brand stewardship

Brand lessons from Starbucks, Amazon, Google et al.

Euro coinLesson #1: The brand is everyone’s responsibility including the CFO.

The recent furore and public backlash at brands which take UK tax avoidance to the extreme was wholly predictable, and avoidable. But how many organisations involve their senior financial people in brand management – how many CFO’s see the brand as part of their responsibility?

I don’t want to get into the rights and wrongs of the tax avoidance activities of these multi-nationals. A CFO had a right and responsibility to maximise post-tax profits for his or her shareholders. They may even be held liable if they do not act to avoid excessive tax burdens.

Boards must share brand values as part of their corporate responsibility. Many of the brands involved in the recent ‘scandals’ take their customer focus very seriously. They have made huge investments in their brands and would probably include such values as fairness, probity, honesty and fiscal responsibility as part of their brand ethos.

Brand leadership v finance.

There seems to be some disconnect here between the brand stewards and the financial stewards.

I’m not suggesting that anybody has acted illegally, but as with all brand issues it is a matter of perception. When the public see successful businesses apparently thriving, they take that as a positive brand virtue. When they hear of shadow companies and ‘management’ and ‘royalty’ fees from overseas that lead to minimal taxes being paid, they smell something bad.

When the tax advisors came up with a great scheme to minimise corporation tax, and when the FCO presented this to the board, did nobody say; “Hey, this does not square with our brand values – it looks bad to our public.”

The problem is one of brand leadership. If the brand is at the centre of corporate decisions it is a great safeguard and reality check for corporate responsibility.

We are already seeing the outcomes: brand aware customers are making their feelings known by using their consumer power. Perhaps the FCO’s will think again. Rather than saying; “I’ve done nothing illegal”, concentrate on explaining falling customer revenues at the next board meeting.

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Do you really own your brand?

When writing or talking about brands, I often find myself using the term ‘brand steward’, which I admit some folks find puzzling. The reason is that I feel uncomfortable with the phrase ‘brand owner’.

When a ‘brand’ is sold, for example, what is actually transferred? It may be the business in terms of premises, or means of production or delivery, but most usually it is the intellectual property – the brand name and all that goes along with it.

There are a lot of intangibles associated with the IPR including reputation, customer expectations and a brand promise. But I suggest these intangible assets are not owned. Nobody created the emotional values and connections – they emerged from the interaction between the public and the brand.

Of course there is a lot that companies can do to help manage, steer and nourish these intangibles, but they certainly don’t ‘own’ them: hence my use of the term ‘brand steward’.

If the company does not own the brand, then who does? Well, if we accept that the brand, the intangible assets emerge from this interaction, then the public has as much claim to ownership of the brand. Without either of these two parties – the public or the company – the brand would not exist.

It’s up to all the brand stewards to ensure the brand flourishes and that is by being sensitive and authentic to your partners in ownership – the public.

What will do the Google brand most damage – profit slump or communications bungling?

Google logoShare trading in Google was suspended for a while when its third-quarter results were published early by mistake.

The results revealed a 20% profit slump, but what was the biggest potential long-term damage to the brand – the figures or the bungling?

Business results matter, but all companies have ups and downs. Many traditional media companies have suffered reversals in the face of changing markets – areas where Google has benefitted in the past. CEO’s present to the analysts, explain the figures, make their future forecasts, and get on with job.

Share prices suffer for the company (Google was down 9% when shares were suspended) – but that is a business fact. Investors will take a long view of performance and projections and move on. It is a pragmatic decision.

Brand damage is another thing – it is an emotional dimension. We don’t have quantitative measures such as share prices, though all are interlinked. Crucially, the brand is more likely to be damaged by the apparent bumbling and fundamental errors in releasing the results early.

The Google brand has ridden quite high, displaying sound judgement and competence, where other internet brands have skidded from error to error.

The general public is often unconcerned with corporate performance so long as the brand is comfortably between the extremes of insolvency and excess profits.  PR disasters are likely to inflict more lasting dents.

This blip for Google is unlikely to be an enduring or terminal issue. It should be a warning to all of us however not to take eyes off the details of process, especially in corporate communications, however big and successful we grow.

Five key characteristics of great brand leaders.

Brand leadershipWhat is the defining characteristic of great brands – large or small? It is brand leadership. They have strong, committed and unwavering direction.

Great brand leaders come in all shapes and sizes from Henry Ford to Richard Branson or Steve Jobs. But they all share some key qualities.

(1) Vision

A clear view ahead and ambition for the brand is vital. Vision is not to be confused with strategic objectives: it is a more amorphous thing and often difficult to articulate, but we all recognise when people have vision.

Vision is not about what a brand will do, but of the brand itself. I’m sure in the early days of Virgin, that Branson had no idea he would be selling financial products or space travel. And Steve Jobs did not see himself in the mobile phone business. Vision is not necessarily about the product or service – these will change over time under market or technology pressures. It is about the brand and its values that should be steady and enduring.

(2) Communication

There is little point having vision if you are unable to share it. Great brand leaders are good at communicating their vision – but not necessarily verbally. Often they communicate by example, by their actions, by the way they go about their business. Branson is not the greatest verbal communicator, but his vision is clear in his operation, manner and approach to business.

(3) Empathy

Great brand leaders have a good deal of empathy for their audience. This is different from understanding – the stuff you get from research. It is an emotional quality. It is relating to the aims and aspirations of your brand stakeholders. It takes exceptional people to still be able to empathise with consumers or junior employees as they themselves climb the greasy pole of success.

(4) Consistency of values

One of the reasons we choose brands is for consistency – when I select brand ‘A’, I know what to expect. So long as my expectations are met, I am happy and loyal. It’s not just about product performance or service, it’s about the way the brand goes about its business.

Consistency is a function of leadership. It is not to say a leader can’t surprise or even shock – but they operate within a clear framework of values.

(5) Brand guardians

Organisations grow. To ensure that the vision is clear, the consistent values are understood and empathy is fostered, the leader needs to recruit brand guardians – trusted lieutenants who will carry his or her values through the organisation.

We see this with great football managers – once the match is in progress, there is little they can do to affect the outcome of the game. But usually they have one or two key players who understand and share their views and wishes. These players ensure things are kept on track and don’t drift.

As brands grow to global stature and complexity, these guardians are vital and should exist at all levels and in all disciplines within the organisation. Once recognised they need to be fostered and nurtured.

The brand and the elephant – the devil is in the detail.

You are probably familiar with the old story of the six blind men and an elephant: it appears in many versions in eastern culture and theology. In brief, six blind men encounter an elephant, one touches its side and declares an elephant is like a wall, another grabs its leg and asserts it is like a tree, the third finds the trunk and decides the animal resembles a snake… and so it goes on. The analogy is often used to discourage dogmatic approaches, but it can also be helpful in considering a brand and all its manifestations.

Peoples’ first encounters with a brand can be diverse: a telephone enquiry, a piece of literature, an email, sight of a pack, a TV interview with the CEO or a critical tweet from a colleague. We all visualise the perfect encounter we would like between brand and customer, but the reality may be far removed. This why it is critically important to pay attention to each detail of the marketing mix: they must each make sense in terms of the brand logic.

The story of the CEO ‘phoning his office when away to check how well the calls are answered should be redundant these days –  such obvious details should be a thing of the past. However, the principle is a sound one. It is important to step outside the brand at times and assess all those details of the brand proposition. If, like one of our blind men, I only touch one part of your brand, it is fair for me to assume that this is representative of your whole offer.

Poem by John Godfrey Saxe’s ( 1816-1887) based upon the famous Indian legend,

It was six men of Indostan
To learning much inclined,
Who went to see the Elephant
(Though all of them were blind),
That each by observation
Might satisfy his mind.

The First approach’d the Elephant,
And happening to fall
Against his broad and sturdy side,
At once began to bawl:
“God bless me! but the Elephant
Is very like a wall!”

The Second, feeling of the tusk,
Cried, -“Ho! what have we here
So very round and smooth and sharp?
To me ’tis mighty clear
This wonder of an Elephant
Is very like a spear!”

The Third approached the animal,
And happening to take
The squirming trunk within his hands,
Thus boldly up and spake:
“I see,” quoth he, “the Elephant
Is very like a snake!”

The Fourth reached out his eager hand,
And felt about the knee.
“What most this wondrous beast is like
Is mighty plain,” quoth he,
“‘Tis clear enough the Elephant
Is very like a tree!”

The Fifth, who chanced to touch the ear,
Said: “E’en the blindest man
Can tell what this resembles most;
Deny the fact who can,
This marvel of an Elephant
Is very like a fan!”

The Sixth no sooner had begun
About the beast to grope,
Then, seizing on the swinging tail
That fell within his scope,
“I see,” quoth he, “the Elephant
Is very like a rope!”

And so these men of Indostan
Disputed loud and long,
Each in his own opinion
Exceeding stiff and strong,
Though each was partly in the right,
And all were in the wrong!

MORAL.

So oft in theologic wars,
The disputants, I ween,
Rail on in utter ignorance
Of what each other mean,
And prate about an Elephant
Not one of them has seen!

Brand longevity often oustrips that of businesses

“If it’s living, it’s dying.”

That is a hackneyed reference to businesses, which was an injunction not to stand still. However, it is interesting to note that brands can often be more durable than businesses, and some are incredibly long-lived.

Tate & Lyle's Golden Syrup The oldest brand name is often attributed to Lowenbrau which dates back to the 1300s. So far as an actual brand is concerned, the Guinness book of records gives that attribute to Tate & Lyle’s Golden Syrup. The syrup was a by-product of sugar refining and despite changing tastes and negative dietary associations with sugar, the brand is as strong as ever.

Branded businesses change and adapt to the times. Products ranges and service mixes change, yet still the same brands survive embodying  sets of core values that transcend the commercial output. For example, Yamaha began life as manufacturer of pianos and reed organs. Today, though the company is the world’s largest manufacturer of musical instruments, but to the public in general, the brand is probably better known for its motorcycles, automotive and marine products.
Incidentally, the company symbol as used in the motorcycle badge, still embodies crossed tuning forks.

The Rolls RazorAn interesting case of a brand with a life of its own was the Rolls Razor company. The Rolls Razor dates back to the 1920s and was a curious and patented hybrid, like a section of cutthroat razor about 50mm wide, with a handle like a standard safety razor and hinged guard. By the 1950s, however, shaving technology had gone beyond the quirky razor and business was a shadow of its former self. The brand had absolutely nothing to do with Rolls Royce, but sharp entrepreneur, John Bloom, recognised the value of the ‘Rolls’ name and bought the shell company in 1958 to use for a washing machine venture. The values hinted at were never manifest and in the mid 60s the company crashed in a whirl of publicity and the brand name disappeared with it. With better stewardship it might still be with us today.

More recently we have seen the case of the Woolworth brand being purchased even after the physical retail network had failed. Again, the brand has the potential to outlive the business.

BP raises the issues of perceptions of brand responsibility

The cataclysmic environmental problems in the Gulf of Mexico have stimulated much discussion and I don’t wish to add to that noise. What it does flag up however, is the changing perception of responsibility in the west. We have seen the trend in government where there is a perception that Government should somehow solve everybody’s problems. The economic issues that the government is wrestling with now are seen as somebody else’s responsibility and hence somebody else’s problem. So far as politicians are concerned perhaps they can be seen to have brought much of this themselves by suggesting: “Elect me and I will cure all your ills”. This is usually followed with a rush to legislation – followed quickly by public disappointment and anger.

In terms of corporate (and hence ‘brand’) responsibility, the same has become true. The public now have high expectations that companies and brand stewards are totally reponsible for every direct and indirect impact their business dealings have.  Of course, organizations do have corporate responsibilities and over recent decades our expectations have have been raised in areas such as product liability, anti-trust, probity and environmental responsibility.

It is interesting that this abnegation of individual responsibility in favour of ‘them’ or ‘somebody’ seems strongest in western countries. Perhaps this reflects Geert Hofstede’s Individualism index for cultures (individualism v collectivism) where the USA ranks 1, with and index of 91 and UK ranks 3, with 89. Returning briefly to the Gulf disaster, individuals want cheap and plentiful fuel, and the dealing with the issues of carbon emissions, environmental risk and potential disaster are someone else’s responsibility. Governments want security of supply and inexpensive fuel for their people and assume that corporations will take responsibility for everything else.

For brand stewards there are two issues. Firstly they must take their corporate responsibilities seriously – not just statements or rhetoric, but real behaviours. But even having done that they must realise that public expectations of them may be even higher. Often these expectations may be unreasonable, but they are a fact of the world in which we live. It will not help the brand to yell, “Unfair”. We need to prepare our brands to live in an unreasonable world.

Sorry my brand won’t be in today… it’s down with a virus

A client of mine has a horror of any social Internet activity and was rocked to his core when his new ad turned up on Youtube and went viral. There was nothing bad or contentious and I would have been quite pleased, but his problem with this was the ‘lack of control’.

Of course that is an issue and one that scares many businesses off anything to do with social media. But let us be realistic, all we have no control over is what people say or think about our brands… and this was always the case! The only control a company can exert is the way the company and the brand actually performs in the market place.

As I have stated many times brands are not ‘owned’ by the companies, they are owned by the public. If the company manages them well, with good stewardship they should have little to fear. I would be seriously worried if my brand was not strong enough to cope with a little gentle fun poking on a social Internet site.

Trimodal theory and brand interaction

I have long been interested in the the way we understand brands on two levels – the pragmatic or declarative knowledge level (accessible via high input cortical processing) and the emotional knowledge level (low input processing). These levels really deal with the epistemology and ontology of brands, but when we look at how we interact with brands in the real world, we see a trimodal model: we interact with brands on both pragmatic and emotional levels, but also on physical or physiological levels.

For example, when I am shopping for a product I am making conscious decisions about my brand choice based upon my declarative knowledge about the brand, underlying this is my emotional attachment or reaction to the brand, but I am also involved in a physical process, perhaps responding to the appearance or tactile experience of the product, or maybe interacting with the retail environment. Perhaps a classic example of this trimodal model in action is choosing a car – we have emotional, almost sub-conscious understanding of brand values, we analyse pragmatic knowledge about brand and product, then we engage in physical interaction which maybe supports or amends our ontological understanding.

Even working with intangible brands and services, such as financial services, there is a level of physiological level of interaction perhaps through a website or telephone sales, or face to face interactions with a representative or brand steward.

I will avoid the cliche of the Venn diagram this obviously suggests, however the interactions between these three dimensions are critical and fascinating – any brand manager or brand steward should consider each dimensions carefully, and be aware of their relative importance to the brand.

Taking care of the brand assets

I am often at pains to underline that most of what we confuse as ‘the brand’ are actually to do with brand communications, they are the signifiers, and it is what the brand is and does that really matters. Ownership of the brand is with the public at large. But one area that those charged with brand stewardship can and should take charge of is that of the brand assets. Brand assets are as valuable, sometimes more valuable, than those buildings and machines that appear on the balance sheet.

I break brand assets down into four main categories, broad and by no means exhaustive:

Tangible

  • Premises, location, iconic buildings, historic offices
  • Flagship products
  • Everyday products
  • Vehicles etc.

Intangible

  • Intrinsic history, brand narratives
  • Reputation
  • Social actions
  • National reputation
  • Brand Loyalty

Created

  • Marcoms assets – The Michelin Man, the Dulux dog, Ronald McDonald etc; iconic advertising
  • Brand identitiy, logos, colour schemes, corporate signatures
  • Intellectual properties

Human

  • High profile people in the organisation – past and current
  • Owners/founders – King Gillette, Richard Branson, Victor Kyham etc.
  • Marcoms personalities
  • Staff
  • Customers

All of these assets require care and careful stewardship. You would not allow your premises to become dilapidated, nor machinery to seize or fail through lack of maintenance – yet those are replaceable unlike many brand assets.