Erik Ingvoldstad, the CEO and Founder of Acoustic Group talks with Darren about their focus on helping companies manage their digital transformation from a cultural foundation, discover innovation within the organisation and manage the customer experience as a way of building brand. He brings a unique perspective with experience in the Army, business school and years in digital and direct marketing.
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Transcription:
Darren:
Welcome to Managing Marketing and today I get a chance to sit down with Erik Ingvoldstad who is the CEO and founder of the Acoustic Group, here in Singapore, welcome Erik.
Erik:
Thanks, happy to be here.
Darren:
Well it’s interesting because you and I both have history as being creative people; creative writers and creative directors but today we are doing very similar things. I believe the Acoustic Group, most of the work you are doing is really helping people with the digital transformation and dealing with the digital disruption that is happening with marketing and in the market place.
Erik:
That’s right. Basically, we work in three areas. One is digital transformation (and I hate the word digital transformation as many do, because it doesn’t really capture what it’s all about) which for me is a cultural shift and is an ongoing process. It is not like a moment in time.
If you want to change yourself, you can’t just do it on a Wednesday, you have to do it on a Thursday and a Friday and years to come, right, and it is the same thing for businesses. They have to make digital changes to the way they operate. That’s a cultural issue not a technology issue.
So, we work with digital transformation from a cultural perspective: how can we make services and products that consumers or people out there think solve their daily problems? That’s what it is all about.
The second thing we do is work with innovation. A lot of companies are setting up innovation hubs and the challenge with that is that people tend to think innovation is someone else’s problem, you know the R&D department, the innovation lab, they are the ones to innovate, but innovation has to happen close to the customer.
So, we work with culture to see how innovation can work in a more efficient way inside a company. How can you identify problems? I don’t want to talk about internal problems. If you ask a client what’s your problem? They will start talking about their internal problems; getting their ROI’s and KPI’S and all of that, and I am like, I am not interested in those problems. Instead, I am interested in your customers problems. What are your customer’s problems and how are you going to solve them?
When we start asking those questions, people are much more creative and much more interested in finding solutions but you have to understand you have a problem first. In the corporate world, I am sure you’ve heard this, people say, we don’t call them problems, we call them challenges or opportunities or whatever and I am like ‘No, a challenge is something you can put off until next year, a problem is something you have to solve today’.
The last part of this offering and customer experience, and I am not talking about that fake customer experience where you do something for a video and then you put it on line where everyone talks about it. That is not customer experience. Customer experience is the real interaction with real customers.
It is like, take a brand like HSBC which have these inspiring ads all over the airports, but if you walk into the bank and you get treated poorly or the cashier is not doing a great job or they have an internet banking solution that’s like from 1998, then you have a problem. That’s the problem you have to solve, not the advertising part, not talking about it.
Placing people at the front of digital transformation
Darren:
The thing that resonates with me is that all three of those are based around people. It is all about solving people problems. Because the first one, even digital transformation, culture comes from the people within the organisation and it is actually about transforming that culture and the way people think about their role and what the business means.
Your second one innovation, the biggest thing that annoys me is that so many organisations are racing outside to get someone else to innovate them rather than knowing that it actually exists within their organisation, they have just forgotten how to do it.
Erik:
Maybe they need a little bit of help to recognise the problems and then find solutions to those problems, but they should have a focus on solving them internally.
Darren:
And the third one, customer experience, we have seen people that actually almost have like a check list of customer touch points and what the experience will be at each of those but it is trying to find a recipe to a situation which should be customised. The best customer experience is the one that is personalised to the needs of the customer.
Erik:
Absolutely, and it is interesting because that is where branding is moving to, and I think that is the most central part of branding today. It is not advertising, it is customer experience. Jeff Bezos once said, ‘a brand is what people say about you when you are not in the room’, which I think is a perfect way of looking at it. If people talk about your brand and they go ‘I went into this and this store and people treated me like this and this’ that was a negative experience then that brand is a negative value to that person or the opposite.
Darren:
That concept first hit me when I was working on a newspaper. I was at J. Walter Thompson and we were given the account for this newspaper, which was the most popular newspaper in the market place, and they were briefing us on promotions and then one day they want a brand ad.
And I said look it is really interesting, you are wanting to spend let’s say a million dollars to make an ad and put it on air to tell people what they already know, because the newspaper is part of the society and every day when people listen to other media like radio and television, those journalists will often refer to that newspaper, your own journalists are talking in all sorts of media outlets.
Don’t you think that the brand actually exists by people’s perceptions from all of those touch points? And you want to do a tiny little drop in the ocean called advertising to somehow change that. It’s like having the tsunami coming at you and you getting a bucket of water and trying to throw it against it to make it change direction.
Erik:
Exactly, and this was the realisation I had after more than twenty years in advertising, that we are making incremental changes to something that we could actually make huge impact on. You know creativity is an amazing thing, if you apply it right and if you apply it to the right place and people at the right time.
Take a brand like Samsung, they are spending billions and billions on advertising. They’ve got great products, don’t get me wrong. Then you take a brand like Apple, and I don’t want to be the typical Apple lover, but I am, so I might as well own up to it, but they build these stores which gives people a great opportunity to come in and have that brand experience. Not in a fake way but in a real way, you get to touch the products and get that community feel. You get everything right by having something old fashioned like mainstream retail.
Darren:
But they also do such a good job with the staff as well. I mean the whole experience from the time you walk through the door is part of the Apple brand experience because the way you interacted.
I remember going into an Apple store in the US and I purchased something and the guy as soon as he swiped my card he goes, Oh, Darren, I see here… he had everything about me and as soon as he could identify me as a person, it was all there, everything I had ever purchased through Apple.
Erik:
That’s an interesting topic in itself because a lot of people talk about big data and collection of big data and use of big data but I say unless you combine that with that small data, that personalised data which goes way back to my direct marketing days. If you know about the customer use that information in a positive way. You get a positive experience out of it. It’s a better business model for the companies.
Darren:
Recognition. One of the great ways you can reward a client or customer is not actually giving them discounts but actually recognising them as being a loyal customer. One of the things that people crave is to be recognised for their contribution or for their loyalty and their commitment to a particular brand.
Erik:
I totally agree, I think discounting in some industries is like the base line now you know. Here in Singapore there’s a huge competition between Uber and Grab for the private hire car market. And Grab is now the market leader but they’ve done that through heavy discounting.
So where is the brand loyalty going to be when those discounts disappear when they run out of funding and all that? What’s the difference between the two services? That’s what they have to ask themselves and I think that’s not discounts.
Darren:
Any time you are buying loyalty someone else can buy it off you.
Erik:
Exactly.
Darren:
When I went and had a look at your LinkedIn profile, you are now working in an area of cultural change and helping people and yet your career started in the Military, which is interesting.
Erik:
That’s true.
Proving strategic leadership to navigate through transformation
Darren:
You trained in the Military in Norway, which I believe is compulsory, but then you went on and did Officer training as well which is really about leadership training, isn’t it?
Erik:
Absolutely, it’s leadership training, which is important. You learn how to lead people in very stressful situations, and I think you learn something from that because you understand that you can’t just bark at people, you have to actually work with people, you have to make them perform at their best and you learn that.
The other thing I think I learnt there, I was a boy scout when I was a kid as well and you focus on fixing problems and I think that stuck with me, that idea that oh, something happened, we can’t get through here, there’s a lake. What do we do?
You know, that kind of attitude to life is you look at the problem, you assess the problem, you go okay, there’s got to be a solution to this and then you figure out what the solution is and you use the team to do that. That’s where problem solving, innovation, creativity is best applied.
Darren:
So part of that which you didn’t mention is also assessing the resources you have at hand and then how to make a decision as a leader around the best approach, which surprisingly or not is called strategy. A lot of people really get bent out of shape about this idea of strategy because it’s been turned into this almost rocket science of thinking.
When in actual fact strategy, in its purest form is clearly defining the objective; what you are trying to achieve, assessing the resources available, money, time, people, whatever and then exploring all of the things that you could do but then making the decision and eliminating all of the other things on what’s the best use of your time and resources and we’ll give you maximum opportunity. And that’s strategy.
Erik:
Absolutely.
Darren:
So really it trains you to be a strategist and not just a problem solver.
Erik:
Well yes it did and also being a copywriter I had to always think strategically, I had to always think what the next step is. What happens after this? It wasn’t just about that idea, it had to be about how does that idea flow when we go further down and the brand becomes bigger or we have other challenges or problems with the customers. How do we deal with that?
I think what’s changed really the last five to ten years in strategy is that, business strategy used to be like a five-year plan; right you stuck to that 5-year plan because that is your strategy. In today’s society, that’s not possible. There are so many changes around us, technology changes, cultural changes, all of these things happening all the time, so you have to have a strategy that allows for that.
The strategy has to be set, but it has to understand that what if there’s a new competitor, what if there’s new technology, what if people start thinking differently, what if people start eating less meat, what if people start driving less cars, what do we do then? What is our strategy for that? How does BMW and Toyota and those companies deal with the idea of co ownership of cars and those kinds of things? That’s strategy.
Darren:
Which is what it should always have been; the objective stays constant but the strategy is constantly reviewed based on the point in time and what is occurring and what could occur.
Erik:
Right.
Darren:
The whole idea of swot analysis was meant to do that. Unfortunately, it got turned into tick the boxes and people actually stopped using it for what it was meant to be which was, a great way to review your current strategy against your current circumstances.
Erik:
That is true. At Acoustic, we have a strategy model that is shaped like an infinity sign to show that it is an ongoing process and that you have to kind of look at the consumer and you have to look at the culture that’s happening, you have to look at the technologies but most of all you have to look at your business and who you are and who you want to be.
That needs to stay the same, those values, those are core. Are you familiar with Ikigai? I am sure you are.
Darren:
Yeah
Erik:
So Ikigai for those who don’t know is like a personal purpose finder, it’s a Japanese tool. I use it with my kids. I sat down with them and Ikigai looks at, what you are good at, what you love to do, what the world needs, and what you can make money from. So, from a personal perspective it’s a great way of choosing your career.
But I re-worked it in a way that works for brands as well to look at what is our purpose. How do we define that purpose? And by using Ikigai to do that we kind of end up finding that type of strategy.
The role of purpose in digital transformation
Darren:
So this is a finesse on language. I think it is actually a great tool for organisations who want to redefine their brand because in a way by defining your purpose in this day and age you are defining your brand. People struggle with this concept of purpose.
Erik:
Exactly, it is a bit “Purpose, what’s our purpose?”, but if you do it from Ikigai, my experience of SWOT analysis in a workshop, you are sitting there and people are running out of things to say, it just really becomes quite contrived, but if you run an Ikigai workshop, you ask people what is it that you love to do. It is endless, people are like, we love to do this
Darren:
It’s what brings you joy in the work you do.
Erik:
Exactly and what can we get paid for? People get very specific how we can make money. What does the world need? Okay, the world needs better transportation services or the world needs less CO2 emissions or the world needs this and this and this and then they can look at how they can contribute to that. So that is an interesting way of looking at strategy.
Darren:
A lot of organisations have actually lost sight of why they exist in the first place. One of my favourite quotes is the purpose of any organisation or business is to create customers and to maximise the value for both the organisation and the customer in that interaction.
It even builds into that concept of I’m in business to make profit but that’s only half the equation. It’s the way you make profit, to actually enhance or bring value to the customer and that, if you see that as the core of why any business should exist.
There’s nuances as to what particular way they bring that value equation to it but then all of the things you are talking about; the role of technology, to innovate, your offering and to manage the customer experience all comes from that core reason for being, which is to create customers and then create customer value in a way that delivers value for the organisation.
Erik:
Absolutely correct. I think this is an area where you can actually look to the past. Hundreds of years back people started wearing shoes. Those shoes got worn, right, that’s a problem. So, someone said I’m going to be a cobbler, I am going to fix those shoes, that’s my job, I fix those problems and it was very simple.
There’s a problem, I’ll fix it, I get paid for it, everyone’s happy. We kind of lost track of that in a lot of businesses. We are looking for new business opportunities but because the customer or consumer doesn’t always know what they need, or what they want, you have to kind of try and find the problems or challenges in their everyday life and then find the problems to solve and that is difficult for a lot of brands.
The banks are struggling, people don’t want to go into branches anymore, why would we, we don’t really want to interact with the bank people so it becomes a race to come up with tons and tons of new ideas.
And new ideas are great but if you don’t filter them, if you don’t choose the ones you believe in, you end up just having fifteen new ideas that just confuse people, not solving the problems but adding to the problems.
Darren:
Well actually creating complexity for people.
Erik:
For no reason what so ever.
Darren:
But you can tick the box that says we’ve innovated because we have engaged all these fintech start-ups to solve all these problems that no one even knew they had.
Erik:
That is what they do, they buy fintechs and they pretty much shut them down because they go okay that’s a great idea, we’re going to buy them and we’re going to put them in. And they don’t really fit to our organisation so let’s just put them in a corner and see if they can come up with some technology though we are not going to use it for anything.
Darren:
So to go back to your first point around the whole digital transformation, I get why you hate the phrase digital transformation because it’s actually a total business transformation, it just happens to have technology as the thing, right?
I am concerned and I’m wondering if you see the same thing, that a lot of organisations go down this path of transforming themselves around technology because of the fear of digital disruption, that other term that was started to be bandieed about five years ago, with the examples of Uber and Amazon and Ali Baba.
All of these companies were going to disrupt every category so traditional legacy organisations have started to embrace this almost as a defence mechanism rather than a business driver.
Erik:
I think you need to do both, I think you need to recognise that your industry is going to be disrupted no matter what industry you are in. If you are in traditional shipping it’s being disrupted as we speak, it’s going to continue to be disrupted.
If you are in wholesale goods it’s being disrupted, and it’s continuing to be disrupted. So, I don’t think you can dismiss it and say we are not going to worry about new competitors or new technologies or anything like that, I think you need to be very cognisant of what’s going on.
At the same time, you have something they don’t have, you have built the business from the start and if you are smart enough and fast enough you can actually be the disrupter of your own industry. But that takes guts and especially in this region we do like money in our hand rather than money down the road, even though the money down the road is a bigger part.
Darren:
Yeah, a bird in the hand is worth two in the bush.
Erik:
Exactly and that makes it very hard to kind of go I’m going to disrupt my own business.
Darren:
The other problem is I’ve seen this working with companies that have a huge legacy infrastructure and the idea of having to write it off to move forward is just an anathema. So, what they end up doing is a strategy to try and breathe life into a dying component because that’s seen as more acceptable and calling it for what it is and transforming into a whole new business.
I think your example before about the banks, if you’ve got branches everywhere full of people delivering in quotes, customer service, to turn around and go we actually don’t need any of these people is a huge headache. The person that makes that decision is going to be written up as the person that destroyed the finance sector of free employment.
Erik:
Maybe the answer is the opposite. It could be, but the thing is you have to look at this. Banks are a good example because they have been incorporating for such a long time they have legacy systems when it comes to IT as well, so the digital transformation is often lead by the IT guy, which no offense to IT people, is absolutely the wrong way of looking at it because again it is not about the technology
Darren:
Well, it’s the cart driving the horse.
Erik:
Exactly, going from seven data bases to five doesn’t really change anything. If you really want to change something then you have to take the core problem and change that. I love the banks and I think the banks have a great opportunity but they have to seize the moment right now.
You look at Tech companies like TransferWise who have come in and disrupted International transfers. In the past if I would transfer money from Singapore to Norway, which I do every once in a while, it would take three days, I would pay a fee in Singapore, I’d pay a fee in Norway.
Darren:
With the worst possible exchange rate.
Erik:
And on top of that they would keep the money for three days, which means they’re making interest money on short term money market, so they are making money four ways on that one single transfer. Then someone comes in and says we’re just going to disrupt that, it’s going to take eight hours and we‘re going to be very upfront with a fixed fee based on the size of the transaction.
Darren:
And the best Google reported rate on the day.
Erik:
Exactly, and that’s the thing. People are starting to wake up to the fact that there are other players out there. That’s going to be hard for the banks to manage because they’ve got to get used to disruption, not just in transfers, they are going to get disrupted in loans, in savings in every single thing they do there’s going to be small players coming in and disrupting and the banks are finding it hard to juggle.
Some banks are doing okay. Some banks are at the forefront of technology and have great digital banking experiences.
The importance of fostering creativity in business
Darren:
Now I’m going to take you back because you said when we were talking about the army you said you jumped forward to being a copywriter because you actually went to the Oslo business school and you did a course around marketing and business, didn’t you?
Erik:
That’s right. I actually specialised in innovation as well which is interesting because twenty or thirty years later it comes back to me finding that entrepreneurship idea. I was very much into IT and computers when I was a kid but by the time I was finished with the army I was kind of fed up with it for a while, and I really didn’t know what to do.
My brother went to Oslo business school and my dad, he was a businessman as well, so I’m like okay I’m just going to do that because I can learn something from it. I never wanted to be a banker or that shipping guy, I never wanted to do that kind of business but I was always interested in how businesses are run and I think it has given me an edge as a copywriter, especially working with B to B Clients. So yeah, I started working as an account person in an agency.
Darren:
But you spent quite a lot of time with McCann in lots of different roles, I mean creative roles. A lot of the time seemed to be around B to B and direct marketing or digital marketing.
Erik:
I was always quite specialised. People saw me as the guy that they could put in the room with clients and I could talk to clients and explain to clients and I could understand client’s needs and all of that, so when it came to more complex tasks, they kind of ended on my table.
When it came to more fun and creative tasks it was other writers. I have no issues with that. I built a great career, I won lots of awards, I’ve done all of that, but to me it was more about solving a problem, seeing the broader picture and that gave me some opportunities. I had a great relationship with McCann. I started there in Norway, I was there for six, seven years and I always made it clear that I wanted to go overseas.
Darren:
Yeah, you worked in China, Australia.
Erik:
First in Australia, I was three years in Australia then I came to Singapore , then I went back to Norway for some family reasons then I went to China for kind of a short time and that was my last year at McCann. Then I said fifteen years of doing this was enough.
It had been good to me, I think I had been good to them, but it was time for me to do something else. When we started Acoustic it was somewhere between agency and consultancy and today we have kind of dropped the whole agency part and just focus on consultancy.
Darren:
Which is where I see the similarities with TrinityP3 and Acoustic in that we’re a consultancy focusing on marketing and the consumer the customer, rather than the big wide world of management consulting. They seem to be moving into this territory very rapidly.
Erik:
They do and that is an interesting discussion in itself. I am not so sure it’s a great move for them but we’ll see. I find there are two things about the big consultancies that I position myself away from.
One is that a report is not solving anything, so you can do your cookie cutter reports approach, which they do and they build like three hundred pages of reports and then the customer can say okay we’ve got this report from this and this consultancy. They are very famous for what they do and we’re pleased now we have this report but it hasn’t really changed your business.
Darren:
I’m sure the two hundred slide power point presentation is going to radically change the business because you are going to be able to use that to prop up desk legs and all sorts of things!
Erik:
Exactly, the other thing I think a lot of consultancies do, and I’m not going to name any names or shame anyone, but some consultancies have something to sell outside of consultancy.
Darren:
They all have something to sell these days.
Erik:
No, I find that if you come to companies.
Darren:
No, technology solution, they all have technology solutions so of course they come in, they get paid a large amount of money to diagnose the problem or opportunities and the solution is X.
Erik:
Exactly.
Darren:
And even worse, they’re getting a commission on selling that solution.
Erik:
And they get a monthly retainer fee and all of that, it’s a smart business model for them but it’s not of great value.
Darren:
Well, I’ve been offered that business model and I say I turned it down with integrity but as time goes on I’m starting to think that maybe I should have sold integrity for the ongoing trailing commission because there’s a lot of money in it.
Erik:
I agree and money is great but…
Darren:
Especially at my age.
Erik:
I feel you, I feel you.
Darren:
No I’d rather have my integrity.
Erik:
I think one of the decisions we made with Acoustic is that we would never do that. The one thing that advertising has got right is that when you produce a TV commercial, which you still do, you go out and you get three quotes, you get three different directors, you get some ideas how this is going to pan out and you produce that.
I think that’s a great model for consultancies as well to kind of go, okay we’re actually going to build something but we’re not going to have the resources to do the build itself. We’re going to find the right people for that right build and that doesn’t come off the shelf, it’s not labelled.
Darren:
You’ve got to be unencumbered to be able to make the right recommendation to suit the specific problem. Every solution comes from defining the problem correctly or framing the problem the right way. You can’t frame the problem and then go oh by the way here’s the solution I prepared earlier.
Erik:
It’s true. An interesting thing that what we’ve found is that working through different clients there’s always a pile of ideas that are great but haven’t come to fruition because they are not right for that client.
I experience that a lot in advertising and I’m sure you did as well, every time you went to a client you presented like three ideas, one of them is great but very bold, one of them is middle of the road and the client will buy that one and then you have one idea, what are you going to do about it, and there’s nothing you can do so you just throw it in a pile.
Darren:
Look we’ve run out of time, but thanks for the time. One last question; in that 15-year career, what’s your favourite ad that you produced?
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