Branding Beyond The CEO – The Role of The Organization

Branding Beyond The CEO – The Role of The Organization - Martin Roll

All companies aspire to build brands that eventually get etched in the culture of the society and become cultural icons. But very few companies are able to achieve this iconic status. Contrary to popular perception, iconicity does not happen by chance, but rather has to be carefully planned and executed.

Branding enhances shareholder value, it can become a catalyst for better leadership, it enables a shared vision to be driven throughout the organization, and it can help to balance short- and long-term perspectives and performance. But what makes an iconic brand?

A look at some of the most iconic brands in business history such as Coca-Cola, Harley Davidson, Dior, IBM, Giorgio Armani, L’Oreal, Louis Vuitton, Apple, Aman and Singapore Airlines reveals some very common characteristics.

First of all, they have all been running profitable and very well-driven operations. Secondly, they use differentiation to build and defend solid market positions. Constant innovation was part of this and an integrated component of their company culture. But a third dimension – a strong emotional connection – is the game changer. They have all been able to build and sustain very strong emotional bonds with their customers and stakeholders. A combination of these aspects will enable a brand to become iconic.

Brands are important corporate assets. Faced with unmanageable choices in every imaginable product and/or service category, customers are ever so challenged to make an informed decision. Brands with powerful equity allow customers a very reliable external heuristic to sift through options in the market and make informed choices.

Brands also facilitate companies to seek and maintain preferred position in the market place. In the face of competition, ever evolving technology and illusory competitive advantage, external actors such as the media, security analysts, the stock market and collaborators evaluate companies based on the power of their brand equity.

As such, brand equity not only enables companies to build and enhance their appeal to customers but also endears them to crucial external stakeholders including attracting and retaining the best talent as a competitive advantage.

A strong brand is characterized by a unique brand promise (the customer focus) and an outstanding brand delivery (the organisational system and performance behind the promise). The brand promise and the brand delivery must be rightly and consistently balanced to achieve branding excellence.

The modern brand-driven organisation is characterized by three distinct characteristics which set it apart from less brand-focused organisations. The company has the right mindset towards and beliefs about branding, it has the right skill sets to build and manage brands, and it allocates the right organisational and financial resources to achieve the various business objectives and build sustainable brand equity.

At first glance, these three elements seem obvious and fairly easy to achieve in any organisation, but in real business life, it is more complicated to get them right. It requires a fair deal of orchestrated and detailed efforts in all parts of the organisation and a long-term perspective, which can also sustain short-term fall-outs in the overall economy, in the industry and among customer segments. The following examines three important characteristics:

Boardroom mind-set and beliefs

Many Asian business leaders still have strong reservations towards investing in intangible assets like brands as opposed to their Western counterparts. It is not uncommon that branding is perceived as and referred to as marketing communication (advertising) and a cost on the marketing budget on the profit & loss statement, and as a discipline residing in and managed by the often lower-level marketing department in the corporate structure. These perceptions are the two core barriers for building more successful and international Asian brands, as will be discussed in the following.

It has been clearly demonstrated above that a significant amount of shareholder value is created by and tied up in brands. Therefore, as Asian boardrooms are primarily responsible for driving shareholder value and earn positive returns to investors, they must be equally involved in measuring, managing and directing brands and their strategies.

Branding is a comprehensive process

Successful branding must encapsulate the entire company and its multiple and cross-functional actions and activities. When everyone in the organization serves the customers and creates customer value, then everyone is doing marketing regardless of function or department.

This comprehensive task of aligning and managing customer touch points cannot be left to or even controlled successfully by the marketing departments alone. All customer touch points have to be aligned and optimized around the brand. This calls for a more cross-functional orientation of marketing in the Asian organisation and at the same time dedicated boardroom attention to ensure it happens.

Hence, branding is not a one-off session run by a separate marketing function by mid-level marketing managers but a truly integrated part of the boardroom strategy that involves finance, operations, human resources and legal issues. This will require a major shift in how the Asian boardroom and corporate management team are structured and operated.

Singapore Airlines is a brilliant example of a dedicated, professional brand strategy throughout a diversified, global organization. The Singapore Airlines brand has been instrumental for the airline from the early start. It serves as one of the leading brand cases from Asia for other established brands as well as any aspiring brands. The Singapore Airlines brand is unique in the sense that the boardroom and corporate management take dedicated leadership of the brand strategy.

Take the examples of companies like Starbucks, Apple, Giorgio Armani, L’Oreal and Nike to name a few. They are all strong and highly aspirational brands where the boardroom and corporate management play a major role in all activities related to building and managing of their brands, being involved from high-level brand strategy decisions to monitoring the representation of the brand in local markets.

The important role of the CEO

One of the key components of iconic brands is their CEO who acts as the chief brand ambassador. CEOs do not only consistently invest in building brands that resonate with customers across time and space, but they also become highly visible representatives of the brand itself. Some of the most iconic brands in the world demonstrate this. Apple has been successfully represented by the charismatic Steve Jobs. The Virgin Group has almost been an extension of the flamboyant and energetic personality of Sir Richard Branson. Giorgio Armani is almost inseparable from its namesake owner.

Such close associations of the brands with their CEOs undeniably bestow considerable advantages on the underlying brand equity. It conveys significant investment in brand building activities, a complete buy-in from the top management and an implicit guarantee from the CEO about the quality of the product and/or service.

But what happens when such CEOs leave? Steve Jobs is a case in point. Every time he announced a break due to his health reasons, Apple’s stock suffered a significant dip. In fact, many firms such as Nike, Starbucks and Dell suffered significant financial losses after their CEOs left. And subsequently, Phil Knight, Howard Schultz and Michael Dell returned as CEOs to bring their companies back to past glory.

With strong associations and reliance on the CEO comes the obvious void that is bound to be created once the CEO steps down. As such, it is crucial for companies and the top management to devise strategies to protect the brand independent of the CEO such that the equity of the brand is not too tightly coupled with the charisma and personality of the CEO.

Three strategies are crucial for brands to continue even after their iconic leaders depart:

Cultivate multiple top level brand ambassadors: The charisma and personality of CEOs, who are traditionally the most visible brand ambassadors, is a double edged sword. Given that, global brands should strive to balance the visibility of the CEO as the chief brand ambassador while at the same time publicly engage multiple stakeholders through other high profile brand ambassadors. Having multiple brand ambassadors at the top management level not only enables the transition of the iconic CEO easily, but it also redirects the focus from the CEO representing the brand, to purely the brand itself.

Inculcate an internal branding culture: One of the most strategic routes for brands to tackle the challenge of navigating the exit of iconic CEOs is to make the branding culture in the organization the core aspect of the company. Although CEOs appear as the tangible manifestation of such cultures, developing a strong internal brand culture wherein all corporate activities are centered on the core brand promise ensures that the company seamlessly transitions between iconic leaders. Inculcating a strong internal brand culture also enables companies to develop their positioning and communication strategies in a manner that effectively highlights the brand promise, brand essence and brand identity over and above the personality of any single leader.

Develop a leadership pipeline: In addition to redirecting the corporate focus on the brand, it is also essential for companies and their top management to instill a well structured system that develops internal leadership pipeline. Anecdotal evidence abound about the devastating effects of the lack of any formal succession plans in some of the most iconic companies. Given the centrality of the CEO in representing the brand to both the external and internal stakeholders, it becomes imperative that brands invest in developing top leaders that not only understand the strategic charter of the brand but also enable the brands’ further development and growth.

Conclusion: Empower the organization to drive the brand

CEOs as chief brand ambassadors are very powerful tools for companies. However, such intense leadership associations invariably lead to inherent costs. By following the three step strategy, companies can strategically navigate such tricky transitions and drive successful business impact.