Big Organizations Need to Have a Start-Up Mindset [Ad Week]

Even if you’re a massive global brand or agency, in this world of convergence and disruption you must innovate as if you were a fledgling start-up. That’s according to Nigel Morris, chief executive officer (CEO) of Americas and EMEA (Europe, Middle East and Africa) at Dentsu Aegis Network, and Dana Anderson, senior vice president and chief marketing officer (CMO) of Mondelez International.

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“Innovation at scale is critical to big businesses and it’s vital to the sustainable success of our economy,” says Morris. “If you are not a start-up, you really have to think as a turnaround.”

Digital technology has enabled us to move from a “physical world of scarcity to a world of ubiquity,” and has changed the landscape into a converged economy, according to Morris. In this new state of convergence, new businesses are entering into legacy sectors and successfully disrupting them. They are gradually changing the rules of the game in each sector, Morris notes.

These changes have created a shift in the way we define “scale,”. According to Morris, “scale” was previously visible, in the form of big factories and a large number of employees, which could be the barriers of entry to an industry. But now, it has become invisible.

“If you think of how people intend to measure the scale of their business now, they don’t measure it in terms of here’s what we’ve got. Instead, they measure it in terms of here’s what we’ve reached;, here are the people we have communicated with, and here are the people who are part of our assets,” Morris says. “This is a fundamentally different way to look at scale.”

Competition has also changed. Morris believes it has gradually moved from a world of perfect competitiveness, where supply-side business like producers and manufacturers have equal knowledge and therefore equal power to the demand-side consumers, to a “demand-led economy.”

In turn, this shift presents an opportunity for businesses that truly understand what consumers need.

“Why are [companies] like Airbnb and Uber joining up from nowhere and disrupting sectors?” Morris asks. “Because they fundamentally understand how a demand-led economy works. And that demand-led world is actually changing marketing and advertising.”

According to Morris, in a demand-led economy, marketing can show lots of information and data about the connection between businesses and consumers: what people want, what they have, what they are going to buy, etc.

“We have to understand the true implication of that,” Morris says. “But this is where it gets hard, because most big businesses who dominate sectors are not structured to take that data and analyze that data. So we need to think a different way.”

Morris pointed to start-ups that are willing to invest in talent, as an example. They have an operational advantage in a sense, as their capital attracts people with great ideas, which will attract more capital, which will attract more talent.

“Then they have a virtuous circle,” Morris explains.

In comparison, big legacy businesses, which have the physical scale that could have granted them entry into the industry before, now actually have financial constraints to efficiently allocate their capital. For example, a large corporation may employ 15,000 people to work on something that could be achieved by 15 people in a start-up.

“If you are not in that start-up business, you have to innovate,” Morris emphasizes. “You have to do that with new ideas. But at the same time, you have to innovate your legacy structures as well.”

So how can big businesses win the converged world? Invest in people and training, and be collaborative, says Morris.

Dana Anderson, CMO of Mondelez International, Oreo’s parent company, agrees that collaboration is essential if legacy businesses want to innovate.

“As we try to change our organization, we all have to sit around the table,” she says. “Let me tell you, sometimes when the guy sitting across from me keeps talking, I’m bored to death. Then I realize he may be bored by my marketing stuff, too. But until we start sharing with each other, I can see his problem, and he can see mine. And we are not going to be holistically aligned until we start doing it. We start doing it inside, and then we start doing it outside with our [business] partners.”

When it comes to the collaboration between brands and agencies, Anderson thinks that agencies should be more flexible in testing new ideas when their clients are figuring out how to work differently. “In my world, to change at scale is really hard. Because if you don’t prove something, nobody wants to do it,” she notes. “So sometimes it’s easier for my agency partners to say ‘yes’ if I extend my hand and say ‘will you try this with me just on this one thing?’ If we do learn new ways to work, then we can spread them out.”

Anderson also emphasizes that if you want to convince other people of change and innovation in a large organization, you have to repeat your ideas.

“Commit yourself to selling your story over and over again when you want to innovate,” she suggests. “Innovation is misery’s child, because nobody wants to change, and nobody wants to be uncomfortable.”

In order to innovate successfully, big organizations have to conquer the fear of failure, because “trying is enough, and failing is OK,” Anderson says.

To close out the Ad Week session, she says, “Innovation is terrific, but only if you carry it over to the finish line.”

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