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Digital transformation- It’s about brand, not technology

Digital transformation: It’s about brand, not technology

Ann Higgins

Chief Consulting Officer, Ogilvy UK

Managing Director, Ogilvy Consulting EMEA

Ann.Higgins@ogilvy.com

 

One of the most overused – and most rarely implemented – terms of the moment is “digital transformation”.  Many businesses have been on the path of transformation for years, since the advent of enterprise resource planning systems in the 70s and 80s. But the term has more recently shifted firmly into the mainstream lexicon, and is now seen as a vital must-win battle in order to survive and thrive.

In recent years, the top of the global BrandZ leader board has been dominated by “GAFA” (Google, Apple, Facebook and Amazon) and other native technology brands. They are inherently digital so are not seeking “digital transformation” per se. But as their brands mature, they have started to face the same fundamental challenges as other brands in the eyes of their consumers – from navigating data privacy issues, to driving the AI agenda. They are recognising that all brands require a foundation of trust with their stakeholders.

Meanwhile, other new economy or digital-native businesses have made great strides, disrupting categories from travel and accommodation to money, with the advent of cryptocurrencies and blockchain. New business models are emerging in long-established categories like automotive and FMCG.

So, what does digital transformation mean for the vast majority of brands today?

All change? Not exactly

There are three stages of progress on digital transformation. Firstly, we see leaders who are getting there – they are moving up the maturity curve very well and creating business growth. They can measure and report it. In the middle, there are brands doing a lot of activity but without clear outcomes. With lots of initiatives in play, they are investing heavily, but not necessarily getting to that clear path to value. And, unfortunately, there is a third group, firmly stuck at the starting line: affected by fear, inertia and doubt, they don’t know where to start.

Brand growth over operational efficiency

The most prominent reason why more than half of the Fortune 500 have disappeared since the year 2000: they failed to achieve digital change. To have maximum impact, the digital transformation imperative must focus on helping brands grow, as opposed to creating operational efficiency. As we see in the Global BrandZ Strong Brands Portfolio, clients that invest in their brands perform better compared to both the S&P 500 and the MSCI World Index, and they perform better over time than other brands. At Ogilvy, we think the role of digital and digital transformation is to “Make Brands Matter”. When you make brands matter to consumers, you make your brand matter to shareholders.

Thinking outside the IT box

Digital transformation is breaking out of a purely technological silo. The most effective digital transformation comes with a vision from the top – a CEO-led commitment that in order to grow and thrive, businesses must become digital. But there’s a broader organisational shift at play, which includes a coalition of functional leaders from across the organisation. Here, the Chief Marketing Officer, sometimes also a Chief Digital Officer or Chief Customer Officer, has the opportunity to embrace Digital Transformation and to lead it.

Back to brand

There is a significant role for marketing in this transformation. Framing digital transformation in the context of brands becomes critical, otherwise we are on a path to zero differentiation. Today, a brand is defined by what it does and not just what it says. It’s not about digital communications, it’s about customer experience. And because brands are now defined by what they do, they must create and spark interactions both individually and universally. Personal interactions. Relevant interactions. Useful interactions. Shareable interactions. This digital currency is how brands create value now.

So, we don’t start with technology, even if that enables transformation. We tackle digital transformation through a brand lens by rethinking the customer’s experience with the brand, what that means for an organisation’s people and, only then, technology. If we start with what the brand stands for, what the promise of the brand is, and build great customer experience around that, we will make consumers and customers happy with their brands, and willing to come back for more. If we start with technology, that will take time and money to implement, it may have an efficiency impact, but won’t necessarily set a business on a trajectory for growth.

That’s why it’s time to get back to brand with digital transformation.