Show 127 – FutureBrand Index
The latest episode of the csuite podcast to be recorded in partnership with FutureBrand.
CIPR members receive 5 CPD points and PRCA members receive 10 CPD points for listening to this podcast if they log it on the CPD programme.
As FutureBrand works towards the release of their latest FutureBrand Index, we looked back at the findings of their 2020 report, where they examine the world’s leading firms and determine how they fared over the previous year.
Russell Goldsmith was joined online by:
Jon Tipple, Global Chief Strategy officer, FutureBrand
Jon began by saying it’s been a fairly transformative couple of years, there’s been some interesting new developments at FutureBrand coming from different parts of the world. He said we’re also seeing a lot of companies re-evaluating as a response to Covid, looking at M&A’s, new brand creation, and fundamentally thinking more deeply about why their company exists, what their purpose is and whether they’re positioned right to go forward into life past 2020.
How the FutureBrand Index was Put Together
Jon explained that ultimately, it’s understanding the relationship between company value, commercial value and brand perception. He said the FutureBrand Index looks at the market capitalisation figures of PwC – they take the top 100 that they do every year and reorder it based on the perceptions of 3000 informed members of the global public. He explained that they are senior, mid-level executives, people who work across all sorts of industries globally, in 17 markets, they’re interested in their perceptions of companies that they’re aware of and know something about.
Stephen explained that his background is actually in construction and he’s worked for McDonald’s for 20 years now, starting his career with them building restaurants for the company in Scotland and Northern Ireland. These days, he is part of the corporation’s global development group and based in an office in Paris with his responsibilities primarily relating to restaurant design in relation to all markets outside of the US. He has a compatriot who covers the US side of the equation and both of them together are looking at the way the restaurants look and support the experience for customers when it comes to the physical environment.
Stephen explained that what he found interesting about the report specifically was the point in time at which they were taking the insights from the respondents, was probably the midpoint of last year when Covid was hitting hard and off the back of that, there were probably some more obvious risers and fallers at the top end of the scale. He said the risers were more in the tech or digital fields and on the other hand, there were some surprises for him. He said that being European, two companies with big positive moves that stood out for me where L’Oréal and Shell and it somewhat pushed him to try and understand the reasons behind that move.
Paul said the report was incredibly interesting and is a great framework, is very useful for elevating brand discussion to a board level and start to think about the brand, the meaning of it and its tangible links to performance, attracting talent, etc. He said there’s a range of brands that he greatly admires, and these are brands that have cut through, so to see a set of metrics, a framework wrapped around how organisations do this, is incredibly useful for marketers and business leaders.
Jon explained that whenever you do a study like they do, you see some familiar companies that come back year on year in every one of these types of studies, so Microsoft, Apple, Samsung etc. He said what’s really interesting and what their study is reflecting is shifting priorities and often times you see changes beginning at the margins. He said the energy sector is an interesting one and there is a general reassessment going on of the role of companies like that and the emergence of brands like NextEra Energy, huge renewable energy companies, hardly ever heard of. He said you begin to realise how big these companies are and the role that they’re beginning to play. He said if you look at what’s happening at BP, where they want to go, where the hearts of their business will be in the future and you begin to notice across the Index these marginal changes seem to be reflecting shifts in consumer, customer and public consciousness, public needs. Jon explained that the pandemic has forced us to reconsider what we really value, what’s critical to our lives and what we no longer want to do. He said Bill Gates often talked about overestimating the short term and underestimating the long-term impact of things like this but some brands and companies remain relatively resilient, and some are genuinely under pressure to survive if they don’t make some serious shifts.
In terms of individuality in the report, Jon said Byron Sharp’s been talking about this for some time but in many ways the pandemic’s accentuated the need for substance and authenticity. He said the ability to be authentic, to stand up for what you believe in has become ever more in demand, we expect it of each other now much more and we expected from the companies we want to interact with, spend time with and work for. He said if you look at Tesla and Elon Musk, he is the famous example of the most individualistic CEO but what individualism really means is prioritising distinctiveness over differentiation. Jon said the time of just looking at what your competitors are doing to try and find a point of difference against them is gone, it’s not enough, you have to really live by your principles. He said they talk a lot about the FutureBrand Index, looking at the relationship between purpose and experience, practicing what you preach. He said Dan Price, CEO of Gravity Payments in the States who took a pay cut to pay his staff a $70,000 wage, everyone’s on the same wage, that’s an early bellwether of the type of individualistic behaviour that will pay back in goodwill, the best talent wanting to work for you and it’s a smart move.
Stephen said that in the report, there were about 8 qualities that allow organisations to stand out from those around them and inside McDonald’s they are trying to move the needle against at least six of them. He said for the general customer, there’s one thing that people recognise in McDonald’s about individuality, sometimes for good reason and sometimes for bad reasons, going back over the years which is their strength and process in deployment of procedures and standards. Stephen said that coming into the Covid world, health and hygiene has come very high on the agenda and there is a good chance that customer’s belief in them having strong procedures and processes in place can mean that across their restaurants when they commit to making sure they’ve got good hygiene processes in place, they will probably go above and beyond those around about them in the same sphere. He said during 2020, a lot of sinews were being strained in the organisation to make sure that confidence and expectation that is placed on them was not misplaced, they did seek to go above and beyond and some of that led to situations where actions they undertook in the restaurants were very visible to customers and potentially reinforced their trust in them. Stephen said there is no doubt that the themes that are listed in the report have a huge degree of validity but there are some things that are just endemic to companies because of their nature, that makes them shine more brightly than those around them in a Covid environment.
Jon said he thinks as an outsider, McDonalds have managed to turn the years of being a pariah into a positive and they’ve become real iconic leaders, they do things first. He said the leadership around format design, restaurant design, the introduction of Wi-Fi, changing of the colour codes, introduction of natural woods. He said McDonald’s have embraced technology in a way that others are envious of and it ultimately comes down to, being one of those rare beasts that is a genuinely global company. Jon said the emotional response that people have to McDonald’s around the world is the same that is partly what individualism, being an individual type of company yields you, that’s the return of taking a stand, being clear about what you’re all about but having the wherewithal to adapt to what’s going on locally and contextually, that’s really powerful and pretty hard to mimic.
Stephen said his job does relate to restaurant design but what he recognises as being one of his responsibilities is to try and take the experience for customers who are coming to McDonald’s to a level where they’re getting something that they would not expect them to deliver. He explained that when they sought to move away from plastic seats and move into upholstery, to provide an environment that was not cold and sterile but was warm and inviting, there’s a number of things that they’ve done over the years which stood them in good stead and helped improve the perception of the company overall. However, he said there’s a number of different threads to this and when you are focused on the same end game altogether, all of those threads need to come together for you to have the maximum impact you can. He said there’s not one thing in a company that he can point to that makes McDonald’s significantly different from any other company but there’s a combination of things that can help set them apart, some are more recognisable than others but because they’re effectively trying to move the needle on a significant portion of them, this does have an effect that is more valuable than any one of them individually.
Paul said that in terms of creating individuality at Microsoft, customers want to understand what they stand for in very simple terms and sometimes brands forget how important this is. For example, he said when he meets with customers, most of the time he will speak about their purpose versus their products, because in the world of tech, technical specifications, product feature, function, comparison don’t really create a clear enough differentiation between technology brands, but what you stand for does. He said as marketers, they have a really important opportunity, more so than ever, to define the individuality amongst their customers through clear storytelling, storytelling that underscores the purpose and values of the brand. He added that’s where the roots of their individuality or any other organisation’s individuality would stem from and so when he reflected back over the year to date, it’s interesting how topics such as sustainability, social injustice are no longer optional, these are their front and centre. He said there are some good examples of how about Microsoft have addressed these topics, utilised the opportunity to talk about what they stand for and drive home that individuality. One example is their public commitment to go carbon negative by 2030, not just to make the announcement but show real transparency and detail as to how they’re going to achieve this. Likewise, he said they made a recent announcement around skilling one and a half million people in the UK for careers in tech and that’s around helping the UK remain competitive and helping build the skills we need for the future. Paul said all of these types of activities and conversations say a lot about Microsoft and it would be very easy to say they have the reach and scale to do this but there are initiatives happening throughout the business that aren’t necessarily driven by budget, but they are driven by individuals and these initiatives are aligned to their mission. He said there’s a phenomenal opportunity among marketers to reinforce what a company stands for and drive that individualization in the way they tell stories, and the way they link their work back to their brand purpose.
Big Movers Since the Previous Move
Jon said in reflection of the new priorities points and new parts of the world coming into play, one of the most surprising things was the arrival of Reliance Industries at number two in the study. He said Netflix is fairly well covered and has been touched on in other conversations, but Reliance is one of those, fundamental to life organisations that is hugely successful, purposeful and is beginning to be recognised for that. He said it’s beginning to punch above and outside of its home market in India and get the credit it deserves. Jon added that the emergence of PayPal as a really vibrant and meaningful brand and also companies like Wal-Mart have got a lot of goodwill and credit for the way that they stood up for their staff in the eyes of certainly US consumers. He added that L’Oréal had a slight dip previously but it really turned things around and brought an authenticity to their communications with some really interesting stuff with Eva Longoria, which got picked up in social media very powerfully and took advantage of that situation in a very constructive way. Jon said the pandemic and 2020 as a whole caused a lot of escalated fears and worries and all of us were forced to make some fundamental reassessments. He said companies that have stood up and taken a positive approach to that situation as opposed to hide away are getting exponentially credited for it. He said the biggest faller this year was Gilead, the pharmaceutical business, hugely successful generally but there’s a fragility to reputation right now and Gilead’s performance suggests that people can very quickly change opinions if you’re seen to be doing something that isn’t in line with standing up for what people need these days.
Stephen said the way communications are these days and the visibility of big corporations, either a well-placed step or a misplaced step, can have big effects on the way companies are perceived, certainly in the short term. He said with L’Oréal being back after having had a bit of a dip, this piece about authenticity is a huge part of the equation. He said authenticity for him is part and parcel of an ability to be trusted and if you lose that authenticity and that connection with who it is that you’re trying to communicate with, then the trust runs out the door behind it.
Key Drivers for Resilience
Paul explained that there’s all kinds of connotations around resilience and he’s happy that they positively progressed across the key drivers but by no means does this mean their work is done. He said Microsoft is a 45-year-old business and so has learned a thing or two about resiliency, most importantly, they’re able to reflect on the lessons they’ve learned to make them better. He said they talk a lot in Microsoft at the moment around them being a learn-it-all culture and not a know-it-all culture which is a nice, succinct way of summing up how they think as an organisation. He said one of the great Bill Gates quotes “success is a lousy teacher because it seduces smart people into thinking they can’t lose” really resonates when you think about resilience. Paul said they’ve been on their own transformation journey and the cultural transformation of Microsoft over the last few years has been really closely aligned to the drivers of authenticity, thought, leadership, mission, innovation, and, of course, the quality of their products. He said when he looks at resilience, particularly, in the face of 2020 so far, personally, he couldn’t be prouder of the way they’ve responded as an organisation to Covid, the way they’ve supported their employees, their customers. He said working alongside deploying and building products with customers, government, assisting schools and educators to flip to remote learning, but ultimately helping all of these organisations build out resilient operations in the initial response to Covid gives them the chance to share their learnings with their customers and the response has really been a testament to the culture they have built and ultimately there’s a mission at the heart of Microsoft that they truly believe in.
Jon agreed with Paul about resilience and said it has some overtones and connotations that are slightly aggressive, slightly macho and out of step with what businesses need to be all about. He said when he thinks about resilience, he’s more inclined to think about companies that are making sure they’re future proof, with things that people value and respect, in a consistent way to drive trust and doing it in service of their purpose. He said PayPal, Microsoft, Netflix, Apple, these are companies that aren’t afraid to put their money where their mouth is, they attend hard on looking across the entire experience piece to make sure that what they say on one channel is consistent and reflects what’s going on in other parts of their business so that the company feels connected. Jon said the brand there that isn’t in that list, but he would add is Nike, he said Nike and Apple are both interesting because they’re design-led organisations, they use design to shape behaviour and if brand is anything, it’s a behaviour shaping force and they’re highly consistent in the way they do that. So, he said whether it’s resilience or whether that’s just simply making yourself future proof, that’s what matters, are you doing what you say? Are you doing it in a way that feels connected to what people want? Jon said it’s exciting but there’s an inevitable risk if you say one thing and you’re not consistent in the delivery of that.
Consumer Goods and Services
The report states that consumer goods and services have reacted quickly and effectively to new consumer needs and priorities. Among the top 10 climbers year on year were Roche, L’Oréal, and Wal-Mart, McDonald’s, and Netflix. The perception is that these firms care about their clients and their staff and are able to give them what they want. When it comes to an emotional connection with the brands, the consumer goods sector scores the highest, 29 percent of respondents said they felt passionate about these companies.
Stephen said that as far as the thinking is concerned, through the McDonald’s lens, they were probably the first place that many customers were able to go to get something to eat when restrictions lifted last year. This is because of their pedigree that’s been proven year over year in relation to drive thru and overlaid with the introductions that they’ve made with delivery services; it’s put them in a good place to be able to serve customer needs. He said from the point of view of accessibility and visibility of the company, they were well placed to be able to take advantage of that and when they were opening dining areas, they were doing so with very visible social distancing measures in place and each of those things give confidence to the consumer. He said there’s also the piece about being in tune with the customers and that saw them as an organisation doing things that a year ago wouldn’t have thought about doing. Stephen explained that in Australia, at a certain point, they were selling bread and milk from a restaurant to serve customer’s needs on the ground and being in a position to step into customers’ lives when they need it in ways that support them has been a huge benefit to them and is something that they need to take forward and capitalise upon.
Jon said the consumer is front line and one of the big things that’s changing, particularly around purpose, is companies that are making themselves fundamental to life and in particular how life is going to be in the future. He said whether you’re L’Oréal, Wal-Mart, McDonald’s, Home Depot, Netflix, these are brands that aren’t just giving customers what they want, they are perceived to be building the systems, infrastructures and platforms which are going to keep going into the future. He said in terms of brand perception, Netflix is higher perceived than the Walt Disney Company, which in many ways doesn’t make any sense at all but if you are underpinning that, it’s a belief at which of these companies is shaping the future versus, part of the past. He added that Tesla is by far the highest placed automotive brand and Toyota is also relatively well placed too, both really different companies, but both perceived to be shaping the future of mobility and that’s the game in every sector, not just consumer, whether you’re a consumer-packaged goods, consumer service or anything else, it’s asking yourself that question as a leader, to what extent is what you do fundamental to life in the future? Is it a platform on which people can enjoy life or live a healthier life or a successful life? He said it’s that ability to create that sense of belief that you’re building that platform.
Jon said there’s some obvious clichés about people being at home bored but the groundwork of Netflix was done before Covid, they spent on innovation, there’s a lot behind that simple screen that serves you, it’s highly personalised and the trick for them is to keep it going. He said Walt Disney won’t sit on their hands, we’ve seen Disney plus really surging, they’re going to respond and that’s what’s exciting to be in the industry right now, the fragility but also the ability to keep coming back, to innovate, to make smart partnerships, smart alliances, create, do things in a distinctive way that people haven’t seen before. That’s what people are yearning for and people are interested in.
Stephen added that at the beginning, he was putting Netflix somewhere under the umbrella of digital, because that’s the way that he intuitively sees it, through a digital device. He said because Netflix has come at things from that angle, it has given them very much the impression of being the first big mover into that territory of streaming and there’s a lot of blurring as far as categorisation is concerned because of the influence of digital. He said when people capitalise upon a niche in the digital sphere based upon whatever product, they have an immediate advantage.
Jon agreed and said there’s a technical answer to that, they use the definitions that PwC sets because the number of times people have personally got in touch with him to say, ‘why is my company associated the consumer goods brand?’ But he said the broader point is a good one, where digital innovation is going, it’s beginning to ask the questions about what type of company you are. He said there’s some really interesting stuff for example what Mars has been doing with pet care, looking at the whole value chain, not just making pet food, trying to understand all those moments in the journey that a pet owner will go down and how can they be part of that conversation. He said the technology companies were the inspiration for this, Amazon, Facebook, Google, looking at people’s entire digital ecosystem and figuring out how they can play a part and be more relevant. He said it’s been triggered by digital but actually it’s trying to figure out different ways to be relevant and meaningful to people’s lives.
In the 2018 index, almost every technology company had fallen in the ratings despite the fact that nearly half of them were viewed as so-called companies of the future. The 2020 index has more technology companies in the global top 10 than any other sector with Apple at number one. The report goes on to say that “although tech brands are deemed to be innovative and in many cases indispensable in modern day life, they have lost their emotional connections with their customers, trust is also an issue and in a world of fake news, concerns over privacy and increasing public desire for corporate accountability, a seemingly unbreakable brands are beginning to show the cracks.”
Paul said that most recently at one of their events, Satya Nadella said they’ve seen nearly two years’ worth of digital transformation in just two months, organisations at the moment are working at unprecedented speed and in unprecedented times. Paul said we are beginning to see just how critical digital technology is in the way we respond to the Covid crisis and there’s lots of great models online that walk through the various phases which he views them as, responding, recovering, and reimagining. He said during this period, Microsoft became digital first responders, rolling out tools and platforms to enable the most critical of work to take place and also prioritising mission critical infrastructure at a country level. He explained a good example of that is around, in a matter of days, deploying Microsoft Teams to 1.2 million NHS users to allow the medical community to be productive, collaborate and share information in an effective and secure way to do their best work. Paul said they worked on an incredibly interesting project, the UK Ventilator Challenge, bringing together some of the most innovative manufacturers in the UK to design, build and roll out ventilators in record time. So, he said from raw backend computer power, right the way through to the use of augmented reality using products like HoloLens, a mixed reality headset to get people in the room virtually to bring the ventilator challenge to life. He added the criticality of digital tools has never been clearer to the extent that these tools are indispensable. Paul said they reported 5.2 billion minutes of Teams usage in a single day, which shows digital collaboration on a global scale, powerful technologies, cloud computing and artificial intelligence are hugely powerful technologies. He said we’re the first generation to use machines to make decisions on our behalf and it’s fundamentally transforming the way we live and work and potentially holds the key to some of the world’s most pressing issues and challenges. Paul said the cloud and digital have created new economies and brought with them a promise of new jobs and new ways of working, but with this comes challenges. He said that issue of trust really sits, there are concerns about the impact on people’s jobs, the vulnerability to cyberattacks, online identity, and also whether technology is leaving some people behind. He said people most importantly now are asking if they can trust the technology they use and the media they consume, if they can trust the technology companies who are designing, developing and deploying these new technologies. He added, do these companies really understand their responsibilities? At Microsoft, they are hugely optimistic about the benefits of technology but also clear eyed about the challenges, these concerns are real. Paul said they are committed to earning and sustaining trust from their customers, partners, and the communities they serve, and this is nothing new. About 15 years ago they launched their trustworthy computing initiative, but the technology is rapidly evolving, it’s infused through our daily professional and personal lives. He said they know there’s more work they need to do to continue earning that trust and they’ll be judged by their actions and not just their words. He added that their mission is to empower every individual and every organization on the planet to achieve more and they believe they have a fundamental responsibility to help others succeed because their success is built on the success of their customers, that is their business model. He said that’s how they monetize their intellectual property, by their customers being successful, choosing to use their platforms and tools and consuming those at scale due to their success and when you look at trust in an era of digital, sometimes it’s the fundamental business model that shapes the way organisations behave and shapes the decisions they make. He explained that for their business model to be predicated by the success of their customers really allows them to create a common goal for them all. He added the emotional connection, telling the world they care is something they’ve learned a lot about in 2020, customers want to understand what they stand for. He believes there is a responsibility for Microsoft to help build a fairer and more equitable society and economy and they accept and take that challenge in all seriousness; with the work they do every day. Lastly, Paul said there’s a lot of cool tech out there but what they’re finding is the tech that people choose goes far beyond just the cool tech, the decision-making process we’re seeing in businesses are starting to encompass mission integrity, trust and looking to work with someone who has a vested interest in your success.
The report cites Facebook is an example of a brand suffering from the trust issue, dropping to number 37 in the FutureBrand index, having been 11th in 2014, similarly Alphabet, Google’s parent company had slipped to number 40 compared to number 21 in 2016. Jon explained that technology is a coming-of-age story, a lot of the Facebook’s and Google’s are just coming out of their teens, they are exciting, unexpected, volatile entities and they often do things that you don’t expect, they make mistakes. However, he said at the end of the day they will find their way. He explained with a lot of these companies, they’ve empowered our lives in so many different ways but inevitably, along the way, there are new questions about the way that they are changing our lives and they are working through it. He said right now it’s in many cases through the lens of social media rage and aggressive congressional committees, but these companies are pushing boundaries and moving humanity on the whole forward and when you do that, there are bumps in the road. Jon said when he looks for inspiration, you do look at Microsoft, Apple, companies with a few more miles on the clock, he said some of the proactivity that Tim Cook’s taken around privacy and data are a sign of things to come, that’s going to have to happen for all companies or else they will fail. He said one of the things that’s both exciting and fragile about technology is people can change who they use at the click of a mouse, it’s not difficult, so attending to the relationship, whether it’s supportive or detrimental between how you’re perceived as a brand and your performance is really important. Jon said if you’re an organisation that’s super wealthy but is not very well regarded, then that ultimately will become an issue when someone better or different comes along.
Jon explained that healthcare in the Index has certainly taken on the mantle of technology and the blurring between technology, digital and healthcare is really apparent. He said in many cases, health companies are tech companies, brands like Medtronic and companies like GSK and Roche are embracing technology to really create rich pipelines of vaccines and medicines that will be protecting people’s lives, so people don’t become patients and when they do become patients, they are cured. He said healthcare is vibrant and complicated at the moment, from an investor perspective, he said healthcare companies are overly diversified, quite complicated and there’s a degree of simplification in their portfolios, which makes a lot of sense. Jon said healthcare it’s definitely going to be the new rock star category in terms of how they behave.
In terms of which organisations in the next Index, Jon said that for brands in the healthcare sector that we’re now seeing everyday such as AstraZeneca and Pfizer it may be too soon, but the wave after that, we might see that these organisations have felt good about coming out from behind their logos. He said there’s a fear sometimes in these organisations about becoming too public, because of the regulatory pressure, the history of Pharma, the way Pharma is often portrayed in the media or movies. He said he would imagine that being on the news all the time isn’t a naturally comfortable place for a lot of these organisations, they don’t necessarily always have highly developed marketing functions, quite often it’s a corporate comms team that’s looking after global reputation and marketing. Jon said inevitably the trigger of Covid will encourage these companies to come out from behind their logos, take leadership, be proactive around regulation and about finding their voice. He said there will be greater transparency in what they’re doing and why they’re doing it, who they’re doing it for. He said there’s only a limited number of great scientists every year that these companies are all battling for, so the more they can bring their inside, outside in a way that they feel good about is essential and it’s going to come down to leadership.
Stephen agreed and said with Facebook and Google, what you recognise is at the beginning, they were offering something that nobody else was offering and how do you do what it is you’re already doing well, better than you’ve done it in the past. He said they set the bar at such a level that they’ve actually made it difficult for themselves to be seen as progressing, so they perhaps suffered more because other people were seen to be taking things forward more than they were, they’re struggling to find new boxes to tick. Stephen also said in terms of pharmaceutical organisations coming out from behind their logos, most big organisations do have a reluctance about sticking their heads too far above the parapet, most people recognise that because you’re a large organisation, you have responsibilities, but you also need to be humble enough that you know there’s going to be opportunities there to address. He said one of the big challenges these days is this piece about authenticity, to be able to say, here’s what it is we’ve done, here’s where we recognise our shortcomings are and here’s what it is that we’re going to do about it. Stephen said for a CEO to do that, it involves coming out from behind the logos and it requires a degree of strength and resilience, because not every time you’re going to get it 100 percent, CEOs these days are on many levels, more is being asked of them than ever before.
Jon said financial services have been probably the most affected by digitisation and the shift to automation of their industry. He said the start-up community has really targeted financial services as a vibrant marketplace so it’s in many ways a highly exciting place to be operating right now. He explained that the challenge for traditional financial brands is to communicate a more innovative front, to be able to transfer the trust that they have built up in their brands over decades into more adaptable, relevant services and experiences for their customers. For example, Coutts, the high net worth bank in the UK but also obviously global brand has begun to evolve its traditional positioning, into a much more eclectic, interesting offer, a much more varied proposition, and really showcasing the people who use it. Jon said it’s not necessarily the people who you would readily assume, so it partly goes back to healthcare companies wanting to come out from behind their exteriors and actually beginning to tell more compelling stories and show more of themselves. He said it’s also about, continually innovate, drive, personalisation, these people have a lot of data on us, it’s a regulated industry, but it’s the ability to use what they know with smart data and analytics to provide invaluable services. He added people are more open these days to using brands like TransferWise, Revolut, to do some of the things that they previously would have relied on their banks, so it’s a highly fertile, innovative space and the brands that are really well placed to take advantage of are actually the most trusted ones and there’s certainly some interesting things going on from some of the traditional banks right now.
Industrials, Telco and Oil and Gas
Jon said in terms of this industry, it’s a question of to what extent they are perceived to be making themselves fundamental to human life. He said brands like Verizon have really got leadership around 5G in the States, that’s seen as a platform that will be fundamental to life in the future. He added if you look at the way NextEra Energy is scoring really highly on the Index because it’s building the future of renewables or certainly perceived to be and the jury’s out for some of the traditional brands. He said we know that companies like BP and Shell are looking at how they pivot from fossil fuel dependency into the near future. He said one of the highest new entrants, Reliance Industries, a huge conglomerate, with one of their powerhouse brands JIO, the mobile phone brand who are providing smartphones and mobile networks as a platform for education, small business, and commerce. He said it’s a real pivot point in terms of new priorities, getting yourselves ready for what’s to come, working out how you can be relevant to people’s lives in the future as opposed to provide them with what you always have done in the past.
What Makes a Great CEO
Paul said a great CEO sets and lives the values and the culture of a business, of course, they need to be great communicators, be adaptable, to possess incredible powers of strategic intent that can energize the company. However, he said today, more so than ever, he would add authenticity, humility, and empathy to those qualities of a great CEO. He said the business leaders today and of the future will be displaying humility and empathy and authenticity alongside what may be some of the more traditional characteristics we think of. He said when he interviews people applying for roles at Microsoft, they want to come to Microsoft because they want to help change the world, they believe Microsoft can provide them with a platform to make that level of difference, but they also always refer to the high integrity of Satya Nadella. So, he said not only are they here to think that as an organization they stand for a better future than the one they’ve already built, but they consistently call out the integrity of Satya Nadella and this is the first time in his career where the vast majority of interviews, the CEO’s integrity is held up as a reason for wanting to be here. So, he said there’s a very powerful set of human skills required now to augment some of the more traditional CEO skill sets that we’ve discussed.
Stephen said the whole role is continuously evolving, these days more than ever, CEOs are expected to have an absolute clarity of purpose, both as far as their own role is concerned, but also as far as the company is concerned. He said the need to retain an unerring focus on anticipating and reacting to customer’s needs while at the same time truly looking out for their staff, to achieve that, they need to deeply understand the business that it is that they’re in. He said not just about the business and the way it is today, but the heritage of a company has a bigger part to play than some people might imagine. He said they also truly need to understand who they’re serving and why those customers are choosing to buy those products, if you don’t know those things as a CEO, then you don’t have a foundation on which to build. He added that the great CEOs need to show an ability to capitalise on strengths and abilities that already exist in their organisations, to turn those strengths and abilities into avenues that are going to better serve the customers, which will in turn, open the door to new customers. He said they also need to embrace their responsibilities, do the right things for the communities that they’re serving, for a CEO and a large organisation, the role continues to grow every day. Stephen said on top of all of that, being able to communicate all of that in an authentic way takes a lot to make a great CEO, it’s not impossible, but we expect a lot.
Jon agreed with Paul and said people like Satya Nadella are pretty unique and, he’s an example of a great CEO, but for every Satya Nadella, every Elon Musk, there’s a different way of doing things, not everyone can be like those people, they’re relatively unique. He said he senses the world now is a much more inclusive world, less about the cult of individuals, less presidential. He said the world is too complicated, too diverse to be led by individuals, individual companies need to be led by diverse teams and therefore the role of a CEO is to figure out the right team. He said we’re all different and we should find ways of creating really diverse teams where everyone is coexisting but not co-dependent, the dependency on an individual is a risky way to go because you’re only as good as that individual. Jon said the role of a CEO in many ways is to get back among the pack and build out a really powerful team that’s bred on difference and brings difference into the boardroom, because that’s the only way we’re going to genuinely cope with the uncertainty and unexpectedness that will come. He said, having said all of that, of course, there are some truly iconic individuals who can do that in one person, Satya Nadella is a great example of that, you can either be iconic and brilliant or if you’re a mere mortal, like the rest of us, build a great team.
Biggest Threats to Business
Jon said genuine leadership around sustainability got delayed by Covid and as we go into 2021 and as we move forward, there will be a whole new reinterpretation of what it takes to be a truly sustainable company. He said people, customers expect us to be doing certain things, behave in certain ways and the truly sustainable companies of tomorrow will be exceeding expectation itself. He said it won’t be enough to just be good on climate, equity and inclusion, sustainable businesses of the future will do far more than just the triple bottom line of people profit and planet, they’ll be thinking about:
- How they drive trust
- How they make people feel
- If what they can do, and serve is indispensable
- How they innovate and thought lead their category
- How they provide a platform for talent to express itself, for people to experiment, be open, try new things and push the world forward
He said all of these things will really change what it means to be a sustainable business and from an investor perspective, the whole ESG agenda will massively broaden to take all that. Jon said when he looks across the Index, obviously there are some companies that are well placed to do that, Apple, Amazon, Microsoft, McDonald’s, but none of the none of the companies right now are really front and centre on everything, they’ve all got work to do. Jon said companies like AstraZeneca and Pfizer have punched into the consciousness around Covid but how do they provide pleasure in people’s lives? How do they demonstrate the quality of their people? How do they continue to thought lead when there isn’t a pandemic? How do they tell consistent stories and bring their personality to the way that they operate in the world? He said all of these things are unknown right now, and they’re going to be real challenges for CEOs or teams of leaders to figure out, because that is the key to becoming a genuinely sustainable business in the future and that’s the only real agenda that businesses should be worrying about right now.
Jon added that a lot of companies right now are looking at what they stand for, their purpose, their positioning, how they do what they do, where they attract talent from and what they want to stand for in the future. He said there are obviously businesses in the healthcare sector predominantly realising their potential and realising how much more they need to do. He said the tech sector is looking at how it evolves and their whole role in the world is evolving hugely, and there are big gaps in perception that they can fill with what they’re capable of doing. Jon said there are a lot of moves going on right now by organisations, so they’re looking at broadening out what it is that they stand for beyond just what they’re known for today and that is really the key to becoming truly sustainable and leading on that agenda, as opposed to being something that’s passed over to the corp comms team or the PR team to try and defend the business. He said it’s a really interesting battle ground, which will provide real opportunity for competitive advantage.
Stephen agreed with what Jon about expressing purpose and mission during the last part of 2020, their CEO very publicly gave visibility to what their purposes is as a company, what their mission is, identifying the values that it is that they’ve got at the core of the business these days and identifying the pillars that they’re looking at to grow. He said if anyone wants to see what that looks like, they just need Google worldwide connection, and you’ll see it all. He said beyond that, at a very business level, thinking about threats to businesses and individual organisations, you can see a few, one could be denial, anyone who expects things to go back to where they were pre pandemic. He said for many organisations, the pandemic presented an opportunity to take a good, long, hard look at themselves and truly understand themselves from the inside out and big organisations that haven’t done that may not understand where it is that they stand today and therefore what it is that they truly need to address when things start to get little bit closer to where it was in the past. Stephen said it also comes back to blurring lines, organisations that still haven’t got to grips with the integration of digital technology into their business are going to be finding themselves increasingly left on the side lines. He added that the coming few years, we could see some relatively volatile fluctuations in the way customers behave, the pandemic is still with us and quite frankly, that’s fuelling tensions in financial, social, and political arenas that still need to be played out, so be ready to be surprised because it wouldn’t be a bad one to keep in mind.
Paul said that where we are today, one of the few comparable scenarios that we can look back on is some of the more recent deep recessions. He said there are some key learnings to be had to look at how businesses performed under the circumstances and there’s some economic similarity. He said there are some fundamental questions you need to ask yourself as a business.
- Does what you did before set you up for success moving forward?
- Is your mission and purpose still relevant?
- Do you have the skills and the tools needed to accelerate as the new world forms?
Paul said some organisations will do this well, they will take market share, be successful, other organisations will fail and then new organisations will emerge at a pace and create and take market share. He said in summary, the biggest threats are skills and skill shortages in your business, static business models that you’re struggling to reimagine, but ultimately, antiquated technology, tools and platforms to allow your business to thrive.
What people involved in their business purpose need to be focusing on.
Paul said be deliberate in the work you do and make sure that you’re driving clarity in your organisation, that people understand your mission. He said one thing that’s clear when you look through the FutureBrand Index is that purpose driven organisations continue to perform very well on it. He said there’s a couple of questions to ask:
- Does your mission galvanize and inspire people, employees, customers?
- If you no longer existed, would you be missed? What would the impact be?
Paul said using that as a cut through question to determine whether your organisation has done what it does, why it does it and who it does it for, you really need to ensure that those components are in place. He said answer those questions and then track, measure, and actively plan around that mission, around that clarity. He said he’s worked in organisations where they’ve had very little budget right through to sophisticated use of third-party insights to understand the perception of your brand. Paul said you need to be deliberate, drive real clarity as to the mission and purpose of your organisation and then build your comms and marketing strategy to reflect what makes you special. He said what differentiates you is being deliberate, having clarity, thinking about how you’re going to measure it and ultimately make sure you’re communicating to the world what makes you special and what makes you different.
Stephen said for him it’s about identifying and solidifying those attributes of a company that show it absolutely lives its responsibilities and to amplify those attributes that can elevate its individuality, not just in its own sector, but beyond.
Jon said it’s all about diversity, bringing different people into your business, finding that there’s so much talent that doesn’t get a voice even within companies now, there’s also people who never get the chance to work for companies. He said the more difference you can bring into your business, not only is it morally responsible, but it will also lead to unexpected, exciting outcomes because they’re not coming from the same old voices, the same old groupthink. He added that the world is desperately wanting a little bit of difference when we come out of what’s gone before and companies that want to become more individual to stand out, to create the platforms on which life will exist in the future will have to embrace the difference that exists in the world right now. Jon said at the moment, it’s still something people tend to talk about, but it isn’t necessarily being manifest in real behaviours but that’s number one priority to unlocking a lot of what they talked about today.
Expectations from the Next FutureBrand Index Report
Jon said he wouldn’t be surprised to see more of a reflection of the changing priorities in people’s lives and slightly more polarised responses to brands. He said everything’s under the scrutiny and 2020 elevated our fears for our future, elevated off the edge of the planet, our own mental health, financial health, and people are feeling a little bit raw. Jon said they will highly reward companies that seem to be making positive steps, even if they’re fallible, even if they are not getting 100 percent right and they’ll be pretty unforgiving on organisations that still are hiding in the pack.
To download a copy of the 2020 FutureBrand Index or register your interest for the next edition or indeed find out any further information go to www.FutureBrand.com, go to the thought leadership tab at the top.