04/26/13

Booz Allen Global Innovation study shows rising R&D investments in 2011 … what about 2013?

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The global innovation report is a yearly report showing R&D spendings across different industries. For reference, I have included the 2009 results by industry and the 2011 version below. The sectors which invest in R&D do not differ much from one year to another.

Although the report states that R&D investments doesn’t always mean that innovation is produced, or that this innovation is performing better than other products investments diluted across other budgets, there a precious few metrics that make it possible for us to measure how innovation is faring. So we’ll have to make do with this.

image_thumb[5]What the report shows as well is that rising investments mostly happe in America, whereas Europe was already deep in recession at that time. I can’t wait to see what the 2013 report will show.

At last, the report shows a strong correllation between sales and R&D investments. One could read this either of two ways: when sales are good, R&D investments grow, or … when R&D investments grow sales are better.

An interesting question would also be to wonder what is actually meant by R&D spending and whether all product development efforts are measured under that umbrella. I have seen a lot of companies in which R&D is kept as a separate effort and doesn’t represent the main area for product design and development ; this is significant in a world in which innovation is driven by vendors’ offerings, mostly in the Computing & Electronics world, the first sector for innovation in that study.s

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R&D Spending Returns to Pre-Recession Levels, Finds Booz & Company Global Innovation 1000 Study | Innovation Management

key findings from this year’s Global Innovation 1000 study:

  • The three industries with the greatest R&D investment were computing and electronics, health, and automotive (28 percent, 21 percent, and 16 percent of the total Global Innovation 1000 spend, respectively).
  • Two-thirds of the $53 billion increase in R&D spending between 2010 and 2011 came from the computing and electronics, automotive, and industrials sectors.
  • 75 percent of companies increased their R&D spending from the previous year in 2011, up from 68 percent in 2010.
  • This year Amazon joined the top 10 “Most Innovative” companies pushing out Facebook. For the third straight year Samsung rose in rank on the list (to fourth place, up from seventh place last year), and Apple, Google, and 3M took the top three positions, respectively, also for the third consecutive year.
  • Regionally, companies based in North America grew their R&D spending by 9.7 percent—just above the global average of 9.6 percent—while Europe and Japan grew theirs at below-average rates of 5.4 percent and 2.4 percent, respectively.
  • India- and China-based firms again increased R&D investment at the highest rate overall across regions (27 percent on average), although from a small R&D spending base.

via R&D Spending Returns to Pre-Recession Levels, Finds Booz & Company Global Innovation 1000 Study | Innovation Management.

02/16/12

Byron Sharp: debunking the myths of marketing 3/3

brands that grow

[This report has been published in instalments, type bit.ly/sharpgrow in your browser location bar to display  the piece in its entirety]

myth number six : the 80/20 rule always applies

This isn’t a myth per se, but the numbers don’t quite add up. Sharp, on the basis of numbered evidence once again, shows that Pareto’s Law does apply but real numbers based on observation are closer to 50% for most brands and never reach 80%. This reinforces the need to acquire more customers.

myth number seven: advertising doesn’t sell

Sharp shows on the contrary that advertising has a clear (but mostly long-term) impact on sales… Provided your product is distinctive enough and that your campaigns follow a few simple principles amongst which:

  • reaching all by categories
  • no lapses
  • clear brand links
  • easily noticed and remembered

myth number eight: price promotions increase sales in the long term

That one is far less counterintuitive I find. Price promotions are quite effective in boosting sales. Evidence produced by Byron Sharp shows that promotion have no or little effect on long-term sales. Sharp sees little rationale for maintaining price promotions over time apart from maintaining a relationship with retailers.

myth number nine: loyalty programs are effective

In fact, loyalty programs work a little, but their impact on loyalty is minimal and in some cases, brands won’t even feel the true effect at all for many external reasons. My friend and colleague Prof Christophe Benavent from the Paris University has been a long-time contender that loyalty programs don’t work. He’s actually quoted in Byron Sharp’s book as well. One may have the vague feeling that conclusions might be different whether one looks at airlines for instance, or a company like AMEX which has built its distinctiveness upon its loyalty program (I even chose to get an AMEX card a few years back which is coupled with my airline frequent flyer program and I have transferred the entirety of my purchases to AMEX) but evidence is required before one makes any rash conclusion.

Overall, I really enjoyed Sharp’s approach which is based on fact rather than fiction, even though some of the most counterintuitive conclusions would benefit from a serious data update. I definitely recommend you buy this book and place it on your bookshelf.

Byron Sharp’s blog is available at http://marketinglawsofgrowth.com/

… to be continued

[This report has been published in instalments, type bit.ly/sharpgrow in your browser location bar to display  the piece in its entirety]

02/14/12

Byron Sharp: debunking the myths of marketing 2/3

brands that grow

[This report is being published in instalments, type bit.ly/sharpgrow to display  the piece in its entirety]

myth number two: heavy buyers matter, light buyers don’t

That is false too. A customer base is like a long tail , with few repeat buyers and a vast majorty of light or very light buyers; but the sheer mass of the latter makes their category very important in fact. These people are those which brands must convince over and over again if they want to succeed.

myth number three: targeting works

That one is really puzzling I must admit. Sharp points out that despite marketeers’ efforts in trying to “differentiate” through targeting, brands end up sharing “normal – looking” customer bases and those customer bases are supposed to be interchangeable. This is – once again – said to apply across all categories and countries. Yet, luxury products for instance, cannot be afforded by all. Sharp’s point is that segmentation within a subcategory doesn’t exist. It may exist between subcategories however. This item would however, in my mind, require further investigation.

myth number four: cannibalisation is a bad thing

According to Sharp’s findings, it’s not! What matters here, is not whether brands are differentiated, but whether they are “distinctive” (that is to say easy to recognise from others).

myth number five: consumers by preferred brands

Sharp contends that is just the other way round. One tends to favour one’s own choices; some sort of post justification of one’s own purchases in fact (I bought this, therefore I like it; or, I’m used to buying this etc.) That point he adds, also applies to iconic brands like Apple and Harley-Davidson. Basically, he means that Apple customers aren’t in any way, more loyal than PC clients for instance.

This chapter is probably the most difficult to sell. There is so much hype about Apple products that things do get very irrational. Sharp may well be right, but the evidence he uses to show that this is the case are rather outdated. Beside, Apple’s overwhelming success has, recently, put so many companies in such a bad position (Nokia, Sony Ericsson to name a few, not to name hp which withdrew from the Pocket PC (then Smartphone) market which it hugely dominated only a few years before). The evidence given here is a bit outdated on the one hand, and debatable on the other. This chapter requires therefore more investigation, even though mine Sharp may well be onto something (for other myth busting regarding Apple on this blog, click here).

Byron Sharp’s blog is available at http://marketinglawsofgrowth.com/

… to be continued

02/8/12

Byron Sharp: debunking the myths of marketing 1/3

brands that growOnce in a while, a business book appears which changes your perception on things for ever. Such business books are inspirational (Crossing the chasm in 1992 for instance), some are critical (such as Scott Berkun’s myths of innovation) and some just take you back to basics. This is the case with Byron Sharp’s “how brands grow” (Oxford – 2010), an opus which unfortunately didn’t get enough attention and is even sometimes wrongfully dismissed as scientific claptrap. I must admit that I enjoyed the book thoroughly, even though some of its conclusions did puzzle me a bit. I suppose that these will lead to more investigations, since some of the evidence presented in the book and some of the conclusions based on such evidence (mostly in chapter 7) are very counterintuitive. Here is what I learned and would like to share with you regarding this book.

[This report is being published in instalments, type bit.ly/sharpgrow to display  the piece in its entirety]

Marketers are used to believing their own stories but often fail to check the facts. This is what Byron Sharp and his Ehrenberg Institute have done and their conclusions can be summarised as follows:

myth number one: loyalty matters, acquisition is less important

How often do we hear that it is more worthwhile to retain existing clients rather than acquire new ones? Well… as far as I am concerned, almost on a daily basis. Sharp shows that this is wrong, that churn depends – mostly – on the size of your customer base and that customer acquisition is of paramount importance. This is what is known as the double jeopardy law: “sales are lower because they have fewer buyers who buy the brand less often”. That law, besides, applies to all sectors, and all countries. As a consequence of the double jeopardy law, it is not cheaper to retain an existing customer than acquire new ones. Acquisition, CRM pundits must be eating their hats now, is not an option, it must even be a priority for brands.

… to be continued

06/15/11

Fons Trompenaars: helping people to perform better should be the focus of managers #live11

reporting live from Orange Business Live in Munich

Despite the fact that his flight was not able to take him further than New York and let alone Munich, Fons Trompenars was brought live from New York by Orange thanks to its network of telepresence rooms.

DSC_1159His presentation was about “managing people in a fast changing world”

Shareholder value was established at the cost of other values, Fons Trompenaars said, and all values established at the expense of other values are doomed to failure. The essence of a value is how you can “integrate opposites”, mostly in a world which is multicultural (60% of people below 25 years of age living in Amsterdam he said have non Dutch parents).

The real question he added not “how can I perform better” but “what can I do to help you perform better”. The real question he added is “why did we forget about serving people in business” and business literature. Great leaders show passion and control, it’s not bi polar like in the Myers Briggs example he said. We don’t need “balance” he said, this is bi-polar too. What we need is integration instead.

Do we need to globalise/standardise or customise?

What we need to do in a global world is build unique offers from “standardised building blocks” he added. Speed comes with hindsight he said (“recul” in French) quoting John Cleese with whom he worked a few years ago. This isn’t self excluding. And he concluded with a lot of humour at the end of his presentation by saying “we don’t need questions because I’m usually very clear in my messages”, but he did answer quite a few questions of course.

05/31/11

blog writing: the slow and subtle art of pondering

Or how not to jump to hasty conclusions in just one step

A few days ago, I came across a piece on Bnet on which there was a mention of Sun Tzu‘s “the Art of War” in not very favourable terms. I therefore asked the Vincent Berthelot, who is very well versed in Oriental culture (he is even fluent in Tai), to write something up for us. Here is his comment, 100% devoid of political correctness.

By Vincent Berthelot, translated by visionary marketing


photo cc (some rights reserved) by AlphaTangoBravo / Adam Baker)

Very often, I have been annoyed by the tendency to superficially squeeze management tips into constrained lists such as “five key marketing techniques”, or even “how to succeed in social media in 12 steps”. Alas, this is a gimmick which has being quickly imported from America by many a Continental blogger. Let’s admit we all wrote at least one piece in that manner, but abusing this method leads to stereotypes and facile conclusions.

When Yann asked me to review a BNET article which falls into that category, I could not resist the urge to stop everything I was doing in order to write something up on that subject. The incriminated piece is won by Geoffrey James, subtly entitled “seven vastly overrated business books”.

In that blog post, James puts together in the same basket, some of the bestselling US management books of the past 20 years and celebrated writings such as Adam Smith’s “The Wealth of Nations” and Sun Tzu’s “The Art of War”. This very list shows the seriousness and hindsight behind the author’s methodology.

Reading that piece online will force you to click on as many internal links as possible so as to maximise traffic; after all, this is serious marketing stuff, don’t get mistaken! Geoffrey James also adds profound comments such as that Adam Smith could not possibly surmise the invention of the modern multinational or of computers and that Sun Tzu’s book is mostly useful if you are planning to play computer or board games only.

Of course, I admit that business and war, at least on the surface of it, have little in common and that Sun Tzu’s advice belong to another time.

I would in fact recommend that James’s list be updated to include his point of view on Marcus Aurelius, Clausewitz, Machiavelli and a few others. Books such as Sun Tzu’s are not meant to be utilitarian, just like your average management book, and they have to be read with different eyes too. They aren’t meant to deliver “recipes”, and since his words cannot be directly applied to your marketing strategy either. Continue reading

05/30/11

Hockey legend Mark Messier teaches great leadership lesson in Bratislava

note: this piece was originally written for the Orange Business Live blog

On May 10, 2011, the Orange Biznis Forum meeting took place in Bratislava, Slovakia. The guest speaker at that meeting was the much revered Canadian Ice Hockey legend Mark Messier, who is now retired. Mark had come to share with us some of his best tips with regard to team management and leadership inspired by the strong moments in his rich and long career. This business meeting had taken place the morning after we had witnessed the splendid victory of the Ice Hockey team of the Czech Republic, at the Orange arena in Bratislava [footage of the match available from our Posterous account]

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a living legend

It’s not everyday you come across a living legend, and even though I’m rather new to Hockey, I could well sense that we were experiencing a very special moment when Mark Messier came to talk to us about leadership and management at an Orange Business Meeting organised by our Orange representatives based in Bratislava, the Capital town of Slovakia in central Europe. Mark played hockey for 26 years and he retired only six years ago. He played in Edmonton, Canada for 12 years and then joined the New York Rangers with whom he won the Stanley cup in just three years. He is credited for the amazing turnaround of the New York City team, despite incredible media pressure.

I have taken extensive notes during that meeting, so here are my takeaways from Mark’s presentation. An impressive and extensive biography of Mark is made available online on Wikipedia.

the wolf inside you

Mark opened his presentation with an old Cherokee quote: “there are two wolves inside you” he said, “one good and one bad; guess who wins? The one you feed!”.

The real challenge is how to convey a “positive and energetic attitude”; something he understood when talking with his uncle Victor Messier “some sort of Guru and philosopher”, in a “Buddhist kind of way” according to his own words. Victor showed him the pictures of one Alex Grey, an artist interested in anatomy whose paintings were trying to make personal energy visible in 7 foot-high paintings. Mark described this as a defining moment. Although he admits that this kind of revelation could happen in various ways according to who you are and how you feel. What is important is to understand “how you can capture the energy in order to show a positive attitude which can lead you to success”.

Continue reading

11/15/10

Andy Sernovitz: “large companies getting into social media need support and SMBC was the missing piece in that puzzle”

Last week, I was attending the Blogwell and SMBC meetings in Philadelphia. I also had an opportunity to sit with Andy Sernovitz, the founder of SMBC and well known author of the Word of Mouth Marketing opus.

It’s now more than 2 1/2 years since I joined the former blogcouncil, now known as Social Media Business Council, and a lot of water has gone under the bridge. I thought, as Hervé Kabla and myself – co-founders of Media Aces in France – are currently finalising our book entitled ‘Social Media Taught to My Boss’ (in French, but I’m open to suggestions from publishers), that it would be a great idea to sit with Andy and review the history and principles of SMBC as well as take a bit of hindsight and see how things had developed over the years. It’s hard to describe but spending 3 years of field practice in Social Media for a large company implies that a lot of work and effort has been put into these initiatives. Sometimes it’s good to put down one’s tools and muse.

Andy keeps repeating that doing Social Media for large groups is not as easy as doing the same for an individual or a small shop. I know that many people must not believe that this is true. « You are a big brand hence it’s way too easy » a lot of people must think. Yet nothing has ever been more true. Innovating within a large enterprise is a never-ending, groundhod day-like heavy-lifting exercise. This is why SMBC is important. It enables the heads of Social Media like us to get together, to help each other and to learn from one another. This is what Andy is referring to as being the « missing piece in the puzzle ».

And this is also why there are now more than 150 members within SMBC. Hats off Andy!

here are some of the 150 members of SMBC as of now …

Social Media Business Council Members

02/25/10

Argenti Warns Social Media Revolutionises Corporate Communications

this is the unabridged version of an article published and written originally for Bnet.co.uk of which I am a regular contributor

The following video is a December 2009 interview of Paul Argenti (Corporate Communications Professor at Tuck University) following the release of his book dedicated to how  ”Web 2.0″ (even though the term is a bit outdated). The book describes how Social Media transforms corporate communications. Here are – in a few words – what should be remembered from that interview. As it happens, a lot of what Argenti describes here is similar to what I have written in these columns and elsewhere:

  1. most execs are out of sync: and it’s easy to dismiss what you don’t know as being a fad or meaningless,
  2. yet a true revolution in corporate communications is unfolding with regard to how our corporate relationships are impacted in all areas: press and public relations, investors, analysts, partners and clients, employees and job seekers etc. What is funny, Argenti says, is that despite point 1, none of the interviewed execs denies this fact,
  3. this revolution has less to do with tools than strategy,
  4. Video and Vlogging (video blogging) are transforming everything we do in corporate communications,
  5. Web 2.0 enable proactive vs. reactive communications;
  6. negative feedback is definitely what execs are afraid of, but it is already broadly available beyond social media. Social Media is not the cause of negative feedback or brand disloyalty and cannot be held responsible for the quality of a product or the fact that a service hasn’t been rendered properly.

to point 6 I would also add that often public relations representatives:

  • have no clue about how to and how not to behave with regard to social media,
  • misjudge the importance of a sentence or a comment whereas – even more than in the printed press – every word counts in Social Media,
  • fail to understand the human factor behind crisis management in Social Media and think that fiddling with comments is enough, whereas human conversations work wonders,
  • minimise the importance of engaging in Social Media as opposed to being present in social media,
  • talk digital vs. do digital, and don’t understand what the web makes available to all,
  • fail to count on positive feedback including that which can be generated by internal blogging communities and partnerships,
  • fail to implement the right processes and spell them out clearly, including disclosure practices.
Many of these issues will be debated at the likeminds conference which is due to take place in Exeter on February 26th at which I will be a keynote speaker dealing with Social Media in B2B.

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02/10/09

Social Media: Beyond the ROI issue

Blog Council

the Blog Council logo

Below is the contribution which I sent to the council on behalf of Orange Business Services.

social media: beyond the ROI issue

With the advent of the Internet since the middle of the 1990s, users have become used to not only getting what they want online, but also to being able to participate and interact with each other. 15 years later, the widespread use of the Internet as a source of information and also a place where users can help each other and solve each other’s problems has changed the face of commerce, of organizations, and even relationships within the hierarchy. In view of these changes which have permeated every section of the outside world, enterprise communications must get to grips with the benefit from the great potential which is made available by the use of social media. The power of the Internet to connect people and get them to interact can not only be used internally, but also outwardly and ultimately with one’s customers to begin conversations in a brand new way. The expected results can extend way beyond the mere ROI issue. This is what we have experienced at Orange Business Services with our 2008 Security Blog initiative.

Continue reading