Tag Archives: Schumpeter

The case for culture in business, as clearly and forcefully as I can make it

This is an abbreviation of talk I gave for the design firm Thomas Pigeon in early April.

It puts the “case for culture in business” as forcefully as I can make it. (NB I’m not talking about corporate culture here. I’m talking about culture as in “culture creative.”)

Here’s a summary:

SECTION 1

00:25 capitalism and its creative destruction

00:30 Schumpter
00:54 Alvin Toffler
01:11 Clayton Christensen

01:31 the world is turbulent
…and culture creatives can help

SECTION 2

01:38 strategy struggles

1:44 Peter Schwartz and the corporation in a state of perpetual surprise

1:56 we wake up one morning to discover that our business model can be ripped out from under us

2:00 Michael Raynor and the death of strategy

2:19 Nassim Taleb on black swans and the unimaginable

2:48 these guys are not the least bit defensive (a joke!)

3:07 Andy Grove, here’s how we do strategy now: act like a firehouse

3:24 all that talk of agility is Andy’s firehouse

3:40 strategy is struggling…and we can help

SECTION 3

3:45 corporations and brands are in crisis

3:48 CPG brands especially, all the big brands are down, all of them are struggling to live in this new world

4:00 brands are struggling…and we can help

SECTION 4

4:07 culture to the rescue

this world of commotion gets simpler if you get culture

4:17 getting culture makes the world less “black swany” and less “suprisy”

4:47 we can do better than Andy’s fire house

4:2 culture is the professional competence of the culture creative

4:59 culture is our competitive opportunity

5:02 culture is our difference

5:03 we have always said our difference is creativity and it is but we can’t do great creativity without a connection to culture

creativity requires culture

5:12 creativity that’s not rooted in culture has this calorie-free quality. It’s not lasting, it’s not impactful. It doesnt really change the brand. It doesn’t really touch the consumer, and it doesn’t really resonate with the culture in place.

5:25 that’s when you know there a cycle here: you’ve drawn from culture buy you’ve created something so good, it’s so powerful, it actually contributes to culture

SECTION 5

5:40 culture is 3 things, meanings, rules and motions

6:20 the difference between Roger A and Roger B
(Roger is a dog, he doesn’t have culture. Roger B is a person, he does.)

7:10 Aspies and culture (making conversation in the elevator)

7:44 three purses, one is a Birkin bag worth $14,000

8:18 culture defines how we think about self and the meanings of gender, age, ethnicity, race, and our preoccupation these days with celebrity

8:24…and how we think about groups, style, entertainment and communications are all established by culture

SECTION 6

8:48 is there a Canadian advantage?
Yes, there is (possibly)
e.g., Michael Ennis, Malcolm Gladwell, Marshall McLuhan

SECTION 7:
the case of the artisanal trend

9:08 food after World War II

9:38 the rise of prepared food: Cheese Whiz!

10:02 the artisanal trend itemized

10:38 the artisanal trend created the CPG crisis, it took on prepared food and fast food

10:46 and big brands disrupted by the artisanal
Unilever, Nestle’s, Coca-Cola, P&G taken by surprise

SECTION 8:
How can we help our clients?

11:07 first step: we map culture

11:11 culture too often the latest hippest thing, the coastal stuff, the beltway stuff, the elite stuff

11:23 the recent error of Democratic party

11:46 we want breadth of coverage

11:50 we don’t want to only listen just to the coasts

12:00 second step: choose the meanings (on the map) that really work for the brand?

12:17 which meanings work for the consumer

12:28 third step: now we build an exquisite brand

12:35 fourth step: stage events in the world that create meanings for the world (culturematics: meanings in action)

13:05 fifth step: meanings in motion. we have to track meanings, we need to find metrics. the corporation runs on numbers, all numbers are made with numbers. and when we are asked for numbers we just say just trust us, your career will be fine, your kids will go to college, you can trust us, look how hip our glasses our

13:40 it’s no longer about “refreshing” the brand, we need to be able to show when we want the client to claim this meaning and when to exit the meaning

13:51 We are still inclined to step in, offer a big idea and then leave, as if to say “our work is done”

13:50 what we need to say is “this is when we want you to get into this cultural moment and this is when we want you to get out”

14:02 this is the stuff of an enduring connection with the client

14:27 culture is our competitive advantage, it’s time to see it clearly!

Resolved: that big companies are better at innovation than small ones

Resolved: that big companies are better at innovation than small ones

PRO

Schumpeter in the Economist reports new research on innovation and the corporation, specifically the work of Michael Mandel of the Progressive Policy Institute

Mandel proposed three explanations for the big corporation as an engine of innovation:

1. The best path to economic growth is the creation of a new product category or operating system. Only big companies, like Apple and Google, can create these. (Plus, small companies may or may not be able to live in the shade of these giant oaks.)

2. Big companies do better in global marketplaces.

3. Only large companies have the scale to address big problems, and many of our our current problems are big problems (education, health care, environment).

Schumpeter adds three more:

4. Big companies have the resources to find and afford the best talent.

5. Big companies are learning to be more porous and more nimble.

6. Big companies now come scaling up out of small ones at a ferocious pace. Some of them remember their origins. They get large without growing out of their smallness.

CON

As Schumpeter notes, conventional wisdom holds that large companies are too slow and clumsy to be creative, that small is beautiful.

Indeed this wisdom is so conventional we tend more to assume than prove it. I wish I could recite all the evidence that supports the CONTRA case.

The only thing I can report is that several people inside the corporate and consulting world have told me how deeply frustrated they are by the corporation’s inability to innovate.

Indeed, to judge from these unscientific results, this is now a critical moment in the history of the corporation. Some few years ago (less than a decade) the corporation decided that innovation was the thing and it devoted itself to centers, institutes, laboratories, skunk works and a range of strategies and tactics meant to deliver innovations out like a major leaguer firing sunflower shells round the dugout.

Many corporations are now on notice: innovation is much harder than it looks. Much, much harder despite vast amounts of money and managerial initiative.  

A truth is dawning:

that the corporation can sometimes act like a gravitation field from which new ideas and products cannot escape. Someone has great ideas. Entire teams can have great ideas. But the corporation itself acts like a dark star. It does not create alternatives to itself. It consumes them.

How we do innovation in the corporation must remain high on the todo list for 2012.