THE FOUNDATION FORUM
FRIDAY 14TH FEBRUARY 2014
This is a summary of an event we held in 2014. Held at One Alfred Place on 5th February, the evening's essay question was ‘Insight or Foresight – where does future success come from?’ The speakers were former BBC broadcaster Dominic Vallely (the man behind bringing the Apprentice to 10m viewers in the UK), Jaguar Land Rover Individual Products Division MD John Edwards (one of the men behind bringing the Range Rover Evoque to a quarter of a million drivers around the world), and National Lottery Marketing and Consumer Director Sally Cowdry (the woman who made the Dome a winner by creating the O2, now looking to repeat the feat for the nation’s good causes). The discussion has been summarised by Simon Caulkin, former Management Editor at the Observer.
‘Never make predictions, especially about the future,’ Samuel Goldwyn is supposed to have said – although since the saying, in slightly different forms, is also attributed to physicist Nils Bohr, Yogi Berra and the ever-present Albert Einstein, it’s apparently not so easy to make predictions in the past either. The government’s Foresight programme, set up in 1994, from hard experience eschews forecasts, sketching broad scenarios of technological trends instead. Let’s not forget that even hard-nosed venture capitalists, acting in a much shorter time frame, pick fewer winners than losers: in a portfolio of start-ups (or Hollywood films), the rule of thumb says that for every big-time hit there will be two or three that break even and at least six stone-cold misses.
Perhaps surprisingly (in hindsight), no-one at the Foundation’s lively February Forum – ‘Insight or Foresight: Where does Future Success Come From?’ - mentioned Big Data in this context. As a kind of high-powered mechanised insight, Big Data is very good at picking up short-term correlations between bits of the future that are already present, which is why short-term weather forecasting is so much better than it used to be (as the science fiction writer William Gibson put it, ‘the future is already here – it’s just unevenly distributed’). On the other hand, in non-linear systems subject to the butterfly-wing effect (such as business, politics and economics as well as the weather), the accuracy of the insight falls off rapidly – which is why, conversely, Goldwyn and co were right.
"It died on its arse because behaviour didn’t match the insight and research: when it’s in competition with feeding the kids or doing interesting things on the internet, who wants to watch cancer films and decide which charity to support on a wet Thursday evening?" Dominic Vallely, ex-BBC Broadcaster
So if, as Forum chairman Charlie Dawson neatly put it, the aim in business is to create the future before it happens to you, how do you treat these two impostors - insight and foresight - which can equally easily turn out to be either boringly and uselessly right or unexpectedly and disastrously wrong? All three speakers had entertaining examples. Ex-broadcaster Dominic Vallely, who brought The Apprentice to BBC screens before becoming a consultant and entrepreneur, left the BBC to set up a sure-fire world-beating tech start-up in the charity sector. ‘All the evidence was that success was guaranteed, it’s exactly what we want, great, £1bn here we come… In the event it died on its arse because behaviour didn’t match the insight and research: when it’s in competition with feeding the kids or doing interesting things on the internet, who wants to watch cancer films and decide which charity to support on a wet Thursday evening?’ On the other hand Vallely’s fart app, not exactly the product of high science, was a resounding (sorry) success (we’ll explain).
Take O2’s (again in hindsight) brilliant decision to take on and rebrand the unloved Millennium Dome. It came, says Sally Cowdry, then O2 Marketing Director, "out of no process at all, just out of being open to great ideas."
Again, Jaguar Land Rover’s chartbusting (not to say enterprise-saving) hit Evoque was born not of insight or foresight but of difficult times, admits John Edwards, Managing Director of JLR’s Individual Products Division. As a radically different concept car, the Evoque was not initially intended for production, an especially challenging idea for a cash-strapped company that was battling to survive the unprecedented market downturn, made more complicated by the sales from parent company Ford to Tata. In the event the Evoque garnered such an enthusiastic response at the 2008 Detroit Motor Show that the company put it into production almost unmodified, an unheard of step. The Evoque is now selling twice as fast as anticipated and JLR is enjoying a different kind of challenge in keeping up with demand. Or take O2’s (again in hindsight) brilliant decision to take on and rebrand the unloved Millennium Dome. It came, says Sally Cowdry, then O2 Marketing Director, ‘out of no process at all, just out of being open to great ideas’, which at the very beginning involved someone being willing to go to Caesar’s Palace in Las Vegas ‘to talk to a company that no one had ever heard of about this magnificent, huge plan.’ The result: a decision that paid off, continues to pay off, and has turned the O2 from laughing stock into reportedly the world’s most popular music venue.
So neither science (insight) nor intuition (foresight) can be guaranteed not to lead astray; and even in conjunction they aren’t foolproof.
For Cowdry, joining the dots – seeing emerging patterns that suggest a future opportunity – is a mixture of having rigorous processes in place (particularly when the core of the company is involved) and yet being able to recognise serendipity when it strikes
Something more elusive is needed as well – the ability, in Cowdry’s memorable phrase quickly seized on by the other speakers, to ‘join the dots’. For Cowdry, joining the dots – seeing emerging patterns that suggest a future opportunity – is a mixture of having rigorous processes in place (particularly when the core of the company is involved) and yet being able to recognise serendipity when it strikes. An example: O2 the brand came about when a researcher picked on someone saying their mobile was essential for life and they would rather leave home without their wallet and keys than without their phone. ‘They fed it back, it led to thinking about what else is essential for life, seeing O2 as an answer, and the brand was born.’ Edwards stressed the need for self-confidence and certain boldness in making these kinds of links. Thus JLR’s choice of Victoria Beckham to launch the Evoque was a high-stakes bet, which (temporarily) offended some of the more traditional customer base but perfectly embodied the insight that Land Rover could be as much at home in the jungle of the city as off road - that luxury didn’t have to be huge, and alpha-male values of strength and security could appeal to women too.
Oh yes, and the fart app. Vallely insists on the importance of thinking about people and their behaviours as much as abstract processes. The ‘wet Thursday evening test’ is one example. The fart app partly came from behavioural insight too. Vallely’s TheGivingLab, which helps charities innovate, was trying to find ways of encouraging young men, a notoriously reluctant audience, to take a bigger part in Red Nose Day last year. ‘Do you want to save kids in Africa? No, not that bothered. Do you care about Comic Relief? No, not really. Do you want to get the biggest fart in Britain? Yes, bingo!’ The result was a Smartphone app which made your mate’s phone fart in return for a contribution to Comic Relief, a fart that grew in its number of dimensions if you passed it on to more people. The app was downloaded 100,000 times on the day, mostly by young men (no surprise there then).
Profit is the reward for being different
A good means of differentiation is thinking about how to create delight in strange ways and places. The fart app illustrates a couple of other things. Vallely cites approvingly the dictum of LBS’s Jules Goddard that ‘profit is the reward for being different’. A good means of differentiation is thinking about how to create delight in strange ways and places. For young men, that was what the fart app did. In another setting entirely, a funeral director created out-of-the-ordinary pleasure of a more solemn kind by putting the ceremony online so that relatives on the other side of the world could say their goodbyes too. Victoria Beckham created an unexpected frisson for fans of both sexes when she launched the Evoque. These examples also demonstrate that being able to recognise and think the unthinkable is one thing; but when push comes to shove you have to act on it too. The unthinkable won’t delight everyone and may positively turn off some (Edwards describes Evoque as a ‘Marmite car’), which doesn’t make it easier. Although many people claim its parentage today, says Cowdry, at the time the decision to go with the O2 as a venue was very difficult indeed. Whole-hearted execution (which can effectively be driven by fear as well as animal spirits) is key.
Both insight and foresight, then, are useful but not sufficient. Don’t neglect hindsight either: the retrospective rationale for the success of an Evoque or a fart app becomes an insight feeding into the next round of innovation (do we want to know where that might lead come this year’s Red Nose Day…?). But that still leaves the joining of the dots as the heart of the creative process, one that distinguishes a great decision from a merely competent one. Despite the hyperbolic claims for Big Data, it’s hard to think that this will ever be completely automated, and thank goodness for that. Another Forum taught us that luck can never be ruled out of human affairs and often plays a much greater role in success than officially admitted. As Einstein (again) is supposed to have said, and if he didn’t he should have, ‘if we knew what we were doing, it wouldn’t be called research, would it?’
The Foundation's view
Three points made during the discussion stood out for us:
It’s not all about bold and cavalier risk-taking. At Camelot, any changes they make to their core product – The National Lottery – impact the extent they are able to support good causes.
In the world of innovation we know we need to accept risk inherent in applying insight or foresight. But we got a reminder of the responsibility of leaders to be diligent as well as inspired, and the techniques available to properly disentangle cause and effect that help them fulfil this duty.
The Evoque story involved a designer whose original vision became an uncorrupted production reality. But this is rare. How often do organisations take a great idea and kill it through the application of perfectly rational decisions and group-think? If it’s true that successful breakthrough often stems from the insight or foresight of a talented individual, then the role of the organisation must be to hire them and provide a culture in which they can thrive.This type of culture isn’t the norm in organisations. One reason for this is the set of KPIs used to define ‘work’, because power and control are built around them.
While governance is essential to delivering the organisation’s purpose, the people creating ‘Scorecards’ and the like also need to understand the unintended consequences and how they can encourage or make space for creativity.
It is this creativity that will ensure their organisation creates the future before it happens to them.
About The Foundation
We are a management consultancy working with all kinds of organisations to achieve customer-led success. This means tackling big organic growth challenges; growing faster, growing into new markets or fending off threats to growth by starting with what matters to customers and then making it work for the business as well.
The aim is to influence customer behaviour, but this is inherently tough. Why? Because people in any organisation naturally see the world from the inside-out, with colleagues close and customers distant, and lots of assumptions about how things work that aren't challenged.
We help clients look from the outside-in, re-connecting them with what customers really value (the problem they want to solve, not usually what the client sells), then finding new and better ways to create this value.
This means working both as expert advisors and facilitators. The issue with simply gathering outside-in information is that it lacks impact to get senior teams to tackle inconvenient truths in what customers want, and to believe their own organisation can be different.
By using ‘Immersion’, personal conversations with customers and leaders of organisations in other sectors who have tackled parts of their challenge, we help teams get around the natural and limiting inside-out beliefs that stand in their way. This helps them develop better answers for customers and new ways of achieving lasting success.
We answer three sizes of question:
Small – a new proposition or an improved customer experience
Medium-size – growing value per customer or improving retention (a sub-set of the former)
Large – creating customer-led business success, often by uncovering a true outward-looking purpose and the genuine belief needed for it to be acted on
Our clients include HSBC, JLR, O2, M&S and Ebay, with achievements including helping create Plan A at M&S, adding £100m of value to a Travelex travel money proposition, and giving Morrisons a competitive direction contributing to their return to growth.
Behind our work our most distinctive characteristic is our team and their outlook. Each individual is motivated to and experienced in crossing the border between the worlds of customers and business which often resist mixing well.
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