Return of the Human: How Big Co’s Can Keep Up with Challengers

Melinda Davis, Group Director of Strategy at Spicefire, looks into how the Big Co’s of the world can keep up with modern competition with a humanized approach.

From calling a cab or taking a vacation to ordering food or applying for a loan, brands with a challenger mindset are transforming the world with solutions that are better, faster and just more fun than those offered by traditional corporate brands.

Even though this revolution is now well-established and extends across many companies in numerous categories, there are still characteristics that almost all challengers have in common – and which the Big Co’s are still struggling to emulate.

From the way they launch products to the way they speak to customers and staff; from their approach to reward to their attitude towards managing risk, there are many fundamental differences between challengers and Big Co’s. But there’s one element these differences have in common: they all relate to people.

Trust-based launches

Look at the way companies launch new products or services. Corporate launches often stem from focused analysis of a market sector, which might reveal an unaddressed niche. There will be some targeted market research, followed by a high-level discussion about whether playing in this new space fits the company’s strategy. It’s all very dispassionate and largely one-sided.

Challenger launches are more likely to result from honest, ongoing conversations with customers. Challengers are not afraid to admit they don’t have all the answers. The conversations they have are more human and more real. They are built on trust and mutual interest.

No brand is more challenger in its approach than UK cosmetics firm The Hero Project, which decides what products to launch based on online reviews and social media conversations. When those conversations highlight potential opportunities, The Hero Project reaches out to the people talking and invites them to get involved in the development of the new product – from planning to launch.

Many Big Co’s say that customers are at the heart of everything they do but how many of them really do? Even the best struggle to get close to The Hero Project model. It’s not that Big Co’s are incapable of doing this – just that they tend to choose a different path.

How to be more human

The challengers have created so much choice and expectations have risen so much, there’s no way we’ll ever go back to the way things used to be. So Big Co’s must rise to the challenge. But how do they do this? How do they become more human? There are four key areas to consider.

1. Get to know your customers – The direct-to-consumer model started because it was so hard to secure shelf-space. Start-ups saw this impregnable corporate castle and thought ‘we’re never going to break in, so we’ll just have to find a way around it’. They worked hard to find people who wanted their product and sold to them directly, online. That’s a great way to build close relationships. Now those DTC brands are creating their own physical retail stores – threatening the future of the very brands that used to make life difficult for them.
2. Embrace risk – This might be the biggest challenge of all for Big Co’s, where the culture is all about minimizing risk. Compensation, bonus schemes, investor relations, corporate governance – all of it is geared primarily towards avoiding disaster. Decisions are made by a committee; no one wants to put their neck on the line. You can’t blame anyone for this approach because it’s how you traditionally progress in a big business. Changing it is a big mountain to climb for the Big Co’s but it’s a mountain that must be climbed.
3. Humanize communications – Too many Big Co’s build layers of artifice between themselves and their employees and customers – just look at the way they communicate, internally and externally. Employees are encouraged to check their humanity at the door. Vulnerability is unacceptable, spontaneity frowned upon, and this is reflected in the language and tone of internal communication, which is paternalistic and detached. Externally, there’s a tendency to point out customers’ failings – you need to be fixed and ours is the product that will fix you. No one buys that line any more; it’s time to stop pointing out flaws and start celebrating the way people are.
4. Nurture your rebels – Have you noticed that every successful challenger founder has a list of stories about being fired from companies that stifled them? Big Co’s are great at recruiting smart, talented people but rather than nurturing the part of them that has inspiring thoughts and takes potentially game-changing risks, they dampen these characteristics in the name of minimizing risk. Big Co’s must be brave enough to seek out and nurture the sort of person who might start their own company – people who are motivated by more than just the next promotion.

These ideas go to the heart of how companies operate. Making changes isn’t easy – especially for brands that have been around a long time whose culture and practices might seem to be set in stone. But doing nothing is not an option – failing to adapt to the people-focused challenger approach poses an existential threat to corporate brands.