Why media companies can learn from the likes of BMW, and elsewhere
South will present an Innovation deep-dive – Understanding innovation in a disrupted industry: What, how and when – at the Digital Innovators’ Summit (DIS) in Berlin, Germany on 24 March 2015 (the main Summit with speaker programme and expo is on 23-24 March.
Alan talks to us about Bain & Co.’s view that media is the most impacted industry by the move from the physical to combined physical/digital world (the backdrop to his deep-dive session) and what it means from an innovation perspective. He shares which companies (and names BMW in particular) he holds in high esteem as innovators. And he talks to us about what he admires about legacy media businesses (and where they might be going wrong), as someone with the unique perspective of looking in from the outside. There is an over-riding message throughout as well, and that is no matter the industry you are in, there are certain universal innovation practices that should be applied in the process of future-proofing your business.
At the DIS, participants in Alan’s deep-dive session will have the chance to directly engage in an intimate, highly interactive session with one of the leading innovation thinkers and practitioners in the world, someone with a thirty-year career in bringing ideas to life.
There is more about the DIS, Alan’s session as well as the Executive Programme for Innovation and Change, but for now it’s over to Alan.
First, tell us a little more about yourself?
I have a thirty-year career bringing new ideas to life. At the start it was about the arrival of computers, and specifically single chip microprocessors that was driving change. Then along came this thing called the internet. I made a presentation at a conference explaining how our homes would have connections to water, gas, electricity – and information. I recall a response of polite indulgence to humour me without being rude. More recently, I have been in the renewable energy industry during its journey from “that will never work” to mainstream investment class. Having witnessed so much change, I become ever more convinced of the truth in the saying: “People overestimate what they can accomplish in a year and they underestimate what they can do in ten”.
Bain & Co mentions media as the most impacted by the transition from a physical world to a combined digital/physical world. How should media companies adapt to this transition?
There is one over-riding message I’d like to share. It applies for any form of innovation, or for any new technology, and most certainly for a transition to a more digital world. Apply the same rigorous management discipline to any new experiments or ventures into digital as you would do to anything else in business. I see commonly an approach to fall in love with a (digital) idea, place a bet, and hope it turns into money. This would not be acceptable elsewhere in business and there is no reason why it should be so in digital. There is a poor track record of companies surviving a major industry disruption of this sort. The best course of action is to load things in your favour by adopting a disciplined approach.
Innovate or die. But innovation is mostly not one single bright idea, and there are different types of innovation. Thoughts?
All companies need to innovate and renew themselves at least as fast as the outside world is changing. Competition and commoditisation drive down margins, and once attractive offers become obsolete. Your question therefore, applies to all businesses: innovate, or fade away. However, your choice of dramatic language – “innovate or die” – applies specifically to an industry where there is rapid and disruptive change. The concept of the “one big idea” is compelling, especially when times are challenging, but the problem is that it almost never works! When times are tough, rather than seeking the one big idea, the correct response is to increase the rate of taking innovations to market. We can all learn a lot from the digital world about increasing innovation rate. In fact, this is very much the principle of the second of the two innovation processes we will be exploring in my session at DIS: how we can learn from the digital world to increase the innovation tempo and the innovation hit rate. Finally, there are indeed many forms of innovation, and a core component of my full masterclass develops this concept and surprises the participants with the breadth of opportunities.
Any thoughts on what the (legacy) media industry is doing wrong? And right?
My impression is that within the traditional media business there is a natural, human, tendency not to cut legacy costs perhaps as fast as they should be cut. I know and respect that this is easy to say and very hard to do. In terms of doing things right, I see an incredible ability of magazine media businesses to connect with and to inspire their audience. Such a level of connection to the customer is something other industries only aspire to and I often wonder how this might be monetised. It is important to emphasise that my involvement with the media industry is only from the periphery, so these points are impressions rather than fully informed opinion.
Which companies impress you with their approach to innovation?
I am always impressed by companies that relentlessly think of the mid to long term and innovate through good times and bad. The results build up in layers to the point where an unassailable position is established. Good examples would be the German or the Japanese automotive companies. I like to single out BMW. Being relatively small by the global scale by which such companies are viewed, their R&D spend in absolute terms is far from the highest. However, when you drive their cars you get the impression they have spent the most on R&D. Also, in terms of major disruption, they are leading the way with the move to electrification and have recently gone public with the statement “We believe that BMW will likely phase out internal combustion engines over the next 10 years”. Relentless layering of innovation should not be interpreted as incremental or dull. It puts a company into a position of great innovation health and able to tackle the big disruptions.
About the DIS (21-24 March 2015)
DIS 2015 takes place from 21-24 March in Berlin, Germany with a hackathon on 21-22 March, Berlin startup tours on 22 March and again the afternoon of 24 March, and the main Summit with speaker programme on 23 and 24 March. Visit the innovators-summit.com for more and/or to register.
About the Innovation deep-dive session presented by Alan South (Day 2, 24 March)
The deep-dive session will take the form of a fireside chat-or informal workshop, where participants will have the opportunity to engage in a highly interactive environment with Alan on innovation themes of critical importance to their businesses. Alan will help participants explore methods, how to choose when to use what and how to communicate it throughout the organisation to build support for your business. Everyone is welcome but note numbers will be limited on a first come first serve basis to ensure the integrity of the session. See the preliminary DIS programme (Day 2, 24 March) for more.
About Executive Programme for Innovation and Change (6-10 July 2015)
The programme is offered by FIPP and the University of Oxford’s Saïd Business School and is open to senior executive media leaders. The programme is designed to help senior leaders consider approaches from within and outside the media industry to help them transition their businesses through periods of dramatic change, with the aim not only to survive but also thrive. Read more about the programme here.
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