Where IS brand management headed?

I wanted to share some thoughts about branding – where it has been and where I think it is going. I’ll split it into three periods, 1.0, 2.0 and 3.0 to be simple.

If we look at what we might call branding 1.0, we’re really talking about the period of theUnique Selling Proposition or USP. Marketers used insight or in some cases dumb luck to create a reason to buy their product or service – whether this was price, quality, performance, exclusivity, luxury, speed, convenience – any of a number of factors that differentiated. This period covered a period probably from the beginning of the twentieth century until relatively recently, say up to the 1990s through the turn of the 21 century.

Around the millennium, then, for the majority of brands, we entered branding 2.0. This is really the period of focusing on the customer experience. Differentiation and USPs still mattered, often being rolled up into a set of brand attributes, but the focus began to shift for most brands to a more experiential and emotional approach. Media fragmentation, the internet, social media, the decay of trust in business and the rise in both globalization and consumer power all combined to create a whirlwind of competitive forces and complexity that meant marketers needed to try to create and maintain deeper relationships with their consumers. So this has really been the period of engaging people in a brand with a focus on the customer experience and lifecycle.

Where are we heading to? It seems to me that some big forces have emerged that are making it easier – and more important – than ever to try to create 1 to 1 relationships with a powerful and demanding customer. Some of these forces – like big data, internet finance and mobile devices – might have made it easier to forge a 1 to 1 relationship with the customer. On the other hand, in the always-on economy and with channel proliferation literally blowing top off of the hopper, maintaining coherence of messaging and consistency in the brand experience is becoming a lot more challenging. When media buying is being done by computer and earned media are becoming powerful factors, brand 3.0 is really going to be all about building a bespoke ecosystem around every customer.

This will mean brands will need to create integrated partnerships with a range of other stakeholders – some of whom might also be competitors – in order to win the hearts and minds, not to mention the wallets, of their customers.

The first challenge this raises for most organisations will be the fact that most are still organized internally around the world of brand 2.0 and the customer experience. Immense friction is going to be caused as internal organizational silos no longer have clear ownership of their stakeholder relationships. This will extend externally to suppliers, partners, competitors, regulators, institutions, NGOs, innovators and entrepreneurs.

The second challenge brands will have in the face of this new complex landscape where coherence and consistency are harder than ever will be in reducing the complexity of their brand models and messaging. I think the way this will have to manifest itself will be in every brand having to be much clearer about its sense of Purpose – that is, why it exists in the first place. Timeless brands already do this, but many brands still operate without understanding that one of the surest ways to generate less profit is to focus entirely on generating it. Organisations that stick to their purpose should thrive in the world of brand 3.0 since they will have a very clear guide to decision-making that exists at a level above traditional brand management models.

The third challenge will be that organisations that win in the world of brand 3.0 are those that hardwire and weave their purpose and brand into every facet of their operation – so it no longer sits within the functional remit of brand, marketing and communications and instead becomes indistinguishable from their strategy and business model. Brand will become the filter through which decisions are made – product and service design, delivery and innovation; strategic investments, acquisitions and dispositions; the talent they hire, don’t hire, those they promote, reward and recognize; the markets they enter and the relationships they establish and maintain.

The successful brands of the 3.0 era will be those who manage to decouple decades of practice internally and build the agility, resilience and mindset to operate in the integrated ecosystem approach to branding – where managing massive data in real time will link to managing complex stakeholders in a way where there is a win-win to be found within and across each relationship.

Let’s continue this conversation.

Engaging People on Purpose…

What is ‘employee engagement’ really?

Employee engagement is an outcome achieved by a planned approach to addressing a specific organizational opportunity or issue (or range of issues). Engagement efforts should result in a change in mindset, understanding and behavior that drive commercial, cultural, personal and professional benefits.

And employee engagement is back on the board agenda. The financial crisis, talent shortages, a demanding, disruptive and dynamic global economy all add up to one conclusion: While attracting and retaining the right talent remains important and challenging for any organization – regardless of its size, sector or location – motivating your people to change, adapt, innovate and deliver is equally important.

Where once it was impossible to prove the value of engagement, we are now swimming in data proving “engagement” drives improved performance across a range of KPIs. Causality has also been tested – and “engagement” is a stronger predictor of financial performance than the reverse.

And yet…

Most organisations continue to struggle to “do” employee engagement well. They want it; they know they need it; but the challenge is: How? And why is it so hard to get right?

I believe it’s because many ‘engagement’ efforts are defined and developed from a narrow perspective. Usually, the ‘engagement agenda’ is owned by a function (even if it is ultimately addressed cross-functionally).

This is the wrong way to think about it.

All too often, “the engagement program” becomes the desired outcome, rather than the opportunity or challenge being addressed. Engagement is not moving a number on the annual employee opinion survey. That’s the tail wagging the dog (although it is nice to assess progress).

It’s time to look at all the data from a different perspective: not as a “one size fits all” aggregate of “employee engagement” data, but looking at it from the business perspective.

Do this exercise: take 10 or 20 so-called employee engagement metrics and then assign their impact to a specific part of the business.

Doing this quickly tells us two things. First, it is important to separate the “human capital” and HR elements from the business and operational elements. They are related but not synonymous. Second, looking at it this way, the role of internal communications appears to be about channels and content, and not about the organizational issue at hand.

So the trick is to clearly understand:

  1. What is the specific problem/problems that need to be addressed (or the business and market opportunity to be exploited)?
  2. What different functional and operational issues/processes does this impact (or is affected by)?
  3. What needs to be done – specifically:
  • Who needs to know what?
  • When and how is the best way to talk to them about it?
  • What changes to people processes need to happen as a result?
  • What deeper operational business processes might need to be addressed?

This also suggests that simply using a top down, one-size fits all approach is probably not going to deliver the desired outcomes. Any engagement effort will need to use a mix of approaches, sustained over time and carefully segmented, to achieve the right outcomes.

It also suggests that the merits and potential effectiveness of specific tactical solutions can really only be assessed once you have answered these questions.

All too often, organisations get excited by well packaged and presented “employee engagement” solutions … that end up not delivering the desired outcome. You can only “engage” people in a way that is right for the situation at hand.

Sadly, there is no one size fits all solution.

So from this perspective, there are three layers of value that your approach to engagement should address.

First, and fundamentally, there is communication. This is usually the easiest thing to do – and even then, organisations can find it very challenging. It can add value in terms of awareness and understanding. It can lay some of the groundwork for attitude change, but on its own it will seldom deliver actual behavior change. Communicating about ‘values’ is not enough to drive the behaviours that reflect ‘values,’ for example. You need to go deeper.

Second, there is the world of people processes. These are often among the first ports of call in employee engagement efforts – attraction, recruitment, on-boarding, training and development, reward and recognition, alumni and related stuff. Engagement often means changes to these processes – and by definition how people think about and work with these processes (and other people). If you are talking about a new vision or purpose, it needs to permeate everything you say and do when you interact with your stakeholders. Focus here can provide many of the ‘human capital’ and ‘living the brand’ type benefits associated with addressing the opportunity or solving the problem at hand.

Third, there is the world of business operational processes. This is usually harder and more involved than the communication and people process elements – but is also where the most significant and tangible improvements can often be made. To truly live ‘values’ or be driven by an organizational ‘purpose’ means more than communicating about it and changing related people processes: It really needs to drive how you operate as a business.

So the real trick in ‘employee engagement’ is to be clear about:

  • What is the outcome you are seeking?
  • How much of it is about communication, people and operational processes – and what is the right mix of approaches to address these? What (and who) specifically needs to change?
  • What is the road map to get you from where you are to where you need to be?

That, to me, is what employee engagement is really all about. It actually isn’t complex – it’s simply very hard to get right.

Let’s continue the discussion.

B is for Brand

kevinkeohane:

Nice words about my recent book ‘Brand & Talent’ …

Originally posted on Nothing but hoopla:

B I have to confess that I’ve recently changed my thinking about the intersection of brand and engagement. Not having been educated or experience in the world of brand, I wasn’t party to the thinking behind the value of brand and it’s place in the success of organisations. Over the last 5 years as businesses search for a post-crash formula for success, I think taxonomy has got in the way of simplicity and what it all really means. Employee engagement has so many definitions and like many, I couldn’t articulate employer brand well enough to make the argument for its place either. Even the term internal communications is being debated – should we call it employee communications now?

As we strive to make work better for people, does it really mattter who ‘owns’ the relationship with employees or who is responsible for engagement. There is one commonality for every employee and I believe that’s brand. And

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Brand and Talent

My second book, Brand and Talent, is now out through Kogan Page.

It’s a simple premise. Most organisations, and those who service them, tend to see brand management and talent management as separate disciplines. While many acknowledge the areas of overlap, solutions and thinking is still very functionally-driven.

In Brand & Talent I offer an alternative approach based on a clear, simple model driven by four simple ideas.

Purpose.

Ambition.

Strategy.

Positioning.

What’s more – I’ve tried it with clients and it works.

Buy it in the UK/Europe

Buy it in the US

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The ingredients for success? Purpose, People, Failure, Luck and Learning.

PALM SPRINGS, CA – I had the real privilege to attend EY’s Strategic Growth Forum (SGF) in Palm Springs last week. An amazing event focusing on mid-cap growth businesses and entrepreneurial startups from across the Americas.

The event itself was flawlessly executed. Quality and attention to detail at a level I have never before experienced in corporate events and hospitality – so kudos to the EY team that made the event happen.

In terms of takeaways, it was a real honor to be relatively up close and personal with some inspirational and highly effective leaders – (I didn’t manage to attend them all as I was working after all) but  managed to squeeze in some really amazing talks – Jeffery Immelt from GE, David Rubenstein CEO of the Carlyle Group (maybe the best speaker I have ever seen on the topic of business), Kathy Ireland, Dr Kjell Nordstrom from Stockholm School of Economics, Jeffrey Sprecher of ICE who just bought the NYSE,  Hamdi Ulukaya of Chobani, and Andre Agassi.

What did I take away? Here are my key thoughts:

  • Purpose. It is essential in life and as a business. In my world, this is good news since BrandPie helps companies find their purpose and bring it to life internally and externally.
  • People. Every speaker made no bones about it: get the best people, (almost) at any cost, so long as they fit your culture.
  • Failure. It is good. Do it. Do it fast. Learn from it and move forward.
  • Luck. All modestly, but probably accurately, credited luck as a powerful factor in any success.
  • Learning. Every single one was passionate about constantly learning and its importance.

Of course, there were many more points made – I particularly related to Jeff Immelt’s passion for focus on outcomes as well as a culture of “zero optionality” at GE; and Kjell Nordstrom’s point that technology has abolished the need for “the centre” so that relationships, organisations and communities can operate “periphery to periphery.”

Time well spent.

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The pursuit of shareholder value as a stupid idea

Dan Gray has waxed lyrical about Jack Welch and others in the business strategy firmament turning their backs on the previous century’s predominant focus on “pursuit of shareholder value” as  the core driver of successful business.

Interesting to see that the first (apparent) argument for the pursuit of shareholder value came from none other than the near-canonised Milton Friedman who said it in 1970. (Forbes article here is an entertaining read on “Who’s money is it anyway?).

It’s interesting to see what the relentless focus on quarter by quarter shareholder returns has done to the long-term performance of capital:

Image

Another reason to advocate Purpose driven business…

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“Make your work to be in keeping with your purpose” ― Leonardo da Vinci

Just back from my holiday, which unfortunately coincided with a death in the family, and had some time to think about the importance of Purpose – in life and in our work.

It matters.

BrandPie have built our consulting model around it.

Others seem to agree:

  • 87% – Informed people who believe business should place “equal weight” on society’s interests and their own business goals. (Edelman Good Purpose Survey, 2012)
  • 94% – CEOs who say that their company is “increasingly held responsible not only for our own actions, but also for the actions of others in our value chain”.  (Corporate Philanthropy CEO Conference 2010)
  • 61% – of recent graduates that are likely to factor a company’s commitment to sustainability into their decision if choosing between two jobs with the same location, responsibilities, pay and benefits  (2011 Deloitte Volunteer IMPACT Survey)
  • 62% – of the public across 20 countries “say they trust corporations less now than they did a year ago.”  (2009 Edelman Trust Barometer)
  • 42 – The number of academic studies showing positive correlations between social enterprise and financial performance.  (Harvard Business Review)

Havas Media Group published a global analytical framework[1] that looked at more than 700 brands in 23 countries and found some remarkable insights:

  • Meaningful Brands outperform the stock market by 120%. Since 2004 the Share Prices of the top 25 Companies on its Meaningful Brands Index (BMI) have increased faster than companies who are not seen as being meaningful by consumers.
  • The Top 10 brands all scored above 50% when asked if people would miss the brand if it disappeared tomorrow. The average across all brands was just 38%.
  • 70% of people think that companies and brands should play a role in improving our quality of life and wellbeing.
  • However, just 24% of people agree that companies and brands are working hard at improving this.
  • This is mirrored in Western Europe (29%) and Eastern/Central Europe (31%), Europe and US (28%), but less so in Japan (46%) and developing markets such as Latin America (48%) and Asia (51%).
  • Just 32% of people trust companies and brands.
  • 54% trust those that are socially and environmentally responsible.

Forbes magazine published figures[2] that support this as well:

  • 87% of global consumers believe that business needs to place at least equal weight on society’s interests as on business’ interests
  • 20% of brands worldwide are seen to meaningfully positively impact people’s lives.
  • Only 6% of people believe the singular purpose of business is to make money for shareholders.

Brand Valuation consultants Millward Brown and former P&G global marketing officer Jim Stengel developed the list of 50 brands, which they say built the deepest relationships with customers while achieving the greatest financial growth from 2001-2011. To arrive at the Stengel 50[3], they valued thousands of brands across 30+ countries. The list included both B2B and B2C businesses in 28 categories ranging in size from $100 million in revenues to well over $100 billion[4].

Investment in these companies – the ‘Stengel 50 ‘– over the past decade would have been 400% more profitable than an investment in the S&P 500[5].

UPDATE – Nielsen has just also released a report on the same subject called “Consumers who care”

Nuff said.

 


[1] “Meaningful Brands – Havas Media Group’s metric of brand strength 2013”

[2] Mainwaring, Simon, ‘CMO Vs. CSO: 8 Steps To Bridge The Divide That Could Undo Your Business’ by Simon Mainwaring, Forbes.com, 2013.

[3] Stengel, Jim. GROW: How Ideals Power Growth and Profit at the World’s Greatest Companies, Crown Business; 2011.

[4] Millward Brown is to publish a book in October 2013 entitled ‘The Meaningful Brand’

http://www.millwardbrown.com/Insights/PublishedBooks/The_Meaningful_Brand.aspx

[5] King, Bart. ’50 Fastest Growing Brands Serve a ‘Higher Purpose’’ sustainablebrands.com, 2012 .

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Brilliant ‘trojan horse’ marketing

Dove Canada build PhotoShop app to raise awareness of the issues with retouching.

CXOs: Have you discovered the 55-minute guide series yet?

kevinkeohane:

Amen to this from Dan Gray!

Originally posted on LIVE LONG AND PROSPER:

It’s official. Short is the new long (unlike this post perhaps!).

A few years ago, Kevin Keohane and I had the heretical notion that the answer to getting c-suite types to open their minds to the business value of brand and business communications was to merrily swim in the opposite direction to most of our brethren.

Where they tried to persuade people with pseudo-academic tomes full of detailed case studies and examples, we decided to take the path less travelled – short, unapologetically opinionated and no-holds barred synopses of critical insights and what to do about them.

So the 55-Minute Guide series was born, and a long-overdue scan of the books’ pages on Amazon would seem to suggest we were bang on.

If there’s a golden rule of branding, it’s to be authentic – to ensure that the gap between what you promise and what you deliver is as small…

View original 549 more words

Publicis-Omnicom merger

As an ex-Publicis ( well, and ex-WPP before that) employee I felt compelled to write a bit about this topic.

First, size notwithstanding it makes sense. Speaking very generally and from a less than fully informed position … Publicis feel strong in advertising and PR, and made numerous Digital acquisitions but are beyond weak on credible brand strategy/branding agencies. Omnicom is strong in brand , analytics and advertising in particular. So that makes sense.

Second, Richard Pinder’s comments seem informed and reasonable.

Third, let’s not forget the “rule of three and four” when it comes to consolidation in any sector.  The classic BCG article is here and makes a strong case for the right balance of market share among big sector players.  In summary (from the BCG site):

A stable competitive market never has more than three significant competitors, the largest of which has no more than four times the market share of the smallest.

The conditions which create this rule are:

  • A ratio of 2 to 1 in market share between any two competitors seems to be the equilibrium point at which it is neither practical nor advantageous for either competitor to increase or decrease share. This is an empirical observation.
  • Any competitor with less than one quarter the share of the largest competitor cannot be an effective competitor. This too is empirical but is predictable from experience curve relationships.

Characteristically, this should eventually lead to a market share ranking of each competitor one half that of the next larger competitor with the smallest no less than one quarter the largest. Mathematically, it is impossible to meet both conditions with more than three competitors.

The Rule of Three and Four is a hypothesis. It is not subject to rigorous proof. It does seem to match well observable facts in fields as diverse as steam turbines, automobiles, baby food, soft drinks and airplanes. If even approximately true, the implications are important.

The underlying logic is straightforward. Cost is a function of market share as a result of the experience curve effect.

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