Level 5 Blog

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.

Looking to inspire a kind of religious fervor among consumers for your brand? You couldn’t do much better for reference than to take a page from the good book itself. There, the ancient ingredients for stirring devout followings are laid bare. Adopt some of these doctrines, and your brand can transcend the earthly bonds of a mere brand, and become a way of life.

                                                                                                                                                                                                                                                In a classic Ad Age article, branding guru Martin Lindstrom wrote about this very subject in which he, having determined by MRI scan that the same regions of Christians’ brains respond to religious symbols as to powerful brands, laid out 10 essential components that brands with fanatical followings share. They were: a sense of belonging, a clear vision, power from the enemy, authenticity, consistency, perfection, symbols, mystery, rituals and sensory appeal.

                                                                                                                                                                                                                                          From those commandments — and our experience — we see a common element that is critical to brand (and organizational) success, one that we’ve been proselytizing about for a while now: the element of emotion.

                                                                                                                                                                                                                                             Each of the identified components are strongly tied to emotion. It’s an aspect of brand that all leaders need to understand since it’s those sentient drivers that enable an organization’s leaders to spread the word among both believers (i.e., employees) and yet-to-be-believers (the market). The importance of understanding the underlying emotional attributes your brand possesses (as our BrandMap™ tool demystifies) cannot be understated in all efforts to convert souls to your particular dogma.

                                                                                                                                                                                                                                   Observe these tenets and enjoy newfound devotion to your brand, forever and ever, amen.

Just when you thought you had a handle on everything, another bug in your ear to remind you that you don’t (and that, p.s., you never really did).

                                                                                                                                                                                                                                              As much as the C suite players might like to imagine that they and their team alone manage the message that circulates about their various plays, the reality is that it’s as much the domain of the folks in the stands as in the head office. The point is well described in a recent piece about sports brands  in which the author makes the case for relinquishing control—or at least the perception of control—to those folks in whose hands it most meaningfully rests.

                                                                                                                                                                                                                                           “The brands that are most comfortable are the brands that allow fans to talk,” the piece points out, quoting Brian Jennings, executive vice-president of marketing for the NHL, speaking at the Sports Media Marketing Summit and Awards in New York in November. “The biggest thing we can do is keep our ear to the ground to our fans, because 99 times out of 100, they’ll drive you to a good place.”

                                                                                                                                                                                                                                                It echoes a sentiment we’ve long endorsed: namely, that an organization is best served by understanding the value of an outside-in approach to developing and managing its brand. As we explained in our discussion paper, The Emotional Science Behind Effective Branding, it’s critical to acknowledge “gaps between the true market beliefs and the internal interpretations of the brand.” Only by understanding the brand’s position in the market place (where current and potential consumers reside) versus the market space (where the people responsible for managing the brand every day live) can brand managers recalibrate and refocus their plans such that they better drive revenue and profitability.  Tools that provide perspective into the emotional drivers of the market create alignment between those two sets of beliefs and directly drive your organization forward.

                                                                                                                                                                                                                                               In other words, don’t deceive yourself into thinking you have all of the answers when you haven’t even asked the market the questions.

Time was when a marketing whiz could limit his range of expertise to card rates, eye tracking and unaided awareness, and leave stuff like supply chain management and employee engagement to masters of other domains. But as we’ve long proselytized, those days have gone the way of paper maps and the iPhone 4.

                                                                                                                                                                                                                                        Today, it behooves each and every member of the marketing team—hell, it behooves each and every member of the entire organization, but especially the CMO—to acquaint him- or herself with the four corners of the operation. Chief marketing officers’ business is their brand, after all, and since the brand is their business, this makes the entire organization part of their turf.

                                                                                                                                                                                                                                           This point of view was endorsed, recently, by a study undertaken by IBM in which this valuable nugget was unearthed: CMOs had better become more tech and finance savvy if they expect to stay on top of a business landscape that promises to make increasingly sophisticated demands of its occupants in those areas and others.

                                                                                                                                                                                                                                              As part of its global CMO study, IBM hosted a panel discussion that surveyed some 1,700 CMOs hailing from 19 industries across 64 countries. The results showed that 79% of CMOs anticipate that business will be characterized by a high level of complexity over the next five years. In the next breath, just 48% report feeling equipped for it.

                                                                                                                                                                                                                                            The panel’s organizers concluded, in harmony with what we’ve been preaching all these years, that marketers need to learn the language of IT and finance (and we’d add, HR, operations and legal to the inventory), and to have a fuller appreciation for the importance of a business’s various discreet departments’ integration, if they want to succeed into the next generation.  “…CMOs [need] to build their credibility of working across an entire business,” the article says. Indeed. Only with such an initiative can this executive fully leverage the brand’s potential throughout the organization and drive its growth and profitability.

To help spur consumer interest in the nascent and labouring Playbook, and to draw buyers away from the expanding surfeit of other tablet options, RIM’s retail partners have been slashing prices. Playbook price tags have been trimmed by as much as $200, and sellers in the UK are offering £150 discounts. The slight lift in sales the move generated notwithstanding, overall Playbook returns remain disappointing.

                                                                                                                                                                                                                                          With a potential double-dip recession on the horizon, many organizations may be considering taking pages from the same “playbook”, with the similar notion that lowering price is the way to prop up profitability.

                                                                                                                                                                                                                                        While going with a low cost (and therefore a low price) may be a viable strategy—provided your business system is aligned to that end (e.g., by optimizing your supply chain, living a low-cost culture, etc., as WestJet does), it’s not a guaranteed trail to turnaround. When HP cut the price of its TouchPad (RIP) to $400—$100 lower than the equivalent iPad 2—it still couldn’t drum up enough demand to keep the thing on the streets.

With that cold, grey reality in mind, then, some considerations to ponder before getting burned by a fire sale:

                                                                                                                                                                                                                                                  – Is price really the issue, or is it more about clarity around what value you offer the prospect? Maybe you need to revisit your consumer value proposition before getting out the red marker.

                                                                                                                                                                                                                                                  – Do you understand the emotional and functional attributes associated with your brand? Your troubles may not be the result of price issues at all, but of issues with the emotions your brand inspires. If so, an initiative to gain a better understanding of the emotional underpinning of your brand , according to the market, may be in order.

                                                                                                                                                                                                                                                  – How are you positioned vis-à-vis the competition? It’s always timely to ruminate on what unique value you bring to the table, especially as it relates to price and value.

                                                                                                                                                                                                                                                  – Will a price cut erode any brand equity you’ve already amassed? Let’s face it, if Apple were to cut the cost of its iPad due to lack of volume, the market would receive a signal that Steve Jobs’ swan song is not in high flight.

                                                                                                                                                                                                                                                  – Do you intend to return the price to its original in the future? That’s tricky business. Bear in mind that it’s generally harder to increase prices once you’ve lowered them than the other way around (which is probably why this short-term solution is so often the first line of attack).

                                                                                                                                                                                                                                    Cutting price may offer a short-term Band-Aid solution, but over the long term, it could result in your brand’s early demise.