Managing change in times of corona

By Moritz Kaffsack

‘Be water my friend’ said Bruce Lee. These words could not ring more true in the chaotic and confusing times businesses are facing. In the midst of the disruption the corona pandemic is creating, how can leaders prepare for an unknown future with so many blind spots in their internal and external environment? When even expert predictions have a very short shelf-life, there is very little understanding of what will change in the short-term and which of these changes are here to stay.

Humans are hardwired to hate uncertainty and perceive change as a loss of control, often resisting it at all costs. Structuring a change plan in this environment is hard; communicating it and bringing all customers, employees, suppliers along may seem an impossible task.

In less volatile times Larry Hirschhorn wrote an article in the Harvard Business Review titled ‘Campaigning for Change,’ wherein he outlined three campaigns of change management: a political campaign (creating allies and a coalition), a marketing campaign (effectively communicating the benefits) and a military campaign (overcoming resistance). This is a brilliant starting point for a change campaign in normal times.

But how do you build alliances, convince your audiences and overcome resistance to change, when you have no clear view of what the future will look like and are struggling to articulate a structured roadmap for your business? When forced to take it step by step, shifting gears and planning actions in constantly changing circumstances? What experiences can we look to for guidance, clues and actionable insights?

Let’s examine how businesses operate in environments so fluid that they’re required to be in constant change mode.

This is the case for businesses operating in emerging Asian markets in the past decades. Multi-year plans are practically obsolete within a few quarters when the economy is growing at 7–10%, when talent shortage drives employee turnover industry-wide to 50%, when big projects can be secured overnight or lost overnight. Planning far ahead isn’t just impossible, it creates a competitive disadvantage. In an environment this fluid, market leadership can change constantly. This offers up big opportunities for businesses but taking advantage of them requires agility and quick thinking and action, insights and instinct, and most of all strong leadership.

Developing a new product with a start-up is an equally fluid experience. To build a winning product, start-ups run on the principles of speed and agility. Products are developed based on hypotheses, but what the product will look like a year from today is not defined. Development takes place in an iterative process, testing assumptions, getting quick feedback and adapting features. This way of working permeates the entire organization. As a result, job descriptions are fluid and talent is applied where needed with a focus on pushing fast progression.

These two experiences are vastly different from each other. What’s striking is what businesses have in common that succeed in them: their primary goal is not to create stability. Instead, their plan is to thrive in a volatile and unpredictable environment by becoming more fluid themselves.

The leaders and organizations I’ve seen thrive in these environments, employed some or all of the following principles to manage maximum change:

1. Manage by principles, not by rules. Rules will change. The principles need to stay the same. Usually, that’s straightforward: you care about your people and you need to run a successful business. Stick to those and explain your decisions in the current context.

2. You may not have a roadmap — you must have a vision. That’s nothing new of course, and it can be very high-level, but it’s what your teams will stick to and be motivated by: to make that vision happen against all odds in an uncertain environment.

3. Surround yourself with a fluid skill set and switch quickly. Different talent will be required for different phases. So focus less on roles and titles, more on talent and capability. Repurpose smart people quickly as a phase winds down and another starts.

4. Don’t waste time on long-term planning. Have a clear vision, yes, understand how it informs company priorities, yes. But develop only short, quarterly plans how to get there. Be ready to adjust quickly, pivot, and guide your teams in a new direction.

5. Communicate all the time. Organizations shy away from doing this in times of change, because they don’t want to be held accountable to things they said that may change later. Don’t let that stop you. We’ve talked endlessly about humanizing business: now live it. Start every communication with ‘the situation is very fluid and we won’t be able to predict what happens next. But here’s our principle. And here’s what we’re doing today and why. We’re on it and will keep updating you’.

6. Co-create everything. Bring people in and show you trust them. Shoulder uncertainty together. That applies not only to employees and colleagues, even partner and customers can handle openness, honesty and the desire to collaborate and find solutions together. This creates buy-in and makes the actions taken ‘our actions’ rather than unilateral initiatives. Not to underestimate the power of offering to be their ally, being ‘in it together’ in times of disruption.

7. Don’t punish failure, address inaction instead. As the strategy adapts, teams need to move with it, overcoming siloes, hierarchies and most of all inertia. To move beyond the fear of action, encourage quick decisions and model results-orientation.

Companies employing these principles aren’t just responding to change but thriving in it. When we apply this fluid approach to managing change in the current setting, the marketing, political and military campaigns are not obsolete, they’re still as relevant as always. With one difference: they don’t run as structured campaigns. Instead, leadership teams draw upon them in a modular fashion.

Instead of marketing a change theme, market your principles. Communicate your take on the ever-shifting context and the resulting decisions. Instead of identifying selected political allies to take your company through the change, cast a wider net to co-create and shape the path forward together with a larger number of employees and even external partners and customers. Instead of using a military approach to fight resistance to change itself, give more leeway, allow for pushback and opposing opinions. Bring those along who fight but also act to get the business to a better place, remove those who hesitate to act until they see a clear plan and a structured roadmap to get there.

Using these principles can get a business closer to being able to move, pivot, change gears quickly while bringing all those important along. This will at first feel unusual, seem unstructured and not planned enough for a big corporation. And that’s normal. The current crisis has accelerated the process of the collapse of traditional structures, forcing companies to deal with the fluidity heretofore not experienced by the larger business world. It’s time to look beyond the boundaries of our past experiences, in search for new solutions and a fluid approach to change.

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Brand fluidity in times of Corona: What comes after the fight or flight-response?

By Lisa Collin and Cornelia Kunze

When in immediate danger, the amygdala sends a distress signal to the hypothalamus, an unconscious chain reaction starts, and the chemical messengers in our brain create cortisol. This leads to suppression of the immune system and a boost of energy, preparing for fight or flight.  Once the threat passes, our cortisol levels go down – and the conscious parts of our brain take over again. Relief!

At this time in our lives the threat has not passed and we’re all unsure about how long we will go through distress, hardship, uncertainty.

The Corona crisis seems to trigger the same kind of almost chemical reaction in businesses or brands. After a first startle reflex and a moment of immobility and disbelief, organizations are becoming hyper-active, fueled by corporate adrenaline, focusing on cash protection first: state subsidies, longer payment periods, third-party contract termination, suspending rent payments, reduced working hours and salaries and putting a freeze to brand activities. Others also rush to empathize and to signal as loudly as possible just how much they care, without fully considering how to make this care tangible, useful or effective.

The responses during and after the immediate reaction can be largely divided into fight or flight.

Those who fight,

  • sustain their operations, keep their employees safe and use all their power and resources to mitigate the effects of the crisis for us all.
  • re-purpose their factories and produce face masks and gloves instead of luxury fashion, hand sanitizer instead of body cream, or find themselves under presidential pressure to produce ventilators instead of cars.
  • stand on the side of their employees, customers and suppliers, put action before words, stay human, do what they can, provide relief for their own stakeholders and beyond.
  • And communicate thoughtfully; joining the dots between their stakeholders and the real needs of the audiences they are striving to support.

Those who take flight,

  • let worst-case scenarios rule over their headcount decisions, bonus agreements, supplier contracts, rent obligations and customer relationships.
  • look for legal loopholes, seize the cost-cutting and state subsidy opportunity, even if they don`t have to  and serve shareholders first
  • disappear from their channels, as they believe they have nothing to do or say now
  • or worse – take advantage of the crisis to re-surface as the winner or hero

We know that crisis brings out the best and the worst in both, people and brands. #BoykottBrandX will scare brand leaders now, and some may think that consumer memories are short-term, and budgets are best used when life picks up again.

Maybe – but maybe not.

There is reason to urge brands to stay in touch closely, behave consistently and prove their relevance more than any time before.  To do so, they must recognize that life has become, and will remain, more fluid. Corona has supercharged the forces on business and brands that were already there and set a new paradigm for future operations.

Listening and adapting day by day is paramount.  A singular message, broadcast once, will not suffice.

This phenomenon of fluidity will be the new normal for all of us, as we will have learned dramatic change the hard way, accepted uncertainty because we had to and often found some joy in our new lives.

As consumers, employees, entrepreneurs, we are building muscles and resilience. We are inventive and less needy, perhaps rediscovering a resourcefulness we’d suppressed. And we are instinctively sorting out abusive or one-sided relationships with people, employers, agencies or brands. The crisis is a catalyst to many things.

For example, to e-commerce, as it was proven with SARS in Asia. Or for better personal hygiene. We all will feel uncomfortable singing happy birthday only once, when washing hands. Or video-conferencing: Why get up at 4 am in the morning to fly from London to Berlin for a meeting, if I can meet people on Zoom? Or going back to office on a full-time basis after so many weeks of freedom. Or the retainer contract with the agency.  Maybe home-schooling is the exception. Some parents among us might thank or bribe schools and teachers for taking their kids back and ensure they are happy and educated.

We see four trends, which are not necessarily new, but which will impact brands even more than before the crisis.  

  • Every product or service will have a digital alternative tomorrow – except for toilet-paper may be. You can be replaced by those digital siblings immediately. People don`t need you. They might discover that they need your whole category less after the crisis. Been with grey hair for 6 weeks? Maybe stick to it. Not travelled the world for the last months? Maybe enjoy home. Learnt to sew and cook? May be reduce fashion and restaurants altogether. Of course, even if they don`t need you, they might still want you but these discreet shifts in behavior represent an opportunity to improve the value exchange with your audience.
  • Nothing will ever stay a secret. Really. You charge a usurious price for your product, you tolerate shabby behavior of your organization during the Corona crisis? Trust is fragile and Google`s memory is unforgiving. Platforms, apps, social media empower everybody to create movements with the like-minded. They will hype or ditch your brand and organization, as they please. Not fair? Well, this has become a game at eye level and your behavior during and post Corona is being watched.
  • Everything is connected to everything. We might have heard before that Orangutans die, because we shower or eat ice-cream. That children stay un-educated, because we buy cotton t-shirts. That cars are made of 20.000 different parts from thousands of suppliers across the whole world. But now we also know that the actions of others in another part of the world can fundamentally change our society and daily experience; and that we need to keep the big picture in mind always. Brands are held responsible for issues, no matter how complex the supply-chain, no matter how water-proof their contracts and codes of conduct.
  • There is a higher meaning in life but efficacy matters.  Do what you do well.  Be the best at it.  But once the basics are covered, people not only want to know what a brand stands for but what a brand stands up for. Brand purpose has too many times proven to be a shallow promise, a mere communications exercise. All of us have been disappointed too often, a trust bonus would be naive. If the only reason to exist for a product is profit, people will behave as transactional with you as you do with them. There are many alternative brands, who do contribute their expertise and money to a higher meaning and a better world.

If our environment is ever changing- fluid – there is an imperative for brands to adapt. Not to simply respond to the forces exerted upon them but to echo or resist, as makes sense for them.  They can apply fluidity too, once the fight-or-flight-response is over.

At this moment, as businesses large and small tackle the many immediate challenges that each day presents, the notion of ’what is next’ may feel too removed or too difficult to consider.  But beyond just keeping things moving, there is an imperative to consider how we not only get back to normal but strive to get back to better. This is a good time to re-vive and re-vise a brand; to assess the rational and emotional value we contribute and develop brand ideas fit for future based on fluidity. The current situation is good for some ‘zero-base’ exercise: What is the true anchor of our brand, which has brought us to where we are today? What are the actions which will make the life of our stakeholders better? And how will we build and nourish our key connections with customers, suppliers, talent and the society at large, so that we together can add value.  Perhaps whether a brand chooses to proactively plan for a different future or not is the true test of flight or flight.

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How fast can we go? Post-corona agility is a test for us all

By Catherine Ogilvie

“In the new world, it’s not the big fish that eat the small fish, it’s the fast fish that eat the slow fish” Klaus Schwab, Founder and Executive Chairman, Davos Economic Forum

The convergence of business, society and culture is changing the way we live, work, and coexist; the acceleration of new technologies and a relentless speed of progress and global challenges impacts the lives of everyone on the planet. Covid-19 is creating monumental challenges which need global response and collaboration from governments, business, academia and society to fight the devastation created by the pandemic. Business leaders face multiple challenges both inside and outside their organizations. Massive disruption in manufacturing, supply chains and revenue; impact on staff; reputation, brand positioning, customer engagement and delivering results amidst a changing global environment.

Globalization is an escalating factor that cannot be ignored. Remember the Greta Thunberg effect and how quickly pressure built for companies to have a voice or a view on environmental issues?  There is no brand that can ignore this issue, or they do so at their peril. The Coronavirus crisis has left few countries or economies unscathed and governments are realizing that only by sharing science, resources and skills will recovery be possible. 

Technology continues to exponentially accelerate change as new developments in data analytics, and marketing stack efficiency, let alone AI and VR, are providing opportunities for communicators and marketers to leverage an increased range of channels and creative strategies to reach and engage audiences. Time scales are shrinking. Leaders must be prepared for direct, swift, trustworthy, global action to stay relevant and effective and many organizational cultures are not ready for this shift.

So, as businesses and brands start to re-evaluate their post-Corona world, where to start? How have things changed and what will be different?  First, accept that nothing will ever be quite the same again and there are massive challenges and opportunities ahead. Why not  take the chance to redefine previous roles, responsibilities and relationships to embrace the post-Corona world to build new agile and fluid processes that can harness the drivers of technology, globalization and shrinking times scales to deliver relevant, impactful and effective marketing and communications strategy? It’s time to become more agile.

Agility: “The ability to create and respond to change, It is a way of dealing with, and ultimately succeeding in, an uncertain and turbulent environment” (www.agilealliance.org)

This concept has been evolving in the tech industry for several years and it has been highly successful for some businesses particularly in new product or service launches. A project management technique, agile is where solutions evolve through the collaborative efforts of cross-functional teams. It’s an iterative process working in a cycle of research, create, test, adapt, repeat. The roots lie in the software industry when in 2001, a group of software engineers wrote the Agile Manifesto with the aim of finding better ways to work. 

They identified the core value as:

Individuals and interactions over processes and tools

Working software (outputs) over comprehensive documentation

Customer collaboration over contract negotiation

Responding to change over following a plan

As we start to emerge from lockdowns into altered economic environments, the idea of creating a core group, within an organization that purely looks at recovery strategy and redefining relevance for key influencer and customer groups provides the opportunity to review the past but plan for the future. A chance to test new concepts, leverage new technologies. To move swiftly bringing in expertise and knowledge from all sectors of the business as required, whilst remaining laser focused on delivering results, adapting, improving and executing without the constraints of the usual organizational process.

What should the team look like?  First and foremost, it should be a small group of highly experienced and talented people who can work together across time zones and cultures. They should have a broad knowledge base and the ability to grasp new concepts and be able to think across multiple disciplines both internally and externally. The team needs clear and open lines of communication throughout the business in order to facilitate quick input and decision making when required. They must be empowered to make decisions and to move fast with the responsibility for implementing their decisions and accountability for results. They must act and think with fluidity! Oversight from the C-Suite is essential but has to remain at a distance or be committed to supporting in real time, not delay progress with “pre-Corona” processes.

Agility is not a new concept and it has long been supported as a valuable methodology but for too long it has been confined to the IT department, software or product development. It has real value in driving focus, and it is exactly that kind of thinking that we need to embrace to rebuild so much after the pandemic ends.  There is value in applying this methodology to marketing and communications but there are also challenges.  It requires new thinking, commitment, and courage to understand the changing dynamics, identify the unknowns and adapt to new paradigms.

With traditional working patterns disrupted, and teams collaborating online, there has never been a more opportune moment to embrace fluidity and leverage talent and technology. Carpe Diem!

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Build Your Imagination Bridge – Seven Steps to Re-“Vision” Your Brand

By Mitch Markson

On February 14th I published a book called the Imagination Playbook for people, brands, issues and organizations. Little did I know then that just a month later, we’d be in the middle of a global pandemic that would change almost everything. For the last few months, out of shock, a bit of depression and the all-consuming pursuit of disinfectant and toilet tissue, I put my own imagination on pause. Well, truth be told,  imagination can go two ways. A vivid imagination can take you to some pretty dark places. You can imagine worst case scenarios (death, destruction, economic disaster and the like) and see an unseen and clever little virus chasing you around every corner.

That same imagination can make you question everything you ever believed or held as an unmovable truth. If all the things that fueled your imagination are gone (temporarily we hope), what’s a normally optimistic and imaginative dreamer to do? In more “ordinary” times, my personal imagination was fueled by travel, live theatre, amazing  conversations at fun restaurants, gatherings with friends, trips to art galleries and museums. Poof! Just like that, those imagination stimulators disappeared. More daunting —  loss of jobs, a plummeting stock market, illness, taking care of children or elders 24/7 could cloud anyone’s imagination. 

So, what’s a person, brand, issue or organization to do? I can only tell you what I decided to do.

Find new inspiration and begin to build a bridge from what’s now to what’s next. I want to use this time to re-evaluate what’s both essential to and fulfilling for a good life,  a good brand and a good society. I’d like to revisit the essence of imagination and find new ways to think,  new tools to use and new partners to collaborate with. Let’s use this time of enforced solitude to look inward so that when we come out of all of this, something more meaningful, equitable,  beautiful and truly essential and fulfilling will be possible. As Einstein said, “ Imagination is more important that knowledge. For knowledge is limited, whereas imagination embraces the entire world. Stimulating progress, giving birth to evolution.” As I say in my book, would you argue with Einstein?  Let’s get started.

Seven Steps to Get Across

Here are seven steps to help you cross that imagination bridge and tear down that wall of fear and indecision. Begin with the classic three essential pillars of brand-building – Vision, Mission and Values:

1. Re-“vision”: It’s time to completely review and rethink your brand’s vision – your raison d’etre and your true purpose or passion. Does it still hold up? Is there real substance behind it? Does it have fluidity* –  the capacity to reflect change, be inventive, embrace new realities and course correct when necessary?  Is it too safe?  Is your vision uniquely purposeful and truly visionary? This goes for personal branding, entrepreneurial endeavors as well as traditional brands. Is your “brand” navigating your stakeholders to a place they actually still want to go? Is your brand vision authoritarian or democratic? Does it provide room for experimentation and collaboration? Can it stand up to transparency and criticism? Is it willing to reveal its flaws and confess its mistakes? A. colleague of mine challenged me on the notion of a brand vision being more fluid. He said a brand’s vision should not change. I couldn’t disagree more. If we look at the travel and fashion industries  in particular, what is the vision for travel brands when one can no longer travel in the traditional sense?  Why aren’t more travel brands creating a bridge or a figurative rocket ship to help take people to far-away places without leaving their homes? This is the time for the travel industry to be more visionary about keeping our love for travel alive until it’s safe and prudent to get out there again.  In fashion, what is the vision for brands in that industry, when even if you had the right clothes, what’s the use of getting dressed up with nowhere to go?  Anna Wintour, the editor of Vogue recently stated: “I think everybody is rethinking what the fashion industry stands for, what it means, what it should be.” This will take imagination.

2. Make your Mission  Essential, Economical and Magical: In a transitional time, what you “do” (your mission which includes the products and services you provide  but also your value-added initiatives)  also needs a re-think. Ford motor company turns their natural “engine-nuity” into ingenuity by repurposing their production line  to make respirators. French perfume giant LHMV utilizing their perfume and cosmetic factories to produce hand sanitizer for hospitals and their essential workers. This is the right time to consider if what your brand is actually doing or producing is mission essential. Not every brand could or should follow Ford or LHMV’s example. Ask yourself, what is your brand authentically built to do in order to serve essential needs. And have brands forgotten the forgotten – those essential workers — supermarket cashiers, delivery people, short order cooks, sanitation workers, train conductors and bus drivers, migrant workers, nurses, hospital staff, some of their own employees, and more?  In an instant we have elevated the contribution and the plight  of those who are truly essential. Let’s hope we as brands, citizens and  governments actually “do” something for those who are now considered essential. Think about their economic needs as well as your own. Make the magic they do part of your brand’s activations. Finally, examine what kind of magic you are putting into the world. Does it inspire, make employees and customers feel good, healthy, honored and included? Think about endeavors and experiments vs. campaigns and content. Do something vs. say something. Build a bridge between cultures, borders, silos, partisans, friends and enemies alike. Accept that the doing isn’t one thing, but many experiments (successful and failed)  that move us ahead.

3. Add the values that should now be common to all brands: Empathy, kindness, humanity, collaboration and humor. These values have been missing for many of us, especially in the United States. Every brand and every person have a responsibility  to embrace these values and pay them forward.

4. Embrace the benefits and realities of global connectivity and citizenship: If the pandemic has taught us one thing it is that for better or worse, we are all connected globally. Unfortunately, the negative view of globalization has made many shy away from the need for global citizenship. We live in a world where despite the rise of nationalism, we are dependent on a global economy, need a global health brain trust and all share the consequences of global warming. In addition, a global citizenship mentality leads to a greater appreciation for diversity of culture and humanity. Imagine how brands and governments could flourish with a new global mindset. 

5. Be promiscuous (yes you read that correctly) and discover the advantages  of hooking up with strange bedfellows: Who you step onto the bridge with, matters. Choose  partners who you might not have things in common with and who challenge you. Move out of your comfort zone. Explore co-creation with other brands in other categories. Mix it up. Combine things that would never go together. Look at what it did for peanut butter and chocolate, fashion and technology, Broadway and Rap, Martha Stewart and Snoop Dog, mobile phones and everything. Just recently, United Airlines joined forces with Clorox and the Cleveland Clinic to make air travel healthier and safer during this pandemic. What new partners could you collaborate with?

6. “Give people what they don’t know they want yet:” This is one of my favorite quotes from former editor-in-chief of Vogue magazine, Diana Vreeland. Steve Jobs had his own version of a similar sentiment. It provokes us to anticipate the future, not rely too much on focus groups where we learn what people want now, not necessarily what they want next. It challenges us to be hypothetical and travel to the “what if” zone, motivating us to be curious and connect dots in a different way. It’s that place on the imagination bridge where we  find that tipping point trend and discover  an unmet need or desire. 

7. Create a fluidity plan instead of a game plan: Before Corona (B.C.), too many of us were on a treadmill lurching forward with little time to reflect and stand still. We all had a game plan and most of that plan had to do with bigger, better, and faster. It’s time to change our game plans and reconsider what’s important. Find what’s better rather than what’s bigger. Game plans are usually finite, have an end goal and are played for the short-term win. Often these plans are evaluated quarter to quarter and  sacrifice longevity and vision. Game plans are designed to thrive in the moment but not for the long haul. And game plans don’t often anticipate or plan for the future. Consider instead a Fluidity Plan that lives on a curve, anticipates the ups and downs, invites experimentation and navigates  change as inevitable and positive.  A fluidity plan helps you or your brand  thrive on the current and surf on the wave of the what’s coming next. And it takes real account of the first six steps above to get you across your Imagination bridge. 

This current pandemic can either make us all more risk adverse or more adventurous with our innovation and creativity. We probably can’t go back, so let’s jump ahead and look forward to a new view from the bridge. Use this time wisely. Stimulate imagination. Take risks.  Think big again. Find your imagination architect or empower an Imagination dream team. Build your imagination bridge and see where it takes you. 

To discover more, read the Imagination Playbook  and feel free to contact me at Imagination.Playbook@gmail.com. Perhaps we can build your imagination bridge together.

*Fluidity is a primary characteristic of the world in which we live and operate. It is characterized by the undermining, deterioration – and even ultimate collapse – of traditional norms, structures and processes. And it challenges organizations, brands people to apply fluidity to their thinking and their actions. This is a concept developed by Fluid,  a global Collective of independent senior consultants from around the world. We come together on a project basis to solve communications-intensive brand and business issues.

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Do traditional brands need to focus more on the user experience?

By Cornelia Kunze

A recent US consumer survey, published in HBR, compares brand success of (new) digital brands and their traditional “twin” – like AirBnB vs. Hilton, Dollar Shave Club vs Gillette, Red Bull vs. Coca Cola, Tesla vs. BMW. They come to the conclusion, that new digital brands make people`s lives easier, whereas traditional brands are more “looked up to”. And consequently call the traditional brands “purchase” brands, who focus on the purchase moment of truth (getting as many people of the target group to buy them) versus focussing on the “usage” and what happens after it, i.e. the advocacy of the user, the experience, the community.

The respondents who are happy with the user experience, seem to show willingness to pay a price premium for “usage brands” compared to the “purchase brands”. It sounds logical, that my product experience (if it is good) and after-sales experience makes me happier than just a good purchase experience. In other words, if brands fail to give me a good user experience, don’t care about improving the experience and don`t care about engaging me, I am more likely to switch to competitors, leave negative comments online, not recommend them.

Improving the user experience is of course easier for a digital brand, which is continuously learning from users in real-time than for a product which is with me at my home, once bought, with no tool for feed-back. I have two take-aways and one caveat:

1) Traditional brands need to and can spend more resource on engagement with consumers pre, during and after purchase and turn insights into action much faster;

 2) Traditional brands can and should expose themselves to feedback online by being available and by actively engendering and rewarding conversation, which helps them to continuously improve product or service and build a community of (hopefully) loyal advocates;

3) The caveat: Byron Sharp (Author of “How brands grow”) will disagree with a user versus purchase focus. His argument sounds logical too: Brands will not grow fast enough, if they focus on “loyal” customers. They need penetration and win many more customers.

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7 common mistakes when entering international markets

By Moritz Kaffsack

A business sets its eyes on international expansion. Building on success in the home market, a great business model, a strong brand and a loyal customer base, it’s ready to venture abroad, grasp new opportunities and acquire new customers.

But once in the market, the venture stalls. The opportunity is there but the complexity of replicating success in an entirely different environment is proving to be difficult. The company starts burning money, fails to build the right relationships, flops with consumers, or in the worst case becomes the target of opposition and activism.

During 15 years in Asia I’ve seen this happen not just to SMEs and startups, equally to big established multinationals, even Fortune 500 companies. No matter the size of the company, the complexity of a new market frequently causes businesses to stumble, sometimes fail. 

Often there are too many unknown factors and the team is not prepared for the new and unpredictable environment. Market entries are difficult to plan, no two are the same. But it helps to look at what frequently goes wrong. Here are the 7 most common mistakes I’ve seen:

1. Getting consumer codes wrong

Indian consumers buying a German luxury car are most likely not driving it themselves. They’re buying it to be driven by a chauffeur. Vietnamese consumers buying premium whisky are most likely not drinking it themselves. They’re buying it as a gift to a friend of business partner, a gesture meant to strengthen the relationship. In many categories in new markets the consumer motivation is radically different and requires a complete rethink of sales, distribution and marketing strategy.

2. Treating it like a replica of your current business

It’s more like a start-up, with new customers, new competitors and an entirely different talent landscape. Some companies find they need to change their business model in a new market. Some companies find they need to switch from a subscription model to pay-as-you-go or from online payment to cash-on-delivery. Some change their positioning entirely: While in Europe Evian is an affordable premium brand, in India it’s a hyperluxury product with the price to match.

3. Underestimating the power of a different system

In most western democracies, businesses need to focus on a number of more or less connected relationships. In markets like China, Vietnam, the UAE, a single stakeholder is more important than all others combined. When a communist party or a monarchy set the vision for a country, all players in the market fall in line – ministries, regulators, businesses, NGOs, the media, consumers. Like all of them, foreign companies entering the market need to find their place and deliver value in the context of the national narrative. Those who get it right will have doors open for them: regulatory approval is easier to come by, partners want to do business with them, employees want to work for them and the media are writing about them. 

4. Focusing only on the customer

This is how to get it wrong in a tightly connected ecosystem that is bound by a national narrative. While these are often thriving consumer markets, the customer or consumer isn’t king. While consumers may be thrilled to adopt the latest fintech or ridesharing innovation, if it doesn’t fit to the plan for the country or is coming up against key players that are entrenched in the national narrative, the company will likely be hobbled or even shut out. The takeaway: Just offering a strong product or service won’t secure a place in the market. Looking beyond the customer at the ecosystem is where businesses secure their license to operate.

5. Hiring the kind of people that would work well in your home market

Local expertise is key to success. But just like managers tend to hire people like them, businesses tend to hire the kind of talent that fits their home market approach. An aggressive, numbers-driven US CEO may be inclined to hire an aggressive, numbers-driven local CEO in Thailand. Good fit for the company, bad fit for the market.

6. Thinking your global brand will carry you

Chances are you’re unknown and the local market doesn’t attach any meaning to you as a company and brand. Sitting at the headquarters of a big multinational company, this can be especially easy to forget.

7. Thinking you can do it alone

In complex new markets, businesses need allies: Individuals and institutions in government, non-government sector and the private sector, who support their entry and expansion. Some businesses solve this by finding a local joint venture partner. But even if a joint venture is not an option, investing in building partnerships and allies will speed up the path to success.

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