Transcription
[Music] I'm going to start by absolving someone of a crime that was committed about 63 years ago. 63 and a half years ago. It's a bit like one of those Netflix specials, you know.
And the man's called Mike Smith, and he was the head of ANR at Deca. And on January the 1st, 1962, the Beatles fans among you will immediately know that as a sort of date um shrouded in infamy, um four Stousers, John, Paul, George, and actually Pete, because Ringo hadn't yet joined, uh drive down from Liverpool to audition for Deca Records. And in a decision which is often studied and often discussed as one of the worst decisions in business history, after some deliberation, Mike Smith decided to sign Brian Pool and the Tremolos to the label uh rather than the Beatles. And the interesting thing about this is I investigated this decision and had a look at it and I think he was right. That's not because I'm a fanatical Rolling Stones fan, by the way. Um, actually given the circumstances and constraints under which he made the decision, he probably did the right thing.
Now, I'll explain this in a moment. Okay? For some bizarre reason, Brian Pool and the Tremolos, by the way, and they're still going, okay, fascinatingly, or they were a couple of years ago, weren't a bad band. They were a reliably good band. Uh, they had a number one hit. They had a fantastic song, Silence is Golden. Some of the very old people among you will actually remember some of their hits, and they were straight off the bat a very successful band who's right to sign them. Okay.
Now what was strange about the decision was slightly different I think. Uh which is that arbitrarily someone had told Mike Smith you can only sign one of them or the other. Okay. You can only do one thing. Now if you like the Beatles were kind of the wild card. They they obviously had talent. They obviously had star power. They're extremely funny. Musically, they probably weren't as good as Brian Pool and the Tremolos to be absolutely honest. Okay, but he had been told you can only sign one. And by the way, think about this, okay? It's much much easier to argue your case in a boardroom for why you should sign one rather than the other, okay? Than it is to make the case for signing both. And my argument is what he should have done is signed both. Okay?
One of the reasons behind the decision, okay, was that the Beatles came from Liverpool, whereas Brian Pool and the Tremolos were from Barking in Essex. And they figured out that every time you wanted to record with the Tremolos, you simply had to, you know, provide them with a travel card or something, whereas the Beatles would require four return tickets from Liverpool Lime Street. Okay. Now, I think it's probably fair to say that wasn't procurement's finest hour, was it? But it shows a very very interesting thing which is a very interesting bias which is that costs are absolutely immediate and quantifiable. Opportunity costs aren't. And my argument was it wasn't Mike Smith's fault at all. He should have signed both.
Now it's a ridiculous and totally arbitrary restriction on a decision to say you can only do one thing or the other thing. But it seems to us incredibly natural to frame decisions in that way. you can either do this thing or you can do the other thing. And that was the mistake. And combine that with the fact that it's much easier to make a case for let's do A rather than B rather than let's do both. And the reason this happens, I think, is because of a natural scarcity mindset. There's an efficiency mindset. There's a short-term cost minimization mindset which makes doing both seem woefully extravagant. Whereas doing one is a single optimum point. And if you want to pretend to be rational, you have to pretend there's a single one right answer.
Now, amusingly, a few a few months ago, I had dinner with Dan Arieli and he was thinking of having a um, a sabbatical in London. And we had a long and convoluted discussion about if you're going to spend six months in London, should you live in the city or should you live out in the country? Okay. And we went on with this discussion debating the relative merits for bloody ages until it suddenly occurred to both of us and we kind of looked at each other and laughed and said actually the optimum solution is to do both. Okay, there's no point in having a big house in London because what the the point of being in London if you're indoors? So the best solution is to have a crash pad in London and then buy a place with an orchard in Kent. Okay, but automatically we tend to frame decisions as either or. And we've created a business environment that makes it incredibly difficult to do more than one thing because the pretense of rationality comes with a hidden cost which is effectively the implication that there is only one right answer and that every problem is solved by a single activity. And I'm going to question that, okay? And I'm going to question it by asking a slightly unusual question.
We often get the question, how do you build a brand? Well, I'm not going to tell you that because we charge for that kind of thing. Okay? Um, but I'm going to ask a different question, which is who can build a brand? And my contention is that it is increasingly difficult for any company enthralled to the shareholder value movement, quarterly reporting, or anything of the kind to actually build a brand because they're optimized around doing only one thing. Okay? There is only one definition of what that purpose of the company is and it has to follow that purpose to the beat of a completely arbitrary time frame. which is the financial quarter or the financial year. And as evidence of this, I think we have an interesting finding uh which is if you look at four out of the five winners of the IPA advertising effectiveness awards in the most recent thing, four of them are family-owned brands. Okay? Doesn't have, of course, the greatest family-owned brand of all time, which is Tunnock's Teacakes. That's not there. But McCain Canadian. That's the best kind of family by the way, a Canadian family. Okay. Uh, Laithwaite's, family-owned wine company. Specsavers, family-owned opticians. Yorkshire Tea, effectively a branch of Betty's Tea Rooms, family-owned. Guinness is kind of family-owned, although it obviously is part of Diageo. Okay. But it it has been in the same family for 300 years. They clearly started with quite a long time horizon because I think they took a 3,000-year lease on the brewery when they first started it.
And I've recently come back from Texas, the greatest state in the union in my opinion, where I kept coming to the coming across these absolutely fascinating brands which everybody loved. Is anybody from Texas here? Very disappointed you didn't shout woo when you saw Buc-ee's displayed. This is a chain of family-owned gas stations which are extraordinary. Sometimes described as the Texas Disneyland. They are absolutely absolutely massive and magnificent. This is a retailer, family-owned retailer. But was the founder. so good as a retailer. Very unusual in America in being actually what you might call a mid-market retailer. Generally in the United States, you either sell everything on price. So Cheese Whiz is on 30 cents off or you go to Whole Foods and you basically mortgage your house. This is actually a mid-market retailer which is so good that Sam Walton decided, and I heard this that he wasn't going to bother competing against them because they were too good at what they did. Okay.
Now, I think we need to look at this question and say, what is it that family-owned businesses can do that shareholder-controlled businesses can't do? And one of the things they can do is they can do more than one thing. They are not required for the purposes of argumentation to maintain a completely specious consistency in terms of both the time frame within which they operate, okay, or the things with which they actually do. They can do more than one thing. What Mark Ritson calls both. And I keep noticing this. I I got an invitation. Another family-owned business. Friends of Fortnum's joined their loyalty program. I got the email because it's family-owned because it's generally a trustworthy brand. I didn't actually read the small print. I just signed up straight away and I'm now member number six in their loyalty program. Again, family-owned. Uh some of you will recognize this. I've never actually been there because I understand it's somewhere northern. Um, but it's T-Bay Services, which is a motorway service station which is monumentally superior to any other motorway service station and it's, wait for it, family-owned. Okay, there seems to be some sort of superpower that exists when you can free yourself from the constraints of narrow financial quantification and actually make a variety of decisions for both the short term and the long term. And funny enough, I wasn't the only person to notice this because shortly after the IPA awards came out, fantastic planner called Lawrence Green actually has written a whole paper which I recommend you read, which is how family businesses go to market. And basically what the paper says is exactly what I'd summarized, which is they're capable of doing a mixture of things.
Now, there are other companies that can build great brands and they're old companies, but here's the thing that never even occurred to me, okay? They're not good at marketing because they're old. They're old because they're good at marketing. All right. Now, this is a quote from uh a great book by Professor John Kay at London Business School, writer in the Financial Times, The Corporation in the 21st Century. Uh why almost everything we're told about business is wrong. And he makes this point. Some companies were able to resist the demands of shareholder value. Notable among these standouts were some of the leading producers of fast-moving consumer goods. Corporations such as Proctor and Gamble, Colgate, Palmolive, Coca-Cola, Unilever, and Nestle, which is pretty much our client list. By the way, the culture of these businesses was and still is dominated by marketing people for whom responsiveness to the need of customers is a preoccupation. And that responsiveness is the key to the durability of these companies. Okay? So, they're not good at marketing because they're old. They're old because they're good at marketing.
Now, I'm just going to pause briefly to have a dig at Scott Galloway who told us that uh you don't need brands anymore because we can simply use ratings to make our decisions of what hotel to stay at. And so, I thought I'd share a couple of reviews of John Kay's book uh for the purpose of illustrating how incredibly successful this is as a means of choice. Okay, so here's a review from T.W. Anderson uh top reviews from the United Kingdom, the best business book of the year. John Kay is an elegant writer tapping into an enormous knowledge base. On the other hand, if you don't like that opinion, um, here's Bert Yawn. Really, really boring. Okay, one star review. Take your pick. But I I'm sure that's helped you all decide. But that's a really really interesting point.
I think the question we we're asking the wrong question. How do you build a brand? I think the question to ask is who can build a brand? what are the conditions that are necessary before someone can actually both survive and and prosper in the short term while also innovating and adapting for the long term. There's one final group of people who are really good at brands because I didn't want people at Manderlay to feel left out by the way the Cadbury people. The other people who seem to be really good at building brands are Quakers. So if you want to put 10% on GDP it's a Quaker revival folks you know it's long overdue. Okay, by the way, a little bit of trivia here. Um, they were the first people to put the price of the product on the packaging. And they didn't do it for marketing reasons predominantly. They did it because they thought it was honest. That storekeepers would often try and charge rich people more for chocolate than poor people. What they discovered was consumers absolutely loved this transparent honesty about price that everybody was paying the same price for the same thing. and it was actually extraordinarily successful in driving sales. But the thing that drove that was a kind of Quaker principle about uh effectively truthfulness and transparency and honesty uh before it was a principle that actually was driven by improving sales. So it was kind of purpose-driven brand in that sense.
But here's the point. I think we normally say okay the great thing about you know building a brand is it's short-term versus long-term. Okay. And that's the usual distinction we talk about the long and the short of it everything else. Okay, I actually think it's about actually a bit more complicated than that. I think there are two different things that a business needs to do to be truly successful and also to survive for a long time. And I think for each of those two activities, the maths is totally different. Right? And therefore, if you impose the same time frames, the same spreadsheets, the same financial constraints, the same ambitions and metrics on both activities, you'll do one of them really really badly. Okay.
Now, I'm going to to I'm going to bring you back to something I talked about last year, and the reason I'm talking about it again is I think it's one of the most important concepts to grasp in the whole of well, the world. Okay, that's probably not overselling it. I mentioned the fact last year that when bees effectively fetch pollen or nectar, they follow something called the waggle dance. And it's very efficient. The bees do a little dance which describes the distance and direction at which pollen and nectar to be found. And lots of other bees then obediently follow in the instructions and go off and harvest the pre-existing known sources of nectar and pollen. Okay, great idea. Nothing wrong with that. Okay, accountants would love it. Simple cost-benefit analysis. you know cost of collection versus value of energy retrieved we can measure this effectively we can measure it in the short term that you can measure it at the level of the individual bee it's wonderfully accountable and predictable and you can look at it at a granular level and you can optimize efficiency a bit wonderful however what they discovered when they studied this in more detail is that 20% of bees ignore the waggle dance and basically appear to piss off at random okay it's it's a less weird finding than from the finding they discovered when they studied the behavior of ants, which is that about 30% of ants do absolutely bugger all. Okay, but what was interesting about this is they thought this is strange. Bees have been around for 20 million years. Evolution detests waste. Why would evolution tolerate this level of waste in a system that's basically persisted for 20 million years? uh you know by this stage you know evolution should have produced sort of uh basically be compliance officers that demand that everybody adheres to the waggle dance so you can actually basically you know you can hit your quarterly target for whatever it is for pollen collection uh for quarter three or whatever it might be and then they looked at it as a complex system and realized that if you don't have the rogue bees the random bees the hive gets trapped in a local maximum stars to death it gets overoptimized on the past Okay? Because all big data comes from the same place, the past. The hive will then become preoccupied in harvesting sources of pollen that it knows about and completely underinvest in discovering new fields where flowers may have come into bloom or new opportunities.
And this, by the way, is known wrongly I think as the explore exploit trade-off. I don't think it's a trade-off at all. I think it's our western mindset that sees it as as a westerner, we are inclined to see two different activities as automatically being in conflict. I've got a I've got a Hindu friend uh called Jag Bala who describes this as monotheorism. He says that all westerners have to have one theory to explain everything. To an eastern mindset, you'd see this as a kind of unity of opposites, two complimentary things which contribute to each other. So there's you can't afford to exploit. Sorry, you can't afford to explore if you're not good at exploiting. But if you don't explore, you don't know what to exploit. Okay? And it's a well-known thing which occurs not only in animal foraging, not only in insect behavior, it also occurs in algorithm design. By the way, they come across exactly the same thing. And maybe even more important than this, there's a Dr. Helen Taylor at King's College London who believes it's also the reason for human neurodiversity. that in any group of 150 200 people in the ancestral environment it fundamentally pays to have a certain group of people who see the world differently. I've also added a possible thing which is it may be one of the reasons why we have a sense of humor as well because humor is effectively an emotional incentive for looking at things in a different way.
But this um uh uh this is absolutely fascinating idea. But this is roughly speaking how the maths of explore and exploit are different. Okay. So you have uh exploit. Okay. Uncertainty you keep it low. Focus efficiency and growth. Financial philosophy safe haven with steady returns and dividends. Culture and process. Linear execution. Embracing planning predictability and minimal failure. People and skills. Managers who are strong at organizing and planning. Okay, you contrast that with explore which is focus is search and breakthrough. Financial philosophy is many small bets expecting few outsized winners. Okay. Um culture and process iterative experimentation embracing speed uh failure, learning and rapid adaptation or adaption and people and skills. You want explorers who are really comfortable with and excel in uncertainty. Now, roughly speaking, okay, that's the marketing department and that's the you have to deal with every day. Okay, very brutally put. Okay, and the reason they're such a screaming P, by the way, um that's an ad agency and that's a holding company. Okay, bit controversial, but I'll leave it at that. Okay, right now the problem you have there is that the maths are totally different. Right. One of them is thin tailed. In other words, low variance, high certainty, predictability. The downside of the thin tail is you can do so much, but you'll never get find anything amazing. One of the reasons why you have random bees is that it expo it increases your surface area exposure to positive upside option optionality, which is another way of saying you might get lucky. It's why teenagers go to parties, right? They don't have a party strategy. They don't do a cost-benefit analysis for every party they go to. They simply know that if you stay at home, nothing that good is ever going to happen, right? It's a very similar reason. And fundamentally, okay, marketing, I would argue, which is heavily weighted towards explore, not exploit, is fat tailed. By which I mean very small things in a thin tailed environment. Okay, this by the way is what led to the Lehman Brothers collapse which which is they they thought that the behavior of these financial instruments was going to be thin tailed and it turned out to be very very fat. Okay, so you got nonsensical statements like we've had, you know, what is it? Seven six sigma events, you know, for seven days in a row. Uh now that would only happen in like 100 trillion years unless you've got the maths wrong and they've got the maths wrong. And I'd argue that finance for for a large part which is fundamentally focused on exploit is applying completely the wrong maths to marketing.
Just to give you an idea, you are basically held responsible for the cost of everything you do. But if you did something 13 months ago which made millions of pounds in perpetuity, does any of that come back into the credit balance of what you do after the financial year has ended? Zilch. Okay. We had an idea for a client about god getting on for 12 years ago which to this day makes them 10 to 12 million pounds a year of incremental high margin income. We got paid for that 25 grand. Okay. And then it occurred to me I was obviously a bit pissed off about that and I realized it's just as bad for the clients who did that because they they had to account for the £25,000 subsequent to perhaps the first year they get absolutely no carryover credit for the lifetime compounding value of that idea. Okay. So ROI doesn't work as a marketing metric fundamentally. It's it only works in a highly linear very high very highly deterministic setting. It doesn't work in what should be the exploratory part of the business. So fundamentally the explore part is probabilistic not deterministic. It focuses on opportunity rather than efficiency. Abundance versus scarcity. Positive sum versus trade-offs. It's relational not transactional. I could go on. Okay. a version of what I'm saying. Okay, I've said that ROI doesn't really work. To to optimize the whole, you need to sub suboptimize the parts in a fat tailed system. Okay, you cannot improve the effectiveness of a large group of people by improving the efficiency of the individuals within the group. You have to practice a kind of group selection. You can't say that the short term is a guide to the long term. I mean, okay, if you imagine the advertising world now is in danger of turning into a publishing world where they say, "You write a book and we'll give you royalties on the sales in the first 5 days." Okay? Right? Because it has no capacity to carry over the value it creates to justify its future expenditure. Now, there is a version of writing like that. It's not called publishing. It's called tabloid journalism fundamentally. And I think you can see the same trend appearing in what you might call tabloid advertising. It's advertising the only possible rationale for which is what it does within its sort of three-day half-life or whatever.
Jeff Bezos got close to this where he made a point when he's saying that business is fat tailed. He made the point that in baseball the most you can score in a single hit is four. In cricket it's probably more than six, but it's effectively six. And Jeff Bezos made the point in business you can sometimes score 150 with a single hit. In other words, those are the things that are on that fat tail where unusual events are not it's not safe to ignore the possibility or potential of unusual events because they're actually much more common and much more potent than they would be in a thin tail world. And if you want a bit more authority for this, Nim Talib, my friend, who is the probably the world's leading authority on promoting the acceptance of fat tail distributions, said to me, "Marketing is fat tails." In other words, you'll know this, by the way, if you look back on your careers, 10% of what you did really contributed about 90% of the value. You only realize this in hindsight because everything we're busy with seems important at the time, but when you look back on it, three or four decisions you make make all the difference. David Ogilvy himself said, "In my entire life, I've only had five big ideas." Okay, really, when you look at the things that are totally gamechanging, generally they're not all that frequent. And question is why is marketing fat tailed? Very simple reason because real life is fat tailed. Marketing has to exist in the real changing world not in the artificial sort of um effectively the artificially stable world of theory and because it therefore has to cope with real world dynamics and real world principles. Real life is totally fat tailed. You know, if if you had failed to catch a bus sometime in like 1997, you'd now have completely different kids, right? Okay. It's that fat tailed. Okay. Um the whole First World War was basically caused because a chauffeur in Sarajevo took a wrong turn. All right. It's massively fat tailed. And yet most people are trying to win arguments and make sense of the world by pretending it isn't. I mean, most of business is probabilistic. The most effort in business is devoted to pretending that it isn't. All right? It's the pretense effectively of certainty, the pretense of knowledge, or what the great Roger Martin will be talking about later, which is basically fake science, false science, something that looks like science but doesn't have anything like the validity or predictive value of science.
So, I better skip. But this is Is Benjamin here? That's good because if he's not here, it doesn't look like a crawly bumlick. But this is our uh this is our Samson client who makes exactly the same point as as Jeff Bezos I would argue and exactly the same point about thin tailed versus fat tailed activities. And he says he remembers walking around the Cannes advertising festival a couple of years ago. All these platforms the Googles the Facebooks etc. And of course the tech world and the consulting world have a mass massive vested interest in pretending that the world is infinitely measurable and predictable. Okay. There's an enormous huge dose of self-interest in pretending that quantification will provide you with all the answers because that's what they sell. Okay, they're all telling me about how we can optimize. We can change this and get another percentage point here or there. And for me, that's great. And we should probably have teams focusing on that. I agree with him. Just as you should have hired Brian Pool and the Tremolos. Okay, Brian Pool and the Tremolos. Safe bet. Beatles wild card. Do both. Got it. All right. Now, you should probably have teams focusing on that because of course it can be worth millions as indeed it is. But you need to take that leap of faith or informed gut decision to create something different and compelling. Otherwise, compare the Mircat where I used to work. That campaign would never happen at Audi. Werbung durch Technik would never happen. All the research said those ideas shouldn't happen. But you have to dare to be different otherwise you do not cut through the noise.
A fat tail marketing decision I was just listening to the other day, the pumpkin spice latte, and I've never actually had one because it sounds disgusting to be absolutely honest. That appeared very low on the list when they researched possible autumnal drinks for Starbucks. I think it's now made them half a billion dollars. Okay, they ignored their research and effectively went with their gut feel. Does the marketing team, by the way, get a larger budget as a result of that success? Basically, no. they just get to keep their jobs for another year. That's how asymmetric the risk and reward is in marketing. Okay? There's not much incentive to do anything fat tailed because if it goes wrong, you you you you get all the blame and if it goes brilliantly well, someone pats you on the back and then when they come to write the annual report, they put all the credit into like economies of scale or supply chain management or some like that that Harvard writes about. Okay? Because you never read in an annual report, we had a great marketing idea and me, did it make us a lot of money. Because nobody wants to present themselves that way. They want to pretend that everything that they've done to make themselves successful is consonant with the economic theory practiced by the people making the judgment.
Anyway, very quickly, soft power. One of the most long tail but extraordinary potent things you can do. This woman is Donella Meadows, the late Donella Meadows, who is a great practitioner of complexity theory and also environmental thinking. And the observation she made is pretty similar to the one Benjamin Brown was making in fact uh which is that she wrote a famous piece while debating NAFTA regulation. Doesn't sound like my kind of meeting, but there we go. Um where she lists in order of increasing importance the most powerful ways to intervene in a system. And at the bottom, it's twiddling nerdy numbers. Okay, it's fiddling with parameters, fiddling with buffers, relative delays, negative feedback loops. This is the small stuff. And what Donella said is this is mostly what gets all the attention because it's with it's effectively a bit thin tailed. It's within the realms of measurement and prediction. The really powerful ways to intervene in a system. However, most powerful of all is the mindset or paradigm from which the system emerges. And top of the entire list is the power to transcend paradigms. And so that's a soft power thing. It's a thin tailed thing. It's unbelievably difficult to do. I would argue selfishly that Ogilvy did it to a degree with Dove. I would say that maybe it isn't as difficult as Donella Meadows believes. it's just they're talking to the wrong people that you can actually change the paradigm fundamentally the entire frame the frame of reference through which people perceive the world make comparisons and therefore make decisions and this is a Donella quote it's in the space of mastery over paradigms that people throw off addictions live in constant joy bring down empires get locked up or burned at the stake or crucified and shot and have impacts that last for millennia okay there are a whole load of paradigms which when you think about it. Maybe they've taken 30 years to change, but they're now completely stable and in a completely new equilibrium. And everything people do becomes fundamentally different when they perceive the world differently.
This is my favorite one, which I have to show for moral reasons. I know I showed it last year. I show it at every talk I give. It's a paradigm shift in how we understand speed. Now on the outside it's by a man called Al Peer who's an academic behavioral scientist at the University of Jerusalem and he invented a thing called the paceometer. The speedometer shows as all speedometers do distance per time meters/s miles/hour kilometers/hour. The paceometer does it backwards in the way that European countries do fuel economy differently. Not miles per gallon but liters per 100 kilometers. What you see and N seem described this as mathematically trivial but completely counterintuitive is that as you go faster for any given distance the time saving gets less and less and less. Okay, if you accelerate from 10 miles an hour to 20 miles an hour over a 10 mile distance you save 10 minutes. If over the same distance you accelerate from 70 to 80, you save about a minute. It's not worth it. What that teaches you is that going fast is quite a good idea. going very fast is an idiot's game. The fuel consumption goes up, the risk of injury goes up, the risk of accident goes up, um the risk of severity of accident goes up. Okay, all of those things go up exponentially. Your stopping time, your stopping distance goes up exponentially. The journey time is basically flattening out. If anybody had seen a paceometer, we would have built High Speed 2 by now, but it wouldn't have gone nearly as fast. Okay? It wouldn't have had to go in a straight line. It could have had intermediate stations where trains could stop. No one ever says, "I'd go to Manchester today, but it takes seven minutes too long." The reason I show the paceometer is that people come up to me and go, "Ever since I saw that, I've changed the way I drive." That's the point. I think if the whole world saw a paceometer, you'd save a few thousand lives a year.
Other um I haven't got time to do this to You're looking a bit desperate, aren't you? Okay, this is one of my favorite paradigm shifts. Fundamentally, the human brain can't look at two maps at the same time. Okay? If you have to plan a journey and the two possible modes of travel are on two separate maps, forget about it. And Londoners basically think the tube map is a map of London. So what do they do? This the Overground cost £200 million. It carries as many people as the Elizabeth Line in a day. The Elizabeth Line cost £20 billion pounds. How do you manage to carry as many people for 1% of the cost? The answer is no. No, don't spend money on engineering. Change the paradigm. What they did is they built a few miles of track. They improved the rolling stock. I'm not denying they did some physical things. They then pretended it was a tube line and added it to the tube map. And immediately Londoners could make sense of a mode of travel. London as if they see a British Rail logo. Basically, it might as well be invisible to them unless they're planning to leave London. So if you brand something as a railway station, I knew people who lived like 200 yards from Tottenham High Street station. They didn't even they didn't know where the trains went from there. Okay, that was literally 20 billion or not quite 20 billion, but 19.8 billion dollars of of value created mostly with pixels with ink and by changing the mindset through which someone perceived a London journey. It's a paradigm shift.
Again, this is one of my favorites. Someone here in marketing has had an idea which makes the entire hotel industry I would argue an extra 200 or $300 million a year and it's entirely it doesn't require anything to be added to the room. There are no Corby trouser presses. There are no mini bars involved. There are no costs. What they've simply done is normally when you book a hotel you it goes standard room, deluxe room, junior suite, whatever it is, bridal suite. It's simply ordered by quality of room. and someone spotted that you could get people to pay a premium for a room regardless of size which was close to the pool or this is purely theoretical in my part uh a room that's close to the gym and so suddenly without actually having to change anything physical you can simply describe something differently okay and people will pay more for it this is worth hundreds of millions to the hotel industry no one will get any of the credit I mean you can obviously use the pool wherever you are in the hotel, but it means wandering down the corridors in a toweling robe, which makes you look a bit Jeffrey Epstein to be absolutely honest. Okay, so being really close to the pool, you know, it's a real bonus. Okay, this is pure genius.
So the question is in a fat tailed world, the job is take rare, this is how the the rogue bees should be looked. Take their rare moments of brilliance and discovery and use exploit to amplify them. Okay, what you might call the boring bee's view of the world is let's maximize efficiency by replicating mediocrity by continuing to do what we've done all the time but in a boring way. And so final slide don't need don't worry. Okay, very simple. The greatest form of soft power is to just create a paradigm shift. Very simply, rather than trying to change the world, we can change how people see the world. When people see the world differently, they behave differently. That then changes the world. or in the words of our later speaker Dan Davis in fact matching the variety and complexity of the world he's a former Bank of England economist by the way or I say recovering Bank of England economist um matching the variety and complexity of the world with the capacity to process it is every bit as important an economic phenomenon as matching supply and demand that is probably the perfect description of how marketing soft power can really change the world that's me thank you very much indeed and back to Dan K [Music]