Back in 1964, Bob Dylan released his third studio album, and the sentiment still holds true today--the times, they are a-changin'. Yet, while people's habits and behaviors continue to evolve alongside technology's rapid advancement, the digital world may be growing too fast for many businesses to keep up. Know as Digital Darwinism, this phenomenon highlights the conflict between brands and their environment, and the difficulties that arise for companies trying to maintain the same pace as their consumer base. As Hartmut Heinrich, partner at Vivaldi Partners Group, notes, such scenarios allow for massive shifts in today's markets, as companies that didn't even exist five or 10 years ago are gaining market leads, while huge brands crumble under the pressure of the digital revolution.We spoke with Heinrich to explore what Digital Darwinism means for companies of all sizes and how the technological revolution will impact the future of business. Here's what he had to say:
1to1 Media: How are our digital and social worlds revolutionizing how businesses operate and survive?
Hartmut Heinrich: The digital revolution has fundamentally changed the way consumers relate to and connect with brands. Nurtured by the ubiquitous digital infrastructure, new brands and business models are quickly entering the market, ready to displace previously successful and established companies. Only those incumbents who are fast enough to adapt to the new digital world will survive.
The selection process of Digital Darwinism will radically split businesses into incumbents and challengers, winners and losers. "Digital Darwinism" is unavoidable and will radically change the way we do marketing, innovation, branding, and business strategy today. It will also affect the organizational setup. Organizational silos will have to be replaced with seamless collaboration and cross-functional data management.
1to1: What are some essential steps companies must take in order to succeed in digital and capitalize on this incoming data?
HH: It really comes down to finding ways to engage with your consumers, to understand the challenges in their daily lives, and the context of their demands, and then turning those insights into relevant and valuable offerings--all in real-time, of course. The good news is, the digital world provides huge opportunities to do so, especially through social media platforms. One essential task for companies is to build a culture that pushes constant innovation of the business model and dares to engage in trial-and-error experimentation.
1to1: What elements must companies integrate into their DNA if they are to succeed in this digital and social landscape?
HH: To innovate at a pace that allows your company to survive, you've got to embrace an outside-in perspective at every level, in every function. Advances in technology will lead nowhere if they are not directed at the demands of the consumer. At the same time, it's especially important for the marketing organization of your company to explore the possibilities of new technologies. In this regard, you have to foster a culture of curiosity, experimentation, and interdisciplinary thinking.
Above all, you have to be willing to engage directly with consumers and be prepared for an open dialog in real time. There is no space left for a dismissive attitude towards consumers. The times of shoving one-way messages down the throat of consumers are over! Brands have to participate in the public discourse on social media platforms and offer real value through truly relevant products and services.
1to1: What are the primary obstacles that send companies off track? How can they recover?
HH: One of the biggest problems for companies is to market their products and services from an ad age thinking. The logic of building an image, bringing that to the minds of the target customers by advertising does not work anymore. Companies need to understand the context of how people live their lives and understand where their products and services can create value in relevant moments, touchpoints, and episodes.
Another obstacle can be the inability of industry veterans to change the way business is done. This often requires the mindset of digital natives. These (often young) talents need to be given the opportunity and the freedom to venture into new directions. In large companies, this can be managed in the form of start-ups within the company.