One of my favourite aphorisms right now is this illuminating quote from the DesignNotes blog:
How to Drive in Life: It’s like F1 -the best drivers brake later and accelerate earlier.
I think this analogy speaks volumes about the current economic state of the business world and the type of mindset required to innovate with design solutions relevant to an increasingly competitive and digitally-oriented marketplace.
The ultra fast sport of Formula One racing can show us the way forward.
F1 is driven by constant technological change, human creativity, and a relentless pursuit of speed and efficiency through a blend of design, engineering, and team-oriented collaboration. It is a sport where the difference between 1st place and 3rd place can be as little as 9/100 of a second (90 milliseconds); where teams must invest heavily in [aerodynamic design] research and [engine] development to gain the strategic performance edge over the competition.
Innovation -or more precisely, a team’s and driver’s ability to manage changing circumstances, to a large extent determines the overall probability for success (i.e. the number of points scored, pole positions, and podium finishes). Changing track conditions (e.g. temperature, humidity) and mechanical variables can significantly impact engine dynamics and tire selection -ultimately determining the fuel and pit-stop strategy for any given grand prix. A driver’s (and team’s) competitive prowess is then essentially measured through adaptation ability and responsiveness to changing variables throughout the season. Contrary to popular belief, simply throwing money at the equation will not ensure success as demonstrated last season by the abrupt departure of Toyota and Honda from the sport.
“Toyota, like Honda, struggled to make the F1 operation work thanks to a failure to understand that racing teams think on their feet rather than rely on cumbersome corporate decision-making by a committee thousands of miles away.” -Maurice Hamilton, The Guardian UK Sport Blog
In a way, it’s the same scenario playing out in the advertising world right now. The recession is weeding out the slower, less-innovative agencies unable to manage the rapid technological changes occurring, which now fundamentally determine how we market products and services to people, from the more digital-savvy agencies.
Many traditional agencies are falling behind, struggling with the transition from print to digital; television to mobile; retail to e-commerce; direct mail to social media -and the list goes on. The global economic recession is further compounding this situation by creating an uneasy feeling of cynicism towards layoffs and job security. As a consequence, reactionary client solutions prevail as the notion of sticking one’s neck out becomes almost inconceivable.
Yet all agencies now invariably face the same tough challenges: declining client revenues, increasing competition, and how best to allocate existing resources -now and for future longevity. The old adage innovate or die has never become more relevant than now.
I believe the best agencies, like the best f1 teams and drivers, are the ones outpacing and accelerating quicker than the competition. Put another way, the most successful agencies focus on newer and innovative approaches (e.g. leveraging interactive technologies) more than traditional campaign approaches (e.g. the 30 second television spot or DM campaign) as their primary competitive strategy.
The least successful agencies, similar to the least successful f1 teams and drivers, are the ones doing the most braking and slowest acceleration where it counts on the track; the ones struggling to master the nuances of their technological set-up (or lack thereof); the agencies most likely to be clinging to the old models of business and marketing.
These agencies have perhaps not yet tapped into the lucrative mobile and social media channels, or capitalized on the power of digital user experience as a game-changing technique for solidifying brand awareness and product loyalty among consumers.
Developing a comprehensive interactive [digital] strategy has become the new business imperative in this recession and should be the mantra of all advertising agencies intent on maximizing their competitiveness.
Interactive marketing is surviving the recession and is poised to thrive in the near future due, in part, to the continued fragmentation occurring with traditional media consumption. The digital space, once the wild west of unproven start-ups and speculative business ventures has now matured into one of the most cost-effective and influential platforms for consumer engagement.
In fact, several weeks ago I was reminded of this outlook when stumbling upon an article written by the CEO of Nurun, Jacques-Herve Roubert, on Why Digital Agencies Are Indeed Ready to Lead. Jacques’ argument personally struck a chord with what I feel are significant changes going on in the advertising industry at present, pointing to the untapped potential of digital.
Our marketplace is revealing a paradigm shift towards digital. This evolution can be regarded as an opportunity or an obstacle; agencies can either embrace change or be relegated to the past. You can think like an f1 driver and quickly innovate or put the brakes on and get used to trailing the competition.