Can digital innovation help repair a company’s reputation?

Facebook’s shift to the ‘meta­verse’ under new com­pa­ny name Meta has been the sub­ject of much crit­i­cism. How­ev­er, com­pa­ny-wide trans­for­ma­tions hold sig­nif­i­cant poten­tial, par­tic­u­lar­ly those that embrace the pow­er of dig­i­tal inno­va­tion. 

Mark Zuckerberg’s announce­ment of a uni­ver­sal vir­tu­al real­i­ty ecosys­tem was derid­ed by many in the media and beyond. Olivia Solon, NBC News tech inves­ti­ga­tions edi­tor, tweet­ed: “I don’t get how the piv­ot to the meta­verse will solve any of Face­book’s prob­lems.” 

She was far from alone. Dan­ny Groner, direc­tor of growth PR at invest­ment fund Fore­cast Labs, said the com­pa­ny was “try­ing to rein­vent them­selves as some­thing else … as a way to dis­tance them­selves from dam­age they’ve done”. That dam­age includes Facebook’s han­dling of user data, the accu­sa­tions of whis­te­blow­er Frances Hau­gen, and con­cerns over the spread of con­tent relat­ed to vio­lence, ter­ror­ism, hate crime and fake news. 

But no mat­ter what hap­pens with Face­book and Meta in the long run, experts say we shouldn’t dis­miss the pow­er of trans­for­ma­tion. Gra­ham Sta­ple­hurst is thought lead­er­ship direc­tor for Kan­tar BrandZ, which pro­duces an annu­al analy­sis and rank­ing of the world’s most valu­able brands. He argues that “cre­at­ing a fresh set of brand asso­ci­a­tions through a new chap­ter might be an essen­tial step for the busi­ness”.

Digital dividends

So how can com­pa­nies make the most of their trans­for­ma­tion? Dig­i­tal inno­va­tion is key. 

Take BP for exam­ple. It was the most valu­able ener­gy brand in the world in 2009, accord­ing to Kan­tar BrandZ rank­ings. But it slid to sixth in the ener­gy cat­e­go­ry fol­low­ing the Deep­wa­ter Hori­zon oil spill in the Gulf of Mex­i­co in 2010, the largest marine oil spill in his­to­ry. 

The dis­as­ter “shook the com­pa­ny to its core”, then CEO Robert Dud­ley said in 2018. By that time the com­pa­ny had recog­nised the need to “mod­ernise through tech­nol­o­gy” to become “future fit”, as out­lined in its 2017 strat­e­gy. 

By 2019, BP had part­nered with Microsoft to accel­er­ate its mod­erni­sa­tion and over­come its chal­lenge of reduc­ing car­bon emis­sions while meet­ing increas­ing glob­al ener­gy demands. This involved a “full-scale rein­ven­tion of the way it approach­es tech­nol­o­gy”, accord­ing to the com­pa­ny, includ­ing becom­ing cloud first, lean­ing on AI and machine learn­ing and incu­bat­ing its own star­tups. 

These ini­tia­tives are said to have cre­at­ed bil­lions in sav­ings and new rev­enue streams. In par­al­lel, BP’s brand val­u­a­tion has near­ly dou­bled since 2009 to $10.4bn (£7.7bn), accord­ing to BrandZ, and it was the sev­enth most valu­able brand in the UK in 2021.

“Its trans­for­ma­tion as an ener­gy busi­ness has clear­ly been effec­tive,” says Kantar’s Sta­ple­hurst.

BP exec­u­tives spoke at length about the pos­i­tive impact of dig­i­tal inno­va­tion at the recent Women of Sil­i­con Round­about (WOSR) con­fer­ence in Lon­don, dis­cussing the company’s advances in robot­ics, cloud com­put­ing, cus­tomer-cen­tric design, smart cities and dig­i­tal upskilling of its work­force.

“BP is tran­si­tion­ing from an inter­na­tion­al oil com­pa­ny to an inte­grat­ed ener­gy com­pa­ny. Through this tran­si­tion, we’re putting a lot more effort, ener­gy and invest­ment into the renew­able space and how we can cre­ate prof­itable busi­ness­es on that side from wind, solar, and oth­er types of renew­ables, but mak­ing sure they’re dig­i­tal in a very nat­ur­al way,” explained Mariza Fotiou, BP’s vice pres­i­dent of dig­i­tal prod­uct own­er­ship and design.

Embracing change

How­ev­er, there are cul­tur­al chal­lenges when it comes to inno­vat­ing with­in a 112-year-old cor­po­ra­tion.

“In a com­pa­ny like BP, you have a lot to lose if some­thing goes wrong,” said Lily­beth Go, BP’s vice-pres­i­dent for data and ana­lyt­ic plat­forms, also speak­ing at the WOSR con­fer­ence. “But we need to accept that change is con­stant, so when we get into new busi­ness and new mar­kets, we have to think, ‘how can we go fast’?” said Go.

Both Go and Fotiou described the shift as a jour­ney that takes time.

“We need to be patient with this change,” said Fotiou. “We need to bring peo­ple into the jour­ney with us to under­stand that we can move away from hav­ing all the answers … to a space where fail­ing is accept­ed, where we work togeth­er across mul­ti­dis­ci­pline teams to think about how we can cre­ate the future togeth­er.”

Sim­i­lar­ly, Volk­swa­gen was posi­tioned at num­ber six in the rank­ing of the world’s most valu­able car brands in the BrandZ analy­sis. That was until 2016, when the US Depart­ment of Jus­tice sued the car man­u­fac­tur­er for effec­tive­ly rig­ging its diesel vehi­cles with soft­ware designed to cheat emis­sions tests. The com­pa­ny set­tled in court for $14.7bn and embarked on a $10bn buy­back pro­gramme to com­pen­sate affect­ed cus­tomers. 

Volk­swa­gen dropped out of the BrandZ rank­ings alto­geth­er for two years but has since recov­ered to become the world’s ninth most valu­able car brand. It’s worth more in 2021 than it was in the first rank­ings in 2006.  

It’s per­haps no coin­ci­dence that Volk­swa­gen also went big on its dig­i­tal trans­for­ma­tion strat­e­gy.  In 2019, the man­u­fac­tur­er com­mit­ted to invest £3.4bn and cre­ate 2,000 new jobs. Ralf Brand­stät­ter, who was then the company’s chief oper­at­ing offi­cer, said at the time: “We are lay­ing the sus­tain­able foun­da­tion for mak­ing the com­pa­ny fit for the dig­i­tal era. We are accu­mu­lat­ing new dig­i­tal exper­tise and mak­ing all areas of our organ­i­sa­tion faster, lean­er and more com­pet­i­tive.”

Wider pressures

That’s not to say such com­pa­nies pur­sued dig­i­tal inno­va­tion pri­mar­i­ly to boost their brands, or that it’s a sil­ver bul­let. Repair­ing the dam­age wrought by a scan­dal or oper­at­ing prob­lem is pos­si­ble, but isn’t always achieved, notes Sta­ple­hurst.  

“Although this is like­ly to be helped by dig­i­tal trans­for­ma­tion, in our view such trans­for­ma­tions are hap­pen­ing any­way due to indus­try-lev­el pres­sures, so it would be hard to defin­i­tive­ly sep­a­rate the effects relat­ing specif­i­cal­ly to rep­u­ta­tion recov­ery,” he says.

So can Facebook’s meta­mor­pho­sis into Meta fol­low in the foot­steps of BP and Volk­swa­gen? Like BP, per­haps time will be on its side, notes Jonathan Has­sall, senior behav­iour­al ana­lyst for insights con­sul­tan­cy Canvas8.

“It could be that Meta is hop­ing the dust will have set­tled on this rebrand by the time their meta­verse prod­ucts go to mar­ket, effec­tive­ly get­ting out in front of the issues around trust and data pri­va­cy that come with being in Facebook’s orbit.”