In Conversation With … IORMA Board Member: Graham Thomas

Graham Thomas, Member of IORMA Advisory Board and Co-Founder of The Radical Company

in conversation with

Pandora Mather-Lees, Director IORMA
March 2015

Graham Thomas is one of the founder members of the IORMA board. Over the past two years he has brought insight, skill and excellence in all things digital drawing on his background as Vice Chairman of Saatchi & Saatchi and latterly as Co-Founder of The Radical Company, an innovative digital product design agency and Join SAM, an on-line bank for kids. Graham’s expertise spans a wide range of product areas from financial services to FMCG and retail. His work is about creating disruptive solutions in order to assist companies conquer consumer markets in a seamless and swift fashion.

I asked Graham to share his knowledge as a digital expert as it applies to the Global Consumer Commerce arena.

PML: You have been one of the digital pioneers from an early starting point. What for you has been your greatest achievement in this area?
GT: There have probably been several rather than one but I say that only because digital moves so quickly and the opportunities change so fast. First it was recognising digital way back in the early 90s as being something which would have a significant impact in the way that companies, brands and organisations would undertake marketing. I could see that it would have a transformational power and consequently started, really early, a digital agency. That was when I was part at Saatchi. I really wanted to push the Saatchi agency globally to start to get seriously interested in digital.

A decade later and in another job I started looking at the way we could develop Tesco.com and the use of analytics to enhance the digital customer experience. Looking, for example, at how we could bring Widgets (smartphones and apps did not exist then) onto people’s phones to assist the way shoppers purchased in store. In the end this was overtaken by the smart phone introduction but we had showed there was a huge opportunity for using digital and mobile in a particularly clever way in-store.

Recently, the achievement has been to bring a very agile approach to digital product innovation particularly with the big banks that we work with. We’ve been able to help organisations which, because of all of the understandable compliance and security issues sheer number of transactions and processes, need to take a conservative approach to digital. Nonetheless, we’ve been able to get our clients to move fast and introduce products quickly.

PML: You mentioned analytics which is obviously a critical part of the process. How can digital and analytics come together to help a client develop in the market and indeed to drive growth?
GT: The great thing about the digital environment is that it offers a significantly better analytical opportunity because the amount of data that can be captured is far more than can be captured off-line. There’s a richness of data that can then be added to analogue-gathered data. This can drive business decisions that previously could not be taken. That said, something I feel very strongly about is that ‘big data’ is a convenient, understandable term but it’s actually not just the size of the data. It is two things: the quality of the data in the first place (and more isn’t necessarily better) and second the quality of insights that derive from it.

There are insights that tell you the ‘what has happened’ but not much else. Too many insights lead to a ‘so what?’ response. What you need is an insight that drives the “what now” response. Facebook for example uses the phrase ‘impact insights’: insights that have a true impact on the business and lead to a clear set of decisions and actions. You want insights that drive actions, you don’t want just insights per se.

Digital allows you to take those insights and then to create and measure an action, to verify if it’s actually the right action and making an impact. It goes back to the whole approach of being agile, doing something now rather than having endless discussions, and doing it quickly and testing assumptions. Everything we do is always based on a set of assumptions. You can hypothesise from your data set forever but it’s smarter to test out the hypothesis quickly (we often do this in a form known as a minimum viable product) to see what happens in the real world.

PML: When you say ‘very quickly’, organisations such SAP are now reaping actionable insights rapidly because they can get data returned to them in milliseconds. In reality when you are assisting a client, what sort of turnaround would you have, say, from when you are pulling together and analysing data to when you are actually able to implement those actions and measure them?
GT: It’s driven by what the action is and how it can be acted on. If it means changing a service or product, a millisecond isn´t going to help because you can´t change, say, the price in a millisecond. It may take many seconds, hours, days or whatever. Speed per se is not the issue. Speed often leads to data dumping. Instead it´s speed of creating intelligent insights that create actions that lead to something positive happening. Sometimes too much emphasis is placed on velocity. Sure you want rapid feedback to see whether something is working or not. If you take Google or Amazon they are testing thousands of hypothesis. Things are changing all the time and they have a continuous programme that measures outcomes. They may not measure the changes across a day, but they may across a week or a month depending upon what is a legitimate time frame in order to test them. We always need to be aware of how we connect the digital world to the physical world, of connecting bytes to people. These two may not be in sync.

PML: So every situation will be different and in a global world, this is ever more complex. You talk about your expertise in the global innovation economy. Could you tell us about that?
GT: A lot of what we do is global work. Nearly anything now is absolutely possible everywhere. Almost all the principles and practices work globally. There is little need for complete reinvention. Our work is best summarised as making people faster and smarter at what they want to achieve through a digital platform and digital experience. We´ve always found out that if you pull it down to “faster” and “smarter” it doesn´t matter where you are, consumers want that whether they buy a can of baked beans or want to get a mortgage. To do that they need to get the right information surfaced rapidly so they are more effective at the decisions they take.

PML: IORMA’s work has evolved over the past couple of years and is now very much focused on the global consumer. In what ways will the global consumer environment be different in 5 years … can we predict 5 years forward or can we only think 2 years because things are moving so fast? What will change?
GT: I think most predictions are a waste of time. We can´t predict the future accurately. What we can do is to enable our clients to innovate and change continuously. To be in the position where, rather than trying to predict a trend and then wait for it to happen, they are offering experiences with a product or a service and to see whether that works or not for their user or customer.

If there is something important about the future it is that digital technology has – and will increasingly – enable people to be more informed. Technologies have the potential to allow people to make better decisions and choices. For instance, a better decision about your health because you are wearing a wristband. Everything is going to be connected. There will just be more information available, processed in a smart quick way, so that we can make smarter and faster decisions and have a better life. But…and this is a big but…too much data will just overload people and will make it harder to make smart decisions. So the future isn’t about data but about insights – technology that allows better insights to be gleaned from data is the future.

PML: What do you feel will be the most problematic issues for consumers over the next few years in attempting to acquire goods and services? There are so many bad things about shopping online right now for instance – will it get better or not?
GT: The reason why it´s bad is only because organisations or retailers seem to consistently offer up a bad experience for reasons which are best known to themselves. What makes a good experience is really clear, you have to understand what consumer needs are, what their journey is and how they can get from the start to the end of that journey as painlessly as possible.

This is actually easy but retailers and brands are adept at making that journey complex and neither intuitive nor simple. Shopping anywhere should be fun and inspiring; both are an important part of the shopping experience. Take Marks & Spencer who spent three years putting their website together only to make it a bad experience in my opinion. Ever since that website has been up they have been losing sales online. Marks & Spencer seemed to laud the fact that the website took them three years to do. Was that something to celebrate? Absolutely not! Three years is an eon in digital. Whatever is ‘right’ now, in three years time is going to be out of date. And that´s what happened to Marks & Spencer. Maybe their assumptions were correct at the time about the way people shopped online but those assumptions were out of date by the time they got their web-site live three years later.

PML: Do you feel also there is quite a disconnect between the digital experts in an organisation and the rest of the bricks and mortar retailers, particularly thinking about retail today. There is so much software out there that is being developed by so many different companies. How can we have a joined up approach and make all of this work, when the analogue side of retail doesn´t necessarily understand or connect with the digital?
GT: Any organisation has a tendency to suffer from silos, that´s a characteristic of many big businesses. Retailers are no different and even in-store it is difficult to get an absolutely seamless experience. Silos are a problem. In the work we do they are a way of life. Therefore it is vital to find ways to connect the silos together. How is that done? There isn’t a magic wand but in terms of creating an enterprise-wide digital strategy, the starting place must be to understand how the silos behave, what the barriers are, how to overcome them and what systems or processes need to be put in place.

PML: What are the drivers for the future that IORMA should be focusing on to enable businesses to compete in the global omni -environment?
GT: The starting point has to be what the business objectives are. Is there clarity? Sounds like a motherhood but so often these objectives don’t exist or they are fuzzy and have no rigour to them. Once they’re set, it’s easier for everything else to fall into place.

That´s what IORMA is able to do in spades. To help businesses get clarity about their objectives. Businesses are often unclear or their objectives are actually contradictory and not complementary. They may not be what is needed to drive the business forward. IORMA associates can help define what the business objectives are and then provide the runway that will allow organisations to move forward with confidence. It’s about having a different level of expertise and being able to say, ‘this is the direction or essential things you need to do’. Hopefully, that then starts to break down the issue of silos.

PML: You have co-founded JOIN SAM, the money site for young people. What has this experience told you about tomorrow’s consumers?
GT: The involvement of young people in the household decision-making process is greater than it has ever been. Kids know a lot about the world and might know more than their parents. They generally know more about what´s going on and are absolutely influential in the way that family lives their life. No longer do you just communicate with parents, you have to engage the whole family and most certainly with kids.

Kids in the future will have no expectations about organisations at all. People from older generations start with an inherent trust that an organisation is going to try to do its best for them. That trust may diminish over time but it´s definitely going to be the other way around with kids today. They’re starting point is that “I don´t trust you, so you have to earn my trust”. It’s a fascinating area for customer loyalty in the future. Or to put it the right way, ‘How is the retailer loyal to the customer, not how is the customer loyal to the retailer? Loyalty to brands, retailers, employers and so on will be much harder to earn.

There used to be a hierarchy in the way we experienced brands or media for example. Young people don´t have a hierarchy now. They just look at any media platform or brand and ask ‘does it do what I want?’ They will use something in a way which is best for their immediate needs or find the platform that can best deliver. They won´t choose it because there´s a hierarchy. With media kids don’t care whether they get the same information delivered by games, DVD, download, books or on tablet. Even the youngest can choose if they want to read the book or play the game. It doesn´t matter how it is delivered, provided it’s in the best way for them.

PML: Expand on this in terms of payments? How will young people going to purchase?
GT: I don´t think there will even be purchasing in the future as we know it today; there will be more renting, leasing or sharing things. Money is going to be different. We will have lots of different types of money. There will be more peer to peer transactions that eliminate the expensive middlemen. At the moment at each point along the transaction chain money is lost. That´s how banks and cards make money and there is nothing wrong with that of course. However in the future, the cost of transactions will come down, so retailers will be able to sell more because it will be cheaper. There will also be micro payments enabling them to sell a part of something rather than the whole.

PML: For example dividing up a book into chapter and to sell that piece for a penny?
GT: Yes, additionally the way people consume will be different in the future. The ability not to buy the whole is going to be something that will have a significant effect.

PML: Ultra High Net Worth individuals for example would rather share a private jet or have a syndicate and just access goods and services when they need them?
GT: Yes, It´s changing hierarchies. The ability to own something outright is not necessarily seen as a particularly smart thing. It´s far better to own a bit of something or lots of bits of lots of things, which will make life more interesting.

PML: As part of your lecture series at Kings College London you have cited Alice ‘Through the Looking Glass’ “It takes all the running you can do, to keep in the same place’. How should we keep up to date with such fast paced change? And is progress hindered by constant re-invention?
GT: It´s an approach that has defined the way I think about innovation because originally I was a zoologist. There’s a biological theory called the Red Queen Theory and I have built another version around innovation. It´s far better to do a lot of small things and test a lot of assumptions as opposed to waiting three years and finding as Marks & Spencer’s did, that their assumptions were wrong. It would be far better to try out a new experience very quickly, test that experience and continue to iterate and improve or to drop it. The Red Queen Theory is about evolution, of the way that life moves on and remains sustainable and competitive within whatever the environment that it happens to live in at a particular time. It says, if you sit back and think that you are going to be ok, you are completely wrong, because of all the things that are going on outside and around you. You can never stop innovating. You can never sit back. Even running to keep still these days, is no good you have to run faster.

PML: This series explores Evolution as a model for brand innovation. Can you give an example as to how this has played out in the real world?
GT: Our client has to identify a need and we have to work out how can we get there quickly? We need to do it quickly because if we don´t then by the time we´ve invented the solution it might be out of date. Some clients come to us being very honest in terms of admitting they have great ideas but that it will take 18 to 24 months to implement them by which time the solution is redundant. A lot of what we do is covered by NDAs but Join SAM is an example. Think of getting what is essentially an on-line bank for children up and running in months. Now, eighteen months later it has gone through several iterations each one an improvement; each one based on our users experiences and feedback. What you see today is really different from what the offering was eighteen months ago.

Any experience is great – even if something fails or doesn’t work in the expected way. When it is working in a different way that´s still an interesting place for us to be: it´s a learning experience and you are getting value out of any learning even if something doesn´t work. The problem that many organisations have is that so much time, effort and resources have been invested into their big idea and if it´s not working, it gets very difficult for people to drop it. We’ve see clients who have invested in software and the whole thing just hasn´t worked. The organisation is reluctant to pull out because there is so much emotional investment has taken place and people’s jobs are at stake. What do they do? They persevere with the wrong solution and it goes from bad to worse.

PML: How do you think the consumer will be engaging with 3D printing in the future?
GT: It will come down to making more choices with greater convenience. That´s 3D printing’s raison d’etre. It’s what all digital boils down to: choice and convenience. 3-D printing will allow brands to offer goods in a customisable way and offer people greater choice. If it works well it will increase availability and make for a cheaper supply chain for the retailer or manufacturer. Who knows…maybe in the distant future everyone will have a 3D printer that will capable of making almost everything they need at home. Bye bye commerce as we know it. There we go…I’ve made a prediction. 

PML: Give me a prediction about the future of the retail ecosystem?
GT: I’m looking at this from the shopper’s perspective. They’re creating an increasingly highly fragmented ecosystem with infinitely more choices held together with apps that will allow shoppers to easily manage their system. One-stop-shopping is dead. All the things we have just talked about will allow more goods to be sold in an increasingly micro-environment. The future will be a micro retailing. That’s a second prediction. I think I ought to be quiet now.