Wells Fargo is an unusual bank. In the first place, it is headquartered in San Francisco, not in a typical financial center like New York. It is also unusually socially conscious, earning high marks for its environmental record and setting records for financing green projects.
Still, despite its offbeat culture, it has been enormously successful. With enviable operating margins of over 40% and a $260 billion market cap, it is the world’s most valuable bank. Since the financial crisis, it has had 16 consecutive quarters of profitability.
To get an idea of how Wells Fargo operates, I spoke to Steve Ellis, who runs its wholesale services group. Surprisingly, the story he told me had little to do with complex financial derivatives or risky trading strategies, but how it learned to innovate around the customer. Clearly, his experience applies not only to banks, but to any business.
Digital technology has changed marketing to such an extent that most brands still struggle to adapt. What once was a massive land war in which the biggest army had a distinct advantage, has become more like a guerrilla insurgency. To win now, you have to own the villages.
Pepsi was one of the first major brands to embrace the shift. In 2010, the company eschewed its traditional Super Bowl TV spots and invested $20 million in Pepsi Refresh, a social platform that awarded grants to good causes. Its social KPI metrics soared.
Unfortunately, in business terms, the initiative was a massive failure. Sales dropped by 5% and Pepsi lost market share. The truth is that simply adding followers on social media is unlikely to create a community of purpose. To succeed in the social arena, strategies need to be grounded in social dynamics and network science, not conjecture. Here’s how:
In the popular TV show, Game of Thrones, the denizens of the North often repeat the mantra, “Winter is coming” to remind themselves and others that they must continually prepare for the challenges ahead.
Managers also have a mantra, “the future is coming.” Some do it to warn of obsolescence, while others do it to promote their new idea. Much like the “Winter,” the future is always vague, promising unforeseen events that are devilishly hard to prepare for in any concrete way.
In a previous post about managing the skills gap, I argued that the best way to prepare for the future is to identify specific platforms—combinations of technologies and markets—that will enable your enterprise to compete. To follow-up, I spoke to some of the smartest people in technology about the platforms that will impact business in the years to come.
I started this blog in August 2009, just two weeks before my daughter was born. While five years is only half a decade, it somehow still seems like an even number and a landmark of some sort. Five years seems like a good time to reflect.
Like my daughter, Digital Tonto has transformed over the years not only in terms of size and scale, but in kind. It is now more of a home page for a larger platform which includes Harvard Business Review, Forbes, IX and others, rather than a singular entity.
Over the years I’ve gotten to know many of you, usually only online, but sometimes in person. As someone who has moved around a lot, Digital Tonto has become very much a second home for me and it’s been your support that has made it a cozy one. So thank you for that. Like in past years, I’d like to celebrate the occasion with some of my favorite posts.
When asked about what makes a great ad, advertising legend Leo Burnett advised, “Make it simple. Make it memorable. Make it inviting to look at. Make it fun to read.” He wanted his work to cut through, because as he also said, “If you don’t get noticed, you don’t have anything.”
And no one was better at getting noticed than Leo Burnett. He created legendary icons such as Tony The Tiger, the Jolly Green Giant and the Marlboro Man that transformed mediocre brands into dominant market leaders.
Now that digital technology has revolutionized how we distribute information, marketers are trying to apply many of the same principles to content. Unfortunately, it simply doesn’t work that way. The truth is that in a content driven world marketers need to start thinking less like advertisers and more like publishers. Here’s what needs to be done.
In a famous scene in the 1967 movie The Graduate, a family friend takes aside Dustin Hoffman’s character, Benjamin Braddock, and whispers in a conspiratorial tone “Plastics. There’s a great future in plastics.”
The line has become immortal because it signifies a common rite of passage: the abandonment of youthful dreams for the practicalities of adult life. Promising young people have always been expected to bear down, follow the rules and lead pragmatic, productive lives.
Yet, these days, we encourage our youth to “follow their passion” and “find meaning.” Corporate retreats often feature creativity exercises and offbeat activities such as bongo lessons, jazz classes and improvisational theatre. We take it for granted that business today is an essentially creative activity, but never question why. What’s changed?
These days, every business needs to innovate. While many in the past assumed that they could get by running the same old business the same old way, the fact is that 87% of the companies on the Fortune 500 in 1955 no longer exist.
So clearly, today’s firms can’t stand still and must pursue a variety of innovation strategies. Some invest heavily in R&D, others use advanced technologies to improve existing products and others create open innovation partnerships to solve tough problems.
Yet even if a business diligently pursues these efforts, it’s still vulnerable to disruptive innovations. These are especially challenging because they require a change in business model and aren’t profitable for incumbents to pursue. However, while competing with a new disruptive competitor is difficult, it can be done. Here are 4 ways to approach it.
In the late 17th century a middle-aged draper named Antonie van Leeuwenhoek became interested in the magnifying glasses he used to inspect fabric. He started experimenting with making his own and ended up creating one of the world’s first microscopes.
His work caught the attention of the Royal Society in London, which encouraged him to continue his research. Eventually he got around to examining a drop of water under his new device, which led to his discovery of an entirely new realm of microscopic organisms.
Technology and science have always been inextricably linked. Watson and Crick used the new technique of x-ray diffraction to discover the structure of DNA. Quantum mechanics would not be possible without proton accelerators. Strangely though, new data techniques have thus far had little effect on how science is done. That’s about to change.
Applying state-of-the-art tools and processes is widely seen as a mark of excellence. So, perhaps not surprisingly, “best practice” is one of those terms that you constantly hear in corporate circles. Managers often see implementing them as key to their performance.
Yet many experts point out that adopting so-called best practices can stifle your ability to innovate. After all, once you designate a particular way of doing things as “best,” who is going to question it? And if nobody questions it, it won’t be improved.
Still, even keeping those objections in mind, best practices can be immensely valuable, if approached with open eyes and good sense. The truth is that much like any business process, they’re only as good as the managers who implement them. While many do use best practices as a crutch, they can also be used as a platform from which to innovate.
The unicorn is perhaps unique among myths in that the creature doesn’t appear in the mythology of any culture. The ancient Greeks, for all of their centaurs, hydras and medusas, never had any stories of unicorns, they simply believed that some existed somewhere.
Of course, nobody had ever seen one, but they believed others had. Travelers would go to far away places, bring back stories of them and speak of the magical properties contained in their horns. Alas, no matter how hard anyone searched for unicorns, none were ever found.
Unfortunately, we don’t seem to have progressed much since then. Today, otherwise competent professionals are busy chasing their own unicorns. They hear stories of new practices, consumers and strategies and off they go, chasing what isn’t there. This is an enormous waste of time. We need to stop chasing unicorns and start killing them off.