May 24, 2012

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March 18, 2012

Why agencies should act more like tech start up's

#sxadcoders Rei Inamoto ECD of AKQA posed this interesting question. Using pre recorded interviews with Kevin Systrom, CEO of Instagram; Chris Sakka VC; Cindy Gallop ex CEO BBH NY; Hashem Bajwa ex Droga5 and Sharon Feder COO of mashable, to make the case for and against, he also invited the audience to tweet their response. This was the result.

Reasons why agencies should not or could not act like start ups ranged from people, size, speed and inability to embrace failure. However Inamoto argued that only three things matter that enable agencies to operate like start ups.

Structure - there is a myth around scale. Scale is not bad, hierarchy is. Agencies need to become nimble, remove hierarchy and empower smaller teams. Also there needs to be a balance of specialists and hybrids if we are to achieve innovation. He suggested Agencies need three types of people hackers, hustlers and hipsters.

Compensation - agency compensation models are moving away from retainers and we need to look to new models that rewards what we are; a talent business, not a people business where we are compensated for our ideas. Shift from resource allocation to talent capacity. Great quote- simple is easy to use, difficult to build and difficult to charge for.

Process - if we look at start ups and what goes into making things in the world we need three ingredients; Insight, Desire and Utility. To be groundbreaking we need all three. In start ups they get this right.

Rei argued that these translate inside agencies to the three S's Strategy - makes the idea relevant Storytelling - makes the idea desirable and emotional Software - makes it useful and usable.

Makes sense. Interesting.

March 17, 2012

Create more value than you capture

Watched a great SXSW talk with Tim O’Reilly. He and Andew McAfee, Principal Research Scientist at MIT discussed the need to ensure we focus on creating value and begin to think about the economy in terms of creating sustainable businesses that fuel a sustainable economy. Citing great businesses like Microsoft, Google, Amazon, he suggested that they began with a higher purpuse, a focus on creating value and as a result created ecosytems around them.

He argued problems start when businesses attempt to retain too much of the value. The banking crisis was an example of too small a group capturing too much of the value and trading against their clients, resulting in ecosystem breakdown. ( Interesting question; is banking still a value creation business?)

O'Reilly and McAfee discussed the damage of short termism and the impact of job elimination on long term economic value. Following the argument that investors don’t create jobs, consumers do, there is now an imperative to create more jobs that will in turn create demand and economic value. Considering this in relation to technolgy advancment; " 6 years hence software like Siri and Waton will be 16 times more powerful" the impact will be jo elimination in industries like call centres.

O"Reilly discussed the need to look for new ways to use technology to create jobs not destroy them. He gave examples from Apple, to Walgreens, to etsy, to kickstarter and Airbnb where people and companies are creating new economic transitions.

They discussed the sharing economy and YouTube economy, where new trends and economic transitions are emerging along with new forms of monetization.

He suggested we need to focus on protecting the future from the past not visa versa.

His advice to the audience - work in something that matters.

Here is the Ogilvy Note from the talk