Business Strategy

The 5 differentiators of highly innovative brands

The 5 differentiators of highly innovative brands

Q&A with Jonathan MacDonald, founder of Thought Expansion Network and keynote speaker at the 2015 Vision Critical Europe Summit. MacDonald is a contributor to Forbes and Google’s Think Insights and the author of Business Poison and 28 Thoughts on Digital Revolution.

More than ever, companies need to embrace change and unlock the opportunities it brings. That’s according to Jonathan MacDonald, a world-renowned speaker and advisor to some of the world’s top executives, including Google, Apple, Nestle and IKEA. MacDonald founded the Thought Expansion Network, an organization that connects companies and individuals to content and the right people they need to drive innovation.

Known as a leading thinker and speaker on the future of business, MacDonald’s insight comes from his two decades of experience creating and advising businesses that thrive with change. His impressive achievements include creating the UK Ministry of Sound’s digital strategy, launching a Sky TV channel and becoming the youngest chairman of the British Music Industries Association.

Ahead of his keynote speech at the Vision Critical Europe Summit, MacDonald sat down with us to talk about driving innovation at a time of relentless change and why companies need to rethink their approach to technology.

What inspired you to start the Thought Expansion Network?

I created the Thought Expansion Network (TEN) because many people were asking me, “how do we find out the inner track on new market movements and disruptive innovation?” I realized that there was a demand for insight for what’s going on around the world—a platform where people can access video, blog posts and other content about the most important changes facing business.  TEN’s network includes the brightest coders, the most influential investors and the most effective chief execs. Since its launch, TEN has grown to a community of 1,500 subscribers who access the platform at least once a day.

I’ve realized that information and access to knowledge is just the start of the journey towards innovation, so I’m about to change TEN’s model into something where ideas can be improved within the network. Soon, TEN’s slogan will be “Even Better If.” Any idea can come into TEN and be improved if, for instance, it’s attached to the right investor or the right business partner or a person with the right skill set.

TEN will move from a network of content into a network of improvements for ideas. The opportunity is in improving existing projects and developing ideas into projects. My goal is to create competitive advantage for people and companies by letting them tap into an expansion network that can help improve their concepts.

At the most recent LeWeb conference, you shared your thoughts on why companies should build “windmills” today instead of building “shelters.” Why is it important for companies to build “windmills” and how can companies leverage customer engagement to achieve that?

When it comes to change management, companies have two choices. The first is to resist change—to build a wall or a shelter. The second is to use change as fuel for growth. The majority of companies choose to defend the status quo because change, ironically, is the enemy of the competent. The more competent we are with things, the more we resist change.

The companies that win are those that can take change and use it as a mechanism to grow faster. Very few companies can do that. Doing so requires a mindset change between defending the old and embracing the new.


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“Public empowerment is one of the most salient changes in business today.”

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Largely driven by the wide availability of technology, public empowerment is one of the most salient changes in business today. The crowd or customer base is already involved in many aspects of the business: through product development (as demonstrated by sites like Kickstarter and Etsy), logistics and production (which you can see in the rise of the maker movement), all the way through sales and marketing (people selling on eBay or writing their own blogs). Throughout the value chain, the public is now a powerful source of insight. Given that salient, prevalent and growing change, it’s not a question anymore of whether collaboration with customers can be useful. Without involving your customers, you will not be able to build the best possible windmill in this time of change.

In a recent speech, you’ve said, “Fascination with tech is belying the fact that revolutionary change in humanity could happen and that we’ve only scratched the surface of what really happens when people collaborate.” What is the solution to that?

The fascination with technology places the tools available to businesses ahead of strategic objectives. Businesses that try to succeed by focusing on technology rather than the bigger picture are not reaching the potential of what they can achieve.

One good example is the use of SMS in Africa, and how it’s saving lives by helping midwives connect with pregnant women. That innovation is not about how cool the technology is. It came from medical researchers and nurses realizing that there’s a gap between people who require health care and people who can provide it. In this case, the technology is a tactic, and providing better healthcare is the strategy.

Which companies today do a good job of anticipating the future of business? What are they doing differently?

I’ll start with the five traits of companies that lead the pack in fundamental innovation. These traits are easy to understand but extremely rare to find in parallel to one another.

The first trait is a clear vision. I’m referring to companies that know what they’re trying to achieve and have a crystal clear understanding of why they do what they do.

The second trait is advanced knowledge and understanding—companies that understand what’s happening around the world in a modern context.

The third one is bravery and confidence. These are people and companies that have the courage to make changes even though those changes can be seen as risky or dangerous.

The fourth is speed and momentum. Companies can’t act in 24-month or 18-month cycles. They need to work in 18-day development cycles. They don’t feel that waiting for competitors to move is fast enough.

The final differentiator is people and culture. The companies that make the biggest difference in innovation have the best people and the best culture. Their people have the desire to win. The companies that win are those with a culture where there’s a desire to work regardless of the risk, the chance of failure and the long hours.

These five are in no particular order; they’re all related, not mutually exclusive and, when taken together, create a formidable force.

For example, take a look at Tesla, a company that Forbes says is the most innovative company of 2015. The company has a clear vision and purpose, which is to create the world’s best car. That’s its singular, clear vision. It’s using leapfrog innovation to develop its products. The company is miles ahead of the competition—figuratively and literally. Tesla’s success is because of the five traits I described working together and producing a company that competitors can’t catch up with.

In media and entertainment, Netflix is a good example. Netflix, as many people know, used to sell DVDs via post. The company’s advanced knowledge and understanding showed that online streaming will kill DVD sales. Instead of waiting for competitors to show the company the new world, what Netflix did was create the new world. Today, Netflix is as valuable or more valuable than many Hollywood giants.

Under Armour is another great example.  With a clear vision and purpose, and advanced knowledge in the fitness and quantified self space, the company had the bravery and confidence to buy two quantified-self startups, MyFitnessPal and Endomondo, for $475 million and $85 million respectively. Those two companies have 80 million and 20 million users>, which immediately became Under Armour users. Because of that bold move, Under Armour is now in a position transform itself from a clothing company to a smart clothing company with technology built into its innovation. This brings out a new range of innovation opportunities across experiences, devices and clothing. Under Armour is now in an entirely different ballgame compared to other fitness brands.

What are the biggest challenges facing businesses today?

This is related to my previous point about the five differentiators of innovative brands. In many cases, companies are lacking a clear vision and purpose. A quick way of finding out if your company has a clear vision is to ask a cross section of the staff—from the receptionist to someone from marketing or customer support to the chief exec—what the company’s purpose is and to see if people have the exact same answer.

There’s also an extreme lack in knowledge and understanding of what’s happening around the world in the modern context of change. To some extent, that’s why I’m frequently asked to speak about this topic. There’s also a lack of bravery. A lot of people are pressing stop on innovation rather than experimenting and pressing go.

Many companies are still not moving fast enough. They still build a long development cycle in a world with an increasing pace of change.


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“Companies need to build a culture that is fearless of change.”

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Finally, there’s an extreme lack of the best talent and culture. If I were to prioritize anything of these five, I would say that the biggest opportunity is with the people and the culture in which those people work. Companies need to build a culture that is fearless of change if they would like to build a long-term competitive advantage.

To hear more from MacDonald, register for the 2015 Vision Critical Europe Summit.

Photo credit: TEDx Warsaw (via Flickr)



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