Brands as Patterns 2.0 –
The Speed of the Market
Originally published by PSFK in 2012
Written by Marc Shillum
Forward
Advances in technology, production techniques and supply chain have always fueled the speed of business. Henry Ford’s production line is a perfect example of how an advanced product could become accessible to so many. Most production techniques use standardization to amortize costs. Moulds, custom tools, even to some level automation reduce the unit cost of production.
With the invention of the customizable production techniques like additive manufacturing used by companies like Relativity Space, adaptive software platforms and robotics used by companies like Zymergen, or fluid supply chain management pioneered by Amazon, businesses no longer have to rely on fixed production techniques. This means that companies are able to shorten the time and overhead to adapt and build new product. This has increased the speed of Business response which in-turn increases the speed of market response.
Brand building was defined in a time of much slower markets where the product was fixed and the up-front costs of Brand building could be amortized over the life-time value of the product. It is increasingly harder to justify the cost of Brand building to companies who’s products have a shorter shelf life. Even if we could, the Agencies created over the last fifty years to deliver Brand strategy and Identity don’t have process or cost structure to deliver value in such a short time, nor do they have the processes in place to adapt Brands to a continuously shifting market.
Landor, one of the pioneers of twentieth century Brand thinking released ‘Agile Branding’ as a response to my first paper Brands as Patterns. They copied my language but they didn’t change their business model, their approach, their cost structures, their metrics or their project methodology to deliver on the promise. No-one can afford to work with twentieth century brand builders in a twenty first century World.
How can Brand stewards respond to dynamic markets? What are practical steps that have worked for others? And as markets continue to speed up, how do we grow the value of our Brands, Products or Services without applying old rules?
The Speed of the Market
The speed of technology is driving markets and categories at an astounding speed. Is Pinterest in the commerce business? Is Facebook a virtual reality company? Is Google in the market of robotics or information?
When large organizations contemplate change, conventional brand consultancies sell a pretty standardized solution:
Conduct stakeholder interviews, undertake comprehensive research programs, then position the company to create greater differentiation in the market. In short, be sure of your direction and get political buy-in from the fragmented organization—then turn the ship slowly. And it seems to make sense: For a Fortune 500 company this kind of project could range between $2-3 million and take 3-5 months. But is it really worth the investment?
The most important question a company thinking about buying this kind of engagement from a consultancy is:
‘How dynamic is my market?’
The second most important question for a company considering change is:
‘What market am I really in?’
My friend Jonathan MacDonald, transformational strategist and founder of The Thought Expansion Network tells a wonderful story about a Chinese manufacturer of white goods called Haier. The story goes that a customer called in to the customer service team to complain about his washing machine—it was full of dirt, and no longer functioned. After much conversation the service team sent out an engineer. When the engineer arrived at the customer’s home he discovered the dirt was not from the clothes the farmer wore in the field, but from the field itself. The farmer had been using the washing machine to wash both his clothes and his potatoes.
Instead of educating the farmer, the wise engineer returned to headquarters to share the news. In 2009, Haier went on to upgrade its product to be able to wash clothes and potatoes which led Haier to become the number one provider of laundry equipment in the entire world.
It’s a nice story, and it appears to be true. So, would conventional stakeholder interviews identify a new market like this? Would regular positioning help a company discover an adjacent business which isn’t even in their market? The truth is, change isn’t a slow deliberate process in which we can canvass everyone’s opinion, decide on a singular direction and move slowly. Change is shocking and unpredictable. It requires nimbleness, speed of action and response.
In my role at the transportation startup, Matternet, I saw first-hand the speed of change of the drone market is even hard for us to keep up with and we set the pace. Markets are fluid. And the days of building 10-year strategies are behind us. None of us have the magic crystal ball to see what will happen, so we must build change into the very soul of our organizations. But, how? A 50,000-person company can’t turn on a dime.
When we worked together at eBay, Karl Isaac and I talked about this problem at length – he shared an idea of fast-twitch and slow-twitch muscle fibers from his time training for iron man. I had a similar analogy from my research on surfing; waiting for a wave & getting on a wave use two contrasting physiologies. Both ideas ask questions about the ability to adapt.
Markets and the business's which succeed within them are moving more rapidly than ever.
Kodak – 116 years from founding to bankruptcy
Blockbuster – 26 years
Myspace – 6 years
Brands and the businesses they represent must adapt & change. The normal roles and responsibility of a brand team focus on 1-5 years. This new responsibility looks at 1-5 months. So it's clear that any team needs a fast & slow twitch muscle. When I face problems like these it usually helps me to think about other processes, practices, organisms or business which have found a solution.
I’ve been interviewing surfers ever since I noticed a correlation between surfing and business in dynamic markets. Businesses are very used to building solid structures, protocols and processes which create value through repetition and scale. One might say these function rather like a track and field athlete. They learn to get better by finding ways to repeat actions, shave time, save energy, gain consistency. The running track stays the same, it’s continuous. But for a surfer, the track is always different. No wave is the same, the environment changes continuously. For a surfer to be successful they must be able to adapt to context in real time. The best surfers carry many boards, continuously monitor weather information and current flows and create two types of operational muscle.
“One minute you’re totally day-dreaming just rolling with the slight chop, then you see a set start to come in and a flip switches and you’re hyper sensitive to the wave” – Shane Brentham, Surfer, San Francisco
A surfer is able to occupy two contrasting states of mind at once:
1. Calm, looking for patterns, continuously watching the horizon, counting waves. This is akin to watching the shifting market, contemplating its change, adjacencies considering new and next markets as much as close and clear.
2. The second mind state is the snap. Instantaneous decision-making, fearless awareness of the now, to walk the board and ride the wave creating instantaneous reaction to stimulae. This is akin to brand response or speed to market.
I talk to business leaders about this all the time. Creating the two operational muscles is imperative to survival in dynamic markets. A runner wins by finding incremental gains on the unchanging static track but a surfer wins by continually adapting to the ever-changing dynamic environment.
Visionary companies like Nike created a response fund where employees are able to cut red tape and respond to market dynamics. Training your brand to get used to deploying smaller nimbler solutions quicker, making smaller bets, makes you more like the surfer.
We can no longer buy $2,000,000 research project which takes months, canvass the entire organization to take a step in any direction. We must create processes and build companies that are born on the more dynamic context that our clients exist.
Be the surfer. Turn months of work into weeks or days, take large budgets and amortize the spend across multiple projects, deploying different strategies, making little bets, from which we can learn and adapt.
Define a company and process which can help steer your brand at the speed of the market.
Ten rules about surviving in shifting markets I’ve learned from Surfers
1.
Never turn your back on the waves “Keep an eye on the horizon for a sign that a set might be coming in. Basically a wave that's a bit bigger and looks as though it might pitch.
This is a great rule. No matter where you are, keep an eye on the horizon, plan ahead, way ahead, and never get too caught up with what you’re doing. The next wave may well knock you off your board.
2.
Create two types of operational muscle. “One minute you're totally day dreaming just rolling with the slight chop, then you see a set start to come in and a flip switches and you’re hyper sensitive to the wave”
I take the words ‘day dreaming’ with a pinch of salt. Every surfer I’ve interviews so far says that they never take their eyes of the sets of waves. They are immersed in the context of the ocean. They feel it, hear it, see it, see signs, patterns everywhere. Then when ‘the wave’ comes, they snap into deep muscle memory. Obtaining the muscle memory to respond in the moment is key – watch they waves too long and you develop operational atrophy.
3.
Be familiar with more than one market. “Know your beach, and break style. Figure out what the tide is doing and whether these variables add up to a good day at a nearby beach.”
If you think about markets, like swells and breaks, it makes total sense to be able to be in more than one market with the same fundamental product. Think about Dyson, the cyclone, vacuum cleaner, hand dryer, fan and hairdryer, or Tesla, the Car, The Charging Wall or the Solar Shingle.
4.
Preparation is everything. “Get in the rhythm of the swell... it’s all about finding that moment, putting yourself in that right position”
Surfers take copious notes, have favorite data feeds. They’re watching trends, listening to the force of nature to work out when to surf. Great Brands do the same, they think about when to go to market, when to expand to another market, when to hold back a product, when to replace, retire or deprecate. Keep looking at the data and use it to be unbelievably prepared.
5.
Look for Patterns “pay attention to where they’re breaking and see if you can anticipate the exact path of the next”
Mike Daniels the extremely astute investor and founder of Network Solutions once told me that he could see the internet as a series of waves coming towards him. He said that when he saw a similar wave approaching around mobile telephony he was compelled to found Mobile 365. His approach to innovation is to watch for patterns and act on them before others.
6.
Do rather than say. “Standing up takes as much time to train for as being able to see the wave and why it’s the one you should go on. You need to be able to snap between those two different states immediately”
Practice, it’s the thing we forget to do when we become successful. The surfers I spoke to said,
you know the difference between a committed surfer and a wannabe. Surf every day. Think about the frequencies of a brand – what you do everyday is what you become good at. Do you create products everyday? Research Develop Launch Repeat.
7.
Adapt often. “Most surfers I know have 4-10 surf boards, depending on the types of waves you’re surfing. Usually I’ll take 2 boards with me on each trip. They’ve have different widths, shapes, and rockers”
This is where pattern thinking comes into its own. Consistency used to be the only measure of Brand value, but in the context of digital World relevance trumps consistency. The market is a moving thing. Bob Greenberg, the visionary founder of R/GA used to destroy his business every 7 years as a rule and reinvent the business for the age that it’s within - adopting this rule made R/GA the thread that connected many moments of relevance, rather than a company synonymous with the past.
8.
Enjoy Improvising “...you can repeat things skiing, you can repeat the run over and over. You can’t repeat a wave in the same way. With surfing, the context is unbelievably complex”
In static markets we build operational margin through successive layers of efficiency. In dynamic markets adaptation is paramount.
The markets we exist in today are dynamic.
9.
Don’t rely on your four year strategy. “The kind of people who survive in a shifting context (like the ocean) are the most aware or most seeking change, they’re looking for the moments of shift. They want to sharpen their skills against completely shifting contexts.”
When you’re doing, you can still make micro strategic corrections. We can thinkmake, see what’s in front of us, recognize the patterns and adapt. Quick shifts between strategy and tactics can offer the best outcome when there are many unknowns.
10.
Oh, and always know where the sharks are.
References & Acknowledgments
The Fast-Twitch Branding Strategy
by Karl Issac.
What We Don't Know
by Jonathan MacDonald
Design system, adapted and extended from 10x10 paper design and typography, Sean McGrath at Method Inc
Further reading
Powered by Change — How to design your business for perpetual success
by Jonathan Macdonald
Names, Numbers, and Network Solutions —The Monetization of the Internet
by J. Robert Beyster and Michael A. Daniels
Antifragile
by Nassim Taleb