady Gaga or our lobbyists?

Walker Percy saw the artist (or writer) as a canary in the coal mine. The artist as prophet. But we are deaf to the canary. We’ve banned our artists from society – not by muzzling them with threats and jail time, but by turning them into designers of consumer and fashion goods.  

For the first time in history, we’ve made art useful as a financial commodity- and killed it in the process.

Meanwhile, somewhere, hidden from the lights of Sotheby’s and Christie’s, art is still being made.

[Book Review] Big Bang Disruption: Strategy in the Age of Devastating Innovation

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Here’s a new and important book that helps us make sense of the changing business landscape. It’s Big Bang Disruption: Strategy in the Age of Devastating Innovation by Larry Downes and Paul Nunes (from Accenture) – and it describes how so many businesses are disrupted overnight by big-bang innovations that come out of nowhere.  The insights presented by the book add new perspectives to the work on disruptive innovation by Clayton Christensen and gang. 

According to the authors, the big-bang disrupters may not even see you as competition. They’re not sizing up your product line and figuring out ways to offer slightly better price or performance with hopes of gaining a short-term advantage. 


EXAMPLES OF BIG BANG INNOVATION

One of the examples is the GPS system. Do you even remember Garmin, or TomTom or Magellan?  They were all disrupted by the smartphone – with Google Maps leading the way.

And the smartphone isn’t done yet. It has wiped out the wrist watch industry, threatens the digital camera market, the video camcorder market, and even the music and TV industries. 

Other examples from the book include:

CampusBookRentals and Khan Academy in education, Pandora and Spotify in radio and recorded music, Skype and FaceTime in voice and video calling, and Square in mobile credit-card processing. These offerings’ lightning-fast adoption is a function of near-perfect market information. Wherever customers are, mobile devices let them search a wide range of specialized data sources–including online sites like Yelp, TripAdvisor, Amazon, and other free databases of user-generated reviews–to find the best price and quality and the next new thing.

What’s more, big-bang disruptions go far beyond information-based goods and services. Restaurants, for example, now depend on online reservations, customer-generated reviews, e-coupons, and location-based services to drive business.


THE SHARK-FIN PRODUCT ADOPTION CURVE

The traditional product development cycle has been radically compressed:

bigbangproductdev.jpg

What this “shark-fin” curve means is that incumbents don’t have time to catch up. The crossing-the-chasm story is over.  New products are perfected with a few trial users and then are embraced quickly by the vast majority of the market!

Here are some ways in which the world has changed:

Big-Bang-Conventional-wisdom.jpg

TRUTH TELLERS

The book introduces us to the folks known as truth tellers. These are industry experts with
profound insights into new technologies and customer behaviors, who can predict
earlier than anyone else when small tremors signal imminent earthquakes. Often,
they are people who spend their careers working in the industry, and share a
unique passion for its mission, its products and its customers. My term for these guys is thought-leaders, or if you 
want to be real – they’re the ubernerds.

Truth tellers are often eccentric and
difficult to manage (no, really?!). They may be
found outside your organization–they may even be customers. Learning to find
them is hard. Learning to listen to them is even harder.

THE 12 RULES OF BIG BANG DISRUPTION

Another reason to buy this book is the neat methodology they’ve come up with to introduce this Big-Band Disruption mindset into your company:  

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I personally don’t think our Fortune 100 companies can adopt this sort of thinking very easily, so I’m looking for a lot of them to get dinged severely by the Big-Bang Disrupters, some of which will come to us from India and China.

Still, the framework they present is compelling – especially the part about leaving the market before you get disrupted in the end.

THE POWER OF ECOSYSTEMS

Finally, one of the key elements of Big Bang Disruption is the replacement of the traditional supply chain by dynamic, ever-shifting ecosystems. Again, the culture of most traditional institutions can’t embrace openness or collaboration. I’ve had some experience in that department.

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Keep this in mind; I’ll be back very soon with a blog post on ecosystem strategy.

Houston METRO: What Will It Take to Become World Class?

One of the reasons why Houston will never get a shot at hosting the Olympics (not that we want it, at this point) is because we don’t have a world-class transportation system. So while Houston is the fourth-largest metropolitan area in the US, we’re not even close when it comes to public transportation (can you believe we’re behind Dallas?). According to the 2010 U.S. Census, we have a population of over 2.1 million people and a land area of 599.6 square miles (and that’s not counting the suburbs). 

Houston is second only to New York when it comes to resident Fortune 500 companies.

So what’s the problem? Why doesn’t Houston have a world class transit system at this point in its history? And what can be done?

The traditional finger-pointing is political. Suburban taxpayers who supported referendums in 2003 and 2012 have demonstrated a desire for development, only to have officials shortchange them.  The latest in line is John Culberson, but to be fair, past opposition has come from both sides of the political aisle.

And who is behind these politicians?  You don’t have to look very far to see that Houston is an energy town – in fact it’s the “energy capital” of the world.  Our energy companies are not interested in a world class transit system;  for them, seems like widening the freeways is the only solution. This lack of civic leadership reflects poorly on our city and is going to be a burden going forward. Those Fortune 500 companies that call Houston home will find a better place to live.

To be clear: between the lack of leadership from business and the misleadership of our elected officials, Houston has a third rate transit system, used by less than 3% of the population.

There is no long-term plan in place. That, in itself, speaks to the magnitude of the problem.  Furthermore, any plan we do get is probably going to be a constrained plan that does nothing to address the real challenge.

What can be done? 

How can we bring our politicians and business leaders together? Or is Houston doomed to remain a third-class city when it comes to mass transit?

The reason I wrote this blog post was to highlight a third way. Let’s look at an example from a country and place where things are a lot harder than Houston. Delhi – the capital of India – is a city with 9.9 million, with horrible infrastructure problems.   Over the years, like Houston, no real attempt was made to build an infrastructure equal to the needs of the citizens.

Delhi_Metro.jpg

Then, in October 1998, ground was broken on a comprehensive metro system that had been talked about for over three decades. Today, the Delhi Metro is the world’s thirteenth largest metro system
in terms of length. The network consists of six lines with a total length of 189.63 kilometres
(117.83 mi) with 142 stations, of which 35 are underground, five are at-grade,
and the rest are elevated. All stations have escalators, elevators, and tactile
tiles to guide the visually impaired from station entrances to trains. It has a
combination of elevated, at-grade, and underground lines, and uses both broad
gauge and standard gauge rolling stock.

delhi-metro-map.jpg

What can Houston learn from Delhi?  At least three things:

1) build a METRO system worth having: don’t build a system that just clogs up already busy lanes to shuttle folks from one business hub to another.  Focus on the real issue: mass transit, specially the mass part.  We should aim for getting around 20-30% of our citizens on the METRO during rush hour, and that will only happen if we focus on real solutions.

2) use the right-of-way on existing freeways: the genius of the Delhi rail line is that it is elevated and runs along the main highways already in place. In Houston, this would mean our HOV lanes would be turned into METRO lines – elevated, above the traffic. Even the stations are elevated; which sounds weird, but actually it works very well. The image below is a METROstop along the line – well above the freeway:

delhistation.jpg

3) mass transit is too important to be left to METRO alone: in Delhi, and you have to appreciate the extent of corruption in public office to understand this, a special purpose organization was formed called the DMRC.  This cross-agency team was vested with great autonomy and powers to execute the gigantic project. In Calcutta where they did not have such a cross-agency team, the Kolkata
Metro was badly delayed and 12 times over budget due to “political
meddling, technical problems and bureaucratic delays.” 
The first
phase of the Delhi Metro project was completed in 2006, on budget and almost three years
ahead of schedule, an achievement described by
Business Week as “nothing
short of a miracle”.

So can miracles happen in Houston?  They can, if only our politicians and METRO folks would actually share some values – like putting aside their petty interests for the good of the city. I’m not holding my breath.  Hey, maybe we can build some more public funded sports arenas; those projects seem to have no problem getting funded!

INFOGRAPHIC: Are you a Wavemaker? (With Tips on Collaborative Innovation)

Here’s an interesting classification or segmentation of change makers (from Deloitte) along with some advice on how to make a difference via collaboration >>

Steady Supplier: Combine your contextual knowledge with the Public Value Innovators to create new value

Multirational Multinational: Engage with Citizen Changemakers to gain local insights and ideas

Investors: Connect Wavemakers to amplify impact

Public Value Innovator: Leverage the reach of the Multinationals to reach more communities

Citizen Changemaker: provide feedback to all in order to get to root issues

Wavemaker.jpg

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Why Making Money is Not Enough

MIT Sloan

This is going to be a central theme in business going forward: what is our purpose?

Here’s William Cohen talking about Peter Drucker‘s perspective:





“…until Drucker came along most everyone believed the basic
“fact” that the purpose of a business was to make money. That is, to make a
profit. This belief leads to a corollary, another myth, believed by all–that
is, that the goal of any business is profit maximization. Another words,
whatever your business, your goal should be to make as much profit as possible.
If you accept making a profit as a business’s purpose, the second part just
follows naturally. This might even seem worthy to many. To quote Michael
Douglas’s famous (or infamous) statement in his role as Gordon Gekko in the
1987 movieWall Street: “Greed is good.” Even today many “know” greed, or profit
maximization to be the correct prescription for business success, even if it is
amoral or shouldn’t be “good” from a moral perspective. Not so fast, Gordon. As
Drucker so often said, whatever everyone knows is usually wrong, Hollywood
films not excepted. Drucker told us first that profit is not the purpose of
business and that the concept of profit maximization is not only meaningless,
but dangerous.”

Now Ratan Tata and gang (myself included) have a similar message

The problem with industrial capitalism today is not the profit motive; the problem is how the profit motive is usually framed. There is a persistent myth in the contemporary business world that the ultimate purpose of a business is to maximize profit for the company’s investors. However, the maximization of profit is not a purpose; instead, it is an outcome. We argue that the best way to maximize profits over the long term is to not make them the primary goal.

So what is to be done?  

What is your company doing to create purpose beyond profits? The future of our planet depends on your answer.

Read: Why Making Money is Not Enough

How to Go Viral: The Power of Emotional Contagion

Ever wondered what makes a video go viral?  

In an age when far too many folks are spending their time at work watching cat videos on YouTube, the research is giving us some insights into what we suspected all along: emotions trump everything.  Positive or negative, doesn’t matter. The emotional nature of the content spreads virally, infecting viewers with “emotional contagion.”
Of course there are cultural issues as well. Here’s an example of an ad that went viral in India:

There are several societal norms challenged in the video. The ad celebrates the second marriage of a woman and includes her daughter. And secondly, the woman is dark-skinned. In a society obsessed with fair complexion, the ad breaks an unwritten rule of Indian advertising. The emotional impact of the ad made it a viral hit, with politicians, citizens, and film stars talking it up on their social media accounts.

Arun Iyer, the creative director, says: “This is the thinking that most progressive people have. They may not be going through the same thing in their life, but the ad makes a bold, progressive, statement and people like to be associated with brands that make such statements.”

The company behind the ad is Tanishq, the largest retail jewelry brand (part of the forward-thinking TATA Group) in India with over 156 stores in 86 cities.

In the US, and specifically in Texas, we have slightly different reasons for emotional contagion: toilet humor.

Larry Keeley’s 10 Types of Innovation

I met Larry Keeley through a mutual friend several years ago.  He’s the thought leader behind Doblin, the innovation consulting company that’s now part of Deloitte.  At the time, Larry had come up with an innovation scanning methodology which looked across industries to identify innovations up and down the value chain. Larry was also kind enough to join the $300 House project as an adviser, and I’ve learned a lot from him – more than he can imagine!

Now, and this is a good read for the holidays, he’s written a book called Ten Types of Innovation: The Discipline of Building Breakthroughs.

You see, most companies focus on just one type of innovation – product innovation. Sure, some of us are looking at service innovation and business model innovation (thanks to Clayton Christensen and Alex Osterwalder), but we still suffer from tunnel vision.  Time to wake up and look across the entire scope of our business activities. Where can and should we innovate?

doblininnovation.jpgHow will your company build it’s business innovation portfolio?

Global Innovation Index 2013: Wrong, wrong, wrong!

globalinnovationhype.jpg

What’s wrong with this picture? 

According to the Global Innovation Index (GII) – co-published by Cornell University, INSEAD and the World Intellectual Property Organization (WIPO) – the most innovative countries in the world are:

1. Switzerland   
2. Sweden   
3. United Kingdom
4. Netherlands
5. United States of America   
6. Finland   
7. Hong Kong (China)
8. Singapore   
9. Denmark   
10. Ireland

Other than chocolate, watches, and secret bank accounts, I’ve never viewed Swiss innovation as leading the world.  The same goes for Sweden (IKEA, Abba?) and the Netherlands (Shell).

Why are these countries being hyped as the most innovative countries in the world? 

Let’s dig a little deeper. Firstly, the index tracks the wrong measures of innovation:

wronginnovationframework.jpg

Swiss “innovation” looks like this:

innovationswiss.jpg

The USA looks like this:

innovationusa.jpg

So, let’s look at three other “not-so innovative” countries: Brazil, China, and India – yes, they are “emerging markets”…

Brazil:

innovationbrazil.jpg

China:

innovationchina.jpg

India:

innovationindia.jpg

See the problem?  Innovation cannot be measured by number of entries to Wikipedia, or number of papers, or patents, or YouTube uploads.

Rather, it should be measured in terms of innovation (and disruption) – by industry.

Brazil, is the first country where renewable energy accounts for more than 85.4% of the domestically produced electricity used. If that’s not innovative, I’ll go re-read Heidi.

China? Well, they’re China. Every product the Swiss used to make is now made cheaper and of comparable quality in China. Red capitalism rules the business world right now, so that’s something of a disruptive innovation, don’t you agree?

And India? They’ve got more scientists and engineers who are hungry to make something happen. India’s also the hot-bed for reverse innovation (which does not seem to be on the radar at the WIPO).  And they just sent a mission to Mars…

So what’s wrong with this innovation survey? 

Simply put, it’s not based on reality. And it’s not an accident that Switzerland is “so innovative,” according to this survey – which happens to be sponsored by INSEAD (in Lausanne) and the WIPO (Geneva).  The innovation for Switzerland is its opaque banking system (ask China about that: Chinese government officials hold about 5,000 personal Swiss bank accounts with the Swiss global financial services company UBS. Two thirds of those accounts belong to high level central government officials.)

… Wait. There is one true innovation from Switzerland that does deserve a mention: the cap on CEO pay. Let’s see if it flies.

Companies and countries that are serious about innovation would do well to not pay attention to this survey, and focus instead on their schools, quality of science education, business transparency, social mobility, gini coefficients, and of course, governance itself (the Corruption Index). See also the Big Shift and A New Culture of Learning.

And if you want to measure creativity, that’s going to be something else entirely.

Lessons from Elvis and Bob

Elvis Presley and Bob Marley as they would look today (h/t these folks):

musicallions.jpgWhat can we learn from these lads? These, the young lions, who conquered the world like Alexander, but then had it all taken from them by Thanatos.

One thing you have they don’t. And if you escape the sword of Thanatos for a while, you still have to deal daily with his post-modern cousins: Boredom and Anxiety.

Just thinking:

He realized now that to be afraid of this death he was staring at with animal terror meant to be afraid of life. Fear of dying justified a limitless attachment to what is alive in man. And all those who had not made the gestures necessary to live their lives, all those who feared and exalted impotence– they were afraid of death because of the sanction it gave to a life in which they had not been involved. They had not lived enough, never having lived at all.

Albert Camus, A Happy Death

The man also said, “to have time was at once the most magnificent and the most dangerous of experiments.”

Every minute counts. Each year is 525949 minutes. How do you make every minute mean something? How do you escape everydayness?

Solar-Based Manufacturing: Is Apple Driving a New Wave of Innovation?

When Apple announced its plans to bring a 100% renewable energy powered manufacturing plant to Arizona, we would do well to ask why?

The answer is partly to be found in the map below:

solarUS_small.jpg

What else? 

1) Proximity to Mexico

There’s a Foxconn manufacturing base in Juarez – just over the Mexican border – and it seems like the output from the Arizona plant will end up there. 

2) Tax Structure

Over the past 15 years Arizona has demonstrated a “pro-business” mentality combined with a minimalist regulatory approach by reducing taxes and decreasing regulations:

  • No corporate franchise of business inventory tax
  • Low workman’s comp and unemployment insurance rates
  • No income tax on dividends from out-of-state subsidiaries
  • 80% sales factor on corporate income tax scaling to 100% option
  • No worldwide unitary tax
  • Aggressive depreciation schedule
  • 90 day or less permitting
  • Virtually all services exempt from sales tax
  • No inventory tax
  • No Sales tax on manufacturing equipment
  • Ability to carry forward 100% of net operating income for twenty consecutive years
  • Small businesses with less than $10 million in assets will not be required to pay capital gains taxes beginning in July 2015
  • Right to Work State

Arizona also has aggressive tax credits to reduce state corporate income tax liability. This includes phasing in a corporate income tax rate from 6.9% in 2012 to 4.9% in 2017.

So what does this mean for neighboring states?

It’s too early to call this is a new wave of innovation, but it’s worth thinking about. How can states like California, Texas, and New Mexico join this solar-shift?  Do they even want to? 

C’mon, New Mexico!

Apple is to be applauded for bringing manufacturing back to the US. More importantly, they can still think different.