Agile Marketing Part I – The importance of adapting to change

Posted 2010.11.10

Technology, new product innovation, consumer behavior, the entire society is changing faster than ever. This poses significant challenges for companies who need to find ways to adapt to change and embrace it as a breeding ground for innovation rather than a nuisance that forces them to reconsider outdated plans. This has pushed a broad range of disciplines to radically change the way they work over the last decade. It happened in software development, new product development and engineering. The objective was simple – how can we change the way we work to become more agile? Marketing seems to have lagged behind in many ways. This is surprising as for most companies change tends to be driven by their customers. One would therefore expect marketing, the discipline closest to the customer, to be the most adept at changing.
In the next couple of weeks I’ll post a number of pieces related to marketing’s ability to adapt to change. I will not spend time asking why marketing hasn’t changed faster. I will instead focus on the opportunity marketing has to learn from the other disciplines who did go through a transformation over the last years.

The Acceleration of Change

Here’s an interesting statistic. If you look at the history of technological change and assume we will continue to see innovation accelerate in the future at the same rate as it has done in the past, we won’t experience 100 years of progress in the 21st century – it will be more like 20,000 years of progress. It was Kurzweil who made this observation in 2001 in his essay The Law of Accelerating Returns. He demonstrated how technology innovation is not changing in a linear way as most people assume, it changes exponentially. He demonstrates this with this graph which shows the growth of computing power over time.

He predicts that by 2045 the power of computers will exceed the collective power of all human brains combined.

It isn’t just technology which is changing rapidly. Innovation in general has been growing exponentially during the last 50 years. The graph below shows the number of patents issued by the United States Patent and Trademark Office (USPTO) over the last 50 years.

It is clear that companies have been trying to respond to the changes in society by stepping up their innovation efforts.

And consumers are doing their best to keep up with this change. One might argue that they are also driving the acceleration of change. The NYT showed this interesting visualization of the adoption rate of new technologies by consumers.

The steepness of the lines on the right shows the speed of new product adoption in the modern day. It took the telephone roughly 70 years to make it into 90% of the US households. Color TV and the cell phone did it in 15 years. Apple lovers are really pushing the boundaries of early adoption. Back in 2007, the original iPhone took 73 days to cross the million mark. The iPad managed the same feat in just 28 days, about 2½ times as fast as the first iPhone. It almost seems like early adoption is normal adoption for Apple products. Apple is the obvious example of a company that not only knows how to adapt to change, but also create changes in the marketplace.

Adaptive Skills as a Competitive Advantage

While Apple’s market sensitivity and speed makes most other companies look sluggish, there are other less obvious examples of companies who have realized that the ability to adapt to change can be their biggest competitive advantage. Coke is one of those companies. For a company of their size they have an incredible ability to adapt to change and bounce back from failures. It didn’t take them long to bounce back from one of the most famous marketing catastrophes ever, the introduction of New Coke on the 23^rd of April 1985. The production of the old Coke stopped that same week, which caused a national uproar. Coke had not just taken a product off the shelf, consumers felt it had taken away a quintessential piece of American culture. It only took Coke 2 months to reintroduce the old Coke as Coke Classic. Coke insiders referred to this as the second coming and consumers reacted accordingly. Their celebration of the return of their old favorite beverage made Coke’s sales roar. It even made some believe that Coke deliberately discontinued Coke classic for 2 months, something that has always been denied by company officials.

This is just one example of how Coke has adapted to change extremely well over the years. Other examples include the turnaround of Dasani, the acquisition of Vitamin Water and the acquisition of their bottlers in a response to a similar move by Pepsi. Other companies who excel in their ability to adapt to change include Zara with their “Just in Time” design system that allows their designs to make it from the sketch pad to the store rack in as little as 2 weeks. And there is Netflix who constantly revitalize their company by picking new enemies, be it Blockbuster and its late fees or illegal downloading, which it is fighting through strategic partnerships with new video distribution platforms such as the Xbox or Apple TV. These companies have shown how to turn their ability to adapt to and even create change into an unfair competitive advantage.  In the following posts we will explore how marketing can learn from other disciplines to become better at adapting to change.