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The Asian Century requires business leaders to step out of the Western mindset

Moritz Kaffsack
July 29, 2020
6 min read

When I first arrived in Asia in the 2000s, the continent was on the rise and yet back in Europe and the US, Asia was a rather peripheral topic. In many ways it still is, or at best the conversation is limited to China. That’s a mistake. One only needs to look at the successful strategies on display in many Asian countries to contain Covid-19 and manage the economic fallout. They are founded in a tremendous confidence in a unique, homegrown approach that has been gaining strength for many years. What we’re witnessing is just a foreshadowing of the leadership role Asian societies, governments and businesses are poised to take in this century.

What does this mean for doing business with Asia and in Asia?

To understand that, it helps to understand the 20th century, which, in many ways, was the Western century. In 2016 77% of all international students at US universities were from Asia. In 2007 44% of highly skilled Chinese professionals preferred working for a western multinational to working for a local Chinese company. English is a prevalent business language in many countries. These are all indicators of intense adaptation.

And it means that the Asia that Western businesses dealt with was in many ways adapted to them.

This momentum is now moving in the other direction. Parag Khanna, author of ‘The Future is Asian’, puts it like this: as Asia is globalizing, Asia is also Asianizing. How does this manifest itself?

Asia’s ability to innovate is growing by the day. In some sectors like e-mobility, Chinese companies are getting ready to compete at a global level. Countries like Vietnam are taking a sandbox approach when it comes to new technologies, providing the framework for companies to innovate fast with regulation shaped as the market develops and consolidates.

Local champions beat multinationals, combining rapid innovation with a deep understanding of market trends. After pioneers like Samsung, Alibaba, Huawei there is already a new generation of smart, fast-growing companies on the rise. Many of them are turning into regional and global players, like Indonesia’s Go-JEK, Vietnam’s FPT, China’s Byton.

In line with this development, there’s a renewed interest from top local talent to work for local companies. A survey from 2017 shows that a third of executives in Chinese companies moved from MNCs during the previous five years – and only 10% moved the other way. This talent pull will increase as Asian companies go global and send their nationals abroad.

Politics and political speech are increasingly focused on the national and the regional, from Indonesia to Malaysia, from China to the Philippines. Existing regional alliances like ASEAN are strengthened and new regional initiatives are formed – like RCEP, a free trade agreement being negotiated among 15 countries in Asia-Pacific.

These changes to the environment multinational businesses operate in, directly impact the most important stakeholder relationships that determine business success. And they raise a number of questions:

  • How can businesses better understand and successfully engage with Asian markets?
  • How can they thrive in a changing global competitive landscape?
  • What do products and services need to look like to wow local consumers with local experiences, in line with local values?
  • How do employers add value to a fast moving talent pool and provide both short-term gains as well as long-term career opportunities to compete with a myriad of other opportunities, including entrepreneurship?

Solving these is key for businesses to thrive in this new world.

But if mindsets of leaders and teams are stuck in the Western century, they will fail.

The critical success factor will be a change of mindset that leaves the Western century behind and focuses on the intense adaptation and collaboration required when operating in Asia.

Six ways to better equip your business for the changes the Asian Century brings:

1. Local trumps localized. Respect and harness the power of local insight, understanding and action to arrive at powerful local solutions. Empower local teams to make new connections and enable innovation to come from any part of the world, taking advantage of different perspectives to strengthen your proposition to customers, consumers, partners and talent.

2. Find your place in the ecosystem. To succeed, go beyond the customer. The eco-system has a tremendous role to play in the success and failure of a foreign business in an Asian market. Ignore it or deprioritize it at your own peril, and you may end up like the many companies that have exited markets they weren’t able to truly connect to.

3. Take a value-based approach. The days where investment, job creation and high-quality products was all that was expected from MNCs are behind us. To be relevant, build talent programs according to what matters to local talent. Connect with consumers based on their values. Talk to partners and governments about contributing to societal goals. Understand the national narrative and weave your proposition into it. The return will be loyalty, purchase, and license to operate.

4. Partnership at eye-level. Global teams win when they collaborate at eye level, taking local mindsets, cultural context and perspectives into account. This takes empathy and an ability to respect each other’s experience. The same goes for interactions with external stakeholders.

5. Diversity is now business-critical. Only truly global teams bring the best of all worlds into the room to find the right solutions. Break the hierarchy that runs from headquarter market to local market, move key positions to Asia and promote talent from local markets in Asia to leadership positions.

6. Lead with a global mindset. Leaders that can change perspective and see the world through the eyes of people with radically different backgrounds will be the glue to achieving both local impact and global consistency to enable their businesses to thrive in this new environment.


Sources:

[1] Source: Forbes Magazine (https://www.forbes.com/sites/anismuslimin/2017/11/30/why-asian-countries-are-investing-so-heavily-in-the-english-language/#27c312665e85)

[2] Source: Harvard Business Review (https://hbr.org/2011/03/the-battle-for-chinas-talent)

[3] Source: Fast Company (https://www.fastcompany.com/90301632/the-definitive-guide-to-asias-global-influence-in-the-21st-century)

[4] Source: Nikkei Asian Review (https://asia.nikkei.com/Opinion/Multinationals-risk-defeat-in-China-talent-war2)

Cover image by Duy Nguyen https://unsplash.com/@duykhuongxyz

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Taking work in-house in times of corona? What comms teams can learn from agencies

Cornelia Kunze, Moritz Kaffsack
May 19, 2020
6 min read

Corona or no Corona: In-house communications team have been in transformation for years. Driven by shrinking budgets, the desire to operate with more flexibility and independence, and the rising expectation of communications within organizations, there has been an ongoing evaluation of the work given to external agencies to determine what parts can be moved to internal teams. Headquarter teams are put in charge not just of strategy and project management, but also more specialized functions such as planning, creative, media buying, and even the tactical execution across channels and markets. Highly qualified in-house hires are accelerating the trend. Some companies even go so far as to set up an in-house agency.

It appears that in-house communications teams have become serious competitors to agencies.

The corona crisis is creating cost pressures reminiscent of the last financial crisis. On top of that it is changing how we work together. Home office and remote work, previously frowned upon by many, is now the norm. But beyond the increased digitalization of work processes, there are other, more fundamental changes taking place. The crisis is a catalyst of a development that was already on the way: to achieve more agility when working across markets, channels and external agency relationships, communications functions are expanding and upgrading their-house teams.

This trend then poses three questions to in-house teams:

  • How can they offer best-in-class career development to attract and retain the talent needed to achieve the desired independence from external agencies?
  • How can they be effective, motivated and successful while working in a partly remote organization?
  • How can they achieve a complete focus on value-creation for the organization?

While in-house teams and agencies may be operating in very different structures, processes and organizational cultures, there are experiences and strengths that come naturally to agency teams and could hugely benefit in-house teams in this situation. Having led international agency teams, often remotely, for many years, we’ve asked ourselves what in-house teams can learn from agencies as they expand their capacities and capabilities. Here are five strengths unique to agencies that can become game changers:

  • Profit-Centre Mindset. In times of cost-cutting, any area that can’t show it’s significant value to the business gets cut first. Agencies are profit centres with revenue and margin goals – so they live by this maxime. Agency managers are trained to allocate resources not by personal preference but wherever they create the most value for the firm. All projects start with a projection of time investment for every member of the team. Time invested is tracked via (the beloved) timesheets, which are checked against plan. In case of discrepancies, corrections are made, resulting in most cases in either efficiency measures or renegotiation with the client.
  • Creativity rules the roost. At agencies creativity and innovative solutions are held in the highest regard, to the extent where they’ve become the raison d’etre for many firms in the industry. Without creativity there’s no business, no talent, no reputation, which is why great ideas and campaigns are put on such a high pedestal. There’s a strong focus on hiring the best creative talent, as well as training teams to boost creative thinking and celebrating creativity at award shows. In-house teams can also hugely benefit from creative specialists, who bring new perspectives to teams that are ‘stuck’ and push for innovative solutions. These skillsets are especially needed in times of rapid change and shouldn’t be shut down by risk minimization efforts born out of crisis management mode.
  • Adhocacy First. Pragmatism and rapid action are key to managing the current crisis – two qualities that are deeply ingrained in agency teams. Good agencies don’t reward those who stay in their box and busy themselves playing politics or covering their tracks. Whoever is present in the moment and takes decisions right then and there that positively impact the pitch, the press release, the presentation, the media interview or the social media post gets the credit. This enables a culture of helping hands, across siloes, without considering processes or hierarchies. Teams are encouraged to directly approach colleagues several levels higher or in markets halfway around the world in order to quickly get the support they need. The same goes for client interaction, where teams are trained to take the most direct path, with little regard for hierarchies. The often long and winding road of the corporate world slows teams down and creates inefficiencies. Agency teams manage entirely according to client deadlines, everything on their side is designed to be as fast and efficient as possible – which also explains the limited centralized structures in many agencies.
  • Team spirit. When team interaction is limited to emails, phone calls and videoconference, something is missing. Informal chats and daily banter are part of the glue that keeps a great team together. Agencies under strong leadership are driven by pride to belong to a great team, transcending divisions, business units and country borders. There’s a solidarity and a commitment to each other that helps carry teams through tough times. Even international teams that aren’t bound by P&L can develop an amazing culture of ‘we’, if united behind a strong vision – even if they have never met in person. This is why many communicators stay on the agency side,

despite the challenge in keeping a work-life balance and the tremendous pressure they are at times subjected to by clients. Inspired agency teams get up in the

morning because they’re part of a team that wants to do great work together. In- house teams that manage to recreate this team spirit will be motivated and in synch even when working remotely.

  • Center stage. At all times but especially in a crisis, team members that are fully invested and working hard to add value need to be recognized. The guiding principle at agencies is “lead from the front”. They excel at recognizing achievements and reward team members who push the boundaries of their comfort zone, display

courage in difficult situations and are not afraid to step into the lion’s den. In-house teams can embrace this spirit and reject their position as a support function. An

organization’s reputation is core to the business, those who manage it actively and successfully deserve the same respect and recognition as those working in sales or R&D.

The corona crisis is an extreme pressure test for in-house teams and agencies alike. Pre- corona we may have been talking about the need to transform and evolve, steadily, and without a clear timeline. Now we’re forced to evolve or perish in all areas of our professional lives. And while we never consented to this giant experiment, it presents opportunities to establish a new working culture.

Cornelia Kunze and Moritz Kaffsack are co-owners of i-sekai, a virtual boutique consultancy specialized in international communications and co-founders of fluid, a global collective of independent consultants. They have held leading roles in-house and in agencies in Europe, Asia and the US. I-sekai works with communications teams to build up in-house resources and more effectively run international communications programs.

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Brand fluidity in times of Corona: What comes after the fight or flight-response?

Lisa Collin and Cornelia Kunze
May 14, 2020
8 min read

When in immediate danger, the amygdala sends a distress signal to the hypothalamus, an unconscious chain reaction starts, and the chemical messengers in our brain create cortisol. This leads to suppression of the immune system and a boost of energy, preparing for fight or flight.  Once the threat passes, our cortisol levels go down – and the conscious parts of our brain take over again. Relief!

At this time in our lives the threat has not passed and we’re all unsure about how long we will go through distress, hardship, uncertainty.

The Corona crisis seems to trigger the same kind of almost chemical reaction in businesses or brands. After a first startle reflex and a moment of immobility and disbelief, organizations are becoming hyper-active, fueled by corporate adrenaline, focusing on cash protection first: state subsidies, longer payment periods, third-party contract termination, suspending rent payments, reduced working hours and salaries and putting a freeze to brand activities. Others also rush to empathize and to signal as loudly as possible just how much they care, without fully considering how to make this care tangible, useful or effective.

The responses during and after the immediate reaction can be largely divided into fight or flight.

Those who fight,

  • sustain their operations, keep their employees safe and use all their power and resources to mitigate the effects of the crisis for us all.
  • re-purpose their factories and produce face masks and gloves instead of luxury fashion, hand sanitizer instead of body cream, or find themselves under presidential pressure to produce ventilators instead of cars.
  • stand on the side of their employees, customers and suppliers, put action before words, stay human, do what they can, provide relief for their own stakeholders and beyond.
  • And communicate thoughtfully; joining the dots between their stakeholders and the real needs of the audiences they are striving to support.

Those who take flight,

  • let worst-case scenarios rule over their headcount decisions, bonus agreements, supplier contracts, rent obligations and customer relationships.
  • look for legal loopholes, seize the cost-cutting and state subsidy opportunity, even if they don`t have to  and serve shareholders first
  • disappear from their channels, as they believe they have nothing to do or say now
  • or worse – take advantage of the crisis to re-surface as the winner or hero

We know that crisis brings out the best and the worst in both, people and brands. #BoykottBrandX will scare brand leaders now, and some may think that consumer memories are short-term, and budgets are best used when life picks up again.

Maybe – but maybe not.

There is reason to urge brands to stay in touch closely, behave consistently and prove their relevance more than any time before.  To do so, they must recognize that life has become, and will remain, more fluid. Corona has supercharged the forces on business and brands that were already there and set a new paradigm for future operations.

Listening and adapting day by day is paramount.  A singular message, broadcast once, will not suffice.

This phenomenon of fluidity will be the new normal for all of us, as we will have learned dramatic change the hard way, accepted uncertainty because we had to and often found some joy in our new lives.

As consumers, employees, entrepreneurs, we are building muscles and resilience. We are inventive and less needy, perhaps rediscovering a resourcefulness we’d suppressed. And we are instinctively sorting out abusive or one-sided relationships with people, employers, agencies or brands. The crisis is a catalyst to many things.

For example, to e-commerce, as it was proven with SARS in Asia. Or for better personal hygiene. We all will feel uncomfortable singing happy birthday only once, when washing hands. Or video-conferencing: Why get up at 4 am in the morning to fly from London to Berlin for a meeting, if I can meet people on Zoom? Or going back to office on a full-time basis after so many weeks of freedom. Or the retainer contract with the agency.  Maybe home-schooling is the exception. Some parents among us might thank or bribe schools and teachers for taking their kids back and ensure they are happy and educated.

We see four trends, which are not necessarily new, but which will impact brands even more than before the crisis.  

  • Every product or service will have a digital alternative tomorrow – except for toilet-paper may be. You can be replaced by those digital siblings immediately. People don`t need you. They might discover that they need your whole category less after the crisis. Been with grey hair for 6 weeks? Maybe stick to it. Not travelled the world for the last months? Maybe enjoy home. Learnt to sew and cook? May be reduce fashion and restaurants altogether. Of course, even if they don`t need you, they might still want you but these discreet shifts in behavior represent an opportunity to improve the value exchange with your audience.
  • Nothing will ever stay a secret. Really. You charge a usurious price for your product, you tolerate shabby behavior of your organization during the Corona crisis? Trust is fragile and Google`s memory is unforgiving. Platforms, apps, social media empower everybody to create movements with the like-minded. They will hype or ditch your brand and organization, as they please. Not fair? Well, this has become a game at eye level and your behavior during and post Corona is being watched.
  • Everything is connected to everything. We might have heard before that Orangutans die, because we shower or eat ice-cream. That children stay un-educated, because we buy cotton t-shirts. That cars are made of 20.000 different parts from thousands of suppliers across the whole world. But now we also know that the actions of others in another part of the world can fundamentally change our society and daily experience; and that we need to keep the big picture in mind always. Brands are held responsible for issues, no matter how complex the supply-chain, no matter how water-proof their contracts and codes of conduct.
  • There is a higher meaning in life but efficacy matters.  Do what you do well.  Be the best at it.  But once the basics are covered, people not only want to know what a brand stands for but what a brand stands up for. Brand purpose has too many times proven to be a shallow promise, a mere communications exercise. All of us have been disappointed too often, a trust bonus would be naive. If the only reason to exist for a product is profit, people will behave as transactional with you as you do with them. There are many alternative brands, who do contribute their expertise and money to a higher meaning and a better world.

If our environment is ever changing- fluid – there is an imperative for brands to adapt. Not to simply respond to the forces exerted upon them but to echo or resist, as makes sense for them.  They can apply fluidity too, once the fight-or-flight-response is over.

At this moment, as businesses large and small tackle the many immediate challenges that each day presents, the notion of ’what is next’ may feel too removed or too difficult to consider.  But beyond just keeping things moving, there is an imperative to consider how we not only get back to normal but strive to get back to better. This is a good time to re-vive and re-vise a brand; to assess the rational and emotional value we contribute and develop brand ideas fit for future based on fluidity. The current situation is good for some ‘zero-base’ exercise: What is the true anchor of our brand, which has brought us to where we are today? What are the actions which will make the life of our stakeholders better? And how will we build and nourish our key connections with customers, suppliers, talent and the society at large, so that we together can add value.  Perhaps whether a brand chooses to proactively plan for a different future or not is the true test of flight or flight.

***

This essay is part of a series of opinion pieces shared by FLUID, our global collective of independent senior consultants from around the world, who come together on a project basis to solve communications-intensive business issues. We identified the concept of ‘fluidity’ as a primary characteristic of the world in which we live and operate. It is characterized by the undermining, deterioration – and even ultimate collapse – of traditional norms, structures and processes. And it challenges organizations, brands and people to apply fluidity to their thinking and their actions. “In a fluid world, it is sometimes difficult to see the dots – let alone to connect them.  Fluid helps you do both.”

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Managing change in times of corona

May 5, 2020
7 min read

‘Be water my friend’ said Bruce Lee. These words could not ring more true in the chaotic and confusing times businesses are facing. In the midst of the disruption the corona pandemic is creating, how can leaders prepare for an unknown future with so many blind spots in their internal and external environment? When even expert predictions have a very short shelf-life, there is very little understanding of what will change in the short-term and which of these changes are here to stay.

Humans are hardwired to hate uncertainty and perceive change as a loss of control, often resisting it at all costs. Structuring a change plan in this environment is hard; communicating it and bringing all customers, employees, suppliers along may seem an impossible task.

In less volatile times Larry Hirschhorn wrote an article in the Harvard Business Review titled ‘Campaigning for Change,’ wherein he outlined three campaigns of change management: a political campaign (creating allies and a coalition), a marketing campaign (effectively communicating the benefits) and a military campaign (overcoming resistance). This is a brilliant starting point for a change campaign in normal times.

But how do you build alliances, convince your audiences and overcome resistance to change, when you have no clear view of what the future will look like and are struggling to articulate a structured roadmap for your business? When forced to take it step by step, shifting gears and planning actions in constantly changing circumstances? What experiences can we look to for guidance, clues and actionable insights?

Let’s examine how businesses operate in environments so fluid that they’re required to be in constant change mode.

This is the case for businesses operating in emerging Asian markets in the past decades. Multi-year plans are practically obsolete within a few quarters when the economy is growing at 7–10%, when talent shortage drives employee turnover industry-wide to 50%, when big projects can be secured overnight or lost overnight. Planning far ahead isn’t just impossible, it creates a competitive disadvantage. In an environment this fluid, market leadership can change constantly. This offers up big opportunities for businesses but taking advantage of them requires agility and quick thinking and action, insights and instinct, and most of all strong leadership.

Developing a new product with a start-up is an equally fluid experience. To build a winning product, start-ups run on the principles of speed and agility. Products are developed based on hypotheses, but what the product will look like a year from today is not defined. Development takes place in an iterative process, testing assumptions, getting quick feedback and adapting features. This way of working permeates the entire organization. As a result, job descriptions are fluid and talent is applied where needed with a focus on pushing fast progression.

These two experiences are vastly different from each other. What’s striking is what businesses have in common that succeed in them: their primary goal is not to create stability. Instead, their plan is to thrive in a volatile and unpredictable environment by becoming more fluid themselves.

The leaders and organizations I’ve seen thrive in these environments, employed some or all of the following principles to manage maximum change:

1. Manage by principles, not by rules. Rules will change. The principles need to stay the same. Usually, that’s straightforward: you care about your people and you need to run a successful business. Stick to those and explain your decisions in the current context.

2. You may not have a roadmap — you must have a vision. That’s nothing new of course, and it can be very high-level, but it’s what your teams will stick to and be motivated by: to make that vision happen against all odds in an uncertain environment.

3. Surround yourself with a fluid skill set and switch quickly. Different talent will be required for different phases. So focus less on roles and titles, more on talent and capability. Repurpose smart people quickly as a phase winds down and another starts.

4. Don’t waste time on long-term planning. Have a clear vision, yes, understand how it informs company priorities, yes. But develop only short, quarterly plans how to get there. Be ready to adjust quickly, pivot, and guide your teams in a new direction.

5. Communicate all the time. Organizations shy away from doing this in times of change, because they don’t want to be held accountable to things they said that may change later. Don’t let that stop you. We’ve talked endlessly about humanizing business: now live it. Start every communication with ‘the situation is very fluid and we won’t be able to predict what happens next. But here’s our principle. And here’s what we’re doing today and why. We’re on it and will keep updating you’.

6. Co-create everything. Bring people in and show you trust them. Shoulder uncertainty together. That applies not only to employees and colleagues, even partner and customers can handle openness, honesty and the desire to collaborate and find solutions together. This creates buy-in and makes the actions taken ‘our actions’ rather than unilateral initiatives. Not to underestimate the power of offering to be their ally, being ‘in it together’ in times of disruption.

7. Don’t punish failure, address inaction instead. As the strategy adapts, teams need to move with it, overcoming siloes, hierarchies and most of all inertia. To move beyond the fear of action, encourage quick decisions and model results-orientation.

Companies employing these principles aren’t just responding to change but thriving in it. When we apply this fluid approach to managing change in the current setting, the marketing, political and military campaigns are not obsolete, they’re still as relevant as always. With one difference: they don’t run as structured campaigns. Instead, leadership teams draw upon them in a modular fashion.

Instead of marketing a change theme, market your principles. Communicate your take on the ever-shifting context and the resulting decisions. Instead of identifying selected political allies to take your company through the change, cast a wider net to co-create and shape the path forward together with a larger number of employees and even external partners and customers. Instead of using a military approach to fight resistance to change itself, give more leeway, allow for pushback and opposing opinions. Bring those along who fight but also act to get the business to a better place, remove those who hesitate to act until they see a clear plan and a structured roadmap to get there.

Using these principles can get a business closer to being able to move, pivot, change gears quickly while bringing all those important along. This will at first feel unusual, seem unstructured and not planned enough for a big corporation. And that’s normal. The current crisis has accelerated the process of the collapse of traditional structures, forcing companies to deal with the fluidity heretofore not experienced by the larger business world. It’s time to look beyond the boundaries of our past experiences, in search for new solutions and a fluid approach to change.

This essay is part of a series of opinion pieces shared by fluid, a global collective of independent senior consultants, united in their aim to solve communications-intensive business issues. The concept of ‘fluidity’ is a primary characteristic of the world in which we live and operate. It is characterized by the undermining, deterioration — and even ultimate collapse — of traditional norms, structures and processes. And it challenges organizations, brands and people to apply fluidity to their thinking and their actions.

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Do traditional brands need to focus more on the user experience?

Cornelia Kunze
2 min read

A recent US consumer survey, published in HBR, compares brand success of (new) digital brands and their traditional “twin” – like AirBnB vs. Hilton, Dollar Shave Club vs Gillette, Red Bull vs. Coca Cola, Tesla vs. BMW. They come to the conclusion, that new digital brands make people`s lives easier, whereas traditional brands are more “looked up to”. And consequently call the traditional brands “purchase” brands, who focus on the purchase moment of truth (getting as many people of the target group to buy them) versus focussing on the “usage” and what happens after it, i.e. the advocacy of the user, the experience, the community.

The respondents who are happy with the user experience, seem to show willingness to pay a price premium for “usage brands” compared to the “purchase brands”. It sounds logical, that my product experience (if it is good) and after-sales experience makes me happier than just a good purchase experience. In other words, if brands fail to give me a good user experience, don’t care about improving the experience and don`t care about engaging me, I am more likely to switch to competitors, leave negative comments online, not recommend them.

Improving the user experience is of course easier for a digital brand, which is continuously learning from users in real-time than for a product which is with me at my home, once bought, with no tool for feed-back. I have two take-aways and one caveat:

1) Traditional brands need to and can spend more resource on engagement with consumers pre, during and after purchase and turn insights into action much faster;

 2) Traditional brands can and should expose themselves to feedback online by being available and by actively engendering and rewarding conversation, which helps them to continuously improve product or service and build a community of (hopefully) loyal advocates;

3) The caveat: Byron Sharp (Author of “How brands grow”) will disagree with a user versus purchase focus. His argument sounds logical too: Brands will not grow fast enough, if they focus on “loyal” customers. They need penetration and win many more customers.