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Building New Strategies for Leading Creative Excellence: Porter vs. Porter

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Executive Summary
Strategy is changing amidst volatile markets, disruptive technologies, and transformed customer and public relationships. Contrasting some of the major tenets of traditional strategic thinking, an analysis of the work and words of Chuck Porter enables the mapping of several key principles of a new strategy of creative excellence. These
include 1) forming an adaptive commitment to strategic intent and ongoing public engagement, 2) fostering communities of participation as part of generating a wider
cultural conversation of creative work, 3) building trust through imaginative, often offbeat and interactive storytelling, and 4) moving beyond competition to highlight the
value emerging through creative breakthroughs or community-building.

Veröffentlicht in: Leadership & Management, Business
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Building New Strategies for Leading Creative Excellence: Porter vs. Porter

  1. 1. Berlin School of Creative Leadership Foundation gUG (haftungsbeschränkt) Franklinstrasse 11 – 10587 Berlin – Germany Phone: +49 (0) 30 88 49 80 80 – Fax +49 (0) 30 88 49 80 99 E-Mail: info@berlin-school.com – www.berlin-school.com President: Michael Conrad Faculty Director: Prof. David Slocum Managing Directors: Susann Schronen, Jamshid Alamuti “Building New Strategies for Creative Excellence: Porter vs. Porter” Berlin School of Creative Leadership White Paper June 2014 Professor David Slocum Professor Paul Verdin Berlin School of Creative Leadership Berlin School of Creative Leadership & SBS-EM (ULB) Executive Summary Strategy is changing amidst volatile markets, disruptive technologies, and transformed customer and public relationships. Contrasting some of the major tenets of traditional strategic thinking, an analysis of the work and words of Chuck Porter enables the mapping of several key principles of a new strategy of creative excellence. These include 1) forming an adaptive commitment to strategic intent and ongoing public engagement, 2) fostering communities of participation as part of generating a wider cultural conversation of creative work, 3) building trust through imaginative, often offbeat and interactive storytelling, and 4) moving beyond competition to highlight the value emerging through creative breakthroughs or community-building.
  2. 2. 2 Chuck Porter is the Chief Strategist of MDC Partners, a network of independent advertising agencies that includes Crispin Porter + Bogusky, where he is the Co-Founder and Chairman. CP+B is a full-service, fully-integrated advertising agency operating as ‘one global agency with seven locations’ in the United States, Canada, Brazil, and Europe that was named the Advertising Agency of the Decade by Advertising Age magazine in 2009.1 Porter’s presentations, like ‘How to Start a Creative Agency,’ are given mostly to industry audiences, such as at the Cannes Lions International Festival of Creativity.2 They are neither theoretical nor grounded in conventional management discourse. Instead, they highlight insights and key tenets of successful agency practice from a history of CP+B and its creative work for clients. His strategic thoughts, as a result, serve as a valuable practical resource for elaborating more systematically developed concepts and models and drawing these together into a more integrated whole directly relevant to creative communication industries. As we will argue, notwithstanding their different form and context, Chuck’s ideas readily connect with those of other strategic thinkers writing today, including Rita Gunther McGrath, Greg Satell, Chris Zook and James Allen, and Niraj Dawar. In fact, his ideas not only capture some of the same key insights as these more empirically- and theoretically- based writers but have the advantage of nearly two decades’ creative work to substantiate and illustrate them. While also sharing in their call for embrace new assumptions, contexts, and possibilities for strategic thinking and action, Chuck has the further 1 Advertising Age, December 14, 2009 ‘Book of Tens: Agencies of the Decade’ 2 Chuck Porter (2010) ‘Chuck Porter – Cannes – How to Start a Creative Agency’ Video 1 of 2 Chuck Porter -- Cannes - How to Start a Creative Agency Video 2 of 2 Chuck Porter -- Cannes - How to Start a Creative Agency
  3. 3. 3 distinction of sharing a surname with probably the most famous and influential proponent of traditional business strategy, Michael Porter of the Harvard Business School. What follows, then, is a mapping of the evolution of four major strategic ideas and priorities that Chuck Porter has proven succeed in contemporary creative agencies and a changing marketplace. It is organized through a series of contrasts and continuities with strategic thinking and models of the past, which are associated for the sake of argument with, but should not be seen as exclusively as grounded in, the thinking of Michael Porter. Our aim with Porter vs. Porter is therefore to emphasize crucial differences in strategic thinking and action that mark a break with the past and support creative excellence moving forward into the future. 1. Adaptive Commitment One of the greatest debates in strategy today concerns the continuing viability and relevance of Michael Porter’s idea of sustainable competitive advantage, which typically derives from using cost leadership or differentiation to create a favorable position in a well-defined industry. Increasingly, arguments, like Rita McGrath’s, have been made a long-term, stable and sustainable competitive advantage can be ‘outdated and even dangerous’ goal in today’s more volatile and fast-changing world.3 While acknowledging the need to account for flexibility and speed in decision- making and adapting to dynamic conditions, we see a vital need for leaders and agencies to still make commitments in their strategic thinking and allocation of resources.4 For CP+B, 3 Rita Gunther McGrath (2013) The End of Competitive Advantage, Cambridge, MA: Harvard Business Review Press, p. xi. 4 A similar call for ‘commitment’ to balance transient advantage has been advanced by Cesare Mainardi, CEO of Strategy&, in Mainardi (2014) ‘Building a Capable Company’, strategy+business
  4. 4. 4 a distinctive way of interacting with customers and the market has been achieved through the consistent strategic investment in producing ‘the most talked about, and written about advertising in the world’. CP has thus struck a key balance: creating an initial platform for communicating brand identity and allocating resources while allowing for further, shared decision-making and co-creation with clients and the public. Two of his major early collaborators at CP+B, Alex Bogusky and John Winsor, offered a helpfully concrete description of this balance in their 2009 book, Baked In: Businesses and their brands are built through great, innovative products. Branding and marketing must be reconnected to the products themselves. The goal of a new design process should be to elevate both marketing and product design at the strategic level, fueled by the same powerful narrative. So brilliant designers and marketers must work together to create products that are consistent in form and story.5 EX. Burger King ads – Chicken fries with NASCAR, Subservient Chicken (2004), Whopper Virgins (2008), Whopper Sacrifice (2009) The long-term (2004-2011) relationship between Burger King and CP+B produced a series of campaigns committed to making the brand culturally relevant and embracing new digital technologies and the public engagement they enabled. Subservient Chicken used 40 pre-filmed segments to create the appearance of interactivity in response to specific public blogs, April 29, 2014; The general idea of ‘flexible commitment’ as driver of ‘continuous corporate renewal’ was developed in Bala Chakravarthy and Sue McEvily (2006) ‘Knowledge Management and Corporate Renewal’, in Handbook of Knowledge-based Management and Organization, eds. Kazuo Ichijo and Ikujiro Nonaka, New York: Oxford University Press. 5 Alex Bogusky and John Winsor (2009) Baked In: Creating Products and Businesses that Market Themselves, Chicago: Agate, p. 20.
  5. 5. 5 requests, for instance, and Whopper Sacrifice upended the cultural drive to add Facebook friends by rewarding ‘sacrificing’ them. Consistently experimental and sometimes bizarre, the multiple campaigns courted controversy and made the brand part of the wider cultural conversation. 2. Serving the Community of Participation What is the fuller nature of that strategic investment? Marketers and advertisers have traditionally been seen to serve one (or more) of three masters: the client, the brand, or the customer. In that traditional scheme, advertisers become ‘suppliers’ serving the client or possibly the brand in order to benefit the customer. Traditional strategists would see the source of value in that equation being creative differentiation of product capabilities – that is, serving the client efficiently and effectively to capture and protect a market or segment. We see CP not only shifting from straightforward client service but making a greater breakthrough. Because of new brand relationships, interactivity, and social sharing, we add a fourth area of service named by CP: the 'community of participation'.6 Bogusky and Winsor provide a useful gloss here, too, saying customers ‘want to participate in building a brand they will become loyal to, generating a conversation around new ideas, and manufacturing products that will speak to their needs. These customers back and appreciate the brands they love’.7 Recognizing how essential is the tracking of 'media impressions' across different demographics through distinct channels to determine brand ROI, we argue the connected community of participation has replaced, or at least 6 ‘Chuck Porter Presidents Lecture’ (2013) Berlin School of Creative Leadership, July 23, 2013 7 Alex Bogusky and John Winsor (2009) Baked In: Creating Products and Businesses that Market Themselves, Chicago: Agate, p. 29.
  6. 6. 6 subsumed, clients and customers in the social and viral world. Markets, in turn, emerge from the communities of participation with whom content-makers like CP engage in more consistent conversation. That conversation takes place, in his words, using ‘new ways of interacting with customers’ and ‘keeping up your end of the conversation’ until it is possible to engage the customer in what you are doing.8 Put differently, as MDC has, purchase paths which were previously “Linear, Emotional, Individual” are today, “Non-Linear, Info-Mational, Social’.9 Strategy for creative excellence in this way becomes based less in new-product development systems or pipelines and more in novel interactions with audiences who, in turn, contribute social influence in creating markets. EX. Early MINI counterfeit campaign 2004 Using a range of materials including television spots, DVD, internet and print, the MINI Cooper campaign launched in 2001. Over succeeding four years, including the ‘counterfeit MINI’ campaign of 2004, it helped the brand to generate a new community separate from the then dominant culture of aggressive and functional, point-to-point driving, most associated with SUV’s, and instead celebrating driving as fun and an opportunity for self- expression. Notably, MINI USA did not provide a detailed brief to CP+B but a series of strategic questions that the agency worked through in an iterative way. 3. Building Trust Engaging audiences and then creating markets ultimately means building trust in the perceived value of a brand. Building trust, particularly in the era of digital interactivity, 8 ‘Chuck Porter Presidents Lecture’ (2013) Berlin School of Creative Leadership, July 23, 2013; 9 Kip Voytek (2012) ‘Thriving on Complexity: MDC’s Response to the Increasing Complexity of Selling’, BMO Digital Harvest, November 8, 2012
  7. 7. 7 requires transparency and, practically, powerful storytelling. While stories that convey meaning and ‘stick’ have obviously always been important to creative work, we believe their role is being re-set and intensified. Rather than either the promised newness or differentiation of products or the value creation brought by efficiencies when scaling described by Michael Porter, CP’s stories are more fundamentally about active engagement, social sharing, and trust-building across platforms in which scaling costs are no longer a key driver of success. We believe story is different not only when jointly owned by client and customer but openly co-created by multiple parties in ways facilitated by the advertiser. Noting that ‘scale isn’t what it used to be’, Greg Satell has described the resulting shift in evocative terms: ‘competing to win in the new economy is more of a journey than a construction project.’10 That process of guiding clients and customers on their participatory journey, which CP+B pioneered and continues to refine, is ongoing, requires trust, and often involves facilitating the sharing and co-creation of sticky stories.11 While classical competitive advantage is finally based in an adversarial model focusing on competitive advantage vis-à-vis competitors by obtaining cost efficiencies or brand differentiation, contemporary value is created through trust-building with clients and customers. Practically, for CP, this means feeding digital channels, growing audience relationships, loyalty and participation in the ongoing generation of creative brands and product solutions. Yet such loyalty and participation are not the simple result of market intelligence or data analysis. It involves combining what Greenberg and Kates call ‘both 10 Greg Satell (2013) ‘The End of the Scale Economy’, Digital Tonto, Sept 15, 2013 11 Creating ‘sticky stories’ is a central step outlined in Eric Greenberg and Alexander Kates (2014) “Marketing Strategies for a Digital World,” The European Business Review; the article is excerpted from Greenberg and Kates (2013) Strategic Digital Marketing: Top Digital Experts Share The Formula for Tangible Returns on Your Marketing Investment, New York: McGraw-Hill.
  8. 8. 8 planned campaigns and unplanned virility’. Crucial here is CP’s belief in the ‘unexpectedness’ or ‘surprise’, a kind of creative essence or weirdness, that can invigorate both the planned and unplanned aspects of delivering brand and business solutions. EX. Amex Small Business Saturday (2010) American Express Small Business Saturday was introduced in November 2010 in the United States to counter ‘Black Friday’, traditionally the largest shopping day of the year for big-box and, increasingly, online retailers. In 2011, working with digital agency Digitas, CP+B transformed the program by creating a digital toolkit for small businesses. Besides using active local engagement and storytelling to build trust and counter the seeming advantages of scale, the creative essence of the campaign was its focus on brick and mortar stores at a time of rapidly expanding e-commerce. Embraced by the public and politicians alike, Small Business Saturday has become an annual event on the weekend following U.S. Thanksgiving. 4. Accumulative Value Creation To be able to repeat the successful generation of creative brands and product solutions require a combination of focus and insights on relevant communities, inventive platforms for co-creation and communication, robust feedback processes, refined measurement and data analytics, and the capability to creatively experiment and adapt. These best practices are evident in CP’s own work and have also been outlined by Chris Zook and James Allen in their argument for continuous improvement and enduring value creation.12 Another of their guiding principles, of ongoing systems of learning, is likewise a central priority of 12 Chris Zook and James Allen (2012) Repeatability: Build Enduring Businesses for a World of Constant Change, Cambridge, MA: Harvard Business Review Press, p. 165.
  9. 9. 9 CP+B (and MDC), where ‘fluency and nimbleness’ and an ‘ever-evolving toolbox’ are requirements.13 Repeatability is essential to delivering value creation for the customer amidst ongoing change. Rather than traditional ‘competitive advantage eroding as competitors catch up, imitate, replicate, or leapfrog product or technology innovations’, Niraj Dawar describes how accumulative ‘advantage can grow with time, experience, and accumulation of information, e.g. network effects’.14 We would go further in shifting the central strategic intent and decision-making away from a focus on competitors over customers and replacing the traditional term, ‘advantage’, with ‘value creation’, recognizing that value can emerge either through the creative disruption or generation of markets or the expansion of brand communities and participation. CP has demonstrated the capacity for both, basing pivotal decisions on how best to grow audiences and trust while retaining fundamental focus on, or making key adaptations to, core business and brand elements or markets. CP’s injunction to ‘think like a Chairman not an adman’ entails a commitment to consistently adapt strategic priorities, foster growth across short-lived opportunities, and finally accumulate created value.15 Here, the essential balance involves adaptability to uncertain and volatile competitive environments and audiences with an assurance that such ongoing adaptations will reinforce one another positively. We see the resulting value achieved by CP-style strategy as not being sustainable in the traditional sense of a long- 13 Kip Voytek (2012) “Thriving on Complexity: MDC’s Response to the Increasing Complexity of Selling,” BMO Digital Harvest, November 8, 2012 14 Niraj Dawar (2013) Tilt: Shifting Your Strategy from Products to Customers, Cambridge, MA: Harvard Business Review Press, p. 70. 15 ‘Chuck Porter President’s Lecture’ (2013) Berlin School of Creative Leadership, July 23, 2013;
  10. 10. 10 term, stable favorable position but accumulative in drawing together a series of connections between audiences and solutions that create value for customers.16 EX. Domino’s Pizza Tracker (2008) In 2008, CP+B developed an inventive online application for customers wanting to track every stage of their Domino’s Pizza order in real time. This fully integrated campaign and, ultimately, business solution was premised on technology that both enabled better internal product quality control and repeatable customer interaction. Interestingly, as evidence of the agency’s openness to sourcing ideas, the core insight about the potential technology came from CP+B’s IT department (rather than research on consumer demand) and they then shared it with planners. The campaign eventually included sharing unfiltered customer feedback gathered through the application, thereby underscoring further the open commitment to building community and trust with the public. Conclusion The continually re-interpreted and re-validated focus of these strategic decisions and actions is on value creation for the customer. Put differently, the more competitive the industry, the less that industry should be the basis of analysis and positioning. This does not depend on product or category. It does, however, depend on consistent and creative leadership. For Zook and Allen, the leadership traits associated with ‘sustained value creators’ are also central tenets of how we at the Berlin School and others define creative leadership: ‘authenticity’, ‘empathy or emotional intelligence’, and ‘humility and self- 16 This formulation parallels the call to reimagine brands as ‘accreted value’ in Barry Wacksman and Chris Stutzman (2014) Connected by Design: 7 Principles for Business Transformation Through Functional Integration, San Francisco: Jossey-Bass, pp. 196-209.
  11. 11. 11 awareness’ – including a willingness to adapt as situations warrant.17 This paper has also argued that those traits and more can be studied in the sustained leadership and strategies for achieving creative excellence demonstrated over two decades by Chuck Porter. 17 James Allen and Chris Zook (2012) ‘The Strategic Principles of Repeatability: How Nonnegotiables Fuel Growth’, Bain & Company, p. 8.
  12. 12. Berlin School of Creative Leadership Foundation gUG (haftungsbeschränkt) Franklinstrasse 11 – 10587 Berlin – Germany Phone: +49 (0) 30 88 49 80 80 – Fax +49 (0) 30 88 49 80 99 E-Mail: info@berlin-school.com – www.berlin-school.com President: Michael Conrad Faculty Director: Prof. David Slocum Managing Directors: Susann Schronen, Jamshid Alamuti PART-TIME GLOBAL EXECUTIVE MBA FOR THE CREATIVE INDUSTRIES Designed with busy creative professionals in mind, the Berlin School of Creative Leadership's flexible part-time Global Executive MBA program provides participants with valuable tools and actionable strategies for leading creative agencies, clients and companies more effectively. Program modules in Berlin, New York, San Francisco, Tokyo and Shanghai are taught by leading academic experts and industry practitioners whose thought leadership is shaping the future of creative industries around the world. Join the next global class starting 7 September 2014 “The time spent at the Berlin School helped me redefine not only the standard of work that we were doing, but the entire paradigm within which we operate as an agency.” - Adrian Botan Creative Partner, McCann Erickson, Romania Berlin School EMBA ’09 & Winner of 2 Grand Prix Cannes Lions 2011 OPEN AND CUSTOMIZABLE EXECUTIVE EDUCATION PROGRAMS Whether you are passionate about increasing your effectiveness as a leader or charged with developing the leadership capacities of creative executives in your company, we invite you to explore the new Berlin School Executive Education Programs. Our compact open seminars and bespoke customized programs deliver the latest thinking and practice in leadership, strategic planning, understanding and managing change, and a wide range of other methods, concepts, tools and techniques for successfully leading creative organizations and developing competitive strategies in rapidly changing business environments. Drawing on an extensive roster of experienced instructors from around the world, our programs offer fresh relevant insights for leading creative organizations and immediately actionable skills that contribute meaningfully to the bottom-line and lead to positive change in the industry. At Berlin School it is no longer only about what you learn, but how we approach "the Learning". Our uniquely designed programs raise the level of impact and make sure you can truly speak of "Creative Leadership" when you leave our programs. Learn more about how Berlin School’s Part-Time Global EMBA and Executive Education Programs can help you accelerate your success as a creative leader. Visit www.berlin-school.com.

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