05 Jan Strategic Communications 2019+ Prognosis Report
Our attention span continues to decrease so let’s cut to the chase: I think this will be the first year where we start to formally delegate a degree of decision making to algorithms beyond allowing Google Maps to guide us in cities. Digitalization continues to accelerate, everything continues going mobile and what is Google & Facebook Ads today will be AI automated and programmatic shortly. Granted, this has immediate implications on how you plan tactically in 2019 – but what should we be reflecting on in order to successfully navigate the future beyond the year that has just started? Here are five key themes I believe are worth your time.
AI & Transparency Go Mainstream
Artificial intelligence (AI) made big strides in 2018, mostly adding efficiency to existing processes. Big communications-conglomerates such WPP are feeling the pain already, shedding 3,500 jobs recently in ‘traditional advertising’ because search and AI driven automation is eating into what people used to be paid for. This human-work-back-scaling accelerates as AI driven automation continues to become nimbler, easier and more accessible. It is early days, however, and whilst the vast majority of sectors are yet to benefit from AI, society at large is not in a good position to deal with this developing momentum. Leading thinkers including Professor Yuval Noah Harari, Elon Musk and Professor Scott Galloway are ringing the alarm bells.
We are already moving beyond making processes better, faster and cheaper with the help of AI. Intelligent applications mapping people who could potentially share a ride (think Uber and autonomous driving) and last-mile-to-consumer access via Alexa and Google Home mark only the visible consumer tip of the iceberg. What makes AI truly powerful is its ability of self-learning. The potential of AI is exponential – both positive and negative. It is important to bear in mind that what provides the fuel for AI is data. And if we are increasingly to trust data, then the latter needs to become more transparent. IBM already unveiled technology developed to improve the traceability of decisions into its AI OpenScale technology, allowing real-time insights into not only what decisions are being made, but how they are being made, drawing connections between data that is used, decision weighting and potential for bias in information. Decentralized ledger technology (Blockchain) is another building block of making data transparent and traceable. If you don’t know how Blockchain-technology works, 2019 is a good year to read up on it, take a class or educate yourself online.
It is in the nature of evolution that change comes with disruption. We’ll continue seeing people and businesses taking (mostly commercial and political) advantage of the possibilities the age of data offers. We will see more of the ‘bad guys’ (SCL, Cambridge Analytica and to some extent in 2018 also Facebook) either learning painful lessons or going down altogether, but on the whole, the benefits of AI and radically transparent value chains will continue to outweigh the risks and potential threats.
Polarization Drives (Brand) Value
Digital distractions like smartphones, social apps, and clickbait articles are diverting our attention and eating up our precious time. A sure way to grab anyone’s attention is to be extreme. There’s nothing new in this and it is a time-tested recipe to make your brain stop, tune out the ‘noise’ and focus on the message that is being delivered. Almost all news-outlets work like that. Donald Trump’s Twitter Account works like that.
In 2019 there will be more polarization between the temporary and the durable, between real influencers, native (paid for) content, quick business wins and quality products. Think of it as either buying a Hublot “Million Dollar Black Caviar Bang” (well, doesn’t’ the name already say it all?) or opting for a “Skull Trooper Skin” in Fortnite (an instant, in-game purchase). Both create incredible monetary value. If you really want to make money, then the latter is the one to go for: Epic Games (the creator of Fortnite) is expected to post profits of over USD 3 billion for 2018, mostly thanks to its blockbuster Fortnite.
The polarization between discerning consumers and the ‘anything goes’ segments will become clearer. Polarization is not negative, it is about clarity – but it’s a delicate walk. Brands and people that manage to take clear positions will win. They polarize and mobilize at the same time. Brands at the lower end who depend on transactional rationality, volume and scale will lose to AI. Unless you build emotion into it (check out what an ‘Emote’ is in Fortnite if you are in doubt what is meant here), there is decreasing upside in mass approaches. The more noisy and competitive markets become, the deeper is the need for differentiation.
Positioning, clear brand identity and authentic distinction will be the critical formulas to master. Brands that set a path to a humanized future will be perceived as honest, transparent and creating societal value.
Purpose Makes an Impact
Profit for a company is like oxygen for a person. If you don’t have enough of it, you’re out of the game. But if you think your life is about breathing, you’re really missing something.”
Peter Ferdinand Drucker
Businesses are good at describing what and how they do what they do. This is rooted deeply in our economic reality of ‘making things’ better more efficiently. Unfortunately, very few businesses are good at explaining why they do what they do. Yet this is critical – especially in times of decreasing relevancy at both individual and organizational levels. Disruptive forces are challenging organizations to reassess how value is created and how people (especially younger generations) fit into an evolved worldview.
Adding meaning (Purpose) to what we do is a new paradigm. It offers a collective way allowing us to close the growing gap between a competitive edge and meaningful work. Here’s a short and factual re-cap on why Purpose matters:
Purpose & Employee Retention
- Staff is 3 times more likely to stay at Purpose driven companies
- Staff is 1.4 times more engaged and 1.7 times more satisfied at Purpose driven companies
Purpose & Customer Trust
- 89% believe Purpose driven companies will deliver better quality services
- 72% would recommend a company with a Purpose
Purpose & Growth
- Purpose led companies outperform the stock market by 20% annually
- Purpose is seen as a strong driver of Innovation
Business models properly centered on purpose build beneficial relationships with external stakeholders and drive culture from within. Successful and future-oriented businesses are increasingly seeing Purpose transformation as a powerful differentiator grounded in humanity, building trust, increasing loyalty and inspiring action.
Reputation Overtakes Brand
Brands are increasingly built by those who understand the delicate difference between active brand (projection) and reputation- (perception) management. In other words, it is not what you say, but what you do (and why) that creates your reputational value. Gone are the times where media buy would automatically buy you credibility. It still buys you awareness, but unless this is met (or better, exceeded) with delivery on expectations, it is no good anymore. The combination of technology, speed and the aggregation of opinions will be of increasing value and matter more than what brands say about themselves. Multi-stakeholder thinking, referral and retention rates, social proof, and Net Promoter Scores will make an even bigger impact in the years ahead.
In 2019 brands will need to capitalize on reputation in a more substantial way. Last year the banking industry’s reputation fell for the first time in five years. This is partly the reason why I have jointly with Jean-Francois Hirschel of H-Ideas created the RIBI (Responsible Investment Brand Index), comparing all major European Asset Managers on the dimensions of good intent (commitment to responsible investment) and the respective translation into brand architecture. Out of 239 Asset Managers we analysed, only 37 managed to demonstrate high scores in both dimensions. And whilst nearly 80% of Asset Managers claim to be responsible investors, less than 2% of these companies have a Purpose connecting with societal impact.
Reputation also propels a new profession: key influencers as well as micro-influencers will increasingly be seen as trusted advisors. Micro-influencers are driving buying behaviour at higher rates than previously thought in terms of volume and impact of their recommendations on consumers.5 It makes for a common thread: small or large, business or personal, the implication is that pure self-promotion will be progressively outperformed by those who are building a (personal) brand with a strong reputation rooted in integrity from within.
CEOs Become Better at Speaking in Public
People trust business leaders with a visionary story and a long-term vision. Vision, stories and narratives have the power to move organizations – but only if these are told consistently and compellingly. In a world of increasing clutter, clarity is key. Leaders who are working actively on conveying their brand-stories build a stronger reputation. Being seen as transparent and credible requires active communication, not just an appearance in times of crisis.
Well-spoken leaders can motivate an entire workforce and unleash a wealth of new possibilities. However, the boundaries between organizations, the marketplace and society are more fluid than ever before. Taking stronger public positions is of utmost importance. Hence, we will see more business leaders participate in interviews, taking time to create thought-leadership pieces, publishing articles and speaking in public.
Speaking in public, whether literally or in writing, is vital for anyone wishing to make waves, disrupt industries, rouse teams, and convince others.
You don’t have to be a Shakespearean actor, but sufficient preparation and following a few key guiding principles can help propel your presence, delivery and ability to captivate people’s attention:
- Start with a story and make it personal
- Examples help your audience contextualize what you say
- Use body language consciously, record yourself and do a few ‘dry runs’
- Speak from the heart, because passion goes hand in hand with authenticity
- Be confident, welcoming and most importantly: be yourself
Further Curated Input for the Curious Mind
AI & Blockchain
- The New Technology of Trust – An interactive page from Goldman Sachs https://www.goldmansachs.com/insights/pages/blockchain/
- A short course on Data, Transparency and Blockchain from Oxford https://www.getsmarter.com/courses/uk/oxford-blockchain-strategy-programme
Stimulating & Inspiring Reading
- 21 Lessons for the 21st Century – by Yuval Noah Harari
- The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google – by Scott Galloway
- Positioning: The Battle for Your Mind – by Al Ries & Jack Trout
- Questions are the Answer by – Hal Gregersen
- The Guiding Purpose Strategy – by Markus Kramer
Podcasts and Videos
- Building A Story Brand – on Audible by Donald Miller
- AI and drones, need for debate, https://www.youtube.com/watch?v=TlO2gcs1YvM
References  Source: https://investorplace.com/2018/12/wpp-layoffs/  Source: https://www.forbes.com/sites/janakirammsv/2018/10/21/ibm-wants-to-make-artificial-intelligence-fair-and-transparent-with-ai-openscale/#5ec2a8401251  https://www.pcgamesn.com/fortnite/fortnite-revenue-2018  Sources: The Energy Project, What Is Your Quality of Life at Work, The Goodpurpose Study (Edelman), Firms of Endearment, Meaningful Brands Index (Havas), Harvard Business Review & EY Beacon Institute, Happiness Research Institute, TNS Gallup  Source: https://www.americanbanker.com/news/bank-reputation-survey  Source: https://www.ri-brandindex.org/  https://www.edelman.com/sites/g/files/aatuss191/files/2018-10/2018_Edelman_Trust_Barometer_Global_Report_FEB.pdf