EDF, Homebase and Heinz, and the marketers behind cultural change
By David Benady, marketingmagazine.co.uk, Wednesday, 10 October 2012 12:00PM
Brand transformation is vital to meet evolving customer tastes, but this change must emanate from inside an organisation, and it's up to marketers to drive the process.
Brands must regularly refresh their appearance and values to keep up to date with a changing world, for those that fail to adapt to the shifting conditions are likely to fail altogether. From BlackBerry to Kodak and Clinton Cards to Blockbuster video, many have discovered how quickly success can turn to disaster.
In all these cases, the businesses failed to respond to the changing behaviour of its customers. People decided the iPhone was cool, preferred digital to film cameras, began printing custom cards from the web, and stopped visiting a store to rent movies.
These corporate crashes were down to a failure of marketing. The marketer's role is to be the voice and conscience of the consumer, within the business. When brands lose contact with the shifting demands of their consumers, they are on the road to ruin.
Marketers must be at the forefront of driving change, by picking up on consumer trends early and making sure the whole business changes accordingly. However, to achieve this, marketers must get other people in the business to listen, and then place themselves at the heart of any change of culture.
Power of marketing
In many FMCG, retail or fashion businesses, marketers often have considerable power to command attention. In organisations where the discipline has a more minor role, however, marketers might struggle to get the message across. That said, with marketing literacy becoming more prevalent in business and society, there is a broad understanding of the idea that a time comes in the life of every company when refreshing its brand position and changing its corporate culture is essential for survival.
DIY chain Homebase has spent the past two years undergoing a business makeover as it confronts intensifying high-street rivalry, the threat from online sales and a depressed housing market. According to its head of marketing, Becky Brock (right), the chain's marketing department has been at the heart of driving this process.
She says that Homebase realised it was losing touch with its customers and urgently needed to reconnect. 'It's been quite a big shift for us, trying to focus on what will allow us to win in the future. We had been trying to be all things to all people. The business had become distanced from what it stands for,' she adds.
The marketing department carried out research to better understand typical customers and how they viewed the chain. The results were distilled into a hypothetical typical customer called 'Helen', a 34-year-old mother.
'We found that Homebase was a destination store for "Helen", with ranges and a store environment that weren't overwhelming for her, like other chains,' says Brock.
'It was a place (where) she felt she didn't need to know a wrench from a screwdriver.'
She claims that creating a model of the typical consumer has helped give store staff confidence in talking to customers and finding out what they want.
Underpinning the initiative was activity by the marketing department, which winkled insights from research, educated staff about the brand's values and brought the strategy to life through ad campaigns.
However, Brock insists that cultural shifts must touch all parts of the business, from TV advertising to the way employees are recruited. A fresh set of values should, ideally, extend from the management board to shop-floor staff.
'We act as the conscience of the customer in the business, but marketing cannot do it alone. We've had support from the commercial department, from retail and from human resources. Everything has to change: how you measure colleagues' performance, how you recruit,' she insists.
Homebase's senior managers keep up to date with the changing culture by spending time in customer-facing roles; members of the management board recently worked in the chain's call centre.
Brock, for her part, spent time on the customer service desk in Homebase's store on Finchley Road in London, which she admits was a 'terrifying' experience. 'But you are under no illusions about what customers think of you, which gives you the energy to do something about it,' she adds.
Brock, who previously worked at Unilever and Edrington Drinks, says she had never experienced change management on quite this scale. In FMCG companies, there is always a distance between marketers and the way in which customers experience the brands in the retail environment.
She says: 'You can get distanced from the customer, and it can be easy to lose sight of them. Part of cultural change is to focus with crystal clarity and make decisions about what is best for customers.'
As the importance of the discipline becomes more widely recognised, FMCG marketers have been hired to advise many different types of company. Former Heinz brand director Scott Garrett is chief executive of consultancy The Storytellers, which works on cultural change with clients, many of which do not have marketers at the forefront of their organisations.
These include financial-services brands, government organisations or pharmaceutical companies. Garrett says cultural-change projects are driven by chief executives at about one third of his clients, with most of the others in the hands of corporate communications or human resources departments.
In contrast, he was responsible for driving a major cultural change programme at Heinz, as it sought to distance itself from the 'junk food' tag associated with many food brands in the middle of the last decade.
At the time, the food industry was under persistent assault from pressure groups, the mid-market press and the UK government over obesity and healthy eating.
Heinz marketers felt that this had been taken up by consumers, and that, in response, the brand had to shift toward a healthy promise, with a strategy called 'good food every day'. This entailed testing 6600 recipes to ensure they lived up to that promise. Any recipe that didn't was ditched, resulting in the demise of variants such as purple tomato ketchup, which was full of additives, while the brand began using real chicken for its chicken soup.
However, this transformation was hard for many of Heinz's UK staff to accept.
Garrett says he had some difficult conversations with food scientists and product developers about which variants to axe. This was tough for many staff, some of whom had spent their working lives coming up with concepts such as green tomato ketchup.
'Scientists are so focused on doing a great job, but the context is sometimes lost,' says Garrett. 'They are brilliant professionals, but they are not marketing people.'
Transforming the mindset of Heinz staff was a big undertaking, with senior management visiting its 16 UK factories about four times a year to explain why it was important to reduce the salt and sugar content of products. 'It is necessary to generate internal belief before you think about creating belief externally,' adds Garrett.
In many companies, the business objectives and values are long established, either historically, or by leaving marketers the job of putting them into practice.
EDF Energy has tried to establish a leadership position in terms of sustainability. Its marketing and communications department has had the job of reinforcing that commitment in the minds of staff and customers. Martin Stead, the brand's consumer marketing director (right), argues that in a service industry, the successful positioning of a brand relies on staff to build on the company's undertaking to consumers; otherwise, there is a risk that it will turn out to have been an empty promise.
He adds: 'While our brand positioning and marketing reflects our company strategy, it also acts as a reminder to our people of who we are and what we stand for as a company. So it's a two-way street.'
EDF's 'Feel better energy' ad campaign, which uses Zingy, a dancing 'blob' character, was first launched within the company, through an executive-led road show that visited 5000 UK staff. They were briefed on the fresh brand strategy, including EDF's 'Customer commitments' and Blue+Price Promise energy tariff.
'We have also employed several tools to help our people walk the talk,' says Stead. These include a 'Trust test' that managers are expected to use in decision-making. 'For every action or initiative we bring to market, we ask ourselves a simple question - is this right for the customer?' adds Stead.
This is a classic marketing approach: testing every product and activity against an overall strategy, before ruthlessly applying it. However, the debate over who should drive cultural change continues, with different units in each business vying for control.
For former Capital One marketing director Justin Basini, now a consultant, marketing is the function that is best-suited to drive such a shift. Since the discipline is about understanding consumers and what they need, the skills of marketing teams should be focused on understanding the organisation as an eco-system of people.
'This should be at the heart of every great organisation and brand,' says Basini. 'Then the question should be asked: "Now, with our intent, what consumer needs can we meet?" This approach creates brands and businesses that are fundamentally more honest and open about what they are there to do. They can be clearer, they can feel better about what they do, including making money.'
He adds: 'This marketing leadership needs to excite and inspire all parts of the organisation and work with different functions to drive change and progress across the business.'
Identifying what needs to be done differently to adapt to changing environments and then putting the fresh methods into practice is not always as easy as it sounds, however. Transforming a business requires more than a fancy new product, change of chief executive or injection of investment.
The culture of a business is that set of attitudes, behaviours and practices that builds over time to shape the way things get done in an organisation. This definition from Mhairi McEwan, co-founder of consultancy Brand Learning, has an important condition that the culture is based on creating better value for customers. Change is needed when this last condition is not being met.
'The culture comes from a combination of history and functions that have driven growth - an organisation might be a finance, sales or research and development-focused culture,' she argues.
The biggest challenge for any organisation is shifting to a consumer-focused culture, where all the other historically powerful functions are harnessed to the essential task of responding to the desires of consumers.
As the theory and practice of marketing becomes more widely understood, executives from all disciplines are more used to the idea that responding to customer needs is their main task. While it often takes an experienced marketer to drive this understanding, it can also come from the corporate communications or human resources departments, or the chief executive's office.
Successful brand-owners make big claims about their employee cultures, attributing much of their success to the inspiration and motivation of staff.
Google contends that people are more productive when they work on projects that excite them. According to a spokesman, engineers at the company are given a lot of flexibility in choosing which projects they join. They are also encouraged - though not required - to pursue any other Google-related interest for up to 20% of their normal working hours. 'We have found that the 20% programme is a critical driver in Google's development of innovative ideas and products,' he says. The programme has led to the creation of products such as Google News, Gmail, Google Talk and Orkut, as well as Ocean in Google Maps and various Gmail Labs projects.
The partnership approach, where the business is owned by the staff, is much-envied today, as it helps ensure strong customer service. John Lewis has modelled itself on this since 1929.
Nike claims to carry out a regular workforce survey to find out how its 29,000 staff feel about working for the company. Its report for 2008 said that staff feel connected to the strategy and vision of Nike and see a clear link between their work and the company objectives. However, it also found that they would like to be more involved and empowered in the company and want more career development, support and preparation. Some 78% said they were satisfied that the company was socially responsible.
This article was first published on marketingmagazine.co.uk
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