On August 28th, (r)evolution will host its first ever Innovate-athon, a half-day event designed to provide pro bono marketing strategy and innovation consulting services to a selected non-profit organization.  This year’s benefiting organization is The Global Village School, a unique organization that helps young women whose lives have been disrupted by war and refugee camp experiences achieve their educational dreams. The (r)evolution team will facilitate the Innovate-athon, bringing together many of our talented clients, partners, and friends to tackle some of this organization’s toughest challenges. By combining our brain power and business experience, we firmly believe that together we can produce valuable and sustainable strategies that can help transform The Global Village School and the lives of the girls that attend the school.

Here at (r)evolution, we are so grateful for all that the Atlanta community has given to us, both as a company and as individuals.  We believe that it is our responsibility to give something back and, in that spirit, we have built and are executing against a holistic Corporate Social Responsibility platform.  The Innovate-athon is our first major step in a plan to contribute our time, money and resources to causes and organizations in our community that need our help.  Stay tuned for more information on our CRS platform.

More about The Global Village School

The Global Village School opened in Atlanta in August 2009 to provide teenage girls whose formal education has been interrupted by war and refugee camp experiences with an enriched, Montessori-informed education. This school’s ground-breaking curriculum provides teenagers with intensive English language training and enhanced education, with an emphasis on science, math, humanities, business, and the arts.  For more information, please visit their website.

Our own Brad White is serving on the Product Development and Management Association (PDMA) Conference Committee, helping to explore the leading edge of innovation. For a brief video overview of the PDMA Global Conference October 16-20 in Orlando, FL, click here. If you are interested in attending, you can register here with the following discount code:

CM10GC

20% of Rio de Janeiro’s population lives in favelas (Brazilian Portuguese for “slums”). And all over Brazil, cities such as São Paulo, Fortaleza, Guarulhos, and Curitiba have seen the growth of large favela populations. A favela is not simply a slum, but instead is marked by:

•    Illegal building on 3rd party land
•    Irregular, self-constructed, unlicensed housing
•    Little or no infrastructure
•    Residing on the urban periphery, many times on undesirable land (such as hillsides)

This combination creates a unique living situation, in which residents need to provide their own water and navigate steep, ad hoc dirt passageways instead of sidewalks and streets in a congested environment. In these highly compact, structurally deprived societies, the rules are different and both residents and governments have had to adapt. When examined, many of these adaptations reveal innovation best practices:

1.    Turn the problem on its head
2.    Incentivize correctly
3.    Learn from everyone

Turn the problem on its head

How do you bring community facilities to a place with literally no free space? Favelas are built organically without prior planning, and this creates problems when all the space is gone. Brazilian architect Jorge Mario Jáuregui has a solution. While there isn’t any free space to use for public facilities, there is space that can be used twice.

“In a project currently underway, Jorge is creating public space in the Manguinhos favela on existing train tracks that bound the community on one side. These train tracks will be elevated and the space below will become a linear park, defined by the conjugation of spaces, activities, buildings and vegetation. Facilities in the park will include sport, cultural, and income generating facilities, with a focus on providing children and teenagers with alternative attractions that will integrate them into the community. The space will also incorporate a new public transportation hub.

“This new metropolitan park will be an articulator, attracting favela residents as well as a larger public from the surrounding communities. As an integrated public space it eliminates the existing barrier and transforms the space from divider to connector. By directly intervening at the physical boundary of the favela, Jorge is directly confronting the deeper socio-economic divide that has plagued the city for decades.”

Jorge Mario Jáuregui realized that while there was no horizontal space left to plan public spaces, there was vertical space left. He turned the problem on its head and came up with a unique solution that meets all of the project’s objectives.

Incentivize correctly

Local governments and institutions are also approaching these favelas in new ways. While historically ignored, city governments are realizing that these favelas are not going away and are only growing. Unless all necessary parties have incentive to change, growth will continue in the same haphazard way as before. The city of Curitiba, in Southern Brazil, is working to integrate favelas into their society through innovative measures that incent residents in favelas to work alongside the government.

“Most favelas receive transit stations shortly after being built, and the city runs a cleanup program for favelas, in which residents receive a bag of fresh produce in exchange for every bag of trash collected and turned over to the city.”

Through their trash for produce program, Curitiba is encouraging both clean living and healthy eating. The favelas get cleaner, the people get healthier. It’s a win-win for all parties.

Learn from everyone

Last, the world is starting to realize that the favelas have much to offer them. True, favelas are home to some of the poorest, most socially marginalized people in the world. But that doesn’t mean they don’t have good ideas. An Architect article titled “Cities of Tomorrow” reveals that favelas are showing many of the signs associated with sustainable development:

•    Compact footprints
•    High density
•    Low energy use
•    Little to no grading
•    Reclaimed materials
•    Humane scale
•    Vibrant social interaction
•    Self-determination

The most unique perspectives come from the most unique vantage points, whether that means talking to a child in a favela or involving all of a company’s pay grades in the innovation process.

They say that necessity is the mother of invention, so it’s no wonder that the favelas of Brazil are such fertile ground for innovation best practices. Sometimes the best ideas come from the most unlikely places, and the slums of Brazil are no exception.

Image sources: walker_dawson and Jorge Mario Jáuregui

(r)evolution is thrilled to welcome Steve Jones as a Principal. Steve is the former CMO of The Coca-Cola Company where he reported to the Chairman and oversaw one of the world’s most loved and recognized beverage brands. There he focused on creating growth by diversifying the product portfolio through aggressive new organic product development and acquisitions.

Steve has held many roles, both in the public and private sector, over his successful career. Early in his career, Steve managed some high growth brands, including Huggies diapers and Kleenex paper products at Kimberly-Clark. He then spent eighteen years at The Coca-Cola Company in various roles, including, Sr. Brand Manager of Diet Coke, Marketing Director of Coca-Cola Great Britain, Region Manager, President of Coca-Cola Japan, CEO of The Minute Maid Company and Chief Marketing Officer.

In addition to his marketing and business operator background, Steve brings diverse experiences with private equity deals and several small/midsize business endeavors in the past seven years. He served as CEO of Ace Bakery, a private $20 million gourmet bakery and, most recently, as CEO of Jones Soda Co., leading the turnaround of the struggling new age beverage company.

Now at (r)evolution, Steve hopes to push our thinking and further refine our practice areas to be even more relevant to the evolving business landscape. He will also help provide our clients with a new perspective on approaching growth creation and provide a range of expertise that can help us to deliver better and more actionable strategies. With his senior strategic leadership skills, diverse global experiences and recent entrepreneurial activities, Steve will help us grow stronger, smarter and more focused in order to continue our role as thought leaders in growth creation and to provide the highest quality solutions for our clients.

We welcome everyone to connect or reconnect with Steve directly. Alternatively, a member of our team will be happy to make an introduction.

“Honey, I swear—I saw black swans!” Byron was back from his journey exploring the Pacific, and was adamant about what he had seen. But his wife Patricia knew better. “No.  Everyone knows that all swans are white. It’s common knowledge.” Patricia was right because all swans in Europe were white and all empirical evidence supported her beliefs. But it turns out that everyone was wrong. Europeans couldn’t have predicted the discovery of black swans in Australia, but they had to immediately change their beliefs with one simple discovery.

So-called Black Swans - rare, unpredictable events - as described by author Nassim Taleb provide opportunities for massive gains or massive failures. Taleb describes these events as having three primary characteristics:

1)    Black Swans are outliers with low probabilities. These events lie outside the realm of normal expectations. They can’t be readily predicted, even using sophisticated models.

2)    Black Swans have extreme impact. These events change something fundamental about the world – either in terms of economic or social costs. Although the discovery of black swans in Australia might not have had this kind of impact, World War I and September 11th certainly did.

3)    In hindsight, Black Swans are very easy to explain. One example is the recent financial crisis of late 2008. As Taleb explains, today many people claim they saw the crisis coming, but these same individuals also held bank stocks, showing that indeed only hindsight is 20/20.

Black Swans are everywhere. These types of events define our modern history from stock market crashes to terrorist attacks to world wars to banking crises. But Black Swans don’t necessarily have to be negative, they can be positive as well.

Positive Black Swans might include new technologies – such as the Internet, runaway bestsellers or blockbuster drugs. Who knew that a communication protocol used by the military would transform into the World Wide Web and change the way society works? In the same manner, who knew that a potential hypertension medicine would change the love lives of millions of people around the world?

How do Black Swans factor in the business world?

Taleb is critical of many modern management and financial techniques in which companies fool themselves into thinking that they can control or predict their future with great certainty. He argues that it is impossible to predict or control Black Swan events, which are often the greatest source of value creation. Instead, he suggests organizations should try to optimize for:

•    Maximizing the chances for positive Black Swans to occur: Companies accomplish this through taking risks while minimizing the costs associated with those risks. Taleb would argue that companies should take all the “cheap” risk they can because being aggressive will ultimately create economic growth. In gambling terms, he wants to be that hyper-aggressive gambler who understands all of the best bets at the casino, always risking a small amount as long as the payoff is maximized. As Taleb says, “learn to fail cheaply, with pride, comfort, and pleasure – and do it often”.

•    Minimizing the chances for negative Black Swans: Since negative Black Swans can come in many forms such as economic crises, terrorist attacks, or even consumer backlash, it is difficult to be specific on this topic. Taleb would argue that companies should be hyper-conservative on downside risk, shying away from huge bets that have the potential to be very costly.

In short, Taleb thinks most companies have it wrong. In a recent interview, he said “Be hyper-conservative when it comes to downside risk yet hyper-aggressive when it comes to opportunities that cost you very little. Most people have the wrong instinct. They do the opposite.”

Sources:

Webb, Allen. “Taking improbable events seriously: An interview with the author of The Black Swan.” McKinsey Quarterly, December, 2008

Taleb, Nassim. “The Black Swan.” Random House, Inc., New York, 2007.

Gladwell, Malcolm. “Blowing up.” The New Yorker, April 22 & 29, 2002.

Image Source: ianmichaelthomas

(r)evolution collaborates with clients to develop business solutions that enhance their existing business models. In addition, we create white space offerings that support new revenue growth models.  Often clients come to us in search of the next Swiffer, but they fail to realize that it is often the less exciting things (process, culture, leadership, organizational structure) that enable transformational change and breakthrough ideas.  Over the next few months, we will highlight case studies of innovative companies that have addressed such issues to transform their businesses.

For an industry that touches every consumer, healthcare is rarely described as consumer-centric.  Drug manufacturers traditionally view healthcare providers and insurance companies as their primary customers, not patients.  Hospitals are typically organized around the needs of nurses and doctors, rather than the needs of the patient.  This lack of attention to the consumer often transforms interactions with the healthcare industry into dreaded experiences.

One particular medical center has made it a mission to transform the patient experience, making it both more enjoyable and affordable.  The Cleveland Clinic has created a patient-centric culture that allows it to fully integrate patient needs into its various processes.  In 2007, Cleveland Clinic treated patients from all 50 states and 90 countries at a lower cost than many other hospitals. In fact, the Dartmouth Atlas of Health Care found that chronically ill patients cost Medicare only $55,000 when treated at the Cleveland Clinic, tens of thousands of dollars less than at many other top-ranked academic medical centers. Here are some of the initiatives that have helped Cleveland Clinic offer great care at such a low cost:

Redefining success metrics. Cleveland Clinic realized that patients care less about what constitutes a treatment and more about the outcome of that treatment. To that end, in 2000 the Clinic became the first hospital in the U.S. to publish its outcome measures, and by 2007, it had published outcomes for every department compared against the best available benchmarks. The Clinic also does informal surveys of post-op patients, realizing that the voice of the patient should not be lost just because he or she has left the hospital. All this data is then used to improve outcomes and lower costs for procedures—something valued by both patients and payors.

Restructuring Departments into Institutes. Hospitals are generally structured around the needs of doctors and nurses. This model often inconveniences patients, who have to go to multiple locations and see multiple specialists for one ailment. In 2007, Cleveland Clinic realized that if it structured its departments more broadly around diseases instead, it could improve patient outcomes while lowering costs—the nirvana of healthcare delivery. For instance, their Neurological Institute brings together 150 doctors of various specialties, from neurosurgery to psychiatry, as well as any therapists and equipment that patients might need. This reduces runaround time for patients, as well as allows doctors and surgeons to work together more collaboratively—limiting unnecessary procedures and tests.

Aligning the Patient Perspective throughout the Organization. The “Patients first!” message starts with Dr. Cosgrove, the CEO of Cleveland Clinic. It then moves throughout the organization, helped by a fully integrated Electronic Medical Record system. This system makes it easy to identify potential research recruits, flag patients at risk for hard-to-detect illnesses, among other benefits. Cleveland Clinic also surveys outpatients and creates advisory councils made up of patients and family members. The patient satisfaction ratings from this research are an important part of performance reviews for doctors, who are incentivized by a purely salary-based system. The “Patients First” message is even delivered by housekeepers, who carry business cards and introduce themselves to patients at the beginning and end of every shift.

Article written by Erica Connelly and Jeff LaFlam
Image source: noraohio

Hello readers. We’re working on a white paper on the importance of B2C marketing for some B2B companies, and we’d love your input! If you’d like to contribute, post your perspective on the following question as a comment. Thanks!

Question: Under what circumstances should a B2B company invest in consumer marketing and what are the benefits?

During WWI, the German U-Boat revolutionized sea warfare. For the first time, battleships had a hidden enemy beneath the surface of the water. And these battleships were being sunk at an alarming rate. In open water, traditional wartime camouflage was ineffective. The sea and sky were constantly changing a ship’s “natural” environment as weather fluctuated.

So what was to be done? Rethink camouflage, obviously. British naval officer and artist Norman Wilkinson pioneered a new camouflaging technique based not on blending in, but on standing out. Blending in was impossible. Standing out was possible, but why was it useful?

Torpedoes were slower back then, and radar and sonar weren’t as advanced. U-Boats had to fire torpedoes based on where they thought a ship was headed. This involved determining a ship’s bearing and speed. Anything that disrupted these two metrics was also effective at camouflaging a battleship in the open sea. Thus was born a form of camouflage termed “Razzle Dazzle.”

Norman Wilkinson used bright, loud colors and contrasting diagonal patterns painted on boats to confuse U-Boat captains and make their bearing and speed less apparent. Examples of this Razzle Dazzle are below, but try imagining them in bright colors like purple, orange, and yellow.

Camouflage is often thought of as a way to conceal an object. However, if the object cannot be hidden, as in the case with a WWI ship on the open sea, the purpose of camouflage then becomes to disrupt those trying to find the object. Case in point: zebras. Alternating black and white stripes doesn’t seem like an ideal camouflage, but when a bunch of zebras are hanging out, the stripes all blend together in a predator’s vision. This makes it difficult for the zebra’s primary predator, the lion, to hone in on one particular zebra, increasing safety for all.

Razzle Dazzle camouflage is a prime example of innovation through design research. Design research is an investigation into the process of product design. In the case of Razzle Dazzle, coming up with an effective means of camouflage meant revisiting the goals of camouflage and the constraints on an enemy’s weapons. In commercial examples of new product innovation, many times this means revisiting how consumers are actually using your products.

Consider the Whirlpool Duet front-loading washers and dryers. Whirlpool observed one woman who had placed her front-loading dryer on cinderblocks to make loading and unloading easier. This kind of design research led to the pedestal and storage unit, which is now prevalent with front-loading washers and dryers. New innovation opportunities can often be uncovered by going back to the basics:

•   What problem are we trying to solve?
•   What are the parameters?
•   How are products currently being used to solve this problem?

As Microsoft Ethnographer Tracey Lovejoy said, “In today’s competitive and global market, companies are finding it necessary to deeply understand their customer and build their product accordingly.” Though in the case of Razzle Dazzle, one could easily substitute “customer” for “enemy” and “product” for “battleship.”

In the 1980s and 1990s, Circuit City was the leading electronics retailer in the United States with about 400 stores nationwide. From 1982 to 1999, Circuit City generated cumulative stock returns 22 times better than the market, beating out Intel, Wal-Mart, and GE. Circuit City’s future looked bright. However, when the dynamics of the market changed, Circuit City rested on their existing brand equity.

In the 1990s, Best Buy entered the market with an innovative retail strategy. In an effort to gain market share, Best Buy secured prime real estate positions and invested in gaming, the creation of an e-commerce website, and viral marketing. But even though Best Buy had changed the retail electronics game, Circuit City stayed the course.

Circuit City laid off their highest paid sales personnel to reduce costs, which negatively impacted customer service. And while Best Buy was paying a premium for the best retail locations and opening new stores, Circuit City stayed with their current stores and failed to update their design. In 2009, Circuit City went bankrupt. Could bankruptcy have been prevented? Perhaps not, but a brand repositioning may have helped.

Brand repositioning is different from rebranding. Rebranding is essentially re-skinning a brand, focused on brand identity and the perceptions and associations of that brand.  Repositioning delves deeper than the skin, and involves changes to some or all aspects of a brand’s positioning strategy, including:

•    Target market
•    Frame of reference (space in which the brand competes)
•    Core benefit the brand provides
•    Reason to believe the brand can deliver on this benefit

Companies should consider repositioning their brand when they need to alter their strategic direction, adapt to changing consumer preferences, bring in new customers, and/or differentiate from other brands.

As in any major corporate change, not every repositioning effort is successful. Several best practices can be employed to avoid common pitfalls and mitigate some of the risk involved.

Secure CEO buy-in

CEO commitment is essential in a brand repositioning effort. The CEO brings credibility to the effort and shows the company’s commitment to change. Furthermore, the CEO is the only person within an organization who can drive change in all functional areas within the company, create a vision, and gain support from key stakeholders.

Engage the whole company

A company’s greatest asset is its people. If a brand repositioning initiative only involves the marketing department without support from sales, finance, engineering, consumer service, and manufacturing, it is likely to fail. Since repositioning is more than “re-skinning” the company, it must go deeper than marketing.

Remember your history

An excavation into a company’s history can lead to new insights and illuminations and reveal core competencies and what differentiates the brand from their competitors. Looking back can help a company move forward and gain inspiration from the company’s founders.

Understand your target market and consumer needs

It is important to listen to your consumers and ask for their feedback. By speaking to current users and non-users of the product or service in question, a company can better understand what resonates with their target market, and what might resonate with ancillary target markets.

Make the new branding believable

When a company repositions their brand, they may say, “We have the best consumer service and we offer the lowest prices. We are fun, reliable, and innovative. We are the best.” However, if it isn’t true, consumers will not trust the brand. The brand’s message should be uplifting and positive, but it must also be honest and believable.

Consistently project and reinforce the branding

Communication of any positioning needs to be clear and consistent so that consumers can easily understand the brand’s benefit to them.

Image source: jakerome

In the wake of a tumultuous decade, many consumers are actively voicing a loss of confidence in big business. This cynicism coupled with a heightened awareness around social and environmental issues have placed a lot of companies on the defensive.  Over the past several years, a number of our clients have approached us with a similar challenge:  a need to improve their consumer-facing image to develop emotional connections and build a foundation of trust.

While the core issue was similar for many of our clients, the execution of each engagement varied.  We have worked on innovation, positioning, messaging, and Corporate Social Responsibility (CSR) platform projects, all with this end goal in mind.  The question that remains is whether these efforts resulted in the desired effect of re-engaging a disenchanted consumer.  In order for any efforts to be effective, the approach must be holistic.

Kaiser Permanente re-engages consumers

Kaiser Permanente is one company that has had a successful run at re-engaging consumers. Five years ago, the company launched a new messaging campaign to reposition the healthcare giant in the prevention and wellness space.  The push came as a direct response to falling membership as well as lack of awareness among the general public.  The company believed that the negative opinion held by non-members was largely due to a “lack of a strong and consistent voice in the general consumer market.”  From this need came the “Thrive” campaign, whose focus was not on how Kaiser cares for the sick, but rather how it delivers wellness and enhances the overall quality of life.  Most would agree that this has been a fairly successful advertising campaign.  It clearly resonates with consumers who feel that there is much more to health than healing the sick.  However, is this just a great messaging campaign?

A holistic approach reinforces consumer branding

Kaiser is actually backing up its brand message with a slew of innovations through an institution-wide effort known as KP Innovation.  Their goal is to align every consumer touch point – from the waiting room experience, to the doctor patient interaction, to the way patient information is stored and transferred - with the overall brand positioning.  In 2007, the company began building a Total Health Environment, which involves applying design theory to all aspects of Kaiser’s operations.  A team inventoried Kaiser facilities to identify areas that were not “thriving,” and they drew inspiration for revitalizing these aspects from outside industries like hospitality and retail.  They also spoke with consumers to identify pain-points within their current experience.  They translated their findings into plans that will be used to build new facilities and remodel existing ones.   They are designing greener buildings, increasing the use of natural light, making waiting rooms more welcoming, selecting cozier chairs, making patient rooms more comfortable, and choosing color palettes that are brighter, just to name a few changes.  These changes not only improve the look of the facilities, but they have also been shown to improve overall patient satisfaction.

The healthcare provider has also launched additional innovative initiatives that align with its wellness positioning.  A number of facilities have on-campus farmer’s markets that offer healthy produce for employees and members.  In addition, the provider teaches health and wellness classes that cover many topics including stress relief, smoking cessation, chronic disease management, and even yoga.  For patients that do not want to come to the facility, Kaiser also offers online support tools weight loss, nutrition, stress reduction, pain management, and smoking cessation.  All of these initiatives support Kaiser’s efforts to show both consumers and employees that they are serious about keeping people healthy.

So it looks like Kaiser’s catchy tag line, “live well and thrive,” may be more than just empty promises. Peter Andruszkiewicz, President for the Kaiser Foundation Health Plan of Georgia, Inc., says this about the effectiveness of the KP Thrive campaign:

“In Georgia and nationally, it has successfully increased the number of people willing to consider KP for membership. It has also significantly increased the perception across multiple audiences that KP is serious about proactively keeping people healthy.”