Brand Impact – BIESALSKI & COMPANY Markenberatung

Why Leaders Need New Thinking

Heike Amler — Wed, 25 Jul 2018 16:40:58 +0000

Author: Frank Weber

Digitalisation has triggered a race for the future. New players have emerged challenging traditional business models or even disrupting them. C-level trips to Silicon Valley are booming. And there is literally no escape from AR, VR, Big Data and Artificial Intelligence. But one fundamental dimension of digitalisation tends to be neglected or even overseen: the need for cultural change in organisations.

Hierarchical models are in crisis

Recipes of the past are not necessarily suited for the digital future. This is especially true for hierarchical models that are based on the principles of power, subordination, command and control. Employees work within precisely defined structures, jobs and processes. Conformity is rewarded. This top-down model has shaped generations of managers and determined corporate cultures. But now these foundations are being challenged and shaken. What has happened?

Welcome to the VUCA world

The speed of change has accelerated significantly. Globalisation, increased competition and last not least digitalisation are among the key drivers. What used to be stable, clear, predictable and controllable has been replaced by volatility, uncertainty, complexity and ambiguity. Therefore, new concepts are needed to cope with this fast-paced, fluid environment. Scrum is such an approach. Initially invented for agile software development, it has in the meantime conquered many sectors outside of IT. In a manifesto, published in 2001 by seventeen software practitioners, the core principles of agile software development were defined: focus on individuals and interactions, pragmatic solutions, collaboration and flexibility. In other words: rigid organisation structures and linear project management slow down processes while they do not deliver better results.

The chief commander has served its time

To become more agile, companies need to redefine their corporate cultures as a prerequisite. How should they proceed? Contrary to common understanding, they should not start with their employees or their middle management (the so-called clay layer). The starting point should be their leadership team. Why is that essential? Because the leadership team is the catalyst of digital change, not only providing purpose and leading by example, but also inspiring, empowering and driving collaboration. Above all, leaders need to be authentic to win employees’ hearts and minds. Mere lip service will not work. Do these leaders actually exist?

Caught in traditional thinking

I think most of the leaders are still caught in traditional thinking. And that has to do with long established patterns, their professional socialisation and their age (many of them are not digital natives). They need new skills to become the new type of leader and transition from chief executive officer to chief purpose, inspiration, empowerment and collaboration officer. They also need to understand that digital change cannot be prescribed top-down and is more than using digital tools and introducing digital business models. And most importantly, they need to be prepared to critically reflect themselves and overcome fears of losing power and control in favour of moderating processes and unlocking synergies.

Leaders need to be at the forefront

The digital revolution requires a fundamental revolution of mindset and culture. And leaders need to be at the forefront to pave the way.

The Future of Marketing

Heike Amler — Tue, 15 May 2018 13:29:24 +0000

Author: Frank Weber

I am always struggling with how marketing is being perceived by most of the companies and where it ranks in terms of importance compared with other functions. Why is that the case?

The above-the-line syndrome

Marketing started pretty much with advertising. Later other disciplines joined such as direct marketing, sponsoring, public relations and online. Advertising was and remained king for a long time (professionals called it above-the-line, so everything else was below). This development established the predominance of creativity which was and is still being celebrated in numerous award contests and reflected in rankings.

The problem with creativity is that it is associated with taste. And taste is very personal. Therefore, everyone feels like an expert and is inclined to comment or suggest alternatives. So any advertising campaign, logo, icon or website design presented internally tends to end up in discussions (I think there is too much red on the webpage and the circle should be closed).

Is this the essence of marketing? Taste and look? Not really. Creativity is not an end in itself, it is rather a means to an end.

Marketing is making things nice or making nice things

Where did this development lead to? Well, marketing is regarded by many companies as the function which is responsible for making things nice or making nice things such as booths, brochures and give aways. The strategic dimension of marketing tends to be pushed to the background. What complicates the issue even more, is that a simple success metric which would build the bridge to business is missing. Instead, there is a large number of KPIs across multiple touchpoints. But the number of booth or website visitors does not translate directly into top or bottom line. And without this ultimate proof of business contribution, the function remains somewhat disconnected.

The way out of the downstream trap is moving up

So what is the way out? I think the best way of contributing tangible value is the brand. Not brand in the creative sense. But brand in the business sense. Something I call upstream marketing (strategic and business driven) as opposed to downstream marketing (implementation and creativity driven). What do I mean?

A strategically managed brand is not only based on a purpose and clear identity, but delivers upon the promise, captures and responds to needs and builds strong relationships with stakeholders. As a result, preference is being generated as well as willingness to pay more and buy again. This translates into more revenue and better profitability. Marketing is the orchestrating and driving force behind it, creating real added value beyond its own costs.

The toolbox is there, let’s use it

The brand value is one of the most important assets of a company. It usually accounts for up to one third of the company value. In some cases, it is even the most important asset (if you think of Airbnb or Uber). But it is not only the company name that counts. Protected trademarks, like company slogans or product names, represent valuable assets, too. The toolbox for measuring, tracking and calculating the impact of strategic brand management is there. Let’s use it.

Investing in brands is like watering plants: a call for efficient brand spending

Heike Amler — Fri, 30 Jun 2017 07:03:28 +0000

Author: Jan Kubik

Imagine you want your plants to thrive and prosper. What would you do? Even with the smallest green thumb, regular and continuous watering seems to be obvious. Otherwise, you would risk that the plant dries out. In this case, the plant is damaged it or at least its rescue takes much more effort while using more water and fertilizer.

Probably you are now wondering why I am talking about plants. It is because growing a prosper plant is similar to developing a strong brand. A strong brand is a value-adding factor. On an average, the brand value accounts for almost 50 percent of the company value (BIESALSKI & COMPANY, benchmark database, 2016). However, to get there the brand needs continuous and regular investments at an appropriate level. Pretty much as the plant, that needs water to grow.

To be aware of the relevance of brand investments is so important because they are directly manageable and assignable to efficient measures in the marketing mix. Having said that, it is the only way to influence the buying decision of the customer by increasing his perception, attitude and preference towards the brand. In turn, this can raise the market share and economic success of the company (see illustration below).

How to become a strong brand?

Creating a strong brand takes time and needs continuity of brand investments. This is not only a matter of fact in B2C but also in B2B. When you think about brand investments, you probably first come up with strong consumer brands like Apple, Google and Co. However, also more unknown brands in the B2B sector like Herrenknecht or Otto Bock are equally strong in their specific target group. Why? Because they have invested in the brand over decades in a focused and efficient manner. Less in advertisement but rather in innovations, product and service quality and customer orientation (BIESALSKI & COMPANY, „Die Marken der deutschen Hidden Champions 2015“). As investments have a delayed impact on the value added of the brand (e.g. in terms of higher market shares) it is important to spend the money sustainably in the long-term, as the graphic below illustrates.

Missing brand spending will result in brand erosion

So far, it is all best practice. Think about a company that exploits its brand while investing in it only on a low level. That is unfortunately also common practice. It is the same as for the plant without water – the brand will erode. How this looks like in a specific example can be seen in the case below. Based on a real example of a once leading German commodity producer we can see that first the brand picture gets less clear, attractive and differentiating to the customers. Consequently trust and loyalty decreases leading to a lower brand equity. Based on this, customers penalise the brand with a lower willingness to pay leading to a decrease in price premium. Concisely, the brand got in serious problems only within 10 years whereas the main competitor did well and out-competed the brand.

To sum up: Care about your brand, put enough money in it and increase business success

Keep in mind that the brand is a crucial value-adding factor. If you want to profit from the brand, put sufficient money in it in the long-term. The brand will reward you with higher sales and prices. The best thing about that: The output should be much higher than the amount of spending you put into the brand – provided you did the most things right. You want to learn how Hidden Champions do things right? Read the study ‘Die Marken der Hidden Champions 2015’.