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January, 2024

Purpose guff, ESG fatigue, culture fails, keeping up with customers and tech: FutureBrand Index on what Australian brands do right, wrong and should fear – lessons from Bunnings, Aus Post … and BHP

By: admin

What you need to know:

  • Tech integration is the top threat to success business leaders around the world see today, but there the similarities between global and Australian business leader perceptions end.
  • Meeting consumer expectations, along with leadership and workplace culture, are the second and third-highest ranked threats to success for Australian business leaders right now – more so than climate change.
  • FutureBrand top 100 rankings paint a positive picture for brands that exhibit a pragmatic approach, action bias, utility to customers and ethical responsibility, with the top 20 dominated by technology, renewable energy, health and consumer discretionary brands.
  • In Australia, brands such as BHP, Australia Post, Bunnings and Woolworths have demonstrated the right attributes. Qantas decidedly hasn’t.

Brands doing tangible things – you can touch them, see them, be and walk in them – feels like the simplest way to avoid the purpose void. It’s about having an action bias. Make it as real and tangible as possible.

Rich Curtis, CEO, FutureBrand Australia

Climate change and AI might be grabbing much of the stage time at conferences, but it’s the cultural impact and customer expectations each is inadvertently triggering that are bigger threats in the minds of Australian business leaders right now.

According to the 10th and latest FutureBrand Index, ‘leadership changes and workplace culture’ has superseded climate change as a top three perceived threat to success cited by Australian business leaders.

Leading the threat list in Australia is ‘technology adoption and integration’, a fear which also dominates the Index globally. In second place locally is a decidedly more human concern, ‘changing consumer expectations’, which placed third in the global Index.

But in marked contrast to global business leaders, ‘leadership changes and workplace culture’ are keeping Aussie chiefs awake more than climate change – third on the Australian list in comparison to sixth globally. It’s also worth noting ‘corporate reputation and trust’ is the second-highest threat to success for global business leaders, again trumping climate change and finite essential resources.

At a broader level, this year’s FutureBrand Index sheds light on the reasons why people culture and consumer expectations are growing concerns. Global uncertainty and the looming risk of a ‘purpose void’ are dominant themes of this year’s report. What’s more, the brand rankings indicate strength is coming from an emphasis on pragmatic action, utility, acting ethically, having strong principles, a clear sense of the future and inspiring change for the better.

Topping the global brands list this year for example is Apple, up six places year-on-year to number one, followed by industrial brand, CATL, also up one spot, and renewable energy firm, NextGen Energy in third. Rounding out the top five are two more IT brands – TSMC (up from 9th) and Samsung (up from 11th).

Brands with the biggest moves up the brand scale over the last year include Tesla (up 25 places to 7th), Nike (up 10 places to 12th), Amazon (up 15 places to 16th), Unilever (up 13 places to 18th) and AT&T (up 32 places to 38th).

The Index uses 18 brand attributes to reorder the top 100 businesses by market capitalisation including personality, premium status, indispensability, authenticity, innovation and respect. The branding agency also sources other surveys and datasets to come up with the broader trends strengthening and weakening brand perceptions of success.

Culture and transparency drive brand strength

FutureBrand Australia head of strategy, Victoria Berry, sees this combination of consumer needs state, workplace culture emphasis, and strong and transparent leadership imperative as indicators of the immediacy of corporate thinking.

“There really seems to be that concern and focus around people here in Australia and the more immediate needs they have,” she tells Mi3. “Whereas last year, ‘climate change and finite essential resources’ was far and away the top concern for Australian leaders and by a much bigger differential from the global set. That seems to have fallen away from the top three this year.

“With climate change, there is that question of how much is focus versus in train – everyone is grappling with this to different degrees. But this year, there are more immediate, front-of-mind concerns leaders are grappling with around governance, transparency, strong leadership and trust.”

The ‘what’s in it for me’ sentiment driving consumer action was highlighted in Pollinate’s recent bi-annual The Australia Pulse study last November. That report revealed while nearly half of the respondents are content living in Australia, 54 per cent believe the situation is deteriorating. Cost-of-living emerged as the most pressing concern among all environmental, social, or economic issues and across most demographics.

FutureBrand Australia CEO, Rich Curtis, also agrees the focus on tech integration, people culture and consumers in this year’s Index has roots in the massive cyberbreaches, privacy and lack of control – and therefore trust situation – they’ve created in Australia over the last couple of years.

“There is a humanity coming through the Index in the ways in which organisations need to deal with their own people at the very least,” he comments. “We have certainly seen post-pandemic, the rise around employee experience and proposition, and those kinds of projects in terms of what’s being asked of us, and how we can most productively support our clients. It’s rare now to do be doing branding work that doesn’t have some kind of internal component to it, whether it’s stakeholder or leadership engagement, or experience more broadly.

“So we certainly see at the coal face how that trend is manifesting in the local market.”

Leaders falling from grace

Hand-in-hand with employee engagement is leadership. The Index’s emphasis on leadership as a business threat coincides with two high-profile Australian CEO resignations towards the end of 2023: Optus’ Kelly Rosmarin and Qantas’ Allan Joyce, who both grabbed headlines for distinctively different corporate failures in 2023.

In Rosmarin’s case, departure came on the heels of a national network outage and one of the largest customer data breaches in the history of Australian cyberattacks. For Joyce, increasingly throaty backlash against hefty bonuses and pay cheques in the face of growing employee and customer disgruntlement finally triggered an early exit.

Yet the fact both leaders had qualities called into question and were expected to go is indicative of the growing threat FutureBrand’s latest Index has identified locally.

Without commenting specifically on situations like Qantas and Optus, “it does seem to be a moment when the Australian business community is shining a light on leadership qualities”, Curtis says. He suggests Australia may be lagging 1-2 years behind the rest of the world for this.

More and more, we’re seeing it’s those brands – especially B2B brands – that feel ‘incredibly real’ rather than abstract – leading. They’re not only purposeful but have a strategy and deliver on it, and are able to carve out long-term competitive advantage.

Rich Curtis, CEO, FutureBrand Australia

Aussie brands rewarded for people and culture

As to the Australian brands FutureBrand believes are rewarded for focusing on people, culture and customer, a standout for Berry and Curtis and one that may feel surprising given its category is BHP. The 62nd largest company in the world by market cap climbed nine places to rank 50th in this year’s Index.

“BHP scores above sector averages on many attributes, increased purpose and indispensability, and nearly all experience scores went up,” Berry says. “It’s perceived as continuously growing, future-oriented, creative and innovative with products that are used and valued globally. We attribute that to recent brand and EVP work around the notion ‘the future is clear’, which is all about demonstrating the tangible value the company brings and the change it enables.  

“More and more, we’re seeing it’s those brands – especially B2B brands – that feel ‘incredibly real’ rather than abstract – leading. They’re not only purposeful but have a strategy and deliver on it, and are able to carve out long-term competitive advantage.”

Another brand on Berry and Curtis’ list that has demonstrated clear and consistent focus on the immediate needs of customers – up until now at least – is Woolworths. It remains to be seen how long this perception will continue as Australia prepares for another Senate inquiry into supermarket pricing and the Grocery Code of Conduct comes up for review.

Australia Post is a third business Berry and Curtis believe is managing to meet changing expectations while staying true to its purpose and service charter. It’s also using technology as an enabler of the customer experience, not just business operations. Bunnings is another sticking to its purpose, focusing on the in-store experience, without moving away from what at its core make people love and value the Bunnings experience, Berry says.

On the flip side, while the last few years have been uncertain and unpredictable, Qantas is an organisation that seems to have shifted focus the other way from people to operations, Curtis says.

“I can’t help but think Qantas has slipped back the other way – from flying people to flying planes,” he says. “The operational focus may well have been about protecting the very survival of the company, but they seem to have got that balance slightly out of whack, with the focus more on logistical side of flying planes more than flying people.

“Considering everything we just said about the role of people and culture, it seems they are fighting against the tide. I’m sure they will recalibrate – they are an iconic brand. But just now, they’re a little out of favour and seem to have that balance a little out of whack.

“Considering a focus on people has never been more important, the opportunity for Qantas is to actively re-establish and build back that trust by reconnecting with their customers – and with their own people too.”

Sustainability and the purpose conundrum

With mandatory ESG reporting requirements in Australia kicking off as early as the new financial year, there’s an expectation sustainability and climate change considerations will continue moving up and down the FutureBrand Index rankings.

Meanwhile, Berry and Curtis advise brands looking to avoid falling into the purpose void to focus on tangibility. Having a clearly defined purpose and being able to translate that into tangible, everyday experiences is what builds meaningful connection and what drives long-term competitive advantage, the pair say. At its simplest, that means getting the basics right.

Curtis acknowledges Unilever’s recent decision to pare back on its purpose mission in the fact of more commercial and practical concerns. There’s no place for hollow or out-of-touch messaging in an increasingly cynical world and trust is being eroded, the pair agree.

“There is a tendency of going overboard and making purpose so much more than just a vision and having a clear perspective on what it is you’re trying to do, and instead, taking on this very overloaded sense of being purposeful and of social good,” he says. “Brands doing tangible things – you can touch them, see them, be and walk in them – feels like the simplest way to avoid the purpose void. It’s about having an action bias. Make it as real and tangible as possible.”

In a world where every brand and business has a ‘purpose’, Curtis and Berry warn purpose as a differentiator is fast becoming a hygiene factor. And that means treating your brand as an ever-evolving, organic material, Curtis says.

“Brands need to be built to change. In order to be future-proofed, they need to be able to evolve, with a degree of flexibility already hard wired into the brand as opposed to set and forget,” he says. “More and more, organisations need to be very clear about what is going to be constant and what is going to enable the flexibility so they can adapt accordingly as and when time changes.”