Building Value in time of crisis


23 de May de 2016

The world is experiencing a crisis, and it’s not easy for anyone. Plus, there has never been a long-term vision in Brazil. Now, given by the moral crisis and the tense economic times, it is much harder to build valuable Brands. But let’s not be trapped by problems, like anchors that leave us paralyzed. We need to look outside, to learn, change, and act. So, how can we do this?

If we look at the Fortune 500 list from 1955, we can see that only 12.2% of the companies on the list are still around 59 years later. This aggressive mortality rate can be seen as a reflection of the dynamic nature of the market, which has accelerated along with the hypercompetitiveness of the global markets. New lists have appeared, such as “The Unicorn List”, also by Fortune, which covers phenomena from the new economy, led by Brands such as Uber, Lyft and Airbnb.

These companies, in addition to being extremely innovative, are now valued at over a billion dollars. There are also the so-called “Cockroach” companies; this term designates companies that have a great capacity for adaptation, survival – even nuclear wars – and delivering results. But associating them with a loathed insect takes the glamor away from what they achieve; therefore, I prefer to see them as Darwinian Brands: those that have a great capacity to evolve and adapt to new business ecosystems.

Just like bacteria and animals, businesses and Brands also compete against others in a fight for survival within a given ecosystem. An ecosystem’s vision must include in the business model all the players and their various roles in the story that will be woven by the Brand, such as developers for mobile apps, taxi drivers for Uber, and apartment owners who make money through Airbnb, among many others. This is a rough evolution of the old vision of the production chain.
In this new economy, a role has been established for Brands. They need to know that their objective is not just to generate profits and to create awareness; today, it’s no longer enough to create emotional relationships with their consumers. Yelling out “I love this brand!” is not enough anymore (even though it is very challenging).

The Brands of the new economy want to make the world a better place. In other words, in order to become relevant to people, Brands need to create engagement in their area of expertise, and have a business vision that generates value for everyone. This means that we have moved away from the perspective of philanthropy or sustainability towards a vision of financial and social relevance for those who are involved in the Brand’s ecosystem. This new working model requires changes in the organizations and their players. Now, judging by the evidence, we are actually talking about Brands with Purpose. We are talking about Branding.

Clients feel threatened by so many Branding, business and communication requirements, since the challenges are immense when we start working on a Branding project. One thing companies worry about, for example, is the number of brands in the portfolio, and the cost of building each one of them up. So, starting with a review of the brand portfolio is a good guideline. From there, the questions that arise are: How to optimize investment in brands? Do I have a business model that can survive all the new threats from new competitors? How does my consumer perceive my brands? Is social media giving too much exposure to brands, leaving them vulnerable to criticism? Will investing during a time of crisis generate a return? At the end of the day, we have no guarantees, no mathematical response. But we have good indicators, which is enough to get started.

According to a 2015 study by Brand Value Growth Matrix, investing both in a brand and in advertising lead to a result that is 168% better than a strategy that is only focused on advertising. So, investing in a brand with a value proposal and unique positioning will deliver a return. In times of crisis, doing nothing is a guaranteed failure. A brand that doesn’t offer anything new doesn’t fit into people’s lives. Even with large investments in communication, it runs the risk of losing relevance. Staying in the same spot, investing in outdated business models, offline and online media with no integration, and in brands with no positioning, places any business at risk.

Therefore, not doing brand management goes against Darwin’s principles. Only those that manage to evolve survive, and anyone who thinks it’s the strongest or the biggest who will outlast, is wrong. On the contrary, those who adapt to change, and who have the greatest capacity to stay relevant to their consumers are the true survivors.

That’s why Branding is essential in an organization. Working on the brand strategy is to do intangible management, to transform corporate culture and maintain the relevance of your brand for your different audiences. A company’s biggest commitment is to training their team to build new, indispensable skills to face the demands of the twenty-first century. And we have already identified a few of them:

Creativity is not exclusive to artists and designers; it is for all professionals, from all areas. Today’s professionals need to solve problems, and in order to overcome these challenges, we need to look at the world as creatives do. Nor do we do anything in isolation; nobody meets a target or delivers anything alone. Your organization needs to work in an integrated way and look at the client holistically. How does a company improve the experience offered by their brand, their service, their communication? By working on several fronts of the organization, in an integrated manner. Bringing together a team made up from different areas to consistently deliver the brand’s value proposal, and providing a unique experience for the consumer. That is the difficulty that both large and small companies need to face.

We don’t leave school anymore; we’re always learning. We need to bring in new knowledge and discover new ways of solving problems. Every company has a commitment to learn and implement brand management; this demands a change in culture, reinforcing the work with a vision that is geared towards building value, and that is focused on the consumer. We are evolving from companies that are focused on delivery, towards companies who are constantly learning.

The method guides change. All change needs to be managed with a clear and efficient approach in order to ensure its implementation and results. Companies need to define how they will manage the Brand’s value and bring innovation into the culture. That is why several processes are incorporating Design Thinking and the Agile methodology, which reinforce collaboration for fast problem solving.

The digital revolution has made it possible to know about everything, and to measure everything, 24/7. Never before have so many things been measured, and never have we had so much information available. In fact, these methods for measurement and management are also in constant change, but no task can be executed without clear indicators. This is also a change that closes the circle of creation and innovation with relevance and results.

These four strategies, and the way we take ownership of them, are essential to increasing the chance of getting out of the crisis building value for people, businesses and the world. We don’t have all the answers – we never will – but we do know that inertia was never an option. In times of crisis, we need to be creative and find tools to come out alive, or hopefully, come out better and stronger.