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Isentia - How do you drive a culture of innovation?
Research First - Warming our hands on a dumpster fire
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Isentia

How do you drive a culture of innovation?

Just over a decade ago, as gaming penetrated the world of children’s entertainment, Lego was near bankruptcy. No matter how nostalgic for parents, multi-colour building blocks simply couldn’t compete in a world of Nintendo, Pokemon and Tamagotchi. Lego was hemorrhaging money and seemed out of touch in this modern new world. Fast-forward to 2017 and playtime is over for many of the world’s biggest toy brands. Toys R Us in the US could file for bankruptcy in as soon as the next few weeks. Yet, profits at Lego are soaring. The secret? Then CEO (now Chairman) Jørgen Vig Knudstorp’s decision to innovate and transform the company into the ‘Apple of toys’. Today, kids can be found assembling Star Wars figurines, Sydney Opera House models and ‘playing dolls’ with the pretty pastel coloured Lego Friends range.

What can we learn from Lego about innovation?

Build a cross-functional team

Underpinning Lego’s turnaround is a cross-functional team known as the Executive Innovation Governance Group. This group take a birds-eye view on innovation: looking at everything from products, pricing plans, processes, channel partners and communities. It’s here where brilliant ideas formulate; ideas like the decision to create a Lego movie franchise starring Hollywood’s biggest names - Morgan Freeman, Liam Neeson and Will Ferrell are born.

It works for us too at Isentia. We were recently named amongst the Australian Financial Review’s 50 Most Innovative Companies in Australia. Our cross-disciplinary advisory board includes representatives from across sales, client serves, marketing and of course IT. This group has been central to solving some of our biggest digital problems. For example, how we harvest and analyse 7 million unknown media items and millions of other data points every single day? Together we developed Huxley, a cloud based platform that takes multiple input services, applies media item topology and enrichment services, and produces fit for purpose data for client facing products and services

Great talent

There is no greater key to a company’s success than it’s talent. What would Apple be without Steve Jobs or Tencent without Ma Huateng? Needless to say, Knudstorp has been key to Lego’s transformation. As a technologist, I am a firm believer that building a strong internal tech team to drive innovation is just as important as an innovative leader. Don’t outsource the talent that brings transformation - insource it to continually find ways of being smarter, faster, and more innovative.

Encourage new ideas

Polaroid creator Edwin Land famously said, “It’s not that we need new ideas, we need to stop having old ideas.” Here at Isentia we have a designated lab area for the tech team to sandpit ideas. We also take 10% time, allocating a half day each week for the team to ideate, playing with new AI algorithms, product upgrades and concepts. Lego’s outside-in approach resonates with us, and as such regularly hold technology hacks with industry leaders. We value the feedback from our client advisory board as much as we value the thoughts of our employers. The end user is what drives all of our innovations – in pricing, promotion and process. It was with clients in mind that our team delivered a world’s first view of the connectivity, context and chronology in a story. With the release of Stories, the story, not the media type, has become the focus of Isentia’s media intelligence. For clients, this has reduced time and effort to understand the core, depth and velocity of a story allowing media intelligence to feed directly into strategic decision-making.

The way forward

As digital disruption penetrates every sector of business, there has never been a more important time for business to innovate. Innovation speeds up processes, cut costs, and importantly, drives profits. It provides ways to penetrate new markets faster and deeper, taking companies into previously unthinkable directions. Quite simply, everyone should be constantly evolving, curiously questioning and innovating.

If you don’t know where to start, try by talking to your tech team.

As seen in 'How Lego rebuilt itself as 'the Apple of toys' by Andrea Walsh, CIO


Research First

Warming our hands on a dumpster fire

The Sunk Cost Trap is another of those cognitive heuristics that can catch us all out. It describes how the more we have invested in something, the less willing we are to let that investment go. So instead of ‘cutting our losses’, we often find ourselves ‘doubling down’.

We literally do this with financial investments but it is also present in other positions we hold. In other words, when we are faced with negative outcomes from a decision we have made, we are likely to escalate our commitment to that decision. This is totally irrational, but then so is much of what really happens in our heads.

If you have any interest in global politics then you’re probably already thinking that the notions of sunk costs and escalation of commitments are useful in understanding why support for Trump remains strong among his admirers. How strong, you ask? According to a poll published recently by Reuters, 85 percent of those who voted for Trump in 2016 said they would do so again.

These cognitive traps also explain why fact checking Trump’s most fanciful claims makes no difference to those supporters. Or, as Vox put it, “Trump supporters know Trump lies – they just don’t care”.

In this regard Trump’s presidency is a remarkable gift to social science, using the largest stage in the world to demonstrate off one cognitive bias after another.

But the uncomfortable truth is that we are all Donald Trump to some extent. Like him and his supporters, facts that contradict our own treasured assumptions are unlikely to change our minds too. Just like him, we’re all confident idiots at heart.

It’s just that some of us are more confident (and more idiotic) than others.

Read more


AON

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