According to an Accenture survey of global C-suite executives published earlier this year, 68 percent of respondents expect their industry to be significantly disrupted within the next three years by technological innovation. The remaining 32 percent, I’m tempted to argue, will simply be caught napping.
It used to be that only tech companies had tech stories to tell. Today that couldn’t be further from the truth.
The breathtaking pace of digital transformation is impacting every industry, every sector. No organization is immune. Those that choose not to invest in innovation are doomed.
This article is featured in O'Dwyer's Nov. '18 Technology PR Magazine
While for the majority smart enough to heed the writing on the wall — actually, let’s revise that to, “read the text on a screen” — the challenge is to develop and implement an effective innovation strategy. And to make sure it’s properly communicated.
If you’re a CMO or communications chief at a non-tech company, you may not fully appreciate the scale and breadth of impact a well-told innovation story can deliver. There’s a growing and credible body of evidence linking a compelling innovation story with an increase in corporate valuation. In other words, talking tech frequently leads to a bigger market cap.
Positioning yourself as an innovative company is also a powerful weapon in the war for talent. You won’t attract the right caliber of people with the necessary technological skills if they don’t perceive your organization as a place where innovation is considered critical to success.
Let me share a few examples of non-tech companies that have boosted their standing by communicating a business strategy which has technology at its core.
Bakery-café chain Panera Bread responded to the threat of disruption in its sector with a strategic decision in 2014 to put technology at the heart of its business. Shrewd investment in digital platforms, including in-store kiosks, meant that by 2017 it was taking 1.2 million digital orders a week (via mobile, web or the in-store kiosks). This represented over a quarter of all sales, translating into more than $1 billion in annual revenue.
This tech-driven success caught the eye of European investment firm JAB, which in April 2017 snapped up Panera for $7.5 billion. Clearly, a well-told tech story has an important role to play in building business valuation.
As Fortune reported in the wake of the acquisition: “Panera Bread — along with Starbucks and Domino’s Pizza — is viewed as one of early adopters to start leaning on technology as American diners increasingly want mobile apps to place orders or get food seamlessly delivered to their homes. Online ordering has become so pervasive that those types of orders now exceed the quantity placed verbally over the phone.”
Fortune refers to Domino’s with good reason. A decade ago its share price languished at $2.83. Both consumers and investors were underwhelmed by what the business had to offer.
As I write this, Domino’s stock trades at over $250 a share and the company’s market cap stands above $11 billion.
It’s not as if America’s pizza consumption has shot up a hundred-fold in 10 years. Although steadfastly still in the pizza business, what’s changed is that today Domino’s calls itself a tech company. A Harvard Business Review piece exploring how the company reinvented itself pointed out that of the 800 people working at Domino’s headquarters, fully 400 work in software and analytics.
What’s more, Domino’s tells the world that it’s a tech company, and makes it clear in every touchpoint of its brand experience.
Upmarket jeweler Tiffany & Co, long perceived as classy but perhaps a little stodgy, is also looking to revitalize its brand by telling an innovation story, after coming under investor pressure to modernize following lackluster sales performance. Giving greater sparkle to Tiffany’s image includes promotion of its revamped design and innovation workshop in Manhattan where the process for developing jewelry collections has been speeded up, in part due to investment in five 3D printers that make wax or resin models for rings.
We’re seeing this trend play out internationally, too. UK company Ocado started out presenting itself as a supermarket delivery service. Then it pivoted to positioning itself as a technology provider.
The result? A dramatic uplift in company valuation.
The change allowed Ocado to secure lucrative international tie-ups with major partners including US grocery chain Kroger, one of the world’s biggest retailers.
Here’s an eye-catching fact. Ocado now boasts a larger market capitalization than one of the most illustrious names in British retailing: Marks and Spencer.
My advice to in-house communications teams at businesses starting to make moves of this kind is to revisit your corporate narrative with the new business strategy in mind. You’ll have to work more closely with HR to assist in getting the best tech talent through the door and with your technology teams to understand the evolution of your product and services roadmap. You’ll need to adjust your communications strategy to position company innovation as core to your message.
Even a business as mainstream as Walmart now has an innovation lab focused on reimagining retail. As a communications practitioner, it’s vital to keep up to speed with the technology advances your business is making and then work these into your company’s story.
Almost every communications person I talk to is concerned with presenting their company as a thought leader. No matter what industry you’re in, a strong innovation and technology message helps you differentiate and position against competitors.
Nevertheless, CMOs face big challenges. Oftentimes, there is a significant lag between companies adopting a new technology-led business strategy and taking steps to externalize messages about this by updating the company narrative.
There is certainly a need for CMOs to work more closely with their CIOs. One key aspect of this is nailing down the whole tech and innovation strategy — and making sure marketing fits in, so that it does not get siloed.
Sometimes it’s complicated to get right. But there’s no reason to despair. Look to communications professionals who have history working with companies to tell their innovation story.
Over the past two years we’ve worked with more consumer, industrial, construction and retail leaders who are shifting their strategy and wanting to understand the tech ecosystem and how to become involved. We envision doing a whole lot more of this with companies from outside the traditional tech world over the next couple of years. This industry shift is not a trend but a next phase of business transformation.
Heather Kernahan is president, North America at Hotwire.