This is a truncated (only eight minute) version of entrepreneur and former Apple software evangelist Guy Kawasaki’s speech on innovation at Cisco. Simple, smart and really inspirational. His points reinforce that innovation isn’t some lofty endeavor that needs to be pursued by a group of people behind the curtain, but can be baked into our everyday endeavors.
Great article by Zephrin Lasker in MediaPost. His shout out to those in the advertising and marketing world is that in crowded markets, where hundreds of companies are fighting over a shrinking profit pool, we have to develop entirely new ways of marketing. Blue Ocean Strategy philosophy and tools (with the desired outcome of creating uncontested market space and new value for customers), is a great framework for making this happen.
The goal of any organization is to create sustainable competitive differentiation, by providing to customers what they value and want in ways that others can’t. One way to beat the competition, according to Kim and Mauborgne in their book Blue Ocean Strategy, is to stop trying to beat the competition. Instead, create uncontested market space to create and capture new demand. Thereby making the competition irrelevant.
The classic example of creating a blue ocean (referenced in their book) is Cirque du Soleil. From a group of 20 street performers in 1984, Cirque is now a major artistic entertainment company delighting almost 90 million spectators a year. The company looked at traditional circus acts like Ringling Brothers and transformed them into “Broadway meets artistic music and dance” experiences. While increasing customer value and ticket prices, they simultaneously eliminated the largest cost items of the circus, including the star performers and animal shows.
The driving forces for creating blue oceans should be apparent. Across categories, we’re presented with more supply than we could possibly demand. Global competition. More information at our fingertips. Too many brands that look, sound and function in similar ways.
This is the situation in healthcare. Many systems and hospitals are indistinguishable. And organizational-wide initiatives that focus on the safety, service and care of patients (functional benefits) do little to distinguish one hospital from another, as these are table stake improvements that all organizations focus on. Healthcare marketing practices don’t help distinguish either – as communications and outreach also tend to look and sound a lot alike.
But this doesn’t have to be the case. Every healthcare organization can create its own blue ocean. Because here’s the thing. It’s not carved in stone that blue ocean must equate to creating uncontested market space. Creating a stronger competitive position can be, and in many instances is, a more realistic agenda. Particularly in a down economy where companies need to do more with less. The size of the ocean doesn’t matter as much as the re-energizing and differentiating value it provides to customers.
The Blue Ocean book offers powerful tools for building a blue ocean strategy. One of them is the Four Action Framework, which guides companies in evaluating what factors they can possibly eliminate, reduce, raise and create:
In the case of healthcare systems and hospitals, consider these factors in the context of how the players in your market tend to compete and how customers choose their providers. Think broadly about all of the elements that make up your value proposition (e.g. product, service and delivery). Look across:
• strategic segments that exist within your market
• different customer groups, e.g. influencers, users, purchasers (including employees)
• the scope, and delivery, of your product and service offerings (across the buyer experience)
• the rational-emotional appeals to buyers
• the trends that affect customers and business over time, etc.
• alternative industries (great stimulus for seeing and thinking differently)
Looking at these factors with a fresh and unbiased perspective, cross-functionally across the entire organization can unlock innovation that creates stronger market space for your healthcare system or hospital and new value for communities, patients, families, providers and partners. In healthcare, these innovations tend to come down to either clinical care (product) or providing care (service). Most likely, given that product is easily replicated over time (e.g. new machines, treatments), these innovations will likely reflect better ways to serve, and enhance the experience of being, a patient.
The starting point, however, must be your brand promise. You need this focus in order to create innovations true to who you are and how you’re perceived, and that employees and providers are aligned around and equipped to deliver.
Here are a few examples of healthcare organizations that have created their blue oceans. The key point to remember is that the size of the ocean doesn’t matter as much as the re-energizing and differentiating value you provide to customers.
• Mayo Clinic Health Manager; a free tool that creates the ability for people to easily manage their families health online.
• HelloHealth; a new company mixing office and online visits to give people personal attention from their neighborhood doctor when and how they want it.
• Parrish Medical Center in Titusville, FL., who chose to compete to improve their culture and the engagement of its employees (who worked together to eliminate over $7 million in hospital costs).
• Highmark, a Pennsylvania insurer who rolled out the nation’s first prepaid gift card designed specifically for healthcare expenses.
• InstyMeds™, the health care industry’s first fully automated ATM-style dispenser of prescription medications.
Message to all health and healthy lifestyle brand marketers…
Now is the time to rethink long-held strategic assumptions inside your company, to challenge decades of conventional wisdom in your industry, and to push yourself to learn, grow, and innovate. This is the advice of Bill Taylor, co-founder of Fast Company in his article The 10 Questions Every Change Agent Must Answer.
He believes that it’s time to think – and do – something different given the backdrop of an economy where there are too many competitors chasing too few consumers with products and services that tend to be too much alike. That if you can summon the nerve, these hard times can be a great time to separate yourself from competitors.
He suggests these ten questions that leaders should ask of themselves and their organizations. And he adds that the leaders with the best answers win. I’ve added my own commentary in the form of organizations that I think have really good answers.
1. Do you see opportunities the competition doesn’t see? By placing the customer in the center of their universe (as opposed to competing with other providers), Hello Health is redefining the game within healthcare.
2. Do you have new ideas about where to look for new ideas? Afterheels in the UK challenged the shoe industry’s prevailing assumptions and found their inspiration on the dance floor.
3. Are you the most of anything? Walmart is (and owns the position of) the most affordable, while McDonalds is the most accessible.
4. If your company went out of business tomorrow, who would miss you and why? Know this is an easy (and too often used) example, but Apple.
5. Have you figured out how your organization’s history can help to shape its future? Puma’s figured it out, reinterpreting its past to stake its place in the future.
6. Can your customers live without you? For most of us, a world without Google would be unimaginable. And though we don’t want to admit it, we’d probably say the same about our Blackberry’s.
7. Do you treat different customers differently? Amazon and Zappos could be two of the most customer-centric companies in the world.
8. Are you getting the best contributions from the most people? SAS is. It’s been on Fortune’s 100 Best Companies to Work For 12 consecutive years; as it’s one of the best for healthcare, childcare and work-life balance.
9. Are you consistent in your commitment to change? To quote from Zara’s website – Zara interprets, adapts trends in record times and offers new items twice weekly.
10. Are you learning as fast as the world is changing? Mayo Clinic is the pace-setter within the healthcare space when it comes to employing social media practices to engage and connect its various audiences.
I welcome others to contribute the organizations they think had/have the best answers.
The main goal of Blue Ocean strategy is to create new uncontested market space, by expanding existing industry boundaries or expanding well beyond them. The only way to beat the competition, according to Blue Ocean Strategy authors Kim & Mauborgne, is to stop trying to beat the competition. Instead, focus on creating and capturing new customer demand (and providing greater customer value at a lower cost) to make your competition irrelevant.
Afterheels is a great example of a company that has created its own blue ocean. Their concept is brilliant, and simple. Women who spend the night dancing in their heels are in pain, and can’t wait to take their shoes off. Separate from carrying an extra pair of shoes in their bag, or walking barefoot through the streets, no other alternatives existed. Afterheels seized the opportunity and started selling their flats in vending machines at nightclubs.
Afterheels looked across the rules of play in their industry – across product, assortment, service, delivery, pricing, functional/emotional appeals, marketing – and created their own strategy canvas. They zigged, while others zagged. Created their own blue ocean instead of fighting in the same shark-infested red oceans with other shoe manufacturers and retailers.
Following the blue ocean strategy Four Action Framework, Afterheels has:
1. eliminated the need to visit the store to buy a pair of shoes
2. reduced price barriers and complexity, selling limited styles and colors
3. raised the level of convenience, flats right there when you need them
4. created and captured new demand, and a following of very happy women
Here are my key takeaways:
1. Observing and seeing the world through the experiences of your customers opens up opportunities to create greater (game-changing) value.
2. If you do number one, existing industry conventions will naturally fall by the wayside and new blue ocean opportunities will become apparent.
3. Don’t take things for granted. Look across key elements of product, service, and delivery, and challenge all the “supposed” rules of the game.
4. Breaking the value-cost tradeoff can reap big rewards for brand and customer.
5. The size of the ocean doesn’t matter as much as the re-energizing and differentiating value you provide to customers.
Simply try things out. Good advice for coming out stronger on the other side of the recession.
Jim Carroll, futurist, trends and innovations expert, speaking in Las Vegas, about investing in experiential capital.
His take is that those companies who are innovating through the recession build up their experiential capital by simply trying things out. By taking calculated risks. They may not know exactly what to do, but they’re willing to experiment to better understand and navigate their changing world.
Three examples that readily come to mind are Hello Health, Humana’s Crumple It Up initiative and Mayo’s Center For Innovation.
Are there others you can contribute?
Case in point as to why it pays (literally) to develop two-way conversation with your customers.
I just found these stats about Dell’s Ideastorm community:
– people have contributed 11,790 ideas
– they’ve posted 84,546 comments
– and the site has been promoted 667,054 times
Most important, Dell has implemented 337 ideas based on customer input.
When people feel like they matter to the company, and when you engage them in ways they value and want, they’ll matter more about you.
Question: Can a company still make money during bad times?
Answer: Your customers, suppliers, and distributors are all suffering. Think about how to help them. Think about developing a new business model, a new product or service, a lower cost distribution channel, a lower cost supply chain. Be more robust, resilient, and responsive to changing conditions.
These are the words of Philip Kotler, the well-known management guru at the Kellogg School of Management, Northwestern University. He’s responding to this “Ask the Coach” question (which was actually part of a longer question) within Marshall Goldsmith’s post Making Money in Chaotic Times.
Moral of the story – change (always) presents opportunity amidst the vulnerability.
According to a MarketingProfs survey, Twitter ranks second to “corporate” blogs as the social media tool that delivers the most company value – ahead of LinkedIn and Facebook. And 83% of respondents stated that their company’s use of Twitter will increase in the next six months.
There are six ways that Twitter (according to MarketingProfs) helps companies strengthen their marketing and efficiently reach their objectives by getting closer to customers. However, I’ve added a seventh, and supported all of them with examples:
1. Building Community—creating a strong community of followers that ultimately help drive business objectives and bring in new customers (DunkinDonuts, Rubbermaid)
2. Customer Service—using Twitter to successfully engage with customers needing help (@JetBlue, @ComcastCares)
3. Selling—driving online and offline sales by using Twitter to post promotions, discounts and offers (Burton, @DellOutlet)
4. Prospecting—creating demand and pinpointing potential customers needing the type of solution your product offers (Gartner, Forrester)
5. Branding & Awareness—employing Twitter in creative ways to increase awareness around a product, or business (ScottMonty – Ford’s official Tweeter, GE, AT&T)
6. Fundraising—using Twitter to spread the word about important causes (Amnesty, NWF)
7. Research—asking for people’s opinions, or searching via twitter tools, to help companies evaluate new ideas (zappos)
Are there other objectives that you think should be added to this list? Do you have other company successes to share?
When P&G finds that social efforts increase sales, and do so more effectively than traditional advertising, we should pay attention. Earlier this week, Josh Bernoff, Forrester Research’s VP and Principle Analyst presented a case study of P&G’s BeingGirl community building site at IAB’s Social Media Conference.
As reported in this Ecoconsultancy blog post For Procter & Gamble, the indirect approach increased sales, Bernoff chose the site because people (and particularly 13 year old girls) don’t want to be discussing personal hygiene products (specifically tampons).
So P&G’s indirect approach was to create a community for these young girls to discuss the issues that stress them out them most. By providing health facts, a discussion forum, and relevant culture items on a site with Tampax and Always branding, P&G greatly increased sales. According to the company, the site was four times as effective per dollar spend as advertising. And the site is now duplicated in 21 different countries.
But the real lesson for Bernoff, and what many marketers still don’t seem to grasp, is that people don’t care to discuss your products. They’re simply not that important. Much more significant is how you help them solve their problems. That’s when ears perk up, conversations start to take place and hearts start to beat faster. And hopefully, you can be the one to provide the solution to their problems in ways that others can’t. Only then, does your product really matter.
Advice for health brand marketers – the art of innovation in 10 steps