I’ve been in Australia for the last week or so for the Symposium event here, and was lucky enough to spend some time on a couple of the beaches in Gold Coast and Sydney. As well as being impressed by the scenery, sun and great swimming, the respect shown for the life guards was impressive. With the danger of strong currents it is no wonder that most people don’t need to be reminded about staying between the flags when swimming.
But seeing these people on the beach got me thinking about the effect of branding and the need for rebranding. Australial life and surf guards with their red and yellow caps are an iconic, worldwide symbol of strength, health, skill and competence. Yet when you look at those caps in isolation, it is hard to see them as anything but, well… kind of ridiculous and silly. The look of those caps instils confidence not because of anything inherent; they could hardly be seen as stylish or confidence-inspiring. They have acquired that connotation due to the work and dedication of the people who wear them.
IT companies periodically feel that they need to rebrand their products, choosing new names and logos because they feel that the existing ones don’t convey the image they want to bring across. I am always skeptical of these efforts. They often are a sign of a new executive who wants to erase signs of his or her predecessor or is looking to make big changes, starting with the symbolic ones.
My objection to rebranding exercises is that they never bring customer value and and can be tremendously distracting. For at least a year, sales people will be explaining the change. Marketeers will be launching the new brand, updating brochures and hunting down references to the old name. Legal will be updating contracts. Coders will be changing screens and help text. Finance will be updating Excel models so that they can make comparisons cross products with different names but really are the same. All this time, the competition will be concentrating on bringing out new products that really help customers. Is this really how you want to spend your company’s resources as a vendor?
I realise that words matter, but ultimately your brand is what you make of it. A logo or name is only as good as the product and service behind it. Those red and yellow caps do not inspire confidence on their own, but they have acquired value over the years. There is no need to rebrand Australian life guards with a more up to date look because they have given those beanies the meaning they want to convey.
So vendors, unless your brand has become absolute poison put your efforts into improving what you provide rather than wasting time and money on the name and logo.
Two books – one from 2009 and the other from 1936. A great pair I can tell you!
Monetary Theory and Bretton Woods, Filippo Cesarano, Cambridge, 2009. Wow ? what a book! One of the four books I annotated most ? the others being Does IT Matter. Nation of Takers and Dealing with Darwin. Since I have been delving into Bretton Woods and its aftermath, I had to dig deeper and understand the gold standard, any why so many economist are enamored with its golden image. Turns out its just a system that worked for a while. Much like Bretton Woods. But I have learned why we can never go back to a gold standard, or any other standard. The natural world is not actually a fixed system but an organic, changing model that is more dynamic, with various equilibrium that come and go. This book explains a lot ? is easily read, and nicely chronological in how history has evolved in the area of monetary theory. Well worth the read ? and I am not even more excited to read more on the subject. Recommended 9 out of 10.
The Downfall of the Gold Standard, Gustav Cassel, Oxford University Press, 1936. This book was referenced by several recently published books on monetary systems and the gold standard. I was able to find an old second hand (used) copy. And mighty glad am I. When this book was written, the world was between two world wars. The ‘first’ or more well known gold standard had just come to an end, with the commencement of WWI. After the war, a sterling block reformed around Britain and its remaining Empire. Germany was being rebuilt. The dollar was emerging as a global force and making inroads as a globally traded currency, on its way to be the next reserve currency. But at the time, the “return to gold” was the oft cited goal from central bankers the world over. This excellent book explores the failings of the gold standard that struggled in the period between the end of WWI and the start of WWII (up to 1936) and compares what happened to the more stable sterling-based gold standard before the war, but also between the War’s. This inter-war period consisted of a flexible gold-exchange rate as well as an attempted fixed rate period. The gold standard failed, spectacularly, and Cassel explains clearly. The U.S. (and to a degree, France) imported much of the world’s gold for different reasons, yet at the same time did not permit the agreed price rises nationally that should have accommodated such behavior. The very trust agreed between nations was disrupted. The accepted “rules of the game” were violated. Only the new sterling area actually showed any signs of stability, but sterlings’ days were numbered. In effect, the U.S. was discovering, as it went, what it meant to have a globally traded and settled currency. And it was ruining the standard through its actions (from the perspective of global trade and prices). WW II changed all that. You won’t find a finer summery for what explains the demise of the gold standard. Recommended 9 out of 10.
When you think about a digital startup, the first image that usually comes to mind is one of a loft-like open space populated by casually dressed smart young things with faces illuminated by the screens of their MacBook Pros jammed along communal tables. But stereotypes are always dangerous. What if I told you that you?ve probably got several digital startups in your own organization?
Right now, there are digital startups sitting inside your marketing department, in HR, in logistics and in sales. Leaders in those business units are driving their own digital innovation. They approach technology differently, trying new analytic tools, cloud solutions and technology services. And they?ve got a whole technology industry geared up to help them.
Every business unit is a technology startup
Technology providers are actively driving this change. Millions of salespeople, hundreds of thousands of resellers and channel partners are selling directly into business units, not just to CIOs or IT. That?s half of the technology industry?s sales capacity focused on also selling directly into the business unit! They know that IT budgets are only going to grow 3% on average in 2015, and they are looking for new sources of revenue within other parts of the business. And you know what? They are finding eager buyers in marketing, sales, HR, logistics and product leaders.
Enter bimodal IT
CIOs need to respond to this cataclysmic shift. And if CIOs can?t beat them, they can at least learn a thing or two from them. The answer is bimodal IT.
The IT organization can?t turn into a digital startup overnight and, besides, there?s a raft of business-critical responsibilities that it simply can?t (and absolutely should not) divest. This is the fundamental challenge for CIOs, but also the solution. Bimodal IT is a concept that helps CIOs address the intrinsic tension that exists between what IT needs to provide and what the organization needs to grow.
Mode one is all-things traditional, emphasizing safety and accuracy ? what a traditional IT organization does best. Mode two is nonsequential, emphasizing agility and speed, like a digital startup. Put them together and what you have is bimodal IT. One organization operating at two speeds, but coordinating, communicating, leveraging shared knowledge and focused on one shared, not competing, goal; improving performance.
Sounds simply, but easier said than done? Absolutely! In my next post, I?ll dig deeper into how CEOs can work with their CIOs to achieve a bimodal IT organization and share some examples of organizations that have enjoyed early success with this approach.
At first it might seem counterintuitive: a company that makes 90% of its revenue ? about $54 billion a year ? from advertising offering consumers a way to block its ads. On closer inspection though, the Google Contributor is genius, and likely to be full of insightful discoveries for marketers and publishers.
First, it?s undoubtedly engineered to be at least revenue neutral. Let?s consider the math:
But direct revenue is only part of the story. More interesting are the many indirect benefits Google and its partners get:
This is all hypothetical of course. There?s a better-than-even chance that the program will simply fail to attract a critical mass of users and fade into the vast landscape of forgottent innovations that have tried to change the long-standing equation of free content supported by ads. That?s is still probably a winning scenario for Google as it will stand as a proof point that consumers are willing to tolerate ads even when given a choice to pay directly for content. (Although those most vehement about ads will simply use ad blockers instead.)
In any case, marketers and publishers both stand to gain from the knowledge this experiment is likely to generate ? about how much consumers are willing to pay to miss ads, whether an aggregator like Google can rekindle the subscription business, and how else marketers might reach ad-averse individuals on their journeys.
If there was one enduring, critical mission statement for marketers it would be: Marketers must prove that they can close business. Global economies and company growth periods rise and fall. In good times, marketers will need to prove that they directly add to the bottom line. In bad times, marketing will need to prove that they directly add to the bottom line. These business expectations for marketers are now set in stone, and measuring marketing?s contribution to top business goals must be intertwined with all of marketing?s activities: ?Engaging?, ?developing customer journeys? or ?creating customer experience at speed and scale?.. All good, worthwhile customer-centric, modern marketing initiatives. But you must prove it.
Digital Marketing has shaped up to be uncomfortable for many marketers. In the past, there was just so much finely tuned attribution we could squeeze out of a roadside billboard, a magazine ad or a TV spot. Now, with current and emerging digital marketing capability, marketers have unprecedented access to vast amounts of data to measure with precision. With seemingly bottomless amounts of data and nearly instantaneous access into areas such as how a campaign is performing on a website, in a social channel, on a mobile device or through an iBeacon, there is an expectation that marketers should be able to measure easily. But it isn?t easy and its getting even more complex.
Marketers are presented with an abundance of metrics. Some metrics measure marketing’s activities: How many marketing campaigns ran last quarter? How many hits did we get from our social marketing content? Who downloaded our app? Other metrics are outcome based: What was the lead?s conversion rate? How many additional products did the customer leave the store with? Marketers must understand how activity drives performance to show that the actions they are doing and demanding an increased budget for, is driving desired outcomes. If the connection can?t be made between the activity metric and performance outcomes defined by the strategy, then the metric, the activity, or both will need to be re-evaluated. Not establishing these types of connections means that high profile company objectives like customer growth or retention won?t be linked to marketing efforts and, well…you?re gonna have a bad time.
This week, (clients only) Gartner for Marketing Leaders shows how marketers are harnessing data, metrics and analytics, even reorganizing the marketing department itself, to meet the challenge of closing business.
There are about 68 million books written on the topic of leadership. No, I haven?t read them all. If you?re leading anything, you don?t have time for that. But I do believe this: true leaders are born that way. It?s a tough gig to actually train someone to lead even with disciplined military approaches. Not every soldier is born to lead. You also can?t really bestow great charisma on someone. They either have the ability to attract and hold people?s attention, or they don?t. And true leaders are courageous, inspired visionaries who have the ability to paint a colorful picture of the desired end state, yet secure enough to let people find their own way there ? unless they take a really, really long time.
So let?s see how you do on this hopefully informative and soul- searching Are you a marketing leader? quiz.? It?s multiple choice so reminiscent of academia, but the content is business reality based. Check out your final score to see if you need a little sanity check, you?re really following, or they should write a book about you.
Are you a marketing leader?
Now for Your Final Score
Count how many #1, 2 and 3 answers you gave.
If you chose mostly 1 ? You?re doing more following and hold firmly to traditional thinking. You still think the world of marketing is what it?s always been with a few twists. You may believe that the current course is the right one and it?s not time to venture off into unchartered waters. Check out the B responses again now and see if you can wrap your head around a few of those instead. Take a few risks. Digital marketing techniques let you do that at relatively low cost for experiments and pilot tests before you commit to a major roll-out.
If you chose mostly 2 ? You exhibit many of the characteristics and behaviors of true innovators and marketing leaders. You probably have perfected the art of the long view rather than compromise strategic intent in the name of short term goals. You?re thinking digital first and have a majority of your marketing budget dedicated to those tools and techniques. I?d love to do an interview with you for our Exemplar Series in the Gartner for Marketing Leaders program and celebrate your successes.
If half your answers were 3= Well, I?m just messing with you. I mean who doesn?t want their picture on the cover of Rolling Stone? With all love and respect, I meant no insult, it was just a way to show a contrast to the leadership patterns. But seriously, I do hear these sentiments more often than you?d expect. Read the #2 responses. You probably picked a number of them. Go with your strengths in these areas and fearlessly pursue some changes in attitude.
Thanks for playing. Now go do something bold, brilliant and brave today.
Holiday shopping season is upon us and is the busiest season of the year for hackers and shoppers alike. 2014 will be no exception and we should brace ourselves for more high profile cyber-attacks although this time, they are likely to gain much less public attention. Consumers have rightfully learned that they suffer little harm from payment card hacks.
So who does suffer?
Home Depot and Target, two big box retailers that suffered two of the largest card breaches ever, just released rosy third quarter financial results proving consumers value attractively priced merchandise more than they do payment card security. Sales were up at Target by 2.8%. Home Depot?s U.S. same-store sales rose 5.8 %, and both breaches seemed to have had negligible impact on consumers. This is a replay of what happened after the massive 2006 card data breach at TJX stores, first disclosed in January 2007. TJX reported an increase in revenue of approximately 7% for the six months ending 28 July 2007, compared with the same period in 2006.
This is a totally rational reaction for consumers, who are well protected under U.S. law and the rules of the credit card companies from unauthorized use of their credit and debit cards. They almost always get all of their stolen money back.
Moreover, I believe that there is relatively very little fraud committed using cards stolen during these massive breaches. I imagine the crooks are only able to make illicit charges against less than 5% of the stolen cards because the credit card companies are well prepared to cut off stolen card use once they become aware of which cards were compromised. This happens relatively quickly once the breach is discovered. (This isn?t the case with theft of other types of data, such as identity or tax or health records).
I estimate that the Home Depot and Target heists resulted in less than $10 million of direct fraud costs although total breach costs incurred by these companies were significantly higher. Target spent about $153 million on breach related expenses and Home Depot so far shelled out a net $34 million in 2014 for its breach. These much higher costs include the money the breached retailers have to pay for customer service, communications, lawyers, and reimbursements to card issuers for card reissuances.
Who pays the most for these breaches?
Clearly the retailers. They already pay in advance for fraud costs as part of their payment card interchange fees. U.S. retailers have also shelled out some $6 billion to secure their payment acceptance systems (sometimes not so successfully) in accordance with PCI (Payment Card Industry) rules they are bound by. They also pay hefty fines and fees if and when they are breached. Although consumer sales do not suffer – the costs of data breaches are still much higher than the costs of securing data in the first place.
What measures should retailers take?
Gartner recommends retailers use strategic data protection technologies which are garnering tremendous interest among our retailer clients, including;
a) point to point encryption (p2pe) which encrypts card data from the time it is presented until it gets decrypted by a merchant acquiring processor or some other central service designated by the retailer. Not all p2pe solutions and implementations are created equal and it?s not a slam dunk security win unless it?s implemented properly.
b) Tokenization of card data so that it is represented by surrogate values that are useless to thieves. Again tokenization is not a panacea and must be implemented properly ? and as soon as card data is presented, so as to avoid holes in the security program. (One of the retailers recently breached had in fact implemented tokenization but the breach happened before the data was tokenized). Also merchants need to be aware that merchant based tokenization schemes collide with Visa and MasterCard tokenization schemes as implemented first by Apple Pay. (http://blogs.gartner.com/avivah-litan/2014/11/07/token-collision-and-point-to-point-encryption-confusion-ala-applepay/ ) Merchants therefore need to make sure their token service providers can retrieve a credit card number from an Apple Pay Token so that the merchant can then use their own tokenization system to tokenize the card number. Otherwise merchants can end up with multiple token numbers for one card.
Until and unless these strategic data protection measures can be taken, Gartner also recommends retailers focus on key tactical measures including
a) Prevent malware and hackers from entering enterprise networks in the first place
For example, keep POS systems single-purpose, and segment the card holder data environment from the rest of the network.
b) Prevent malware installation and operation, assuming the malware manages to get inside the network
Such steps include restricting outbound connections from POS and back office systems, keeping auto-login passwords unique on each POS machine, and using whitelisting techniques on POS endpoints.
c) Rapid detection of active malware, assuming preventative steps fail.
For example, monitor network logs, especially from file integrity monitoring systems, implement processes for physical and logical detection of USB drives often used to introduce malware and exfiltrate data, and sample store system memory for signs of malware.
We outline a more complete list of the measures involved in these three tactical steps in our research note ?How to Avoid Becoming the Next Target Retail Breach Victim?. But these tasks can be overwhelming in number and ongoing hyper-vigilance is required to ensure the security controls are maintained. In many cases, this will be too much for most retailers to take on.
To breathe more easily, we recommend moving towards point to point encryption and tokenization technologies, while recognizing those measures are no panacea either and most assuredly will be compromised if improperly implemented. We are already hearing reports about poor implementations in the field.
But focusing on a couple strategic technologies is far easier and more effective then juggling dozens of point solutions whose plethora of alerts is bound to blind even the sharpest shooters amongst us.
The other alternative? Use cash.
Background. When I?m not working, parenting, or cleaning up my house, I?m running. I?ve been running for 25 years, and run (or work out) most days. I?ve done two marathons, several half marathons, dozens of 10K and 5K races, and last year set a streak of 153 days of running in a row.
In the last 20 years, I?ve largely worn one style of shoes: Saucony Hurricanes. I have owned dozens of pairs and am alternating between two different pairs right now. Sometimes I ponder whether there?s a brand manager out there with my picture on their desk. (Kidding. Kind of.)
On my 40th birthday, I tweeted this image after my pre-dawn run. I thanked the brand for being with me on my milestone birthday, and for 20 great years together, and tagged their #FindYourStrong campaign.
I was sad when Saucony never responded. It was the runners’ equivalent of unrequited love.
But I get it?.this was the day after a holiday weekend and everyone was probably ramping back up, and I?m human?I miss stuff all the time. I still believed, though, in the power of Twitter as a connector between the universe and brands.
Until last week. In addition to being a runner, I am also a new triathlete. Having watched the Ironman World Championships for years, I eagerly awaited when this year?s race would be broadcast. The program is a great source of inspiration to the everyman about what?s physically possible, and is often all the mental fuel I need to keep moving all winter long. I marked my calendar: November 15 was the day! YES.
However, blackouts in my area meant I didn?t have access to the program. I downloaded the NBC app, the NBC sports app, the NBC Universal app, and checked OnDemand. There were no re-broadcasts indicated. I also tweeted all of these parties, as well as GoPro, who sponsored the event. Theoretically, one of them would have told me where I could have found the content I was requesting, or at least told me to take a hike. Theoretically. Instead, radio silence. Cue crickets.
Now this blog is not meant to bring grief to the social media teams who handle these brands. I realize the volume of content that must be processed, the problems that must be addressed, and the connections that must be served each day. It doesn’t change the fact that I wanted more.
So as we move into a marketing era where the customer is taking center stage?.where customer experience investments are leading marketing priorities and budgeting?we are reminded there is still work to be done. Remember, friends, among your conversations about hubs and data and journeys and engagements that there are people ? not consumers, or personas, or even constituents ? who are part of your conversation. Don?t just target them, talk to them. And if you know where to find the Ironman coverage, send me the link
Another proposal for a new alternative to the ?Turing test? has emerged. It?s not interesting if you?re trying to determine if technology has finally equalled or surpassed human intelligence (whatever that is.) It is interesting because it provides a different approach to quantifying relative differences between machines but it?s too biased towards ?humanness? measure instead of ?effectiveness? measures. Suitability to task and ever increasing richness of capabilities are more important measures, along with other properties of smart machines which we?ve defined (e.g., autonomous behavior, active and passive learning and ability to abstract).
I?m not impressed by attempts to duplicate human intelligence. I?m anticipating more human-machine cooperation ? where one?s strengths counterbalances the other?s weaknesses. In both directions. That?s likely to be the most fertile ground over the next decade. We?re going to come to appreciate how unintelligent humans are. And how stupid machines can be. But how the two together can be far better than either alone ? within limits.
A shout out to Larry Dignan?s rant on ZDNet. Man after my own heart. Look at his comments about what he wants to see, not what the vendor he?s writing about is already willing to talk about. Nice piece, Larry!
They are driving the acceptance, use and growth of the IoT through the creation of a multitude of niche applications. The ramifications Makers and startups on your organization’s long-term success are fundamental and crucial.
My colleague Jim Tully and I published a piece of ?Maverick? research about the IoT a few weeks ago. Maverick research is unconstrained by Gartner?s typical broad consensus-formation process to deliver breakthrough, innovative and disruptive ideas from our research incubator. We found that:
Consider Shockbox from Impakt Protective.
I visited Xerox?s Palo Alto Research Center (the illustrious PARC) about 5 years ago, where I met researchers developing sensors that would accumulate data about concussive forces that soldiers experience on the battlefield. The sensors would be mounted in the soldier?s helmet and periodically checked. The idea was that the soldier would be removed from the action when exposure to explosions had reached a certain, potentially brain-damaging level.
Today, Shockbox sensors send live alerts to a sideline smartphone when the hit on a football player exceeds a set threshold. A smartphone app enables coaches to view player history and hit counts. Shockbox is in use by hockey and football teams across North America. Similar devices formerly cost $1,000. Shockbox is available for under $200.
Source: Impakt Protective
Conventional wisdom is that the growth of the Internet of Things (IoT) is driven by large enterprises. And, as is always the case, there is an element of truth in conventional wisdom. Major consumer goods companies, utilities, manufacturers and other large enterprises are, indeed, developing IoT product offerings. These things are meant to meet the perceived needs of their customers while assuring a profitable revenue stream.
Our Maverick* research found just the opposite: Makers and startups are the ones shaping the IoT. Individuals and small companies that span the globe are developing IoT solutions to real-world, often niche problems. They are taking advantage of low-cost electronics, traditional manufacturing and 3D printing tools, and open- and closed-source hardware and software to create IoT devices that improve processes and lives.
Which is not to say that the IoT offerings developed in the R&D labs of large enterprises do not cut costs or improve people’s lives, because they do. Rather, we found that around the world Makers and startups are the creative sources, the inventors, the doers with solutions to the needs of real people and businesses no matter how small the community or how trivial those problems seem to multinational behemoths.
digitalSTROM equips all the electrical devices in the home with intelligent terminal blocks that communicate via the power lines and can run small programs using an integrated high-voltage chip. This results in a digital infrastructure suitable for new builds and retrofitting rented apartments or apartments in historical buildings.
Certainly there is no small number of factors working against Makers and startups, whether they have an IoT offering or a more traditional product or service. Several key factors work against the success of Makers’ and startups’ initiatives, including:
The result is that Makers and startups tend to address modest-sized problems or create new categories of products. Basically, they are dealing in areas where the entry barriers are low; they are not competing in product domains with large entry barriers, such as automobiles or aircraft.
So what does this mean for you? Among others, Jim and I recommended that you:
Take an open-minded look at your industry to see the potential for disruption by Makers and startups. Then conduct your product strategizing and planning processes by considering two scenarios: one that assumes the big, established IoT providers are the market drivers and one that assumes Makers and startups are the primary forces that shape the IoT. Scenario planning will foster innovative thinking that considers maverick ideas about the future of the IoT.
Think about it. Your next competitive advantage may come from a Maker.
Our complete report is here: Maverick* Research: Makers and Startups Are the Ones Shaping the Internet of Things
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