Please welcome our newest superhero.
Vivaldi CFO, Richard Rolka, joined new Senior Partner, Chris Halsall [see bio], for a virtual Q&A to welcome him to the Vivaldi team.
Richard: Welcome to Vivaldi, we are very excited to have you.
Chris: Thank you, I’m very excited to be here.
We thought this Q&A would be a good opportunity for everyone to learn a little more about you and the work you do. You have a very interesting consulting background – at McKinsey, Prophet, and Ogilvy Consulting. Can you tell us a bit about how your focus has evolved over your career?
Sure. I like to describe my focus as driving growth and change at the intersection of business and brand strategy. I have been interested in marketing and innovation from a very early age, and it has influenced my career choices to ultimately bring me here today. I started out in brand management with P&G, which at the time was a wonderful place to learn the fundamentals of marketing.
The transition into consulting was really a desire to tackle a broader set of business challenges. My choices of consulting firms over the years have moved me progressively closer to the customer, which is where the real value creation and innovation is happening. Just creating a strategy deck that sits on a shelf gets old very fast — I wanted to help make the change happen, which is what brought me to Vivaldi.
So tell us a bit more about your decision to join Vivaldi.
Vivaldi gives me the ability to connect all the dots needed to help clients transform and grow — from leading edge brand and business strategy, to actionable innovation, new digital experiences and creative expression. Some shops have similar scope, but Vivaldi is the first one I’ve seen that has genuinely “de-siloed” these capabilities in how they work with clients.
So what is your “super power”?
I guess the ability to see around corners, which is not as amazing as it sounds — it’s just a new type of pattern recognition. It’s about seeing what’s happening in other categories – where new technologies and customer behaviors have shaken up the status quo – and then applying that to shape the change with clients in their categories. A great example of this is with Erich’s new book, The Interaction Field [Erich Joachimsthaler is Vivaldi’s founder and CEO]. The Interaction Field unpacks how a new breed of company has been able to achieve unstoppable growth, and then demonstrates how almost any business or brand can apply this formula. It’s very cool.
I think we have all heard the expression, “seeing around corners”, but what does it really mean?
Traditional consulting created a multi-billion dollar industry in the late 20th century by monetizing their pattern recognition of “best practices”, observed across many clients within the same sector. Essentially helping companies skate to where the puck is — if you will allow a hockey reference. Today, that is often the last thing you want to do, as it just makes you more vulnerable to having your business eroded by more nimble attackers.
Now more than ever, companies need to, “skate to where the puck is going”. Often this means putting aside what is best practice in their industry, as that becomes increasingly irrelevant. Irrelevant because customer and consumer expectations are no longer being defined separately in each category, but rather collectively across all categories. They want all the brands they engage with to deliver the choice of Amazon, the convenience of Uber, the experience of…well you get the idea.
When you accept the premise of this convergence of systems – of expectations, behaviors, technologies, and this new type of pattern recognition, it gives you much more line of sight into what is next for your brand and business.
Take Bitcoin as an example. You didn’t have to be Nostradamus to see that recent correction coming. Examined narrowly, there was no reason to believe the market enthusiasm for Bitcoin should abate. But when you take a holistic, systems view, how could Bitcoin maintain its rate of growth, without addressing the huge carbon footprint it is creating?
“We can’t just skate to where the puck is. Now more than ever, companies need to skate to where the puck is going.” – Chris Halsall
Can you describe an example of a sector where you have applied this new type of pattern recognition?
Sure, I think automotive is a great example of an industry that has had to fundamentally transform very quickly. Everyone is familiar with the big technology shifts there, around BEV and AV, but these are just a part of many more changes to come.
With any significant transformation, it really has to start with “framing” — essentially, what business are you in? If you hear a CEO or an analyst call refer to their business as “carmaker”, that’s probably not a long-term stock to hold. While manufacturing will represent the bulk of the sector’s revenues for at least another decade, we reached peak auto 5 years ago, and there is no turning back. This is why you are increasingly seeing auto makers reframe what they do as being a, “mobility services provider”.
Once you have reframed what your reason for being is, now you can start to look around the corner and plan where you need to go. Applying our convergence principle, we can identify several forces that will fundamentally reshape the sector. Some of these have already begun to take hold and others have not yet reached a tipping point. I will describe just a few here.
Why is that you can buy anything online — literally anything, but it’s still a very painful process to do that with automobiles. Carvana showed what was possible, but that was limited to used vehicles. New vehicle ecommerce in the US has been slowed artificially by regulations, that I won’t get into here. But now that Tesla has found a workaround, the genie is out of the bottle and won’t go back. Much more of these transactions will shift to digital, which sets off the next ripple of foreseeable implications.
One implication of auto ecommerce, is that it will result in the move to a single, non-negotiable price for each new vehicle. It just won’t be sustainable for manufacturers and dealers to “race to the bottom” with inconsistent pricing. In the short-term manufacturers and dealers are trying to preserve negotiated price with an ecommerce-light experience but it won’t be possible for that to survive long-term. Which of course sets off the next ripple.
If you are a dealer and you have lost your ability to negotiate extra margin on a sale, what does that mean for the future of your business? What if at the same time you are losing this profit, you are also being impacted by the move from internal combustion vehicles to battery electric vehicles, which require a small fraction of the dealer service visits that dealer profitability once depended upon? Now you see the next ripples of implications — around the need for new offsetting revenue streams, etc.
I could go on and on but you get the point. And this was just chasing down the highly predictable implications of one thread of convergence around online sales. We haven’t even gotten into the implications of the move away from “owning” things, what happens in an AV world, etc. Seeing around corners, is not a parlor trick, it’s just about putting in the work to look at the forest and not just the trees.
Is this just about new business models and innovation, or can it be applied to things like brand?
Absolutely, although it’s probably not too wise to only focus on brand without adapting your business. We can apply the same principles to skate where the puck is going on brand building. While this is a whole, rich topic on its own, let’s talk about some of the bigger shifts.
This convergence in expectations has profound implications for the role of brands and how they are built. It is no longer enough to just make a great widget and overlay it with some emotional benefits. Consumers are demanding more value than brands are providing, and this value needs to show up in many more places. This is forcing brands and businesses to begin to focus more on the quantity and quality of “interactions”, rather than just on the “transaction” alone. The days of monolithic brands that just pushed ads and engagement are drawing to a close. Brands now need to reframe their role, and construct an ecosystem of new direct interactions around their consumers — interactions with real, reciprocal value exchanges. Anyway, this is a big topic, so let’s set up another time to dive into this further.
“The days of monolithic brands are drawing to a close. Brands now construct an ecosystem of new direct interactions — interactions with real, reciprocal value exchanges” – Chris Halsall
Thanks for sharing your thoughts today Chris, and once again, welcome to Vivaldi.