Diageo’s Syl Saller: To drive growth, brands must embrace change but respect marketing fundamentals

Growth for big companies is hard won, with challenges from new disruptive competitors and from doing business in new markets, but to succeed they must adapt to new realities while also remaining true to their brand principles.

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We are in the midst of an enormously exciting shift in in the history of brands, marketing and business.

One of the many examples is in mobile. Mobile is the biggest technology shift the world has witnessed since the industrial revolution. The ubiquity of mobile means most people are online all the time and this is fundamentally changing the way people discover, shop and experience brands. This great change brings great opportunity.

Technology levels the playing field – entrepreneurial innovators are raiding and upending established industries – think Uber, Airbnb and Netflix. All this is starting to play out in the consumer products sector – as a former Gillette marketer I have watched with much fascination the rise of Dollar Shave Club and Harry’s in the United States. In Diageo’s own industry, small craft beer, spirit and wine makers are able to capture the interest and imagination of consumers as easily as big, iconic brands.

Don’t resist change

Growth is a state-of-mind: we’ve learnt not to fear or fight these changes at Diageo. Instead we choose to ‘lean in’ to them. We are getting behind the entrepreneurial renaissance in craft spirits through Distill Ventures – our incubator-accelerator for companies we believe will shape the future of our industry. Diageo Tech Ventures engages tech entrepreneurs and start-ups in solving our big business challenges and unlocking new opportunities for growth.

Both Distill Ventures and Diageo Tech Ventures are driven from our Futures Team – a group tasked with identifying and creating disruptive growth for Diageo. A strong external orientation underpinned by partnership-driven learning-by-doing defines our approach – not just in the Futures Team but across all brand marketing and innovation.

One way to operate better in a fast-changing world is to partner with people living in that world. Just engaging more with other industries can spark new thinking.

With brands and business challenged by constant change, marketing is a continuous exercise in ‘growth-hacking’ – exploring innovative alternatives to the traditional ways of increasing sales and profits. Growth is the fuel of that helps a business flourish and thrive. Without growth, investment dries up, and opportunities for people diminish.

As brands face ever more challenges from economic and technological shifts, marketers have to constantly hack growth. For instance, the same changes in digital media that fragment attention spans have equally enabled us to be more data-driven, opportunistic and agile in addressing consumer needs and desires.

The emergence of digital platforms such as Facebook, YouTube and Google have allowed Diageo brands such as Smirnoff and Johnnie Walker to show up with global scale and stature – a single online video has the power to resonate with tens of millions of consumers across multiple countries and cultures. The entrepreneurs and startups that challenge the establishment are also open to collaboration and partnership. What’s not to like about this change?

Use marketing fundamentals in developing markets

In an increasingly connected world, change – whether it’s technological, economic or geo-political – in any one country or region tends to have a ripple effect everywhere. Running a business in emerging markets requires a strong stomach for volatility, uncertainty, change and ambiguity – or VUCA in the parlance of Diageo’s leadership.

Taken together, these challenges have significant implications for all companies in terms of the way they operate and drive growth. The old growth paradigms are falling away. How do you steer a course when the whole world is shifting around and nobody agrees on what’s right?

Paradoxically, in order to cope with the changes and challenges of this new world, the old fundamentals of marketing are more important than ever.

In this world of constant change the True North for any brand-owing company ought to be the consumer. An obsession with consumers better equips companies for change. Consumer insight must inform how, when and where a brand embraces new ideas in the pursuit of growth.

One of today’s big challenges from consumers is they expect their brands to hold meaning and stand for a higher purpose. Purpose-driven brands are empirically proven to create higher shareholder return. At Diageo, we’ve long recognised the value of purpose  – the purpose of Johnnie Walker is to ‘celebrate personal progress’, the purpose Smirnoff is to ‘bring inclusivity to a divided world’ and Diageo’s purpose as a company is to ‘celebrate life everyday, everywhere’. People celebrate with our spirits because of their quality but they identify and resonate with the purpose of our brands.

But you also have to deliver purpose-driven brands at the right price point, which implies having the right supply chain. That can be a problem in developing economies, and as a multinational, dealing with this in a profitable way can be a real headache.

Then there are implications for leaders and managers. In today’s less structured world, they need to be more customer-focused, more holistic in approach and better able to work across internal corporate silos. From my own experience, if marketers are not comfortable working across the supply, finance, research and development, and increasingly, IT silos, then they’re probably going to struggle.

The nature of work in big companies is changing

Thriving in this new world places emphasis on mind-set over skill-set. Today’s skills and expertise may not be relevant tomorrow – learning, open-mindedness, inclusivity, collaboration, creativity and entrepreneurialism will define the leaders of tomorrow. Our leadership team does not include any digital natives – but we are rapidly climbing the learning curve on digital by hiring and empowering digital millennials.

Leaders must also understand the importance of growth in the short, medium and long term, and must be able to balance all three ‘time horizons’ at once. At Diageo, for instance, our marketing, innovation and Futures teams divide and conquer the growth agenda across the three.

Beyond Diageo, I am awed by companies such as Uber and Airbnb that have transformed old sectors by applying new business models. The genius of these ‘sharing economy’ companies is they eliminate friction for consumers, they deploy idle assets and they create new value for all involved.

Netflix and Amazon Prime are proving ‘subscription is the new loyalty’. Apple is living proof that mass-market and cool are not mutually exclusive – it’s inspiring to note how each new product from Apple surpasses everything that came before. How digital publishers such as Buzzfeed, Vice and Thrillist bring art and science to creating content for millennials sets a high-water mark for anyone in the business of consumer engagement.

As an advisor to the Growth Drivers study led by Brand Learning, specialists in lifting capabilities to drive customer-centred growth, I’ve been fascinated to see how growth-driving companies and leaders are rapidly changing their capabilities to access the tremendous opportunities ahead of us.  The Growth Drivers study is essential reading for anyone wanting to create a ‘growth-ready’ organisation.

Syl Saller will appear at the Festival of Marketing with Virgin Media CMO Kerris Bright and Marketing Week columnist Mark Ritson on Wednesday 11 November, debating the findings of the Brand Learning Growth Drivers study.

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