Digital revolution or evolution? Take part in the debate

In the digital age, a smart new player with a good idea can wipe out an established name nearly overnight. Brands around the world are just one innovation away from falling behind the curve. So is a hard revolution in your business the only way to stay ahead? Or can agile adjustments and strategic investments keep you at a profitable pace?

Campaign Asia-Pacific and SapientNitro will be hosting an invite-only roundable on this topic next Wednesday. To start the debate, two of SapientNitro’s digital strategists lower their firewalls and take sides below. We also want to hear your opinions, here in the comments or via email. We’ll invite a select few to take part in the offline conversation about how to get Asia’s businesses completely online.

Melanie Cook
Head of Strategy
SapientNitro Asia Pacific

Brands need a revolution to put them in the same digital world consumers live in.

In the internet age, the barriers to entry into any industry are getting lower. Successful businesses use technology to learn, code and measure faster, to keep up with consumers’ expectations, which are no longer conveniently confined by industry sectors. That is how Netflix has gone from providing other studios’ blockbusters through the letterbox, on to streaming it, and finally to creating blockbuster content of their own.

Businesses need a wholesale change in their models, products and services, as well as organisational power structure and culture, to survive in this competitive age. Many incumbent majority holders think embracing digital is simply taking an offline product and pedalling it online. It’s this kind of piecemeal investment that leaves major players exposed to an innovative idea. Hirt and Willmott recently reported for McKinsey that the major car rental companies (who rarely offer more online than their offline service) could be the next victims of digital transformation. New players, Smove.sg and Zipcar.com, allow automatic hourly rentals that don’t require staff to manage paperwork or conduct license and vehicle checks at each collection and drop-off. The rental companies that maintain their bit-by-bit investment in digital won’t have done enough to compete with this radically new approach to hiring cars.

Big Businesses including Unilever, Singtel and Target to name a few, have invested big in innovation labs. But, can innovation that is confined to a relatively small section of the company infect its host? There isn’t much evidence of it in old school big business. Once you start looking beyond Nordstrom and Wal-Mart, it’s difficult to find examples of successful wholesale change generated by an innovation lab. This is especially true of FMCGs, consumer financial services and the F&B industry.

Company-wide innovation can only ever thrive in an agile business model that allows for the unpredictability of calculated risk taking. One that has enough flexibility to pivot when things go wrong, and build on services with products, and vice versa, when things go right. In the last 15 years the music industry has shifted from selling records, tapes and CDs in physical stores to digital mp3s, and now thanks to the likes of Spotify and Tidal, music ownership is becoming more and more subscription based. The companies that couldn’t adapt quickly to these changes in consumer behaviour no longer exist, and this should act as a stark warning to other industries.

In an agile business model, marketing, operations and technology have to work together. This means the C-suite can no longer measure success in the narrow confines of their particular fiefdom. It also means that every person in the organisation is empowered to take action against an agreed purpose, even if it breaks the existing model. Think Google, Facebook and Netflix.

This wholesale change cannot be created through small iterative steps taken by a few individual change-makers who are expected to breakdown decades of ‘that’s not how we do it around here’. This is why organisations need to think revolution where there are no sacred cows, when it comes to organisational transformation.

Simon Collins
Director of Marketing Strategy
SapientNitro Asia Pacific

Digital revolution is a biased, digital-agency ideal; brands need organic evolution.

Digital technologies have long been viewed as disrupting established industries. And it’s true that the oft-touted, doomed soothsayers of Blockbusters, Borders and Tower Records have all been replaced by tech companies. But I believe that digital disruption was only part of their ailment. The impact and speed of their demise is often overstated to make for attention-grabbing headlines, books with foreboding titles like Breaking Banks, and convenient platforms from which pundits can sell the latest tech fad. It’s time to get some perspective. 

It is important for companies to understand the opportunity for customer centric engagement offered by new behaviours and new technologies. Digital transformation is vital, but for it to be effective, organisations first need to identify the opportunity. For instance, recent Sapient Research found that in Singapore, only 5 per cent of people research financial products through social media channels, with 48 per cent asking friends and family. Clearly refocusing a bank’s marketing budget on a digital-first approach won’t guarantee an increase in revenue. In this case success doesn’t have to come from a companywide digital shift, it might just mean strategically investing in areas that can be improved with technology. This could be achieved simply by creating and promoting ways that enable friends and family to discuss financial products, and then a bank could enter that space in a “helpful” manner.

Technology needs to be seen as an enabler, not as a disruptor. National Geographic is one of the few companies to have embraced each new tech invention, benefiting as it came along, rather than radically changing a business model in one overhaul. In its own words, “The National Geographic Society has been inspiring people to care about the planet since 1888”. To meet this goal National Geographic has always augmented business processes and organisational structures to make the most of the new media outlet. Whether it be a print journal, radio programs, TV shows, feature-length movies, digital magazines, parallax micro-sites or Facebook’s new Instant Articles. National Geographic has invested, experimented and evolved without having to pledge wholesale company change.

One lesson other companies can learn from National Geographic is that the bean-counters have always fully supported these new ventures. Far too often businesses create native, hybrid or web apps only to change their minds before completion. In fact, Telerik’s HTML5 Global Developer survey found that 71 per cent of organisations switch mid-way. Oftentimes the project wasn’t scoped effectively, costs overrun, and it’s all a waste of money.

To avoid making this mistake, it’s vital to look at how tech changes can facilitate relationships with customers, and business efficiencies. It’s important to understand why the business needs to augment and not just leap for the latest placebo fad. It’s not always necessary to dismantle established processes, systems and organisational structures to find digital success.

What’s your view? Come help forge the way forward for brands in the digital age by joining Campaign Asia-Pacific and SapientNitro in a roundtable debate next Wednesday. If you’re a brand looking to attend this debate, please contact Sara-May Mallett.