- Emerging Branding Trends in 2022
- Navigating Changes to Business Needs
- Reinventing Brands for New Evironments
- Lifelong Learning in Branding
- Paving the Way: Innovation, Talent, and the Path Forward
**This transcript has been edited for readability
Chris Wilks: Hi, and welcome to Solving for B°. I'm your host, Chris Wilks, and we've got a really great episode for you today. Today we're discussing emerging trends and innovation that brands need to be prepared for in the coming year and beyond. And to help me unpack this topic, I'm joined by author and business development consultant at Sherlock Resources, Tom McDonald.
Tom McDonald: Glad to be here.
Chris: And Chairman of BrandExtract, Jonathan Fisher.
Jonathan Fisher: Hey Chris, always a pleasure.
Chris: Thanks guys, I really appreciate you guys taking the time today. So before we jump in, I want to introduce our audience to Tom. Tom, tell us a little bit about yourself and your background.
Tom: Sure. Currently, for the past three years, I've been working with Sue Orr at Sherlock Resources as a business development consultant, leading our thought leadership programs and doing our branding and marketing, business development.
Sherlock Resources is a small boutique recruiting and talent management firm focused on engineering and scientific disciplines. So we're working with oil and gas chemicals, petrochemicals, and supply chain manufacturing.
Like I said, I joined three years ago and started up our thought leadership program as a part of our branding. And so we don't consider ourselves a typical staffing firm: We like to be strategic partners with our clients and work with them over time and help them grow, understand their business and help them with find and recruit the talent that they need.
And over the years my background is laid out fairly well on my LinkedIn profile, but I've spent many years in corporate finance in business development and sales. So I've got a broad background and that's what I'm currently doing.
Chris: Well, we're excited to have you, so thanks for joining us.
Chris: So the first place I want to start is by asking you guys: what are some of the emerging trends that you think will have the greatest impact on businesses in 2022 and beyond?
Tom: I think there are a lot of things going on, as we all know, there's a great deal of uncertainty in the marketplace. A lot of question marks on where things are headed. Some industries are more chaotic or more uncertain than others.
What I see in the work that I do is a very strong push towards automation and toward digital transformation. And I've done some research in that area, talked to some business owners and other technology professionals and have done some work in those arenas.
So the impact of machine learning, AI, and blockchain is a particular area that I focus persona in my book, smart contracts as the application for blockchain. The old fear that robots were going to totally replace humans is getting replaced by humans and robots learning how to work together and become synergistic.
So yes, there will be some displacement of workers due to automation, but more so there's an opportunity to learn how to automate and streamline. It can reframe business processes and customer delivery systems to incorporate automation in a way that enhances the value delivery.
It doesn't totally replace people, it just changes what they do and how they work and what the core skills are needed going forward.
Jonathan: So we have an insight into 2, 300 companies that we've worked with over the years, helping them with their branding process. And I completely agree that the pandemic has shifted people's mindset around technology and what can be done remotely.
Now we have this hybrid in-person/remote environment that we're having to figure out how to work within and to manage within. So for all of the systems and processes, it continues to be a topic with everybody that we talk to.
And from our perspective it involves branding in general, not just technology and automation and blockchain, and all those components and IOT. Because we do see that impacting the companies on items like ESG reporting, for example.
A lot of the companies that we're seeing are addressing this concept of energy transition. And so on the topic of ESG, it's:
- Environmental or economic, depending upon your perspective.
- And then social, which is all the human capital components and the corporate philanthropy and the community impact components.
- And the G being the governance components, which is the policies, to Tom's point, about contract management using AI. That's part of a governance impact.
So we do see companies impacting all three of those categories, and then having to manage and report on those categories, because now this ESG reporting component is basically business risk management.
So that's one big category that we see changing in the marketplace for these companies and using technology to support it, whether it's on the publishing side or on the monitoring and the management side of it.
But I think people's perceptions of need are also changing as they reevaluate where they are in their workplace, and where they are in their life as a result of the pandemic. I think they're also having to evaluate where they are in their financial stability.
A lot of people have lost jobs. Others have been huge winners from this economic environment where they live where they want to live, and work remotely. And I hear stories all the time that people are working two and three jobs now remotely because they can and their employers don't necessarily know it.
But I think there's been a huge social adjustment in people's mindsets and what they buy and how they buy. I read an article from Rolls Royce the other day that was saying how the pandemic was really good for them. Because people adopted a perspective that life was too short and went ahead and purchased the car of their dreams. And I thought that was an interesting point of view.
So people have always purchased on two motivating factors: need or want. And I think that one of the things companies have to be super sensitive about right now is which side of the coin they fall on regarding that perspective. How do they position their product and their service offerings so that it addresses what people's needs or wants in these changing environments in the future?
Chris: It feels like there's a lot of uncertainty right now, and, to your point Tom, a ton of change happening. What advice would you have for a business or a brand that doesn't know what to make of it or is overwhelmed by all of the fluctuating norms or resetting of norms in this environment?
Tom: Well, that's a very big question. I mean, the place to start is with your current customers and delivering value to the customers that you've promised. But you have to look forward from that too and see where things are headed, not only with those customers, but also in terms of gaining new customers.
Jonathan mentioned a couple of interesting points that do tie back to talent management when he mentioned the energy transition, as well as the need to navigate the change due to other environmental factors.
And so one of the top concerns of CEOs, according to multiple surveys, is the need to re-skill the workforce. And I wrote more extensively about that in the article that I wrote for the journal of the Society of Petroleum Engineers called The Way Ahead.
So in regards to skill management, there's multiple surveys, one by Deloitte that says over the next three years, between half and all of the workforce needs to be re-skilled. That's a pretty wide window, but the point is pretty bold. There's a massive need to re-skill.
And a lot of it has to do with the things that Jonathan's talking about, not just an energy transition, but other broad social trends towards taking care of the climate and other trends as well, but re-skilling the workforce is going to be very high on the minds of many CEOs.
Jonathan: Yeah. I think, if I can add to what Tom is saying, it's reframing sometimes, what is the problem? What do we want to accomplish? Taking a hard look at it, taking a more holistic look at it. Looking at the data you do have and how that's shifted and adjusted over the last two years. Working on some predictive analysis models to see where things are going.
I think that really insightful thing, and we've been doing this for a number of years with some professors out of Rice University, is understanding where value comes from and how that's weighted.
More often than not, companies have a litany of things that they think are valuable to the customer but at the end of the day, it's usually an 80/20 rule. That there's only about 20% of what you do that drives 80% of the value for why they purchased or used you or reselected you or recommended you.
I think that companies that don't have a really good perspective on that are going to struggle. And so one of the things that I really enjoyed in Tom's book was he talked about reframing a lot. Problem framing is something that we've always done with helping companies think about their positioning in the marketplace and how to capture new market share.
Understanding where waste occurs in the delivery of the service is really critical now because they can't afford to waste any money, and they can't afford to hire more than they need to hire.
Chris: Yeah. So, we talked a little bit about the technology, and there's this ESG stuff, Jonathan, and you mentioned the social impact that we see impacting businesses in 2022.
Chris: I want to talk about how we expect those to impact business models. In what ways will business models evolve or need to evolve to match some of these trends that you're pointing out?
Tom: The main example that I provide in my book on business models comes from the massive change that's occurring in large-scale industrial construction. There's an enormous amount of research and practice going on in that industry to reframe the way that the problems are looked at, and essentially reconstitute a new business model, which they've termed OS2.
One business model shift is called the neighborhood concept. It's reframing the view of the overall business ecosystem to include upstream and downstream players in the overall process of, say, building a bridge or a skyscraper or some multi billion dollar project. The rule in that industry is that for every million dollars in revenue, you have a company involved.
So your typical billion dollar construction project is going to have over a thousand companies involved in the supply chain of pulling that together. And dealing with that with management science techniques that were developed largely in the 1950s is just not working like it should be.
This OS2 movement is a reframing of how to approach that. The neighborhood concept is zooming out and looking at the ecosystem and all of the players and treating the other partners in the system like your neighbor meaning well.
The research in the OS2 has highlighted and demonstrated that late payments cost more for everybody in the value chain. So when a subcontractor withholds payment or doesn't pay on time, that backs up all of the payments in the supply chain, or the contractor ends up borrowing money at a fairly high interest rate to pay salaries and wages and rent.
So think about a thousand companies in this value chain, and they're all hedging because of late payments. Well, the typical controllership principle of "pay your bills as late as you can, but collect your bills as fast as you can" doesn't really work in a complex supply chain. All companies are better off if everybody pays on time, because that reduces costs for everybody.
And so that example is just reframing a very simple concept, like working capital management. Reframing it, and looking at it from a broader perspective of how it impacts each player in the complex supply chain. How can you make that more efficient and reduce the cost for everybody?
So that's a concrete example of the neighborhood concept, and one example of a change in a business model, looking at things through a different frame and trying to get to higher capital efficiency, higher talent usage, better outcomes, and lower cost.
Chris: One of the things that you mentioned whenever we met previously was that there's this decentralization happening where decisions are being pushed closer to the field. Can you talk about that and what's enabled that?
Tom: Yeah, that was an example on smart contracts based on blockchain technology.
So smart contracts, at least the ones in the OS2 movement, have nothing to do with cryptocurrency whatsoever. So people in the popular press, there's so much out there on cryptocurrency that some people think blockchain and cryptocurrency is the same thing. There are other applications of blockchain that don't include cryptocurrency.
And so the blockchain that's involved in OS2 is more about a distributed ledger, and what it does is it builds and enables trust among players. It facilitates better behavior in the business system.
So one of the byproducts is that everybody can see real time, immediate posting of transactions. you could have instantaneous or daily payments, not monthly payments, those sorts of things that are possible given the technology. It also pushes decision making out to those that are closest to the action, closest to the project, and closest to the customer.
And so decentralized organizations are enabled through these changes in technology. That's another opportunity for 2022 and beyond is the leadership that's needed to ask, "how do you coordinate and drive?" How do you drive an organization to its objectives in an environment where the people are enabled by the technology to make decisions in a less bureaucratic way?
Chris: Yeah. I mean, that speaks to the need for re-skilling. For the workforce to understand these technologies and how to best leverage them.
Tom: Yeah. Re-skilling not only of the workers themselves, but also a different model of leadership.
Jonathan: When you say the word decentralization, I just look at all the supply chain logistics that have just been so disrupted from this process. You talk about late payments, well, late product. I ordered a car in September and it's still not here yet. So that crushes your cash flow if you're a business group.
So one of the trends that we've seen is companies are really having to rethink their supply chain and their logistics processes, because of those delays. So to Tom's point, something as simple as the late payment chokes everything out.
We've seen this: manufacturers that can't get material on the shop floor. If they can't get material on the shop floor, then they can't get it to labor. If they can't get it to labor, they can't hire when part model. They can't hire in a part model and then they can't deliver on time. Can't deliver on time, the customer goes elsewhere.
So companies are having to step back and say, what can I deliver on time with the equipment? I'll give you a small example.
We were talking with a vet service recently, and the vet service is wanting to expand, but they have these complex mobile delivery offices. They're just vets on wheels and they go to your house or your business, your location, whatever it might be. And these are very expensive vehicles, they take time to outfit.
And so my first question back to the CO was, "Well, what percentage of service can you deliver without this vehicle?" And he's like, "Yeah, we need to think about that. Because I can't get the vehicle. So do I really need to hold up my services? Or can I trim my services in some manner?"
So I was talking with a trailer company the other day and they couldn't get screens for their windows. So they're completely not delivering the campers. And I'm like, "Well, why can't you deliver the camper without the screen, adjust customer expectation, and then work with a screen manufacturer independently to go and install the screens after the fact?"
It might not be an ideal environment, but if the buyer is so hungry for the camper, are they willing to adjust their behavior in that conversation? And they're like, "We don't know, we haven't really thought about it that way."
We saw good examples of reframing the problem during the start of the pandemic when people that were used to making one thing suddenly pivoted and made face masks and shields and other things. Well, why did it take the pandemic for them to think about that? Because they had skill and they had labor, but they'd only envisioned using it one way in that process.
And so I think companies have found completely new revenue streams by stepping back and deconstructing their business models to figure out what else they can do with their brands in this process. And we see this all the time just working with brands.
And so helping companies evaluate how their materials get used is a big part of what we do from a branding perspective. We worked with a device manufacturer for doctors and when we asked the doctors how they used the device, we came back with dozens of applications the company had never thought of to market against in that process.
And so I can't emphasize this concept that Tom has in his book enough of just re-imagining, rethinking, deconstructing, and looking at the technologies and the course sets that you have. And then how do you adjust for the future with this re-skilling of opportunity and service and product delivery?
Chris: I'm curious, do we think that the reframing and re-skilling, is this a one time shot? Do we do this and say, "Okay, now we're set up for the next however many years." Or is this just a process brands are going to have to continue to undertake?
Jonathan: I think it's constant. I think the companies that reinvent themselves on a regular basis are the ones that are going to lead the market. Because I think we are going to live in an ever increasingly changing world that becomes more extreme with everything, from weather to consumption and consumer predictions, and to technology and innovation.
And I think that's a topic that Tom mentioned very briefly. It was this notion of just reshaping your leadership mindset and how that whole process works through the culture of the organization.
Tom: I would echo that all the research is showing that the half-life of technologies is shortening. And it's not just technology, it's business models, it's the macro environment.
I completely agree with what Jonathan's saying, to the point where not only is re-skilling constantly going to be important, but what will be the foundation of that will be developing the capability to learn faster and more efficiently.
And so once you build that ability within a company, as well as individually, it has implications both for companies in terms of their investment decisions on re-skilling and up-skilling, but also implications for individuals in terms of understanding how skill paths lead to real opportunities in the marketplace.
Just be open to new ways of doing things, new ideas, don't be so risk averse. The flip side is people who don't become lifelong learners, who are excessively risk averse and want to stay in that old world, so to speak, who will continually be challenged.
And so the implications here are not only for companies in terms of investing in developing the workforce, but also individuals from a career management standpoint.
Jonathan: We've been talking about AR and VR with our customers for years and years now, but it's rapidly evolving. Look at the hottest toy products at Christmas time with the Oculus headsets.
I was having a conversation with a real estate agent the other day, and just talking with them about how their world and the whole real estate market has been turned upside down.
They had realtors who would in their wildest imagination 30, 40 years ago could never imagine selling a house without ever a buyer stepping into it. And they were doing virtual showings.
And same thing with the trailer guys, the camper company, I was talking about earlier. They weren't taking people into the showroom. So they were doing these personal walkthroughs on their iPhones to show the camper and talk about it.
And so for one, it made it way more efficient. They could do way more walkthroughs. They could record the walkthroughs. They became better trained at watching their own recordings of their walkthroughs. And they were demoing and selling in the process. And they created an asset library that became searchable and online.
This one thing triggered like half a dozen values that they'd never imagined in this entire process of just the basics of recording and demoing virtually in this process. They didn't have the travel time for the customers. Weather was no longer a factor for them because on cold days or wet days, they generally saw lower traffic to their yards and lots.
And to me that's very exciting to have those types of conversations and as a management consultant for Tom, I know that's the thing that gets him out of bed, just to talk about these opportunities.
Chris: Yeah, no, that's great. I mean, it sounds to me like adaptation and agility is more critical to brands than it ever has been. And it sounds like we're all in agreement that it'll be critical for brands even more going forward. I mean with the rapid pace, the rapid change in technology, all these new worlds opening up to us. I mean, it's exciting times.
Chris: This was a great conversation guys. I really appreciate you guys taking the time. Before we jump off, I do want to give Tom a little bit of the floor to tell us a little bit about your book. The book's called Paving the Way: Innovation, Talent, and the Path Forward. Tell us who it's for and where we can find it.
Tom: Well, first of all, it's not a thick book. It's about 80 pages and that actually includes a few cartoons. And I didn't write it to be a long read. It's not a how to, it's not a deep dive. It's just a thought provoker.
There are some leading ideas in there. And when I decided to write a book, I decided that I didn't want to just sit in my office and do research and write about things that other people had written about. I wanted to write a book that came from my conversations with people out in the field, doing things that were innovative. And so that's what I did.
There are maybe seven or eight people in that book that I've quoted. And I worked with them very closely. In total there were well over 100 people that I actually met and had Zoom calls with and discussed and got to know. So there were many more people behind this than the ones that I've mentioned in the book.
So it took over a year, but it was more of a process. It wasn't just me sitting and writing. It was more me meeting a lot of people having conversations. The examples are coming from real innovation in various market places. And that's what I wanted it to be, was just a thought provoker with some key ideas to help people think about some key concepts.
It's just a short book. And again, it ties back to the thought leadership theme that we have here at Sherlock Resources, in that we're advocates of leading-edge thinking and practices and approaches to the marketplace. Innovation is key in our arena. And that's why I did it. It was more fun than work.
It's out on Amazon. There's a paperback version. There's also an e-version. You can find it on Amazon, under my name and the title Paving the Way. If you're so inclined, pick up a copy and enjoy.
Jonathan: Yeah. I would say that any book you can pick up three or four solid concepts out of it, in my opinion is worth your time. And I don't think anybody's going to walk away feeling like they didn't get their value out of Tom's book, because there's a lot of great ideas in there and a few that will probably refresh your memory, you've forgotten.
But an easy read and a solid product. And I'm not just plugging the book for Tom's sake because I don't do that, anybody that knows me. But I do fundamentally believe that the ideas that are in the book are really going to help any company think about how it moves forward in business.
Tom: Thank you.
Chris: Cool. All right guys. Well, thank you very much, really appreciate the time.