The Genius of Business

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The Genius of Businessby Peter FiskExecutive SummaryYou need to be a genius to succeed in todays business world. Marketsare incredibly complex; customers demand ever more; competition is

intense; imitation is instant; margins are under pressure; and theexpectations of stockholders are unrelenting. Marketing, in the formsof strategy and innovation, brands and connections, has never beenmore important.

IntroductionFrom the vision of Apple to the insight of Zara, the passion of Nike andirreverence of Jones Soda, the entrepreneurship of Jet Blue, and thrill ofAgent Provocateur, todays leading brands think and act differently.The genius of business today lies in the ability to connect outside andinside, markets and business, customers and shareholders, creativity

and analysis, promises and reality, today and tomorrow. Customerinsights and creativity are important, but must be combined with theanalytical and commercial rigor that drives strategy, innovation andprofitable growth. Todays business leaders, like Einstein and Picassobefore them, see things differently, and by applying intelligence inmore imaginative ways can do extraordinary things.

Blinkered BusinessToo many businesses are obsessed with their inside how to do whatthey do better, reduce their cost base, automate their processes rather than their outside. This important but limiting preoccupation

plus the blinkers of functional silos and industry conventions meansthat businesses often miss what matters most.Yet in the fast-changing world incrementalism can lead to irrelevance.Ask Kodak, the market leader in photographic film for many decades,who within a handful of years found that its market had disappeared,swallowed up by alien digital worlds led by the likes of Sony and HP.They had not even been on Kodaks radar screen until it was too late.The best opportunities and biggest challenges are outside, not inside.Market change and its implications are often discontinuous, requiringmore significant responses. They should be the starting point of anybusiness strategy rather than a consequence. Market thinking should

be at the heart of decision-making and market thinkers at the heart ofbusiness.Apple watched the marketing for music fragment and blur into chaos,as new technologies disrupted the industry model, consumers rebelled,new entrants challenged the economics, and old formats quicklybecame obsolete. Apple brought together an innovative solution in theform of hardware and software iPod and iTunes to offer a waythrough this turmoil, redefining the industry dynamics with a


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compelling and profitable solution.

Customer powerWhile borders have blurred and markets merged, within markets thereis a shift from economies of surplus demand to those of surplus supply.

Customers now call the shots. Most of us, in the Western world,typically have everything that we need, so our wants are moreemotional and unarticulated. Customers are more different too, moreinformed and less tolerant. Gone is the day when we fit into a macrosegment, or adhere to average marketing research statistics.Customer expectations are sky high, and their loyalty is rare.The noise in markets is deafening, as we are bombarded with at least1500 commercial stimuli every day, many causing resentment throughthe deluge of direct mail and intrusive telemarketing. A young personis likely to have seen around 150,000 different ads by his or her 18th

birthday. Indeed kids have learned to cope with more. Research

shows that they can typically deal with 5.2 activities at once, whereasadults can only survive with 1.5, and men even less. Therefore weneed to address each differently.We surf through 300 channels of television, dispersing our lifestylepatters, and destroying the predictability that advertisers used to relyon. And neuroscientists have found that consumers typically choosewhich brand to buy within 2.6 seconds, not long to turn marketingpromises into profits. And the competitive response has been to workharder rather than smarter, with more products, more options, andmore campaigns. Product lifecycles have typically fallen by 70% in thelast decade, while 75% of customers now turn to personal

recommendation, rather than anything a brand might tell them.

Market LeadersSo what should business leaders do? How can they throw off theirblinkers and address the emerging market landscapes and the newbalance of power?The essence of genius is to apply intelligence in a more imaginativeway. Imagination is required to see the uncharted waters, the biggerpicture, to drive more sustainable innovation and differentiation.However, business also requires more intelligence than ever in order tomake sense of complexity and provide focus amidst unlimited

opportunity.

Analysis and creativity are richly complementary, despite our oftenseeking to label people in one way or another. Human beings haveevolved with brains that can do both, and as result perform better.Analysis helps focus creativity on areas of most impact; creativityhelps to break through data to find insight and direction. It requiresthe left and right brain to work harder together, and to embrace the


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yin yang opportunities.Todays geniuses must combine the scientific mind of Albert Einstein,with the creative touch of Pablo Picasso, one a phenomenalmathematician who could only reach new places through hypothesis,the other a radically unconventional artist but with a technical training.

So how would such figures approach the challenges of todaysmarkets?Perhaps king of movies and technology, Steve Jobs, designer-cum-philosopher Philippe Starck, or accountant turned marketing Phil Knightof Nike can give us some clues. However, it should not be limited tothe special few. Indeed you too can achieve genius in your everydaydecisions and actions. A genius thinks more intelligently by makingsense of chaos, and acts more creatively to cut through the noise andengages the skeptics, and as a result is able to deliver extraordinaryand definable results.

Seeing Things DifferentlyAs with the theory of relativity, the Alessi orange squeezer, or thebrand endorsement of Michael Jordan, a genius is able to see thingsdifferently, and thereby has the opportunity to do extraordinary things.In business, the starting point is to see the world from wherecustomers stand to see products and services, business and sectors,the way real people see them. The obvious questions then no longerhave simple answers which market are you in, who are yourcustomers, what do they want, how do they use your products, whoare your competitors, what is your difference, where to focus, what willhappen next? Event he worlds leading brand, Coca-Cola, has

recognized that it must reframe its market context, and that juices andteas, rather than carbonated drinks, will more likely drive its futuresuccess.The magic however, is not just in the insight but in the actions that canfollow. A business leader who sees a new landscape, with appropriatedirection and stimulus, develops the belief and conviction to actdifferently to disrupt the industry conventions, to do what everyoneelse has avoided, to innovate the market rather than just a product.

Doing Extraordinary ThingsStrategies become more directional and flexible, but with stronger

focus on the best opportunities, exiting and emerging. Planning startsto work from the future back, rather than extrapolating from today.Doing the right thing matters more than doing things right. And doingit right and fast, before somebody else grabs the new ground or thebest ideas. Knowledge becomes a commodity; the ability to turninsight into innovation creates the advantage.Look at the leaders of Dell or Tesco, eBay or Zara they are market-thinking people by background, who intuitively start with the


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customer and all else follows (As Google defines its number oneprinciple)> they bring an outside-in approach, starting with the marketrather than what they have done before, obsessed with theircustomers and competitors, championing the brand and innovation,constantly searching for new ways to stay ahead.

Indeed the CEO comes from a marketing background, then the impactcan be even greater. Recent research shows that such companiesgenerate 5.9% better stockholder returns that those led by people withan inside-out, operational perspective.

The Outside-In BusinessAn outside-in approach to business starts with the market. A marketstrategy defining where and how to compete, and what to do forshort- and long-term commercial success must sit at the core of abusinesss decision making framework. This requires fundamentalchoices, about which markets to focus on, and how to be positioned

within them 0- less about legacy or capability, and more aboutopportunity and customers.An outside-in brand defines what it does for customers, rather thanwhat it does itself. Outside-in innovation starts by redefining contextbefore considering products and services. Outside-in communication isless about blanket campaigns, more about customer-initiateddialogues. Outside-in channels are no longer an extended arm ofsuppliers, but trusted agents of customers. Outside-in relationshipsare based more on communities than transactions.Amazon, for example, uses its intelligence and imagination toanticipate and meet the needs of each customer. Not only did Jeff

Bezos and his expeditionary marketers seize the new whitespace byleveraging virtual technologies and physical delivery, but theyharnessed customer powers, fundamentally doing business oncustomer terms, and doing it profitably.

The Tomorrow ParadoxWhile customers must be the orientation of business, performance isultimately measured financially. This only becomes a tension when thetwo goals get out of kilter. Over the longer term, creating exceptionalvalue for customers is the only way to create significant value forshareholders. Profitable growth enables this virtuous circle.

Stockholders invest in companies in order to get a return on theirmoney. They look at the future earning potential of a company, thecash the company is likely to generate over future years, the newmarkets and products which will drive it and the strong brands andrelationships which make it more certain. They take a longer-termview.Yet in business, we spend most of our time focused on the short tem.Of course, this marketers because cash is needed to pay the bills, and


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provide some indication of future success. However the long termmatter more. Marketers, in particular, end up torn between the shortand long term, between sales promotion and brand building, productderivatives and real innovation.Indeed stockholders look for the things that the forward orientation of

marketing provides profitable growth through market and brandstrategy, innovation, and relationships.When P&G acquired Gillette in early 2005, only $6 billion of the $57billion purchase price was for its tangible assets, the vast majority ofthe value being in its brands and relationships. On average 86% ofmarket value is intangible, which is the real measure of the worth ofnew ideas, the right market choices, and the brands to ensure futuresuccess in them.

Geniuses WantedIn todays incredibly complicated world, every business faces

enormous change, uncertainty, and opportunity. The best ideas willmake companies great. Customers, rather than capital, areincreasingly the scarcest resources. Market strategy and brands,relationships and innovation are the most significant drivers ofeconomic value.As organizations, genius is about sensing the best opportunities, thenresponding in ways that drive short-and long-term results. Asindividuals, genius is about engaging left and right brands to see andthink differently, and responding by turning the best, most radicalideas into practical actions, and to inspire people to deliver them.The genius of business is about seeing the things everyone has seen,

but thinking what nobody has thought, engaging the whole brain toturn great ideas into profitable implementation, creating tomorrowwhile delivering today. There has never been a more important timefor new market thinking, or more exciting time to lead a business.

10 Steps to Genius1. Leadership Bring an outside-in mindset to business, drivingfocused decision-making and inspiring more enlightened action2. Strategy consider a broader context, focusing on the best fewexisting and emerging markets, and how to be positioned in them3. Brand Define your brand by the benefits it offer customers rather

than the functional description of your business or solution4. Customers Engage more deeply with customers, observing andcollaborating to discover emerging and unarticulated needs and wants5. Innovation Reframe opportunities in ways that create new spacesin which to innovate products and their market applications6. Channels Invert channels so that they become the trusted partnersof customers, creating solutions based on more personal knowledge.7. Pricing Actively manage perceived value, changing the frame of


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references so that a premium price structure still offers value for themoney8. Communications Build dialogue with customers on the customersterms and in their time and place, rather than product-push, mass-market campaigns.

9. Relationships Build loyalty between, rather than with, customersthrough branded communities of people who want to come together.10. Performance Invest in markets, brands, and innovation thatcreate a virtuous circle of more value for customers and stockholders,short- and long-term.

For More InformationBooks:Fisk, Peter. Marketing Genius. Chichester: Wiley, 2006Fisk, peter. The Complete C.E.O. Chichester: Wiley, 2006

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The Genius of Business