The only thing for certain is that everything changes. The rate of change increases. If you want to hang on you better speed up. That is the message of today. It could however be useful to remind everyone that our basic needs never change. The need to be seen and appreciated! It is the need to belong. The need for nearness and care, and for a little love! This is given only through slowness in human relations. In order to master changes, we have to recover slowness, reflection and togetherness. There we will find real renewal.

-Professor Guttorm Fløistad

Fred Wilson’s recent post on  slow capital in a recent post caught my attention and held it as I contemplated the analogues to marketing.  In working with clients on strategies for connecting their business goals and aspirations to the customer who shares those same goals and aspirations, some of the things that Fred is seeing by investing slow, I’m seeing in marketing slow.

Marketing is particularly at risk of falling prey to the cult of speed. Let’s  adopt this technology, let’s change this message, let’s hit the quarterly numbers with a massive ad spend. This tactical ADD is compounded by the relentless pressure our clients feel to ensure that their agencies are delivering ROI value to their businesses.  The post-recession consumer is exhibiting values and views that do not align with fast marketing, so let’s dig into some ideas of slow marketing and see if we have the start of some answers for post-recession marketers. This is a start and you’re contribution to expanding this thought are welcome and encouraged:

1. Return to the beginning - Return to your roots and remind yourself of what the original problem was that started you down the path of creating this product or service. American’s are entrepreneurs in mind if not always in action, the story of how a product is created and the problem it set out to solve matters and resonates. Tell that story.
2. Feedback is everything - Success is a matter of pattern recognition. If your business is selling to a customer, seeing their participation behavior is essential to building and supporting your relationship with that consumer.  You cannot internalize your marketing, in fact you must externalize everything. Embed feedback in your product, your marketing and your management organization so that you have the richest stream of customer data. While it may seem like we’re in a fast moving constantly changing world, if you can see the deeper, slower moving underlying trends and position against those, you’re probabilities of long term success are much greater.
3. Value and Values - In pursuit of the material at core, consumers see through pretense to the performance. Things have to work. Emotion attracts, rationality sells.  Call it ‘defending your life’, but purchases need reasons or you’re not seen as a smart consumer.
4. Declasse Consumption - The appearance of spending recklessly is passé.  Pretense is out, prudence is in: it’s stylish to exercise restraint and even to bargain in order to appear as a smart consumer.
5. Flea market capitalism- A capitalism based on personality, uniqueness, provenance and storytelling, where the product is connected to the producer/seller and the transaction forms a relationship. Increasingly this manifests in a local manner, where artisanal products are valued for being local and steeped in narrative, building value into their meaning. Moving from consumer to customer is at the heart of Flea Market Capitalism.

What would you add? Can we add slow marketing to the slow movement pantheon?

I was honored that Mike Lundgren and the VML team invited the ideas of The Great Unwind to TEDxKC.  In the ensuing months my team and I will dig much deeper into the themes discussed in this presentation. We’re living in a fascinating time of social and economic transition. It’s people like Mike, Umair Haque, Fred Wilson, Chris Anderson, the brilliant participants in TED and thousands of others agitating for the expansion of our collective knowledge that will lead a 21st century revolution in commerce. I’m happy to be participating in the discussion and the revolution.

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I enjoyed speaking yesterday in Sao Paulo at MaxiMidia and wanted to share my presentation.

Please note: If you watch this using the full view presentation mode, the examples are hyperlinked to all the case studies.

Thanks again for having me.

Old CSR was structured, analytical and (frankly) self-serving. A company planned their initiative and pushed their messaging out into the marketplace with tangible intention. CSR 2.1 is more organic and intuitive and the immediate benefits are not always clear. Consider this Google conference, where some the industry’s brightest minds were brainstorming how to improve customer service, sustain employee retention and be more transparent in the marketplace. Competitive pretense was dropped as ideas began flowing. Google’s industry forums demonstrate CSR is no longer an initiative, but a core strength and tool for attracting and connecting with the consumer. You can see this transition through a recent McKinsey Quarterly article which begins with:

Over the past 30 years, most of them (companies) have responded by developing CSR and sustainability initiatives to fulfill their contract with society…

Before, businesses simply wanted to check the CSR box. But Google wants to expand it. Through their leverage, they encourage moments of convergence industry by industry, creating platforms for collaborative problem solving which has the ultimate intention of greater customer value and eventual monetary success. Reading Vineet Nayar’s article “The Collaboration Imperative” after the conference I saw how the collaborative business world in which we operate demands new thinking around CSR.

Business in our globalized world is only possible because of transparency and collaboration. If we do not embrace those concepts then we cannot efficiently access the resources necessary to grow our businesses. CSR in a globalized economy acts as the first tendrils of business relationships, establishing a platform for future conversations. In our economy a series of responsible acts can be amplified in our social media age to cast a global glow upon a brand from a local act. See the work that Tom’s of Maine is doing with its 50 States for Good program. Hyperlocal philanthropy with global resonance.

At its core, CSR 2.1 is one of the 21st century business imperatives that leaders must adopt. Vineet proposes the following:

In order to survive, business requires the cover of a collaborative ecosystem that will probably render obsolete traditional views of competition.

This new culture of collaboration means that businesses can no longer treat CSR as something to be “fulfilled”; it must be lived and integrated in a way that it becomes core to your business. As marketers we are facing a consumer who no longer cares about headlines, they want the story. CSR is a story, start writing yours and succeed mightily in the 21st century.

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Yet as a marketer I cannot help but be bummed out by green as a label and not as an energized core of a brand. I  know, through the data amassed in BAV, that to simply state green and not live it is an opening for consumers to reject not only your product, but your company. Trust and authenticity are huge brand keys in this age of atomized media, and our dawning awareness of the importance of sustainable living creates an opening for abuse. Market gains generated by subterfuge will not hold.

Which brings me  to Ford, a company near and dear to my and my agency’s heart. Henry Ford’s assembly line was a momentous step forward for the Industrial Age. The idea that precision engineering was possible at scale previous to Henry Ford was simply the work of theorists(I think). Today we live with effect of this innovation as the smog clouds of Asia and the smog clouds of LA both attest to Ford’s industrial brilliance. What’s interesting is that in 2009 his great-grandson is actively laying the groundwork that will position Ford as a leader of  our coming energy resource limited, Network Age.

It started with grand statements of green roofs, higher fuel efficiencies and a new standard for environmental consciousness. Words of a leader and an estimable vision, but alas market booms clouded that vision and the massive profitability of SUVs and trucks became synonymous with Ford, synonyms that were not in line with this vision. However, below the surface the vision percolated into tactics and operations that would place Ford at the forefront of American car manufacturers in the coming post-Great Recession age.  As we eye the end of this recession and consider what post-recession 21st Century companies must stand for we see the trails of Bill Ford’s vision in global car platforms which maximize flexibility, limiting waste and creating a platform for customization, not standardization.

But his vision is manifest most strikingly in a radical partnership that appears to be forming between Zipcar and Ford.  This recent article from Fortune begins with the platitudes to the unique Zipcar business model, but ends with Ford being lauded for its vision for future transportation.  Ford is a manufacturer who sees Zipcar for what it is, not an alternative rental service, but an alternative to individual car ownership. A direct affront to a car manufacturers goal of selling more cars. With the industry struggling to deal with a loss in overall car sales it seems shocking that Ford would be the company that Scott Griffith, Zipcar CEO, says:

Ford is the only American-branded company in the auto industry that seems to understand what we’re doing and has some affinity for what we’re up to.

This reflects an organization that is thinking about how to build an enduring brand in a rapidly changing time. There is no doubt that Ford has more work to do, but as consumers look to future purchases, they can take solace in the fact that if they buy Ford they’re buying a product that is embedded with a vision of the future that we can all support.

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Like iPod’s value is in iTunes, and iPhone in its applications, infrastructure is once again, king. Just as Tom Friedman pointed out that cheap fiber optics after the 2000 recession enabled global commerce, the investments of the early part of this decade by Amazon, Apple, Cisco and others are now bearing fruit as this recession begins to abate. And this is creating value for a whole host of new partners. Consider my conversations last week with Andrew Rashbass, CEO of the Economist, they have found a burgeoning Kindle audience, which supplements their existing print readership.

New infrastructure = new channels = growing audience = greater profitability

Profit is an interesting word to focus on. Because Amazon was routinely criticized for not turning one. Yet we now see that careful, capable long term strategic thinking (e.g. At the expense of short term shareholder value creation)  may inevitably lead to greater shareholder value over the long run. Then if we consider PIMCO CEO Mohamed El-Erian’s description of a “new normal”, where returns will be more modest, perhaps its time we think more about building.

Also include in your analysis of this issue the fact that innovation is revolutionizing in terms of time to market for innovations. The impact of massively scaled innovation cycle is that Schumpeter’s creative destruction will reach rates never before experienced. Therefore you as a business have only one path that you must take and that is to build and build fast, even if that means compromising profitability in the short term. We are shaking things out right now, so take your profits where you can get them, but dare not rest on your laurels because the network age doesn’t abide roadblocks for profit.

To close let’s bring it back to today’s media obsession, Twitter who faces the same question’s Amazon faced ten years ago ‘What’s the business model? I have no idea, but I know they’ve got a valuable asset that others are building businesses on. There is no doubt that Twitter and other businesses need to make money, but making money for the long term is a slog sometimes.  If you’re building the infrastructure for the future of communications do it right.

Even while newsweeklies are hemorrhaging, The Economist revenues are up 25% in a down market. Of course, I asked Andrew ‘why?’. And he believes people are reframing their relationship with information. That in a post-crisis world where trust is at an all time low people are voracious for learning in order to be self-sufficient. I call it hyphenated living like in Hollywood, where more power comes with more hyphens (actor-writer-director-producer). And this seems to be driving interest in the Economist, along with Kindle, where research shows its readers are ‘more read’. This is why The Economist is bringing a product to Kindle.

Continuous self-improvement is the mantra. Americans are retraining, retooling, and learning new skills furthering their education and expanding their opportunity. There’s a boom in Community college applications and enrollment.  The recession has done little to dent demand for high quality private k-12 education. The Library of Congress reports 68% of American’s now has a library card, the highest percentage in U.S. history. And with 74% of Americans now using the Internet, libraries have become valuable career counseling centers, where the majority of employment classifieds are now online. As shifting consumption to education rises, education-oriented companies such as Kaplan, Pearson and various educational divisions are thriving. The trend is broadening, increasing the demand for “Serious Games“, video games that unearth deeper social issues through their gameplay, and creating a rise in museum attendance .

And with greater perspective there is more openness to provocation. See this week’s Economist cover story on America’s Harsh Sex Laws. Perhaps there’s a growing desire in these times of turmoil for people to push out beyond their local networks and their established comfort zones. The dawning realization that the sense of comfort, 25 years in the making, was false. The idea taking hold is that if all one does is listen to like-minded individuals, the oxygen quickly dissipates from the room, and there is nothing left. The Economist is pushing beyond the mainstream and exploring the niche, and so evidently are consumers. 

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It’s this statement which I find most interesting as I continue to think through the post Great Recession consumer and in this particular blog entry, the furor arising around Wall Street’s pay. Rather than attack this post from the angle that the we, the taxpayers, are taking the risk off of which a small sub-section of society benefit hugely, I’ll take it from the perspective of marketing and in particular the corrosive effects of class envy on America’s growth.

The problem in particular with the growth of Wall Street Wealth is that it is institutional and not individual. Individual wealth creation is a hallmark of American capitalism and as such doesn’t create envy as its achievement is that of an outlier not the mainstream. When massive wealth is generated institutionally, see Dick Fuld as paper billionaire, $GS paying 2007 era bonuses after near bankruptcy, or the latest Andrew Hall scandal, we have cognitive dissonance. That dissonance comes from comparing our own career path’s within institutions and realizing that these institutions do not pay anywhere near the amount paid to bankers. And more to the point, despite this high, “achievement based pay”, we’re bailing these folks out for their massive underperformance. 

The Wall Street brand was built in this latest incarnation on a merit based system that rewarded performance from the backrooms to the institutional top. indeed we see these stories of rags to riches in the current generation of CEOs, but this is the final generation as entire companies are now composed of individuals from 4 Ivy League schools and a few high prestige eastern liberal arts academies. That is not America and as a consequence America, via its politicians, is rejecting this mode of operation.

As a consequence it is incumbent that Wall Street address its marketing if it is to maintain some semblence of the business model that has been so successful. One way to think about managing this issue, while still maintaining profitability, is to position yourself as an entrepreneur. Illuminate the risks taken, think long term wealth as opposed to short term gain, tell the stories of the path to success and figure out how to broaden your work force and mightily increase philanthropy. We need Wall Street, what is not entirely clear is that we need Wall Street pay to manage this essential function. Unless Wall Street starts thinking like an entrepreneur you can be sure that this time it’s going to be tough to displace the public envy.

As you would expect the response to 15th Street among the marketing digerati has been swift and almost universally negative. Their are two main veins of contention with this new concept. The first is from the purists who are flummoxed that Starbucks would dare to create a new concept that claimed local when in fact it just an appendage of the evilness that is corporate coffee shops. The second issue raised is that 15th Avenue is the tired marketing trope of a big company rebranding a small subsection of its business, but not changing it philosophy or operating principles, these critiques have been rife with talk of TED, Song or Gap’s ill fated effort Fourth and Towne.

I’d like to quickly deal with the criticism and then lay out what I think would be a fascinating strategy by Starbucks, presaged by a very different brand than United or Gap. I think the chiding of Starbucks for being big but trying to be small misses the point. Starbucks has created a category that led to a thriving culture of coffee shops around the US, the creation of innovative devices like Clover, the growth of coffee bean entrepreneurialism in countries like Rwanda and many other positive externalities of scale and demand creation. That said there are certainly negatives that are attributable to Starbucks, but overall I find it very difficult to chide a brand for experimenting with new ways of expanding their business which are unrelated to the core brand. As for the second criticism, I think it is a fair warning, but with only one store built and the overall strategy neither fully articulated or executed I think patience is in order.

I think patience is in order because Starbucks may be embarking on a rather remarkable retail exploration that could establish a new operating model for the 21st Century Coffee House that would enrich Starbucks and this country. That model in my mind, is the Amazon Web Services of Coffee. Bear with me here and by all means inform me in the comments of where I misjudge, but here’s where I think Starbucks could go and why I’m so excited. Rather than get stuck on one concept, 15th Avenue, as a new brand, my hope is that Starbucks exposes their incredible supply chain and operational expertise to local entrepreneurs who utilize these services by paying a monthly fee. This is exactly what is happening at Amazon, where they have exposed the guts of their organization (supply chain, order fulfillment, web hosting, bandwith) as services that entrepreneurs can call on on a monthly basis to scale their businesses in line with demand.

Now imagine this same model applied to coffee houses, local entrepreneurs, trained at Starbucks (or perhaps elsewhere) lead their own local coffee experiments. These experiments generate not only immense real world data about what’s working but also maximize the value of Starbucks operational and procurement resources. If Starbucks does this right I think that they’ll model themselves more like Amazon than as United and as marketers we’ll have a new case study in marketing effectiveness.

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As we have watched this wonder of industrial scaling unravel, causing massive financial and social damage, we have started to rethink whether industrial scaling is a proper way to grow business and the US. The core problems of scaling are two fold. The first is that scaling becomes an operation unto itself, with entire businesses built up around the idea of scaling as a goal. Scaling is not the goal, the goal is providing the customer with the product they need at the time they need it. The other problem with industrial scaling is that the benefits are concentrated creating large systemic risks in the event of the failure of a single, highly scaled product.

Now let’s return to the Amazon/Zappos deal and think about scale in the networked economy of the 21st century. Zappos has principally scaled, not production or operations, but its customer service and they’ve done if not through efficiency, but through authenticity.  In the 21st Century the challenges of building great businesses are different than in the 2oth century and at the core of success is responding to the consumer. Amazon has responded to the customer with remarkable innovations in supply chain and information transparency, but they still did not have the customer service piece. Zappos has built the ultimate lab for figuring out how to maximize the VALUE of customer service to a business.

The 21st Century’s innovations are seeping into our business culture and in time these will be understood to be the mega-innovations that establish the United States as the hub of product and service innovation, which is then exported to the emerging consumers of the BRIC and ultimately African and Asian economies. America’s opportunity is in leading the network economy, not protecting the industrial economy. As a result we have much to learn from the work of Amazon and Zappos as they navigate towards business success.

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