Sleeping with the enemy

In recent years I have been observing a curious behaviour in certain companies, especially those that are still mentally stuck in the 90s (however “digitalised” they may be). Each and every one of them embark on “brand transformation” processes only from the moment they detect that new players are appearing in their market beating them to the punch. For them, “transformation” is a one-off event triggered by something external, not a constant and intrinsic evolutionary process. Moreover, almost all of them are obsessed with “transforming” their front side (logo, spaces, product) but they forget something essential: transforming their back side (the transversal teams previously called “service departments” and their processes and tools). The outcome: an operational disaster resulting from the incoherence between the front and the back.

The truth is that I am still surprised that there are still so many companies that consider their competitors as the enemy to beat. They even go so far as to make it the backbone of their business strategy. Many mature organisations, in their eagerness to kill off potential new competition, do not realise that they actually are their own enemy, burdened with the silly internal procedures they have created. I am also shocked by the short-sighted way they manage this situation. The pattern is usually the same: most of the time the competition is a new, smaller, bolder and more agile player, which breaks into the market without prejudice and speaking directly to the user. The companies that have been dominating the sector to date get a shock. They are in their maturity stage and, although most of the time they are not aware of it, they are living in a continuous stage of establishing processes, centralisations and audits that make them more focused on their back side than on their front business. Every new proposal, whatever it may be, is analysed, calibrated, audited, measured, compared and verified. While mature companies are immersed in their checks, in their verifications and in coordinating their meeting agendas, new players are creating disruption and expanding their market more and more without asking for permission and, at times, even recklessly. For them, action comes before analysis, disruption comes before compliance, getting a dedicated and devoted audience comes before audits. For better and for worse. When mature companies decide to stop navel-gazing and lift their heads up from their forms, they realise that these new threatening players have appeared. Clumsily, they hire a couple of projects with some well-known consultants and decide that a “transformation” is needed, which usually involves rebranding: they change the logo, reorient the product, invade the social networks with new campaigns aimed at a new target, … I am not saying that all this is wrong, but the novelty remains on the outside. On the inside, they are still those companies paralysed by the analysis and where the back departments live more focused on procedure than on the business. Here lies the short-sightedness: there is no point in “transforming” the front if the same is not done with the back. And this is where the new players will win it all, as their back goes hand in hand with their front, in an eagerness to make things happen.

 

So the big difference between mature players and young players is not on the outside, but on the inside. No matter how many facelifts are done, in today’s environment it will be difficult for a procedure-and-compliance oriented company to overcome the approach of exploration and potentiality in terms of disruption, innovation and direct contact with the customer community showed by some new organisations. Yes, of course, we can assemble all the lobbies we want to stop these developments, but we already know that what’s new will, sooner rather than later, make its way (fortunately).

Perhaps the solution lies in the old brands ceasing to see the new players as the competition to be beaten. Perhaps the solution lies in creating spaces for collaboration between younger brands and more mature brands, where the best of both scenarios will mix for the good of the industry, society and its consumers. Because a world of win-win partnerships will always be more thriving than a world of competition where only one can win.

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