Do you ever have that dream where there is someone some metres in front of you about to get mown down by a juggernaut that for some reason they just aren’t aware of? You are shouting a warning to them and they can see that you are trying to tell them something, but they just can’t hear you. Well, I feel like I have been living this for the past few years!
There’s nothing worse than feeling cosy. Especially in business and sadly there are so many businesses and business people out there who have snuggled into a warm and comfortable business model and just can’t see that the reasons for abandoning it could possibly overcome the nice warm feeling they get inside every day. Sure, business is getting tougher, but that’s the case for everyone … isn’t it? Its just a matter of improving efficiency, streamlining a little and maybe settling for a little less out of the whole deal. Besides, there’s enough slack in this old machine to get us through to retirement and then … who cares really?
Well, I have news for you. The days of nip and tuck are gone. One business analyst this week stated that he thought businesses that haven’t revised their model will fold within the next twelve months. Its not that the writing hasn’t been on the wall for the past few years. I’m not alone in having given warnings to businesses that I have worked with. What’s going to catch people out is the pace of the change. Its accelerating like crazy and a lot of businesses are going to find the tail end of that whip wiping them off the face of the business map any day now.
You can see it happening already. The most vulnerable businesses, even major international concerns have had to accept they are doomed because they didn’t move fast enough and now there’s no wriggle-room. We’ve seen household names bought up by smart young businesses founded on a new business model for a fraction of their market value simply because they had to admit they couldn’t make the necessary changes.
In the past they might have tried to acquire the younger businesses and steal their model, but these days the new businesses, especially the tech ones, have the upper hand in any bargaining session. They hold all the cards. They are lean, energetic, nimble, market savvy and built on a culture of innovation. They started with the premise that their value wasn’t in the product they created, but in their ability to generate ideas that work and instead of building a business that merely produced the same old thing day after day they set about creating a model that generated new ideas every day. As I have repeated many times over the last few years “You are only as good as your NEXT big idea”.
There’s no doubt about it, innovation is what it’s all about, but how do you drive it? In fact there is probably no set answer to this, but there is a basis that its essential to establish as a platform upon which to build. Its your brand.
For decades business people have talked about brands and still few of them have actually worked out what a brand is. Now, having and understanding a brand is the key to success in the new business world. Seth Godin calls them “tribes” I have always referred to them, as “communities”. Whatever, a brand is not a product, nor is it a logo, a business or even an idea, its people. A whole mass of people from different places who share a set of desires and beliefs. A brand community is made up of employees of the company that manages it (It’s a fallacy that companies own brands), their partners, suppliers and investors and their customers. Their values and beliefs are manifested in a product, products or service, which will change and adapt as their needs evolve. Some of them make it, others buy it, they all believe in it. Kevin Roberts at Saatchi & Saatchi calls these communities “Lovemarks” and we have a relationship with them something like that which we have with our friends. That’s why I have coined the term “brandships” and the key to their success is the feeling of belonging that they generate.
In my travels around Asia and the Middle East I have seen many businesses that run on a “flog ’em and fire ’em” approach to HR management. It works to a point when your business objective is just to pump out the same old product in ever increasing volumes, but we all know that the world market is finite and we are nearing the end of the road as far as that model goes. Once everyone in the world who can afford one, owns a smartphone, apart from making more people more wealthy (which economists are telling us isn’t going to happen like it used to) the only thing you can sell them is a smarter one – Its that innovation thing again. Businesses like these exist in the West too, for the time being at least, but we have more real brand communities. Smart businesses recognised a long time ago that your bottom line is better when your employees are “engaged” and the way to do that is to focus on brand building. A brand gives people something to focus on, an objective. Handled well a brand will get all your employees behind the promise you make to your customers. It will help partners understand the role you need them to play in delivering that promise and it provides the belief system that consumers can relate to. Members of a brand community are proud to be so. They carry your logos around as a badge of belonging and act as evangelists. Recommendation is far more effective than advertising when it comes to customer acquisition so your cost of sale reduces. Meanwhile your happy, committed workforce set about the innovations that enable you, in turn, to deliver your brand promise. There’s no confusion, so you don’t waste time, effort and money chasing ideas that don’t fit your community’s expectations. Suddenly, you are efficient, lean, energetic, just like those smart young businesses who are buying up your big competitors right now.
The question you have to ask yourself right now is “Is my brand strong enough to get me through the next twelve months?”
August 5, 2014