Incumbency Is Basically A Death Sentence: Andy Lark

Incumbency Is Basically A Death Sentence: Andy Lark
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Here’s a harsh truth for incumbents. You probably can’t match it with the new generation of insurgents coming after your business. You have too many managers and not enough makers, and your systems will drag you down argues Andy Lark, CMO of Xero.

Andy Lark

Andy Lark

According to Lark, your capabilities-debt and your technical-debt are the byproducts of legacy environments that make it almost impossible for you to make products that people will fall in love with.

“The newcomers are arriving and they’re highly data driven, and they are focused on the platform from day one .

“They don’t say we need a marketing orchestration platform or we better buy some data analytics software. Instead the platform is where they start.”

But don’t worry, it gets worse. 

Lark’s killer punchline – delivered to delegates attending Teradata’s annual marketing conference in Sydney yesterday was this: “I was with some old world companies the other day and they asked me, ‘How do we compete with people like you?’ and I said, ‘Well you don’t, you’re kind of screwed. The simple reality about why you are screwed is that I am going to hire half my work force in the next 18 months. I don’t have to retrain anyone. I am simply going to hire best of class at day one.’”

He contrasted his happy situation with that confronting incumbents where the ratio of what he calls managers to makers has blown out of all proportion. “It turns out that this ratio of managers to makers is profoundly important.”

Great brands are great, he said, precisely because they make products that people fall in love with, and not as a result of their marketing or advertising.

“Apple’s advertising sucks, lets face it. It’s a picture of a bloody phone  There’s no genius in that. But they have created products people fall in love with as well as an amazing retail experience, so you fall in love with the brand. It’s not the advertising and its not the marketing.

“Marketing is fraught with waste and full of inefficiency. It’s fraught with all kinds of legacy ideas,” he said. “And many of the assumptions we work with at the end of the day are really quite hard to accept when you look at the data.”

Incumbents are also poorly placed to recalibrate their businesses because of how quickly markets change and he used the example of the online dating industry (a relatively new and tech savvy market participant) to illustrate the point.

“Imagine the online dating industry trundling along. We all saw the TV ads for Match.com and eharmony – those were major global brands thinking things were going great. And then out of the blue this thing called Tinder comes along and they get annihilated in roughly 60 days.”

Tinder tapped into a new consumer sentiment, Lark Argued. “It turns out we weren’t looking for partners for life we were just looking for date on Friday night and we didn’t want to start looking until Friday morning.”

“And this is happening in every traditional industry in the world.”

Want to hear more on this topic, Andy Lark will be speaking in  Melbourne at B&T’s Daze of Disruption event, 3rd-4th December. See the Agenda here.

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