Monday, August 11, 2014

A Potentially Untapped Source for Innovation: Your Marketing Department

An interview with
Stephen Liguori
Former Executive Director, Global Innovation & New Models

Interviewed by Sam Narisi

Why Marketers Must Get Involved in Helping Their Companies Innovate

As executive director of global innovation at GE, Stephen Liguori led the company in building break-through customer offerings in new growth areas. Prior to this position, he served as the company’s executive director of global marketing, and with this background, he understands the value of marketing in helping companies develop and shape new business models.

We recently spoke with Liguori about marketing’s role in innovation and how larger organizations can compete with start-ups when it comes to generate new ideas.

Describe how marketing fits in with innovation.

A lot of what I do is get people to understand that the way buyers want to consume products and services is becoming a combination of digital and physical. GE for example has grown up making very physical things – jet engines, ultrasound machines, power turbines, washing machines. Those are now being connected digitally, developed digitally, and monitored and maintained digitally. That creates a whole new ecosystem.

New business models are not about new technology per se; we call that invention. Innovation is how you bring ideas to marketplaces in different ways. The app store is the classic modern-day new business model. There’s nothing new about the software, what’s new is the business model.

When you talk to marketers about digital, they talk about finding a better way to mine social data to get you to buy their flavor of yogurt or their color shoes. That’s only the tip of the iceberg. The message I bring to executives is that innovation is going to be disrupting business in every way, shape, and form. This whole idea of digital meeting physical will completely radicalize every aspect of business.  

We’re trying to get marketers to understand that they need to get more involved in how business is run. Innovation is a 360-degree term now. Marketing has to go from end-to-end in a company. You’ve got to be involved in the company’s total business strategy, not just its promotional strategy. That’s where a lot of marketers get hung up and put their jobs at risk because they’re taking too narrow a focus.

How should marketers adapt to fulfill that changing role?

First of all, you should go hug a programmer, and you yourself should get some programming experience and hire people who know how to do programming. You’re going to need a much broader skill set, and you’re going to need to navigate in the world of IT. One example is data science. How many marketers are truly facile with data? And I don’t mean just mining social data, I mean someone who can do complicated algorithms to help companies run their businesses better.

Marketers have to go and get skills around things like data science, programming, and finance, and number-one on the list would be understanding the implications of new business models for your organization. By virtue of being able to step back and connect customers to their firms, marketers are the ones who have a chance to pull this all together.

When it comes to innovation, how can established companies compete with small startups?

We have a strong relationship with a number of startups, venture capital firms, and things like that. The trick I can tell you is that the principles are the same in a big company in terms of what you need to look out for, but the application of them is night and day. You cannot pretend to be a startup when you’re a billion-dollar company. You have a whole finance department and a whole legal department, for example.

You can’t fire all the lawyers because that’s just how a big company has to be run. So what do you do if you want to be startup-like? How do you adopt those ideas in a big company? That’s where I work very hard on simplification. At GE we, focused on figuring out the customer problem we’re trying to solve, and getting the bureaucracy to be adaptive and flexible enough to develop solutions. The bureaucracy can’t go away, but you can do a lot of things to streamline it.

A question that’s a personal favorite of mine is, “How do you become comfortable being uncomfortable?” I can guarantee I don’t know the answers to everything I’ve started doing, but I know I’m headed in the right direction. The way you get there is to keep experimenting and keep learning. I know I’m going to have bumps and bruises along the way, and that’s OK. You have to get your team, your boss, and your mentors to understand that it’s a learning journey. If you can get comfortable being uncomfortable, you can be a successful entrepreneur inside of a big company.

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