When Hasbro wanted a hand lifting its decades-old My Little Pony toy line out of the realm of kitsch last year, it turned to a tiny Brooklyn, New York, creative agency called Thunderdog Studios. The result: a New York gallery show full of Ponies, each uniquely decorated by a different woman artist.
Now, that was cool. Which is exactly what Hasbro was after. The question: Why did a $3 billion toy giant with 6,000 employees need the help? Even Thunderdog, now preparing to freshen up the toy giant's Transformers line, is at a loss, sort of. "We're all very young. When we're in the boardroom, we feel like, 'What are we doing here?'" admits president Tristan Eaton. "We're waiting for them to realize we're just a bunch of kids."
We should've seen this coming. For decades, business pundits (and, okay, we) have lauded the merits of lean, flexible organizations: Embrace the activities that truly add value; jettison everything else. And companies have done so, outsourcing their IT departments, human resources, copy shops, even manufacturing and distribution.
But this is something different, and more sinister. Companies are outsourcing cool. They're paying other companies—smaller, more-limber, closer-to-the-ground outsiders—to help them keep up with customers' rapidly changing tastes and demands. Talk about a core competency! It's like farming out your soul—or at least, asking someone what you should wear in the morning.
It's happening because technology allows ever shorter design and manufacturing cycles—in turn forcing more-fleeting half-lives for anything deemed "cool." So our friends at Time Inc.'s Fortune have hired hipster ad shop Strawberry-Frog "to contribute some strategy on how to best position the Fortune brand," according to The New York Times. A magazine spokeswoman says it's a "small research project." (Fortune to StrawberryFrog: "Honey, should I wear the gray suit or the brown suit today?") Mitsubishi Motors recently did the same.
"We surround them and give them a hug; it's a process we call 'total engagement,'" says StrawberryFrog president Scott Goodson. It's not clear how literal he's being about the hug. "When we started [at Mitsubishi], they had dissatisfied dealers, apathy in the organization, no sense of spirit. The mission we came up with was to fight boredom. It was a movement to make a more dynamic organization." (StrawberryFrog to Mitsubishi: "Oh, dear, don't wear that old thing again.")
There's something ageless about this: One generation has looked to the next for advice on cool for as long as there have been out-of-it parents. But seeking advice is one thing; letting an outsider set your agenda is another. Doing so forfeits control of your brand to someone who doesn't own it; it turns you from a creator into a distributor, which is a pretty low-value activity to base a business on. Martin Lindstrom, whose 25-person consulting firm, Brandsense, helps 11 of the world's 100 largest companies keep their brands cool, says, "I'm surprised when they come to us, because they should have structures built in to inform and shape their brand in those fundamental ways."
They don't because staying cool is difficult work. It requires constantly scanning the horizon and taking gambles. And that's scary. "People in huge corporations are afraid of being fired," says Lindstrom. "They don't dare take those risks anymore. The only way they can get a mandate to do this is by taking the risk outside of the company."
The question: Can big companies find their inner Thunderdog? Can they create internal structures and processes that let them recognize, and embrace, cool on their own? Some already have. Procter & Gamble's Tremor is an in-house "word-of-mouth marketing" division that continually tests new ideas and products (80% of them for non-P&G clients) with a network of 220,000 teens. And in April, P&G launched Vocalpoint, intended to do the same thing with a universe of 600,000 mothers.
"I'm surprised when they come to us. They should have structures built in to inform and shape their brand."
To get closer to customers and speed the feedback loop, Samsung's U.S. marketers established relationships with some 1,500 Web sites that serve its target markets, from fly-fishing sites to the home pages of rock bands. When designers in Korea give the word that a new product is on the way—often with only a few months' warning—marketing puts out the word through its network. Presto! Instant product launch.
It's a promising approach to the challenge of keeping up with one's customers. Cool, even. So, your choice: Farm out what most makes you distinctive to a bunch of kids in Brooklyn—or do the hard work of figuring it out yourself.
A Brief History of Cool
A version of this article appeared in the July/August 2006 issue of Fast Company magazine.