Digitally enabled business transformation may be pervading our discussions at the moment, but in reality, this conversation theme is at least as old as the Internet, and more likely older. It was therefore with interest that I read a recent HBR article by Scott Anthony and Evan I. Schwartz which noted how often significant transformations fail. They then followed on by listing the transformations that their research identified as most successful and why. On top of the list were Amazon and Netflix; but also on the list well-known brands like Apple, Microsoft and Adobe. In reading the profiles of the companies on the list, virtually all of them had achieved their successful transformation through digitally enabled interventions. For Amazon it was the addition of their cloud services which helped grow their profitability. Netflix was able to take advantage of burgeoning and cost effective bandwidth, to introduce their popular streaming service. And of course Apple’s addition of the iPhone, iPad etc. revived their fortunes from a struggling computer manufacturer into the world’s most profitable company today.
Just making the list is ThyssenKrupp, the German Steelmaker who have transformed from a failing industry sector, under pressure from low cost steelmaking countries. ThyssenKrupp have added industrial solutions and digital services, creating systems such as internet-connected elevators and 3-D printing services. This story resonated with me as I spent much of my early career working in the Steel sector with BHP, much of that time in research and development. Then just this week I see this news article that declares BHP Billiton is now undertaking a ‘back to the future’ re-branding, dropping the name of its merger partner Billiton from 2001, in an effort to regain the ‘household name’ status they enjoyed when I first joined the company in the 1970s. On one hand, we see one company ThyssenKrupp successfully re-inventing itself away from the legacy of its past, and another looking to recapture something that they had lost as a result of a prior transformation. This brings into question as to what part branding actually plays in major business transformations?
When I joined BHP in the 1970s the logo was a steel ladle, flagging the company as centrally a steel company. By the 1980s the logo was changed to reflect the full diversity of the company, and to reinforce its Australian home. By 2001 a major transformation saw a merger to form the world’s largest resources company BHP Billiton and of course a brand new logo.
It also signalled the start of a major divestment program, where the previously central Steel businesses were spun out and the significant Services businesses sold off (along with yours truly). The early boost in the share price at the time flagged the new merger as a successful transformation. However, over time the star has become somewhat tarnished. A number of poor investment decisions, public affairs disasters and a pedestrian share price has now resulted in this ‘back to the future’ rebranding exercise.
Now as a long term shareholder, more so than as an employee, it’s hard not to get cynical about re-branding exercises. At best they may flag a significant change in executive intent, or at worst, a shallow public relations exercise.
So now back to the HBR article; which concluded that the leaders of the organizations that have been able to successfully transform were ‘inside outsiders’, who undertook dual transformations. They were able to generate new revenues from brand new product lines e.g. iPhone, iPad, but not at the expense of their core product lines, which also received a makeover e.g. iMac computers. When I look down the list of successfully transforming companies, no ‘rebranding logo transformations’ come to mind. It’s not the branding changes of Amazon, Netflix, Microsoft, Apple for me. Their branding is much deeper than that. These companies did not need a change of branding to underpin their transformation success. And even if they did change their logos, it certainly did not influence my admiration for their success.
I like the new BHP logo however. As a shareholder I look forward to many successful transformations in the future. And with this plain logo, it is unlikely to need another change; no matter what the nature of a future transformation might be.