Brands embrace change

04 October 2011

NEW YORK: Brand owners like Hilton, Kraft and AstraZeneca have reaped the rewards of successful transformation programmes, but are continuing to adapt as emerging trends reshape the market.

Christopher Nassetta, CEO of hotel group Hilton since 2007, has fostered a common culture across its ten chains while building each individual brand internationally. He also warned the next 30 years will require greater change still.

"I call it the age of empowerment," Nassetta told the Boston Consulting Group. "In big global companies ... no one person or small group of people can ultimately know enough about what is going on to manage every detail effectively."

"Those organisations that are able to push decision making throughout and effectively empower their people structurally and geographically to advance the corporate priorities will succeed and outperform those that do not."

Since 2006, Irene Rosenfeld, Kraft's CEO, has implemented several equally big ideas, from moving into the health and wellness sector to spending $27bn on LU and Cadbury, and splitting the firm into two separate entities.

"The impact that the macroeconomic environment has had on our business over the course of the last two years has been profound ... on our categories, on our consumers, and on our input costs. That's not going away any time soon," she said.

Rosenfeld also argued tighter regulation in the US, and dealing with governments and political unrest overseas, were major obstacles. "It is a unique set of challenges, so many of which are outside an individual company's control," she said.

In 2005, AstraZeneca, the pharma giant, devised a plan looking a decade ahead, focusing in particular on open innovation and developing nations. David Brennan, its CEO, suggested today's "millennials" offered a glimpse of the future.

"These are people who grew up on Facebook, with computers in their laps. They are constantly wired and enabled," he said. "It's very diverse. I think you have to acknowledge that and accept it. It can create strength if you get it right."

National Bank Financial Group, recently named the strongest North American bank by Bloomberg Markets, began a four-year reform scheme as the recession took hold in 2008, based around the tagline "One Client, One Bank".

Alongside bolstering its investment in marketing and branding, the company streamlined its corporate model, encouraged cooperation across departments, and reduced operating and procurement costs.

"People come first; risk management, second; and technology, third. Those are the three types of expertise you really need to get right within your organization," said Louis Vachon, its CEO. "That is what we're trying to do with One Client, One Bank."

Data sourced from Boston Consulting Group; additional content by Warc staff