As part of an ethnographic study on internet use, I watched an internet user with three screens open, each with a blackboard showing 12 sites, that’s 36 sites in total sitting open in front of him, plus RSS feeds and a list of other sites to visit at a glance. He was looking at a dozen technology sites, non tech sites related to his work, plus general news and hobby sites. There was no separation between work and leisure. Those very words “separation between work and leisure” have lost their meaning.

I saw someone who works in security skim a dozen sites including police sites, corporate security sites, public as well as private access sites. He grabbed information from his own security staff at various locations, plus local news, weather, traffic to understand in several minutes what security issues occurred during the past 12 hours in his neighbourhood and what to be on the alert for at the moment. He knew what was going on in his area. He made seemingly instantaneous decisions about where to assign staff and what to tell them to be aware of.  He obviously knew his business.

I saw an immigration lawyer check a dozen government sites because regulations and judgments across different jurisdictions and departments effect her actions. And changes occur daily, sometimes hourly. With fingers moving like a virtuoso pianist, she looked at numerous sites from various countries as well because what is happening in the countries of her clients affects their actions and her advice. Up to date in minutes.

Is their comprehension more superficial? Are their conclusions less effective? Is their judgment less trustworthy? I believe the opposite. They not only absorb information more quickly, they make connections between info nodes more quickly and they include far more information links than ever before. Think of the information used to make conclusions or decisions as a string net with the information points or nodes being the intersection of strings. Because of the internet and how it is used, the information net is far wider than ever before and the decisions or conclusions contained in the net are based on more information than ever. We are seeing exponential change, not linear change.

Think synapses in the brain. Brain plasticity in simple terms means the more you use it, the more it grows. Learn to play the piano and your brain changes; more connections -  more grey matter. http://www.sharpbrains.com/blog/2008/02/26/brain-plasticity-how-learning-changes-your-brain/

We are not seeing a loss in cognitive function, analytical skills or plain good sense. We are seeing an explosion in intellectual ability; brain power maxed to the nth. It just looks different.

By Internet, of course I mean all forms of modern electronic communication including this blog.

First some dumbing down arguments from two really intelligent people.

He’s a physician. He diagnoses kids with serious problems. He looks at a myriad of clues, the colour of the kids’ cheeks, their fingernails, the sound of a cough, the gurgle of a stomach, their cries, the smell of gas and breath, plus five dozen other clues. And he puts the puzzle pieces together to form a diagnosis. He believes he can do this because he can see the entire puzzle, not just the pieces and he does this because he was trained to see the complete picture not just the parts.

But this is not how today works – he says. A blizzard of information comes to us in snippets, micro bits. We don’t look at the entire work; we skim the surface of the first page – less actually. We glance at pixels without ever having the opportunity to see the whole. It’s like looking at a square inch of a Seurat painting. RE Seurat, try http://www.montana.edu/cybertour/art/6to12/blairm/ or the ever popular wiki http://en.wikipedia.org/wiki/Pointillism

Think of news through You Tube. Think of 2 second click throughs. The only thing that sticks is noise. Want to understand the changing relationship between the former Soviet Union and the West – listen to a few sound bites. Except the sound bites had better be quick before we turn to more pressing and visually more arresting news about Mel, or Lindsay or Britney or the latest Idol. Reasoned, detailed, nuanced analysis of events in politics, science, education? Who are you kidding.

My friend the Book Lady owned a bookstore. Knows books. Knows content from cover to cover. She also believes that unless you take the time to read an actual book, consider the evidence and conclusions being made and respond to them, you loose the skills to truly comprehend and evaluate anything. We have TMI and NEU.

But they are wrong.

In the next blog I will describe an ethnographic study we conducted watching skilled internet users on the net, their staggering ability to absorb and process and the plasticity of the brain.

SYS (See You Soon)

Domino’s new mea culpa ad campaign: a bold move, will it work? For those living on another planet, mea culpa ads have the company – usually someone senior, admitting a serious problem with their product, showing remorse and assuring the public that they are fixing the problem. Food and auto recalls are often accompanied by mea culpa ads. Consensus appears to be in favor. And the company certainly wants to avoid the questions “what did they know and when?” And then there is Domino’s.

Domino’s ad campaign is unusual. The company has been airing ads with scenes from focus groups where respondents describe how much they dislike Domino’s pizza (http://www.pizzaturnaround.com). One woman says, “Domino’s pizza crust, to me, is like cardboard.” In another scene, a marketing executive reads customer comments about Domino’s including an assertion that the pizza is “totally devoid of flavor.”  The product bashing is extreme.

The point of these ads, of course, is not for Domino’s to disparage its own brand. Instead, company executives and chefs use the rest of the commercial to explain that they recognize customers felt their pizza was low quality. These executives say they understand customer frustrations and have changed their entire product based on customer feedback. The company now uses different cheese, sauce, and other ingredients. Executives explain they hope customers will give them and their pizza another chance.

Why is this unusual? There was no product recall. No one died or as far as reported, was infected with e.-coli, listeria or salmonella. Their market share was holding, there was no apparent public groundswell of complaints. But they trashed their product  (ha on you who used to like Domino’s pizza) and said they are improving the product. All trumpeted in a commercial.

Will it work?

This type of ad campaign is always risky. The biggest danger is that loyal customers will be offended. They may believe the ad is an admission that executives themselves knew the pizza was bad but marketed it anyway. The ad tries to avoid this by showing customers, not executives, describing the pizza’s poor quality. It also suggests executives were surprised to learn about these reactions. This is probably a good move, but people still may not believe them.

On the other hand, customers don’t generally hear companies describe how terrible people thought their product was. It’s a good way to attract attention and get their message across. In addition, people may respond positively to Domino’s honesty, and new customers may try the pizza.

What do the numbers say?

A successful ad campaign of this type would be expected to have both immediate and long term effects. In the short term, the company hopes people will see the ad and try the new pizza. This should produce a short term sales increase. If the campaign succeeds in the long run, these new customers should become regulars, while most loyal customers should continue to purchase the product.

So far, the numbers suggest modest short term success. Domino’s domestic franchise same-store sales have increased by 0.3% in the third quarter. By comparison, Papa John’s sales increased by 0.2% while Pizza Hut’s fell by 13%. Too soon to say.

The key question is whether Domino’s new customers like the improved pizza enough to keep ordering and whether loyal customers are comfortable with the new taste. Investors are betting in Domino’s favor as the stock price has increased significantly recently; but a rise in stock price is never a guarantee a company will succeed, so it’s worth keeping an eye on the company’s long term sales.

By the way, what ever happened to “never complain, never explain.” What do you think?

Price advertising is everywhere.  Low prices, lower prices, lowest prices; budget, budget and more budget. But isn’t the advertising equation “cheap = crap”?  Don’t marketers tell us that non-stop promoting of low prices weakens, and in the long term, destroys the brand. Any brand.

Tell that to Wal-Mart.

Wal-Mart advertising and signage, says great price, low price, unbeatable prices, save money. But the message says value. And value is an equation price/quality. High price/top quality means good value. Inexpensive price/acceptable quality also means good value.

How does Wal-Mart say great value when they flog price price price? By selling good brands. They don’t necessarily sell the top priced brands in every category, but shoppers can always find most top national brands at Wal-Mart. And perhaps save a buck or two some of the time. Even while increasing the proportion of store brands that they sell, they maintain their value image (how about the Great Value brand name for Wal-Mart’s private label grocery products).

We did a research study for a chain of Dollar Stores (not that particular retail brand). Management thought of and spoke about their products as cheap. Occasionally they used the word “junk”. And they didn’t shop their own stores.

Their customers never saw the store in that light. They saw great value. Too bad management didn’t believe their customers – or the research company. Believing their own “cheapest price – nothing else matters” view of the stores led them to permit cheap displays, ignore over-cluttered, dirty and disorganized premises, only look for the cheapest, damaged  overruns and never look for above basement quality in anything they sold. After all, they thought, customers only go there to buy cheap, cheaper and cheapest.

They went bankrupt.

So in a recession, how do you sell less costly goods while maintaining a good value, or better yet, a great value image? Shout PRICE. But make sure you are also conveying quality. What has your experience been?

The oldest rule in the advertising handbook is that advertising should be focused. The only effective advertising is single message advertising delivered with a punch. Over the years, we’ve researched advertising that was single minded and successful and advertising with multiple messages that failed the test. So we generally supported our advertising colleagues who encouraged their clients to avoid highlighting every product feature, benefit and function, in every 15 second commercial. We agreed with the view that  multiple messages means diffused messages and that viewers or readers retain nothing rather than everything from multiple message advertising.

That was then, this is now.

We haven’t done studies directly comparing the effects of multiple messages in an ad or commercial vs. single messages. But we’ve studied how people deal with what used to be considered a bombardment of stimuli. They handle it just fine. The Internet of course has led the way. Watch how even the less skilled with this medium use it – not just skipping from site to site, page to page, item to item at blazing speed. They absorb multiple images and information elements simultaneously. Watch the more adept moving their fingers across their keyboards like the fingers of a virtuoso violinist moving across the strings of their instruments. And the minds of those Internet users are moving even more quickly.

Was single minded focused message advertising ever really single minded? Take a typical food ad or commercial from the not too distant past. “NOW MADE WITH 100% ORGANIC FLAX SEEDS!” or “THREE EXCITING NEW FLAVORS!”. The explicit message may be single minded. But there was also a food shot that in and of itself conveyed delicious taste, healthy and nutritious. And the food setting, the characters the music and everything else conveyed messages about the target group, usage, heritage and much more. With the possible exception of some outdoor ads, there probably never was single minded advertising.

If we move multiple messages into fast forward, will advertisers really lose their audience. Or will the viewers be less bored and watch or read the advertising. I think they will absorb multi message advertising if it’s engaging on multiple levels. The reason Shakespeare plays are so much better than any others is that in any minute in a Shakespeare play, there is  more going on than in anyone else’s play.  Plot is moving forward, character development is taking place, the relationships between characters are developing, the audience is learning some of the history of the situation and the characters. And of course the dialogue is superb. Multiple messages circa the year 1450? You bet. What we see today is barely the beginning.

What has your advertising experience been?

Next blog will talk about price advertising – does it really cheapen the brand? Then mea culpa advertising – “I’m at fault but I’ve changed”. And it’s not only Toyota doing it.

What is twitter?

Twitter burst onto the social networking scene in 2006. It is a service that allows individuals to send and receive short text messages that are under 140 characters. Twitter users create an account and can use it to send these messages (called tweets) to anyone who signs up to receive their message. People who sign up to receive someone’s texts are “followers,” and users can restrict their followers to people they approve; alternatively, some users (like CNN) encourage the public to follow them and leave their tweets unrestricted. Twitter users can also become followers without sending messages to others.

How are big retailers using twitter?

Many big retailers like Wal-Mart and Sam’s Club, Target, Gap, Sears all have twitter accounts. Some, like Wal-Mart, have designated employees who post official tweets. These employees respond to questions, announce company news, and post general marketing tweets like information about a sale or new store opening. Other stores have fewer twitter accounts and use them mostly to announce specific sales.

Does any of this matter?

Not yet. I glanced at major retailers’ twitter account numbers and most accounts seem to have a few thousand followers at most. By contrast, the top 20 twitter accounts people are following have between 2.5 million and 4.6 million followers. These accounts are almost all celebrities including Oprah Winfrey, Britney Spears, and Lance Armstrong.

Can big retailers make better use of twitter?

So far it seems people are not very interested in receiving information about sales through twitter, and this makes sense. Many people who would sign up for twitter are probably on the retailer’s e-mail list already, so there’s no need for them to get sales information twice. Also, many of the tweets feel like advertisements (touting a new low price on a store item), and people probably don’t want to receive these kinds of tweets. While we haven’t conducted consumer research on using twitter, we have done ethnographic research among people at their computers. We found that they accept advertising as long as it is not intrusive or interferes with their basic usage pattern. Reaction to advertising through twitter is likely the same.

That said, retailers can build a twitter following by offering general interest tweets and while throwing an occasional advertisement in. For example, clothing retailers should avoid simply announcing sales on twitter, but may want to tweet about upcoming fashion trends generally. If the fashion tips are good, the tweets will generate interest, people will start following, and they won’t mind an occasion plug for the store. Similarly, a grocery store may want to tweet about healthy recipes. These kinds of tweets not only generate interest in the store, they also help develop loyal customers.

Consumers are tolerant of advertising, but only to a point. What has your experience been?

Venture capital financing was down significantly in 2009 compared to 2008. Perusing the blizzard of published data, we find a surprising consistency in results, i.e. VC investments were down by about a 50% from the previous year. From Dow Jones, Canada’s VC investments were “less than half” then the previous year. Sweden’s investments – $50 million vs $108 million. “ Europe sees worst quarter on record as investment falls 47% vs a year ago” .The aggregate  for  VC investments in Europe, Canada, Israel, China and India was down 63% in the second quarter of 2009 compared with the first quarter.

The number of investments are down, the mean size of investments are down and next year is unlikely to be much better.

In 2009, U.S. based VC firms only raised 13 billion, considerably less than in recent past years, Funding will continue to be scarce.

Distinguish the proposal

As every entrepreneur knows, in order to obtain VC (or Angel) funding, he or she must distinguish the proposal. The investor has to believe there is something different—and something better—about this idea than hundreds or thousands of other ideas.

Market research helps accomplish this goal. How? Target Group market research data.

1. Soft  Data: Qualitative research, typically, focus groups or a small number of interviews enables the start-up and the VC to hear the voice of the target group, i.e. the potential buyers of the product or service; what they like, how it compares with competitors in the market. This enables the start-up to polish its pitch or modify its offering.

1. Hard data: If there is robust demand in the market for the entrepreneur’s service or product then market research will uncover it. A quantitative market research analysis gives the entrepreneur hard data. If that data indicates that a large number of people are very enthusiastic about a product or service, it helps the entrepreneur make a more compelling case that the idea will be successful. Quantitative research findings are particularly useful for an “elevator pitch” (the quick description of the product) because they demonstrate the entrepreneur has invested significant time and energy into the idea. Quantitative findings also show that an independent evaluator, not just the entrepreneur, has evidence that the product can be successful.

1. Feedback: Target group research, qualitative or quantitative provides the entrepreneur with useful feedback about how to improve. If demand isn’t as robust as the entrepreneur thought, he or she can modify the business plan to make the product or service more compelling. Investors also want to see the entrepreneur is flexible: start-ups rarely if ever follow their original business plan because they have to adjust to an ever changing market. Changing the business based on market research shows the investor the entrepreneur is ready for and can respond quickly to market fluctuations.

1. Cost: One of the most challenging aspects of entrepreneurship is rationing effectively. There are always huge demands on the organization, but limited resources require the entrepreneur to prioritize. Market research can be effective because new technology, particularly internet surveys, can help keep costs down.

Pipedream? Not in the slightest.

Research Dimensions has conducted hundreds of new product / service concept studies in several dozen categories including looking at start-up company concepts especially in technology.  And the Canadian government has joined the target group market research program. IRAP (Industrial Research Assistance Program), a government grant agency, part of the National Research Council of Canada, has begun offering to finance half the cost of target group market research for start-up companies. Research Dimensions is a preferred supplier.

The primary task of all market research is to increase the likelihood of success in the market. This includes helping start-up companies find VC dollars.

Are the dramatic changes that we see in so many companies structural and permanent or a temporary result of economic uncertainties? If the changes are long term, what are the consequences?

Consider lay-offs. In a previous recession, mid level management seemed to be the ones laid off—with dramatic effects on how business was conducted. Many senior managers dealing with a myriad of issues never had the time to look at strategies and recommended action in detail. They listened to the “elevator summary”, that is, they asked for the key issues, findings and recommendation then moved to the next item on the agenda. Junior staff are often highly motivated and energetic but by definition, they lack experience; this can sway them to deal with issues at a surface level. Typically, it was middle management that had the experience and the time to analyze and understand issues in depth. Their input to decisions was critical. Among our business contacts across many industry segments, the ranks of middle management were decimated.

In our view, the quality of decisions often deteriorated. But its manifestations were gloriously disguised. Sixty page text rich reports became twenty page bullet point PowerPoint presentations. Text was replaced by illustrations, photos and diagrams. Word pro was replaced by desktop publishing. When we compare modern presentations with presentations that are as recent as a decade ago, the older documents look laughably out of date. Moreover, delivery times escalated dramatically. Reports that once took a month were now demanded in four days or overnight. Decisions were made immediately with no opportunity for second reflections or considered discussion.

If the content of virtually every business document was drastically abridged, was the thinking equally abridged, reduced to top lines? Too often the answer was yes. All too often we have seen significant business initiatives, from new products launched to new processes to mergers, where the potential benefit is questionable.

What have we seen in 2009? We all know people who have been laid off. What appears different from earlier experience is that many layoffs are among very senior experienced people.

A good friend with a meteoric career, repeatedly sought after and rapidly moving up the corporate chain told me that since his lay off six months ago, he has interviewed with 19 companies, half of which decided, after seeing multiple candidates multiple times, not to fill the position. Responsibilities are shifted to others who already had too much to do before the change. Seniors are being replaced by juniors or jobs are contracted out, not always to seniors with experience. I wonder if the failure rate on business initiatives has increased over the past decade. And I wonder it the failure rate will increase as skills are being cast aside. What is your experience?

The next few years will be very interesting. Forgive the cliché, but we aren’t in Kansas anymore.

6. Communications Patterns and Methods

Communications is changing in most organizations, forced by the Internet. We all use e-mail, even to communicate with the next office. This is a good beginning (perhaps with the exception of using e-mails to communicate across the dinner table). It is self-evident that e-mail is needed for survival in today’s electronic environment. But it is only the beginning.

In many organizations, hierarchy and habit stand in the way of more extensive and necessary communications changes. Organization charts take on an unwanted lives of their own. Does your organization have an internal electronic open door policy? Do you have a process to communicate with your colleague in France or Brazil or even across departments. You should. Can you easily share data, especially on new projects? Perhaps internal confidentiality is more dysfunctional rather than useful.

Solution: Find new ways to communicate. A friend who teaches in University told me he asks all his students to post their assignments on a classroom social network bulletin board. When students ask how they did on an assignment, he sends them to the site with a list of what to look for in a superior assignment. “They can tell which ones are creative and show original thinking.” While he still assigns grades, the grades are secondary to learning. Social networks might not be the solution for you, but new forms of communications (even old forms like text messaging) might be. And throw away the hierarchy barriers.

7.   Same old, same old environment

Most meeting rooms, offices, board rooms always look the same, feel the same, and generate the same tired emotional response from those who sit in it.

Solution: Change the room. Add decorations for the meeting or innovation session. Add frivolity. The local party supply house can be your ally. And it can help move your spirit. Or use an off-site location. A one on one meeting at the nearby coffee shop instead of your office can work wonders. A change of scene helps release your imagination.

8.   Alphabet Generations

The Boomer, Gen X, Gen Y divides are among the greatest innovation challenges faced by many organizations. The age groups have different values, expectations, behaviour patterns, even different cognitive brain functions. At times, they seem to speak different languages. Gen Y has learned better than their older brothers and sisters how to find and process information, then relate it to other information. But they don’t do rote learning. So successful school educators or work trainers include video presentations, instant feedback, simulations and lots of practice. Evaluation typically means open book or take home exams. Games are increasingly being used in schools. How about the workplace? Standbys like flex time, extended mat leave – for men and women– part time and contract work that enables one to be home for the kids or maintain other interests are becoming more standard and necessary than ever. New remuneration formulas that take into consideration new work and life requirements are needed.

The common need is innovation, in process, attitude, culture, behaviour, expectations and rewards. For corporations, the choice is change or die. For the individual, it is change or stagnate.

Fortunately innovation can be learned.

4.  Meetings, the Death of Innovation

Meetings don’t have to be the death of innovation. But they often are.

Solution: Understand that innovation in meetings is not just a process, it is an attitude and an environment you can establish. Borrow from the techniques of innovation training and ideation facilitation, beginning by turning the group into a team. Here are a few simple suggestions borrowed from the process of innovative facilitation.

Turn the meeting into a team exercise

• Credit suggestions, and allow each individual to build on another participant’s comment. Giving credit to the person who initially suggested the idea is polite.
• Break into small work sessions. Just having someone holding the pen writing on a flip chart while leading a few team members to look for solutions builds the teamwork and improves the quality of output.

Keep it positive; criticisms are like an innovation hemorrhage

• Ensure that every suggestion is accepted and respected without evaluation, criticism or judgment. Make this a formal rule of the meeting. At the end, ideas can be examined and dealt with – not during the meeting. Keeping on a positive track will also increase quantity and quality of output.

• applause works. The first time you applaud you may feel a bit silly. Not the next time or the next.

Get started early

• Give out an agenda before the meeting, and assign specific tasks. For Innovation Sessions, provide a “homework” assignment, deliberately using this familiar and non-threatening term.
• When participants have completed a homework assignment, they understand the purpose and have started their thinking. Meetings are more productive. Output from participants will be at a higher level. Cooperation will be stimulated by sharing the homework results.

5. Toys, yes, toys! Sterility is the death of innovation.

Toys are a critical element of an innovation session. Play helps participants think better, more creatively.

Fill the meeting room (and your office) with toys, gadgets, hand puzzles, play-doh, Lego, pipe cleaners, colored paper. These inform the participants that the process and expectations are different from an traditional meeting. It relaxes the atmosphere. It provides implicit permission to try new things and be creative. It also focuses attention on the tasks at hand. Fun enhances innovation. Your outcome will be more ideas, more better ideas, some of which will soar.