Innovation Strategy in media – Strategy Planning. Trends to watch.
View from the Top: Arcus Innovation Leaders Series. How business leaders use innovative approaches to shape their strategy plans. An interview with Mr. Roger Dunbar, VP Digital Media & Business Development at The Globe and Mail. Mr. Dunbar says that innovation is not ideation. What you need is a structure wrapped around everything so that organizations can actually implement those ideas. When there’s no structured process, things can get frustrating, ideas get lost, good people leave.
Read the Arcus Innovation Leaders Report.
What does it take to innovate? Arcus Consulting Group has launched a major initiative to explore growth and innovation as key elements of corporate and business unit strategy. A majority of executives say it involves a pervasive corporate culture, deeper customer insight and a comprehensive strategy that will enable an organization to offer its customers important added value. They say such steps reduce costs, increase sales and achieve higher earnings. But how does one come up with new solutions, and can innovation really be part of a strategy plan? Arcus’ multi-industry survey of senior executives found that of all the challenges companies face in this area, the biggest challenge is finding ways to create a “culture of innovation”.
Arcus research indicates doing so means that you need to be surrounded by highly talented people. It also means finding a way to transmit your passion to them, so they will buy into your vision of the future, perform at the highest possible levels, and come up with innovative solutions to the challenges of achieving the vision. No surprise, then, that the topic of innovation has been gaining ground as CEOs seek to incorporate concepts like a “culture of innovation” into their assessments of a company’s long-term value.
Arcus: Is innovation something that you think we are good at, or what kind of challenges do you think Canada faces?
Mr. Dunbar: I think relatively speaking, Canada is quite innovative in general, but given the size of the population, the relative size to a country like the United States, we have seen innovation in particular categories be more successful than others. So I think health sciences, for example, has seen a great deal of innovation, whether it’s the Bay Crest Hospital and their research into Alzheimer’s or into memory and aging.
I think they’re very much world class in terms of their advancements in their area of focus. In the same way, Princess Margaret and others are world-class in terms of their innovation in areas like cancer research or in other categories of health. So I think that is a good example of where Canadians are in the lead or very much a part of the leading development of treatment, cures, etc. I think some of the other areas where we probably are leading-edge, is in areas like culture – not necessarily the mainstream or in terms of maybe film or other more popular types of entertainment – as well as in dance and in theatre.
I think we are very innovative in terms of how we approach the creation of works of art. I don’t know whether the country is more left-brained or right-brained, but mathematics, engineering, chemistry and some of the physics, are some of the various areas we are very strong in. I think Canada is absolutely a very innovative country overall, certainly relatively speaking, and we have developed specialties in certain areas. Perhaps not as high-profile; we’re not leaders in pop culture, that’s the United States, but perhaps some things that are a little more math-oriented. We absolutely have a lot of capable, bright people in this country, making a lot of great things.
Arcus: So Culture and healthcare would be two separate areas. Healthcare and technology seem to be at the top of your list. Culture is quite unique. Marketing and technology for the media are also prominent.
Mr. Dunbar: Sure. I think this is an area is where having a very large audience is beneficial, unlike healthcare, physics or the other areas of possible innovations. There isn’t a lot of innovation in Canadian media, in my opinion, because the audience isn’t there, and when there is a lack of audience like this, it’s very hard to find the resources necessary to drive innovation and investment.
Arcus: Would you say scale is an issue?
MR. DUNBAR: Scale is certainly an issue, especially in our particular space. You need the ability to, let’s say, develop a website, or a mobile offering. If I have ten times the audience, I can capitalize that investment over a much larger population. So to build a great website is half a million dollars or a million dollars. If I’ve got an audience ten times that size and I’m able to capitalize it over that audience, then that initial production investment isn’t so daunting – if I’ve got a tenth of that, to capitalize on…
We tend to follow, rather than lead. We tend to adapt or adopt quickly, but that’s why Canada is not creating popular entertainment like television shows, movies or great website experiences. It’s just difficult for us. The opportunity to drive an ROI just isn’t there so we look to the government, and in a lot of cases, CBC, etc. There is also a limited amount of funding and not a large enough appetite – particularly if it’s concerned with government – to invest in culture and entertainment on a mass level. So I think we’re all struggling.
If you look at CTV, Global and CBC who are purchasing a lot of productions out of the US, when what we call ‘conventional television’ is becoming less and less lucrative, where do you go? You don’t have the ability to create a lot of home grown productions or a lot of content that will generate much interest.
Q: Isn’t it a North American market where Canadian content can be marketed in the US?
Mr. Dunbar: Yeah but it’s still a rarity, because it’s not a slam-dunk. If you’re looking at investors to help contribute, it is a million dollars per episode to create a television show which has the production quality or value that you would find in the US. It’s just not there. It’s a couple hundred thousand that gets invested, and it doesn’t stand up to North American quality standards. There are some exceptions; some things have worked, but there really is no consistent track record of our ability to produce mass entertainment product or content that works.
Q: Anything else around the digital space? I notice you worked at Disney.
Mr. Dunbar: I worked at Disney at a great time. I was in the theme park division in Florida. The demographics were extremely favourable; the baby boom kids were of that age where going to Disney was a rite of passage, so we had a tremendous amount of capital. We built new parks, probably three or four new ones while I was there, a billion dollars apiece. We certainly built dozens of new attractions, at anywhere from 50 to 150 million, but again you need scale and you need audience. In any given year, you’re looking at 50 million park visits. You need that kind of scale to be able to invest in those kinds of experiences and/or attractions. Disney was able to pull it off; it was a great time to be there, to work with the Imaginarium Group and see the kind of process which drove the innovation.
Q: Do you think the value chain of innovation needs to be at the front end or the back end of the scale?
Mr. Dunbar: I get that you’re asking “what drives innovation”. I think there are different pieces to it. There’s no shortage to ideas in Canada whether they be ideas on how to create new product or film, or whatever. The idea is really just the first piece of that. Let me back up again to the Disney days.
We would sit down and we would identify an opportunity and say “we need a new theme park in California, we have now acquired enough land to build a second park, and we know that, given the traffic we get, we can make this profitable.” So the Imaginarium Group would sit down and generate the ideas.
Let me step back even further, for a moment. We would define the space in which we wanted the idea to be generated, and I think that’s an important part of the process. So when I worked at J. Walter Thompson, that idea provided a brief to the creative team, which says “you can come up with all sorts of ideas, but we need you to come up with ideas that fit this particular strategy or fills this need.”
I think that’s an important part of the innovation process which, more often than not, requires that a little bit of structure around the idea of exercise actually be necessary for a creative person to operate within. There needs to be some structure; a book has a certain structure, a play has a certain structure, coming up with a theme park has a certain structure to it. I think that structure needs to take place.
Canadians are as good at that as anyone, and in the ideation station we come up with ideas as strong as anyone. What happens at Disney is, you would go through a business filter where by you’d say it’s going to be two billion dollars to build your idea. Suddenly it would become “we can’t afford two billion dollars, now start to scale it back”. If you start to scale it back too much, the idea, what you would call the innovation, can get lost. We refer to that as “don’t kill the baby before it’s born”. Allow that process to happen, but the moment you start to lose the core concept, someone would draw a line in the sand and say “we’re just not going to do this anymore” or “We’re going to find more money to do it.”
At that point I think Canada suffers. If the funds are not there, you cut back so much, you end up hiring not quite the talent you wanted, you cut back on production values, on filming two takes instead of three, etc. All of those things have implications on the ability to express the basic idea. In those cases where you have to cut back so much, you end up killing the baby. We then either step away and don’t bother at all or we end up doing it in a way that’s not particularly attractive to the market. I think there are some exceptions to that, where we find the funding to do the things that we need to do, and continue that good work, and obviously health sciences and some other areas are areas where it can happen.
Also, in the case of RIM, clearly they borrowed some intellectual property that existed elsewhere but they were able to not have to face a time where the product was diminished or it wasn’t viable, it caught on. So there are always exceptions, but in order to create more innovation, more consistent innovation, you have to be well-resourced.
Q: Obviously the resource problem isn’t going to change, but in your industry and your area of work, what would you like to see happen?
Mr. Dunbar: I think it’s about being focused, and what we are best at. Let’s not worry about all the other peripheral content areas. We’re great at news and maybe a couple of other areas of content, but let’s be ‘truly great’ where we can be great. We’re journalists and that’s what this brand is all about; we’re focused on news and journalism, in a way that tries to focus on issues that will help make Canada, Ontario or Toronto a better place to live.
As long as we stay focused on our mission and what we do well – either online or through mobile or any content platform – we’ll make sure we do a good job of delivering on that technology. We don’t have to be leading edge; we’re not here to be leading edge on technology, we’re here to be leading edge from a journalistic standpoint, and be better than anyone else and therefore have our content be more valuable.
Q: There are two parts, there’s content and how you deliver that content. Could you comment on how change and innovation is driving both these areas? It seems the way content is collected and disseminated is changing.
Mr. Dunbar: With respect to news, for example, citizen journalism is something that’s real, and there are a lot of very competent people out there in terms of people, their ability to write, photograph or video record events that are happening around them.
We are looking at leveraging the technology that will allow us to sign up members, who, as they are out and about, covering all regions of the country, will be able to share with us video, images or text of what’s going on, what breaking news is happening in their area.
So, let’s say with the panel protest on the expressway last night, we wouldn’t necessarily have to send reporters there – it might even be difficult just to get there – instead we’d have two or three people stranded in cars, who are part of our community, who could feed us images and recordings because they are on-site. So you effectively expand your ability to cover issues in a real-time kind of way. Instead of every six hours, you can update it every fifteen minutes, rather than having resources tied up there for six or eight hours. So clearly our ability to deliver more news, more timely news, more relevant news, expands by using that technology. For us, the idea of community is really important.
Q: How do you manage the migration of access to news over the internet?
Mr. Dunbar: You have to puzzle through what you think each medium does best. The web, in our minds, is a bit of both extremes: it’s great for quick breaking news, leveraging community and citizen journalism as well as your own journalists to get that image, get that headline, etc.
It helps them get that short paragraph that says “this is what’s going on” and update it on a regular basis. The web also allows you the ability to link to other content, to provide a deep experience in a particular sliver of content if somebody is interested in it. You can go from Stephen Harper in Afghanistan to the whole history of Stephen Harper, who he is, where he came from, every vote, caucus, whatever.
You can provide all that depth, whereas the print product is sort of a snapshot in time; it attempts to settle somewhere in the middle; it’s an edited content piece that shows everything we think you should know.
Q: How are people consuming the news in different ways now? What are the mega-trends that will change the face of news?
Mr. Dunbar: Yes. Just a quick comment on the struggles of the industry: much of it is just poor leadership or management. They take on far too much debt, too many assets to be of service. If you look at the Globe for example, we have a larger audience than we’ve ever had before, between print and online.
A recent survey claimed that about four and a half million Canadians, in any given month, would come to the Globe either online or on paper. The challenge is that really, how do you monetize that? So really the organization can’t keep up. It’s entrenched in old revenue models and can’t wrap its head around how to deal with the content it’s creating and how to generate revenue from it.
So to me, it’s a business management issue more than an audience issue. That’s where innovation exists in our organization; the right skill set is in the right places, and it’s then structured to be able to allow innovation to take place. If I look at earth shocks, when you have people who aren’t clear what their roles are when the ground shifts underneath them – or there is no one directly accountable for different pieces – you’ll have an organization full of people who have ideas and think they know what needs to be done but have no means to execute them.
Everyone thinks of innovation as ideation, and it’s not. This place, this building, is full of ideas. If I went around and asked everybody for their ideas and compiled them, we would have thousands. What you need is a structure wrapped around everything so that we can actually implement those ideas. When there’s no structured process, things can get frustrating, ideas get lost, good people leave – it just doesn’t feel good.
That’s where Disney did such a brilliant job of clarifying who did what and who was responsible for what.
I’ve not yet been in an organization that didn’t have a ton of ideas, but I’ve been in many organizations which weren’t resourced or structured properly to make those ideas happen.
Q: What would be the biggest things happening in your industry?
Mr. Dunbar: I would say the external challenges and the pressure the external challenges are putting on the structures. But the external challenges…once you digitalize content, you can unbundle it. We’re used to delivering a newspaper – a bundle of content spread throughout different categories that we control. People are saying, “Hell with that, I want to know this, this, and this, and if you don’t want to tell me then I’m going to go elsewhere because I can do that easily enough.”
So it’s the ability to unbundle that content, wrap our heads around what it all means, put it in the mobile space, put it on Facebook, and put it on our own website or somebody’s website. Finally, it’s then how you use the content to attract people where you’d like them to be and how you can then monetize it all.
Q: Would you say news has become a commodity?
Mr. Dunbar: Well, I think poor quality news, yes, is commoditized. The story of Obama and Dijon mustard, everyone’s heard of it but, there are a lot of questions and issues around that which I’d be interested in knowing – “Why does he like Dijon mustard?”, “When did he first have Dijon mustard?”, “Does he just put it on his hamburger or does he put it on his hot dog too?” – All those questions are what I think people would still like to know.
So I think if you can be creative about it, as opposed to reactive, then you can still add a lot of value. I think also that the challenge of unbundling of content and what not, and the choices from a distribution standpoint are just multiplying. You never would have thought, five years ago, that we’d be sharing the content that we create, with Yahoo! or Sympatico – or putting it in different portals, different places, such as Facebook, Linked In, just making it mobile into outdoor sort of digital spaces. For me, it’s a matter of how you cut the content, how you fragment it, how you unbundle it, where you put it and how you monetize it. Those are the big issues for us today.
Q: Would you say it is about re-packaging and then delivering it to channels where people are consuming information differently. Is it getting fragmented, and does mobile have a role?
Mr. Dunbar: Well, it’s become very situational. For example, when I get up in the morning, I like to read the paper while I’m having a bowl of cereal.
Why? Because I can sit in front of the computer, but if I spill my milk on the keyboard I probably am not doing a good thing. Then when I’m at work, I’m right here in front of my desktop. If I’m in an airport, I might be on mobile because I don’t want to pull my laptop out and go through all that hassle. E-readers are interesting if say, I just want to lie back on a couch and read; otherwise I’m going to read a book. I don’t want to pull my laptop over and hold it up while I’m lying down on the couch. I think an understanding of how consumers behave is critical.
It’s really driven by the context of where a person is and how they’re consuming news. I’m not going to take my laptop into the bathroom. I might take my newspaper or a magazine, or even the radio. There’s a place for all media, but you have to really think it through – that’s where consumer insight is so critical, that’s where most real insight ideation comes from; understanding some really good nuggets of behavioral information and attitudes.
Q: What other trends are driving your industry?
Mr. Dunbar: I think there are some disruptive business models, because printing and distributing newspapers – it’s not cheap, and you have to have a huge infrastructure to do it. You don’t need that today – you just put it on a website. I could charge nothing for it and give it away. So I think those kind of free business models are pretty disruptive, and they scare us – Craigslist killed classified advertising in newspapers in the US, and they weren’t prepared, didn’t see it coming, and they didn’t think “How can we add more value here to bring people in?” Somebody picked up their ball, took it away and now they’re left standing in the schoolyard wondering “Hold it, where did my ball go?”
Q: Would you say the second big insight is around the streams of revenue, how they’re being defined? Because the source of revenue used to come in a certain way, like the classifieds revenue was a stream that dramatically changed. Is that a fair comment?
Mr. Dunbar: Absolutely. There is a business reality here. You have to think these things through and ideation isn’t just coming up with a great idea for a commercial, a show…they aren’t brainstorming around how to destroy cancer cells; there’s a discipline behind it. That’s the piece I think we haven’t been particularly good at. So it’s all about consumer insight. The deeper understanding you have of the behavioral aspect, the more likely you are to really control how things are changing, because if there was a big insight around how a crisis could change the face of classified advertising, some media companies may have redefined the way they approach classified advertising.
Could you share some example that stem from deeper behavioral insights related to product, media and advertising?
Mr. Dunbar: Yes, the Flip camera. It’s a digital camera, and they now have an HD version of it which retails for about $230 US. It’s the size of a cell phone, basically, and the quality of the video is great.
To me this is a great insight, since as a parent with two kids I would love to be able to take a lot of videos. I don’t need to be Spielberg, don’t need to have a thousand-dollar piece of equipment, but I can point this thing at my kids, take a video, hook it up to my new TV with the port, or I can upload it to Facebook as quickly as I want. To me, simplicity is the main thing here.
It addresses the need that people like me have to just take quick videos, capture moments and memories, that I can compile later. If I want to be fancy I can use other software to do it; it allows me to take just an hour to solve a whole bunch of problems; it’s dead simple. To me this is very reflective of the idea behind the iPhone, the iPod, all of that. It’s a great example of how to take smart technology and make it simple for people, which I think is a beauty. It drives me crazy when I see things being ridiculously complicated to use; I finally asked for Christmas this year, for a digital alarm clock that I didn’t need an Engineering degree to program!
This is where I think that with technology people sometimes get carried away. It felt great, but this is a single-minded sort of device, very clean, very simple, and I love it. To me, it’s emblematic, symbolic of a lot of things. The other ideas that I like – it’s quite established in Europe as a model – are the experience companies. What they do is aggregate experiences, so it could be bungee jumping, riding in a helicopter, all of those things into the themes.
Smart Box is a company that does it very smartly. Another company in Canada that we’re actually running some ads in our paper for a product called Pompede. They aggregate all of these experiences like Action, Adventure, Spa, Rejuvenate and others. So, to me, I’m sure it’s going to take a while to establish itself in Canada, but it’s a smart way to go because the gift-giver has enough variety to work with.
I bought one for my wife and even though I didn’t know which spa she wanted to go to, I’m a hero. You see, I give her a pack that has fifty different choices in it, so I don’t have to worry about whether I got it right or not since there’s enough choice there. I know one of them has got to be good, and she thinks I’m a genius. Really though, I was just lazy. To me that is another example, from a pure consumer/product standpoint, of something really smart.
Q: You talked about the process being critical, you also said people need to be at the heart of the innovation process, and you talked about resourcing, essentially a challenge around the scalability of ideas, and how that’s the reason why Canada has some pockets of innovation around culture and healthcare; scaling up ideas is really driven by the size of a market.
Mr. Dunbar: Leaders have just got to lead; they’ve got to say, “Okay, we’re going to play in this space, not that one. We’re going be focused here, not there.” They have to make the choices that define where their organization is going to play. Then they have to make sure the process is in place and clarity of roles.
They’ve got to be the guys to lead, and then get out of the way of the actual innovation, ideation and all those things. They also have to make sure the resources are there in order to help teams deliver. I think that’s where most CEOs fail; they don’t appreciate the importance of defining focus, defining and setting the right circumstances. That’s their job. If you’ve got a CEO who thinks he’s going to be the innovator, then he probably shouldn’t be the CEO.
For more information, please contact Arcus Consulting Group – (416) 335-8000 or online.