Tag Archives: Finance

Mapping The Cost Of Innovation

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Many companies claim that they place an emphasis on innovation – and to a point, they are delivering – but when it comes specifically to marketing and buzz generation, companies set themselves up to fail in the innovation category.

Sure.  They may execute a campaign that utilizes a new technology or create a video that goes viral and generates an insane amount of views. They might even develop a marketing product that revolutionizes the industry or makes use of an existing product in ways nobody thought of before. But when it really comes down to it, most companies fail when bringing innovation to their marketing because they don’t plan or spend in the right way that lends to cost-savings down the road. Or, even worse, the execution doesn’t align with their strategy, so it hits the intended consumers like a thud.

Many innovative marketing products could be better if they were not treated as the end-all product that is oft copied, but as something that builds upon itself. Innovation done correctly is built with future iterations in mind so that products and development can be built on or added on cost-effectively. Too often, those new product are developed for one execution and then, upon its success, they do not allow for augmentation – forcing companies and their vendors to start from scratch.

Numerous factors lead to innovation that is not cost-effective.  Sometimes, due to a lack of vision or strategic planning.  Others might be due to a company’s lack of determination in supporting ongoing innovation expenditures. And then sometimes, products just don’t work out. All of those factors, are reasonable explanations for the waste of money but they don’t need to be. It really comes down to the ability to have long-term vision and communicate objectives well.

With the right executives supporting the long-term innovation play – where a specific near-term ROI may not happen – the environment can be ripe for marketing success for quarters and years to come.

Here’s how you do it — think more than one step ahead. Auto manufacturers build concept cars with the full knowledge that the car as a whole might not make it to the dealer, but components like auto-parking most likely will.  With that vision toward the future derivatives, even an unsuccessful campaign is not a waste of money. Be thinking of what components might be re-used in the future and make sure your team and vendors build those elements accordingly.

Granted, some form of smoke and mirrors is a component of your innovation process – and not in a devious way – you might think of innovation as putting the cart before the horse.  What it does is build an environment of hype that points to a vision of what the future could be. Be prepared to create assets that just show off what you are planning to do in order to effectively communicate expectations within the company. Utilize communication and spin control. If innovation is treated solely as a magic force that nobody has insight into, it is doomed to fail in the long run.  Even the major technology companies that have super-secret labs share some of their developments internally and sometimes, even externally. Maintaining to others that you are doing really cool things under a shroud of mystery will only lead to further questions on the money that’s being spent. Conversely, communicating too much without conveying the ultimate vision can be almost as damaging.

To the finance types, developing key KPIs to measure your success is a necessary component. Innovation is not an always-win proposition. You may not find huge marketing numbers to point to a winner. Come up with those elements that prove its working.  Is it money saved on future campaigns?  Is it press coverage of your marketing products? Is it related to time-to-market for future products? Is it tied to sales? Brand recognition? Whatever it is, make sure that is known to your team and management. Without those clearly understood KPIs, you’re effectively spending a lot of money on just an illusion…

When all is said and done, there needs to be an environment or atmosphere that welcomes trial and error. Intrinsically, there is no other undertaking that comes across so much success and failure with few traditional methods of measuring both. It is those corporations and organizations that truly embrace innovation (and not just tout that they are innovative) who most consistently bring successful innovations to market. Sometimes innovation can seem just outside your grasp (as an individual or an organization) but with vision, communication and execution, it will come back x-fold in marketing and revenue streams you might not have even considered at the onset.

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Navigating The Cost Of Innovation

It’s a new year and we are all on the continued lookout for things new and innovative. The Consumer Electronics Show (CES 2014) kicks off every year with many promises of innovation and they often deliver. Walking those halls provides a course in one way to look at innovation – which we’ll delve further into later. Many companies claim that they place an emphasis on innovation – and to a point, they are delivering – but when it comes specifically to marketing and buzz generation, companies set themselves up to fail in the innovation category.

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Sure.  They may execute a campaign that utilizes a new technology or create a video that goes viral and generates an insane amount of views. They might even develop marketing product that revolutionizes the industry or makes use of an existing product in ways nobody thought of before. But when it really comes down to it, most companies fail when bringing innovation to their marketing because they don’t plan or spend in the right way that lends to cost-savings down the road.

It would seem clear in the writings on this blog that I am all for marketing innovation and have pulled off some executions that I am quite proud of.  The buzz and impressions they generated were phenomenal and have often brought on follow-up coverage in the press. But they could have been better.  Many innovative marketing products could be better if they were not treated as the end-all product that is oft copied, but as something that builds upon itself.

Innovation done correctly is built with future iterations in mind so that products and development can be built on or added on cost-effectively. Too often, those new product are developed for one execution and then, upon its success, they do not allow for augmentation – forcing companies and their vendors to start from scratch.

Numerous factors lead to innovation that is not cost-effective.  Sometimes, it is due to a lack of vision or strategic planning – you were only looking to do this one creative vision and didn’t think how it could be used or grown beyond that.  Others, it might be due to a company’s determination to support ongoing innovation expenditures. And then sometimes, products just don’t work out.

All of those factors, and more, are reasonable explanations for the waste of money but they don’t need to be.

It really comes down to the ability to have the long-term vision and communicate objectives well. With the right executives supporting the long-term innovation play – where a specific near-term ROI may not happen – the environment can be ripe for marketing success for quarters and years to come.

Here’s how you do it.

Again, think more than one step ahead. Auto manufacturers build concept cars with the full knowledge that the car as a whole might not make it to the dealer, but components like auto-parking most likely will.  With that vision toward the future derivatives, even an unsuccessful campaign is not a waste of money. Be thinking of what components might be re-used in the future and make sure your team and vendors build those elements accordingly.

You need smoke and mirrors to be a component of your innovation process – and not in a devious way. Going back to the CES reference, you might think of innovation as putting the cart before the horse.  What might surprise many is that a lot of the hyper-cool technologies shown at CES are not real or ready for prime-time. Sometimes features are faked in to prove the concept. Other instances show content that is not optimal or canned to showcase a technology. An example of this is the content that is shown on 4K monitors.  No broadcaster is filming in 4K yet and they started showing those monitors two years ago with dummy content to show clarity. What they did was build an environment of hype that pointed to a vision of what the future could be – with no true revenue stream to show for it immediately. Be prepared to create assets that just show off what you are planning to do in order to effectively communicate expectations within the company.

Utilize communication and spin control. If innovation is treated solely as a magic force that nobody has insight into, it is doomed to fail in the long run.  Even the major technology companies that have super-secret labs share some of their developments internally and sometimes, even externally. Maintaining to others that you are doing really cool things under a shroud of mystery will only lead to further questions on the money that’s being spent. Conversely, communicating too much without conveying the ultimate vision can be almost as damaging.

Develop key KPIs to measure your success. Innovation is not an always win proposition. You may not find huge marketing numbers to point to a winner. Come up with those elements that prove its working.  Is it money saved on future campaigns?  Is it press coverage of your marketing products? Is it related to time-to-market for future products? Is it tied to sales? Brand recognition? Whatever it is, make sure that is known to your team and management. Without those clearly understood KPIs, you’re effectively spending a lot of money on illusion…

When all is said and done, there needs to be an environment or atmosphere that welcomes trial and error. Intrinsically, there is no other undertaking that comes across so much success and failure with few traditional methods of measuring both. It is those corporations and organizations that truly embrace innovation (and not just tout that they are innovative) who most consistently bring successful innovations to market.

Sometimes innovation can seem just outside your grasp (as an individual or an organization) but with vision, communication and execution, it will come back x-fold in marketing and anywhere else.

The Question of Myopia in Global Business and Financial Issues

The global business and financial issues are requiring deep introspection and, hopefully, ingenuity to help get us collectively to the other side.  As we see with Greece and their ponderance of returning to their native currency from the Euro, the temptation to revert to thinking locally just doesn’t work. On NPR’s All Things Considered the other day, there was an interview with Thomas Friedman about his book with Michael Mandelbaum, That Used to Be Us: How America Fell behind in the World it Invented and How We Can Come Back.  It was striking amidst these global concerns to focus so much on the strength of America – as whether we like it or not, we are all affected by global issues. 

Granted, I have only had the opportunity to hear and read the NPR item above and read The Christian Scientist Monitor’s review – so this is absolutely an oversimplification – but perhaps the strongest part of the interview and the book itself is Friedman and Mandelbaum’s optimism.  When challenged about that optimism at the end of a book that clearly details America’s challenges and mis-steps, Friedman says that:

We end on a long discussion about what makes us optimists. It’s because this country is full of people today who just didn’t get the word. They just didn’t get the word that we’re down and out. They just didn’t get the word that Washington is paralyzed. And they go out and start stuff and invent stuff and fix stuff and make stuff, no matter what’s going on in Washington.

It is key that innovations and development – and the funding for those things –  continue.  Whatever mess we’re in globally, there isn’t a heap of optimism if we can’t move on from the way we’ve been doing things. There certainly are challenges ahead and it requires a little naiveté (or more simply a little selective blindness about those challenges) to forge ahead to make that change.

What at first was off-putting by focusing on one country might not hold fast as the old adage goes that change begins with the individual.  In this case, it is a stretch to think of America as being simply an individual making change – we seen what bone-headed situations the world has gotten into with America thinking it can do that.  But, the caveat is that we have to truly start thinking globally while acting locally from business and financial perspectives.  If big business truly runs the world, its time to be responsible as nothing will sell if people have nothing to buy them with. Robert Siegel brings up the point about technology and the changes therein during his conversation with Friedman.  Because of those advances, the opportunities to grow are there – we just have to not be blind enough to miss them.