Read the original article in Business Leader here.
“Lohan Presencer, chairman of the Ministry of Sound, was one of the business leaders sharing his insights at HeyHuman’s recent Transformative Growth breakfast briefing, which spotlighted business transformation in 2019. The event gave the stage to leaders who have navigated the peaks and troughs of their industries, including Slimfast’s managing director, Lindsay Reisser-Weston and Alex Batchelor, non-exec chair at Watch Me Think who has worked for the likes of ITV, BT, and various venture capital/ private equity firms.
During the panel discussion, which was chaired by business journalist and former Financial Times columnist Stefan Stern, the question of brand versus product was debated.
“The biggest mistake we made was assuming our brand was the magic formula to make something shit into something good,” Lohan said. “It just isn’t. Your product has to be something differentiated, brilliantly marketed, and there has to be a consumer demand for it. All the mistakes we’ve made have been because of a poor product, rather than the brand straying beyond its means.”
Lindsay, however, took a completely opposite view. She was brought onto SlimFast at a time when the brand had just changed hands from Unilever to private equity firm Hevnos Capital. There was no office space, and none of the staff from Unilever made the move over.
“I’d like to say it’s all about brand,” she told the room. “When we started building the business, we had nothing but the brand, and that helped us enormously because everyone knows someone who has lost weight on SlimFast, and everyone knows it works so that stood us in good stead.”
A strong brand name can give you the right to play in a space, but you need to make sure that the product that you’re offering is differentiated and brings something genuinely useful for the consumer.
PLAN FOR SUCCESS
When the conversation turned to the practicalities of transformative growth, Alex offered advice about what businesses need to do in order to hold their nerve.
“When it comes to growth you need to start small and do it in ways that aren’t going to kill you; figure out how to do it better, then accelerate and scale up,” he said. “Any market penetration strategy you see is really about winning people’s customers. You don’t win them wholeheartedly, what you tend to do is you win a bit of them, or a bit of their business, one at a time.”
Lindsay meanwhile, drew on her experience with SlimFast to emphasise the importance of getting the right team in place; “We knew what was going to be really important was to have a team that was capable of running the end point, not the size of the business we inherited but the size of the business we aspired to be.”
And indeed, this is often the stumbling block for many businesses who try to scale up. Time and time again businesses are ambitious in their mindset, but unprepared when it comes to having soldiers on the ground. If you’re going to grow, you need to have the right tools in place to make sure you’re ready to deal with its needs.
Another common problem is that businesses fail to spot a crisis in their industry before it’s too late. As chairman of the Ministry of Sound, Lohan knows all too well how radically an industry can change. He oversaw the Ministry’s record label and navigated it through the challenges thrown up by the digitisation of the music industry.
His understanding of the industry, and his ability to look ahead, meant that he knew when it was time to sell. “We could see what streaming was going to do to the music industry, turning music into a globalised commodity, predominantly denominated by an American army of artists. We had seen the end of the album, very quickly. And that people were just streaming hit music.
“You could see that curatorial brands like ours were going to have no value to the independent businesses. They might have a value to larger content owners, like big record companies, who could pack those playlists full of their own music and they might have a value to big music services, like Spotify and Apple Music, who could attract users to their services. So, counter-intuitively, with 2015 being the most financially successful year in the history of our record company, we put our label on the market.”
FIND AN ENEMY
At the end of the discussion, a key conclusion the panel arrived at was that if you want to grow a business, then you need to find an enemy. You need to appeal to that primal urge, and use it to motivate your business growth. What are you fighting against? What is your business going to try and change in your sector?
When Ministry of Sound first started running their club nights, the enemy was convention. It was a deliberate resistance against the stale, traditional nightclub experience of going out just to drink. The model was about putting the music front and centre of the clubbing experience.
At HeyHuman, our enemies are legacy agencies and old marketing models. They’re outdated and everything we do comes back to trying to be as innovative and disruptive in the sector as possible. However, as Lohan pointed out, if you’re preparing to do battle, then you need to make sure you’re sufficiently prepared.
“When you’re taking on your mortal enemy, you need to tool up effectively,” he said. “If you’re going to disrupt, you need to understand everything about what you’re disrupting first.”
The secret to transformative business growth? Find an enemy, and then make sure you have the right tools in place to bring that enemy down.”