The turmoil in the market challenges companies to redefine their renewal strategies. Easier said than done, right? Many traditional companies struggle to redefine their markets and create new business models, putting them at risk of ending up on the list of "big companies that once dominated the market". The question is, how do successful companies renew themselves to avoid ending up on that list?
Today's successful companies have understood that most of their market value is immaterial and based on their brand equity. They have successfully defined an engaging purpose and communicated what good they do for their stakeholders and society at large. This purpose sets the foundation of all their commercial development activities.
These successful companies redefine their market continuously and have effectively aligned their operations in value-creating ecosystems that secure their customer's success or create a change in consumer behaviour. They ask themselves:
"What do our stakeholders say about us today, and what do we want them to say about us tomorrow"?
Sounds easy in theory but requires an entirely different understanding of the market and how to organise the company to create value and thus reach commercial success.
The main reasons why renewal strategies often fail are:
- Lack of understanding of what drives value for customers. As our Strategic Renewal study shows, the majority of renewal in corporations still stem from the product-driven R&D department, usually far from the customer. For over 50 years, we have even understood the importance of customer focus, yet most companies are still product-driven. Their customer journeys only illustrate how customers should be managed in the company's complex omnichannel sales process but fail to create value for the customers.
- Lack of understanding of what drives value internally. Commercial operations such as marketing and communication are not seen as "mission-critical", although they are the main driver for any company's commercial success. The relationship with a customer begins far earlier than when they buy a product or service and stops well after they stop using that product or service. Knowledge of what drives this immaterial value (read Market Cap) is unclear. Marketing investments (e.g. advertising) are still seen as a cost, as marketeers fail to recognise what drives price and volume on the market and fail to communicate the strategic value of their efforts to the management.
- Missing focus. A shift of communication professionals to sustainability has been a trend. Even if only a few have succeeded to coordinate these actions into fundamental business model changes for commercial benefit. The busyness of digital and everything else has driven companies to try out things with small investments creating a puzzle of different initiatives whose strategic links and KPIs are missing.
A solution to tackle these mistakes is to align your commercial operations to a strong purpose linked to your company's strategy. You need a vision for your desired state that answers what you want your stakeholders to say about you in the future. After testing this both internally and externally, you need to build an operational model unifying your (and your ecosystems) sales-, marketing- and communication activities to support this desired state. In this way, you will create a mission-critical machine that drives your strategy and secures commercial success.
Hanken & SSE has developed a commercial framework that links strategy to commercial operations to support you to maximise your corporate value with expertise and tools. Brand X supports any CEO, Business Unit Director, Sales Director or CMO and their team in clarifying the goals and coordinating activities for commercial success.
Brand X is a pan-Nordic development journey. It includes a customer-specific current state analysis, road map and workshops with leading inspirators and other non-competing companies. You share insight and benchmark through the journey, giving you the power to execute your short- and long-term goals. For more information about Brand X, read more here.
About the author
Marc Hinnenberg is the CEO of Hanken & SSE Executive Education. Marc has worked with sales, marketing, business development and innovation for over ten years. His passion is to improve businesses and make organisations stronger for more significant business impact and better profitability by understanding the customers' needs.