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German “Hidden Champions”, who previously preferred to celebrate their success away from the limelight, have to step out of the shadows during the digital transformation. They need visibility through strong brands. 

Technology companies need the power of the brand

Article

The digital transformation makes technology companies drop their “Hidden Champion” status and instead shape the future with brand strategies.

The digital transformation is currently the big topic in German companies – and it is putting the entire technology location Germany to the test. Will the old economy manage to transform itself quickly enough to develop new business fields including Industry 4.0?

Allegedly, the location Germany is already more digital than its reputation. But this reputation has to be improved, because peak performances alone will not be enough in the future. The days when small specialist operations could enjoy their "Hidden Champion" existence in out-of-the-way German valleys are over.

Today, all companies must ...

  • market their peak performances at the highest possible value,
  • attract the right top people,
  • position themselves against worldwide competitors,
  • win the race for customers.

In a nutshell, that means: Every company has to build a credible, attractive, and differentiated » brand in order to achieve its strategic goals.

"Hidden Champions" will have a problem

According to research by Manager Magazine, there are a number of "Hidden Champions" in Germany, some in leading world market sectors like machine engineering and the automotive supply industry. This is precisely what is now becoming problematic: German firms are world champion innovators, but only regional champions when it comes to building outstanding, valuable brands.

There is also an impressive number of "Hidden Tech Champions". How important a brand would be for them is illustrated by Apple. Without its outstanding brand work, the company would probably occupy a niche as a computer manufacturer for design freaks – despite its undisputed innovative performance.

Tech companies underestimate the significance of brands

Brand rankings by » Millward Brown or » Interbrand show: Nearly half of the world's most valuable brands in the past 10 years came from the technology sector. Among the top 30 of the most valuable brands, there were only 3 German brands - BMW, Mercedes, and SAP – even though German firms are among the top 3 suppliers in over half of the industrial sectors.

SAP shows that for a tech champion it is completely irrelevant whether they work for end users or business clients. Especially technology companies should see » brand management as a strategic secret weapon – for more added value and for more agility and stability during the digital transformation. Unfortunately, it is still often considered an advertising tool for the masses.

In the future, the winners will not be the companies that deliver the best quality at the best price. The winners will be those who use their data superiority to offer the greatest benefit to the customer. Uber has no taxis, Airbnb has no contracts with hotels, and PayPal has no branch offices. Still – or precisely because of that fact – they are attacking established brands from the transport, banking and travel sectors:

  • They use their brands to develop a special approach to the customer.
  • They recognize where customers perceive the greatest need.
  • They beat out established corporations who still don't have a grip on their service – with customer-oriented brands and high customer benefit.

Brands make tech champions resilient

The big world of advertising – with a lot of hot air over nothing – seems suspicious to many a humble engineer at the helm of German tech company. They prefer not to be famous. Based on a few examples of "Manager of the year today, broke tomorrow", they would rather act in the background. But a desirable brand can be a shield against crises and strong fluctuation, especially now in this time of transformation.

However, this does not apply when these brands are built on advertising soap bubbles and not on solid » brand strategies. At the same time, strong brands motivate their employees to develop new products that match the brand. But to do so, it must be made transparent what the company stands for in the digital transformation and what principles are to guide the brand into the future.

Elon Musk shows how it's done: With his brand Tesla, he has gained a following of employees and customers alike. He spreads a grand idea based on technological peak performances and thrilling customer experiences at breakneck speed. In his brand, he condenses his mission, his attitude, and the principles by which he manages the enterprise behind the brand. More agile than any established player in the business.

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