While people in most countries of the world watch the race between vaccination delivery and our dreaded virus and wonder whether we will encounter further pandemics, businesses that are still preparing to take their first steps to success are asking themselves “Are we far enough along the transformation road to even survive 2021?”

Sadly the answer for many is “no”, but where that’s the case they have no-one but themselves to blame if they haven’t already taken their first steps to success. How many warnings do they need for heaven’s sake?

Don’t take my word for it. As though the clamour from experts around the world hasn’t been loud enough over the last couple of years, watchdogs and business communities that have been making excuses for their members are finally having to admit what a sorry bunch they are.

86% of today’s businesses are winging it.

The Financial Reporting Council in the UK has concluded that the purpose statements of 86% of companies are no more than “advertising slogans”. Well, I could have told them that! 

In my experience very few executives understand the difference between purpose, process and product and a large proportion of those who remain think it’s a question of telling people what they want to hear regardless of their ability to live up to it. If it turns out to be anywhere close to the truth, it’s hardly ever more than a happy accident.

In fact “purpose” is the first subject we tackle with my Brand Discovery programme and I can guarantee, when I ask senior executives what the purpose of their business or brand is, a good number of the people in the room will tell me “We make widgets”. Your first steps to success therefore require you to know what you are talking about.

Get the basics straight before you take your first steps to success.

Let’s start with nomenclature.

Marketers and business consultants love jargon. To the extent that sometimes you can barely understand what they are talking about. I’ve always felt that this was an attempt to sound superior, but it certainly doesn’t help their cause. If there is any confusion or uncertainly regarding terminology it’s a “fail”. So, let’s clarify a few of the most basic, but widely miss-used terms.

Purpose

Purpose is what you do to make your customers’ lives better. This is not your products or services.

Products

Your products and services facilitate the delivery of your promise, but it’s essential to note that, because customer needs change, so must your products and services. Products and services are all transient and their lifetime is getting very much shorter as life speeds up and needs change ever more frequently. That’s why “any business is only as good as it’s NEXT big idea”. 

Process

Process is how you bring this all together. This will almost certainly be unique to your organisation, the uniqueness representing all or part of your point of differentiation.

The first steps to success mean overcoming “Transforminertia”

The experts have been telling us for years that every business has to transform to survive in the digital economy.  By that we don’t mean digitising or automating existing business models. This will only serve to accelerate the organisation’s demise. You need to re-invent your business from the ground up. Only then will you be sure of delivering your promise.

A few have jumped on-board, but their rarity makes them conspicuous and the failure of other businesses in their sector to follow suit has accentuated their success — not only do they have a better proposition, but they have no challengers. For them it’s like taking candy from a baby!

There’s no clearer example of the phenomenon I’ve called “Transforminertia”  than the demise of the UK’s retail sector. For the past few months one after another of our biggest retailers have folded. They have all blamed the pandemic, but in truth that has only served to speed up a process already in play. The real reason for their demise is their leadership didn’t respond to disruption quickly enough.

The impact of “Domino Disruption”

However, it would be a mistake to view these events as confined to individual businesses. The consequences always reach further. For example rescue talks between JD Sports and Debenhams ended when Arcadia folded. This was because Debenhams were so reliant on the Arcadia franchises that occupied their floor-space. This demonstrates another phenomenon I’ve been talking about recently, “Domino Disruption”.  Just think what would have happened if the Arcadia collapse had happened a few weeks later. JD would have forked out for a business and ended up with nothing other than leases on large sites that nobody wants. Domino Disruption doesn’t just concern the relationship between individual businesses either, it’s happening between entire sectors every day.  

The automotive industry has been revolutionised by technical advances made by battery manufacturers. Until they cracked the problem of battery size your EV commuter would have been linked by cable and followed by a ten-ton truck carrying its batteries. This impacts oil producers and retailers, as evidenced by Shell opening their first forecourt with no fuel pumps, just charging points. We won’t need lubricants either.

It also changes demands on the auto-servicing sector. EVs need very little servicing so, a few years from now we won’t need mechanics. Demand for electrical engineers, though, will have increased immeasurably. Electric vehicles don’t wear their tyres out as quickly either, so tyre manufacturers will have to re-think not only the design of their tyres, but their business models too. 

It’s not confined to the private motorist either. Electric trucks are already changing the logistics game. Boeing have announced not one, but three totally green-powered aircraft, while the shipping sector is already experimenting with green vessels. If you thought the green movement would pave the way to exclusively local sourcing, that was a bit of a blind alley as well as an example of how quickly needs change in the digital economy. Are you agile enough to deal with changes like this on a daily basis? There’s no end to Domino Disruption.

Thankfully, the obstinacy of traditional business leaders has provided opportunity for start-ups, disrupters and transformers. However, businesses that are founded on digital technology need fewer employees to deliver more and better output than traditional firms — that’s why traditional businesses can’t hope to compete against disrupters.

Had it not been for Covid the laggards may have eked-out a few months or maybe even a year more, but it would only have been a lingering death. There’s a point of no return for these things after which, whether you experience a sudden epifany or not, there’s simply no time to act. Covid brought that forward. You need to take your first steps to success now!

Being “Digitally Savvy”

Research by MITSloan recently revealed that businesses where the senior management team were not “digitally savvy” performed 48% less well than their digital counterparts. Putting aside for a moment, the definition of “digital savvy”, no business has ever survived with that kind of disadvantage, but in the post-Covid, digital marketplace the impact of that deficiency will be felt far sooner than would have been the case just a few months ago. The outcome is the same though — oblivion!

It has been taking traditional companies around three years to get to a point where they are competitive in the digital marketplace. Covid has probably accelerated that, but it’s still not an overnight thing and most businesses have discovered too late that their concept of transformation was way off the mark. I don’t think I’ve yet encountered a business leader who appreciated the scale of the task.

First steps to success with a different approach to transformation

More than 70% of transformations fail and the cost, time and pain represented by the process means very few indeed have the opportunity to go around again. If you don’t at least have a digital mind-set and know how to resource your transformation it’s way too late for you now. You’ll be one of the 30% of businesses that fold in the next twelve months. If you do have a grasp of the digital principle there may be a glimmer of hope if you tackle your transformation differently to businesses that have already headed off down that road.

It’s a big ask though. The reason many businesses are failing is the demands of a transformation are way outside the comfort zone of traditionally-trained senior executives. If you want to stand a chance of catching up now, though, the stuff you are going to have to do doesn’t bear thinking about. The question is “How brave do you feel?”

If you are up for it, this is your three-step guide to resurrection.

Step one – Clarify

Get some clarity. Understand what your organisation is about. At the heart of this is your “purpose” a subject that surprisingly few senior executives really understand, but that’s just the first of twelve coordinates I use to define a brand.

Step two – Build your community

Greg Satell in his book Cascades explains why change is only successful when disparate special interest groups are united behind a single idea. In the case of a business this idea is encapsulated in your brand promise. Your brand promise sits at the heart of your brand model and your stakeholder segments align behind it to create your brand community.

Step three – Focus

Most of the 70% of transformations that fail do so because they lack focus, so don’t make the same mistake.  The key to success will depend on delivering your brand promise, but first you need to be sure what that is.

Every brand incorporates a single promise made to all six stakeholder segments who commit to playing their part in its delivery. This is your point of focus and it’s the role of today’s business leader to align their brand community behind it. This is achieved with internal marketing. Another barely understood concept.

These three steps aren’t the solution, of course. They just represent your initial move toward your transformation start point. Neither is “transformation” the end of the project. I tell my clients transformation marks a change from a state of routine to one of constant change. However, getting your brand community in order — because that’s what these three steps represent — will get you fit for business in the digital era.

The rest is up to you.

Phil Darby
March 15, 2021

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