Business transformation and the science of momentum
Let’s face it. There’s no going back to business as usual. COVID-19 has upended industries, challenged business norms, and lit a fire under brands to evolve through business transformation and make lasting changes to their operations.
Business transformation is happening on a global scale. So, how are companies surviving and thriving almost 2 years into a global pandemic?
The key is innovation, but it demands momentum. Businesses are challenged now more than ever to make changes and drive momentum to keep up with the rest of the pack and steer clear of pitfalls. But first, let’s look at why momentum is important to your business transformation.
The origin of momentum stems from Newtonian physics. Hang tight, we’re going to get geeky for a minute. More precisely, Newton’s second law of motion, expresses momentum as p = mv. For physicists, the momentum of a particle (p) is the product of a particle’s mass (m) and its velocity (v). For the rest of us, momentum describes the strength of a moving object. The larger an object is or, the faster it moves, the greater its momentum.
Ok, so why the heck are we talking about physics in a business transformation article?
While momentum is a physics term, it’s not limited to the physics classroom. Momentum refers to the quantity of motion an object has. If you are in motion, you have momentum.
When a company has momentum, they’re on the move. Every time they pioneer a new idea or embrace a new way of doing business, they increase their speed. A company with momentum is hard to stop.
What happens when momentum is lost
No momentum? In physics terms, that means an object has stopped moving forward. Call it a pause or a rest. Either way, the object isn’t going anywhere, which leaves it vulnerable to falling behind any other object (large or small) that has momentum.
For companies, this means that if your brand stops moving forward, embracing new technology, programs, or innovations, you will lose momentum and be outpaced. Even a large established brand is susceptible to the smallest competitor, increasing its velocity with new products and discoveries. Size doesn’t matter. Only momentum does.
Increasing momentum in the wake of global uncertainty
In pre-COVID times, new technology and business systems constantly entered the market to disrupt and replace outdated ones. This “creative disruption” led to radical changes in the marketplace. The thing is, unexpected worldwide events (like a pandemic) can speed up disruption and leave slow-moving companies, with little to no momentum, stunted. And companies with less momentum are stunted. They can’t pivot quickly and ultimately die off to open the door for nimbler companies.
In the Spring of 2020, the world was in limbo from the first signs of a global pandemic. Across the United States, businesses shut down, closing their doors temporarily—but causing permanent disruption. Over a year later, the pandemic and its effects still persist, changing consumer expectations and business operations. For some companies, a business transformation was impossible, and they were forced to close their doors for good or declare bankruptcy, including many iconic and well-known brands.
How we do business is forever changed. But, change can be transformative and positive.
While some companies couldn’t adapt to global upheaval and departed the marketplace, others were resourceful and thrived. So, who came out on top after 2020? Businesses that embraced innovation and pivoted when faced with challenges.
Challenges can accelerate your momentum
For some brands, the burdens of a pandemic heralded a new way of doing business. Such was the case with Coca-Cola.
Before 2020, about half of Coca-Cola’s business depended on sales from away-from-home venues—bars, restaurants, movie theaters, sports stands —all locations that shut down or became less popular during the pandemic. By mid-2020, revenue from the soda giant plunged 28%, and the leadership was faced with the question, “How do we come back from this?”
They found the answers from their customers. More specifically, from their brand research.
Brand research helps Coca-Cola lead business transformation
Leading into 2021, Coca-Cola took stock of its beverage portfolio, surveyed customers, and looked at what Coca-Cola products people bought annually. What did they find out? They realized that they needed to focus on what products their consumers actually wanted (rather than what Coca-Cola thought they wanted).
Coca-Cola cut its brand list in half from 400 to 200 global brands and embraced a new model that starts with customer insights and focuses on product development.
Coca-Cola said goodbye to outdated drinks like Tab and Odwalla, freeing resources to focus on high-performing offerings that align with consumers’ desires. This strategy led its business transformation and helped the company grow and invest in future taste innovations. With this newfound momentum, Coca-Cola is set to emerge from the pandemic as a more robust business, showing a full year of revenue growth.
New opportunities can be a catalyst for momentum
Although the fashion industry struggled in 2020, an area of fashion did gain in popularity—athleisure and activewear. Men’s athleisure clothing sales in 2020 were 20 percent higher than in 2019. As workers embraced remote work and families stayed home, business attire was out —and leggings, loungewear, and more comfortable clothing became staple pieces of the daily wardrobe.
Consumers crave Crocs
Consumer behaviors and demand changes have thrown retailers some curveballs throughout the pandemic. Crocs responded to the consumer trend for comfort clothing by embracing new techniques to direct customers to their shoes (and, it worked). At the height of their momentum, Crocs were named the “it” shoe of the pandemic, known for its comfortable (and somewhat hideous) clogs.
So, how did Crocs become a break-out brand and footwear leader in the midst of a pandemic?
The new management team of Crocs made a few essential changes to increase momentum. First, instead of a disjointed marketing plan for multiple shoe products, they fine-tuned their focus on the Crocs classic clog (which now makes up nearly three-quarters of sales).
They also restructured their brand marketing strategy to include collaborations with celebrities and designers. Crocs are now making their mark on the red carpet, on TikTok, and on the feet of famous influencers, fueling consumer demand for the plastic shoe.
Crocs also found a new revenue stream in the highly-profitable Jibbitz charms. These shoe charms exploded on social media and have helped lead the way to record profits for the Crocs brand. Crocs have seen a 95 percent year-over-year surge in sales and show no signs of slowing.
A comeback and business transformation
If anything, Crocs has demonstrated that brands can seize opportunities and make a comeback. But, it takes an innovative attitude and a commitment to understanding your customer. In 2 years, Crocs has undergone business transformation and made Crocs cool again. But they’re not done—they’re rolling out new offerings (popular sandals, for one) to answer customer demand and reach customers worldwide.
For Crocs, the pandemic and the rise of comfort wear provided Crocs the opportunity to reshape their image and expand their sales to new demographics. Crocs can now soar to success for years to come with renewed momentum.
A cautionary tale of what happens when you lose momentum
For every brand that had an epic and positive transformation during COVID, multiple brands were met with challenges and sometimes, defeat. COVID was highly disruptive and took a toll on many businesses. Did you know that by September 2021, over 80 major companies declared bankruptcy? These were large chains with multiple locations. Faced with new challenges, these companies did not innovate and came to a standstill in momentum. Instead, they waited, ignored business transformation opportunities, and ultimately closed.
However, it doesn’t take something as devastating as a pandemic to shutter businesses. Brands lose momentum all the time due to failure to pivot or innovate. Companies that can’t keep up with the pace of change and adapt often find themselves floundering. Case in point, Blockbuster.
In the 1990s and early 2000s, Blockbuster was a giant in the video game and movie rental business. It’s easy to see why their business strategy worked—they offered an easy way for consumers to enjoy video games and movies. But, over time, technology changed, and Blockbuster didn’t. People were downloading movies from the internet and enjoying video-on-demand from cable companies. Instead of offering new digital rental options, Blockbuster refused to budge. They believed that consumers preferred renting from a store. Obviously, they were wrong. And their reluctance to embrace digital presented a wide opening to a small competitor, Netflix.
Netflix popped up with the savvy technique of online rentals and then soared by launching a streaming service to watch movies on digital devices. Blockbuster’s aversion to a digital system led to its demise. In 2010 Blockbuster declared bankruptcy, and Netflix is now valued as an almost 300 billion-dollar company.
Take it from Blockbuster—if you don’t move forward, you’ll be left behind.
How can you increase momentum?
Let’s be honest. You can’t risk standing still. Innovating is necessary for your business to grow and thrive. Your competition is doing it—in fact, 75 percent of companies report that innovation is their organization’s top three priorities. So, how can you get started?
Start your customer research
There is no return to the norm. To succeed today, you need to understand your customers’ expectations, new opportunities in your industry, and the current challenges to overcome. Align your organization with at least one trend that the pandemic has created or intensified. Research your brand, survey your customers, and understand how you can innovate in ways that will create momentum and propel you forward.
Look for new business transformation opportunities
Innovation doesn’t always happen internally with a new product or initiative—it can also be a new partnership. Connect with a brand in a sub-sector that you haven’t adopted. This can give you an advantage and reach a larger audience. It also can build brand trust with your current customers and show your commitment to new trends. Newfound opportunities can unlock an unexpected surge of momentum for your brand.
Don’t stop moving forward
It’s easy to get comfortable with your current success. No one wants to “upset the apple cart” when profits are on the line. Nonetheless, if you wait too long, you’ll find yourself irrelevant in your industry (like Blockbuster or Kodak). So, take small steps towards business transformation and boldly embrace incremental innovation. Deploy new applications and initiatives that don’t threaten revenue streams but keep you ahead of the competition and focused on long-term influence. Momentum doesn’t mean you are always racing to the finish line, but you are constantly moving forward.
Business transformation is possible
As Isaac Newton says —objects in motion remain in motion. Companies and brands that are continuously innovating have the momentum to drive them forward towards growth, business transformation, and success. That’s not to say there may not be bumps in the road or unseen challenges (they’re expected), but rather with innovation, it’s easier to overcome these
unexpected hurdles and regain momentum to pass the competition, leaving them in the dust.
Work with us
Don’t innovate for the sake of it. Stay in lock-step with your customers, aligning innovation to your goals. Let’s work together to innovate and gain new customers without losing your base.