Ogilvy Consulting x BrandZ — This thought leadership paper has been published on December 13th on WPP BrandZ Top 50 Most valuable French Brands 2019.
Last year was a record year for startups in France, raising close to €2 billion, up 10 percent on the previous year. Led by DoctoLib and ManoMano, many of these startups are part of the new BrandZ “French Digital Champions” ranking.
In autumn this year, we will also see the launch of the Next 40 index, a kind of CAC for startups, which is one of the 100 flagship measures planned by Secretary of State for Digital Affairs Mounir Mahjoubi. The Next 40 indexwill identify high-potential startups, to accelerate their growth and reputation both in France and internationally. With all of this going on, how can we best help startups today grow from Next40 into CAC 40 businesses tomorrow?
Finding a purpose to accompany growth
It is essential that French Tech companies express a purpose that goes beyond technology, which can so easily be copied and updated. This will allow them to steer their own growth and stay on course in times of turbulence.
To achieve this, it is crucial that businesses recruit the best talents. Effective recruitment means identifying people who share your values, then assessing their personality as well as their skills, and developing a sense of belonging to the shared entrepreneurial adventure. At the same time, it is important to retain those who first contributed to the success of the business, to increase their motivation and prevent them burning out. To do this, brands must develop a strong talent-engagement program that reinforces their bond with the company. It is, therefore, the startup’s ability to develop a culture that both directs people and is inclusive that will determine its success.
The development of such a culture has allowed Zappos, an online shoe company, to quadruple its revenue in just one year. By affirmingits intention to “deliver a wow effect through service”and spreading its culture throughout the company — most notably through the creation of specialist training in customer service — Zappos successfully diversified its services to include leather goods, clothing, children’s supplies and more. This helped Zappos make Fortune’s “Top 100 Companies to Work for”, entering the ranking in 23rdplace. More importantly, it has allowed the business to maintain the independence of its teams, and its innovative mindset in the years since its acquisition by Amazon for $1.2 billion in 2009. As former Zappos strategist Robert Richman says,”It’s not the market. It’s not the economy. It’s not even your products and services … it’s culture that drives success.”
Continuously reinvent yourself to stand the test of time
Once they have entered the Next 40, the next challenge for startups is to stay up and running. This is no small feat, considering the average lifespan of a company in 2020 will likely be 20 years, compared with 60 years in 1960. This challenge is even more pronounced for French startups; in 2017 their estimated lifespan was just four years.
This is where, again, culture can come into play, but the challenge is threefold:
Free the company from a “startup” image. The image many people have of a startup is usually a combination of youth, independence and democracy, in contrast with the reality of long-established businesses. Empowering employees can bring benefits as well as risks, as evidenced by the testimonies of former Google and Facebook employees. For a business to grow to the CAC 40 levels, a trendy workplace and a supply of Haribo sweets will not be enough. Next 40 companies will need to align their culture with their ambitions, and reinterpret both as they evolve.
Develop a culture that goes beyond the founding figure. This is what CAC 40 companies like Michelin have achieved, whereas the storytelling of startups is too often based on mythology of the visionary hero, who, having started alone, manages to defeat conservatism. Think of Mark Zuckerberg, Jack Ma or Xavier Niel. If the founder remains at the heart of the brand, startups must update the mythology over time. This has been the case for Nestlé, which has relied on the legacy of the work of chemist Henri Nestlé, to reinforce its position as a leader in child nutrition.
Bring culture to life, every day: They can do this by establishing rituals that run throughout an organization — such as the Decathlon Innovation Awards — and by ensuring culture permeates every level, through symbols such as Disney’s Cast Member Pins, and finally, by accepting that the brand is constantly evolving in the hands of those who are in contact with it.
We are confident that the French Tech companies which will consider and develop their culture as a growth pipeline will be the ones standing out, and probably one day, the ones entering the CAC 40.
Batoul Hassoun, Managing Director at Ogilvy Consulting
& Claire Gallon, Senior Consultant at Ogilvy Consulting