The secret to unleashing a disruptive brand? Stop being a victim

As brands struggle to survive in a transforming world, marketers should be asking themselves:

• Which changes in my category are truly disruptive?
• Is my brand initiating any of these disruptions? If so, in what sense?
• If not, how am I harnessing my brand or portfolio against these disruptions?

We posed the questions above to 30 of our clients around the world. While they work in a variety of industries, many of their responses to the disruptions they are seeing in their categories were quite similar. On the other hand, their responses to how their brands are approaching disruption were quite different – even when they played in the same space.

What separates the leaders from the followers? We think that whether a brand is a disruptor or not depends on the company’s internal strategy to manage change. Do they take ownership of transforming their category, strive to think differently and set up their people to drive change…or not? 

Digitalisation and competition

When asked about the most disruptive changes in their category, our clients most often cited digitalisation and competition. Digitalisation as a disruptor comes as no surprise, encompassing e-commerce, social media, and new apps, services and touchpoints.

Competition as a disruptor was more interesting. Clients from nearly every industry cited competition from new sources as one of the biggest disruptors. Competition is now coming from other categories, local brands, niche players and new private labels (e.g. Amazon).  According to one of our clients: “The available offer does nothing but increase. Years ago, creating a brand and reaching a considerable number of customers took years; today it can be done in months.”  

Initiating change 

When asked if their brands were initiating disruption, about half of the clients we interviewed believed that they were. So, what were they doing that made them disruptors and not just reactors?

The most disruptive brands developed a strategy that enabled them to think out of the box. They engaged in experimentation (e.g. Uber says it “continuously experiment to not lose its edge or be left behind”), solicited feedback from experts (both consumer and professional experts) and created incubators. For example, L’Oréal has an incubator team that operates like a start-up within the company. AB InBev launched ZX Ventures, a global growth and innovation group within the company whose mandate is to develop new products and businesses that address emerging consumer needs.  

But not all clients we interviewed felt that their brands were driving disruption. These companies were trying to bolster their brands or portfolios against disruption. For example, they might boost their brand’s value by acquiring small leading-edge technology companies to advance their digital capabilities. Or, they might harness the power of their established brands by moving them into new segments.  Unfortunately, this might not be enough. As one of our food clients pointed out, “Sometimes private labels are more disruptive.”

Where lies the control?

We believe the success of a company depends on whether it sees the power to disrupt within their control or not. Why? Because companies are made up of individual people. If a person thinks he or she is in control of their life, they are said to have an internal locus of control. If a person feels that he or she is not in control, that events happen to them, they are said to have an external locus of control. If these principles work on an individual level – and companies are comprised of individuals – it stands to reason that it applies to companies as well and scientific research supports this.

A leader’s locus of control is linked to a company’s productivity and profitability, as well as employee satisfaction. Moreover, how people in a company perceive the culture within the company affects their perception of locus of control.[ 1 ] The more the company has an innovative, risk-taking, result-oriented culture, the more people will feel they are in control and will display forward-looking behavior.

Taking control of disruption

How can marketers instill an internal locus of control in their company and start taking control of disruption? Here are some recommendations:

1. Stay close to your consumers: Understand how to stay relevant in changing times. What experiences are people looking for today – and what will they expect tomorrow?

2. Dare to embrace new possibilities: Allow your company to think outside its core business. Some car companies are repositioning themselves as mobility companies instead of car manufacturers; others have set up independent teams to generate unhindered new ideas. This demonstrates an understanding of how to create new solutions.

3. Create a culture of growth: Train people on general skills that allow them to take risks; don’t focus too hard on narrow technical knowledge. Create small experiments of change and let your teams react. Introduce challenges for teams to address. This serves not only to spark innovation, but also allows for more flexible thinking when larger external challenges present themselves.

In short, don’t be a victim of disruption. Instead, set the standard for transformation and shape the future of your brand and category.

Douwe Rademaker is global leader and Ben Joosen is director for Ipsos, Market Strategy & Understanding

Reference:

[ 1 ] Fundamentals for becoming a successful entrepreneur ( 2016, Malin Brannback, Alan Carsrud)