Yes, the world is changing. Macroeconomic and geopolitical conditions are in flux, industries are being disrupted, and millennials and, yes, centennials are demanding new things.
But is this really new? James Belasco’s 1991 bestselling book, Teaching the Elephant to Dance, implored leaders to empower change. Belasco opens, “We are in trouble. Business as usual is out.”
More than 25 years later, does this sound familiar? So how do brands and especially established ones continue to embrace change that drives brand value? A startup is created to take risks; its investors embrace and encourage it. For a large brand, though, where even a small quarterly miss may rattle investors, it’s tempting for leaders to hunker down and rely on tried-and-true recipes for success. But to what end in the long term? We know risks— smart ones—can drive brand value, and there is much to learn from some of the world’s most valuable brands. Despite small, nimble competitors and disruptive forces, there are large, strong brands that continue to lead the way. A common characteristic among these large, growing brands is a willingness to experiment and take risks. It seems the biggest threat may be the slow, steady decline caused by taking no risks at all.
Microsoft has overcome missteps during the early days of the Internet and smartphones and re-emerged as an open, more collaborative company. Disney’s focus on its customers and willingness to try new things in their parks resulted in innovations like MagicBand, which allowed the brand to boost customer satisfaction and operating income. Starbucks’ commitment to living its purpose is clear through its leaders’ passion and willingness to close locations and eliminate efficiency-minded processes contrary to the desired experience. CVS saw millennials thinking differently about health and an aging population focused on healthcare, and placed a purposeful bet by eliminating tobacco products from its stores. This was a significant risk in support of its purpose. GE explicitly trains and hires for curiosity so that its employees challenge the status quo and evolve. Verizon’s CMO seeks out sessions where experts outside of his industry challenge him to think about the business differently and try new things.
If large, global companies like these can take risks, other large brands can too, using strategies that foster a culture of smart risk-taking and experimentation. Among them, they can:
1 INVITE CHALLENGES
Risk-taking starts at the top. Leaders must have ideas challenged by both external and internal parties to avoid tunnel vision and blind spots. Don’t surround yourself with “yes” people, but instead create an environment where everyone is encouraged to think differently. When meeting with your team, don’t say, “Everything’s OK, right?” Ask, “Where should we improve?”
2 REVERSE MENTOR
Pioneered by GE, reverse mentoring is a practice in which junior employees mentor senior executives. In a win-win situation, senior executives keep a pulse on emerging trends (“Show me how Snapchat works—wait, you’ve never owned a TV?”), while junior employees gain exposure to senior leadership.
3 HIRE AND TRAIN FOR CURIOSITY
Curiosity is both innate and learned. Screen potential hires for latent curiosity that can then be further developed with training and coaching.
4 BUDGET FOR EXPERIMENTATION
Put your money—and time—where your mouth is. A workforce of curious employees, eager to take risks, will be frustrated without the resources they need to test ideas. Budgeting money and time for experimentation enables employees to act on their ideas rather than default to tried-and-true tactics to hit quarterly targets.
5 FAIL FAST
Silicon Valley lives by this mantra, but few within a large organization are likely to scrap a multi-million-dollar, year-in-the- making project or campaign. Large corporations need to create space, both physical and mental, where the objective is to experiment quickly with clear rules. The recipe for success is no longer plan, plan, plan, launch big, and (hopefully) win. It now needs to be try, fail, try, fail, try, succeed, scale, and win.
6 REWARD RISK-TAKING
Often, only success is rewarded, while the act of taking a risk, even when it was true to purpose, is not. Rewarding risk encourages experimentation and fosters a culture of risk-taking that results in breakthrough ideas. Rewarding only success, paradoxically, creates an organization where employees play it safe and can only achieve incremental success from proven tactics.
7 FACILITATE EXTERNAL EXPERIMENTATION
Nobody has a monopoly on good ideas. Startups and large organizations can work together to commercialize innovative ideas. Large, established companies can provide startups with a client base and resources, while the startup can bring innovative ideas and inject fresh thinking. Above all, startups don’t have a monopoly on risk taking or innovation— and the given the right environment, even elephants can dance.
Written by Kevin Singer at Kantar Consulting