I am exposed to many brands and companies, in various contexts (consulting, training, panel discussions on x or y).
I also see many markets be “upset” by the arrival of start-ups or bigger internet groups (who have often bought out the start-ups).
This is the case in :
- Media (oh, how they laughed in 2006 when Google bought Youtube for $1.6Bn after 18 months of existence and virtually no revenues)
- Research and studies
- Banking, very soon
Obviously, it’s not that simple and much easier to write about a posteriori, but in reality, the market doesn’t change at the clap of a hand. It slowly evolves, slipping little by little towards a new model. A simpler model for the consumer : “no friction”.
Brand executives often resist for different reasons : “this is not in our strategy”, “our margins will drop”, “this is not who we are”, “it’s interesting, maybe next year”.
In a word : Inertia !
In a few more words : the inertia of top management is the primary threat.
These people don’t want to take risks. They may be waiting to retire, they think in the short-term and don’t realize that they are making the wrong decisions.
Sometimes, they may even be victims of their own pride. If at their level, they don’t see how things could change (after all)… They choose the short-term view in order to satisfy the shareholders (and secure their own hefty bonuses).
Unfortunately, by the time this approach begins to impact on the operational margin, it’s already too late (but not always).
It is of course crucial that a brand remain true to itself (as crucial as it is rare, in this world where everyone tries to please on a superficial level), true to the reason for its existence, the place it holds in the heart of the consumer. At the risk of oversimplifying, let’s take the music industry. Working in this industry is not synonymous with selling CD’s. It signifies offering people an experience, one that can be renewed as simply and pleasantly as possible.
It’s NOT about changing one’s job or corrupting one’s beliefs. It’s about evolving with new means of distribution, along with the consumer, to continue to keep the brand promise intact.
Companies are full of people who understand these changes. They see them coming, they try to work in this direction. But moving the mountain of inertia can be exhausting.
It’s upsetting to see companies like Universal or the Fnac not take the right turns, just as it’s wonderful to see conglomerates like American Express embrace the web and invest significant amounts in start-ups that could potentially disrupt their business.
Unfortunately, I don’t have any solutions for this problem, other than to recommend that when you are in a key position, keep your eyes open and don’t fall victim to your pride.