Level 5 Blog

The scapegoat is alive and well and drawing from your operating budget. 

                                                                                                                                                                                                                                            That would be your marketing department, a crew of lacklustre individuals who take up space and resources, but have yet to pony up the goods that might justify their existence.

                                                                                                                                                                                                                                                So says a report by Fournaise Marketing Group, whose inquiries of more than 600 CEOs and decision makers hailing from large corporations and SMBs across the globe reveal that the presiding shepherds are widely dissatisfied with the performance and perceived participation of the marketers within their flocks.

                                                                                                                                                                                                                                             The study in question, the 2011 Global Marketing Effectiveness Program , reports that almost three-quarters of CEOs feel marketers lack credibility. More than that, they complain that they don’t pull their weight, regularly failing to demonstrate what their efforts add to their company’s top line. Your latest cross-channel marketing campaign might be flashy, say the CEOs via this research, but where’s the increased customer demand, sales, prospects, conversions and market share?

                                                                                                                                                                                                                                            The lack of hard results isn’t surprising, the execs go on to say, considering how much of their time marketers spend on the artsy, fluffy elements of their jobs. Seventy-four percent of CEOs, says the research, believe marketers rely too much on cool new crazes, and on the eventual salvation from their ad agencies in the form of brilliant ideas.

                                                                                                                                                                                                                                              Alas, it’s a scene we come across all too often, but a solution can be found in a simple change of perspective about the role your brand plays. Instead of thinking of it as a communications tool only, recast it as a management tool, as well; instead of thinking of yourself as the CMO, act like the CBO with responsibility for the brand’s implementation across the organization (your CEO will love you for it); instead of looking only at marketing metrics such as unaided awareness as the measure of success, consider employee engagement and culture strength, too (for example); instead of thinking of brand as a psychological heuristic, reconsider it as a tangible asset whose growth in value can be financially measured on, and can add strength to, the balance sheet.

                                                                                                                                                                                                                                                 If you expand your field of domain and adopt this revised view of brand, you’ll gain credibility across the pasture.

The fortunate few who break the first-interview barrier and make it to the second round with Singapore Airlines’ HR team have their proclivity for serving others put to a scalding test. Candidates are gathered in a room outfitted with table, chairs and tea service. Only those applicants —being viewed by their would-be employers behind two-way glass — who twig to the opportunity to pour and offer a hot beverage to their peers move on.

                                                                                                                                                                           Excellent.

                                                                                                                                                                                 Also a bit extraordinary? Perhaps. But effective, plainly, given that the 40-year-old, well-established airline is regularly singled out for its exemplary brand-management efforts. And bang on, as far as we’re concerned, in its nailing of exactly what it takes to pilot a brand.

                                                                                                                                                                             Namely: an all-in infusion from each and every ingredient of the intricately composed blend that is the brand.

                                                                                                                                                                                  As described in the article How to Build a Strong Brand, management at any company must, from the personnel-sourcing get-go—before assigning an ID card or describing the vagaries of the in-house microware oven—ensure that every last of its (potential) employees be in possession of the inborn DNA that is consistent with its brand and reflective of whatit wants the world to understand about it. 

                                                                                                                                                                                                                                            The point’s well made.  The article describes how Singapore Airlines’ executive spokespeople James Boyd and C. W. Foo were invited to nominate those universal concepts they believe helped establish and grow their brand. Among them, they include: “Carefully select the best possible staff imaginable,” and then go on to explain that a “service company existing within a service industry” must demonstrate a cellular appreciation for the critical role its customer-facing people play in perpetuating a brand that permeates every last breath of its existence.

                                                                                                                                                                                 For Singapore Airlines, it’s all blue skies ahead.

Enough already with the articles that dismiss the concept of culture as the exclusive distraction of those souls who wear socks with their Birkenstocks. Not only is culture not the scratchy, granola-crunching preoccupation of the touchy-feelies alone, it is the very lifeblood of a brand, the scaffolding of an organization, without which its component parts would tumble to the ground.

“It’s not good enough just to have an amazing product and a healthy bank balance,” declares a Fast Company article we recently uncovered that expresses this outlook masterfully. Defining culture smartly as “a clear set of values and norms that actively guide the way a company operates,” the piece points out that “culture is the environment in which your strategy and your brand thrive or die a slow death.”

The slow deaths are the fallout of companies who fail to appreciate the essential role culture and brand play in informing and reinforcing one another throughout an organization’s existence. As we described in an earlier post about our whitepaper, The New Approach to Winning, brand, business and culture have a very relevant point of intersection. And managers ignore it at their considerable peril.

More than that, they ignore it at their bottom line’s peril, given the direct-line connection tying a vibrant and integrated culture with commercial success. Indeed, goes the Fast Company piece, which draws on a whack of points of reference — from the “connected community” culture of the US Marines to the “well-documented and highly dysfunctional” culture of American Apparel — “the money invested in research and development, product differentiation, marketing, and human resources is never maximized and often wasted because it’s not fueled by a sustaining and functional culture.”

Ain’t nothing touchy-feely about that hard-hitting perspective, a preference for socks with sandals or no.

Those who hire the feckless, unengaged retail-working slacker take note: consumers of luxury goods consider customer service the single most important factor influencing their shopping experience.

So say the results of a study conducted by customer-experience-management solution provider Empathica, who polled 5,000 American and Canadian consumers about their luxury-buying proclivities. Nearly a third of them singled out highly knowledgeable and well-trained employees as the most significant element of their extravagance-purchase adventure, with one-on-one customer service following in a close second place.

It’s a revelation that dovetails smartly with LEVEL5’s overarching philosophy on brand: that every last soul involved in a company’s existence — from the slick-haired executives in the top-floor suites to the dirty-fingered operatives toiling in the pit — must be invested in the unified development and delivery of the brand.

The poll results show that employees’ everyday actions (i.e. the delivery of the brand) can be more powerful than any ad campaign in driving profitable growth. The brand then, when used as a management tool, should act as a guide to mold the culture and ensure that the people behind a brand, especially those in a front-line retail role, understand exactly how they can bring to life the brand’s promise, the value it offers consumers and its key points of difference from the competition.

Endorsing this approach to brand will almost certainly guarantee luxurious results for a high-end retailer.

Those hospitals in possession of the healthiest standings in their markets enjoy that robust condition largely because their management is being handled by capable CEOs who understand their role in, and the value of, a cohesive brand. So says a newly published report from healthcare advertising and brand strategy firm Smith & Jones.

In acknowledgement of the surfeit of healthcare organizations whose approach to brand management is ailing, the company offers a four-point prescription for hospital CEOs that includes the imperative for a firm grasp of the hospital’s competitive position, an ability to succinctly articulate that to all and sundry, and wholehearted participatory buy-in from every level of the organization.

None of this is a new diagnosis to us at LEVEL5, where corporate management by an informed and enthusiastic CEO, based on a clearly defined brand, is regarded as an essential to success. But we can draw some new lessons from the prescription about the best way to manage your brand’s health to drive growth and profitability:

• Take an outside-in POV.  Too many business people think they know the state of the market, customer and competition but never do the research to confirm.  As a result, they build a brand and business from the inside-out based on their own, often incorrect, bias and opinion, ignoring the facts and the all important feedback from customer experience.
• Partner your outside-in market assessment with an inside-out determination of your vision, mission and values. Many leaders believe that vision, mission and values are just bumpf that offer no value. But in reality they form the foundation for the entire direction and operations of the organization and brand.  Princess Margaret Hospital Foundation’s vision – “To conquer cancer in our lifetime” – doesn’t seem fluffy.  It does sound like a rallying point to focus an organization and a guide to help make strategic decisions  as effective as possible.
• CEO = CBO (for all the reasons mentioned in our previous post). Only the CEO has the viewpoint from on high to manage all aspects of the organization in a coordinated way in alignment with the brand.  Thus, it makes sense that the ultimate responsibility for the brand should lie with that office.

Building a brand and organization with these measures can cure the disease of a poorly managed hospital, and strengthen your brand’s health and wealth.

Anything else is just bad medicine.

A reputation, argues Dr. Paul Temple, a senior lecturer in higher education management at the University of London’s Institute of Education, is built, not bought.

                                                                                                                                                                                                                                             We would heartily agree with this position, outlined in a recent article in Times Higher Education, a weekly British publication devoted to the subject of post-secondary learning, had he but stopped there. Unfortunately, though, he goes on to illustrate perfectly the prevailing misconceptions about brand and the influence it can wield on said reputation. (Clearly, the guy hasn’t been reading this blog.)

                                                                                                                                                                                                                                             His article, which introduces the very legitimate concept of university as brand, proposes that branding consultants have “almost no effect” on how a school is perceived, and that much of their work is “a waste of time and money.” Poppycock.

                                                                                                                                                                                                                                              As opposed to merely presenting the university “in an appealing way,” through “superficial manipulations…” and crossing fingers that time will do its work to cement an appealing legacy (as Temple suggests), our idea of brand is different and effective (as we’ve proved in working with one of Canada’s leading universities).  It’s not focused just on communicating a reputation (although that is important) but on the conviction that brand impacts how an institution is managed, and that its fundamentals can be changed for the better through aligning and operating the various departments and functions inside a common ideal (read: brand).

                                                                                                                                                                                                                                       Taking this management-by-brand approach, universities can move closer to reaching their objectives by addressing questions in four key areas that will inform how they manage and communicate the school/brand:

• What is at the heart of their brand? What promise are they making?  How should the organization be managed to deliver it?
• Why would their students want to attend? What value do they get?  How do the functional, emotional and self-expressive benefits get demonstrated through the university’s words and actions?
• How do they express their promise in the market? What makes them better and different? How do they communicate that in the market? How do professors and administration live that promise every day?
• What measures do they have in place to track their progress and reach their brand and organizational goals? What are the key management metrics that will guide priorities, decisions and actions throughout the university?

When used in the management of the organization, and not just in the marketing, these inquiries, and the answers thereto, demonstrate that brand is not merely “candyfloss,” as Temple so erroneously suggests, but a powerful operating philosophy creating a very real source of competitive advantage.

How easy it is to level a pointy finger at the other guy when things go awry at the shop. A company begins to fail and the organization starts splintering, each department pitting itself against the other. More often than not, the headline matchup is this one: slippery sales guys in it for the buck alone vs. product geeks enamoured with their own brilliance.

                                                                                                                                                                                                                                                A recent Forbes piece provides a fascinating perspective on the roles that products and sales play in the demise of a company, as per the viewpoint of four business experts – Peggy Noonan from The Wall Street Journal; Steve Jobs; well-known business author and columnist Steve Denning; and the piece’s author, August Turak, a software engineer who’s a founding MTV employee. 

                                                                                                                                                                                                                                        From where we sit, the trick to solving the contest seems best expressed late in the article, when Turak suggests that “everyone … must share a value system.”

                                                                                                                                                                                                                                           This value system, of course, comes in no better a package than an organization’s brand.  When done well, the brand represents the company’s key essence, the reason customers would buy and the factors that distinguish it from its competition.

                                                                                                                                                                                                                                        When considered and expressed properly (which, the article rightly points out, happens when it’s benefit oriented, not feature laden), an organization’s brand directs the priorities, decision-making and actions of each department and function, so they’re all aligned toward a common goal.

                                                                                                                                                                                                                                            That all-on-the-same-pageness is critical during tough times, when it’s the brand that acts as the glue keeping an organization’s various roles working together, helping to smooth over, or even avoid altogether, the disagreements and finger-pointing that stressful times bring.

                                                                                                                                                                                                                                           And that’s an idea we’re stuck on.

With a new year comes new perspective, a home truth that’s certainly the case for us. 

As always, we’ve been thinking a lot about brand, its application as a management philosophy (not just a marcom effort) and the best way to explain our brand as a business system™ approach (including why it offers so much opportunity to create competitive advantage that, ultimately, drives growth and profitability).

But in talking with both clients and prospects, we’ve come to realize that, as a starting point, the word “brand” is still regularly misunderstood. So donning our thinking caps, we’ve conceived of what we believe to be a much clearer definition of “brand”:

Brand is the value of a promise consistently kept.

Let’s clarify what we mean by each of the three component parts of that definition:

Value

A brand has value that shows up on the balance sheet. In some sectors, the brand has accounted for up to 40% of the enterprise value of an organization, and GAAP rules now clearly indicate that breaking out the brand’s value as its own line item from the goodwill bucket on the balance sheet is prudent accounting practice.

Promise

A brand represents a promise the organization makes to various stakeholders (its customers and employees being but two). When you go to watch Cirque du Soleil or purchase an i-anything from Apple, you have certain expectations of what that experience/product will be like based on the past words and actions of the organization. Whether planned or not, those words and actions make up the promise, and that promise can have a far-reaching impact on the organization’s ability to drive growth and profitability – ultimately affecting the brand’s value.

Consistently kept

The capacity for the brand’s promise to create value is in large part a function of the organization’s ability to consistently keep that promise (assuming it’s strategically developed). This means ensuring that every department and function is aligned with the brand promise and that every employee understands what that promise means to their actions, priorities and decision-making. The ability for an organization to consistently keep its brand — or lack thereof — has a tremendous effect on the brand’s value on the balance sheet.

In other words, a brand is a promise made by an organization to its stakeholders, and that promise creates value for the organization based upon how consistently it is delivered.  A consistently delivered promise creates more value for the organization than a promise inconsistently delivered.

With that new characterization, we hope comes new insight into how brand should be applied to create the most value for the organization. We’ll be spending the rest of this year, and the years to come, putting that definition to work to achieve our vision of driving profitable growth for our clients through the power of their brand.

Good luck to all in 2012 – here’s to a new brand year!

Changing the world is no easy feat. Heaven knows we’ve been working to make adjustments to our own little patch of turf for a very long time, and we’re always thrilled by glimpses of others who share our point of view. As in the example of a recent Harvard Business Review article, in which a senior associate at Harvard Business School’s Institute for Strategy and Competitiveness takes aim at those wrongheaded moves managers make that critically derail their companies.

                                                                                                                                                                                                                                              It’s the first managerial misstep the author nominates that most profoundly reiterates our mantra (although she’s bang on with the others as well). Too often, she laments, managers confuse marketing with strategy, a deadly generalization that ignores corporate fundamentals with abundance. “What the marketing-only approach misses,” goes the piece, “is that a robust strategy also requires a tailored value chain, a unique configuration of activities that best delivers that kind of value.”

                                                                                                                                                                                                                                            Tell us something we don’t know. Apart from her use of “strategy”, where we would use “brand,” it’s the same saw we’ve been leaning on since the lot of us were in senior executive roles on the client side. People see brand and think marketing — full stop. It’s a limiting oversight that will surely trip up any organization bent on market domination. “To establish a competitive advantage, a company must deliver its distinctive value through a distinctive value chain,” the author instructs.

                                                                                                                                                                                                                                          True enough. And an organization only identifies that differentiating force by adopting an approach that embeds brand throughout: from top to toe; first contact to last; human resources to accounts payable (to, yes, marketing). Imagine you’ve got your brand covered with marketing efforts alone, and the only thing you’ll change about the world is your company’s downgraded ranking within it.

                                                                                                                                                                                                                                               Of course, nothing could ever downgrade the holidays and we wish you and yours only the best – see you in the new year!

Time was when a CEO would bristle at being labeled a “brand guy.” Over the years, however, our brand as a business system™ approach has made inroads into changing that outdated stigma and, much to our delight, we’re increasingly discovering that we’re not alone on the mission.

                                                                                                                                                                                                                                            The merger of CEO and CMO is a point eloquently made in a recent Forbes piece, “Great CEOs Are Always Great CMOs”, in which the author convincingly argues that great CEOs understand that building a stellar company and building a stellar brand are inherently and utterly indivisible pursuits.

                                                                                                                                                                                                                                            The article submits that “CEOs and CMOs must be two in a box, sharing the responsibility of defining and fulfilling their organizations’ purpose.” A chief executive who provides scant attention to the identification, dissemination and management of his brand, thinking it the nuts-and-bolts business of the marketing department alone, is overlooking a tremendous opportunity to profitably grow the business. 

                                                                                                                                                                                                                                              As we’ve long endorsed, the best CEOs are masters of all things, with the brand — historically assigned to marketing only — most prominent among them. As such, we endorse the notion that a great CEO should be not only a great CMO, but a great CBO (chief brand officer), as well, assuming responsibility for the brand’s implementation throughout the organization, not just in marketing. The brand, if fully leveraged, has the capacity to provide guidance on aligning and managing all aspects of the company to drive profitable growth and excellent CEOs who are not  also brilliant CBOs are only fulfilling a fraction of their responsibilities.