Purpose-driven transformation

03 Oct “Purpose-driven transformation” – GLOBEONE at INNOVATIONSTAG 2019 in Munich, Germany

Posted at 16:16h in Future-Proofing Corporate COM, News, Shaping Agile Brands, Transforming Businesses & Cultures by

Transformation is everywhere you look – the German economy is in upheaval. The INNOVATIONSTAG in Munich is a great challenge to the arbitrariness and exchangeability of lectures at many other conferences.

Thorsten Scheib, Marketing Director of Philip Morris Germany, Susan Schramm, CMO of McDonald’s Germany and Robin Ruschke, Senior Vice President Global Brand & Communications of Sixt, describe their current transformation experiences at the INNOVATIONSTAG without mincing their words. The individual cases impressively show how different transformation can be:

Philip Morris – Giving up the top-selling business

The tobacco company has begun an unparalleled turnaround. In November 2016, Philip Morris CEO André Calantzopoulos shocked his organization with the statement: “I hope that one day we will no longer sell cigarettes”. The goal: to move 1 billion people away from smoking or to switch to IQOS – the device that only heats tobacco and is therefore considered a “low risk” product. From a dimensional point of view, it’s as if McDonalds were to stop selling burgers overnight or Coke were to decide not to produce cola anymore. CMO Scheib describes the drastic turnaround as: “Until now we could only sell tobacco – today we sell electronics, and 95% of our equipment is sold online – none of that existed before”. If he were to describe transformation, then only one word comes to mind: “Painful”. When an applicant in a job interview enthusiastically tells him about the transformation experience in his old job, Scheib is sure: “That wasn’t a transformation. Today, Philipp Morris stands at a 17% switch rate to risk-reduced products and CMO Scheib says that 0% of the marketing budget is spent on classic cigarettes. If you don’t see purpose as a quest for perfection, but rather as a positive contribution made step by step, then Philip Morris is certainly a good example of purpose-driven business transformation.

McDonald’s – digitalization & individualization in the Mass Market

With McDonalds the transformation is different. They are focused on improving the “experience” in their ~40,000 restaurants worldwide, and above all on the digitalization and individualization of their experience. Order kiosks with individualized menu crates, serving the burgers at the table, delivery service, and the sensible evaluation of gigantic amounts of data that arrive at McDonald’s every day. CMO Susan Schramm admits that the company is still at the beginning of this process. But McDonalds recently incorporated two AI companies in the USA precisely for this purpose.

Sixt – platform strategy to the extended “purpose”

Sixt has also undergone an extremely interesting change. The company has changed from a car rental company that puts the cars on the road to an agile provider of mobility. So, it wasn’t really a question of digitizing a car rental company, but rather of creating an open platform for customers and significantly expanding their purpose by combining various mobility offers. The linchpin of this transformation is a new app developed by Sixt with 600 IT employees and a budget of roughly 300 million euros. The new platform offers three services “rent” (car rental), “share” (car sharing) and “ride” (arrangement of taxi and chauffeur service) and expanded the market for Sixt several times over. The cross-system solution, which even includes e-scooter offers, has been well received. Brand boss Robin Ruschke is sure that Sixt can earn “good money” with this new solution. The new offering obviously answers the need target groups. This is increasingly critical of their own cars in view of the 1 billion cars in the world that spend 7 billion hours in traffic jams, even though they are used on average only 1 out of 23 hours a day.

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