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Branding Strategy Insider

The Internal Branding Mandate

The Internal Branding Mandate

It seems obvious that developing successful relationships with customers requires strong and successful relationships with those inside the company. Strikingly, though, many companies ignore employees in their branding efforts.

Indeed, brands that focus on creating brand admiration from the inside are often the exception, not the rule. Yet if the people who represent the brand and deliver its promise to the outside world don’t themselves admire the brand, how can they credibly and authentically convince customers to do the same? Customers and other stakeholders often see employees and employees’ actions as synonymous with the brand. As such, it’s essential that companies build brand admiration among employees.

Employees As Brand Champions

It’s easy to see how enhancing brand admiration among employees helps a company to realize its value. Employee brand admiration activates pro-brand employee behaviors, including employee brand-loyalty.

Employees who admire the brand (1) want to work for the brand and are loathe to leave it. (2) They have a sense of ownership in the brand, taking personal responsibility for its achievement and success. (3) They are more forgiving of organizational mistakes. When employees admire the brand, (4) it plays a role in their lives even outside of work (e.g, at home), and (5) they are vigilant about competitor actions deemed threatening to the brand.

Employees who admire the brand are also brand advocates, (1) They are strong and authentic brand champions. (2) They go beyond their prescribed roles for the well-being of customers and the brand. (3) They participate in various brand community-related events. (4) They recommend the brand to friends. (5) They defend the brand from criticism. (6) They also encourage other employees to focus on the brand (versus focusing on internal politics or other negative company behaviors). (7) They also publically display their association with the brand (e.g., on T-shirts, branded gear, tattoos, etc.). Beyond contributing to employee morale, these outcomes should also reduce employee acquisition and retention costs and enhance employee and knowledge retention.

Recognizing the power of internal customers, Herb Kelleher, founder of Southwest Airlines (pictured), once noted the importance of treating employees like customers. He apparently succeeded at this effort.

When Kelleher retired after 37 years at Southwest Airlines, the company’s pilots and flight attendants took out a full-page ad in the USA Today newspaper to thank him for his service to the company. By way of contrast, the very same day American Airlines pilots and flight attendants went on strike and picketed during American Airlines’ annual meeting.

As with customers, marketers can create brand admiration and its drivers by finding ways to enable, entice, and enrich employees. This process is referred to as internal branding or brand culture.

The mission statement plays an important role here as it serves as the guidepost for employees’ feelings, thoughts, and pro brand actions. Hence, we define internal branding as a set of processes that enable, entice, and enrich employees so they can deliver on the brand’s mission in a consistent and credible way.

Cultivating brand admiration starts with the mission statement and its features. Specifically, building trust, love, and respect among employees is possible only when a brand’s mission statement has enabling, enticing, and enriching features, and when the company offers enabling, enticing, and enriching benefits to employees. These combined outcomes boost employee brand admiration, enhancing employees’ brand loyalty and advocacy behaviors. What’s important to realize here is that by creating these effects, the company develops internal brand admirers who consistently deliver on the brand promise and help to set it apart from competitors.

Key to this discussion is the company’s mission statement.

Creating A Meaningful Mission Statement

The company’s mission statement plays an important role in creating employee brand admiration. When the company is new and it has a single brand, the mission is closely aligned with the brand’s positioning in the marketplace. When companies become larger and have a portfolio of distinct brands, die company’s mission can become more abstract so as to accommodate the various brands that it makes. Each brand’s positioning may well be somewhat different. But the mission statement is important because it represents a global perspective on what the company (and each of its brands) stands for. It provides a broader description of the company’s identity, based on the brands it markets. Thus, the company’s mission and brand positioning statements should be aligned (or at least not inconsistent) with each other.

When thinking about the mission, consider the following quote from Starbucks’ CEO Howard Schultz: “ People want to be part of something larger than themselves. They want to be part of something they’re really proud of, that they’ll fight for, sacrifice for, that they trust.” As human beings, we want to have a sense of belonging and distinctiveness, and we take pride in what we do. Employees are no different. The mission statement can encapsulate this belief, such that employees are inspired to have faith in it and make it happen. But if a mission is to contribute to employees’ behavior, it must be meaningful.

A meaningful mission statement should describe the brand’s purpose and goals and answer the following questions: (1) what benefits should be offered, (2) to whom, and (3) how should they be delivered.

The decision about what benefits to offer gets at what core customer needs have yet to be addressed in the marketplace. Employees are frustrated when they lack clarity on what the brand is supposed to do for customers. Employees must understand what the brand (and by extension, they themselves) is expected to deliver to customers. A clear promise (i.e., an articulation of what benefits the brand offers) makes it easier for employees to deliver on that promise.

The for whom question asks which target customers are most likely to appreciate the brand’s benefits. If employees know what benefits to deliver but they lack knowledge about who the real target customer is, they are less capable and effective in communicating these benefits. Without clarity on the core target market, employees end up using their resources inefficiently— by targeting the wrong customer group(s)— or even worse, inadvertently damaging the brand.

Finally, the how question describes the means or strategies by which a brand plans to respond to target customers’ needs. Answering the how question gives employees guidance and clarity on what needs to be done to satisfy customers’ needs, particularly as it pertains to employees’ roles and responsibilities. A mission statement that addresses these questions acts as a compass for employees. It gives them a sense of direction and it reassures them of the path taken to get there.

Consider, for example, Google’s mission “ to organize the world’s information (the what) and make it universally (the whom) accessible and useful (the how)”. Such a sense of purpose and direction helps to build employee brand trust, love, and respect. Whereas it’s helpful for a company to have a mission statement, employees must also accept and embody it to make it meaningful.

Unfortunately, some internal branding experts suggest that over 50 percent of employees don’t believe in their company’s mission statement, or don’t think they have the knowledge, skills, and training to deliver on it. Thus, beyond stating a mission statement, internal branding needs to focus on making that mission come to life for employees.

Contributed to Branding Strategy Insider by: C. Whan Park, Deborah MacInnis and Andreas Eisingerich, excerpted from their book, Brand Admiration with permission from Wiley Publishing.

[Complimentary Webinar] Why Marketing Leaders’ Customer Strategies are Failing. Learn how to transform your marketing team into creators of post-digital brand experiences and leaders of enterprise-wide customer obsession. Join us Dec. 7 at 12PM ET –  Featuring: Shar VanBoskirk, Forrester

The Blake Project Can Help: Please email us for more about our purpose, mission, vision and values workshops.

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Brand Transparency Must Be Strategic

Brand Transparency Must Be Strategic

In times or situations where there are low levels of trust, transparency becomes very important. Indeed, transparency was one of Geoff Colon’s top 10 disruptive marketing trends in 2016 for Branding Strategy Insider. He predicted transparency will be part of all successful business-customer relationships and offered, “Companies locked into a conventional broadcast model are failing. By 2020, customers will have an even greater expectation of transparency.”

In the last few years, we’ve seen that customers are often interested in more than just the products or services a brand offers. They want to know if a brand is environmentally responsible, if the brand treats their workers fairly, and as issues like workplace diversity and sexual harassment are top of mind in society, we should expect some customers to be interested in even deeper workings about a brand’s culture and operations. With the rise of digital networks and social platforms, many brands can have real-time, unfiltered, immediate dialogue with their customers.

But sometimes, brands share more than is needed.

When Angelo Carusone of Media Matters tweeted to Keurig to pull their advertising from FOX news’ Sean Hannity Show (regarding his handling of sensitive social issues), Keurig responded by tweeting they would pull the ads. Fans of the conservative news program immediately took to social networks with calls to boycott Keurig, some even posted videos of themselves smashing coffee machines. (With more than a few prominent advertisers withdrawing from other conservative news outlets in the past year, some feel that the conservative point of view is being forcibly silenced by progressive-leaning groups).

This dramatic reaction is of the sort we’ve seen many times in 2017 that quickly can escalate to the point that it impacts the stock price. It’s no surprise Keurig’s CEO Bob Gagamort wasted no time in issuing a statement and apology for their handling of the issue. Gagmort explains, “In most situations such as this one, we would “pause” our advertising on that particular program and reevaluate our go-forward strategy at a later date. That represents a prudent “business as usual” decision for us, as the protection of our brand is our foremost concern. However, the decision to publicly communicate our programming decision via our Twitter account was highly unusual. This gave the appearance of ‘taking sides’ in an emotionally charged debate that escalated on Twitter and beyond over the weekend, which was not our intent.”

One of the most important things every brand must realize is that story is now porous. An individual’s opinions, interpretations and perceptions about a brand’s story that were personal and private in the broadcast era, can now be amplified and promoted at surprising scale thanks to networks and platforms. It doesn’t matter if the perception is accurate or real. Truth is not a requirement.

When the reactions and sentiments amplified by people are positive and in alignment with what brand leaders intend, there’s great potential for these porous stories to invigorate and activate communities of fans united by the brand. But at the same time, when the perception is negative or out of alignment, things can go downhill fast.

Keurig’s error was responding on Twitter. In a hyper-polarized climate like we have in the US (and with several other countries are in similar situations) it is all too easy to act before considering how information will be received. Brands can continue to increase levels of transparency. When it comes to sensitive and polarizing issues, choose wisely the channel and timing for that information to be shared.

[Complimentary Webinar] Why Marketing Leaders’ Customer Strategies are Failing. Learn how to transform your marketing team into creators of post-digital brand experiences and leaders of enterprise-wide customer obsession. Join us Dec. 7 at 12PM ET –  Featuring: Shar VanBoskirk, Forrester

The Blake Project Can Help: The Strategic Brand Storytelling Workshop

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Brand Positioning For Competitive Advantage

Brand Positioning For Competitive Advantage

The best brands make customers’ lives easier, more gratifying, and more meaningful.

Many people love to vacation by taking a cruise. But it wasn’t always that way. In the early 2000s, Royal Caribbean discovered through brand research that non-cruisers thought three types of people went on cruises: (1) the newly wed (honeymooners), (2) the overfed (sedentary people), and (3) the almost dead (retired people)! Many people didn’t perceive themselves as belonging to any of these categories. But in fact, there was a large market of people who wanted excitement, adventure, fun, and opportunities to see different places— benefits that were not typical of the cruise experience at the time. This untapped market of active adults was big and reachable through advertising and social media.

Further, competitors weren’t targeting this group, and even if they had been, they were unlikely to outcompete Royal Caribbean. Tapping this new market also fit Royal Caribbean’s goal of becoming a leader in the cruise industry, and they had the resources and competence to cater to it. A new target market for Royal Caribbean was born. To attract these customers, the cruise line made innovative design changes to their ships and added features like rock-climbing walls and ice-skating rinks. On-board and off-board activities emphasized what these users wanted. For example, its European cruise featured an off-board excursion to the Sistine Chapel, with reminders to customers to visit the on-board spa after a day of sightseeing.

While this insight would eventually drive their competitive advantage, first it was used to inform the brand positioning which defines what the brand promises its customers.

From Insight To Crafting A Brand Positioning Statement

A positioning statement and a mission statement are very similar. The major difference is that a positioning statement is directed at external customers while the mission statement is directed at employees. The mission statement is also more abstract. It’s not specific enough to guide how the brand is positioned to external customers. It doesn’t specify which set of marketing actions and tactics will bring the brand’s identity to life. When it comes to targeting external customers, the brand’s positioning statement serves as the guiding tool.

Components Of A Positioning Statement

A positioning statement is a short, internal document that distills what is known about the target market, the benefits its members seek, and ways to communicate and deliver these benefits. A positioning statement is the distillation of three strategic decisions. A positioning statement specifies:

1. The target market being pursued. It begins with the phrase “For target customers” followed by a description of the target market.
2. The brand’s identity, meaning the higher-order (abstracted) summary of core benefits that the brand offers. It begins with the phrase “Our brand offers” followed by a description of the  higher-order summary of core benefits offered by the brand, including a tagline.
3. The marketing actions that make the brand identity real in the minds of target customers. It begins with the statement “In these ways”.

Good positioning statements help employees understand what the brand is and does, and why it should be attractive to customers. In short, they specify how brands can build brand trust, love, and respect (and brand admiration) among customers.

The following illustrates a potential positioning statement for the retailer Petco. It describes the target market (for target customers…), the brand’s identity (our brand offers … ), and how the brand’s identity is implemented (in these ways… ). This final implementation element is an often-neglected but critical component of a good positioning statement. Without considering this implementation element, employees are less clear about their roles and responsibilities in building brand admiration among customers.

Positioning Statement Example

Petco Target Market: For people who respect animal rights and love their pets as much as they do their children.

Petco Brand Promise: Petco nurtures pet health and happiness more completely throughout the life of one’s pet than the leading competitors (as captured by its tagline “ The Power of Together” ).

Petco Identity: (1) Enabling benefits: Offering nutritionally balanced Implementation pet foods with natural ingredients at affordable prices that contribute to the nourishment and  health of pets throughout their lives (thus making the “ power of together” sustainable). (2) Enticing benefits: Offering communication, promotional events, and vivid packaging/logo elements that underscore the sense-pleasing and/or heartwarming appeal of “ the power of together.” (3) Enriching benefits: Building on “the power of together” by reflecting how pets have the ability to connect all living souls.

The implementation described in this positioning statement example does not include all the specific marketing activities that Petco may pursue for each of enabling, enticing, and enriching benefits.

Positioning statements require strategic thinking about each of three decisions; the target market, the brand identity, and the implementation. The strategic thinking involves the task of addressing customers’ needs more quickly and efficiently than competitors, thereby building brand admiration among customers.

Identifying The Target Market

When identifying the target market, brand managers should consider these three elements: (1) identifying need profiles of potential target markets, (2) choosing a target market, and (3) clarifying the chosen target market’s need profile.

Identifying Need Profiles Of Potential Target Markets

Potential markets are untapped markets whose needs are not fully met by existing brands. Customers’ needs can be described in terms of any of the four factors shown next. We use the term need profile to describe the target market’s needs on all four factors.

1. What benefits customers want from a product and why they want these benefits. Specifying not just the benefits customers are looking for but also why they want them is important because a given benefit can be linked to different customer needs. Customers may want a non-calorie soft drink because they want to avoid health problems, or because they don’t want to add calories to their diets, or because they believe that aspartame tastes bad. Specifying why customers want a particular benefit helps internal employees understand the mind-set of target customers and what motivates their purchases.
2. When they want these benefits. It’s possible that customers want certain benefits because they’re useful in specific situations. For example, customers might want a sports watch that allows them to listen to music when running. They may want automobile tires with a special grip for when it snows in winter.
3. Where they seek these benefits. For example, there might be an untapped market that wants a cafe-type cappuccino at home. They may want a bicycle that they can ride to the office. They may want to access and analyze critical data from anywhere.
4. How they want to use or experience benefits. For example, they may want to use medicine without having to struggle to open the bottle, drink coffee from a tetra pack rather than sitting down in a coffeehouse, or complete an MBA online rather than going to classes on campus.

When we specify customers’ need profiles based on each of the four factors, we are most likely to identify multiple potential target markets. Some might be combined to form a large and more inclusive potential market. Others may be dropped quickly from farther consideration, due to their impracticality. Royal Caribbean found an untapped market by considering these unmet benefits. In terms of what benefits, a sizable market wanted to feel enticed through action. They wanted fun and adventure. They wanted to learn something new (cognitive stimulation). They wanted to feel enriched by a status-enhancing trip that offered intellectual pursuits, fine dining, a spa, and the opportunity to connect with others in their general social circle. From the standpoint of when and where, they wanted these benefits during times of the year that might be different from those of the typical family traveler (enabling benefits). From the standpoint of how, they wanted benefits that would be delivered in a way that provided excitement and adventure (enticing benefit).

Addressing these four factors helped Royal Caribbean identify a wholly distinctive, underserved, and large potential target market.

Contributed to Branding Strategy Insider by: C. Whan Park, Deborah MacInnis and Andreas Eisingerich, excerpted from their book, Brand Admiration with permission from Wiley Publishing.

The Blake Project Can Help: The Brand Positioning Workshop

Build A Human Centric Brand. Join us for The Un-Conference: 360 Degrees of Brand Strategy for a Changing World, April 2-4, 2018 in San Diego, California. A fun, competitive-learning experience reserved for 50 marketing oriented leaders and professionals.

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education

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How Emotion Drives Brand Choices And Decisions

How Emotion Drives Brand Choices And Decisions

We now know more about how the human brain processes information and triggers our behaviors than ever before. Even with all the technological advancements and resulting brand transformation, it may be the discoveries in neuroscience that have the largest impact about how we think about brands today. We now know that up to 90 percent of the decisions we make are based on emotion. Take a minute and read that again; almost every decision we make is based on emotion, not rational thought and measured consideration. Our decisions are the result of less deliberate, linear, and controlled processes than we would like to believe. This is true whether it is a personal decision, a professional one, or even a group decision.

Yet for over 1,000 years in the West, philosophers, scientists, and even psychologists did not focus their attention on human emotion. The general opinion was that emotions were a base part of humanity, a vestige of our “animal” past, and that rationality was what separated Homo sapiens from other, lesser animals.

This attitude began to change somewhat in the twentieth century, with considerable focus being brought on the psychological and psychiatric treatment of neuroses and psychoses. But the subject of what emotions are and what their evolutionary or survival value is to human beings was not addressed to any great extent until the last 20 years.

A big change in the field was sparked by the discoveries of neurophysiologist Antonio Damasio, reported in his 1999 book, The Feeling of What Happens. In it, Damasio reports: “Work from my laboratory has shown that emotion is integral to the process of reasoning and decision making, for worse and for better. This may sound a bit counterintuitive, at first, but there is evidence to support it. The finding comes from the study of several individuals who were entirely rational in the way they ran their lives up to the time when, as a result of neurological damage in specific sites of their brains, they lost a certain class of emotions and, in a momentous parallel development, lost their ability to make rational decisions . . . These findings suggest that selective reduction of emotion is at least as prejudicial for rationality as excessive emotion. It certainly does not seem true that reason stands to gain from operating without the leverage of emotion. On the contrary, emotion probably assists reasoning, especially when it comes to personal and social matters involving risk and conflict. I suggested that certain levels of emotion processing probably point us to the sector of the decision-making space where our reason can operate most efficiently. I did not suggest, however, that emotions are a substitute for reason or that emotions decide for us. It is obvious that emotional upheavals can lead to irrational decisions. The neurological evidence simply suggests that selective absence of emotion is a problem. Well–targeted and well–deployed emotion seems to be a support system without which the edifice of reason cannot operate properly.”

If Damasio’s work was the catalyst, then the Nobel Prize-winning work by psychologist Daniel Kahneman was the revolution that changed our way of thinking about thinking. Through dozens of experiments over decades, Kahneman created a new model to explain how people think and make decisions. Kahneman created a construct, called System 1 and System 2, to replace left and right brain, respectively. System 1 handles basic tasks and calculations like walking, breathing, and determining the value of 1 + 1; System 2 takes on more complicated, abstract decision making and calculations, like 435 x 23. System 1 is more driven by intuition, snap judgments, and emotion. System 2 is driven more by reason. Kahneman explains the differences as follows: “‘System 1 does X’ is a shortcut for ‘X occurs automatically.’ And ‘System 2 is mobilized to do Y’ is a shortcut for ‘arousal increases, pupils dilate, attention is focused, and activity Y is performed.’”

What may be most important about Kahneman’s work is his finding that most human decisions are made emotionally, and that the function of human reason is to justify those decisions after the fact.

“The implication is clear: as the psychologist Jonathan Haidt said in another context ‘The emotional tail wags the rational dog’ . . . Until now I have mostly described it [System 2] as a more or less acquiescent monitor, which allows considerable leeway to System 1. I have also presented System 2 as active in deliberate memory search, complex computations, comparisons, planning, and choice. Self-criticism is one of the functions of System 2. In the context of attitudes, however, System 2 is more of an apologist for the emotions of System 1 than a critic of those emotions—an endorser rather than an enforcer. Its search for information and arguments is mostly constrained to information that is consistent with existing beliefs, not with an intention to examine them. An active, coherence-seeking System 1 suggests solutions to an undemanding System 2.”

The idea of humans as rational actors who make decisions to buy or use products and services in purely rational thinking is clearly flawed. We’ve seen firsthand that brands that do well today are the ones that touch peoples’ emotions in deep, meaningful, and authentic ways. Features, specifications can be noise—additional and largely unneeded fodder for System 2 to rationalize emotion-based decisions after they are already made.

Jonathan Haidt, in his book The Righteous Mind: Why Good People Are Divided by Politics and Religion, notes, “The mind is divided, like a rider on an elephant, and the rider’s job is to serve the elephant. The rider is our conscious reasoning—the stream of words and images of which we are fully aware. The elephant is the other 99 percent of mental processes—the ones that occur outside of awareness but that actually govern most of our behavior.”

What this suggests is that, in order to impact and affect decision making, you have to appeal and connect to people’s emotions. Although perhaps counterintuitive to prevailing sentiment, playing to rational considerations is not a compelling motivator; in fact, it limits the potential of building bonds. The bottom line is that scientific and academic data has proven that human beings react intuitively to everything they perceive and base their responses on those reactions rather quickly. Within the first second of seeing something, hearing something, or meeting another person, impressions are made and actions are born. Intuitions come first.

This suggests that traditional models, constructs, and methodologies that we have used for decades to drive our marketing and communications efforts outweigh the importance of rational thinking, rendering them outdated and faulty.

One particular aspect of the work done by Kahneman and his peers has been widely adopted by Behavioral Science and Behavioral Economics. Behavioral Economics aims to change the way economists think about the way humans perceive value and express preferences. This line of thinking, which uses psychological experimentation to develop theories about decision making, has identified a range of biases related to people’s perceptions of value and expressed preferences. In short, people don’t make considered choices; they are not always benefits-maximizing, cost-minimizing, and self-interested. They go with what feels right, with what feels like the right option. They are influenced by readily available information, and that includes our memories and salient information in the environment. We tend to live in the moment, resist change, are poor predictors of future behavior, are subject to distorted memory and are impacted by psychological and emotional states.

Our thinking is subject to insufficient knowledge, feedback, and processing capacity, as well as cognitive biases and emotions. This makes the context of our decision making extremely influential. Additionally, behavioral scientists have recognized that humans do not make choices in isolation. We are social beings with social preferences, trust and reciprocity play a key role.

Behavioral Science also suggests that we use “stories” as a way to help us organize the information we receive, help us remember it, and help us make sense of the world. Since our brains have a limited amount of processing power and memory, shortcuts like stories and heuristics help us to make sense of our environment. This starts first thing in the morning as we consume information and interact with the world around us continuing through the day and into our dreams. This can become an important opportunity for marketers—using stories to impact how we notice, connect, and consider brands. Combining the significant role emotion can play with the power of a strong narrative establishes a new fundamental for effective brand building.

Contributed to Branding Strategy Insider by: Mario Natarelli and Rina Plapler. Excerpted from their new book Brand Intimacy – A New Paradigm in Marketing.

The Blake Project Can Help: Accelerate Brand Growth Through Powerful Emotional Connections

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The Role Of Brand Recognition In Innovation

The Role Of Brand Recognition In Innovation

Brands gain strength from the associations they build with consumers. But those same associations can work against brands when they look to introduce ideas that go too far beyond what consumers expect.

Professor Kyle Murray of the University of Alberta says that the failure of Crystal Pepsi is a classic example of what happens when new products fail to align with the characteristics that consumers know. Launched in 1993, with much hoopla, Crystal Pepsi was a colorless soda that was expected to become a billion dollar brand. It was discontinued two years later, having failed to fire.

A key reason for that failure, explains Professor Murray, was that Pepsi simply never said why a drink people had come to expect to be a rich caramel color was suddenly clear. And that spooked buyers. Nor is Crystal Pepsi an isolated case. Each year, hundreds of thousands of products are introduced into the consumer packaged goods sector alone, and a huge number of them fail. Timing, competitiveness and lack of effective distribution can all play their part, but, says Murray, the expectations that come with brand recognition also have an important role.

“We tend to resist products that fall too far outside the familiar. As a result, even though companies are constantly innovating, people struggle to keep up with the many changes that innovation can bring … consumers tend to be curious when products are different from what they expect. However, when the new product is extremely incongruent with what consumers think is typical of the category, it creates anxiety.”

The Sweet Spot Between Curiosity And Anxiety

There’s the tension right there – finding the sweet spot between curiosity and anxiety. And getting that right is about ensuring that product developers are very clear about the core associations that come with the brand, and that are therefore indelible, and those that are more flexible, and therefore open to improvement and innovation. In the case of Crystal Pepsi, I’m sure that many consumers didn’t see how a clear drink that looked like water could be a cola. They literally didn’t recognize what they were being asked to buy.

Kyle Murray, Theodore Noseworthy and Fabrizio Di Muro concluded that where brands do look to introduce changes that fall outside that sweet spot, they also need to introduce some form of enabler to help consumers make sense of what is happening. For example, when Murray and his colleagues tested the Crystal Pepsi product recently, telling those prepared to taste that the cola was clear because it was made with spring water, they saw acceptance jump. “Our findings reveal how minor design or promotional changes can significantly improve evaluations when it helps consumers make sense of otherwise unappealing innovations.”

Linking Recognition And Innovation

Of course no brand should simply press ahead with lateral innovations and rely on design or promotion to engender acceptance. What Murray, Noseworthy and Di Muro’s findings do reinforce is that expectations can be changed if the explanation for the change fits with what consumers feel they ‘know’. And one way to do that is to marry an idea that consumers recognize, and that has its own associations, with the brand innovation in order to lift overall interest, acceptance and curiosity.

Getting that right is about:

  • leveraging the trust factors that consumers have with the brand itself;
  • using story to normalize new ideas; and
  • making the brand’s high-level intentions clear so that people can connect where the brand is going with the products it releases.

Too many brands rely on the novelty of brand extension or improvement to sell itself. What the work of Professor Murray and his team shows though is that buyers may say they embrace the new, but in reality innovation can work to a brand’s disadvantage. Just as no brand should innovate for its own sake, neither should it introduce changes that it simply expects consumers to change their attitudes around.

So the irony of innovation and indeed diversification is that if you want to move people to try new versions of your brand, you need to firmly embed what the core brand stands for. Brand recognition in that sense – knowing what a brand means to consumers in comparison to all the other options available to them – underpins the ability to successfully innovate. Without that sense of reassurance, shoppers just won’t pick it up.

The Blake Project Can Help: The Brand Positioning Workshop

Build A Human Centric Brand. Join us for The Un-Conference: 360 Degrees of Brand Strategy for a Changing World, April 2-4, 2018 in San Diego, California. A fun, competitive-learning experience reserved for 50 marketing oriented leaders and professionals.

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Spying Brands Face A Reckoning

Spying Brands Face A Reckoning

Marketers take note, in the last 20 years, no changes to data and privacy rules have been more significant than the EU’s General Data Protection Regulation (GPDR), set to go into effect in May 2018. What’s important about GPDR is that it asserts that the personal data of EU citizens is private property owned by the individual citizen. Here’s a short summary from Shift Communications’ website (or see the longer text from the EU website).

  • Right to be forgotten: EU citizens may request to be forgotten by any entity; for example, an EU citizen could request that Google delete any data it has about them.
  • Right to access: EU citizens may request any and all data that a company has stored about them, free of charge.
  • Privacy by design: Rather than be an add-on, companies are expected to design their systems for privacy from the ground up. This also includes collecting the minimum required data needed to conduct business operations.
  • Data portability: EU citizens will have the right to request data about themselves in a common, machine-readable format and be able to give that data to a different company if they so choose.
  • Strengthened consent: Companies doing business with EU citizens will be required to vastly simplify consent requests – no more pages of unintelligible user licenses or tricks designed to mislead consumers into clicking/giving up their personal data.

Perhaps more significant to marketers is the ePrivacy Regulations, which build on the definitions of privacy and data that were introduced within the GDPR, and act to clarify and enhance them. In particular, the areas of unsolicited marketing, cookies and confidentiality are covered in a more specific context.

Together, these regulations will make it more difficult for online marketers and media in the EU to collect personal information about users without their consent, or as Bob Hoffman more honestly says, “It will make it hard for them to track us all over the web and collect, exploit, and sell the information they are harvesting without our explicit consent or knowledge.”

Brands that collect and use data on a smaller scale are less likely to be impacted. In some cases where data is out of compliance, re-opting in their existing marketing lists and updating landing page registration forms may be required. But for the most part, brands will have little problem using their own data and their own domains. In a legal analysis from a firm hired by DCN, they offer, “Companies that create trusted, premium digital experiences, enjoy direct relationships with consumers and do not rely on tracking consumers at such a large scale may find new leverage and opportunities in the marketplace.”

It’s Google and Facebook who will be hit the hardest. And like any food chain (or perhaps a better thing to say would be ‘gravy train’) the impact cascades out to media agencies and some brands, who are mounting major lobbying efforts to prevent many of the changes from coming into effect. In an open letter to members of the EU parliament, a consortium of advertising, marketing and media companies concluded with this fallacy, “ePrivacy Regulation threatens the data-driven advertising business model of European press publishers and other online media and services.”

Isn’t all advertising data-driven?

If anything, the objections from these companies attest to the fact that much of the online advertising industry has prospered by adapting and evolving increasingly sophisticated and ethically questionable tracking and surveillance practices.

There seems to be trend happening in the world right now around the idea of reckoning. Two weeks ago here on Branding Strategy Insider, I offered the idea that “there is an ‘upside down’ for everything.” It’s getting more difficult to hide activities, practices and behaviors that are problematic. The online advertising industry has reached a point where a reckoning is needed.

Nobody doubts the potential for rich data to positively impact all aspects of society. But if governments were collecting and using the level of information held by Google and Facebook (they likely already have access), we’d be in an uproar with cries of tyranny and legitimate concerns about secret police. It seems that European policy makers have remembered their history by acknowledging the growing risk and doing something about it.

Becoming GPDR compliant is probably a good idea for every brand, even if you don’t interact with EU citizens. But more importantly, a renewed importance for brands to be transparent with customers about what’s being collected, and how it’s being used will be important to continue to win trust. And not the empty talk of transparency from Facebook, Google, IAB, 4As, and others.

It’s likely the manner in which online advertising operates today is going to have some significant and fundamental change. The transition will be bumpy for some, so it’s important to think ahead. An extreme exercise for brand marketers to consider might be to ask their teams an important question: “If we couldn’t use online as a direct response medium for marketing, what would we do, and how would we get the customer information we need?”

Bob Hoffman really says it right when he concludes, “The online advertising industry does not need to spy on us in order to thrive. Every other advertising medium has done quite well, thank you, without trampling on democratic principles of privacy and security. Tracking, surveillance marketing, and the current model of ad tech are affronts to the values of free societies. The ePrivacy Regulation is a sound and reasonable reaction to our industry’s inability to exercise a mature degree of restraint or self-control.”

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How A Founder’s Mentality Propels Brands

How A Founder’s Mentality Propels Brands

Despite their many differences, most companies that achieve sustainable growth share a common set of motivating attitudes and behaviors that can usually be traced back to a bold, ambitious founder who got it right the first time around. The companies that have grown profitably to scale, while maintaining the internal traits that got them there in the first place, often consider themselves insurgents, waging war on their industry and its standards on behalf of an underserved customer, or creating an entirely new industry altogether. Such companies possess a clear sense of mission and focus that everyone in the company can understand and relate to (in contrast with the average company, where only two employees in five say they have any idea what the company stands for). Companies run in this way have the special ability to foster employees’ deep feelings of personal responsibility (in contrast with the average company, where a recent Gallup survey shows that only 13 percent of employees say they are emotionally engaged with their company).

They abhor complexity, bureaucracy, and anything that gets in the way of the clean execution of strategy. They are obsessed with the details of the business and celebrate the employees at the front line, who deal directly with customers. Together, these attitudes and behaviors constitute a frame of mind that is one of the great and most undervalued secrets of business success.

We call it the founder’s mentality.

The founder’s mentality constitutes a key source of competitive advantage for younger companies going up against larger, better-endowed incumbents, and it consists of three main traits: an insurgent’s mission, an owner’s mindset, and obsession with the front line. In their purest expression, these traits can be found in companies that are founder-led, or where the clear influence of the founder still remains in the principles, norms, and values that guide employees’ day-to-day decisions and behaviors.

In our analyses, surveys, and interviews, we’ve found a consistently strong relationship between the traits of the founder’s mentality in companies of all kinds—not just start-ups—and their ability to sustain performance in the marketplace, in the stock market, and against their peers. Since 1990, we’ve found that the returns to shareholders in public companies where the founder is still involved are three times higher than in other companies.

Founder-led companies outperform the rest:

Founder's Mentality

The most consistent high performers exhibit the attributes of the founder’s mentality four to five times more than the worst performers. Furthermore, we’ve determined that of the roughly one in ten companies that achieve a decade of sustained and profitable growth, nearly two in three are governed by the founder’s mentality. These are all remarkable numbers.

All too often, however, companies lose the founder’s mentality as they become larger. The pursuit of growth and scale adds organizational complexity, piles on processes and systems, dilutes the sense of insurgency, and creates challenges in maintaining the original level of talent. These sorts of deep, subtle internal problems, in turn, lead to deterioration on the outside.

How else to explain the disappointments of companies that once dominated their business and seemed to have everything—growing markets, massive investable funds, proprietary technologies, best-known brands, leadership in their channels? In the 1990s, for example, Nokia rocketed to the top of the handset market.

During that decade, we estimate, the company captured more than 90 percent of the market’s global profits and seemed poised to maintain its leadership for years to come. It even was putting in place many of the elements for next-generation smartphones: it had developed some of the earliest small-touchscreen technology, was the global leader in selling tiny cameras, had learned how to distribute music, and was one of the first companies to offer free e-mail on its phones. Yet somehow, overloaded by its own growth and blinded by its burgeoning organizational complexity, the company failed to capitalize on its advantages and take the lead in developing next-generation phones, despite calls from some of its own engineers to do just that.

None of this stemmed from a lack of resources or opportunity. Nokia sat on top of one of the biggest growth markets the world had ever seen, and on top of one of the biggest piles of cash in history. But instead of thinking like an insurgent and investing in the future, it gave out 40 percent dividends and used its cash to buy back large quantities of its own stock. Within just a few years, Apple, Samsung, and soon Google had seized the smartphone market, and Nokia, once a model of innovation and insurgent-style thinking, was in steep decline. A board member, when interviewed about what happened, pointed to internal factors, not competitive moves, and concluded simply, “We were too slow to act.” In our studies of growth crises, we’ve come across a plethora of companies like Nokia—companies that seemed on the outside to have everything (market position, brand, technology, customer base, enormous financial resources) but ultimately lost it all in shocking fashion, because of how they failed to play the internal game. But we’ve also encountered many remarkable and inspiring stories of the opposite nature —companies that seemed on the outside to have no hope but that were revived by leaders who virtually refounded the company from the inside.

Does Your Organization Have a Founder’s Mentality?

A company has the founder’s mentality when its employees live and breathe the principles and entrepreneurial approach characteristic of great founders. The Founder’s Mentality® diagnostic survey is the first step in the process of understanding whether your company is really retaining the founder’s mentality as it grows, and the biggest internal barriers that are eroding it. To get started, consider each of the following statements and rate yourself or your organization using a numerical scale where 1 = “Strongly Disagree” and 5 = “Strongly Agree.”

Insurgency

Bold mission

“Spikiness”

  • Our organization is clear on the one or two capabilities that drive our differentiation with customers.
  • We have a repeatable model for growth that will allow us to capture or extend leadership in our markets.

Limitless horizons

  • We are focused on the long term in our investments and our budgetary decisions; managing quarterly earnings is truly secondary.
  • We embrace turbulence and are experimenting and building new business models ahead of the competition.

Front-line Obsession

Relentless experimentation

  • We innovate and experiment a lot in the field; this drives our learning and is a competitive advantage.
  • We have an efficient feedback process in place to help us understand what is working and take corrective action quickly.

Front-line empowerment

  • We are the most sought-after employer by top talent in our industry.
  • We treat our front-line people as the heroes of our business and do whatever is needed to support them.

Customer advocacy

  • We are clear about who our core customers are; their loyalty is a competitive advantage.
  • The voice of the customer is fully represented in all important meetings.

Owner’s Mindset

Strong cash focus

  • We have a sharp focus on cash and costs; we treat each dollar as if it is our own.
  • We rapidly redeploy people and capital wherever they are most critical to the business.

Bias for action

  • Our organization makes and acts upon key decisions faster than our competitors; speed is an advantage for us.
  • People in the organization are quick to take on personal responsibility and risk to do the right thing.

Aversion to bureaucracy

  • We have simplified our initiatives to focus on the biggest priorities that deliver value.
  • Our planning and review processes are the best in our industry, efficiently reallocating resources to make our front line more competitive.

Overall Statements

  • Our biggest barriers to growth and future success are much more internal than external; our fate is in our hands.
  • Our main competitors five years from now will be different companies than those in the past five years.

Scoring

At the highest level is your cumulative score. The data we’ve seen typically groups companies in four ranges, from a strong founder’s mentality (total score across all statements is greater than 75), to waning (total score of 60–75), to low (total score of 45–60), to founder’s mentality lost (total score is less than 45).

While the overall score is a strong indicator of a company’s health on the inside and its ability to sustain profitable growth on the outside, the pattern is even more important for identifying the highest level of issues. This is because companies don’t lose the founder’s mentality uniformly, but see big drops in one or another dimension. Taking this further and ultimately drilling down to the root cause of decline is critical (that is, understanding the unresolved issues that the front line is grappling with, getting real feedback from customers, and so on)

Contributed to Branding Strategy Insider by: Chris Zook with the permission of Harvard Business Review Press. Excerpted and adapted from The Founder’s Mentality: How to Overcome the Predictable Crises of Growth. Copyright 2017 Bain & Company, Inc. All rights reserved.

The Blake Project Can Help: Please email us for more about our purpose, mission, vision and values workshops.

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Brand Innovation: 5 Rules For Failure

Brand Innovation: 5 Rules For Failure

Vinko Bogataj doesn’t usually come to mind when savvy marketers think of influential business lessons. In fact, most of us don’t even know his name. But, growing up in the U.S. in the 1980’s, I’ll never forget his image in the opening montage of ABC’s Wide World of Sports. It was accompanied by Jim McKay’s epic narration contrasting “The Thrill of Victory” with “The Agony of Defeat”; which McKay offered as “its inevitable companion”. The footage was from the 1970 Ski-Flying World Championship in Oberstdorf, Germany. Unfortunately, on that infamous run, there was no actual ski flying. There was only a horrific sequence captured on film of a helpless athlete bounding head over heels off the side of the ramp.

The good news was that Bogataj suffered only minor injuries. The bad news, the young Slovenian became the anonymous icon for agony for a generation of American sports fans.

You might think this is an interesting sports story. It’s actually a story about brand innovation.

Zero Sum Games

Jim McKay’s thrills and agonies of the sports world could equally apply to business where there are also dramatic and uncertain outcomes, although usually not in such a swift (and visual) fashion.

The reason is simple: Successful brands are driven by growth imperatives. For example, your brand may need to grow by 10% next year. But, in the short term, populations usually don’t grow by 10%. In the short term, incomes don’t generally rise by 10%. In most cases, if you are going to grow by 10%, somebody else has to shrink. If you taste the thrill of victory, somebody somewhere feels the agony of defeat.

Brand Innovation For Growth

Innovation is a hot topic. It’s often seen as an answer to the growth imperative. Among other things, innovation allows you to enter new businesses, re-define the competitive landscape, or differentiate your offering in the market and separate yourself from lower margin commodity products.

Bold innovation is one of those things many brands enjoy dabbling in and dreaming about. But in practice, we may not like the realities it entails. Lives get changed, markets get disrupted, our sense of security goes out the door, and people get hurt. And, that’s what happens when we’re successful! It’s much worse when brands try bold innovation and fail (cue Wide World of Sports video).

In summary: We need the thrill of victory (from innovation and other growth drivers). But, we never want to experience that agony of defeat (from failing).

Paradoxically, how we cope with failure – both the fear of it and the reality of it – often determines our ability to succeed.

Dealing With Failure

The traditional approach to dealing with failure owes a debt of gratitude to Pavlov: Failure is bad. Do something bad, get punished. Don’t do something bad again.

In innovation, punishing failure leads to a really bad thing: Failure Avoidance, with nasty side effects like decision paralysis, finger pointing, and playing it too safe. Innovation comes to a halt when employees feel it’s unsafe to work on projects with an uncertain outcome. Brands with cultures of fear and blame are historically low-performing innovators.

There’s a temptation to solve for this by over-correcting and declaring “Failure is OK”. This well-meaning approach is designed to allow “safe space” to explore, experiment, and play. But the unintended consequence is that when nobody is held accountable for failure, quitting becomes an easy option…opening the door for an equally crippling condition: Failure Acceptance.

During the course of any significant innovation project, there will always be logical, rational, compelling reasons to quit. Try to think of a successful innovation project that didn’t go through a dark period where the outcomes looked bleak. The companies that win don’t do so because they don’t face challenges, but rather because they have the will to persevere and adapt their way to success.

Think of it this way: when you have to solve a problem, you usually do. When given the option to not solve a tough problem, you often don’t. History is full of examples where groups succeed when they didn’t have the option to quit (the Spanish after Cortes burned their own boats or mission control on Apollo 13 to name two)

So failure avoidance leads to inaction and failure acceptance leads to a higher likelihood of failing. What do the world’s leading brand innovators do? I offer these five rules, gathered over the last decade of working directly with them.

1. Understand That Failure Is Not OK

Show me a brand where failure is truly OK and I’ll show you a brand that fails a lot (or did). Failures cost money. Banks keep score.

2. Accept That Failure Is Innovation’s “Inevitable Companion”

If you play it safe, you’ll never do anything fundamentally better. Bold leaps require commitment and investment based on imperfect or ambiguous information. Despite your best effort to minimize risk, some percentage of the time every brand will miss the mark.

Apple made the Newton. Coors launched spring water. Life Savers made soda. They were all bold.

They didn’t work out.

Failure is part of the game. Of course, this creates the tension at the heart of the innovation challenge – failure is not OK, but failures are inevitable. You can’t avoid failure or you’ll never do anything bold, and you can’t accept failure or you’ll lack perseverance. You may not like it, but just as Jim McKay said about victory and defeat, failure and innovation are inevitable companions.

Apple, Coors, and Life Savors are all highly successful, despite losing some big bets. They don’t win every time, but – importantly – they win more than they lose…which lets them live to innovate another day. And that’s the key – if you learn from each loss, the next time your odds get better.

3. Understand That “Wrong” Is Not The Same As “Fail”

Many cultures equate “wrong” with “fail”. Nothing could be further from the truth. In fact, being wrong is a vital part of the innovation process. If you pursue bold innovation, you will almost certainly be wrong some of the time (maybe a little, maybe a lot). Designing businesses for the future is unpredictable with complex factors, many outside of our control. Having the space to explore and play is critical, and that requires having permission to be wrong.

4. Over-Invest In Making Smarter Bets

In my experience, the brands that are consistently best at innovation invest generously in an exceptional process to gather learning, analyze risks, and create viable plans to make modest bets based on the information available. This up-front investment can be expensive, but it’s a wise investment if you’re serious about innovation. And, it’s ultimately much less expensive than writing off costly failures much later in the process.

I can’t stress enough how important it is for brands to over-invest here. Over-invest in simple prototypes. Over-invest in interacting with customers. Over-invest in being wrong so you can figure out what’s right. Do your homework, make smart bets, and course correct. If you do this well, in the long run you’ll win more than you lose.

5. Think Of Launch Commitment Like A Ski Jump

Remember Vinko Bogataj? Ski jumpers like Bogataj never know for sure if they’ll land on their skis each time they jump. But once they take their butts off the seat, there is no other option but to see it through. They don’t think about the “what ifs.” They only think about how to adjust and succeed. High performing innovation brands (and entrepreneurs) think the same way.

I urge you to think of outcome commitment like a ski jump with a similar “Butt Off the Seat” moment. You wouldn’t strap on skis and hurl yourself down an icy ramp without a serious amount of prep work, would you? Do not commit to any innovation project lightly. But once you do, see it through. After your butt’s off the seat, either you’ll make choices that let you win, or you’ve already lost.

In Closing

What most of us never saw was that earlier on his fateful day, Vinko Bogataj made the jump of his life. He flew 410 feet down a German mountain to experience the true thrill of victory.

I’d love to say “ski jumpers and innovators have a lot in common”, but I can’t do that with a straight face. However, there is an important lesson about dealing with failure that we can learn: If you avoid failure you’ll never get in the game. If you allow it you won’t persevere.

In the middle is a balanced, if highly uncomfortable, space dominated by the inevitable tension most athletes have come to accept where failure is bad, but losses are inevitable if you’re in the game.

For those new to innovation, it’s easy to believe that success somehow occurs overnight and without having to fight for it. But it’s never easy, and while not every innovation project is a winner, every one could be a loser if you don’t persevere and make the right adjustments.

By the way, what did Bogataj say to the medical crew loading him into the ambulance 10 minutes after his fall. “Can I jump again?”

The Blake Project Can Help: Accelerate Brand Growth Through Powerful Emotional Connections

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Using Glamour To Build Brands

Using Glamour To Build Brands

For many of us, glamour is embodied by timeless icons such as Jacquie O., Marilyn Monroe, Grace Kelly or Cary Grant. Certain brands and products also became synonymous with these icon’s glamour: Rayban’s wayfarer, James Bond’s Aston Martin and Hermes’s Kelly bag. At that time, glamour was the exclusivity of celebrities and professional photographers.

Today, smartphones and social media make it easy for just about anyone to be glamorous and tell the world about it. For most people, this means posting a glamorous picture every once in a while. The most avid social media users carefully curate and enhance each and every image they post to project a (mostly imaginary) glamorous lifestyle.

For marketers, the democratization of glamour presents an opportunity to insert their brands and products in glamorous narratives. To take advantage of this let’s take a closer look at defining glamour in the context of today’s consumer environment and explore a few best practices on how to make your brand glamorous.

Glamour Defined

To glamorize is to fantasize, says Virginia Postrel, who has written extensively about The Power Of Glamour.

Glamour is different from romanticism, whereby glamour is an end result and romanticism is a process of seduction.

Glamour is an illusion, a projection of reality that likely begins with a stylized image of an object, a person, an event or a setting. Postrel further stresses that glamour is not something you possess but something you perceived, which emerges through the interaction between object and audience.

Lenses and filters embedded in most smartphones software make it easy to create these objects and spread them throughout an audience. By liking or commenting on these objects almost immediately, the audience reinforces the glamorous aspect of these pictures. The sociologist Colin Campbell notes that people who watch glamorous pictures turn these images into daydreams, creating ‘an illusion which is known to be false but felt to be true’.

Glamour constantly reemerges in new forms as users post new pictures, enabling users to pursue emotional pleasure without ever feeling fully satisfied.

How To Make Your Brand Glamorous

I can think of two prominent bakeries in downtown Los Angeles, both baking outstanding pastries and bread. The reason why one is always packed and the other seems to struggle to stay in business is the lighting. Yes, the dim light of the later makes it hard to take good pictures and filters and lenses almost make the pictures worse. A Gen X friend of mine confessed she went to this bakery and never went back because ‘it was impossible to stage a picture there’. If you operate in any type of brick and mortar environment, make sure your store or restaurant is well lit. Also, setup a backdrop with the name of your brand printed on it and setup a few professional lights. Invite your guests to get their picture taken in front of the backdrop; they’ll feel like a star for a minute and make themselves and your brand look glamorous on social media for the rest of the day.

The Museum Of Ice Cream: Turning A Glamorous Experience Into A Brand

Earlier on Branding Strategy Insider, I wrote about the marketing power of nostalgia. When opening The Museum of Ice Cream Maryellis Bunn and Manish Vora created a contemporary glamorous experience by combining childhood memories, indulgence and escapism in a picture-perfect environment. A simple search for the Museum of Ice Cream on Instagram will return 1,000 of pictures that fulfill the definition of glamour outlined above.

The success of the ‘museum’ was immediate. Yet it’s debatable if the space really qualifies as a museum. When considering names, the founders chose ‘museum’ because it was something people would understand. Shortly after opening in New York last summer, all tickets sold out, leaving 200,000 people on the waiting list. The same result for the Los Angeles and San Francisco locations.

Besides selling $29 entry tickets, the museum partners with brands such as Tinder and American Express, which invest $180,000 to privatize the space for a day. An obvious fit, Artisanal creameries such as McConnell’s and Coolhaus keenly associate their name with the glamorous museum by providing a free sample scoop to guests.

To sum up, glamour is more prevalent today than it has ever been since its inception in the early 1700s, as it fulfills consumers’ need for self-actualization. Technology and social media are the perfect enablers of glamour, which by definition is constantly changing. It presents a unique opportunity for brands to insert themselves in an idealized world created and controlled by consumers rather than advertisers.

The Blake Project Can Help: Accelerate Brand Growth Through Powerful Emotional Connections

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Long Term Thinking Drives Brand Competitiveness

Long Term Thinking Drives Brand Competitiveness

There’s a lot of talk about building brands from the inside-out. But is the time needed to build such a high-performing culture at odds with the demands of quarter-by-quarter performance appraisal?

Aetna CEO Mark Bertolini put forward what many might see as a disruptive view in an interview recently: “Profit is an outcome of a well-run business based on sound business fundamentals and a well-educated and happy workforce. You don’t manage a bottom line. Anybody who manages a bottom line is making a big mistake. That’s why a lot of companies aren’t around for a long time.”

Two immediate points to note in his statement: the link between short term thinking and shorter living companies; and the description of profit as an outcome of human factors.

The relationship between short term-ism and expected brand duration in Bertolini’s statement is interesting because it suggests that focusing on the short term tangibly deteriorates the life expectancy of a brand. Companies are actively building dying brands and telling themselves that is the accountable and responsible thing to do.

The Dutch social psychologist Geert Hofstede, who first talked about long term versus short term orientation in the 1990s, makes the often-missed point that whereas long-term orientation in reality stands for the fostering of virtues oriented to future rewards, short-term orientation revolves around virtues related to the past and the present. That, I would suggest, is the exact opposite of how it is justified by those who assess progress in the short term.

When brands think only in the short term, they extrapolate their future from how they are currently tracking, and they motivate their people around that same sense of currency. Everything is about trends – and true to Hofstede’s model – the future becomes an extension of the way the numbers are pointing at a specific point in time. That’s because they seem to need an immediate sense of proof. Of course, no-one’s denying that there needs to be metrics and that they need to be measured regularly, but Bertolini’s point that you should read those numbers as a performance indicator of your culture before you read it as an indicator for the company’s well being will rankle some.

However, as McKinsey pointed out in this article, the market’s assessment of performance can be at odds with the actual wellbeing of the brand. “The most common approach to measuring the stock market performance of a company is to calculate its total returns to shareholders (TRS), defined as share price appreciation plus dividend yield, over time. This approach has severe limitations, however, because over short periods TRS embodies changes in expectations about the future performance of a company more than its actual underlying performance and health. Companies that consistently meet high performance standards can thus find it hard to deliver high TRS … The better these managers perform, the more the market expects from them; they must run ever faster just to keep up … This predicament illustrates the old saying about the difference between a good company and a good investment: in the short term, good companies may not be good investments, and vice versa.”

Too often companies separate their numbers from the people who made the numbers happen, but as this perspective from the New York Times reveals, stakeholders can have very different views on potential earnings and their impacts. “For companies, failure and expansion could not be more different. For employees, they can feel the same … On the one hand, the collapse of British retailer BHS, with the potential loss of 11,000 jobs, has set off a witch hunt. On the other, the energy giants Shell and BG Group have merged, and expect to generate $4.5 billion of annual savings as a result. The cost is that 12,500 jobs worldwide get the chop.” That’s because the outcome for people in both cases was exactly the same. It’s impossible to motivate anyone to see redundancy as a reward for working harder and harder.

As a result of both these dilemmas, people are aiming for short-term targets that continue to allude them and can then work against them.

Long term brands look to different measures – hopefully, their purpose and ambitions – to evaluate whether they are on track. They also recognize that brands live or die on their ability to generate trust. Those brands that focus on quality and responsiveness, that respond to customer needs and engage in regular conversation are more likely to keep customers. No customer stays with a brand because of how it is performing financially. They stay, or re-select a brand, because of their own experiences and the experiences of those around them. And the most likely encounter they will have – until chatbots take over the world – is with people.

The difficulty for many brands in laying out and working to a long term view is that it requires confidence and faith. As a brand, you need to lay out plans for what you will achieve beyond the timeframes in which you are often assessed. My experience is that many brands do not actually believe their own vision. They are not examining their progress against that long-term view, and most have not connected that long-term goal with the pay-offs for all involved in reaching that point.

In such circumstances, reaction quickly becomes a much simpler way to assess progress than action. ‘If we look after the immediate, the long term will take care of itself.’

In point of fact, the converse applies. Brands that truly understand what they need to accomplish in the long term will know what they need to achieve in the short term, and how that will affect their people, in order to remain on target. Five thoughts around how to do this:

1. Quantify your vision/purpose in terms of what it will mean for your people. When you become the brand you’ve always wanted to be, what will it mean for them?

2. Define who you will be. What are your long term goals for your brand culture – in other words, what qualities will the people within your brand culture need to display in order to achieve that?

3. Assess progress broadly. How will you assess advancement towards the goal in the terms that Bertolini referred to – as your brand edges closer to your purpose, how will that play out across your wider metrics: not just the numbers, but also your people’s wellbeing, competence, leadership, succession etc?

4. Report specifically. Memory and history are created by people, and ultimately that’s where a brand derives its value – from what it’s known for, and for the consistency with which it keeps delivering on that. What expectations will you have of people and they have of themselves and their teams that will keep them motivated on what needs to get done now in order to stay on track for tomorrow? What results will you highlight and which ones will you downplay? How often?

5. Make change part of business as usual. How much innovation/improvement/disruption is built into your long term vision – and how will you reward people for making that happen (rather than penalizing them once it has happened)?

The Blake Project Can Help: Please email us for more about our purpose, mission, vision and values workshops.

Build A Human Centric Brand. Join us for The Un-Conference: 360 Degrees of Brand Strategy for a Changing World, April 2-4, 2018 in San Diego, California. A fun, competitive-learning experience reserved for 50 marketing oriented leaders and professionals.

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