If you believe that you'll get what you've always got by doing what you’ve always done, you’re wrong. You won’t. You have to change. Jonathan Sands, Elmwood
Jonathan Sands takes a whirlwind tour through inspiring ideas from around the world, and discusses tools to change your business with Economist correspondant Vijay Vaitheeswaran.
Read the transcript below.
Jonathan Sands, Chairman, Elmwood
Good morning, everybody. I was here yesterday morning and there were two real outtakes for me, two great sayings of the day. The first one was 'change starts with your underpants,' I really liked that one. And then the other one was 'a skip on a brick.'
But actually I took these photographs in China two weeks ago, three weeks ago. I was there for Chinese New Year, and if you are born in the year of the Tiger, which it now is, it is the time of year when you change your underpants, and you have to buy red underpants. So, I’m going to talk very quickly because actually I’ve been told I’ve got five minutes less than I thought I had, but if you buy red underpants it’s meant to give you good luck, so I did think I should buy myself some. And for the designers in the room, I do encourage you to get some red underpants because every pitch in the last two weeks we’ve won. That is a fact.
People keep talking about, you know, doom and gloom. This was a quote by Archie Norman, one of my business heroes, for recession virgins and it said, 'The first thing you have to do is make sure that everyone understands that this is a long term situation, and then you can get on and enjoy it.' Well, you know, what else do you do? Do you moan and groan about it and think, you know, my business is going down the pan, or do you actually do something about it?
The truth is in Britain our industry is in deep trouble and I have had the fortune to travel the world more than 50 times in the last five years, I spend all of my time on aeroplanes. And I’m going to give you a quick canter of some of the things that I think are happening and will give you some tools to hopefully reinvent your business. Because I am in the camp that you do need to reinvent your business model – even though my own business is doing quite well, but I know it has to change.
Another one of my business heroes was a guy called Peter Asquith who was one of the founders of Asda and he believed in the thumb gutty principle. And basically he said that businesses are run by too many accountants these days with lots of analytical thinking. And he said, 'I always used to run my business on the thumb gutty principle, and it was basically, I used to lick my thumb like that and I used to look at something and I used to do that, and if it felt right we did it.' And that was his business principle, and I would encourage everybody to think, you know, if you believe that if you keep doing what you’ve always done you’ll get what you’ve always got, you’re wrong. You won’t. You have to change.
So, I’m going to just give you a few things that I’ve seen around the world. When I go to Australia I always stay at the same hotel because they have a bath menu, so when you get off the plane ten minutes before... it’s ten minutes to the hotel from where I get off the plane, they’ll run you a bath and they’ve got a menu of different baths. And the bath for guys is a cigar and a whiskey and some, sort of, essence in the bath. You can have a bath for lovers which is two glasses of champagne and some strawberries. And, when I got to the hotel I thought I’d got lucky with the chambermaid and she’d left me this sign which said to call me. It was only later that I realised it said Como which is the name of the hotel, and I actually just thought what a great piece of branding, and branding is in the detail.
I just thought this was interesting. It’s a supermarket but when you go round the corner there’s a guy sat on a grand piano. I just thought, wouldn’t it be great to see that in our supermarkets?
How many people in this room have been to India and China and Latin America within the last 18 months? About eight. You might have been to China, you might have been... That is the problem, is that we come to seminars like this to get insights and you really need to go out there and see what’s happening. I took these photographs; five people on a motorbike, is common, which is why Tata are now producing a car for a £1,000 because lots of people are dying. I did see human bodies by the side of the road when I was driving to Agra one day. And the pace of change is really fast. You know, this shows the new train system going in on the top, but the old mode of transport, the horse and cart... the ox and cart still happening.
And this is a typical shopping environment. Ladies look away, this is the gynaecologists in amongst the motorbike stand on the top left. But also I bought a – this is a new store in Gurgaon – and I bought a T-shirt in that store and it cost me £8. So, you’ve got two different worlds all in one place, and the same as in China. An Avatar movie on sale for $1, which is obviously a knock-off but actually really good quality, and then you’ve got shoes which are Arsenal spelt with a lower case L and a Porsche emblem on the side. What’s really frightening is this was sold in a major supermarket chain. I can’t remember whether it was Tesco or Carrefour, you know, they’re actually selling knock-off gear in their stores.
But then also you’ve got very expensive – I couldn’t resist this – a bull in a china shop, but actually that’s a piece of whiskey packaging which I just thought was fantastic. And the confectionary, that’s a box of confectionary at £70. Actually it’s not confectionary, they’re dried worms but if you want dried worms worth £70 then you’ve got them. And I thought this was a neat idea. Talk about sustainability, beautiful perfume bottles. Why do you have to buy new perfume bottles all the time when you can actually go and get your perfume out of an optic in terms of the beautiful jar that you might have bought. I thought that was... It’s not done particularly nicely but I thought that was a great idea.
So, the message is the future has already arrived, it’s just not evenly distributed. And I actually do believe we’re living in a mature market and our market is driving lots of stress levels. Sadly I’m no longer 44 but, and you can probably guess how many years ago this is because I didn’t get three points. You would get three points now for having a mobile on while you’re driving. But, you know, we have all of these devices that make our world even more stressful as we’re connected 24/7. You’ve got a billion apps for the iPhone that have already been downloaded. You can find the price of everything online. So, you know, we are living in this stressful world. We’re also living in a very cynical world, and in Japan consumers... sorry, corporations are using cartoon characters to get over corporate cynicism because Mickey Mouse would never tell you a lie – the corporation might, but Mickey Mouse wouldn’t, and so too with cartoons like the lion.
So we’re living in this world of anxiety. We’re worried about everything. We're worried about global warming, we’re worried about the credit crunch, we’re worried about food scares, we’re worried about pandemics. And so we’re living in a world where we try and escape. We escape to Second Life, but actually that adds more stress because in Second Life now we’ve now got our first real life divorce as a result of a Second Life affair, so escapism is perhaps not what it’s cracked up to be. And what’s really frightening is escapism, even kids are escaping. I don’t know how many people have been into American Girl, it’s doll store in the States. I had to be very careful, as a, sort of, a man of certain years going into a doll store on a Saturday, but I couldn’t resist it. You can get your doll in your own likeness, you can even buy the same clothes as your doll – although your doll isn’t called a doll, it’s called Emily or Sarah, and they get a birth certificate. Top left, is you take your little thing for a haircut and this is the hospital. You know, if your doll is broken, it’s not broken, it’s got a hand trauma as I understood, and the nurse will make sure your doll is all right. It’s quite scary. And also, because they’re born on a certain day, they all come for a birthday party the following year, which is amazing.
So, I think the great thing is that in times of difficulty innovation happens. So sliced bread happened in 1929 because we needed to make our loaves go further. Hardship is the mother of invention. But just give you some of the quick trends that are happening around the world and things you might like to think about for your business; nostalgia is a great antidote to anxiety because it reminds us of a time when things were safer back then. You know, you can now buy digital cameras that look like old Leicas. The Fiat 500 is a fantastic retro design, and it’s no surprise that last week Lego announced increase in sales while video games went down. Humour is also a great antidote and this is a Smiles an Hour zone in Australia. The Mayor decided that his town wasn’t very happy and actually property prices were going down so he put cameras on the street to see how many people smiled in an hour as they went by, and guess what? The areas where people smiled the most the prices went up, so everybody was going around like this all round the town.
And togetherness; this is our local pub in Melbourne. You can’t see her probably, but top right there’s a topless girl. I’ve never seen her in there but what’s good is that this pub – these are all photographs of the customers – what a great way to show you love your customers. It’s like inviting them into your front room. And, this is a brand called ARK which stands for Acts of Random Kindness. Kindness is a trend, and the idea is that when you wear this clothing it’s meant to change the way you act, so it’s meant... you give up your seat on a bus for an old lady or give somebody a cup of coffee.
And, yesterday we talked about how sustainability is about making sustainability visible so you can do something about it. I thought this was a great idea. You know, why do bin bags have to be black and why can’t we make rubbish more visible so we can probably do something about it? I’m going to skip over a bit of sustainability stuff and you can ask me questions later. This just is a great idea; L-shaped packaging. Why does a box have to be so big when actually you could take out a bit because the product’s long and fat but not all the way? So, as a result by designing the boxes in an L-shape you get more on a pallet so you can ship more and it reduces costs. That’s where a designer is thinking about driving out cost rather than thinking about increasing sales and market share. If you’re interested in that buy one get 15,000 free. I’ll tell you how that works later.
A tool that everybody here can subscribe to; we have a saying at Elmwood, 'no grazing no milk' or in other words, if you don’t get new input you can’t deliver new output, you can’t reinvent things. So, we have something called the Daily Poke which if you go onto Brand Channel you can see it but anybody in this room if they want to email me we can subscribe you to this and everyday you’ll get a neat idea that somebody’s seen from around the world.
This is a map based on your mood so if you’re feeling energetic it tells you where the great parks are for a walk or if you’re feeling down it tells you where the comedy store is, so it’s a map based on mood. This is packaging where the product grows in the pack on its way to the supermarket, so actually it’s as fresh as can be when you get there. And this is a drinks pack which, after you’ve used it, turns into a toy. So, those are just some of the Pokes.
I’m going to finish with two, sort of, quick stories. This is a business guru, Jerry Garcia. Okay, he was also a rock star, but I love this quote; 'It’s no longer good enough to be the best of the best, you have to be the only people who do what you do.' If you are the best of the best you are benchmarking yourself against likeminded businesses, but if you’re the only people who do what you do then you’ve got somewhere to go, and to do that you have to think differently, so this is one of the tools I wanted you to think about. It’s about stepping into other people’s shoes. You know, we’ve got learning based on our baggage so if you are of a certain age you’ll know what your boss thinks and you’ll know what your wife or husband thinks, and it stops you doing things because you know, you’ve learned stuff. Whereas if you step into the shoes of Chris Evans or somebody else then you think like them. Now, recently I was walking a store with a client on my knees, and they said, 'Why are you on your knees, Jonathan? You’ll wear your trousers out.' I said, 'I’m pretending to be an eight-year-old and I’m wanting to see the store from their perspective.' And I thought, here is somebody who obviously walked the store on her knees, this is a kids’ toy shop, and it shows how they love children because they’ve got their own doorway for them.
Just to give you a quick example of how this works, I was at a conference like this a couple of years ago and a guy from Heinz was in the audience and he said, 'Jonathan, what you’re talking about is a load of nonsense. Heinz is a holy cow of a brand, all we need to do is keep advertising it and we’ll be fine.' Well, that was like a red rag to a bull for me. And the conference organiser said to me afterwards, 'Jonathan we’re meant to be doing a workshop this afternoon but the guy’s not turned up, can you do one?' I thought, you know, 200 people in an audience and no brief.
Anyway, the guy from Heinz had upset me so I got the 20 people in the front row and I said, 'Right, you’ve got a brief, you’ve got to design a bottle of tomato ketchup that’s going to beat Heinz in ten minutes, and in ten minutes you’re going to come up on this stage and present.' And, you could see them all shifting in their seats. I said, 'But the only thing is you’ve got to design it as if you are Mickey Mouse and you’re designing it for their friends.' And this guy jumped up on stage after ten minutes and he said, 'Right, our tomato ketchup comes in a squeezy bottle, it has six different caps with it and each cap squeezes the ketchup out in a different shape. And we’re going to do food art on the web and we’re going to call it Sketchup.' They kept talking for... you know, we couldn’t get the guy off the stage, and I got my phone out and said, 'Is that the patents office? I just want to...' The guy from Heinz did come up and apologise afterwards.
So, the final bit of wisdom is – some of you will have seen this story before – but for the first time I’m going to give you a piece Elmwood intellectual property that I’ve never given to any competitors and I know there’s some great ones in the room. But, we talked yesterday about storytelling and great brands tell great stories. I was fortunate enough to be with an animation studio in the States recently and they told me what the secret is to a great story. A great story has to have a conflict within it, and when the conflict is over, the story ends, and there are only three types of conflict. There’s a character against character, goodie against baddie; character against the environment, so the Poseidon Adventure, a ship going down; or character against an internal struggle, so dying of cancer, lover jilted you. Die Hard was a blockbuster because it embraced all three conflicts at once; character against character, goodie against baddie; he’s stuck in a lift shaft in a burning building and his wife’s a hostage – all three. And it changed the whole genre of action movies. And, therefore, great brands need to embrace conflict. I don’t know how many remember the Skoda ad where they’re walking along and they’ve seen this great piece of engineering and then they see the Skoda badge? Sort of like, great car, crap badge – and actually this is what we did with this organisation.
Sewage is not particularly interesting – although it was for the guy that I spoke to and he got me around his table and he said, 'Jonathan, have you got a septic tank, I believe you have, I believe you live in the country?' And I said, 'Yeah, I do.' And, he said, 'Well do you realise you could go to jail for three months and have £20,000 fine?' I said, 'So, how come?' He said, 'Well, they don’t work anymore. Septic tanks were designed when farmers had a bath once a month, now you’ve got power showers and dishwashers and Domestos that kills all known things dead, so you’ve got this horrible tank of stuff in the ground that – if it goes into the natural watercourse – the Environment Agency can fine you and put you in jail.' And I jokingly said, 'That’s serious shit!' – hence the rebrand of the company. We rebranded the company Serious**, the colours are not accidental. On the back of the stationery it says, on these compliment slips, it says, 'You asked for it.' One the business card it says, 'We deal with it.' On the PR sheet it says, 'Read all about it.'
This was about embracing the conflict of here’s something that’s not very amusing and making it amusing, or not very interesting and making it interesting. What’s really interesting, though, is we got a seven-page article in a Japanese magazine. We won a German award that we never entered for an environmental award, and these Germans phoned us up and said, 'We love your Serious Shit so much we give you the award anyway.' But most importantly it increased the client’s business by 50% overnight, and believe me, having a septic tank emptied is not a purchase that you think, oh, I’ll have my septic tank emptied today, you know, you either need or you don’t. And best of all, it beat NatWest bank for Best Corporate Identity of the Year.
I’m going to finish on the real truism, which is that the secret of great creativity and not getting over anxiousness is to get yourself some Alpacas. Thank you very much.
Vijay Vaitheeswaran, The Economist
Thank you. Let’s have a seat. We’ll take some questions.
Jonathan Sands, Chairman, Elmwood
And I did it in 20.
Vijay Vaitheeswaran, The Economist
You did. I’m very impressed.
Jonathan Sands, Chairman, Elmwood
I was frightened from yesterday I saw you beating people up.
Vijay Vaitheeswaran, The Economist
Yes, that’s right. My reputation lingers. But I didn’t realise, aside from your many talents as a branding guru that you’re, given that you’ve been up in the air 50 times, the George Clooney movie is actually about you. You’re being played by him in this crazy movie. Tell us, of the tools you have advised companies, including Wal-Mart and others, what is the one that they’re most resistant to accepting?
Jonathan Sands, Chairman, Elmwood
Well, I think the reason why I often use the Serious** case study or another one that some people in this room will know is the Debbie & Andrew's case study, is that small businesses are better risk takers because the bigger the company, the more they have to justify their actions to institutions and the stock exchange and therefore incremental change is what they’re interested in. They’re interested in safe, steady returns. They’re not interested in being brave because quite often brave equals dangerous. But if you’re dealing with the Chief Executive of an organisation, like I was with the guy from Serious**, David Birkett, who just a splendid guy. He’s as passionate about poo and wee and I am about design. He will make that decision to think, 'Actually this is not a big risk and I can live and breathe that brand.' So, I think the biggest challenge for businesses is being brave.
Vijay Vaitheeswaran, The Economist
Well, this gets actually to one of the key aspects of innovation I think that companies are coming to grips with. It seems to me that a willingness to embrace failure, certainly to take the risk of failing, and having a culture that rewards managers that take risks. You talked about bigger companies being less reluctant to do this. This is one of the hardest things for companies, but especially as we move to an era where the corporate metabolism has to be higher. We have heard a lot about change coming faster, a more globalised world, disruptive innovators coming along challenging existing business models. In this kind of world companies have to be willing to do this better, but it’s quite hard, isn’t it, to do what’s called... what at GE they call fast failing?
Jonathan Sands, Chairman, Elmwood
Yeah. I think two expressions, again, we use a lot, first; ask for forgiveness not for permission – because if you ask for permission you probably won’t get it. And, secondly, we actually believe in a process called 'frighten and enlighten.' What that really means is that if you don’t get out there and see the world and see what’s coming at you fast... I mean, I thought it was a typo when I was in China two weeks ago. They’re going to build 150 airports in the next five years, we might manage one more runway. I went through Shenzhen – this is a place that didn’t exist 20 years ago – and after an hour of driving it was still tower blocks. You know, the pace of change that is coming down the tracks and... I was in Singapore and I went to some of the design schools. The design innovation thinking that’s going on in some of these places is world class. So, my one plea of today is; it’s fantastic that people are at a conference like this and I think it’s truly wonderful that the Economist and the Design Council are collaborating in this way. I really do urge you to go and see some of these emerging nations. Go to Brazil, go to Mexico, go to India, go to China, because it’ll certainly make you go, 'Holy cow, I have got to change and fast!' Because the UK economy, the Western economies are in trouble.
Vijay Vaitheeswaran, The Economist
So you talk about needing to change fast. I’m going to ask people to get their questions ready while I pick one up from the text. There is a question that says; isn’t change centred around strong individuals? And, particularly if you talk about big companies, the role of culture, the role of executive leadership, what do you think about individuals as those making change?
Jonathan Sands, Chairman, Elmwood
Well, it’s, sort of, a cliché but, you know, you only have to look at Steve Jobs to realise that there is a company driven by somebody who is a risk taker. And he himself, I think he said something like, you know, I can only see... join the dots going backwards, none of us have a crystal ball to see what’s coming forwards, and that’s why I believe in the thumb gutty principle. I think you have to believe in your own intuition and I think great leaders inspire those people around them and encourage innovation and risk.