The importance of being unreasonable

Kodak invented digital photography only for the iPhone to steal its thunder.
Blockbuster presided over home movie rentals, only for Netflix to stream its way to dominance. Borders was the USA’s second largest bookseller, only to contract with Amazon and seal its gloomy fate.

From innovative market leader to ignominious bankruptcy within the space of a few years, Kodak, Blockbuster and Borders could each stake a legitimate claim to be victims of the digital era.

The importance of being unreasonable
George Bernard Shaw once observed that “the reasonable man adapts himself to the world”.

Kodak, Blockbuster and Borders all behaved perfectly reasonably. They innovated. They invested in marketing spend. They benchmarked their competitors. They serviced their customers. They played by the rules.

What we have witnessed is the decline of mature brands that have ultimately been unable – or too polite – to act unreasonably

Yet, in a world where, as Shaw goes on to say, “the unreasonable man persists in trying to adapt the world to himself … [and] all progress depends on the unreasonable man”, these brands were condemned by their reasonableness.

The rise of digital – where marketing spend is negligible, competitors are ignored and customers act as self-appointed marketers – offers clear proof that we are living in an unreasonable age.

Yet, as the growth of brands such as Facebook, Google and Airbnb testify, this unreasonable age does not have to mean the end of brands. Far from it. Digital presents one of the best opportunities ever for brands to triumph: a Darwinian survival course where only the fittest – and most unreasonable – survive.

Five key tenets for unreasonable brands

1. Stay Curious

From being creators of the ‘Kodak moment’, and the inventor of digital photography, Kodak failed to re-examine often enough the premise of its success. It did not recognise that photographers’ habits were flexible and open to change. As a result, the swift and widespread acceptance of the virtual photo took Kodak by surprise and left them floundering commercially.

In life, the only constant is change – and maintaining the impetus to question, challenge and refuse to accept there is any such thing as a ‘given’, is essential.

2. Interrogate the data

Much has been made of the age of Big Data – and of how redundant much of it is. Yet, data is not an end in itself. It is a means to an end. The more that brands use the data at their disposal to probe, test and challenge the world around them, the greater their chance of competitive advantage.

Wonga may not win prizes for ethics, but its unique method of credit assessment – using 8,000 data points to segment those borrowers who will repay from those who will not – is a brilliant example of how pushing boundaries and going beyond the ‘reasonable’ can win clear market advantage.

How might Borders’ destiny have been different if it had been more intent on using its data to hypothesise the potential popularity of online book purchasing?

3. Dare

Sony never set out to invent the Walkman. It allegedly arose from President Akio Morita’s bold decision to merge two parallel projects – development of light earphones with invention of a stereo cassette player – into one unknown entity.

The rest is history.

How might Blockbuster’s fortunes have panned out, if it had dared to take Netflix up on its offer to venture into the unknown world of streaming? Having the bravery to test the robustness of an idea, to take an instinctive leap of faith and to risk ridicule is a key prerequisite of the unreasonable brand.

4. Empathise

Unreasonable brands hold a bold conviction of how they can transform the world.

One of the reasons that Nokia became a giant of mobile telecoms was because it recognised the enormous potential in speechless communication. As a result it focused on enlarging its phone screens to facilitate SMS, leaving arch-rival Ericsson to sweat over the next technological advance and an irreversible loss of market share.

Unreasonable brands understand people.

5. Matter

Faced with the new generation digital propositions of iPhone, Netflix and Amazon, the traditionalists of Kodak, Blockbuster and Borders look woefully outmoded. Hardly surprising. Why would they be preferred to their shiny, new, technologically advanced, lifestyle-oriented counterparts?

Unreasonable brands need to repeatedly re-appraise why they matter and be swift to act when they recognise a sell-by date has been reached.

Unreasonableness in the insurance industry

The inherent conservatism of the insurance industry means it will have to work hard to pay more than lip service to these five tenets. For example, rigorous data analysis is one thing – yet if that is conducted from a perspective of enhancing control over customers, rather than offering a new, liberating approach, the effort is likely to be futile.

Yet it can be done. Friendsurance is a powerful example of how the bold application of daring and empathy can create a model where friends pool their premiums so any unused cash can be re-invested to reduce renewals.

Similarly, Guevara in the UK has made itself matter by exploiting the opportunities of social media to bypass traditional insurance companies and create a peer-to-peer auto-insurance model that displaces the traditional approach in one fell swoop.

The imperative of iteration

What we have witnessed is not so much the demise of brands in mature markets, but the decline in those markets of mature brands that have ultimately been unable – or too polite – to act unreasonably.

The digital era’s stringent demands means that far from being the end of brands, the requirement for them to constantly re-examine, re-calibrate and re-invent themselves means that only the fittest will survive and flourish.

And that can only be a good thing.