12

developing a brand building organization*

One of the most difficult tasks in brand management is transforming the organization from one that does not understand the scope or importance of brand management to one that embraces and actively builds the brand as a critically important source of sustainable competitive advantage. Key to this transformation is the organization’s brand promise.

The following comment is typical of what I hear from marketing executives at more and more companies these days: “We conducted exhaustive consumer research,” they say. “We carefully positioned our brand. We developed and instituted a comprehensive brand identity system and standards. We are running our new advertising campaign. Now what do we do? How do we get the rest of the organization to understand and care about the brand and its promise? How do we get the organization to deliver on the promise? How do we make the brand promise real?”

Brand management guru David Aaker posed the following very important question when he visited Hallmark during my time there:

Until everyone from your CEO to your receptionist can accurately and consistently articulate your brand’s promise, how do you expect your customers to?

Certainly, the brand promise drives your marketing communication and your brand identity system and standards. But it must do much more than that. Your products and services, every point of contact your brand makes with consumers, and the total consumer experience your brand creates must reinforce your brand’s promise (see Figure 12–1). This has tremendous organizational implications. How can an organization deliver against its promise if its frontline employees don’t know (or care about) what its brand stands for?

At Hallmark, we did a number of things to incorporate the brand at every level of the organization:

• We worked with our public affairs and communications department to include key brand concepts and messages in all internal and external publications and executive speeches.

• We worked with the training department to build brand strategy modules into all internal training programs, especially new employee orientations.

• We gave Franklin Planner page finders, featuring the brand essence and promise, to all employees.

• We created a brand management and marketing intranet site so that all employees could easily access brand plans, brand research, brand identity standards, and other brand information.

Negative Example: The Toyota Recall

A way to illustrate the importance of developing a brand building organization is through an example of what happens when it is not working. A good example is the Toyota recall crisis, a two-year debacle that resulted in the recall of 7.5 million vehicles and a loss of revenue of $54 million a day. The crisis begain in August 2009, when four people were killed in a Lexus (made by Toyota) because the car accelerated on its own. Over the next several months, Toyota refused to acknowledge a defect in the manufacture of the accelerator, issuing news releases that blamed floor mats. As more cases of out-of-control acceleration came to light and more deaths were reported, Toyota continued to announce minor fixes and was forced into the position of apologizing repeatedly for its lack of a more aggressive response. The crisis could have been averted by an automatic recall when the first few accidents emerged, but Toyota severely damaged its fine reputation and spotless brand identity by refusing to admit to product defects.

United Airlines experienced a similar kind of failure to respond to a customer’s injury, made worse by the power of the Internet. The protest song “United Breaks Guitars” (presented as a YouTube video) was written by Canadian musician Dave Carroll after United Airlines broke his guitar in 2008. The song recounts the incident and United’s lack of response in resolving it. Within a few days of Carroll posting the YouTube video, United Airlines’ stock price decreased by 10 percent, destroying $180 million in company value. As of December 11, 2013, 13,641,538 people have watched the YouTube video.

Critical Support Factors

The Conference Board conducted a study on “Managing the Corporate Brand” that laid the groundwork for brand management during the corporate boom of the late 1990s and early 2000s. In that study, the researchers discovered four organizational support factors were critical to brand strategy success. They are:

1. CEO leadership and support

2. A distinctive corporate culture that serves as a platform for the brand promise

3. The ability to obtain support from a broad spectrum of employees

4. The alignment of brand messages across functions

At the Institute for International Research’s Brand Masters Conference in Palm Beach, Florida, Sixtus Oechsle, then manager of corporate communications and advertising for Shell Oil Company, indicated that in a study of sources of brand favorability, Shell Oil found that interaction with company employees had the greatest impact (much greater than brand ads or news) on brand favorability.

Common Organizational Barriers to Brand Building

Here are some of the most common problems that organizations encounter when trying to implement new brand management programs:

• Senior management is not focused on the brand.

• Senior management has a short attention span and fails to provide the support and resources necessary for the branding to occur.

• Some senior leaders do not believe in the brand management concept.

• The organization is highly fragmented and resistant to change.

• The organization is internally focused.

• Difficulties exist in shifting people’s focus from their functional “silos” to cross-functional ownership of the brand.

• The organization’s culture does not reinforce the brand.

• The organization’s operations and systems do not support the brand.

• The brand message is just one of many among a myriad of corporate messages.

Overcoming Obstacles

In my workshops on “Creating a Brand Building Organization,” several approaches have been found to be effective in overcoming the obstacles encountered in creating brand building organizations. The main issues and ideas for addressing them are as follows:

• Issue: How do you get corporate officers to support brand management initiatives when they don’t understand the value of brand management or marketing?

Ideas:

• Use books and speakers to influence the leaders.

• Enlist the help of credible outside brand experts to spend some time with the corporate officer group.

• Provide case studies of how brand management has worked in comparable companies and industries.

• Symbolically “clean house” in the marketing department. Hire some new high-profile marketers with a history of success.

• Invite senior executives to help you solve brand management problems. Appeal to their egos and their propensity to mentor.

• Issue: How do you get corporate officers to act as brand champions when they are accountable for other corporate priorities?

Ideas:

• Tie brand performance objectives to their compensation system.

• Give them bonuses based on achievement of brand goals.

• Educate them. Sell them.

• Include “brand passion” as an executive hiring criterion.

• Figure out how the brand helps them.

• Provide them with a quarterly update on progress against key brand objectives.

• Issue: Once you have most of the brand pieces in place (e.g., brand promise and positioning, brand identity), how do you translate all of that to a brand building culture?

Ideas:

• “Walk the talk.” Challenge others to do so as well.

• Throw it back out to the organization to figure out. You don’t have to know all the answers up front.

• Review the brand tenets with various groups. Ask them where your plans are lacking in helping you achieve brand goals.

• Develop a six-month plan, including objectives, obstacles, messages, and vehicles.

Issue: Identify out-of-the-box tactics to ensure continued employee involvement in and support of brand initiatives.

Ideas:

• Hold a poster contest. (“Communicate what the three brand tenets mean to you.”)

• Feature twelve of the posters on a twelve-month calendar.

• Hold open houses. (Different areas showcase what they have done to promote brand initiatives.)

• Promote (through internal publications or other means) “the person on the street” who has helped build the brand.

• Name and recognize a “brand champion of the month.”

• Create brand “certificates of appreciation.” Award them to people who have furthered brand causes.

Issue: If we believe frontline employees are 80 percent of the way there in their understanding of the brand, what else should we ask them to know, say, or do?

Ideas:

• Validate your beliefs with research. Measure your employees’ understanding.

• Create an employee “focus group.” Run it by the people in the focus group (for ideas on what to do next).

• Ask them how they are going to “live the brand.”

• Ask them what actions they are going to take to deliver against the brand promise.

• Instead of focusing on dissemination of information, focus on recognition of the appropriate behavior.

• Issue: How do we convince geographically and functionally diverse groups to embrace the brand promise when we have little authority and can only use influencing skills?

Ideas:

• Identify each stakeholder’s burning issues and discover ways that your brand initiatives can address them. Relate your brand programs back to their issues.

• Sell your initiatives to top executives in other divisions and departments.

• Set up measures to highlight gaps.

• Identify influencers. Create grassroots support for your initiatives.

Brand Building Requires More Than Advertising and Brand Identity Management

To create the change required to build a brand, all of the following questions must be addressed:

• Corporate Mission and Vision. Are they congruent with the brand essence and promise?

• Business Planning Process. Is it linked to the brand planning process?

• Corporate Culture, Values, and Behavior. Do they support the brand essence, promise, and personality?

• Recruitment. Are you screening people for congruence between their beliefs, values, and personality and your brand’s essence, promise, and personality?

• Internal Communication Vehicles. Are you using them to communicate brand positioning, strategies, and priorities?

• Training and Development. Are you using them to increase understanding of brand positioning, strategies, and priorities?

• Performance Objectives (especially common objectives). Do they include brand objectives?

• Performance Appraisal. Do you provide feedback on how well individuals and groups are delivering against the brand promise?

• Rewards and Recognition. Do you reward and recognize people who have furthered important brand goals? Do you compensate people for achievement of brand objectives?

• Products and Services. Do they deliver against the brand promise?

• Operations, Systems, and Logistics. Do they support delivery of the brand promise?

Brand marketing won’t work (at least to its fullest potential) if it is confined to an advertising agency, public affairs department, or even a brand management function. This is especially true when the brand in question is the corporate brand. The CEO is the ultimate brand manager, and everyone throughout the organization must be a brand champion (which implies they all know the brand essence and promise). The corporate culture must support the brand’s promise, and indeed, the company should be organized to optimally deliver the brand promise. How can consumers know what your brand stands for if people in your organization don’t? Does the person answering your 1-800 number know what the brand stands for? How about the in-store sales associate? The copywriter for your brand catalog? The person developing a brand promotion? The people who design the brand’s products?

Hiring employees whose personalities and values match those intended for the brand will ensure that the brand experience is consistently delivered as intended. Hiring employees who are category enthusiasts ensures knowledge, passion, credibility, and the ability to communicate more easily with customers and potential customers. It also helps you tap into customer networks more easily. This is important across functions—from product development, sales, and customer service to marketing research, quality control, and senior management. For example, Oakley looks for employees who have a serious interest in sport. Southwest Airlines hires people for their sense of humor and positive attitude.¹ Virgin Atlantic also hires people based on their congruence with company values.

At the Institute for International Research’s Branding Trilogy conference in Santa Barbara, California, Kristine Shattuck, then Los Angeles–area marketing manager for Southwest Airlines, put it well when she said, “Enthusiastic employees spread enthusiasm to customers. Market to your employees as much as your customers. If your employees don’t ‘get it,’ neither will your customers.”

You, your executive team, and all your organization’s employees should share your passion about your brand each and every day. What story is uniquely your brand’s own? Tell that story, and people will pass it on. As you know, “word-of-mouth” marketing is one of the more powerful forms of marketing. The story could spread to a key decision maker or an important influencer.

Also investigate possible organizational misalignments. At Hallmark, a key brand objective was to differentiate the Hallmark brand of greeting cards from the Ambassador brand of greeting cards, but products for both brands were developed in the same business units. Those business units had profit-and-loss responsibility, controlled all the product development resources, and had SKU (stock keeping unit) reduction goals that could not be accomplished except by combining SKUs across brands and removing the brand identity from the affected SKUs. That was a powerful incentive against brand differentiation.

Or consider the Hallmark licensing department. It had a strong incentive to license the Hallmark name out to any organization that was willing to pay the appropriate royalties (whether or not the product category was right for the Hallmark brand). Why? Because it was not managed as a part of a strategic brand development group but rather as a part of an independent division that was driven by revenue- and profit-generation goals. In both of these examples, the organizational design made it more difficult to achieve brand goals.

In both instances, education, persuasion, influencing, and constant communication from the brand group were required to ensure brand goals were not completely compromised. Educating division heads and other executives was a critical component of this approach. If they understand the importance of brand stewardship, it makes the brand manager’s job much easier.

Employee morale is a very important element in maintaining a strong brand. It affects everything from quality of frontline service and product defects to word-of-mouth negative comments about the company, some of which will eventually make it into the press (trade and general). It is often true that as you treat your employees, so they will treat your customers. Think about that. As you treat your employees, so they will treat your customers.

What are the ramifications of that thought for brand design and organizational design? Only an organization that authentically cares about its employees can demonstrate genuine concern for its customers.

Creating employee goodwill is very much linked to creating customer goodwill. At Element K, we offered our employees special touches, such as paid health club membership fees, Weight Watchers classes, on-site seated massages, company picnics, and holiday parties, as well as ice-cream socials in the warmer months. I have also found that making insignia merchandise available to employees helps them share their pride about the brand and the company. “Learning maps” are increasing used to roll out new or repositioned brands, especially when concurrent cultural changes are required.

A trend in some companies is to include the human resource function as a part (and in support) of the marketing function. Michael Porter’s customer value chain concept is based on the thought that every activity a company performs should add to customer value, or it should be eliminated.²

If a company has chosen the right promises for its brands, the concept could be adapted to say that all company activities should contribute to the delivery of brand promises or be eliminated—this includes operations, logistics, marketing and sales, human resource management, organization design, technology development, and procurement.

Brands typically are a company’s most valuable assets, along with its people. In fact, the value of the brand asset often exceeds a company’s annual sales. However, in many companies, people view brand management functions and activities as “overhead,” implying they are expendable and do not add value. (In contrast to this view, in the 1950s Peter Drucker stated that “marketing and innovation add value, everything else in the organization adds costs.” He assumed marketing was integrated throughout the enterprise.) Accounting systems that categorize brand spending as “nonproduct” or “nondirect” expenses often reinforce the view of brand activities as “overhead.” The long-term perspective of brand building also contributes to this view: A brand building (or brand diluting) activity typically does not produce visible results in the current quarter. The results are cumulative and are more visible over time.

If the brand is recognized for what it is—a very important asset that must be built, maintained, and leveraged—then people will begin to view brand activities and spending very differently. This thinking must begin with the CEO and the CFO, but it should be a view shared by all employees. The CFO can become one of the biggest brand supporters if this executive is aware of the financial value of the brand asset, which is why measuring the value of the brand asset is so important.

The New Brand Management Paradigm

The most successful brand building organizations are creating a new brand management paradigm. Increasingly, the brand is becoming the key source of differentiation that guides customer purchase choice. The brand is also the focal point around which an organization defines how it will uniquely deliver value to the customer for a profit. The brand embodies the “heart and soul” of an organization. Its promise is delivered through its products, services, and consumer communication—the total customer relationship and experience. If the brand promise is well conceived and consistently delivered through all business processes and customer contacts, the organization will grow and prosper.

Ultimately, you want to create a company full of brand maniacs, champions, and evangelists. Not until this happens can you be sure that you have developed a brand building organization.

Use the checklist in Figure 12–2 to assess the efficacy of your brand management practices in the area covered by this chapter. The more questions to which you can answer “yes,” the better you are doing. The checklist also provides a brief summary of the material covered in the chapter.

* This chapter is an updated version of my article “Developing the Brand Building Organization,” Journal of Brand Management 7, no. 4 (2001): 281–290 (copyright Henry Stewart Publications).