Digital Transformation and Brand Strategy: the Chicken or the Egg?

Olivier Laquinte is President and Founder of Talsom, a management consulting firm that offers services in business transformation and optimization, project leadership, and organizational efficiency. Since 2010, our team of 80+ experts has supported clients through more than 400 technological projects in industries ranging from agri-food and transport to retail and manufacturing.

Simon Éthier is VP Consulting at Adviso, which helps companies solve the most complex issues by providing unmatched services and solutions in strategy and digital marketing.

Simon’s group has been helping businesses succeed online since 2007, through a focus on e-commerce, business model generation and optimization, and digital strategy that goes beyond e-marketing.

Benoit Giguère, VP Creative and Content at BrandBourg. Previously, he was at the heart of the transformations at La Presse newspaper and was a key player in the great success of La Presse+, a unique digital media platform that has garnered numerous awards around the world.

BB: What is the relationship between brand strategy and the digital transformation of a business? Is digital transformation a must in a context like that of COVID-19?

Olivier
I think there must definitely be thought put into the brand, and there must be as much thought put into the experience that we want to give employees as there is into the customer experience. The current discourse around digital transformation or the need for companies to undertake a digital transformation in the context of COVID-19 is very simplistic. The real question people need to ask themselves is, “Should I transform my business model? Who are my clients? What are their needs?” Before anything, companies need to do some in-depth soul-searching.

Simon
I share your opinion, Olivier; the choice of the term ‘soul-searching’ is very apt. When we mention the “brand,” it is perceived by some in a somewhat simplistic way. For them, it comes down to a logo or a name, while a brand is a mission, the reason your business exists, what defines what you do and what you shouldn’t do. Anything is possible with technology, so it forces us to step back and take stock of what is really important for the brand and what is at the heart of its mission. Technology can help to better accomplish the mission, to better serve customers, to better solve certain problems in a specific market or even for society. Sometimes organizations realize that they have adopted ways of doing things that are not consistent with their brand. Sometimes digital transformation gives us the opportunity to question brand strategy. Digital transformation forces us to rethink the brand and allows us to reconsider it as well as its mission. It begs the question, “What should the organization allow itself to do?”. It forces companies to start thinking about why they exist. This can sometimes be a painful exercise, but at other times it can do some good.

BB: Is it a mandatory transition in the long term? What should be the decisional factors leading to a digital transformation?

Olivier
The real strength of a company lies in its employees and its ecosystem. A company that wants to use digital must remain vigilant of where its strengths truly lie. The notion of vigilance is extremely important to keep in mind when talking about digital transformation. In relation to digital transformation, brand and strategy have represented “the chicken or the egg” for the past few years. Does technology impact the strategy and the brand, or is it the brand that impacts the use you are going to make of the technology? Companies sometimes have a hard time understanding and accepting that this reflection must happen iteratively. It is no longer a linear process as before, when you had your mission, your vision, your goals and then bang, it was settled! It must be done iteratively. This iterative way of working, companies have a hard time accepting it.

Simon
You are absolutely right. I think that for a long time people were thinking that technology must follow the strategy or that it must be in the image of the company. But we live in an ecosystem. Technology comes to us from different sources, it’s coming to you from Google, from your partners, your suppliers and your logistics suppliers. The idea that you can think of a technological solution and then the technology will follow, well, we are no longer there.

BB: I often hear that Quebec is lagging a bit in terms of digital transformation. Is it a positive or rather a negative impact of the COVID-19 situation that companies seemed forced to deal with it?

Simon
Quebec is a small economy with many SMEs. Often, our flagships are companies with revenues in the single-digit billions and not in the tens of billions. Once you outline business units, initiatives, you can see you’re working with budgets that are not that big. These people are not starting from the same point as Walmart or Home Depot. It causes a certain delay for them. But you have to be careful when talking about digital transformation: in general, people are connected and they all have a credit card. We don’t have that many obstacles in the way. But still, we have factors that are unique to our economy and that can slow down our businesses, even if the market is ready.

Olivier
Yes, but we must also be careful with saying that Quebec is lagging in digital. We are working on opening an office in France and the French tell us that they are behind the rest of the world. So we have to be careful with this notion of lagging. We know that South Korea, in terms of 5G, are the leaders. And are we really so behind in terms of all the commercial aspects of e-commerce? Yes, definitely. This is a real issue and now we see it will be a steep climb for our companies to catch up. I want to order my product from a Quebec supplier, but if I am told that I will receive it in six weeks while another supplier can deliver it to me in a week, I am sorry but I will go with the one that delivers it to me faster. Also, at a government level, there is a poor understanding of technological resources. We are allocating more resources to do 4.0, to invest in equipment, in robots, rather than planning a strong business strategy on the web and seeking to better understanding the different possibilities the web has to offer.

Simon
You’re so right. It frustrates me to see the way things are subsidized. We subsidize Internet lines and bricks and mortar, instead of subsidizing the capture of demand. In the end, when you think of a value chain, from the raw material inputs to the person who ultimately pays at the other end, there is more wealth on the demand side than at the other end. And that’s what Google, Facebook and YouTube understood. Google, they are the ones who control the tap of demand; Amazon, in e-retailing, are the ones who control the tap of their demand. This is where the money is. Encouraging marketing rather than the means of production makes me feel like we are in another century at times.

Olivier
One of the symptoms of this is the fact that we are always talking about digital transformation. Digital transformation? I don’t know a single entrepreneur or business executive who gets up in the morning and says, “I’m going to do a digital transformation.” The core of his concerns is, “Can I achieve a better sales figure?”,“Can I give my employees a better experience, because my turnover rate is too high?”All the efforts made to achieve a digital transformation must be truly tangible. Transformation models like that of La Presse+ are rare. When you embark on the path of digital transformation, one of the first things that needs to change is the corporate culture. It must become much more agile. It will make the company more able to adapt to the opportunities that arise. It will undergo constant adjustment. To say that we want to make a digital transformation always comes back to asking why: What do you want to do?

BB: Nowadays, what would be the decisional criteria for going through with digital transformation? What are the key questions to ask?

Simon
Where should I be in 10 years? Where should I have been 10 years ago? Amazon is already 25 years old; meanwhile, the people who just got their first credit cards are 18. So Amazon was around before them. How do I see my industry undergoing transformations? What kinds of players do I see appearing? It can be seen in all industries. From the mining sector to waste collection, we always end up having a startup somewhere that will revolutionize its market. There are very common patterns. Capturing demand. Having a lighter infrastructure; everyone always comes back to the comparison with the models of Uber and Airbnb. The player who captures the market demand, who is the most accessible, who establishes the rules of the game, there is a design pattern. This reality varies from one company to another. It depends on whether it’s a business that’s fueled by faith or fear. But there is no shortage of good reasons. The question is, “What is the trigger for this company versus another?”

BB: Wouldn’t you say that, in the cases of Amazon, Airbnb and even Uber, there are challenges at the brand level? Are there not issues around the brand promise? Shouldn't this promise be fulfilled and clearly stated?

Olivier
Yes, but that’s where, in terms of the brand, the very established companies may have an advantage over these younger companies, even if the latter are huge. Okay, you founded Uber, we think it’s great, it’s the sharing economy, then suddenly people say that you don’t pay your fair share of taxes. Our governments are lagging behind in this new digital world in which we live. They are very late and very disconnected; they are not able to follow what new companies bring to the market. A company that has been there for 50 years has values that are well established. That gives them an advantage to grow coherently in line with their history. On the other hand, there is a disadvantage to having all this legacy. There are situations where that can be an advantage but you have to be able to strike a balance. I’ll build on what Simon said; “Where could my business be in 5-6 years?” To get there, what should it do now? When you visit a new client, one of the first things you do is set up an ERP. But when you deploy an ERP, you are far from being able to automate business and to optimize planning, to do domain forecasting. But when you start a project like this, you have about a two-year journey ahead before you can even say that you are able to connect your data effectively and do something with it. You start with a project, you’re looking at 3-4 months, then you have to implement it, which will take another 18 months. You can find some quick wins along the way, but for this to be a long-term investment, you need to change the culture within your organization. You need to get people to undo what they took years to figure out. It’s much more difficult than implementing the technology itself.

BB: Do you ever begin a transformation process for a client and then realize that the thinking behind it is insufficient at a brand level, and if so, are you inclined to tell them? To say, “We’re not sure you’ve done your homework”?

Simon
Olivier just said something very important, about the change in corporate culture. There is a culture change to be made. Brands like Amazon, Uber, Airbnb, they have flaws, but essentially they have achieved a significant transformation of the criteria in their respective industries. The challenge with digital is that there are so many possible variables that it gives a lot of room for creativity, to create interesting things, to create a brand and live the brand in a different way. How do you interpret what a brand means? There are so many criteria on which we can take action, and that’s where things can result in a clash.

Olivier
I would like to come back to your question about whether we ask people, “Did you do a good branding exercise?” Instead I would ask them, “Do you know what your clients want?” Often the answer is “no.” Or they tell us, “Yes, they want this and that.” However, if we follow up with “But did you really ask them?”, the answer is “no.” This is what led us to use marketing tools like the customer journey. In IT, it wasn’t very common, but we do it with advertising agencies. When we say we’re going to go all in, we’re going to do the customer journey together, what you want is the voice of the customer. Maybe you thought what was most important was your after-sales service, but that may not be the case. It challenges them, but in the right way.

BB: Does it vary depending on the industry?

Olivier
The thought process has to be the same. We all have a client, whether you’re in B2B or B2C. Often people who are in B2B say “I don’t have a client,” but yes, you do have one. Whoever buys for the business is a person. That’s why it’s important to start from people’s expectations. People’s expectations are what they experience every day. You always have to focus on people. What are the expectations? What need are you trying to fulfill?

Simon
I would even add that the concept of first mover is important. The more advanced an industry, the greater the expectations. In the banking sector, a few years ago, the trend was the possibility of depositing a check through a mobile application. This functionality was what drove competitiveness. Everyone offered it. When you have a more advanced digital business, you have more aggregators that emulate you. Like the travel industry, a few years ago: you couldn’t survive if you weren’t on Trip Advisor. This is one of the challenges: the more you are lagging in your industry, the more you have a technological debt when facing your market. And as a brand, if you only do the same things as the others, you are just another player. Which brings us to the notion of disruptive innovation. For example, La Presse had the guts to go it alone and bring something different to its industry. It’s a gamble that hurt in many ways, but if you don’t put yourself through it, your brand won’t be as strong as the others. In any race, there are winners and losers.

BB: Are you saying that for brands, it is essential to be innovative because it positions them to listen, to keep their momentum going and not be static? Are brands “doomed to innovate”?

Simon
Yes, you are doomed to innovate, but also to renovate. You have to listen to customer expectations. We knew that one day Apple would put out a tablet, but for 10 years Steve Jobs said “We will give you a tablet, but we will not give you just any tablet.” This is where we must be able to resist and be hard on ourselves with respect to what people ask of us. This is where the good brand strategist will be able to say “This, we must deliver because otherwise we won’t survive, and that, we will deliver later and I will formulate it in a completely different way.”

BB: You have early adopters, but you always have those who resist. Brands should also consider this aspect. How do we do this?

Simon
What you’re saying here, Alan Cooper put it like this: “We must design for eternal intermediates.” No one really needs the paperclip in Word, but not everyone is able to write a macro. Everyone knows something about Word. We’re doing it wrong when we do everything for power users, but we also go astray when we think we do it for dummies. So I say to myself, “Who are my good intermediates who will pay off for my brand?”

The criteria for what makes a good brand are blurred by digital. This is the most important takeway. I remember a speech by David Heinemeier Hansson, in which he said “You know what is viral? Shoes. You order them, they’re delivered right away, and you’re happy because you got them right away and the customer service was good.” In digital, you have so much to do in order for your brand to survive that it just becomes more trouble. It becomes a challenge for brands because it forces them to reinvent themselves, but it is also a digital challenge. What is the right algorithm? This is a choice that can ultimately assert your brand or dilute it.

Olivier
I think it’s an interesting point. Digital creates a lot of noise because it’s something that is very abstract in the end. You will make the most of it, but you must stay grounded in what your business is and what you want to offer. What do you want to do and why do you want to do it? Why is this valuable to your customers? At this point, you can identify your true North. But if you only go with digital in mind, you will not be able to find your true North. There are so many things, innovations, breakthroughs, that you’re always going to be trying to make up for your technology deficit, and you’re constantly going to be doing things wrong and to the detriment of what you really want to accomplish. You have to build on a corporate culture that will bring your people together within your organization. That is the very essence of a brand.