Velocity – The seven new laws for a world gone digital – By Ajaz Ahmed & Stefan Olander
(Summarised by Paul Arnold – Strategic Planner, Facilitator and Trainer – firstname.lastname@example.org)
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IN A NUTSHELL
The world is rapidly changing. The authors define this new environment as ‘Velocity’. Digital data allows instant feedback loops to help an organize better adapt and meet its customer needs better. Critically brands need to become ‘service’ oriented with a shift in mindset from ‘How do we convince?’ to ‘How can we be useful?’
The seven laws of ‘Velocity’ are:
1) Evolve – because entitlement kills
2) Get going – then get better
3) Make meaningful connections
4) Work hard to make life easier for others
5) Make people’s lives easier, richer or more fun
6) Have the balls to make the calls
7) Have a purpose larger than yourself
The first law of ‘Velocity’ – A Smith & Wesson beats four aces (i.e. Evolve – because entitlement kills)
New technology is changing the rules – A tale from the old Wild West: No matter how good the cards you hold, if someone changes the rules of the game with a gun, those cards are useless. The gun (i.e. new technology) changes everything.
Organisations that do not evolve will decline – Big organisations are trapped in old mindsets and modus operandi that built their success in the past. Since the environment has radically changed, these beliefs and processes are holding them back – e.g. CD’s Vs Digital downloads; Blockbusters Vs NetFlix; Borders Vs Amazon and Kodak film Vs digital.
Thus it’s suggested to ‘act’ like a start up and force disruption.
How institutional thinking limits innovation – The best brands are constantly trying to extend themselves further and not rest on past successful products. Thus fit organizations institutionalise innovation to better meet the changing needs and tastes. The trouble is often the quality of innovation is held back by the paradigms of the organization (so tends to develop smaller incremental improvements). Typically it’s organisations outside the category that think in a different way who are able to bring step-change innovation into a category.
Innovation through consumer obsession – At Nike, their aim in innovation is to edit and amplify: “We need to do fewer things better, and make sure our innovation is built around true deep consumer value, not gimmicks”.
Using on-line data to improve services – Technology helps puts the customer at the centre. The Amazon model creates superior customer servicing as every purchase/browsing history provides more detailed insights into a person’s personal choices. This then allows Amazon to better tailor offers to its customers.
Customer data is increasingly becoming an organizations core competence (and thus should not be outsourced or marginalised). Many new company start-ups have analytics at the heart of their operation (unlike more established companies) – allowing them access to real time data rather than audited data that can be months out of date.
Beware the blinding by data – Data is like crude oil – it has to be refined to be useful. The digital space has produced mountains of data – but the information is only as good as the data we collect (and the meaning we make of it). They reference the Thanksgiving Turkey from the book, ‘Black Swan’. As far as the turkey is concerned, life is good…until a certain day… Thus it often needs a wider perspective to gain a truer understanding.
New technology – new opportunites – The current market situation is ideal for any entrepreneur with a disruptive idea, as the Internet allows rapid dispersion of a great idea. Even raising funding is much easier with crowd-sourced funding (cf the TikTok watch, the founders wanted to raise $15k pm to fund tooling, but after 30 days had banked $942,578).
The Organisation as athlete – Unsurprisingly, (since one of the authors works for Nike), they use the metaphor of an organization being like an athlete: The need to be totally committed; To constantly improve and adapt to the evolving competitive situation to win; To face harsh facts (and hence the need sometimes to change tack); To keep pushing (even through failure, even when you want to give up); To never stop learning; To accept criticism; To scrutinise and improve every detail of the process (as small incremental improvements across a wide number of parameters means the difference between winning and losing).
In high performing teams, speed and quality of feedback is critical to adapting quickly. The best coaches praise effort as opposed to praising an innate gift /talent (as the former leads to more effort whilst the latter suppresses it). They also push their athletes to perform beyond their own belief.
The second law of ‘Velocity’ – It’s easier done than said (i.e. Get going – then get better)
Execution is all – Sir John Harvey-Jones said ‘Making it happen’ is the biggest challenge facing management.
The ‘Velocity’ model is about moving from up-front strategy development to implementation – it needs a culture of ‘execution’. Whilst it’s necessary to start with a simple idea the key it to tirelessly push for quality of execution (as an idea is only as good as how it is expressed). Everyone in the organisation (at all levels) needs to be focused on constantly trying to improve delivery.
Nike encourages their staff to become ‘super-users’ of their own products – to see themselves as consumers again (as its often by truly living it can one distil real insights – informed intuition is worth a thousand times more than any commissioned research).
Do – Don’t debate – ‘Always in Beta’ is the current mindset – i.e. focus less time on discussing the perfect solution in endless meetings and more time learning from doing.
Prototyping – We learn more from a working prototype than we ever do from sketches. Face Book prototype everything (e.g. Timeline) – as one needs to see how it works in real life – operated by actual users. This then leads to a continual line of incremental improvements (that can only be discovered through usage).
Nike used a principle of launch-learn-relaunch when working on Nike+. They stripped back all the superfluous features to help make it faster and simpler for its users. Such an attitude allowed them to launch the Nike+ GPS watch in just 11 months. They also added a ‘Tell us what you think’ button on the nikeplus.com site and received 15,000 responses per day.
2nd mover advantage – Even though ‘first mover advantage’ grabs the headlines, often the ‘second mover advantage’ takes the share – as it builds on their experience.
Find a better way – Do not just copy what others have done. Merely jumping onto a bandwagon is often no longer the right thing to do (as the environment is evolving so fast).
The third law of ‘Velocity’ – The best advertising isn’t advertising (i.e. Make meaningful connections)
The changing role of communications – The role of communications (especially on line) is changing from persuasion to being of service. Instead of just interrupting people brands need to make meaningful connections. The aim is to produce ideas/services etc that people want to share with others.
The need to drive engagement through being truly useful – The average person in London is exposed to 3,500+ marketing messages a day – but 99% of these had no impact on the individual (Source: The Guardian). We gain engagement by offering products/services that are truly useful. The stronger the service, the better the connection. Jeff Bozos from Amazon is quoted, “Advertising is the price you pay for having an unremarkable product or service”.
Advertising is not always the answer – Instead of running a campaign to tell people to put their rubbish in bins, would it not be better just to install more bins?
Digital + Advertising – Advertising is not dead but the opportunities to connect with consumers has expanded. Digital allows for more tailored messages and services that benefit more specific groups. Digital does not replace TV – it enhances it.
The transparency of brands – Brands can no longer hide behind polished advertising messages – brands are now transparent and thus they need to be authentic in all their activities. The web acts as a magnifier of issues – both positive and negative.
The co-creation of brands – Increasingly, we are relying on other people’s experience (aka collaborative consumption) and not just the brand’s message.
Using data to target better – By ‘listening’ to their consumers, a brand can know what, where and when they should best communicate to people on a more relevant one to one basis.
Creating on-line communities that self generate content – The Internet allows for communities to self-form and share ideas amongst itself. Nike Training club connects individual runners to a wider community (where individuals can share advice with others and become part of a bigger narrative). It has accumulated over 50 million minutes of training – all for the cost of one 30” commercial.
Harnessing multi-tasking – There is an increasing trend towards multi-tasking. People are surfing the net and texting friends whilst also watching TV. Heineken picked up on this trend and developed StarPlayer, which allowed people to predict (on their phone/PC) what will happen whilst watching a Champions League game.
Stories – Storytelling is a critical part of brands. We store experiences in stories (and through stories we experience the brand). People do not just buy the product service – they buy the story and values that surround it. It is the role of the agency to be a storyteller for the brand – to uncover the truths and bring them alive in an interesting way.
Storytelling has moved beyond film or ads and can be expressed in many different formats. For example, apps use a narrative arc to increase their relevancy and engagement. The 30” constraint to tell a story can now be lifted with You Tube (Indeed, Nike have launched a few products via You Tube rather than conventional media – which also has the advantage of gaining immediate analytics.
The age of entertainment – The digital world is increasing the role of entertainment for brands. In 2008, US games revenue overtook cinema for the first time. Games provide a more stimulating, interactive, co-created story that really engages. Increasingly, games are played on-line in real time communities – an ideal vehicle for brands to operate in.
New technology – New opportunites – New technology is unlocking whole new opportunities and services e.g. Jamie Oliver’s 20 minute meals app or TaskRabbit.com (where you post online something you want done (e.g. wrapping presents) and then you receive offers). BlaBa.com is also matching people together to share car journeys, whilst Fiat’s 500 eco.drive app allows a person to monitor how fuel efficiently they are driving (and then compare to other drivers).
The fourth law of ‘Velocity’ – Convenience is the enemy of right (i.e. Work hard to make life easier for others)
Working hard – Human nature means we tend to make a decision often based on convenience as opposed to the optimum solution. One of the truisms is that making life easier for others often means making life more difficult for ourselves. Thus an organization dedicated to the principles of ‘Velocity’ needs to set and hold to high standards – to constantly go beyond what is ‘necessary’.
The experience economy – Brands need to provide meaningful experiences (whose footprint is often wider than just the product experience) – cf Nike+ Fuelband, linked to NikeFuel (which helps people set and maintain training targets, and cross compare with others). Kiehl’s store creates a deeper shopping experience as does Heston Blumenthal’s The Fat Duck which brings theatre to food.
The fifth law of ‘Velocity’ – Respect human nature (i.e. Make people’s lives easier, richer or more fun)
Brands being useful – As our lives become more complex, so our desire to simplify will grow. Organisations that can take the friction out of a person’s life will become indispensible. If a brand wants to develop a long-term relationship with their customers it needs to develop products or services that are ‘useful’. Organization should therefore focus on “how can we make people’s lives easier, richer or more fun?’ rather than ‘How do make extra profit’? (By doing that they are then more likely to generate their profit target).
Using data to increase usefulness – Hidden amongst the cacophony of noise on the Internet can be found powerful insights. Facebook, Zynga, Google, Apple and Amazon are very good at analyzing customer data to improve their quality of service to their users. For example Zynga watch how players are interacting with their games in real time (they have 55m daily users) – they are an analytics company as much as they are a gaming company. The key is to spend time mapping people’s real behaviour and then develop products/service that improve their lives.
It’s not just data that gives the insights – One should never forget that at the other end of a brand, service or technology is a human being. This requires detailed observation of the person interacting with the product (ethnography) so to better meet their needs (e.g. website should use conversational language like ‘Send’ not ‘Submit’). Seeing how a 5 year old can use an i-phone/i-pad is testament to how well Apple has painstakingly honed their products with real people in real situations.
Making the total user experience easy – Often the ‘cost’ of something is greater than the cost of the item. For example, it includes the cost of purchase (in both time and effort) – so an app/website that makes it easy is more likely to be used (e.g. Domino’s Pizza app or Amazon Prime).
The sixth law of ‘Velocity’ – No good joke survives a committee of six (i.e. Have the balls to make the calls)
Need debate to make things great – Decisions made by committees are often sub-optimal. Ideas accepted too early have not had the thoroughness of analysis they need. A key managerial skill is the ability to foster a culture that encourages open debate without people taking offence. Final decisions should be arrived at through unfettered debate, supported by facts. Then one person needs to be brave enough to make the right decision (even if it is not the most popular one).
Values guide decision-making – Strong values and a clear vision helps guide consistent decision-making – e.g. Virgin, Apple, Audi and Red Bull.
Intuitive decision-making – In a world surrounded by data, part of the art of intuitive decision-making is knowing what to ignore (because you cannot plot a straight line through all the data points).
Do what’s right – not what others do – Good decision making is not about doing what everyone else is doing but doing what is right – e.g. Barcelona have a number of short players versus the current trend for taller players.
The seventh law of ‘Velocity’ – Have a purpose larger than yourself
Make a dent on the universe – Organizations must strive to make a contribution to society (i.e. bigger than just share, sales or profit gain). An organization that coalesces around a shared passion can create amazing things – e.g. The Nike Human race where over 1 million people from around the world ran 10k on the same day, or the Livestrong armband appeal (70m armbands and $100m in donations).
Have a driving mission – Bill Bowerman, the co-founder of Nike was always focused on one question: “What’s the best way to make a lighter shoe?”
The need for flexibility – The world is moving too fast to ever be in total control – instead we have to learn to be fast and flexible to respond to the dynamic environments we live in.
It’s an easy & quick book to read (and has some useful insights into Nike) – but like fast food, not particularly filling. Like with the Internet, one can be seduced by thinking its all new. A lot of the content feels more like a large collection of sporadic (often repeated) ideas loosely tied into an artificial framework called ‘Velocity’. Many of these ideas are not necessarily new or distinctive to ‘Velocity’ (such as ethnography, brands being useful, courage to make decisions or even data analysis).
When you have a hammer every thing looks like a nail… They seem to think that all answers could be addressed through digital. They imply that all the old ways (especially advertising) have been replaced by this brave new world. The Internet has certainly helped accelerate and amplify things, but still many of the original principles in brand and business management remain constant (but are enhanced by the potency of the internet).
The book is more a couple of experienced people ‘shooting the breeze’ and expressing their point of view over a wide range of subjects (there is no bibliography unlike authors like Gladwell or Lehrer). The issue for me is that there are quite a few assertions that are not substantiated by evidence or fully thought through (e.g. ‘Informed intuition is worth a thousand times more than any commissioned research’, Or the fact that whilst 99% of ads fails to create attention – well so do 99% of websites! And I’d like to hear what P&G or Unilever thinks of Jeff Bozo’s comment that “Advertising is the price you pay for having an unremarkable product or service”!
Furthermore they contradict themselves (e.g. Doesn’t ‘Do then learn’ clash with ‘a focus on detail’ (as one is about ‘It’ll do – just get it out there’ and the other is about perfection?)? Or Doesn’t the need to constantly evolve clash with having a clear direction? Or that Nike rarely rely on external research to make its decisions (yet they listen to their consumers all the time?)
So net, it’s an interesting, eclectic book for anyone new to the digital world, but for me told me very few new things.