It’s fair to assume that the most successful companies embrace change and actively plan for the future, however many established businesses shun the long-term benefits of forward planning in order to focus on short term goals. This is just one of the findings of the Future Ready research study, unveiled last week by our sister agency, Wunderman, at an event hosted at the Natural History Museum. The event focused on the strategies and approaches that companies need to adopt in order to survive and thrive in the ever changing business and technological environment.
Why do brands need to embrace change?
The Future Ready study was conducted at the end of 2017 through research partner Penn Schoen Berland. It asked 250 leaders from global brands how they are navigating this new, complex landscape.
It concluded that there are significant gaps between the recognition of these challenges and creating the opportunities that they present. Whilst the majority of companies considered themselves to be future focused, 70% were unwilling to sacrifice short-term gains in exchange for longer-term business benefits.
Richard Dunn, Wunderman UK Chairman and Chief Strategy Officer, kicked off by stating that we are currently in the slowest period of change that we will ever experience, given that the rate of change is expected to increase in speed and complexity exponentially.
He highlighted the complex dilemma facing organisations that are looking to future proof but still working on a short-term mindset. This was highlighted by the research that revealed that 70% of companies are still impacted by organisational silos, with 89% finding it hard to deliver a consistent brand story and experience. And that whilst 99% of companies regard data as crucial, only 62% are able to turn this into actionable goals. A rather alarming 59% of respondents said that they were disappointed overall with their marketing investments.
What are brands currently doing?
Stephan Pretorious, Wunderman UK Group CEO & Global CTO, chatted to a panel of business leaders from Shell, BT, EY and technology partner, Adobe.
While the panel generally acknowledged that you need to have the right vision and long-term view to build long-term value, they argued that short-term gains are the currency that enable investment in the future. Without demonstrating short term wins it’s hard to secure long term investment. Another observation was that too many conversations focus on technology choices when the emphasis should be on customer requirements and building holistic customer experiences.
On the topic of transformation, opinions and views differed greatly. Organisations that are owned by partners, rather than shareholders, have different challenges as any transformation plans needs to be by agreed organisationally rather than by external shareholders. All progressive companies need to be prepared to experiment without fearing failure. Instead, failure should be celebrated as the learnings achieved from experimentation.
What do brands need to do to win?
So, if companies are going to prepare for success in the future they should consider the elements that they will need to focus on. The Future Ready research cited five key imperatives to the long-term success of tomorrow’s businesses:
Along with Wunderman, we'll be talking more about these over the coming months.
The data paradox
With one of these imperatives focusing on data, it was interesting to hear advertising veteran Rory Sutherland’s (Vice Chairman, Ogilvy) take on the marketing community’s obsession with data. His view? Whilst the importance of data cannot not be underestimated, used in isolation it can kill brands.
One example that was given was around the failure of Nokia to enter the smartphone market and their subsequent demise. Prior to the launch of the iPhone, Nokia conducted extensive research into the price that customers were willing to pay for a mobile phone. They concluded that there was an absolute ceiling on the price that people were willing to spend on a new handset which was far lower than that of the emerging market. As a consequence of that research, the company decided not to enter the newly emerging smartphone market and subsequently died as a leading sector brand.
The obsession with data needs to be balanced with the importance of creativity and an understanding that some data - which is hard or almost impossible to gather - may be equal or more important than all of the other data collected. The McNamara fallacy named after the former US Secretary of Defence, is a reminder of the dangers of only using data to form absolute conclusions. McNamara believed that data alone could be used to ascertain a precise and objective measure of success. So, according to research, the administration lowered admission standards to the military on the premise that, with the correct training, all soldiers would perform to a similar standard, irrespective of their ability. Needless to say, the programme was disastrous.
Whilst thankfully most marketers won’t need to make the kind of decisions that McNamara made; creativity, gut feel and common sense should still play a part in informing decisions. After all, the iceberg straight ahead is only one data point, albeit a pretty significant one.
If you’d like to learn more about what it takes to get Future Ready, email us. We’d love to talk!
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