What’s the key to adopting the kind of marketing innovation that is necessary in today’s environment? According to a new report from Forrester Research, it boils down to one thing: a culture of innovation.
The report, “Culture is Key to Marketing Innovation Velocity,” said that creating an innovation-driven marketing culture is “the hardest challenge,” but it is necessary in order to “build a marketing innovation foundation and culture that emphasize a post-digital mindset” and reward innovation. Traditional marketing channels, tools and strategies, the report noted, are becoming less and less effective.
Digital Innovators: Nestle, 7-Eleven, Chick fil-A
Innovation, by definition, takes many forms. The report points to Nestle’s recruiting and development of digital leaders, 7-Eleven’s creation of a business innovation team that was outside its core group, and Chick fil-A’s broad roll out of Daddy-Daughter Date Night that began at a single store.
Behind these program examples, Forrester said, was an attitude toward marketing innovation that can “unlock discontinuous or disruptive marketing programs.” Digital leads the innovation culture, such as with digital labs that are designed to provide spaces for experimentation and for leveraging data. But digital efforts have to be integrated with physical traditional marketing that can magnify progress with point-of-purchase displays, sold-out events or non-digital media buzz.
The report found that the most consistent predictor of marketing innovation success was a “strong cultural bias toward innovation,” from the executive level down. To get there, Forrester recommends that Chief Marketing Officers demonstrate the tangible value to the company of marketing innovation investments, such as new brand relationships and new markets.
Executive teams must also be cultivated, with innovation an established part of budgets. The report cited Coca-Cola’s Liquid & Linked marketing budget strategy of 70-20-10, where 70 percent of the budget is on low-risk marketing programs, 20 percent on emerging marketing trends that are just beginning to gain traction, and 10 percent on next generation, completely untested ideas.
Four Innovation Cultures
The report also points to strategic hiring decisions in support of innovation, by focusing on attitudes toward innovation among new hires as well as on technical and other skills.
As context, Forrester noted the four kinds of innovation culture:
- Risk-averse ones that innovate only when forced, such as those with command-and-control structures in financial services, utilities, government services or healthcare.
- Pragmatists that innovate on occasion, but the innovation is focused on the product or service and not new ways to market. These companies, typically in such sectors as consumer product goods or durables, will only move forward if ROI is proven before execution and if the program in question has been thoroughly vetted.
- Experimenters who innovate rapidly but don’t follow up with a long-term strategy. This culture often occurs within large multi-brand organizations, and innovation typically occurs within rogue groups.
- Customer-oriented cultures that are “post-digital by nature,” accelerating to where customers are going rather than where they are now. These are often organizations that are primarily digital or became digitally-oriented through “exceptional leadership.”
The report recommends companies recognize that innovations bubble up rather than fall downward, that they set “big audacious” goals for the entire organization and that they hire digital practitioners who are also great at communicating.
In this report, Forrester tackles the problem of making innovation part of a company’s DNA. Interestingly, though, the report often points to customer-oriented cultures as being among the most innovative, suggesting that focusing on the customer, rather than quick responses, experimentation or digital techniques, is the long-lasting characteristic of innovation cultures.
~ Curated by TME, World of Marketing, May 21, 2013