While access to technology and low startup costs mean it’s easier than ever for a brand to find success, the level of competition means it’s harder to maintain it. In 1964, the average tenure of companies on the S&P 500 was 33 years. By 2016, it was 24 years. By 2027, it is forecast to decrease to a mere 12 years.
With this portentous backdrop in mind, a gathering of regional leaders from sectors including FMCG, finance and telco sat down over breakfast in Singapore on 27 June. Led by Michael Stich, chief business officer at VMLY&R Global and Oliver Eriksson, managing director of advisory services at VMLY&R APAC, the group participated in a lively and fast-paced dialogue focused on how harnessing disruption can lead to growth.
The conversation launched with a discussion on recent research by the Institute for Real Growth (IRG), a thought-leadership initiative conceived and created by VMLY&R’s parent company WPP, along with partners across Facebook, Google, New York University, Kantar, SpencerStuart, LinkedIn and the University of Oxford.
“The intention is for us to be able to come in and study what really is driving growth within organisations and where to go with it,” Stich said, pointing out that a set of seven common themes can be found across all ‘over-performing’ companies.
These broad themes revolve around a willingness to embrace business from all quarters, and adopting a culture of flexibility. By not tying themselves to one market, or aiming to go after the next-biggest competitor, over-performers were found to be open to thinking laterally and moving into different markets if needed.
But it takes more than a mindset to find success. Amid shrinking corporate longevity, turbulent political times, the climate crisis and the rapid rise of e-commerce, traditional business growth formulas are falling short. The ‘fail fast and pivot’ mantra has long been favoured in Silicon Valley, but many on the panel deemed that this mercenary mindset is now losing its clout.
While opinions around the table were mixed, Erikkson pointed out that brands who pick a strategy and believe in it, without retreating at the first sign of failure, often do better than their rivals. As Stich put it: “[Over-performers] fail and continue in the direction they want to go and they learn from their failures.”
The conversation soon switched to the powerful suit of ‘satellite services’ offered by successful brands (such as Spotify’s Discover Weekly playlists, Uber Eats and WeChat Pay). “If you keep building up these satellites, you're building a robust ecosystem around the product or service that you're providing to your customers,” Erikkson said. The panel agreed this is one way to keep customers satisfied without a full-scale commitment: Such services can be introduced, trialled, tweaked and withdrawn quickly and easily without impacting the core service.
Customers increasingly prioritise personalised and responsive customer service, and it’s been shown that better service reaps financial rewards, too. A Microsoft survey shows some 56% of people around the world have stopped doing business with a company after a poor customer experience, and one in two millennials has complained about a brand on social media. Outperforming brands make a customer-centre approach a linchpin of their model, and consciously reward their most loyal customers. As Stich put it: “Customers are always beautifully wonderfully dissatisfied, and overperformers embrace this.”
The table nodded as Stich launched into the topic of agility by admitting that it’s become an overused buzzword: “Agile, agile, agile. Is anyone sick of talking about agile yet?” he laughed. But his analysis of the organisational constructs behind the word were deeply insightful.
Stich highlighted the widespread practice of small, ‘cross-functional teams’ that adheres to the ‘two pizza rule’: meaning the group could be fed with two pizzas. This lateral organisational structure of so-called squads, tribes and guilds, each operating on a given task for a concentrated amount of time, has helped companies such as Amazon and Spotify to remove internal barriers to getting things done. These self-contained teams work together to achieve a specific goal, before moving on to the next one, and are protected from the time-wasting elements involved in regularly reporting their progress up the chain.
In this connected age, we’re awash with data and information – but sheer access to data is not always a key to success. Human nuance is increasingly valued. “Over-performers unlock data with human insights,” Stich pointed out, “And they bring creativity and technology together. So this notion of whole-brained: a combination of those that are analytical and creative together, is the thing that drives growth.”
Most people around the table chimed in that top performers are also generally more interested in their impact on people and bringing a benefit to the wider world, rather than concentrating on the bottom line.
“Do it for humanity. Do it for a broader purpose than just profitable growth,” Stich concluded with gravitas. “Focus on the top line and focus on impact to society, you'll be better off.”