We are witnessing a shift to real-time innovation. Here are five simple principles to help you innovate faster.
Every day millions of commodities are traded on financial markets. Trades take place across different geographies and by people with different perceptions of value, which ultimately leads to differences, albeit subtle, in price.
Arbitrage refers to the act of taking advantage of these pricing imbalances - referred to as a "spread" - through a series of matching trades that exploit these opportunities to generate a profit.
I have always been drawn to the concept of arbitrage as a metaphor for rapid ideation and innovation in business. The analogy stems from working in Sydney, Australia early in my career. I remember watching the U.S. ad industry from afar. I could not understand why local Australian brands weren't leveraging new and emerging marketing techniques and applying them to profit their businesses.
It wasn't hard to reverse engineer or see how these concepts could apply to their businesses. It wasn't a question of capabilities; it simply boiled down to most companies choosing not to take the risk. The "marketplace" for adopting new ideas was glacial.
Financial markets, by contrast, moved in real time, seizing on and profiting from opportunities. Even when the differences were in fractions of cents, traders saw the opportunity to scale these small imbalances and create a profit. Why couldn't marketers adopt a similar mindset?
Fast-forward 15 years: I find myself living and working in the U.S. The "innovation" buzzword is hotter than ever. A lot is hot air, but even that heat is slowly helping to thaw companies from their glacial habits. Companies are finally realizing that they must innovate faster if they want to avoid being the next "Kodak moment" dinosaur.
The technology behind financial trading has also significantly advanced. Nowhere is this more apparent than in the emerging area of high-frequency trading involving state-of-the-art hardware, enabling trades measured in milliseconds - faster than humans can react.
Controversy aside, speed has evolved as a critical tool for high-frequency traders to make markets and manage risk. The connection between risk management and speed is one that is strangely analogous to marketing.
In the financial sense, high-frequency trades help companies reduce their exposure time (the time it takes for quotes to be placed and processed on an exchange), in effect reducing the downside.
Speed in marketing, as in finance, has also become a means of reducing "exposure risk." Want proof? Just consider the real-time engagement required in social media: customer demand for instant information via mobile devices, the application of real-time analytics in e-commerce to optimize shopping behavior, or the challenges faced by manufacturers to innovate faster as product lifecycles continuously shorten.
Yet acting quickly is contrary to decades of conservative brand-management practices. It is natural that there is some inertia - but it doesn't negate the fact that marketing, like trading, is increasingly about taking a position in the market.
The evidence is everywhere, and what is becoming abundantly clear is we are witnessing a shift to real-time innovation.
So in the spirit of turning up the heat, here are five simple principles to help you innovate faster:
The recent Facebook IPO lodgment gives a good example of this shift to real-time innovation and insight into Facebook's culture.
Mark Zuckerberg, CEO of Facebook, describes in "The Hacker Way," the IPO's letter to investors, Facebook's culture of "building something quickly or testing the boundaries of what can be done." There is no doubt this philosophy is heavily influenced by the developer roots of Facebook and its credo that "code wins arguments," but many progressive companies outside the tech space are adopting the practice of more rapid innovation and iteration.
Call it hacking, agile development, whatever; it amounts to the fact that doing is better than debating. Smart marketers shifting more money toward digital are waking up to this opportunity. Their brands and businesses will be the beneficiaries.
The Ice Age of ideation is over, and real-time innovation has just begun.
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An integrated marketer with over 14 years experience, Adam has worked in a variety of senior roles in almost every category. Having previously run MRM's Sydney operations, Adam relocated to the U.S. to take on the role of EVP, worldwide account director for General Motors. In this role, Adam was part of a team who helped establish GM's Digital Production Services offering and ultimately a 275-strong office in Detroit.
Returning to New York, Adam took on the role as EVP, corporate strategy, Americas where he is working to make MRM the leader in technology-driven marketing solutions at scale.
Adam brings considerable expertise around innovation having worked extensively in the ITC space, including six years on German enterprise software leader, SAP; three as the lead for Microsoft Australia; and two leading Australia's largest telco, Telstra. He developed a proactive response for Microsoft, relating to the global financial crisis. The campaign was successfully picked up in over 40 countries.
Adam has a degree in communications from the University of Newcastle, majoring in marketing and journalism.
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August 21, 2014