Partnering in order to survive digital disruption is a must.The old chairman iterate’s here on his 10 tips for partnering by adding tips 11 and 12. They’re pearlers.
TIP 11 : If you can’t afford consultants et al, then ‘partner’ like a start-up
If you don’t have the advice and cash on hand that the big companies like Woolworths and Coles do then you need to get creative and partner like a start-up does.
Typically start-ups look to do deals with their suppliers which trade off things like early access to technology for the things they need but can’t afford. If you trade with your brand and other assets such partnerships can be very fruitful.
When Three Drunk Monkey’s (today ‘The Monkeys’ – don’t ask) , an innovative start-up creative agency started quite a few years back they needed a client to experiment on and someone who would be a good reference client. U-Bank, also starting up, had very little money. U-Bank were a NAB incubation so there was a great reference point there, and a U-Bank really wanted to do left field. It was a neat partnership. A meeting of needs of two creative groups, both with small bank accounts but big aspirations.
Incumbent companies need to rethink partnering. But it isn’t easy. All those rules and maybe a board that thinks you’ll be giving away secret recipes or who don’t think the value exchange is ever good enough. Classically, a typical board member might say to you “your brand value is way to high to be working with something so small and risky”. A more astute board member would ask “how risky is it for you to not be making the odd bet on these strange creative types” , ” what’s the risk of doing nothing” and “we have to take risk , how do we make sure we do it in a way that doesn’t take the whole company out”.
A good way to start in this sort of partnering activity is to throw all your suppliers on the table and think how you can exchange stuff with them and not buy from them with cash anymore….or buy their stuff with less cash at least. You will probably land a few interesting deals and the practice will be perfect for moving onto the partners who can help you with innovation.
This is harder. Give up the idea that you make the money and therefore that gives you the upper hand. Just get out there , do a bit of research and pick a few which seem to fit your mould. You will have a ton to offer them…brand, people with experiences, problems to solve, maybe a little money. They will have a ton to offer you…unencumbered thinking, loose, wild and creative. A match made in heaven. Until it isn’t. Then move on to someone else. You haven’t got much time.
If you think that partnering is just for the small end of town, look no further than Telstra, who have made an art form of it in the past few years as they shed their crusty image and gather a bit of innovation momentum. You may not have noticed but Telstra does lots of interesting partnering. They partnered with Lithium very early when they were just a small start up. It was a great match. Telstra needed to expedite innovation in its call centres and customer service and Lithium, born of a particularly smart founder who was trying to solve the problem of poor call centre experience in his video gaming business, had the perfect emerging technology. As a founding partner Telstra were a great global reference and a partner that was up for experimenting. Fast forward to today and Lithium is a major emerging force in customer crowd servicing platforms and data automation and their technology is saving Telstra lots (not sure how much lots is but we think it could be getting to the $100m mark and over).
So give true ‘partnering’ a think and get someone on it quick.
TIP 12 : Don’t keep secrets
Keeping secrets is a sign that you haven’t worked things out, no matter how big you are and how much expensive advice you are getting. You may ultimately be sewing a ‘seed of doom by insulation’ if you keep it up.
What secret do you have really that someone else hasn’t already developed somewhere else? Almost certainly someone has. Almost certainly everyone here knows about it as well. The secret, which isn’t secret, is commercial execution using your unique assets and people.
There is a Daze of Disruption rule – not yet published – about Great Chefs. It says you need to act like a great chef because great chef’s are loved everywhere and everyone uses their recipes. But can anyone really cook like them?….usually not. That’s what being a great chef is – execution! And swearing lots.
Openness is at the heart of ‘partnering’. When you truly partner, you’re creating through the process of sharing your ideas openly. If you keep secrets and the eco-system comes to think of you as ‘secretive’ then lots of great potential partners are likely to pass you by. And not just because they don’t realise you’re there because you’re being so careful hiding in a corner with your ‘precious’ ideas. They won’t want to work with you because people don’t like or trust people who are secretive.
Some of the very big companies in town think that they are ‘partnering’ and arguably they aren’t. They’ve got some great consultants assisting who have recommended that they form ‘partnerships’ with other big and powerful groups. Often these ‘partnerships’ are based on mutual data sharing that will create a sort of ‘rule the marketing world’ scenario.
Woolies possibly thinks its pretty cool to have a ‘partnership’ with a big bank and with a big airline (with lots of frequent flyer data) and with a big social media company . That would be a knockout data set if combined! Which it is. But to the world, its not partnering. Its a club. And not the sort of club that we like because most everyone else is not allowed in. It feels a bit like an old boys club or the Masons.
Is this Woolies just acting like that big bad ol’ Woolies that cornered distribution through the 2000s so well they could lean on everyone in the supply chain and send half of them broke if they didn’t bend to their will. Now they are just going to corner customer data and do the same thing but in a digital fashion. This feels even more sinister than last time. Btw, farmers are at the end of the Woolies supply chain and doing farmers in is not a good look.
This isn’t ‘true partnering’. They are just doing what they used to do except they are now doing it on digital steroids using some of the ‘smartest help around’ and ‘great tech’. So points all around for use of tech and ideas I guess and using their money and market power to keep themselves in front. Its going to work for a while. And they are doing really interesting stuff – not that I’d actually know because most of it is secret right.
But ask them to share some of their learnings and the walls come up like the old security screens in a bank when someone pulls a gun. Its a pity because if they were a little bit more open they could help lots of other companies in Australia get out of their funk and even help the economy along. Rising tides …. bigger ponds. Companies like Woolies should take responsibility for helping the business sector in this way.
Acting secret like this is very ‘old world board motivated paranoia’. Its tough being big. You can’t be seen to be big and powerful anymore. You have to do some good. Real good. Which means more than hiring a great director of social responsibility and running the office on a low carbon footprint. Being ‘good’ would be helping other companies, even competitors, and growing the economy overall so everyone benefits.
If Woolies, Coles Qantas and the big banks keep acting in this way, they are going to succeed spectacularly…. in taking more control of what is effectively an extremely ‘small pond’ – Australia. The problem with that is that digital is a global distribution game. The only real route to survival for local players – big or small – is to make the pond bigger and bigger. The only way to do this is to collaborate, partner and ‘go wide’ – global.
Im sure a manager from one of these brands might argue something different here: that they a their plan of owning more of the pond is ‘good’ for everyone. So if we were once just a supermarket brand, lets now become a bank, an insurance firm, a media buyer, a chemist and so on. We could do that if we ‘own enough data’ because we can service customers better than anyone else, right? Its efficient? Good for everyone? Deja vu.
A neat example unfolding before our eyes which these guys should take note of is video streaming. Seven, Nine, Foxtel, Fairfax, Quickflix, Ten and all the other local media players had one chance before Netflix ably assisted by Google and a few others came in – partner. But somehow they all ended upretreating to their corner after a bit of early chit chat and put a plan together that was going to see their play come out as the winner.
What we have developing now is what is commonly termed by experts in the business as ‘a bigger than average cluster fx8k’. Maybe there will be a local winner – doubtful as you suspect Netflix can wipe them out if they put their resources and mind to it. But if any Australian players do survive they will be so depleted by the local “battle of the midgets” that they will have well and truly missed any chance to ‘go-wide’ and create real value for their shareholders and Australia.
No one can own all the data. All the big companies who are vying to own the datasphere in Australia are going to run into each other pretty soon. They are already starting to overlap in all sorts of areas. Lines are getting blurred. Boardrooms are getting tense.
There is no question that if Australian companies, especially some of the really big ones, don’t stop acting parochial and start partnering properly – including at times, but not limited to, their most vile of longstanding enemies – then they are toast. Not today maybe, but soon.
Telstra, which was once in my top 3 most hated Australian Iconic brands (NRMA and Qantas were the other two), has an interesting approach to secrecy. They pretty much don’t keep anything that secret anymore. “Why bother”, says Gerd Schenkel, who is the enigmatic head of their digital group. “There are hardly any real secrets developed here and the its not the tech or the idea that’s the problem – these ideas and technologies are everywhere. Its getting them into a viable commercial package that is the really hard part, and to do that even we need to get good partners. We can’t do everything”.
No one can.
Telstra is a very interesting example of a company that was so ‘gone for all money’ a couple of years back and has actually transformed itself to the point where it stands a chance of surviving the gathering storms of disruption – at least for a few years. I once viscerally hated them, and nearly everyone else did as well. I still remember that ‘Mexican bloke’ telling me ‘how good we had it’ and trying to get my net connection fixed for about 2 days each time it went down – which was often.
That something so big and monstrously stuffed only a few years back can transform in that time should provide hope to everyone in business, big and small.
Telstra still have a ton of warts. But they’ve definitely changed. Just hang out in the cafe at the bottom of Liverpool St in Sydney where their marketing and digital offices are . You’ll get run down by the young (natives) and the old (converts) getting stuff done around you. You will literally get knocked over and its noisy. They’re intense and interested in things.
I remember visiting the Telstra offices at 400 George St 4 years ago a few times and sitting in the Cafe downstairs with a lot of slow motion cardigan wearers who were obviously miserable.What happened?
So big or small you can change. Telstra might not make it. Schenkel reckons it’s probably touch and go. “We wake up most morning’s pretty worried about the stuff we have to get done that day to stay in front of things….you can’t take a break and success actually causes more problems….you need to be paranoid.”
But the staff don’t look paranoid. They look pretty engaged. I never thought I’d say Telstra was an interesting story. They fixed my internet recently, at 3am in the morning….really quickly and politely. Stuff like that can make you change your mind about things. Schenkel says that being successful is first base.
” If you’re not successful now, you’re probably dead already”.
That might be taking things a bit far. Even I hang onto hope for companies still stuck in their old ways. Everyone can change. Telstra did.
Schenkel is one of about 65 local and overseas speakers who will be talking about this stuff at Daze of Disruption, May 18-19, Belvior St Theatre, Sydney. Click Here for more information.