Ideas were at the at the heart of why I started this blog. One of the first posts that I wrote there being a sweet spot in the complexity of products based on the ideas of Dan Greer. I wrote about the first online election fought by Howard Dean, which now looks like a precursor to the Obama and Trump presidential bids.
I articulated a belief I still have in the benefits of USB thumb drives as the Thumb Drive Gospel. The odd rant about IT, a reflection on the power of loose social networks, thoughts on internet freedom – an idea that that I have come back to touch on numerous times over the years as the online environment has changed.
Many of the ideas that I discussed came from books like Kim and Mauborgne’s Blue Ocean Strategy.
I was able to provide an insider perspective on Brad Garlinghouse’s infamous Peanut Butter-gate debacle. It says a lot about the lack of leadership that Garlinghouse didn’t get fired for what was a power play. Garlinghouse has gone on to become CEO of Ripple.
I built on initial thoughts by Stephen Davies on the intersection between online and public relations with a particular focus on definition to try and come up with unifying ideas.
Or why thought leadership is a less useful idea than demonstrating authority of a particular subject.
I touched on various retailing ideas including the massive expansion in private label products with grades of ‘premiumness’.
I’ve also spent a good deal of time thinking about the role of technology to separate us from the hoi polloi. But this was about active choice rather than an algorithmic filter bubble.
The New Working Class by Claire Ainsley is unashamedly wonkish in nature. Ainsley comes from the left of the political establishment. She is an executive director of the Joseph Rowntree Foundation. She had previously worked for Unite and as a government advisor.
Ainsley posits that the Labour Party is out of touch of who the working class are and what they care about. Deindustrialisaton and immigration has changed the nature of what working class means. They might have lower middle class incomes working in the services sector. Traditional blue collar roles declined to represent about 14 percent of the British population.
Ainsley’s The New Working Class is a testimony to how out of touch policy makers and advisers with the society that they claim to represent. This also makes wonder about the usefulness, and or, the attention paid to polling and research done by political parties in the UK. The Conservatives understanding of hard-working families shows at least some understanding at a high level of who the new working class are.
What struck me about the book is that much of the ‘new’ working class isn’t actually that new at all. The struggle to make ends meet is one that Orwell would have recognised the best part of a century earlier. The challenge of unemployment is one that haunted much of the 1970s and 1980s.
Family is still important and while society is secular, working class communities have been more socially conservative. That doesn’t mean that they hate gays or immigrants, they take a common sense approach to fairness but they will be concerned about family. The rate of change in society and the desire for working opportunities has been more of a driver over immigration than outright racism back to the rise of Enoch Powell.
I had thought I would gain new consumer insights in the same way that I have had in the past, reading books by like likes of American pollster Mark Penn, but this wasn’t the case with Ms Ainsley’s book. Ms Ainsley has clearly written for a different audience. Instead of the ‘new new’ insight, her work is a 101 guide for politicos to the society that the profess to live in and represent. That scared the hell out of me. More on the book here. You can find more book reviews here.
Beyond Disruption by W Chan Kim and Renée Mauborgne moves their focus from general business strategy in their book Blue Ocean Strategy. You can read my review of Blue Ocean Strategy which I originally read a number of years ago. By contrast this book looks at the idea of non-disruptive innovation. Non-disruptive innovation as a topic makes sense within the blue ocean / red ocean model.
Beyond Disruption book cover
Success has its own challenges.
Kim and Mauborgne face a Augean literary challenge. Blue Ocean Strategy was so successful at the time, that any subsequent book will look diminished in its success by comparison. Blue Ocean Strategy had something for everyone. To marketers it spoke of differentiation and salience, for business management types it was about differentiation and innovation. Beyond Disruption delves deeper into the nature of that innovation in a way that Blue Ocean Strategy didn’t.
In Beyond Disruption the authors posit that their blue ocean strategy approach was a blend of disruptive and non-disruptive growth.
Difficult narratives
Disruptive innovation by its very nature means destruction of existing businesses as a new one is created. A classic example of this would be the battles between regulators and taxi drivers with Uber, or city governments looking to protect the needs of their citizens from AirBnB. The ideas of Joseph A. Schumpeter fit in with the innovation stories coming out of Silicon Valley. Apple and Google didn’t invent the smartphone, but they came up with a design that captured larger scale consumer interest than Nokia devices and captured the market.
It is the predominant narrative in the media and business community at the moment around innovation. Disruptive innovation fits in with the conflict driven narrative of business. It is reinforced by adaption of military thinking in a literal manner to business strategy. The authors themselves point out about how much business decision-making is driven by aggression and fear.
Approach of Beyond Disruption
The approach of Kim & Mauborgne to ‘nondisruptive creation’ in Beyond Disruption is broken into two parts which cover
What it is and why it matters.
How to realise nondisruptive creation.
What it is and why it matters
Kim and Mauborgne focus a lot of time in the first part of the book explaining the economic and social impact of non-disruptive creation. The idea is that creating new markets doesn’t destroy existing marketplaces. In theory, value will be created on top of the existing economic order, rather than being substitutive in nature.That narrative is largely true, but there are exceptions to bear in mind.
If we think about the smartphone as a device category, even prior to Apple and Google displacing Nokia, cell phones were displacing existing categories. Sales of answerphones dropped, as did the sales of chocolate to children and the incidence of children smoking. Instead the pocket money was spent on handsets and PAYG (pay as you go) mobile tariffs.
Beyond Disruption outlines four sources of business advantage to non-disruptive creation:
Avoiding direct confrontations with established incumbents.
An effective way to respond to full-on disruption.
Support from internal stakeholders who will view non-disruptive innovation as less emotionally charged.
No evident backlash from external stakeholders.
The authors see this approach as a way to address the challenges of ESG and the fourth industrial age of automation.
How to realise non-disruptive creation
The authors start with the idea of the right perspective. This involves:
Leaders moving away from the ‘startup story’ of an innovative founder or co-founder. Instead the problem to be solved needs to be recognised first.
Don’t confuse the means with the end.
Focus on the many, not the few. Have a product that is likely to be adopted by a range of customers.
Identifying opportunities is considered in a separate section, the key point of which was the idea of empathetically observing newly emerging or unexplored problems. These ideas can then be explored further by understanding the scale of the challenge (amount of people affected etc) and understand the assumptions others have made that persuaded them to avoid the opportunity.
In conclusion
With Beyond Disruption, Kim and Mauborgne are looking to encourage a business more in keeping with the needs of stakeholder capitalism. More on Beyond Disruptionhere.
Is Open AI the equivalent of Sir Hiram Stevens Maxim? Maxim invented the Maxim gun. A belt fed machine gun that helped colonial powers grab territory in the scramble for Africa. It was reputedly used by one British official to help clear game from land that was soon to be put to farming use in Kenya. Later on it was used by both sides in the Russo-Japanese war and World War 1, due to Maxim’s business associate Sir Basil Zaharoff.
Investors are betting that Open AI will have a similar role in the battle shaping out between tech giants over generative machine learning related processes.
Sam Altman of Open AI
When a company that has issues with making profits can raise money at a valuation of $85bn, it becomes abundantly clear that investors in generative AI have taken leave of their senses
I can understand the argument that Richard Windsor is making with this argument. While others might point out how dominant funding drove Amazon’s present-day monopoly, there are other precedents like Netscape, General Magic, Uber and WeWork that others can point to.
There are bigger questions about whether the LLM approach is in itself a limited model to pursue? If so, Open AI could look more like when IBM bet the farm on Josephson Junctions. The use of synthetic data implies that LLM scaling might already be at its limit. Nvidia looks like a better bet from this angle despite its own extremely high valuation.
Brand purpose has a lot of issues, but it’s worthwhile bearing in mind the kind of marketing Unilever was pushing out prior to buying fully into the concept. These efforts came to light from social sharing about the the British ‘vulgar wave’ that contextualised Russell Brand.
Unilever Heart Brands UK
While China’s ads skewed conservative compared to the UK’s vulgar wave of 1997 – 2012, this Axe (Lynx in the UK and Ireland) ad isn’t exactly on brand purpose. The spokesperson in the advert is Edison Chen. At the time Chen was a star in Hong Kong’s entertainment circles. But getting involved in street fights and a leaked hard drive full of pornographic images of girlfriends he dated meant he withdrew from the industry. Now he is better known for owning streetwear brand CLOT.
Dove Sparks Boycott Calls Over New Partnership—’Never Buy Them Again’ | Newsweek – controversial question, but have Unilever gamed out that conservatives are more likely to use Irish Spring or similar products over Dove? I suspect that there might be something in the semiotics of cleanliness in this. African Americans by contrast might have challenges like ashen skin that would benefit from soap that cleans and moisturises, hence the popularity of shea butter based products.
Hong Kong
Architect Demi Lee on Kowloon’s Walled City. The comparison with the idea of rhizome was very interesting.
Ideas
Demi Lee’s video on how elements of cyberpunk are leaking into our current reality.
Dimensions of luxury as a post came together thinking about fictional influence account Gstaad Guy, Horizon Catalyst’s New Codes of Luxury report and Sense Worldwide’s Future of Luxury report.
Dimensions of luxury breaks down into three areas which Catalyst calls:
Traditional luxury
Contemporary luxury
Personal luxury
Nowadays, most luxury brands won’t fit neatly into these classifications. For instance the Swiss watch brand Blancpain would be considered to be traditional luxury, but the Swatch x Blancpain collaboration which borrows the design language of the 50 Fathoms dive watch is very much contemporary luxury. Part of this has been driven by many brands being part of large combines:
LVMH – depending when you look at the stock price, Europe’s largest company by value run by Bernard Arnault. Related to L Catterton private equity fund which has been financed deals such as Birkenstocks.
Kering – LVMH’s rival best known for Gucci. It is currently run by François-Henri Pinault
Richemont – Swiss listed group focused more on jewellery and watches than rivals. It has a range of brands including Dunhill, Montblanc and Panerai.
Swatch Group – which owns most of Switzerland’s premier watch brands
Fosun – China-based multi-sector conglomerate which owns a hodge podge of western heritage and luxury brands including Ahava, Folli Follie, Lanvin, Sergio Rossi, Silver Cross prams and St John knitwear.
Notable independents include The Rolex Trust and Hermés.
Traditional luxury
Unsurprisingly this is the kind of luxury that most people would think of. Timeless style, heirloom designs and peerless quality are likely to be the kind of language that springs to mind. When the luxury industry talks about sustainability and the circular economy, the lives of these traditional luxury products come into focus, since they are often passed down. The influencer behind Gstaad Guy in an interview with the FT talks about his favourite item of clothing being a Loro Piana vest that was his Grandad’s.
What we think of as ‘traditional’ luxury brands came out of businesses with heritage that are known for their quality
Loro Piana and Zegna were both high end fabric manufacturers before becoming ‘luxury brands’
Rolex made high quality reliable tool watches, as did Omega and Panerai.
Louis Vuitton made high quality robust trunks for travellers.
Zero Halliburton and Rimowa made cases that were ideal for air travel and protecting sensitive instruments and camera equipment. The Halliburton in Zero Halliburton actually refers to Halliburton Company who are famous for providing oilfield services.
Contemporary luxury
Contemporary luxury is where the greatest controversies of luxury tend to lie. Horizon Catalyst tend to tie up premium brands like AirBnB and Apple together with the luxury sector. It includes values like innovation and sustainability. But it doesn’t discuss what Dana Thomas calls the massification of luxury, with traditional European brands being more often being ‘Made In China’. This has driven a drive for brands to try and ‘shortcut’ their way to success. Luxury brands have adopted the techniques of streetwear brands were scarcity and limited drops fuel the ‘hype’. What Sense Worldwide called ‘Supremification’. Chanel is opening special UHNWI only boutiques. And ‘Made In China’ allowed China to develop its own ateliers.
Personal luxury
Catalyst defines personal luxury as subjective in nature, individual to each person and having a deeper connection with personal values. It could be items that might be considered treats like having their groceries delivered. Their discussion of everyday luxury would be familiar to marketers in terms of the ‘Lipstick effect’ familiar from Juliet Schor’s work during recessions. But it’s interesting that luxury is being defined by consumers and followed by brands. The classic example of this would be brands from Nike to LVMH getting on board with NFTs, following consumers and creators.
IPSOS conducts CX research on an annual basis. They surveyed 1,000 CX (customer experience) specialists around the world about the current state of CX in their businesses. The IPSOS CX research painted a complex picture of organisations. Key take outs of the CX research:
82% of respondents believed that CX investment will provide a competitive edge, but only 52% were expecting an increase investment over the next 12 months.
28% of respondents admitted that their organisation’s CX was worse than promised and only 15% of respondents consider their organisations ‘CX leaders’.
Only 52% have CX governance policies in place.
At the present time the majority of CX leaders have data integration issues and 46% now have to integrate AI as well, adding to their business challenge.
Environmentally friendly clothing brand Patagonia gets called out about the ‘greenwashing’ design of its buffalo work boots by the Rose Anvil YouTube channel who specialise in analysing boot and shoe design.
Standard Model: The Chanel J12 Eclipse Set – LUXUO – interesting, particularly given the manufacturing problems that Rolex has had with dual colour ceramic bezels. Chanel has managed to master this and master it across the whole watch. Matching bezel and case divisions.
Interesting analysis on supercar prices.
Profile of Lacoste.
Marketing
A few days of lunch time viewing from the IPA (Institute of Practitioners in Advertising) media planning and strategy summit. Interesting mix of presentations and case studies.
Really interesting case study on McDonalds and how the brand has evolved over two decades in the UK.
