Revolutionarize firm's approach to commerce

IBM Smarter Industries Symposium C-Suite Summit in Korea on Mar 3.





Revolutionary firm's approach to commerce for transformaional marketing





I had an opportunity to attend the IBM Korea Industry Symposium C-Suite summit which was taken place in Grand Intercontinental Hote Seoull on March 3rd. IBM uncovered the perspective how firms to revolutionize their approach to commerce. Interesting points to cover were, IBM seemed now seriously recognize the proliferated mobile media and started to think of strategic approach to put the "customers" at the center of every business operations. Fistly, IBM VP of SW shared his perspective on the future approach to commerce. Net message was, firm must anticipate customer behavior based on customer insights across all channels - this perspective more clearly articulated at the second topic: "From Analytics to Interactive Marketing."




Second topic was covered by IBM SVP Unica. He articulated interesting data points. 75% of people don't believe that companies tell the truth in advertisements. 88% of CEOs picked "getting closer to the customer" as their top priority, and 75% of marketers plan to reorganize by the end of 2011. ... and Mobile is not a single channel - actually it has multi facet such as mobile messaging, mobile web sites, mobile email, mobile applications and mobile search & display Ads. So challenges were, 1) channels were proliferated how do we....


2) The internet evolves more than we expected.... 3) the consumer is now at the driving seat, so at the end of the day, new marketing requires new thinking...

Making this a reality takes an integrated marketing approaches: Integrated Marketing Solution.


Firstly, consistent, compelling Brand & Customer Experience is required. Secondly, optimized cross-channel marketing processes are needed. Lastly but least, deep customer insight is essential piece of ingredients. Then followed by the showcase how does this related to our real life customer interaction. One example was, cross-channel user identification strategy and the other one was identifying the influencers & opinion leaders.

Pannel Discussion





After the break, pannel discussion continued. KAIST professor Youngjae Jang, who is known for influencer in management science area and also famous for the book titled "management concert" in Korea, lead the pannel discussion as a chair. His short presentation was also interesting. He shared his experience in U.S during MIT Ph.d Student. Amazon sent a personalized e-mail and professor Jang was somewhat thrilled by the preciseness of Amazon recommendations - it was a perfect match of professor Jang's unmet needs! I could not remember the other whole stories now, but he illustrated the cases where technologies were analyzed and recommend toward the personalized offer based on historic analysis and behavior.

Professor Jang also explained the case of Netflix as another example of persolized offer. He also has been contributed series of article to the Chosun weekly biz section to which he claimed management should be based on science. Netflix case also has covered from Chosun Weekly biz at the edition of incentive design between enterprise and consumer. He also mentioned the story of US baseball major league winning prospect between Sanfrancisco Giants vs LA Dodgers. UC Berkley and Georgia Tech stundent could figure out who would fall out in this match by using the linear programming. He also mentioned the IBM's ILOG acquisition and mass hiring of mathmatical consultants. You can see the Weekly biz article from here. Sorry it's Korean language.

Senior VP of LG Display, VP of Amore Pacific and IBM Growth Market VP were the panel lists. Amore expressed its intention to provide personalized campaign offer target to more than three million Amore user and shared their plan for customer analytic project. LG Display explained their challenges and unveiled its intention to analyze the its customer's customer market, in other words, B2C market to cope with the swiftly changing but uncertain future customer trends. IBM VP John (my boss) shared the IBM's challenges to cope with rapidly proliferated and changing mobile media and demand program process design.

When I return to my office, one scene came to my memory. That was popped up from second topic by Unica VP: the scene from "minority report." So new marketing is now talking about this kind of personalized offer owing to the advanced analytic technology and proliferated floating mobile informations. Then next question is, people will be happy... or feel certain sentiment of intrusion?

Open Service Innovation

Innovation that matter: Sorry but, put every effort to make a cool product, is NOT enough.Services as means to transform its business into more sustainable, profitable business platform.
Companies that are making cool products must think beyond the product to turn it into a sustainable, profitable business platform. In a product exchange, products are a means to a desired end rather the end itself. After the product exchange takes place, the product provider’s job is done. It is then the customer’s responsibility to use that products to reach the desired end. In a service exchange, the service provider’s task is not finished until the customer’s need is fulfilled.

Customers often desire to have their needs fulfilled not only initially but over a series of interactions with their provider. This shift requires companies now to think about the lifetime value of their customers across many transactions. It then stimulates them to learn more about their customers so that their knowledge of their customer’s needs also grows over time. It can even motivate companies to craft more customized or personalized solutions for their customers, driving up satisfaction, reducing customer switching to competitors, and capturing more value form more satisfied customers

Source from the book "Open Service Innovation:Rethiniking your busienss to grow and compete in a new era" written by Henry Chesbrough, UC Berkeley professor.

Aachen Tech professor Frank Piller's Open Innovation & Customer Co-Creation Presentation

This presentation suggest the new research perspective on open innovation and customer co-creation particulary on the context of "HOW" to participate the customers to the NPD processes.

Frank Piller: Open Innovation & Customer Co-Creation

View more presentations from Frank Piller.

The Synthesizing Mind

Harvard professor and also best known for the theory of multiple intelligences, Edward Gardner introduced the capability of five minds for the future from the book “Five Minds for the Future.”

Author introduced disciplined mind, synthesizing mind, creating mind, respectful mind and ethical mind as five minds which would lead the people to the successful career in the future. He suggested that future leaders should posses the capability of multiperspectivalism, interdisciplinary intelligence and synthesizing to be a role model who can fulfill the mind of the synthesizing, considering the fact that we all increasingly live in the age of talented peoples’ “laser intelligence” rather than the “searchlight intelligence.”

Today I found similar argument from Robert Shiller who wrote the book “Animal Spirit” and renowned behavioral economist in Yale university from the column of Korea Chosun Daily Newspaper. He claimed that we all live in the era of “popular economies”, and at the same time paradoxically “losing faith in economists”. According to the author, this golden age of economics stemmed, paradoxically, from the lost of general public’s credibility on economists. He articulated that if economics are merely relied on computer simulation model and could not afford to taking advantage of human intelligence then, in turn, economists would expected to lost the credibility from public and could not be able to predict the future. Sometimes economist are expected to turn off the navigation system and must learn to think for themselves.

Harvard business review (Jeffrey Dyer, Hal Gregersen and Clayton Christensen, Dec. 2009) also introduced five discovery skills which made one person more creative than others. Authors suggested that our ability to think creatively comes one-third from genetics; but two-thirds of the innovation skill set comes through learning – first understanding a given skill, then practicing it, experimenting, and ultimately gaining confidence in one’s capacity to create. Associating skill was one of them. Associating, or the ability to successfully connect seemingly unrelated questions, problems, or ideas from different fields, is central to the innovator’s DNA.

I could find similar notion from recent article from HBR blog (HBR Blog, The next big thing in managing innovation by Henry Chesbrough). Father of open innovation Chesbrough asked the question – what about the decade just ended? He expressed that one plausible suggestion was that past decade has been the decade of open innovation.

Then where might management innovation go from here? He offered three short predictions: First, management innovation will become more collaborative. Second, business model innovation would become as important as technological innovation. Third, we would need to master the art and science of innovating in services-led economies. To me, first prediction personally caught my eye – more collaboration. Author predicted that it will evolve into a more iterative, interactive process across the boundaries of companies, as communities of interested participants work together to create new innovations. It sound likes, to me at least, it is necessary to have a mind of synthesizing for more effective collaborations.

The book written by Amy Chua who is professor at Yale Law School and author of “Day of Empire” is ranked as 6th at the Amazon best seller as of today. Title of the book “Battle Hymn of the Tiger Mother” imparts the secret behind the stereotypical Asian child's phenomenal success: the Chinese mother. Chua promotes what has traditionally worked very well in raising children: strict, old world, uncompromising values. What they are, however, are different from what she sees as indulgent and permissive Western parents: stressing academic performance above all, never accepting a mediocre grade, insisting on drilling and practice, and instilling respect for authority etc.
Well, Chua's efforts "not to raise a soft, entitled child" seems to strike American readers as a little scary.

So now, we have two different but somewhat contradictory view point here – synthesizing mind vs harsh discipline.

What the new world is calling for
Howard Gardner shared his experience of moment when he met the Chinese psychologist about 20 years ago in China. He noticed that every student in the class took turns to memorize the seven rules of human memory of which Howard thought as time consuming. He and Chinese professor discussed about the pros and cons of its teaching method. Chinese professor concluded by saying: “We’ve been doing quite a long time, so we know this way of doing is right.”

Howard explained the evolution of education from ancient times such as 700 years ago. Educated elites were perceived as people who had the series of capabilities such as calligraphy, archery, music, riding etc. Even bright students were simply asked to repeat the intelligent ancestor’s wisdom – Confucius and Mencius in Orient and Aristotle and Aquinas in Western - and sometimes asked to memorize the core phrases rather than understand and apply.

He insisted that goal of educational effort is to learn the proper scholarly knowledge, thinking habit and behavior pattern. In spite of the good motivation and the utmost efforts, why so many students stick to the wrong or improper way of thinking? Author stated that perhaps the main reason would be stemmed from lack of understanding a difference between “subject matter” and ‘discipline’.
Likewise what the teachers have been doing, most of the students in the class or training camp thought their mission was to learn the subject matter. They store lots of facts, formula and numbers into their memories.

Where as, ‘discipline’ is basically different phenomenon from “subject matter”. Discipline means the chain of particular way of thinking towards the world. It strives us to analyze the relevance between two information or questions, and often tons of information. Specific way of thinking makes the distinct feature of profession and skilled professionals could be a good example under certain satisfactory circumstances.

Back to Chua’s book, this Chinese education method story lead me to infer that cultural heritage and education system is closely interwined each other.

I have been noticed two different reactions from Korea leading electronic companies when they faced the challenges stemmed from iPhone launch in Korea during 2010. One company could swiftly confront the challenges and moved in relatively nice order. While, the other company seemed not to identify the implications of these changes, so consequently, could not connect the dots. I happened to hear the complaints and appeals from the trench during my visit in this company – “why should I care the business model ? All we need to do is selecting the right platform and crafting best smartphone in the world”. But it did not take a long time- only six month. One company sold 10 million smartphone worldwide while the other company recorded the 185M$ deficit in 3Q 2010.