Cybercrime is on the rise and threatens the safety of major corporations on a growing basis. Unfortunately, it has taken some headline news stories of businesses being severely attacked to get the attention of board members in charge of high-profile companies.

Is your Board of Directors paying heed to its technology exposure?

Technology touches everything a company does today – from hiring, to mergers and acquisitions. It has become embedded in the corporate culture. There are new and old buzzwords such as:

 Big Data

Cloud Computing

Virtual Workplaces

Social Media

Email Security

As a result, threats such as data loss and hacking are in the news every day. Gartner has stated that only 6% of the companies that lose their data will survive in 2 years. The world is changing and the competitive advantage of a company can no longer be just the responsibility of the IT department. The board needs to review and approve technology policies.

Boards = Stewards of Technology Best Practices

Additionally, boards must strategize on what and how the new technology trends will affect the future of the company. Cyber attacks are becoming more prevalent and boards must approve cyber security policies. Company’s reputations and brands must be protected through social media policies. In short, boards must play a more active role in guiding the future use of technology by defining best practices. This requires a tech-savvy board. Is your board one?

There are 5 ways a board becomes tech-savvy:

1. A board needs at least one board member with a technology background. These board members have a technology background and can make sure that the IT strategy is aligned with the strategic plan. They can stimulate conversations and make sure the conversations stay on track. They can also be a cornerstone on the risk and or governance committee.

2. Companies need a CIO that can interact with board members. CIO’s need to be able to present at board meetings and share their suggestions and ideas in a way that all board members will understand. They need to be able to educate and apprise directors of how the technology strategy links to the overall business strategy.

3. Boards need to educate their members on a regular basis on technology issues. IT literacy is an important competency for directors this can be done with seminars, CIO presentations etc.

4. Technology needs to be on the board’s agenda on a regular basis. Directors need to spend as much time on IT as on accounting rules. This is rarely the case.

5. Boards should not be afraid to hire outside experts to get another view on major decisions and policies. Bringing in experts with “fresh eyes” is one of the best ways to identify ‘blind spots’ in the board’s vision for technology policies and best practices.

In summary, the goal is to have the all board members tech-savvy. It starts by bringing in a tech-savvy board member and then educating the rest of the board over time. Boards do not want to risk being blamed for technology failures in the future. Why? The technology decisions and policies that are made today will affect the company for years to come.

Larry Putterman is a certified board member, entrepreneur, and business coach. Learn more about him at www.LarryPutterman.com.

As a communication network specialist for the U.S. Military, I follow a strict 5-point checklist when creating solutions for them. This systematic process for assessing and creating military-grade communication networks is the result of years of systems engineering work in which I learned the power of identifying key components essential to the successful use of a network. They are:

Security – Why types of information will be allowed to safely travel through the network?

Technology – What hardware and software is needed to connect the communication points?

Access – Who will be able to send/receive information over this network?

Performance - How quickly and via what paths will the information need to travel?

Scale – What is the maximum amount of users and information that need to be accommodated at any point in time?

By answering the questions above and understanding its intended use prior to developing a solution, I can save my clients significant time, headaches, and money while improving overall expectations. Here’s an example…

Not All Big Systems Issues Require Big Fixes

At a recent military exercise, networks were installed at various locations to practice an actual deployment. When deployed, the military must bring virtually everything they need. Things like a mission plan, satellite communication technology, computers, cable, phones, tables, chairs, tents, heating, and much, much more. As they set up, they put together their communication networks so they can talk to one another locally and between locations. Just like a rapid response team for the police, or firefighters, they must execute this process as quickly and effectively as is humanly possible. These communications systems in real deployment situations have the power to save lives – but only if they work.

In the case of this military exercise, the video conferencing was choppy and failing. We determined where, within this extremely complex remote communication system, the problem was occurring. Without a systematic approach like the one above, it would be easy to randomly test a multitude of components where the video communication was failing – costing the military precious hours of functionality. Instead, we applied the 5-point checklist above and quickly determined the problem was the result of a simple setting change that would finally enable the video conference to transmit acceptably over the satellite connection. Just one small tweak and the network was functioning optimally.

Proven Process  + Unbiased Approach = Robust Systems That Aren’t Over-Complicated

At Canyon Applied Technologies, we’re committed to seeking the best ways to develop and integrate communications systems that are military-grade in performance, while maintaining a level of simplicity to the design. Because we are not associated with any particular technology solution, we are able to independently assess a client’s needs and offer a truly honest recommendation regarding their ideal solution.

Do you have a communication network need? Contact us today to set up a *free* 30-minute consult regarding your system requirements using our 5-point checklist and let us help you get started on the right path to a cost-effective solution.

Joe Loda is founder of Canyon Applied Technologies. He has 15+ years experience creating military-grade communications networks using his systems engineering expertise. Learn more about Joe Loda here...

When Terry Francona, “Tito”, came into the role as Red Sox manager, the honeymoon was sweet as candy.  A team that had gone 86 years without a championship gelled in a fun, exciting way that culminated with (sorry Yankee fans) the greatest comeback in the history of American sports.  Tito got the most out of the players and the team, and everyone seemed to have fun doing it.  No small feat, when managing larger-than-life personalities like Manny Ramirez, Pedro Martinez, and Curt Schilling.

How did he do it?

Francona used the right balance of leadership, positive support, and giving great performers the opportunity to do great things.  He communicated his goals, listened to the needs of his team, and combined them to build the recipe for team bonding and success.  He stepped in where help was needed and stepped aside where players were performing at their best.

3 Tips for Leading Hi-Tech Engineers

Let’s acknowledge some realities.  A good manager does not perform magic.  If Tito’s team was comprised of me, my brothers and sister, my next door neighbor and my dog, he would not have been sporting Dom Perignon mousse in the locker room in October.  Leadership execution works if the right team has the skills to fulfill the needed roles.  However, we have all seen teams of great individuals fail to come together for the grand prize.  The great leader then brings the positive to bear and provides the guidance to work through the challenges. In my experience, here are three tips for helping your high-tech engineering team succeed.

#1 – Talk the Right Language 

You have probably heard the joke: How do you tell an introverted engineer from an extroverted engineer?  The extrovert looks at your shoes when he talks.  We all know it takes a special, Big Bang Theory kind of style to communicate well with this gifted, yet sometimes quirky group of people.

Engineers know they are smart.  It is not arrogance, simply fact.  They were the first ones in their second grade class to understand multiplication tables.  In high school, they were the ones people wanted to sit next to on test day.  In college, they continued to get A’s.  When an engineer makes a statement, she truly believes in its veracity, and probably has the facts to back it up.  So, if you don’t pay attention, you will likely be wrong, as well as irritating her.  This applies not only to engineering problems, but to issues with your company, as well: IT management, HR policies, what kind of snacks are kept in the company kitchen.  An engineer will take home the company medical plan, analyze it, and come back with a formulaic decision on the plan to choose, the funding to contribute, and how many children she and her spouse should have to optimize the coverage.  When an engineer speaks up on these or other issues, acknowledge her concerns and respond with a concrete plan to address them.  If you treat her like a worker bee, she will end up buzzing off to another hive.

#2 – Respect the Work = Compliment the Engineer

Engineers want to feel involved and to have meaning for their work.  Show them, on a very regular basis, the importance of their presence on the team and the value of their work to the company goals.  While there are some mercenaries out there, underneath the “as long as I’m paid, I’m happy” mantra, everyone feels better if he can look back proudly and say, “I worked on this,” or “I built that.”  When I walk around and talk to the engineers – and I walk around a lot – I find they are so engaged and responsive to my questions.  I don’t have to pretend I understand all the complexities of their work.  It is fun for both me and the engineer when I say, “I don’t understand how your piece works.  Can you give me the quick tutorial?”  People like to see that leadership cares about their piece of the project, and people never mind a quick compliment before you move on.

#3 – Focus on Their Future

Focus on long-term goals is critical to keep engineers engaged.  Ask an engineer regularly what he wants to be doing in the future, and help him structure a path that gets him there.  I once lost one of my best engineers, because I hired a person into a position that he had hoped to attain.  In hindsight, I realized he would have done just as well or better in that role, but I had neglected to speak with him and focus on his career needs.  That lesson stuck hard, and I try to always look internally before externally to fill vacant positions

Take away: You Need to Love Coaching Your Engineering Players

The thing I love most about managing in the engineering world is that I am always learning.  The combined knowledge and capabilities of the team gives me so many opportunities to improve, I just need to pay attention to them, and we all advance together.  I believe that my role is to enable the greatness of the engineers to shine.  When I pay attention to what they tell me, show them I understand, and give them the tools to perform, they respond by shining more brightly than I could have imagined.

About the Author: Tim McConnell  is an engineering executive with 20+ years in management and engineering development. He currently serves as Executive Vice President of Solekai Systems, where he has overseen the engineering department since 2009 and directs the technical staff of 75+ engineers and project managers. You can learn more about Tim on Linkedin.

The Right Problem

First off, here are two ways to ensure you are working the right problem:

1.    Get Lots of Customer Feedback

In today’s rapidly changing world, entrepreneurs need to market test their vision continuously and iterate though solutions until they’ve found one that’s proven. Get out and talk to people. Run cheap ad campaigns to attract enough users to test new iterations of your product.

Fire a lot of test rounds. Find the ideas that have already hit the bull’s eye before you commit significant resources to pursuing them.

2.    Know Your Fanatical Early Adopters

Finding a small tightly clustered group of users will allow you to pursue “Niche to Win” or “Start small while thinking big” strategies. In the first case, you will aim to completely own a niche of the market that are too small for bigger competitors to pursue. In the second, you use that small but fanatical group of early adopters as the tip of a two ton wedge into other markets.

Whichever strategy you pursue, knowing who these fanatics are inside and out will make it easier for you to:

• Mine their deep understanding of the problem
• Find early evangelist
• Get paying customers
• Focus your limited marketing dollars

The Right Team

Here are four ways to build the right team:

3.    Focus on Your Company Culture

Create a culture where your team has fun and enjoys solving problems together. Your teammates should respect each other and work toward common goals. You are going to have vigorous arguments and debates all the time, but to be successful you need to fully unite behind decisions regardless of personal positions or interests. People who cannot row in the same direction need to be asked to get off boat.

4.    Bring Together People with Diverse Skills and Backgrounds

Make sure your team has a diverse set of skills, experiences and backgrounds, and to nurture a range of personality types. Have a balance of thinkers, persuaders, connecters, and controllers. See David Roth’s article for more about the importance of diversity to startups.

5.    Find a Problem that Matches Your DNA

Your team needs to have a deep personal passion for the specific problems facing your target market. Success will be based on the insights and energy your team brings to solving those problems. If some of you aren’t part of the initial target market, they should have a deep empathy for it. You need to have felt the acute pain yourself or know people who have.

6.    Make Sure You Have the Right DNA for the Solution

Think carefully about what technical skills and domain expertise are needed to prove your concept, and build a team around those needs. Find a playing field where your team has an unfair advantage, and where your company can be the best in the world.

For more on building start-up teams and cultures, see this post by Peter Cohan.

The Right Business Model

Next up are three ways you can increase your chances of creating a great sustainable business:

7.    Do Not Focus on Advertising Revenue

Ad-based businesses rarely get funding these days. So, decide early on to provide a clean, ad-free premium product or service. If ads become a necessary evil later on, view them as a nice secondary source of revenue not a core part of the business.

8.    Find Paying Customers

Find on a compelling value proposition that people are willing to pay for. If you do, people will sign up to be alpha test users based on your understanding of their pain and your vision of the future. They’ll pay for your minimum viable product, and provide active input into your product road map. Make sure to identify several alternative revenue streams to fall back on as well.

9.    Be Paranoid

Finally, exude a confidence that comes from a healthy dose of productive paranoia. Include more than just “conservative” estimates of your market size and financial projections in your business plan. You won’t be able to predict what will go wrong, but you can be certain that something will go wrong with even the most carefully laid plans. Market adoption might be slower than anticipated, production schedules slip, recruiting the right people takes time, global economic shocks happen, or unexpected competition may appear.

By articulating the biggest potential threats, you can prepare accordingly, be hyper-vigilant for changing conditions, and give yourself more time to react with thought and discipline when the unexpected happens.

In closing, we can take inspiration from Jim Collins’ book Great by Choice in which Collins reports that successful companies need not be more risk taking, more visionary and more creative than their competitors; they just need to be more disciplined, more empirical, and more paranoid.

More Reading

To get more insight into the frameworks that used in these articles, check out the following books by Jim Collins, in particular, Good to Great’s chapters on Who then What and the Hedgehog Concept, and Great by Choice’s chapters on discipline, empirical innovation, and productive paranoia.

• Jim Collins and Morten T. Hansen, Great by Choice: Uncertainty, Chaos and Luck—Why Some Thrive Despite Them All (New York: HarperCollins, 2011).
• Jim Collins, Good to Great: Why Some Companies Make the Leap and Others Don’t (New York: HarperCollins, 2001).

The following books by Steve Blank and Eric Ries provide more details on the tactics employed by great startups.

• Steve Blank and Bob Dorf, The Startup Owner’s Manual: the Step-by-Step Guide for Building a Great Company (Pescadero, California: K&S Ranch, Inc., 2012).
• Eric Ries, The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (New York: Crown Business, 2011).

About the author:

Kenneth J. Hong is a veteran of multiple start-ups and specializes in disciplined data-driven approaches to creating and growing internet and mobile businesses. Connect with Ken on LinkedIn.

This is the very image of what being an entrepreneur is supposed to be, at least what’s portrayed in the movies. Indeed, this may very well be the starting point where many new companies, but most new companies fail. Here are nine signs that the passion and energy that has brought you this far might not be enough to be successful in the market:

Problems with the Problem

If you’ve studied Dave McClure’s presentation carefully, you know how important it is to pitch the problem, not your solution. The first step toward success is nailing the problem. Here are two signs that you are not working the right one:

1.    Minimal Customer Feedback

Gone are the days of elaborate business plans and stealth mode waterfall product development. Moving full steam ahead without enough evidence to validate your business hypotheses is just building a field of dreams.

2.    No Fanatical Early Adopters

Broad positive feedback of your idea indicates general market acceptance, but it also shows that you haven’t worked hard enough to find your initial target market. Very few startups have the resources to exploit a large expansive market right off the bat.

Problems with Your Team

In the startup world, people like to invest in teams. Here are four indications that you don’t have the right one:

3.    Poor Team Dynamics

Building a new company is not the time for dysfunction, politics and pettiness.  Immature, ego-driven team members will kill a startup as quickly as a bad product.

4.    Everyone Looks the Same

To avoid the pitfalls of having a dysfunctional team, you may instead fall to the temptation to join forces with people who are just like you, literally or figuratively. A team that lacks diversity will have blind spots and sub-optimal problem solving.

5.    Wrong DNA for the Problem

No matter how good your idea is, if you can’t make a personal connection to the problem, then you will have a hard time empathizing with your customers and it will show in your end product.

6.    Wrong DNA for the Solution

Similarly, your company may not have what it takes to be the best in your market. Your competitors are fighting to dominate the market, and so, should you. To do otherwise would be akin to showing up with a knife at a gunfight.

Problems with Your Business Model

7.    Going after Eyeballs and Advertising

It is expensive to acquire and keep a large audience, and with increasing pressuring on advertising rates, it’s becoming more difficult to cover the cost of acquisition let alone overhead with ad revenue alone.

Then there’s the competition. There’s a reason why Google is so successful and why competitors with massive audiences like Facebook, Pintrest, and Twitter are struggling with their revenue models. Simply put, Google is better at targeting users at the exact moment when they are intent on purchasing. Will your solution be better?

8.    No One Is Willing Pay

If you cannot find anyone who will pay for your product, you have a huge signal that either you don’t understand what the problem is or don’t have the right solution. If you can’t generate immediate revenue, you’ll most like need to raise money. If you try to raise money with no revenue in sight, you will either get turned down or get less desirable terms and a lower valuation.

9.    No Appreciation for the Risks

Finally, it’s easy to paint a picture of unstoppable success, but startups need more than a vision and a good story. Entrepreneurs with unalloyed optimism are too easily caught off guard by changing conditions and too often fail to recover.

In my next post, I’ll discuss how you can improve your odds of success by building the right team, validating your value proposition and target market, and finding a better business model.

About the author:

Kenneth J. Hong is a veteran of multiple start-ups and specializes in disciplined data-driven approaches to creating and growing internet and mobile businesses. Connect with Ken on LinkedIn

A Lewis & Clark Comparison

The term “Big Data” does a poor job of describing the digital expanse involved. IDC describes it as the digital universe.  Maybe “New World of Data” is more apt, a sort of Lewis and Clark comparison.  They set out to explore the North American continent 184 years after the Pilgrims landed.  While it was not all new, there was still much they didn’t know.  They made some amazing discoveries – little could they imagine what the land would look like two hundred years after they crossed it.

Digital Discovery

We are in a similar mode of digital discovery with opportunity for new understanding. We have experience in the New World of Data as our world has already been rapidly moving from physical to virtual, from analog to digital.  But now, it’s happening much faster than expected.  It won’t take two hundred years and we are all part of the exploration.

Big Data = Volume, Variety and Velocity of Digital Data

▪         Volume – is that huge amount of digital data created by all sources – companies, individuals and devices.  (What constitutes “big” varies by perspective and will certainly change over time.)

▪         Variety - comes from increasing types of data – some structured, as in databases, much of it unstructured text or video and some semi-structured data like social media data, location-based data, and log-file data.

▪         Velocity – is the speed of creation, which in turn drives interest in real-time analytics and automated decision-making.

Think of this as our equivalent to the continent facing Lewis and Clark.  It is there to be explored and facing it we need an action plan – how to store, process, and access the data.  How do we best discover hidden value?  What are the critical questions we should ask that depart from more traditional data analysis?

What Do We Mean By “Big”?

An IDC December 2012 study projects digital data increasing from 161 exabytes in 2006 to 40,000 exabytes in 2020.  That’s a factor of a 300 increase.

For perspective, an earlier study noted that just 161 exabytes = 3 million times all of the data in all of the books every written.

If you Google the term “big data” you get back over 800 million hits.

Big Data Bundling Can Be Serious & Funny

We can bundle the key elements and value of Big Data in a few focus areas.  It is a collection of data sources and technologies that enable new measures of predictive analytic insight.  The intent is to gain techniques for rapid decision-making that can lead to competitive advantage.

All of the above do not necessarily apply all of the time and it could be argued that it’s only somewhat new, since parts of it have been around for a long time.   What’s really new is the variety of ways it brings together and takes advantage of massive amounts of data using disparate technical tools and data sources that lead to increased understanding and perception of the world around us.

Some instances are entertaining, some silly and some deadly serious.  See “What if Santa Used Big Data?”, and Academy Awards Big Data for amusing examples.  In the more serious vein, look at the study that indicates how homicide can spread like an infectious disease.

Your Next Step – Big Data Usage

Now that you have the overview of Big Data and what it really means, let’s move on and learn the Finding New Value in Big Data. You can check it out over at my blog here:

While Facebook was growing, so was m-commerce, native apps, QR Codes, augmented reality, Internet TV, webcasting, neuromarketing, and new techniques such as geo-location, gamification, behavioral SEO, daily deals, and on-line communities. Positions such as chief marketing technologist, content, community or customer experience manger didn’t even exist a few years ago.

In the history of marketing, it took decades for new technologies such as radio and TV to gain critical mass. Which means everyone in the industry could focus on a single technology, and they had years to figure out how to use it. But that world is long gone. There are new technologies emerging every day and reaching critical mass in unprecedented time.

Most companies have an explicit or implicit technology strategy (e.g. an approach underlying their R&D or new product development thinking).

For example, in our industry how valuable is it to be a first mover, fast follower, or perhaps an imitator. Companies may even have a chief technology officer (CTO) who focuses on these types of questions full-time. Beyond new product development, CFOs may have very aggressive to very conservative approaches toward adopting the latest innovation in financial instruments.

However, most CEOs and CMOs do not have a marketing innovation strategy, which means they can never be a first mover. Their strategy is completely reactionary. They wait for their agency or a vendor to “pitch” them.

Even worse, are executives who decide to adopt a new technology because they hear their colleagues adopting it. The most recent example was executives who felt they needed to “do something” in social media like put up a Facebook or twitter page because they were hearing about it everywhere. That is not a strategy!

Well it is, but it is not a good one.

The result is you end up adopting emerging technologies on a reactionary, ad hoc basis. The initiatives are siloed, and not synergistic. This doesn’t mean you can’t adopt new technologies opportunistically. It means you can’t know what fits opportunistically if you have no overarching plan or strategy.

If you don’t know what you are looking for, how will you know it when you see it?

When a new technology emerges such as cloud computing, a company needs to spend some time brainstorming how this new technology could help them achieve their strategic objectives, long before the vendor or agency shows up. This is all part of developing a marketing innovation strategy.

Let’s take a look at the definition of marketing innovation again.

Marketing innovation is the act of incorporating advances in marketing science, technology or engineering into your marketing strategy, research, communications, operations, and analytics, increasing your marketing efficiency or effectiveness, resulting in completive advantage and/or increasing shareholder value.

If you have a strategy, you have a much better idea of knowing what you want the technology to do; even if no one else has thought of using the technology to do something similar. This could give you a competitive advantage as your competitors are probably waiting to react to the latest use cases presented by their agencies or vendors.

You need a marketing innovation strategy so you are not spending all of your time reacting to the latest developments in marketing, or worse yet not reacting at all.

Image Credit: Shutterstock

Many tactics such as calls to action, colors, landing pages, copy text, layouts, and images can be tested. The idea is to come up with something that will beat the control group. The purchase funnel is great for A/B testing because small improvements in drop-off or abandonment rates can have a significant impact in sales. What we are arguing is companies should take the “test and learn’ concept and apply it to the entire marketing organization and its processes.

But test and learn does not have to be limited to just tactics. It can be applied to pricing strategies, store formats, merchandising, etc. The idea is to test on a small customer segment, limited number of stores, or a specific geographic area to assess the potential impact before it is rolled out nationally.

For companies committed to marketing innovation, I advocate they have a budget to do a small number of test and learn projects each year. A test is an expense and it needs to be budgeted. But just as a company invests in training and professional development, they should invest an amount that is appropriate for their strategy to do these test and learn projects.

Companies should ask, (and test) new ideas and technologies. This is particularly important with emerging technologies. The more mature a theory or technology, the better we are able to predict the result. With mature technologies, we understand the best practices based on prior tests, published research, case studies and use cases.

You are not limited to testing tactical improvements. You can develop hypothesis and experiments to test and learn from novel approaches and technologies that have a larger potential to be “disruptive” in their impact.

Clearly there are too many ideas and technologies to test. So it is important to be strategic.

• Where does test and learn fit into your overall marketing innovation strategy?
• Are you looking at the discrete activities you perform in marketing and thinking about how those could be improved?
• Is there something that is critical to the success of your marketing strategy, say your content creation or customer community?
• What metrics are you using to measure those and can you brainstorm or research and find ways to improve those metrics?

The key is to go beyond the testing and make sure the “learning” takes place. When you do an A/B test, A performs better than B, but do you know why?

The key is to capture the learning.

It is not enough to say the test was a failure or that the test beat the control group. It’s about the learning. Test and learn is more than a technique, it should be thought of as a state of mind and should be incorporated into the culture of the organization, if not the entire organization, then the marketing function.

Image Credit: Shutterstock

These techniques became popular because they helped to cut costs, improve product quality and reduce working capital requirements. In addition to the financial impact, customers were more satisfied with defect-free products and services. Companies such as Toyota built their brand on these techniques. And while products can be reverse engineered, it is a lot harder to replicate these types of winning processes.

These techniques, which have done so much for manufacturing and services, need to be applied to processes such as sales and marketing for those companies that want to embrace marketing innovation as a way to gain competitive advantage and increase shareholder value.

Some have pointed out the S (sales) of SG&A expense has not undergone the same type of scrutiny as other costs. While the marketing budget may be reduced based on a lower revenue or earnings forecast, it has been hard to look under the hood and see what was and what wasn’t working.  rom a benchmark perspective as long as our sales and marketing dollars seemed to be as productive as the industry average, it was hard to ask for much more. And of course, every imitative presented to management had a positive “ROI.”

Before marketing was thought primarily to be a creative process, and seen above the fray of such examination. Sure, there were and are many areas in marketing that are quite quantitative (e.g. market and consumer researcher, price elasticity, etc.).

No one wants to minimize the importance of creativity in promotion and branding.  We could tell how great our advertising was based on the juried awards we won and the “oohs and aahs” we got from others.

What has changed is mountains of data and metrics we now have, which enables us to look at our sales and marketing at a very granular level and make improvements.

We can now look at our marketing operations the same way we look at our manufacturing operations.

This begs the question, is our marketing process the same as it was years ago, with the exception of adopting a few new technologies? Are we using these new technologies to pave cowpaths, or innovate how we do marketing.  Marketing innovation is far more than moving from “outbound to inbound marketing,” or tacking on a social media strategy next to our core marketing strategy.

It is a commitment to looking at our entire marketing process from how we develop our strategy, conduct our research, execute our promotions and communications, understand the implications of the analysis and then act on it.

How can we use the mountains of data we now have available to improve our marketing operations process?

What metrics do we need that we don’t have?

The learning curve only works when learning takes place. If you keep doing things the way you have always done them, you won’t increase your effectiveness.

The next new breakthrough in marketing science, technology or engineering won’t save you because your marketing system is broken. Even the marketing department has to commitment to continuous improvement as part of a larger marketing innovation strategy. Not doing it would be like wanting to maintain product parity with competitors, but not wanting to spend any money on product development.

In this day when innovation in marketing is taking place at an accelerated rate, it just isn’t optional to look at ways to improve the marketing operations process.

Image Credit: Shutterstock

Or you do neither and let the competitors pass you by.

Marketing Innovation is a Relatively New Term

Since it’s so new, it’s not surprising there is some confutation as to its meaning. First, are those who see marketing innovation as synonymous with creativity/innovation.

Of course executives want their company’s culture to be more innovative and marketing to reflect that cultural. They may offer rewards, and/or recognition for innovation by employees, perhaps having an employee suggestion system. They allow employee a certain percentage of time to work on projects that are outside of their area (3M, Google). They set metrics to have a certain amount of revenues from products developed within the last few years. (Hewlett Packard) Senior management lets it be known that risk taking will be rewarded.

Having a more innovative culture will likely result in more innovative marketing. But it is not the definition of marketing innovation and it won’t help you craft a strategy.

Some see marketing strategy synonymous with marketing innovation. Strategy is a combination of creativity and qualitative and quantitative analysis. The combination helps a company identify new opportunities with customers and markets and how to take share from competitors in existing markets. But marketing innovation is not limited to new customers, new markets or penetrating existing markets.

Finally, there are those who see marketing innovation as a campaign or program, as in a multi-channel, interactive marketing campaign. They may be launched or featured during high profile events such as the Super Bowl, and incorporate some cutting edge technology. The result could be some very innovative marketing. But an innovative campaign is not marketing innovation.

Marketing is a discipline, a practice and it is changing because the underlying knowledge in the social sciences that supports it is changing. Marketing is composed of micro-economic data (e.g. price, quantity, and behavioral data, the understanding of human behavior from psychology, anthropology, and sociology). The research was often limited, expensive and moved slowly from the academic world into practice.

With demographic, psychographics and social data tied to behavioral and economic data, there are mountains of data and insights to be had, the types of data that in the past would have taken years to have complied and analyzed.

When you combine all of that data, with inexpensive computing power, storage and application development, like developing native apps, you are going to get an explosion of insight, which will lead to innovation. To understand the potential, look at what happened with the development of UPC codes and scanner data. It made marketing science possible and it helped us determine how much if any of a company’s product we wanted to put on the shelf and where, how much product we would sell if we offered a discount or a coupon, etc. and with loyalty cards we could tie that data to individuals.

Now we have tons of information from people’s cell phones via their GPS, cell tracking, or people “checking-in,” what types of searches they are running, where and when for what, what transactions they are making, what they are “sharing” or tweeting about, etc. Combine this with what customers are telling us directly, and we have tons and tons of data on consumer behavior, all waiting to be mined and analyzed.

Now add the products themselves, as the products have intelligence with sensors, chips and RFID tags, and they will start communicating via the internet and we will have even more data. Cloud computing makes it possible to have access to massive computing power and you only have to pay for the amount of time you need.

Marketing Innovation is About the ‘Big Picture’

How do we incorporate the advances in marketing science, technology or engineering to increase the effectiveness and efficiency of our marketing, how do we use it to gain competitive advantage and increase shareholder value?

Marketing Innovation is defined as:

The plan to incorporate the advances in marketing science, technology or engineering to increase the effectiveness and efficiency of marketing, to gain competitive advantage and increase shareholder value.

When we say use it to improve out marketing we mean, improve our strategy, research, communications, operations, and analysis. When we talk about shareholder value, we mean improve the lifetime value of the customer, improve their probability of spreading positive word of mouth, increase their engagement, and the chance they will share their ideas for new products and services, with us.

The answer may not be in a way that increases revenues, but perhaps it improves the customer experience, perhaps it improve the margin or results in a better use of working capital.

It is important to have the proper understanding of marketing innovation or else you won’t create an effective marketing innovation strategy.  With the rate of change in the world of marketing, that would put you at a serious competitive disadvantage.

If your competitor figures out how to adapt a new technology, or engineer a solution, or gain insight from the existing mountains of data before you do, it could be a real game changer.

Image Credit: Shutterstock