Brand How Nestlé Transformed a 100 Year-Old Company into a Startup
Earlier this month, we had the privilege of attending the LeWeb conference in Paris. We were pleased to see our own Noah Brier speak, but beyond that, there was something magical about our time there. Walking into LeWeb was like entering a digital laboratory in the process of concocting various future-proof vitamins. No, it wasn’t just the dazzle of the sparkling stars on the ceiling, the robot demos, or the fact that the schedule of the day included the likes of Sir Tim-Berners Lee, inventor of the World Wide Web. There was a new way of thinking in town. It was open and humble, with widespread talk of embracing an unknown future and building windmills ahead of winds of change.
In listening to some of the world’s biggest and most successful brands tell their stories, one major theme emerged: the transition from traditional (seasonal stock content) to digital marketing (relevant and contextual flow) has already happened. Disruption was yesterday and now it’s the status quo. Digital is a business strategy, not an IT or Marketing strategy, and if you aren’t thinking like that, you are already behind.
One company in particular brought this message home: Nestlé. In operation for over a century now, Nestlé continues to prove their leadership at the forefront of transforming marketing strategy. Operating in a disruptive environment is the new normal for them. They’ve embraced the hashtag and the hackathon. Now it’s about transitioning to their existence as a digital company where marketing is in lock step with the rest of the business, as well as IT.
To do this, Nestlé is doing two things, 1. They’re fostering entrepreneurialism by embracing a hacker culture at the top level and, 2. They use digital to collaborate across all business divisions to create value beyond pure marketing communications.
1. Fostering the start-up ethos
The biggest challenges at times are often born from the company itself. The old company structures that were built for yesterday’s pace of marketing and traditional platforms are not the same structures (almost entirely opposite, really) to what they would build if they were launching Nestlé today. Looking at the company through that lens, Pete Blackshaw, Nestle’s Global Head of Digital and Social Media, spoke of the need to have a startup culture within the company in a discussion with Gregory Pouy of LaMercatique at the LeWeb conference.
How does a startup culture fit into a 150 year old company? By setting up an innovation lab that sits above the senior executive level in a Silicon Valley outpost, they are attempting to influence how the entire enterprise learns, thinks through problems, and acts as nimble, entrepreneurial teams. The hacker culture trains leaders to create value in a highly disruptive environment. Their innovation hub created this exciting parallel of innovation and ambition unbounded by previous structures that perhaps didn’t accelerate new ways of thinking.
2. Collaborating across the organization
Pete brought their innovation ethos and start up mentality back to digital. “We want to create world class business leaders and digital is the context to do that,” he said. To transform the organization into an entrepreneurial community of brand builders, you have to embrace digital as an operating principle, and not just a communications channel.
When Andrew Wood of Bernstein Research asked Nestlé CEO Paul Bulcke about the equilibrium between digital media and traditional media, his response made it clear that it wasn’t just a question of where you spend your communications budget, but how it works in concert with the entire business to build the brand. “It is like a bicycle…only in equilibrium when it moves. This is the dynamic. You have to also look at what the consumer is doing? We are using it to get something,” Bulcke explained, “we call it ROBBI, which is Return on Brand Building Investment.”
In February 2013, Nestlé launched a new digital labeling system that put QR codes on their Kit Kat candy bars to offer customers even more information about the product and since they have been increasing the number of other products that also have QR codes on the label. “We have a wealth of information about the nutritional value and the environmental and social impacts of what we produce, and it makes sense to share that with consumers,” said Patrice Bula, Nestlé’s Head of Strategic Business Units, Marketing and Sales.
Nestlé’s move toward digital is a move that goes beyond marketing and communications. It wraps service around products and drives towards a commitment to shared values in sustainability and transparency. It took that mission and made it an integral part of its business strategy. That’s what effective marketing is today. It’s the business’ values being present throughout the organization and consistently delivered to customers at every, single touchpoint.
This talk with Pete Blackshaw at LeWeb struck a chord with us because it showed how an established company like Nestlé can so adeptly move towards being a digital company, by embracing digital at every level and in every division of a company, but the conference went beyond just that idea. It explored a new mindset of collaboration. Brands can move quickly, react organically, and create authentic and meaningful connections with customers, beyond social or traditional marketing. The engine of innovation in companies isn’t digital alone. The cross-functional commitment to a digital strategy is what turns the gears of innovation.
Originally published at blog.percolate.com on December 29, 2014.