Glossary

A transformation is a major, strategically comprehensive realignment that a company carries out in an extreme phase.

What happens during a transformation?

A transformation occurs, for example, when a company shifts its business from a highly competitive market with declining margins ("red ocean") to a growth market with high margins. If such a transformation is successful, the company can benefit from new success factors ("blue ocean").

A reactive transformation is when restructuring is unavoidable in order to ensure the turnaround of a company - for example, after a phase of stagnation that has lasted too long. This requires rapid, radical measures.

What is the difference between change and transformation?

Both terms describe change processes in an organization. However, there is a clear difference between them: we understand change to mean optimization through gentle, continuous adjustments. In a transformation, on the other hand, the scope of action is much larger: completely new processes are established and new business areas are conquered - right up to the realignment of a company.

What impact does a transformation have on the brand?

A transformation is a major challenge for brands. Companies often have to break with structures that were previously important for the brand in order to undergo such a change. This is why it is crucial to involve brand management in transformation projects. It must prepare the brand for the new circumstances and adapt it without damaging the brand core. Only then will the brand capital and brand trust built up so far not be lost.

What role does the brand play during the transformation?

The second reason why brand management must be involved: The brand is an indispensable, powerful pillar for transformational processes because it provides stability and clarity. It prevents you from losing your bearings. The enormous potential for success that the brand can contribute is often underestimated or overlooked in practice.

What needs to be done to ensure that the brand contributes to the success of a transformation?

The following must be ensured for the transformation to be successful: The new direction must be understood as a position of strength by everyone involved, both internally and externally. The mobilizing power of the brand is ideally suited to this task.

These are the necessary foundations: the brand strategy is well anchored in the company. Employees and managers know the brand values, the positioning and its limits. If this is ensured, nothing stands in the way of brand-compliant, almost intuitive action during a transformation.

What are the advantages of such a brand-centered transformation? Just two examples:

• Employees are then able to emphasize the brand promise efficiently at all brand touchpoints.
• Customers continue to trust the brand, despite major changes taking place in the background. For example, customers buy a Mercedes again and again without hesitation because they trust the brand - while the automotive industry is struggling with dramatic upheavals such as the switch to electromobility. 

BrandTrust supports CEOs, brand leaders and entrepreneurs in change processes based on the brand. Find out more about our expertise in change and transformation.