Q&A with Charlene Li, Jumpshot Board Member
“What I’m saying in the new book, based on my research, is this: If you can create a real strategy that will drive growth, it will be disruptive. It will be extremely hard to do, it will feel painful and it may even feel awful, but you’ll know what you’re going after. You’re chasing after that opportunity that your customers are presenting for themselves.”
Charlene Li has been helping people see the future for more than two decades. She’s guided business leaders and organizations to thrive despite disruption as a speaker, advisor, board member and author, including six books on The New York Times’ bestselling list. Charlene founded and ran Altimeter Group, a disruptive analyst firm that was acquired by Prophet in 2015. She continues to work at Prophet as a Senior Fellow.
Earlier this year, Charlene joined the board of Jumpshot, and we are so lucky to have her valuable advice. With more than 20 years of experience in tech and business, she’s a respected advisor to Fortune 500 companies on digital transformation and leadership. She serves on the regional board for YPO, a global network of CEOs. Charlene is a sought after speaker and has appeared at events ranging from TED and the World Business Forum to SXSW.
We sat down recently with Charlene to get her thoughts on how fast-growth companies can successfully manage disruption, the importance of customer obsession, what she predicts in the future for some of the largest tech giants, and other trends and hot topics she’s been tracking.
Deren: Your latest book, The Disruption Mindset: Why Some Organizations Transform While Others Fail, focuses on the theory that disruption doesn’t create growth; instead, growth creates disruption. How would you advise business leaders to survive and thrive in the wake of fast growth like what we’re experiencing at Jumpshot?
Charlene: I wrote this book because so many people were asking how to create a disruption strategy. What I found is that people keep looking for some sort of disruptive innovation or technology to drive growth, but it’s just the opposite. It’s growth that is disruptive. When you actually start putting together a plan to drive exponential growth, you go, “Whoa, that’s really scary. I don’t know if we can do that,” and many back away from that.
What I’m saying in the book, based on my research, is this: If you can create a real strategy that will drive growth, it will be disruptive. It will be extremely hard to do, it will feel painful and it may even feel awful, but you’ll know what you’re going after. You’re chasing after that opportunity that your customers are presenting for themselves. Frankly, that’s the only way to do it. Some companies and leaders have the ability to do this very well because they have the disruption mindset to think about things very differently.
Deren: Please elaborate on how to build a strategy designed to meet the needs of future customers and a culture that thrives on disruptive change.
Charlene: Building a disruptive strategy, requires you to have a very clear idea of who your customers are and in particular, your future customers. Because it’s only when you see the opportunity that those future customers represent that you’re willing to go back to what you’re doing today and make the preparations, put in the investment, hire the right people, and make the sacrifices you have to in order to move off of what you’re doing today and become focused on what you’re going to have to do in the future.
Unless you have a really strong vision of what you’re trying to create, what that big opportunity is with your future customers, you won’t make those hard decisions today. It’s a way to modulate that pain and to be able to focus on what has to be done today, no matter how difficult because you know it’s going to be worth it.
Deren: Earlier this year, you wrote an article for MIT Sloan Management Review about “How Customer Obsession Creates Accountability for Change.” In that, you noted that 70 percent of change efforts fail. What are some of the common obstacles business leaders face when it comes to managing change, and what’s your number-one piece of advice when it comes to customer obsession?
Charlene: I think the biggest obstacle is that leaders don’t focus on ensuring that everyone in the organization is aligned around a common understanding of the customer. If I were to come into your organization and walk around your office for an hour, intercepting random people, would they be able to answer these questions: What is your strategy? Who are your current and future customers? How does what you’re doing tie into the organization’s strategic goals? Chances are they will answer that they have no idea and say, “I just do what my manager tells me to do.”
I hear this over and over again across many organizations. Again, it’s a really simple task that’s difficult to execute. Do people really know why they’re there? What is the company trying to accomplish and do employees know what their role is in it? Are you really helping them to be successful and enabling all the managers throughout the various levels to know how to orient and to focus people on the right actions in order to achieve the company’s objectives?
That’s alignment and awareness. And, it takes a lot of work to make sure all those details are lined up. It’s easy to say, “Hey, our number-one goal is to drive revenues.” Half of my revenues are tied to these particular customers. Well, how does a front-line person know how to execute?
Many disruptive companies actually have a lot of order and structure to them. They have many good processes in place to help people understand what that strategy is, who their customer is, and how to act when they see one of those customers. When they have that order, they’re able to move really quickly and be highly disruptive. They all know what’s going on and they can focus all of that energy on that future customer.
Deren: Speaking of disruption, even tech bellwethers such as Google are being threatened on a number of fronts. For example, according to our Jumpshot data, the number of Google web searches is actually trending down by about 10-15 percent since January 2016. And, Amazon surpassed Google in product searches last year. What do you think Google needs to do to avoid becoming a fading brand such as AOL or Yahoo as its core advertising business is challenged?
Charlene: Let’s use the product search as an example. If you’re a Prime member, you go straight to Amazon first and skip Google altogether. That’s why Google is partnering with everybody else who’s trying to take on Amazon, such as other retailers with brick-and-mortar stores like Target, Walmart, and Costco. I think that’s a really smart idea because with Amazon, even though they’re really big, they are actually still only a small slice of the entire commerce space. People still buy a tremendous amount of products offline, and they’re using Google to do the research, so it makes a lot of sense for Google to focus on those relationships.
That said, I think that if Google’s search advertising market share is eroded by even just a few percentage points every year, that’s a significant draw away from their cash flow into somebody else’s pocket. And, believe me, they’re going to defend it very fiercely. It should be an interesting contest to watch over the next year or so.
Deren: One arena that Google has expanded into recently is the online travel agency (OTA) sector with the launch of its Google Travel offering as it moves towards a one-stop shopping source for travel bookings. What do you think of Google’s prospects in the OTA sector?
Charlene: I think that Google’s advantage is not that it’s a one-stop-shop similar to all the other travel sites like Kayak and Expedia. The sweet spot for Google is that many people are just trying to figure out where this resort is when they do a search on Google Maps or on Google search.
Google has the opportunity to intercept that natural path and to say: “Hey, since you’re here, go and check out some hotel rooms. Go check out some airfares.” They’re right there when someone is thinking, “Do I want to go?” That is the biggest advantage here for Google, to catch travelers earlier in the consideration stage. I don’t think Google wants to become a travel agency and is instead interested in directing people to sites and living off of the fees that come from the redirection. They’re making the bet that they’re better off being a clearinghouse and drawing advertising earlier into the buying process versus getting into the transaction space, which is what most of the OTAs are doing.
Deren: What other trends in eCommerce or digital marketing have you been tracking lately or are particularly intriguing to you?
Charlene: I am intrigued by how AI is going to impact digital marketing and eCommerce and, in particular, to what extent advertisers and even platforms will use AI to put the best options in front of consumers. Instead of giving you things that are relevant to everybody, people may prefer to get things that are relevant to them.
I think AI is going to make that shopping relevance far, far superior. But, to make it work, requires a lot of data. Companies in this space need a lot of diversity of data. I’m particularly interested in watching to see how that develops because I think it’s still really early on.
I’ll give you one example. I was in Boston and my son was coming to meet me. He’s leaving his dorm and got an ad from Google that says: “Hey, you want to try an online scooter?” It was just the perfect timing in the right place. Somehow or another it knew that he was trying to get to someplace and it went, “Hey, try the online scooter.” It was like 20 percent off for two or three hours, whatever the promotion was. And, he decided to try it.
So afterward, I said: “How did Google know that this was the perfect time and place to even send him that ad?” It’s just amazing. It’s a convenience and it’s incredibly helpful and relevant when you think of it that way, but you could also think of it as an extremely spammy version of “Minority Report” if it’s not helpful. It’s a very fine line. I’m curious to see how AI actually helps us be more relevant to people without making us feel like it’s too scary.
Deren: We’re so honored to have you as a board member for Jumpshot. What attracted you to what Jumpshot is doing, and what opportunities for disruption do you foresee in our future?
Charlene: I came across Jumpshot a few years ago and asked for a company briefing. I came into the office and met you. I was just really impressed by the service, the unique set of data that Jumpshot has and your tremendous commitment to consumer privacy. It’s very rare to see that combination of a rich data set with no ability to compromise that data. I could see a clear opportunity to use that data to improve the customer experience on so many levels. Fast-forward two years, and I now serve on the Jumpshot board with you.
Deren: Are there upcoming events here in the San Francisco Bay Area or other major U.S. cities where people can come out to hear you speak and get signed copies of your new book?
Charlene: You can see my upcoming appearances on my site at charleneli.com/appearances. If you’re interested in my new book, you can go to your favorite online retailer or you can buy it on my website: charleneli.com/disruption-mindset.