Category: Amazon

Qualcomm Antitrust, ARM and Huawei, Avon Sale: CEO Daily for May 22, 2019

Good morning. David Meyer here, filling in for Alan from Berlin.

It’s another tough week for Boeing, which is facing increased scrutiny from aviation regulators and a bunch of huge compensation claims over the grounding of its 737 Max fleet and delivery delays.

Tomorrow, global regulators will meet in Texas to discuss Boeing’s bid to get its planes back in service–the company has rolled out software updates to the 737 Max jets and wants to start training pilots on the changes.

The updates and training should, Boeing hopes, reduce the likelihood of bad sensor data accidentally triggering the aircraft’s anti-stall mechanisms, which may be what caused the fatal Lion Air and Ethiopian Airlines crashes (though Boeing’s shares are currently up following a report saying a bird strike may have caused the Ethiopian Airlines disaster.)

Boeing’s problem is that the 737 Max saga is changing the regulatory landscape. Until now, it’s been standard practice for all major air regulators to green-light a plane if one of them certifies it as airworthy. But the Federal Aviation Administration now has a “credibility problem,” as House aviation subcommittee chair Rick Larsen put it during a hearing last week, following reports that the FAA had given Boeing employees too much of a role in its certification of Boeing’s planes.

The European Aviation Safety Agency is now unwilling to take the FAA’s word for it when it comes to certifying Boeing. As reported by the Financial Times, EASA said it would have to approve and mandate Boeing’s design changes itself, and judge whether pilots have been “adequately trained” in them, before allowing the 737 Max back into European skies. That could mean a slowdown of the planes’ redeployment.

Meanwhile, Boeing is facing yet more calls for compensation. Earlier this week, Ryanair chief Michael O’Leary added his voice to the throng of those calling for a payout, due to 737 Max delivery delays. But now China’s biggest three airlines–Air China, China Southern and China Eastern–have filed claims for compensation over the grounding and over delivery delays. China operates the world’s biggest 737 Max fleet, so this is going to hurt.

Perhaps we can even expect the Boeing narrative to blend into that of the U.S.-China trade war, which shows no sign of improvement. One Trump administration official told the FT that the regulatory splintering over the 737 Max affair could give China an opportunity to “start shutting out U.S. airplanes, as a way to boost its own aircraft manufacturing industry.”

More news below. And incidentally, Fortune‘s Aaron Pressman has a great piece out this morning about defense contractor Leidos (No. 311 on the Fortune 500 list,) which built an A.I.-powered ship that sailed from San Diego to Hawaii and back without pesky human guidance. Have a read, and do savor the headline.

David Meyer
@superglaze
david@dmeyer.eu

Top News

Qualcomm Antitrust

A federal judge has backed the Federal Trade Commission in its antitrust case against chip giant Qualcomm, ruling that the company, which dominates the cellphone-chip industry, “strangled competition” with its patent licensing practices. Qualcomm will likely appeal the ruling, which says it has to change how it calculates royalties and license its patents to rivals at fair and reasonable prices. Wall Street Journal

ARM and Huawei

The British phone-chip-design giant ARM has told staff that the U.S. clampdown on Huawei means it has to stop trading with the company. If this blockage continues in the long-term, that means Huawei’s phone business–the second-biggest in the world–is almost certainly toast. Most phone processors out there are based on the SoftBank-owned company’s designs. BBC

Avon Sale

Ding dong, Natura Cosm?ticos calling! The Brazilian owner of the Body Shop is reportedly set to buy Avon Products in an all-stock deal that will give it 76% of the combined group, with the rest being in the hands of Avon’s shareholders. Struggling Avon’s equity value was about $1.4 billion at the close of yesterday’s trading, but the Natura deal will value it at over $2 billion. Financial Times

British Steel

The U.K.’s second-biggest steel producer, British Steel, is reportedly set to go under after failing to secure a $38 million loan from the government. That could mean the loss of 5,000 jobs at the company and 20,000 jobs in its supply chain. Reuters

Around the Water Cooler

Dollar General

Dollar General now has more stores than any other U.S. retail chain and–despite offering little in the way of e-commerce–it’s on its 29th straight year of same-store sales growth. Why so successful? As one analyst told Fortune‘s Phil Wahba, the Great Recession brought all income demographics to the bargain-basement door, and many people are still coming. Fortune

TransferWise Valuation

The international money transfer operation TransferWise carried out a second share offering that gave it a valuation of $3.5 billion. Co-founders Taavet Hinrikus and Kristo Kaarmann retain more than 80% of their shares, and none of the firm’s institutional investors sold theirs as part of the offering. The big winners here were the Estonian-British company’s employees, who, in Hinrikus’s phrasing, got to turn their “monopoly money” stock options into “real dollars.” Bloomberg

Tech War

Tencent chief Pony Ma is monitoring the U.S.-China trade war to see if it turns into a “tech war,” he told Chinese media. Ma: “If we don’t continue to work hard on basic research and key technologies, our digital economy will just be a high-rise built on sand, difficult to sustain.” CNBC

Entry/Level

What’s it like starting out these days? Check out McKenna Moore’s new Entry/Level series for Fortune, in which she interviews an Amazon user experience designer, an assistant merchant at J.Crew-owned Madewell, and an associate account strategist at Google–all just 23-years-old, yet all equipped with some sage advice.

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.

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Why Your Online Marketing Needs an Offline Boost

We tend to forget that the success of online stores doesn’t depend only on online marketing methods. Of course, the modern business world is almost entirely digitalised and customers are increasingly purchasing products online, however, we cannot ignore the influence offline marketing has on online businesses.

The post Why Your Online Marketing Needs an Offline Boost appeared first on Innovation Management.

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15 Ways to Get More Followers on Instagram

It’s no secret that business opportunities are quickly growing on Instagram. Approximately 80% of Instagram’s 1 billion active monthly users now follow a business account on the platform. While Instagram hasn’t reported its current number of business users, the platform reportedly hosted more than 25 million of these accounts in late 2017.

As the platform continues to grow and develop more interactive features, such as Instagram Stories, businesses are regularly using it as a tool to humanize brands, recruit future employees, showcase products and company culture, delight customers, and generate new business.

But here’s the deal: Unless you’re famous, it’s really hard to amass a huge following on Instagram without some hard work.

For the average person or business, growing your following takes time and attention on a daily basis.Download 25 Free Business Instagram Templates.Luckily, there are a few things you can do right away to collect at least 1,000 quality followers for your personal or professional Instagram account. It’s all about knowing where to invest your time and effort. Let’s discuss a few strategies that will help you gain those followers, from creating a follow-worthy Instagram profile, to using contests, to staying true to your brand.

1. Create and optimize your profile.

First things first: customize your Instagram profile to make it look good, tell your potential followers who you are, and give them a reason to follow you.

How? Start by making sure your username is recognizable and easily searchable — like your business name. If your business name is already taken, try keeping your business name as the first part of your username so that people searching for your business are more likely to come across you. For example, the Australian activewear line Lorna Jane uses the username @lornajaneactive.

Setting Up Your Account

Step 1. Make sure to add your full business name to the “Name” field in the “Options” section. To find “Options,” tap the three lines in the top right corner of the IOS app, followed by “Settings” which will appear at the bottom of the screen next to a gear. If you’re on Android, tap the three dots in the corner. Your business or name will appear under your profile picture and under your username in search.

Step 2. Make sure your profile is public. To make your profile public, open Instagram, open “Options,” and make sure “Private Account” is turned off.

Switch your Instagram account from private to public to gain more followers.

Step 3. Choose a profile picture that’s on-brand with your other social networks, like your company logo.

Step 4. Fill your bio with delightful, actionable, and informative information about your brand. Information like this lets people know what you’re about and gives them a reason to follow you. Include who you are and what you do, and be sure to add a hint of personality. Here are a few examples for inspiration:

  • @WeWork: “Make a life, not just a living.”
  • @Oreo: “See the world through our OREO Wonderfilled lens.”
  • @CalifiaFarms: “Crafting, concocting and cold-brewing up a delicious, plant-based future.”
  • @Staples: “We make it easy to #MakeMoreHappen”

Step 5. Add a link to your bio to make it easy for people to go straight from Instagram to your website if they want to. The space allotted for URLs is precious real estate. When you receive 10,000 followers, you can add swipe up links to your Instagram Stories. Until then, your bio is the only place within Instagram where you can place a clickable link, so use it wisely. We recommend using a shortened, customized Bitly link to make it more clickable.

Step 6. Finally, enable notifications so you can see when people share or comment on your photos. This’ll let you engage with them more quickly — just like a lot of companies do on Twitter. To enable notifications, go to “Options” and then “Push Notification Settings.” Select “From Everyone” for every category.

A word to the wise: We don’t recommend you link your Instagram account to Twitter and Facebook so your Instagram posts are automatically published on those other accounts. Post types are different.

2. Designate a content creator.

Just like there should be one (maybe two) people managing your other social media accounts, there should only be one or two people managing your Instagram account. If possible, choose someone who has experience using a personal Instagram account, and therefore “gets” the platform — and be sure they know all the handy features Instagram has to offer.

If you work for a large organization, you might find that a lot of people want to have a say in what’s posted. That’s when an organized request or guidelines document comes in hand. This document should inform people how to request a post on your Instagram account, when, the value of the post, and why.

3. Follow photography and editing best practices.

On Instagram, post quality matters. A lot. Your Twitter followers might forgive a few bad tweets, but a bad photo on Instagram is a big no-no. By no means do you have to take a photography course to be a good Instagram poster — nor do you have to practice for weeks before you start. But you should get familiar with basic photography tips and photo editing apps.

Photography Best Practices

Since Instagram is a mobile app, chances are, most of the photos you post to Instagram will be taken on your mobile device. That’s not just okay; it’s expected. While some brands use professional photography for their Instagram photos, most use smartphones — and that’s the vibe that Instagram is meant for, anyway.

Here are some highlights:

  • Focus on one subject at a time.
  • Embrace negative space.
  • Find interesting perspectives.
  • Look for symmetry.
  • Capture small details.
  • Make your followers laugh.

Edit photos before you post.

Instagram has some basic editing capabilities, but oftentimes, they aren’t adequate to make a picture really, really great. Most of your photos should go through at least one or two other photo editing apps on your mobile phone before you open them in Instagram for the first time.

4. Set a regular posting schedule.

Once you’ve created and optimized your profile, have someone manning it, and know a thing or two about phone photography and photo editing, it’s time to start posting.

It’s a good idea to have a solid number of great posts up — maybe 15 or so — before you start really engaging people and working down this list. That way, when people visit your profile, they’ll see a full screen of photos instead of just a handful, so they know you’ll be posting great content regularly.

To start posting on Instagram, first download this social media content calendar template and start planning out your Instagram posts. Over time, you’ll want to build up a backlog of photos for times of need, like the weekends or when you go on vacation.

Keep your target persona in mind when you first start planning out your posting schedule, as that can drastically change your posting timing and frequency — especially if you’re targeting an audience in a different time zone. (Download this free template for creating buyer personas if you don’t have a few already.)

Optimizing your schedule for your specific audience might take time and experimentation.

Here are a few of our best practices:

  • The very best times to post on Instagram seem to be Mondays and Thursdays at any time except between 3:00–4:00 p.m. in the time zone of your target persona. (For a United States audience, your best bet is to combine Eastern and Central time zones, For audiences located outside the U.S., use whichever time zones your target audience uses.)
  • Posting at 5:00 a.m. CDT from Tuesday to Friday generates some of the highest engagement. This is because people tend to check their phones when they wake up.
  • If you post on weekends, try to do so around 11:00 a.m, CDT on Saturday.

Because Instagram is primarily an app for use on mobile devices, users tend to use the network all the time, any time. According to a recent Pew Research study, a majority of U.S. Instagram users are on the app daily, although many users engage with content more during off-work hours than during the workday.  

Some businesses have also seen success with posting at 2:00 a.m., 5:00 p.m., and Wednesdays at 7:00 p.m. Experiment with these to see if they work with your audience.

5. Curate some of your content.

Although it’s best to have only one or two people manning your account, one or two people can’t be everywhere at once taking photos. What about that fun sushi night the engineers had last night? Or the event your head of sales spoke at earlier this week?

There’s a whole breadth of content you’ll want to post to Instagram, and more often than not, one person won’t be able to keep track of it all.

One solution? Create a system where you can curate photos and content from members of your team. There are a few ways to do this. One is to create a specific email address for employees to send their photos, short videos, memes, hyperlapses, and so on.

Just encourage people to put a subject line on these emails so you can more easily sort through the photos they’re sending. While this doesn’t seem like the smoothest way to curate photos, it’s actually the easiest for the people sending you photos — and the easier you can make it for them to send content, the more content you’ll get.

If your team shares a Box or Dropbox account, you could also create a shared folder where people can automatically drop their photos and videos. This just makes a few more steps for the people sending you the content, and not everyone might have that app downloaded on their phones. 

6. Use a consistent, platform-specific brand voice.

Photos and videos might be the most important part of your Instagram posts, but captions, comments, and other text should never be an afterthought. If you’re managing a channel for a brand or have more than one Instagram manager, consider developing a consistent voice that humanizes your brand.

This shows potential followers that you are credible and relatable, rather than formal or intimidating. 

When developing a voice, you should keep the platform and your audience in mind. For example, many influencers and prominent accounts on Instagram have a very casual voice and style, but still remain professional and on-brand. Once you’ve got your voice down, make sure it stays consistent and natural in your captions, comments, messages and your bio. 

7. Write engaging, shareable captions.

Captions are an essential part of your post — the icing on the cake, if you will. Consistently great captions can do wonders for humanizing your brand, winning over followers, and making your content more shareable — thereby giving you more exposure.

Here are a few things you might see in a winning Instagram caption:

  • Clever or Witty Comments
  • Calls to Action
  • Relevant Emojis
  • Hashtags
[youtube https://www.youtube.com/watch?v=498VDB076eY]

 

Clever or Witty Comments

Some brands and influencers have used clever or witty captions, or even audience-appropriate jokes to further humanize themselves on Instagram.

My colleague Kelly Hendrickson, HubSpot’s Social Media Manager, says that she loves Netflix’s account and sub-accounts, particularly because of the post captions: “They have such a clear brand voice, and you laugh along with them. They’re in on the joke, just like one of your friends.”

Here’s one example she gave where Netflix makes a pun out of the term “ghosting”:

Netflix’s voice is casual, trendy, and humorous while still staying on brand. In the post above, the caption cleverly connects a new commonly used phrase to an older film that’s streaming on the platform.

Calls to Action

Another way to increase the shareability of your caption and engage your followers is to ask questions or have some sort of call-to-action in the captions of your photos. For example, you might say, “Double-tap if you find this funny,” or “Share your story in the comments.” In the example below, we asked followers of the @HubSpot Instagram account to like the image if they agreed with its advice.  

 

Relevant Emojis

According to a recent study, certain emojis can actually spike engagement such as likes, comments, and shares on platforms including Instagram.

Adding just a few relevant emojis can add even more personality to your posts. It could also make them even more noticeable on an Instagram feed. In the post below, HubSpot includes the combination of a call to action and relevant emojis to make the post pop. 

 

Along with the three items listed above, you’ll also want to include hashtags.

8. Optimize posts with relevant hashtags.

On Instagram, a hashtag ties the conversations of different users who wouldn’t already be connected into a single stream. If you use relevant hashtags, your posts will get exposure to a wider audience than the people who already follow you or know about your brand.

The key to using hashtags effectively is to use them smartly and sparingly. Try to limit the number of hashtags per caption to around three. Similarly, don’t use “like for like” hashtags, like #like4like or #like4likes. This is a dirty tactic that’ll leave you with a whole bunch of low-quality followers.

To find the hashtags your audience might be using, do a little research on relevant hashtags in your niche or industry. The easiest way to do this research is in the Instagram app itself, in the “explore” tab (i.e. the magnifying glass icon).

When you search for one hashtag, it’ll show you a list of related hashtags at the top of your screen. For example, when I search for #inboundmarketing on Instagram, it shows me relevant hashtags like #marketingdigital, #marketingtips, and so on.

Hashtags can optimize your post in hashtag-based searches and help you gain more Instagram followers.

To help relate to your followers on a personal level, you might consider hopping on hashtag trends like #tbt (“Throwback Thursday”), #MotivationMonday, #TransformationTuesday, or hashtags that are trending at any given time. 

Here’s a post from @HubSpot’s account using the #InternationalWomensDay hashtag: Once you build up a bit of a following, you can try creating your own hashtags — like your company name or a slogan that applies to a lot of your photos. This is a great way to build up your brand on the platform and build a more cohesive presence.

 

9. Interact with users through follows, likes, and comments.

Instagram is very much a community, and one great way to get involved in that community is to find people who post pictures that interest you, and follow their accounts and interact with their content. It’s the most natural way to draw attention to your own Instagram account. It may also get your foot in the door in the platform’s community.

That does two things for you: for one, when they get the notification that you’ve followed them, they might check out your account and decide whether or not to follow you. (This is why it’s important to have some great content on there before you start reaching out to others.)

Secondly, it means you’ll be seeing their recent posts in your feed, so you can Like and interact with them if you choose to.

As you build a following, celebrate your followers and show you appreciate them by responding to their comments, and even following them and engaging with their posts.

10. Cross-promote with users who have audiences similar to your own.

Once you build a solid relationship with some of the folks behind these accounts that have a similar audience to your own, you might ask to do some co-promotion on each others’ accounts.

The more natural and less spammy you can make the content of these cross-promotions — especially the captions — the better. It also helps to be picky about them, and don’t do them very often.

Below, @flow, an alkaline water company, and @completelymomblog, the account of a blogger named Cortney Lynn, cross-promoted each other at about the same time:

 

11. Run Instagram contests to encourage engagement.

Another great way to expand your reach while increasing engagement on your photos is to publish a post promoting a contest, and then ask people to follow your account and Like or comment on the photo in order to enter.

You might add a UGC (User-Generated Content) element to the contest, too, where people post a photo of their own and use a specific hashtag along with following your account. Here’s an example of a post from Starbucks promoting a UGC contest on their Instagram account.

 

12. Use Instagram Stories and explore its interactive features.

Instagram has always offered the opportunity to post beautiful, curated photos to represent your brand. However, with the introduction of ephemeral Instagram Stories, brands can also share on-the-fly, behind-the-scenes looks for 24 hours that may not be as polished as a published photo, but give your brand more personality on the platform.

One look at Snapchat’s explosion in popularity demonstrates that social media users are clearly responding positively to ephemeral photo and video sharing. Instagram Stories let brands engage with users in different ways to cultivate brand loyalty and appeal.

Although Snapchat pioneered this feature, Instagram Stories now has over 400 million daily users, which is double the amount of Snap’s user base.

Along with sharing video clips and static images through Instagram Stories, users can also use interactive features like polls to gain more engagement and learn more about their Instagram audiences. Once a user is verified or has over 10,000 followers, they can even include a link to a webpage within a story.

[youtube https://www.youtube.com/watch?v=Xv-8hDlPfz8]

How Brands Can Use Instagram Stories

Instagram Stories disappear after 24 hours, unless they are marked as a “Featured Story.” Featured stories will show up at the top of your profile between the photo feed and your bio. We can’t embed Instagram Stories just yet, but you can view HubSpot’s Instagram page to see what we’ve featured.

Here are a few other brands we recommend following to see what they’re sharing:

Rachel Brathen (@yoga_girl) is a yoga teacher and entrepreneur in Aruba who uses Instagram Stories to document the behind-the-scenes action of building a yoga studio. While her Instagram portfolio features beautiful, professional photos and videos of her in yoga poses, her Stories feature her dog sitting in on staff meetings, her team unwrapping amethyst crystals to decorate her studio, and artists painting the walls.

She uses Stories to showcase the other side of her brand to her 2 million followers in an authentic and unpolished way, and to keep her followers apprised of what she does every day (besides yoga, of course).

Dana Shultz (@miniamlistbaker) publishes easy vegan and gluten-free recipes on her blog. Her Stories feature neat how-to videos of her making breakfast and testing out new recipes in her kitchen. The behind-the-scenes aspect of her Stories provide a lot of human context for her blog’s brand, and everybody loves a good how-to video.

Casper (@casper) publishes quirky Instagram content to advertise their mattresses — without overtly doing so. The main theme of their content? Staying in is better than going out (because you can stay in and lay on a comfy Casper mattress, naturally).

They’ve even created a gallery for followers to use as backdrops for their Snapchat and Instagram stories to make it look like they’re out at a party, when they’re really laying in bed. One of their latest Instagram Stories featured someone watching “The Sopranos” in bed, with the caption: “Who needs plans when you have five more seasons?” This video supports Casper’s campaign to stay in bed with a very real look at what millions of people do when they’re hanging out at home.

Here are our tips for using Instagram Stories for your brand:

  • Whether it’s funny, sad, or unique, be authentic. Your photo gallery is where content can be perfect and polished. Instagram Stories are for the raw, unscripted, and un-retouched. Use Stories to share the other side of your brand that followers might not be able to glean elsewhere. Do you have a dog-friendly office? Is your team trying out the Mannequin Challenge? Start filming to showcase the more human side of your brand.
  • Go behind-the-scenes. These are by far our favorite type of content for ephemeral video sharing. Show followers what goes into the planning of an event or the launching of a product, and make it fun. Your followers want to feel included and in-the-know, and you could use Stories to cultivate a brand loyalty program that only rewards people who check out your content.
  • Embrace interactivity. As mentioned above, Instagram allows you to add interactive stickers to your stories. For example, you can ask your audience to vote in a poll, rate something on a sliding scale, or send you burning questions. These features might help you learn about your audience while also engaging with them.

13. Use the Live Video feature.

Instagram also lets users record and share live videos, another content format that’s proven to be hugely popular on other social networks. What’s unique about live videos on Instagram? They disappear when users stop filming.

This authentic, bi-directional experience lets brands share unscripted, raw moments with their audience to incorporate human elements into a social media platform that’s highly edited and polished in its traditional use.

Since the Live feature launched, Instagram has added even more features that may enable more engagement or interactions from viewers. For example, users can now launch live video Q&As or add music to live streams.

Live video is a growing trend across a variety of social media platforms, so if something interesting is happening, start rolling. Whether it’s a team birthday party, a staff meeting, or a cute animal, your devoted followers want to see what you’re up to every day. 

14. Share your profile link on your website and social media channels.

Place a follow button on your homepage, your “About Us” page, and various other places on your website. Consider adding an Instagram badge to your website that hyperlinks to your account. Here’s what the badge could look like:

Instagram

If your brand has brick-and-mortar locations, put out a good ol’ print call-to-action letting people know you have an Instagram account and encouraging them to follow you.

Also, be sure to promote your Instagram account on your other social media accounts. Chances are, the folks who already follow you on Facebook and Twitter will also follow you on Instagram without much prodding. Let those followers know you’re on Instagram and encourage them to follow you there by including a link to your Instagram account in the bios and posts of those other social media accounts.

So give it a shot: Make a profile and start posting, testing, tweaking, and promoting your account. Garnering a following on Instagram won’t happen overnight, but the stronger of a foundation you create on your account in in your niche Instagram community, the higher quality your followers will be.

15. Apply for a verification badge.

When an account on Instagram is verified, it has a blue dot, called a badge, next to the username. When another user comes across this profile or finds the verified username in search, the blue dot confirms to them that the account is the business, individual, or brand that it’s claiming to be. 

While Instagram has a list of eligibility requirements for the badge, the platform does allow users to apply for one. You can learn more about that process in Instagram’s help center

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It’s all horizontal (and books went first)

With enough top-down energy, it feels like the creator of an idea can broadcast it, anytime and anywhere. That enough hype/promo/media/leverage ought to allow a major publisher or network or candidate to bend the culture simply by yelling.

If you follow this road, you’re going to be sorely disappointed.

For 500 years, this hasn’t been true for books. And now it’s not true for anything.

Ideas spread from person to person. Horizontally. Because someone who encountered an idea cared enough to spread the word, to talk about it, to insist that friends and colleagues pay attention, if just for a moment.

If you can figure out how to embrace the true fans, they’ll go ahead and spread an idea–not because you want them to, but because they want to.

Your ability to reach a tiny group of committed fans is essential. But the work spreads because of the fans, not because you figured out how to spend money to interrupt more and more strangers.

       

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Innovation Versus R&D Spending

Investments in R&D to foster technology, science or product innovation are just the first steps towards success. The hard part of innovation is achieving market success with the technology and products we invent. Some of the most innovative companies in the world do not spend a lot on R&D in proportion to their revenues.  

We are often asked to advise company leaders on how much they should invest in technology, science and product innovation. Their assumption is that the more technology and products they invent, the more success they will have with innovation. While spending nothing on R&D is often not an option – technology, science and product innovation are just the first steps towards success.

Having great new technologies and products certainly doesn’t guarantee immediate returns. Research by the consulting firm Simon Kucher & Partners shows that 72% of all new products do not meet their revenue targets. This shows that the difficult part of innovation is creating value propositions that resonate with customers and finding the right business models for profitability.

innovating-vs-spending-strategyzer-01.png

Research by the PwC firm Strategy&Business, has consistently shown that there is no relationship between R&D spending and returns on investment.  The companies that are rated as being the top 10 at innovation outperform the top 10 R&D spenders in terms of revenue growth, gross margin and market cap.

A great example of this Nintendo who developed the Wii using off-the-shelf components. Nintendo found remarkable commercial success with a technologically inferior product, in a market where competitors such as Sony and Microsoft were spending more money on developing cutting edge gaming consoles.

Source: Strategy + Business

Source: Strategy + Business

In fact, companies that are ranked among the top 10 in innovation are just as likely to be low or high in terms of their R&D spending. For example, Amazon spends 13% of its revenues on R&D and is ranked among the top 10 in innovation. Apple spends only 5% of its revenues on R&D, but is also ranked among the top 10 in innovation. In contrast, Nokia spends 21% of its revenues on R&D and is ranked lower than 20th in terms of innovation. This illustrates that there is no direct relationship between R&D spend and innovation. It is what you do with the investment that matters.

Source: Strategy + Business

Source: Strategy + Business

The most amazing company in terms of innovation versus R&D spend is Tesla which is not among the top 10 R&D spenders within the automobile industry. The top spenders include Daimler, Honda, BMW, Nissan and Fiat. This shows that, even with better funded competitors, a disruptive insurgent can win market share by creating the right value proposition for customers and finding the right business model. Incumbent companies may be able to spend their vast resources on technology, science and product innovation, while startups are funded and incentivised to find business models that work.  

Conclusion

If R&D spending is not the driver of innovation success, then what is? At Strategyzer, we believe that beyond technology and products, companies need to be prepared to support and nurture business model innovation. They need to go beyond products and technology and think about how they create, deliver and capture value from customers. Investments in R&D will only bring returns if the products we invent become successes in the market.

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Tears and rage – the rise of the emotional release industry

When Ariana Grande cried on stage recently, following her performance of an emotionally laden song, she later took to Twitter to apologise and thanked her fans for accepting her humanness.


Producing emotional tears is a uniquely human thing and yet, for many, our first reaction to crying is to apologise.

Public displays of crying and emotional release, especially of emotions deemed as unattractive like being upset or angry, remain taboo. This is because there are socially accepted rules that govern the way we feel things. These “feeling rules” guide the types of emotions and feelings deemed appropriate to display at certain times and places.

These rules tell us that is it acceptable to cry at funerals, but not necessarily at pop concerts. Equally, such rules have often stereotyped certain cultures and genders into particular norms. So feeling rules tend to dictate that men must show greater restraint in expressing their emotions publicly.

The pressure of fast-paced, 24/7 societies has created a deficiency of times and places to release emotion. And into this emotional void a marketplace has sprung up to provide people with places where they can safely vent.

Japan is at the forefront of this. The Japanese, often stereotyped as emotionless, have found ways to cater to a growing demand for emotional release. In response to the stresses of everyday life particularly among women, hotels launched so-called Crying Rooms. These made-to-order rooms come complete with weepy movies, a cozy atmosphere and tissues on surplus, with the aim of providing women a time and space where they can privately release their upset and tears, free from society’s judgement and gaze.

The Japanese company Ikemeso Danshi is even building a reputation for its cry-therapy services, during which customers watch emotive short films under the guidance of a “tear courier”. In a culture where crying in front of others is taboo, the cathartic benefits of group crying brings stress relief and relaxation, leading many Japanese companies to embrace the service as a useful team-building exercise.

But it’s not just Japan that has an emotional release industry. Cities around the world have seen the launch of anger rooms that provide a designated and safe space for customers to release rage through destroying objects. The recently launched Rage Club in London is a monthly event marketed as a game where participants “play with different practices to embody, enjoy and express rage”. The Wreck Room lets you just smash things up in a room on your own.

For some, these services will represent the unwelcome commercialisation of human interaction and fundamental needs. Others will welcome them as a therapeutic experience.

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Judgement-free environment

A commonality across these services is that they are an opportunity to release emotions in a judgement-free environment, with like-minded others. These are the key features of our new concept entitled Therapeutic Servicescapes, which outlines how service providers can build an environment where people can healthily release their emotions. Our research was based on a three-year study of the Catholic sanctuary of Lourdes in France. We uncovered three key features that help produce a setting where particular emotions are permitted and released. These features involve:

1) A space that’s designed to stimulate particular emotions.

2) Like-minded beliefs provide a sense of safety, security and acceptance of the behaviour and emotions of others.

3) An escape from the dominant cultural feeling rules.

We found that these features catalysed emotional release, which boosted people’s emotional well-being. While many of the Japanese services outlined above are aimed at women, our research found the therapeutic environment at Lourdes was crucial to both men and women. Many of the men we spoke to saw it as a safe space, where they could release emotions and cry, free from judgement and stigma. This acceptance of crying, people told us, contrasted with their home cultures that they described as “emotionally straightjacketed”.

The value of this kind of service space is evident, especially at a time when society faces a mental health crisis, with men often worse affected by the inability to talk about or release their emotions. Suicide is the number one cause of death for men under 50 in the UK and suicide rates among US men is four times higher than women. Our study shows the importance of creating spaces where men can open up about their feelings, free from the usual societal pressures that stop them from expressing their emotions.

The health and wellness industry is expected to grow to £632 billion globally by 2021, with more and more people spending money on healthy eating, exercise and activities that help their mental health. We see the appeal of services that promote emotional release as a relatively untapped but growing segment of this burgeoning industry.The Conversation

Leighanne Higgins, Lecturer in Marketing, Lancaster University and Kathy Hamilton, Reader in Marketing, University of Strathclyde.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Innovation Versus R&D Spending

Investments in R&D to foster technology, science or product innovation are just the first steps towards success. The hard part of innovation is achieving market success with the technology and products we invent. Some of the most innovative companies in the world do not spend a lot on R&D in proportion to their revenues.  

We are often asked to advise company leaders on how much they should invest in technology, science and product innovation. Their assumption is that the more technology and products they invent, the more success they will have with innovation. While spending nothing on R&D is often not an option – technology, science and product innovation are just the first steps towards success.

Having great new technologies and products certainly doesn’t guarantee immediate returns. Research by the consulting firm Simon Kucher & Partners shows that 72% of all new products do not meet their revenue targets. This shows that the difficult part of innovation is creating value propositions that resonate with customers and finding the right business models for profitability.

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Research by the PwC firm Strategy&Business, has consistently shown that there is no relationship between R&D spending and returns on investment.  The companies that are rated as being the top 10 at innovation outperform the top 10 R&D spenders in terms of revenue growth, gross margin and market cap.

A great example of this Nintendo who developed the Wii using off-the-shelf components. Nintendo found remarkable commercial success with a technologically inferior product, in a market where competitors such as Sony and Microsoft were spending more money on developing cutting edge gaming consoles.

Source: Strategy + Business

Source: Strategy + Business

In fact, companies that are ranked among the top 10 in innovation are just as likely to be low or high in terms of their R&D spending. For example, Amazon spends 13% of its revenues on R&D and is ranked among the top 10 in innovation. Apple spends only 5% of its revenues on R&D, but is also ranked among the top 10 in innovation. In contrast, Nokia spends 21% of its revenues on R&D and is ranked lower than 20th in terms of innovation. This illustrates that there is no direct relationship between R&D spend and innovation. It is what you do with the investment that matters.

Source: Strategy + Business

Source: Strategy + Business

The most amazing company in terms of innovation versus R&D spend is Tesla which is not among the top 10 R&D spenders within the automobile industry. The top spenders include Daimler, Honda, BMW, Nissan and Fiat. This shows that, even with better funded competitors, a disruptive insurgent can win market share by creating the right value proposition for customers and finding the right business model. Incumbent companies may be able to spend their vast resources on technology, science and product innovation, while startups are funded and incentivised to find business models that work.  

Conclusion

If R&D spending is not the driver of innovation success, then what is? At Strategyzer, we believe that beyond technology and products, companies need to be prepared to support and nurture business model innovation. They need to go beyond products and technology and think about how they create, deliver and capture value from customers. Investments in R&D will only bring returns if the products we invent become successes in the market.

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