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Levi-Strauss, the jeans and apparel maker, missed out on the hip-hop trend. They didn’t realize that those kids in baggy jeans represented a whole new — and lucrative — market opportunity, one they could have seen coming if they had but been paying attention to the shape of American culture.
Levi Strauss isn’t alone. Too many corporations outsource their understanding of culture to trend hunters, cool watchers, marketing experts, consulting firms, and, sometimes, teenage interns. The cost to Levi-Strauss was a billion dollars. The cost to the rest of corporate America is immeasurable.
The lesson? The American corporation needs a new professional. It needs a Chief Culture Officer.
Grant McCracken, an anthropologist who now trains some of the world’s biggest companies and consulting firms, argues that the CCO would keep a finger on the pulse of contemporary cultural trends-from sneakers to slow food to preppies-while developing a systematic understanding of the deep waves of culture in America and the world. The CCO’s professionalism would allow the corporation to see coming changes, even when they only exist as the weakest of signals.
Delightfully authoritative, trenchantly on point, bursting with insight and character, Chief Culture Officer is sure to expand your horizons-and your business.
MORE PRAISE FOR GRANT McCRACKEN AND CHIEF CULTURE OFFICER
“This is a marvel of a business book: highly entertaining, original, and provocative. Entrepreneurs who want to understand their customers, target market, and the cultural dynamics that shape the business world—which is to say all entrepreneurs—need to read it.”
—BEN CASNOCHA, author of My Start-Up Life: What a (Very) Young CEO Learned on His Journey through Silicon Valley
—FARIS YAKOB, Executive Vice President and Chief Technology Strategist, McCann Erickson New York
—PHILIP KOTLER, author of Chaotics: The Business of Managing and Marketing in the Age of Turbulence
—RICHARD GREFÉ, CEO, AIGA | the professional association for design
—MARIAN SALZMAN, partner and chief marketing officer, Porter Novelli
HOW TO CREATE A LIVING, BREATHING CORPORATION
LEVI STRAUSS, THE JEANS AND APPAREL MAKER, MISSES hip-hop. The penalty: $1 billion.1
Quaker pays too much for Snapple. The penalty: $1.4 billion.2
Facebook claims 7 billion photos as its own. Embarrassment and recantation follow.3
These corporations, like most, were bad at reading culture, bad at staying in touch with culture, bad at working with culture. And it cost them dearly.
By “culture,” I don’t mean corporate culture. And I don’t mean “high culture,” the world of refined taste. By culture, I mean the world outside the corporation, the body of ideas, emotions, and activities that make up the life of the consumer.
It’s not that the corporation hasn’t tried to take account of culture. It’s resorted to the advertising agency, designer, consultant, cool-hunter, and guru.4 Worst case, someone says, “Let’s see what the intern thinks.” (Now a million-dollar decision rests on a twenty-year-old.) But culture is too important to be left to an outsider (or a twenty-year-old). When there’s $1.4 billion at stake, it needs a Chief Culture Officer.
The corporation has learned many things in the past one hundred years. It has mastered most of the mysteries of organizational behavior, operations management, human resources, communication, marketing, and finance. Until it masters culture, it makes the world needlessly mysterious. It multiplies risk.
Culture matters for reasons good and bad. First, it is the place to discover advantage, opportunity, and innovation. The Four Seasons, Patagonia, Starbucks, Nike, Red Bull, Target, Method Soap—each is a culture play. Each found value in culture. Each extracted value from culture.
Second, culture is the breeding ground of cataclysmic change, a North Sea out of which commotion constantly storms. Without a working knowledge of culture, the corporation lives in a perpetual state of surprise, waiting for the next big storm to hit. Without a CCO, the corporation has no way to perform this crucial piece of threat assessment.
It’s a great puzzle that the corporation should still be trying to solve this problem. We have had 230 years since Adam Smith to find a way to work with culture. Certainly, gifted entrepreneurs and managers rose to address the problem. What was missing was a clear idea, a working knowledge, of culture.
In management literature, there was always a newcomer to elbow culture out of the way. “Objectives!” said Drucker. “Quality!” said Deming. “Reengineering!” said Hammer and Champy. “Excellence!” said Peters. “Strategy!” said Porter. There’s always a new guru, bearing a shiny new toy for the C-suite.5 Poor culture, always the bridesmaid, never the bride.
That’s what I want to do with this book: invent an office and an officer—the Chief Culture Officer, the person who knows culture, both its fads and fashions, and its deep, enduring structures. I hope this book will be read by two groups: people inside the corporation who want to make the corporation more intelligent, strategic, and responsive, and people outside the corporation who want to turn their knowledge of culture into a profession and a career.
To the CEO, I say, appoint a Chief Culture Officer. To those poised to become a CCO, I say, “You can do it. I can help.”
GETTING PAST GURU
Being Steve Jobs
“HE’S A GENIUS.”1
“Jobs is indispensible.”2
“Steve Jobs is the key to Apple success . . . [W]ithout him [Apple’s] future is very much in doubt.”3
People talk about Steve Jobs as if he were one of a kind. Clearly, he is a remarkable man. When we look at what he’s done for Apple, cell phones, digital content, the art of design . . . well, he has earned our admiration.
But when it comes to helping Apple navigate culture, Steve Jobs may be less indispensible than we think. With a more systematic approach to culture, many could do what Jobs has done. Let’s not be blinded by the “cult of personality.” It’s good for Jobs. It’s good for Apple. It’s not so good for the rest of us. We have made ourselves guru-dependent.
Jobs owes some of his celebrity to how bad the corporation is at culture. As long as the competition is someone like Sony’s Sir Howard Stringer—the CEO who couldn’t bring himself to apologize for “Rootgate” and struggles to grasp new media and youth culture—well, Jobs is bound to look like a genius.4 As long as culture is ignored by business schools, C-suites, big brands, and consulting houses, Jobs looks great. In the land of the blind, the one-eyed man is king (even in sneakers, jeans, and black turtlenecks).
Many companies depend on a guru: Apple on Jobs, Virgin on Richard Branson, CBS on Les Moonves, Omnimedia on Martha Stewart, Bad Boy Entertainment on Sean Combs. The Securities and Exchange Commission worries about this sort of thing. It says that these companies must warn the investor. Here’s what Omnimedia is obliged to say about Stewart in its annual report.
Ms. Stewart’s efforts, personality and leadership have been and continue to be critical to our success . . . [T]he repeated diminution, or loss of her services, due to disability, death or some other cause . . . could have a material adverse effect on our business.5
But precisely. Martha Stewart is the taste maker at Omnimedia. Her loss would be cataclysmic. But, TV appearances aside, is she essential? Stewart is a virtuoso, to be sure. But her gift is not mysterious, imponderable, or irreproducible. Stewart is not essential.
That’s the operating idea of this book: We can reverse-engineer the Stewart sensibility. We can reverse-engineer Jobs’s feeling for culture. We don’t need gurus. We can be our own barometers. The celebrity CEO would like to play the French monarch and insist, “Without me, you’re nothing.” The truth is otherwise.
I will know this book has made a difference when the annual report reads,
[T]he repeated diminution, or loss of the CEO’s services, due to disability, death, or some other cause . . . could have a material adverse effect on our business. We have appointed a CCO to diminish the risk.
We will scrutinize the likes of Jobs and Branson and see if we can reverse-engineer their abilities. How do these people do it? What’s the secret of their ability to read culture? And could we do it ourselves?
Steve Jobs’s parents sacrificed heroically to send him to Reed College, a small liberal arts school in Portland, Oregon. But he wasn’t happy. He couldn’t see the point of his studies, and after six months he dropped out.
Jobs didn’t leave Portland and he didn’t leave Reed. He stayed on campus as an unregistered student, walking, thinking, noticing. One of the things he noticed was that campus posters were particularly beautiful. A little investigation told him that Reed had a good calligraphy department, and Jobs decided to take a class, his only class. He promptly fell in love with the art form. “It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.”
And not just fascinating. When Jobs designed the first Macintosh computer, ten years later, his Reed training came back to him. And the rest, as they say, is history. Without his calligraphy course, Jobs says, “the Mac would have never had multiple typefaces or proportionally spaced fonts.” And he says, “It’s likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do.”6
Thanks to Jobs and that course, Apple was unique in the tech space. It cared about beauty. And this gave it a strong connection to the creative community, which in turn supplied the corporation with a passionate, supportive base. Apple enthusiasts were so dedicated to the brand they helped fund each new Apple experiment, embracing, without much complaint, even the odd Apple failure. Competitors like HP and IBM lived in a ruthlessly commoditizing marketplace filled with consumers who were “brand disloyal” and aggressively “price sensitive.” Apple lived in a magic bubble with brand evangelists and huge profit margins. Jobs had found a way to connect to the creative community. He had found a way to read culture and speak to it.
Jobs wasn’t a CCO but certainly he acted like one. The lesson: Connect to our culture and we will follow you anywhere. And Apple is now so spectacularly in touch with parts of our culture, it seems almost in control of it.
But the problem is not always a guru who exerts undue influence and claims undue attention. Sometimes the corporation has a CCO on board, a stowaway who deserves more influence than she has.
For much of the twentieth century, Coke was the defining brand of American commerce and culture, fashioning the image of America at home, distributing the image of America abroad. Coke even helped create our idea of Christmas. (We think of Santa Claus dressed in red and white because these are the colors of the Coca-Cola Company.)7 Coke was everywhere. Coke was it.
That was then. Now Coke struggles to stay in touch with American culture. The value of the brand fell some 20 percent between 1999 and 2006.8 Consumer taste and American culture started running away from Coke, not toward it. Niche players like Gatorade and Red Bull were creating new drinks. Coke wasn’t it. Consumers were rethinking what a “drink” was.
Mary Minnick might have been CCO to the rescue. She joined Coke straight out of business school in 1983. But despite the fact that she was a Coke “lifer,” she was alive to the new directions drinks were taking. She was particularly interested in the noncarbonated drink. (She created Fruitopia.) At Coke, this made her the apostate. A manager told her, “You’ve pushed too hard, you’ve alienated everyone in North America, your passion for non-carbs [non-carbonated drinks] has gotten in the way of what’s right for Coke, and nobody wants to work with you anymore.”9
Still, Sergio Zyman and Neville Isdell, the most senior managers at Coke, believed Minnick was the person who could push Coke from “soda-centric” to the “cutting edge of consumer trends.”
God knows, she tried. She vented impatiently, complaining that Coke’s intelligence was “superficial.” She launched a coffee drink called Blak and a green tea drink called Enviga. She brought in Wieden + Kennedy to create a new ad campaign called the “Coke Side of Life.”10 By her departure, Minnick had created an “enduring pipeline of innovation.”11 Despite these encomiums, she left, forced out.
When it came time to appoint the new CEO, Coke passed Minnick by. Instead, it chose Muhtar Kent, who has a bachelor of science degree in economics from Hull University in England and a master of science degree in administrative sciences from London City University. Kent managed the Coca-Cola system in Central Asia and Eastern Europe. This is another way of saying, and I say this with all due respect, that Kent knows relatively little about contemporary American culture. He is by all accounts a smart and charming guy. But American culture? Perhaps not so much.
Let’s be clear. Without a connection to culture, Coke is merely carbonated water and syrup. Without culture, it’s just a fizzy drink. So culture counts. Let’s be clearer still. The fundamental terms of the Coke proposition are changing. The carbonated soft drink is now contested by new ideas of what a drink should be (Snapple, Gatorade, Poland Springs, Vitamin-water, Red Bull). In the traditional case, culture matters. In the present case, it matters more.
At a crucial juncture, Coke had the good sense to make Minnick the head of marketing. But when it came time to making her CEO, it blinked. It ignored the one person in the corporation who seemed to grasp the new world of the noncarbonated drink. Indeed, Coke appears to have searched its empire until it found someone who didn’t. Now, to be fair, a corporation doesn’t need to appoint a master of culture as CEO. (Though it is hard to imagine knowledge that matters more to a company like Coke.) But when a company has a local genius, it should count its blessings and do the right thing. If it has a Mary Minnick, it should make her CEO. And if can’t do that, it should appoint a CCO.
In the 1990s, Motorola was a force to be reckoned with. The StarTAC clamshell was the “it phone” of the moment. (PC World called it “the first mobile phone to establish that design matters as much as functionality.”)12 But by 1999 the company was struggling. Before long, it was in free fall, losing $6.5 billion in 2001-2002. Motorola appeared trapped between a Nokia that was big enough to outmuscle it and new Korean players like Samsung and LG that threatened always to be more innovative.
Geoffrey Frost joined Motorola in 1999. He found Motorola products “stodgy.” Having worked at Nike, having built campaigns around Michael Jordan and Tiger Woods, he knew something about being attached to the moment. By the late 1990s, Motorola seemed entirely detached from the moment.
It wasn’t that Motorola was incapable of innovation. Periodically, things would come spinning out of the lab with “it” status written all over them. And Motorola the company would find a way to strip them of the qualities that made them thrilling. Every corporation practices “death by committee”—when the time servers, the bean counters, and the naysayers set upon a new idea with their steely knives and murder it in its crib. By the late 1990s, Motorola was very good at death by committee.13
It wasn’t long after Frost got to Motorola that he was wandering the Chicago lab and discovered a technology, a handset concept, and it was beautiful. A colleague recalls, “From the beginning, once you picked up the Razr and used it, you never wanted another phone.”14 The question was how to protect the nascent Razr from death by committee. Frost was cunning. He kept the Razr below the radar. He concealed it from the corporation. He didn’t put it in the business plan. He reached out to the “best, brightest, craziest and most passionate people” he could find at Motorola. And when someone asked how much money this new phone was going to make, Frost said, in effect, “Oh, it’s not going to make money. It’s a brand builder.”15
The Razr proved to be the little phone that could. It launched in 2004 to modest expectations. Motorola projected sales of 2 million units. By the end of 2005, the Razr had sold 20 million. By the end of 2006, it had sold 50 million. Geoffrey Frost had saved Motorola.
Like Minnick, Frost gave the corporation a chance to escape its own gravitational field. Once more Motorola was making a phone the consumer “had to have.” Frost knew we don’t win contemporary markets by adding a feature or shaving the price point. The trick is to make innovations that make people blink with surprise and perhaps shiver with desire. Frost understood that phones are something more than a means of communication, a function, a utility. In our gadget-crazy culture, they are charismatic or they are destined for the “commodity basement,” where competitors slug it out for profits measured in pennies over cost. No one wants to live in the commodity basement, not when the alternative is so glorious. (When it first appeared, the iPhone was making $250 in profit per phone.)16
Tragically, unexpectedly, Geoffrey Frost died in 2005. And for a while Motorola continued to flourish. Ed Zander, then CEO, remembered Frost fondly, saying he’d helped make the brand “cool again,” “renew[ing] and reinvent[ing] Motorola.” But with Frost gone, it was as if the navigational equipment had been ripped out of the corporation. It was going somewhere, but no one quite knew where. The “death by committee” contingent got their mojo back, and by 2007, Motorola was once again losing money. By 2008, things were so grim Motorola wondered whether it should sell its cell phone unit. By 2008, Ed Zander was gone as CEO.17
With Frost’s passing, Motorola seemed to return to the form of the late 1990s. It forgot that phones must be wonderful. It forgave death by committee. It let the bean counters have their way. It forgot what Frost knew so well, that “it” status is a miracle of calibration that comes from a fleeting seal between the culture and a corporation. Because our culture is turbulent, the seal cannot last. Innovation is the name of the game. Poor Motorola. It clung to the Razr until it was just another phone on the shelf. Ignominy of ignominies, eventually we could get a Razr by signing a two-year AT&T contract. The Razr was being given away.18
CCO AS A PROFESSION
Corporations live or die by their connection to culture. And sometimes they have the good fortune to have a Steve Jobs, a Mary Minnick, or a Geoffrey Frost. In a more perfect world, they would have a CCO to supply cultural intelligence as a matter of course. This is better than forcing the corporation to rely on the whim and the ego of a virtuoso.
Most people now acting in the capacity of a CCO have come to this position not through professional study but by biographical accident. David Ogilvy, the founder of Ogilvy & Mather, had been a chef, a sales rep, a farmer, and a spy. Splendid. Any of these is an excellent window from which to learn about culture. Together they are the stuff of deep cultural knowledge, an anthropological foundation of special value. Neil French, now creative director at the ad agency WPP, was a bouncer, waiter, rent collector, singer, and manager of the band Judas Priest.19
Sometimes people know the culture that matters because they have lived it for several years. Phil Knight, the founder of Nike, had been a runner. He knew runners. He was connected to the community. No research was called for. The market was mostly guys like him. Icebreaker, the New Zealand firm devoted to adventure clothing, was founded by Jeremy Moon, himself an adventurer. Anne Rice, the author of spectacularly successful vampire novels, grew up in New Orleans (where, she says, “the dead walk alongside the living”).20 Lance Jensen of the ad agency Modernista says his brilliant advertising successes of the 1990s came from the fact that he was the audience he was talking to. In all of these cases, someone can act as a CCO not because he has studied contemporary culture but because he comes from that culture. He knows it in his bones.
The problem with this approach is the “best by” date stamped on knowledge. Our community carries on without us. In the early days, we can update our knowledge without much effort, but eventually our knowledge wears out. We have lost our “seal” with culture.
The other problem is that we must finally transcend the community from which we come. Eventually Phil Knight had to talk to nonathletes. Eventually Lance Jensen had to do ads for people who were not like him. Eventually every CCO has to know about the whole of culture, and not just the part of it he or she knows from personal experience.
This is, finally, an issue of professionalism, of systemizing our knowledge, of getting organized, of going beyond our own preferences and comfort zone. Unofficial CCOs may rely on particular knowledge, on “hunches.” They may feel things in “the gut,” as if culture were a probiotic enterprise, after all. But the professional CCO has a breadth and a depth of knowledge. The CCO has to know the whole of its waterfront, not just his or her favorite patch or point of origin.
A student I taught at Harvard now manages an investment fund. We had lunch one day and he took me through a “day in the life.” I was amazed to see how disciplined his approach was. Greg, let’s call him, never made an investment without scrutinizing and then recording his assumptions. At routine intervals, he checked his assumptions. And when he was wrong, when his investments failed, he did an autopsy. Where did he go wrong? What assumption was mistaken and needed replacing?
Most of us don’t admit error. We proceed from hunch to hunch. When we’re right, we like to think our genius is confirmed. When we’re wrong, well, the less said the better.
This is not the stuff of professionalism. We wouldn’t tolerate doctors who relied on divination. Judges may not justify decisions on the grounds that it “feels right.” Engineers may not reassure us that bridges are trustworthy because “I know it in my gut.”
The C-suite has higher standards. We are entitled to know that the CCO is working to the same standards that our CIO brings to the corporation’s information technology. Standards, knowledge, continual learning, the ability to process massive bodies of data and possibility, the ability to spot the crucial development in a perfect storm of possibilities—this, and not intuition, is the work of the CCO.
THE CHIEF CULTURE OFFICER DOESN’T YET EXIST. BUT THERE are people who act like CCOs and we can learn from them.
DAN WIEDEN FOR NIKE
By the mid-1980s, the running boom was giving way to a fitness craze, and Phil Knight, founder of Nike, wanted his company to take part. Knight didn’t much believe in advertising, but competition with Reebok was fierce, and he had begun to work with a small shop in Portland, Oregon, called Wieden + Kennedy. Dan Wieden, Portland native and second-generation ad man, proved an essential asset.
It was Wieden who coined the slogan “Just do it” in 1988.1 Most slogans are about the brand (“Coke is it.”). They may make a promise (“You can do it. We can help.”), or they evoke a mood (“Bilbao, now more than ever.”). Rarely do they tell the consumer what to do. But “Just do it” was imperative, impatient, presumptuous, and, well, a little rude. This was not the sort of thing consumers had heard before.2
Acting as unofficial CCO, Dan Wieden had looked into the life of the consumer. He saw someone struggling to get off the couch into fitness, someone suffering aches and pains, someone tempted by excuses. In “Just do it” Wieden found the three words that allowed Nike to intervene. Acting as unofficial CCO, Wieden had found a way to help Nike ride the fitness wave.
Wieden is the author of a 2001 Nike ad called “Tag.”3
- On Sale
- Nov 10, 2009
- Page Count
- 288 pages
- Basic Books