NMP Live Meets former MD of Google UK, Dan Cobley.
In our exclusive interview, Dan explains the key to Google’s success, how the digital era changed our attitude to marketing, and what 10x Thinking means.
Watch the full interview or read the transcript below.
In conversation with Dan Cobley
What are you aiming to achieve with one of your talks?
Most commonly I am speaking to organisations that are on a digital transformation journey, and they are looking for somebody to either inspire, excite or sometime terrify them in to making that leap within their organization to move from the old world to the new.
And so drawing on examples that I have seen at Google, and in the other companies we work with, and that I am now seeing in the FinTech startups I’m working with today, showing how those that are slow to get to digital are being left behind, how those that are embracing it are winning and giving them some really practical and valuable tools and frameworks to help them succeed on their journey.
What are the key topics and themes on which you speak?
I tend to speak about innovation, about digital transformation, about culture and structure within organisations to help make that transformation journey work.
I talk specifically about financial services, and how digital and innovation is reshaping that industry and where the opportunities and threats are. I’m also increasingly talking about the new things that are going to be the transformational forces of the future, whether that is AI and machine learning or whether that’s how the whole infrastructure and organization of transport is going to change in the future. Those kind of things.
What is the key to Google’s success?
I think the fundamental underpinning of Google’s longstanding success is it’s relentless focus on innovation. It has designed everything about the business to drive innovation.From some weird and wonderful things like managing the length of the queues in the canteen so that if they serve you too fast there is no time to bump in to people and chat in the queue, so they slow down the service, you chat in the queue, you come up with an idea, to the way they put furniture and layouts in to new buildings.
They have a building where all the facilities and real estate people work in - Mountain View, and they will pilot those layouts and that furniture to see how it works with those guys before they take it to the new building.
So, those are two little examples but the whole organization is driven around processes, practices and structures to make innovation the core of everything they do.
What is Google’s twenty percent time process?
Google is very famous for it’s twenty percent time process, and what that means is that for anyone that is involved in engineering, or product management, then they have not just an opportunity, but actually an obligation, to spend twenty percent of their time, and that could be one day a week, or a week a month, or a chunk of time once a year, on working on something that is outside of their day job. So, you might be working in the maps team, but you might have a real passion for music, and so your twenty percent time might be spent thinking about how you write an algorithm for compressing music so that it can be delivered more efficiently.
And that process has been at the core of a huge number of Google’s most important product developments, and it’s also a huge reason why so many talented engineers choose to stick around and stay with Google – because they can do stuff that they really, really care about. So I think that it is a fundamental element of Google’s success.
Every organization should have something like that, and the key part of it is how do you tap in to the passions that people have for things they really care about, and let them work on them in a way that forwards your business. And if you can do that then you can really deliver real value.
How has the digital era changed our attitude to marketing?
Digital has changed everything about marketing. I remember doing a talk about ten years ago to a bunch of McKinsey clients where I forecast that half of all advertising and media spin would go through digital, and the jaws in the room were dropping. That will never happen in our lifetime was the view.
But, now, the UK is the first country in the world where that is already the case, more than fifty percent of all media in the UK now is digital and that is aligned with the vast majority of purchasing decisions being either influenced by or completely driven by digital. So if you don’t have digital at the core of how you both run your company and run and manage your marketing, then you’re not in the right places where people are making decisions about what they are going to buy and what they’re going to do, and you’re going to be left behind.
It’s obviously a combination of the paid-for media, but also the social media, and the opinions, and the buzz that is around on the web, and you need to be a part of all of that to succeed.
What stifles innovation in business?
I think there are lots of things that stifle innovation in existing incumbent businesses. Probably the most significant one is fear of the unknown amongst senior managers.
So, if you are a senior manager that has been doing something this way for five years, and you have got three years left before you retire, then the last thing you want to do is have some new scary thing come in, even if you know that if you don’t do it then in ten years time your business is going to be in trouble – that would be somebody else’s problem. So what you need is a very strong mandate from the top defining what the future is going to look like, figuring out how your company needs to change to be successful in that future, and then kicking people until they realise that change needs to happen. That is probably the biggest challenge.
There are also things in the environment and the culture of businesses that just make it hard for innovation to happen. There are the infrastructural things like people working in glass boxes or high-walled cubes where they just don’t talk to each other, and they don’t interact – that’s a problem. Or people not being given any time outside of the rigorous task-based piece work that they have to get done every day to think about outside of their day job.
Or it’s people that are afraid of failure, and if you don’t have an organizational culture that allows people to view failure not as something bad but as an opportunity to learn something new, which is of value, then that can stifle innovation.
What is 10x thinking?
10x thinking is the idea that to really innovate you need to not just make things a few percentage points better than what other people are doing, but to make it ten times better.
A lovely example from this goes back to 2004 when Google was launching Gmail. So, at the time everybody had a web-based email account. There was Yahoo email, and there was Hotmail and so on, they each gave you 25 megabytes of storage for your free account and people were constantly frustrated with their mailbox getting full and having to delete emails with big attachments. Google wanted to come in to this already existing market with something that was an order of magnitude better, so they launched Gmail, not with 25 megabytes of storage, but with 1000 megabytes of storage, and at the time people thought that was mad, they thought there is no way this can be an economic proposition for an ad funded product, but Google knew that they had to be 10 x better to win the market, but they also knew from Moore’s law that the cost of storage was falling very rapidly, and in the time it would take people to fill up their massive mailboxes, during that time the costs would come down. So whilst it was potentially unaffordable on the launch day, it would be affordable by the time it was properly adopted.
To most people it looked like a crazy idea, but to Google, who understood what the future looks like, it was something that made sense. It was a 10 x innovation versus what was there before, and now, as we all know, Google is the world’s favourite email provider.
Are small improvements just as important within Google?
So alongside Google’s focus on big leaps of innovation, it’s 10x thinking, it also has an obsession with data, and using data to drive constant marginal improvements to everything.
There is a philosophy within Google, which is data beats opinion. Always bring data to a meeting to discuss whether something should be improved.
One of the famous examples is the one about the ten blue links. In the early days of Google down the side of the search results there the links to the advertiser sites – ten blue links. Soon afterwards Gmail was launched with a blue link off to the advertiser sites as well. Designed by different designers the blue links were in a slightly different shade of blue, so in a typical organization you would ask the marketing director or head of design to pick one, and they would put it out there. Google, being a data-driven organization, demands that data answers that question, so they ran a series of 1% experiments. A 1% experiments is where you expose a version of your Google website to 1% of users, and see if they react differently to everybody else. Google didn’t just test the two blues, like two 1%, they tested a range of forty different blues across the spectrum from the greenish blue to the purplish blue, and they found out from that that people actually preferred, and clicked on more, a link that was slightly more purple in its shade. That is a marginal gain, and you get more clicks, and you get more revenue, but due to the scale of Google’s business it is a big margin, so that change in blue, from the old blue to the new blue, was worth $200 million a year in additional annual revenue, and Google is doing hundreds of those experiments all the time.
Why did you leave Google and move into FinTech?
So I had a great time at Google, but after eight years I had done most of the jobs in the UK that were interesting, and it wasn’t right for my family situation to go to the US, where there would have been, obviously, other great opportunities.
Prior to my tech at Google I had worked in Fin of Capital One’s Financial Services, and FinTech was a very hot space at the time, where the UK was in a leadership position and there was real opportunity to disrupt the, perhaps the slowest moving of the big industry verticals, that I had seen transformed by digital in my time.
So my time at Google I saw travel, and retail, and entertainment, and so on, fundamentally changed by digital, but the banks were, if you were lucky, moving a few of their direct mail pounds into AdWords, but not doing much more to the structure of their industry. So the opportunity to go into FinTech, work with startups and create some new and exciting companies that would bring better value to consumers and small businesses through better financial services products – that was exciting and that’s what I’m doing now.
What will be the next big digital revolution to impact businesses?
Firstly, the digital transformation journey that we are on today is far from over. Some people think that digital has happened, you just need to catch up and then your fine, but actually today is the slowest rate of change for the rest of your life. The journey we are on is still accelerating.
We’re seeing broadband speeds will be doubling in the next four or five years in the developed world, we are going to see the three billion people that are online today move to five or six billion by the end of the decade, and so those kind of forces continue to change everything.
Then on top of that the technology has got to a place right now where artificial intelligence and machine learning are now very valuable and practical tools for ordinary businesses. We are seeing a wave of AI and machine learning flowing through sector after sector, where the leading players in those areas are harnessing it in a way to give them a really unfair competitive advantage, and that’s an area that I think all businesses now need to understand.
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