Good growth creates a more sustainable ecosystem: Adam Gerhart

Growth is being redefined for all of us today, and it is being questioned daily, whether you are a consumer, stakeholder, shareholder, investor, or whatever, said Adam Gerhart, Global CEO of Mindshare, during his keynote address at e4m Conclave 2023, held in Gurugram on Thursday.

“The challenge is how do we find growth that is enduring, diverse and sustainable to support all of our businesses,” he remarked.

Speaking on Good Growth, Gerhart stated there was no doubt there were compounding pressures facing every single business, regardless of sector or category, along with the very concept of growth being called into question daily.

It's about how we reconcile the needs of various stakeholders, whether you're a consumer, ecosystem, media owner, or agency partner, Gerhart noted. “All of those parties' needs are frequently at odds. So, how do we begin to reconcile those in the future and become more inclusive and equitable in our approach to growth?”

Gerhart stated that we must reinvent how we approach growth in the future. Growth was earlier driven by geography, and reaching new markets and new audiences. However, in an age and era driven by platforms, that environment has fundamentally transformed and evolved. “Platforms today have completely broken down the sales funnel. They've completely collapsed it and given consumers new power in new ways to define themselves, create, control other people's influences, and change the very world around them. This has changed the very nature of growth.”

He further said that everything was moving with a velocity that we had never seen before. “This requires more transparency from brands, more authenticity from businesses, and it empowers consumers to take control in ways that we haven't seen before.”

“The platforms these days have all the control and the power and they're enabled for the consumers as well. So, the challenge really is about businesses we have to adapt. In today's world, they're either being born from platform ecosystems or are evolving into platform ecosystems.”

According to Gerhart, the rules of growth have fundamentally changed. “The platforms have given rise to new economies, new routes to market, and consumers are now calling all the shots. It's why businesses today are failing at a faster rate than ever before.”

How do we need to start to think about it in the future? Gerhart highlighted that firstly, the time between innovation and adaptation is radically down to less than five years. Secondly, margin volatility is up to three x versus what it has been historically. Thirdly, and arguably most importantly, the connection between scale and profitability has virtually disappeared.

“Growth has not only changed but in the future, not all growth will be created equally. For some, D2C is far more important in brick-and-mortar. For others, short-term sales and conversion are more important than long-term equity. And yet still some will prioritize brand and lifetime value over the immediate quarter's results.”

According to him, growth has to be defined for every single business. He said if we are not careful, it could radically erode trust between consumers and businesses, either by misuse of data, poor experiences or bad media inventory.

He also said that industry may encourage short-termism at the expense of the long term but it can have detrimental consequences to the society or the world around us. “This is the single biggest threat with things like DEI. But in the age of good growth, using media and marketing with good intention can benefit all stakeholders in that ecosystem,” highlighted Gerhart.

Acting with intent can create support for the world around us, whether it's the environment, DEI, or responsible journalism - all of those are critical foundations to new avenues of growth, he remarked

Gerhart further added that for the industry, good growth creates a more sustainable ecosystem, whether you're a media owner, an agency, or a consumer at the receiving end, and most importantly, it creates growth that is more meaningful to all of us as individuals.

“We have to intentionally think of growth in a very different way. We are all architects of growth, but what it means for each one of us will be radically different depending on the space in which we play, and the emphasis we put on those areas.”