From Apple to Obama, what are the secrets of the next business generation? How do they bring together all the "cool new stuff" to shape markets and engage people in new ways? Leadership is no longer about being the biggest but the best. Connecting the new approaches of design and sustainability, co-creation and social networking, virtual and physical, to survive and thrive in a fast and connected, fragile and human world ...
The disruptive impact of digital technologies has created a seismic shift in the world's markets, accelerated by the effect of economic crisis. Power has shifted from West to East (the E7 nations will grow at around 5.5% this year compared to 1.2% for the G7), from big companies to small (who have more agility to change faster), from mass markets to niches (people are more different, profit pools are not even), and from business to customers (who now have the knowledge and access to demand that companies work on their terms).
The old market models favoured scale. The bigger the better, the highest market shares delivered the most profits. GM proved that was no longer the case. Biggest is no longer best. The new market models favour difference. The smarter the better, the more relevant and distinctive brands win out, engaging people through collaboration, growing through avocacy, and sustaining a premium through participation. The new value equation.
- Customers : from passive audiences to active participants
- Innovation : from scientific development to creative collaboration
- Brands : from abstract logos to inspiring purposes
- Products : from average packages to enabling applications
- Price : from value-based pricing to a participation premium
- Promotion : from interuptive advertising to engaging storytelling
- Place : from distribution channels to networked partnerships
- Relationships : from loyalty to brands to loyalty to each other
Customers have lost confidence in business. Trust is at an all time low, and loyalty is incredibly rare. They have new attitudes and behaviours, priorities and power. Brands need to engage people in new ways, more responsible and collaborative, unlocking the power of ideas and networks. Business is no longer about products and transactions, it's about participation and enablement. Enabling people to do what they could never do before.
Market leadership is no longer about scale and dominance, but about purpose and relevance. It crosses markets and sectors, and is achieved through collaborative insight, thoughtful creativity, and inspired participation. It is about ideas and influence, and value is created through innovation and relationships. They set the bar higher, redefining customer expectatons, technological possibilities, and the business world.
Who are the new market leaders?
1. Air Asia : It symbolises the new entrepreneurial spirit of south-east Asia. CK Pralahad describes the “bottom of the pyramid” as a $5 trillion opportunity. In 2001 Tony Fernandez promptly cashed in his AOL stock options and bought the Kuala Lumpar-based airline. Today it is one of the world’s fastest growing and most profitable airlines, connecting the bustling capitals of the region. Air Asia succeeds by targeting some of the most populous markets in the world with a low-cost business model that also delivering service to match that of nearby Singapore Airlines. In 2008 it became the first long-haul low-cost airline, and Richard Branson was so impressed he took a 20% stake.
2. Apple : In January 2010 Jobs walked on stage with the world holding its breath, again. The iPad seeks to revolutionise publishing like the iPod did music. It follows a well rehearsed script. In recent years Apple has turned the smartphone from a business badge into a cool tool for everyone with more than 13 million iPhones were sold in the first 15 months. Similarly, with the superthin Air, the new unibody aluminum MacBook, it continues to prove that it delivers a lust-worthy design aesthetic that has competitors playing catch-up. Despite challenges from all comers, iTunes remains the dominant player in the only growing part of the music business: digital downloads.
3. Live Nation : The music industry was stunned. Madonna had just signed a ground-breaking $120 million recording and touring contract over ten years with Live Nation, ending her 25-year relationship with Warner Music. She became the founding recording artist for the new music division Live Nation Artists. Live Nation's mission is to maximize the live concert experience. Its core business is producing, marketing and selling live concerts. The Los Angeles-based company is already the largest producer of live concerts in the world, annually with16,000 concerts for 1,500 artists in 57 countries. It sells over 45 million concert tickets a year and expects to drive over 60 million unique visitors to LiveNation.com in 2008. Whilst Live Nation is a concert promoter, it signs up exclusive partnerships with artists in the same way that they would have signed to record labels in the past, but taking on the role of promoter, rather than "owner of music". This is because, like in every creative industry, the business model has changed - there is now far more money to be made out of live events, sponsorships and merchandising, than there is to be out of selling music.
4. Nintendo : “Leave luck to Heaven” is the English translation of Nintendo. The keiretsu’s first idea was handmade hanfuda cards, followed by a taxi service and love hotel. Eventually, this evolved into playing cards and today a $85 billion video game company like no other. From the double-screen, hand-held Nintendo DS to the all-conquering collaborative action of the Nintendo Wii, the Kyoto innovator continues to reshape its industry. However it is not just about electronics, but about the aesthetics of design and human interaction that sets Nintendo apart. Japanese culture Shibui means unobtrusive beauty. Wabi sabi is the reflection of inner perfection and simplicity.
5. Obama : The 2008 US Presidential elections is one of the best examples of the power of crowdsourced activism. From relative obscurity, Obama rose in popularity through his novel use of network technologies. His fundraising did not rely upon large cheques from elite dinners, but much smaller sums for many thousands of normal people. With the help of social networks his campaign fund rose to $122 million, compared to McCain's $27.7 million. His messages reached people every morning by emails and SMS messages, instant and direct, rather than relying on reported broadcasting. And his supporters were able to actively engage in debate, and two-way dialogue, rallying around the simple themes of “hope” and “change”.
6. Samsung : The Korean electronics business is guided by a vision to lead the digital convergence movement. “We believe that through technology innovation today, we will find the solutions we need to address the challenges of tomorrow. From technology comes opportunity—for businesses to grow, for citizens in emerging markets to prosper by tapping into the digital economy and for people to invent new possibilities” said the company’s enigmatic chairman, Kun-Hee Lee. “It’s our aim to develop innovative technologies and efficient processes that create new markets, enrich people’s lives and continue to make Samsung a trusted market leader. Everything we do at Samsung is guided by our mission - to be the best digital e-company”. Out of a small export business in Taegu, South Korea, Samsung has grown to become one of the world’s leading electonics companies, specialising in digital appliances and media, semiconductors, memory and system integration.
7. Tesla : The advertising copy begins “Zero Emissions Equals Zero Guilt”. You can add to this, and say that driving the fastest, coolest, most hyped sports car in California, also equals zero guilt. Tesla Motors is a small Silicon Valley based manufacturer of high performance electric cars - named after the Serbian physicist Nikola Tesla who invented the AC induction motor. The company has around 1000 workers producing around 25 battery-powered sports cars per week, mostly customised vehicles designed to individual owners' specifications. Tesla was founded in 2003 by Martin Eberhard and Marc Tarpenning with a mission to “design and sell high performance, super efficient electric cars. Tesla Motors cars join style, acceleration, and handling with advanced technologies that make them the quickest and the most energy-efficient cars on the planet”.
8. Threadless : Nude no more, is the off-beat slogan of user generated entrepreneurs Jake Nickell and Jacob DeHart who started Threadless by entering an online t-shirt design competition, encouraging wild and personal designs which fellow entrants then voted on to find the winners. Soon the two friends from Chicago were thinking this is how all t-shirts should be made. In 2000, with $1000 start-up money, they developed an online store, threadless.com, which became an instant hit with with online designers and everyone else who was bored with the limit ranges of t-shirts they could buy in most stores. T-shirts are an expression of yourself, people judge you by them, and they could be an artform too. Their business model focused on online networks, user-generated design and voting, low-cost production and high margins. The designs came free, except for a small number of incentive cash prizes each month, the shirts cost $4 to make, and because they were distinctive, sold for $15 or more.
9. Virgin Galactic : Richard Branson’s Virgin Group needs little introduction – from his early pioneering music business he leapt into the aviation world without any idea about running airlines. But quickly found people to help. Championing the customer, challenging existing markets, became a Virgin speciality – and succeeded in everything from finance to cosmetics, mobile phones and TV. What is there left to do, mused Branson to first side-kick. “Go to space” replied Will Whitehorn, who set about building Spaceport America, testing SpaceShipOne,. With the help of rocket scientist Burt Rutan, Virgin is launching space travel for the masses, at a fraction of the cost, and carbon emissions, of NASA.
10. Zipcars : Becoming a “zipster” is easy, register your details online with a membership fee of $50 a year, and then whenever you need a car – for 20 minutes or a month – just spot a Z-space, zap the door with your phone, turn the key, and off you go. From San Francisco to Berlin you will find Zipcars positioned around the streets, located by GPS on your phone, waiting to be driven. Richard Branson’s Virgin Group needs little introduction – from his early pioneering music business he leapt into the aviation world without any idea about running airlines. But quickly found people to help. Championing the customer, challenging existing markets, became a Virgin speciality – and succeeded in everything from finance to cosmetics, mobile phones and TV.
Becoming a new market leader
New market leaders have a number of common and defining features. It is not the fact that each of these exists, for example that they use social networks, but how they use them together ... for example how they use social networks to engage people better through collaboration in a way that drives innovation that also addresses relevant social and environmental issues.
1. Iconic. They stand out from the crowd, often with particular relevance to a niche rather than trying to be everything to everyone. They are symbols of the times, capturing the zeitgeist through contextual relevance, telling stories that engage people in the issues and opportunities that mean most to them. They reflect people's aspirations rather than just needs, they go beyond simple differentiation. Reflect on the essence of Apple, inspiring people beyond functional needs, or the power of Obama's campaign to give people new hope.
2. Collaborative. They work with their customers to co-create solutions that are more relevant and needed. This goes beyond products and services to solve real problems, in more practical and specific ways. They add related content, for example in terms of how to use it, or to optimise the outputs of it. Much of this content is user-generated, so has much lower costs, and is more trusted. Consider Threadless t-shirts designed and voted for by customers, or Current TV's user-generated satellite and cable station, the most profitable channel in the world.
3. Designed. They bring together function and form in a way that ensures that products and services are more human and intuitive, aesthetic and beautiful. They embrace the unmet needs of their audiences, and harness technology to enable more. They embrace simplicity in a world of ever greater complexity, finding ways to make both their use, and their broader applications simpler but not simplistic. Think Nintendo Wii, playing with all the family, or Shanghai Tang, the fusion of exotic and contemporary design.
4. Responsible. They are more considered in how they work. They embrace social and environmental issues, not just out of compliance, but as an opportunity to innovate in new ways. They address the paradoxes in products, the trade-offs that customers are often forced to make, and seek a new way. They understand that doing good and making money do not have to be competing forces, both in profit and non-profit situations. Look to Aravind Eye Care which has transformed sight across India, or Tesla where green doesn't mean compromise.
5. Networked. They work in partnership with many other companies, of suppliers and distributors, coproducers and codistributors. They recognise that a business doesnt have to do everything itself, and can be largely virtual, building an ecosystem of mutual value. They recognise that they do not have to be subserviant to old capabilities, and instead should follow the opportunities, where the best ideas are what matter, and partners help make them happen. Look at Li and Fung, the ultimate business facilitators, or Alibaba's business ecosystem.
6. Human. They dont forget that business is ultimately about people. In a world of virtual technologies and online collaboration, its easy to forget people - the power of intuition, the strength of relationships, and the value of ideas. The best online companies are more physical, the physical companies are virtual. All become hybrids. But above all this is a business purpose, to make life better for people, in their particular way. They succeed through warmth, humour and empathy. Indulge in the wellbeing of Aveda, or smile with Pixar.
7. Agile. They have the ability to continually change. They are flexible and fleet of foot, mentally and physically able to seize new opportunities faster than others. They reflect the dynamic action of the high-speed Asian markets, and the impatience of youth. They can make decisions without all the protocols of traditional hierarchy, and can turn ideas into action with the speed of entrepreneurship. Small businesses have a natural advantage, which means big companies have to work even harder at their fitness and flexibility, personal and collective wellbeing. Live Nation capture the power of the moment, Zipcars are there when/whereever you need them.
More about the new market leaders
Peter Fisk is a bestselling author, inspiring speaker and experienced business leader and consultant. He is founder of the GeniusWorks, an accelerated innovation business that offers a wide range of consulting, workshops and training in strategy, innovation and marketing.
Having trained as a nuclear physicist, he worked with British Airways and Coca Cola, Microsoft and Virgin. He became the CEO of the Chartered Institute of Marketing, the world's largest marketing organisation, and a business entrepreneur. His books include
- Marketing Genius on the "left and right-brain" of brands and marketing success
- Customer Genius on doing business on customers' terms, from the "outside in"
- Business Genius on the "yin yang" of leadership and strategy in turbulent times
- Creative Genius on innovation from the "future back", inspired by Leonardo da Vinci
- People Planet Profit on embracing sustainability for innovation and profitable growth
To explore more about Peter Fisk and the GeniusWorks - to read latest insights and ideas on his blog, watch videos of recent events, download free articles and presentations, book him as a keynote speaker, engage him for consulting projects - visit the GeniusWorks website, or contact him at peterfisk@peterfisk.com
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