All Brands Have Ups & Downs

Brands, like people, are not perpetually perfect. Organizations have their ups and downs where they lose focus and forget why they are in business. I think there are many reasons that contribute to the loss in focus: new management who don't believe in the organization's purpose (or just don't get it); taking shortcuts or making compromises to save on costs; expanding products lines or appealing to new consumer groups that don't help the organization pursue it's purpose, and so on...

When this happens, not only are consumers confused, but so is the organization internally. Consumers no longer know what to expect from the brand, because what the organization has been saying about itself (brand messaging) no longer aligns with its actions (reasons to believe). So, that trust and loyalty a customer had for the brand begins to diminish - they are no longer able to believe in the brand. And internally, employees no longer know what their purpose is - there is no guiding beacon to point them in the right direction. They begin to worry about cutting costs, capturing more market share no matter the cost to the organization's long term value. They no longer have to uphold a credo or a higher purpose. This not only induces poor decisions, but it also eliminates motivation to come to work and the feeling of making a difference. 

However, if an organization looses its way, it doesn't mean there isn't a way back. You just have to refocus - looking back on why you got into business in the first place and make sure you are relevant to your customers today (but in a way that enables you to pursue your purpose).

Take Apple, for example - in the late 80's Steve Jobs recruited John Sculley from PepsiCo to go work for the company. Supposedly, Jobs asked Sculley, when recruiting him, "Do you want to spend the rest of your life selling sugared water, or do you want to change the world?" Unfortunately, Sculley mustn't have taken Jobs seriously, because after Steve left in 1987, Apple took a turn for the worst.  The first product launch post-Jobs was the Macintosh II - it no longer took the form of the one-box design Jobs created.  Rather it looked like every other PC on the market - it was no longer special. To make matters worse, in 1993 Apple launched 19 computers! So, not only were the Apple computers like every other PC, which made competition difficult, Apple created 19 more competitors creating additional competition for even its own computers, officially eliminating any possible point of differentiation. Apple was no longer unique. As a result Apple's loyalists were no longer loyal and its profit margins were suffering, indicating that the perceived value for the brand was diminishing.

However, when Jobs returned in the late 90's he refocused the company starting by cutting out all the unnecessary products & focusing on a select few - the iMac, iBook & iPod. Jobs was also extremely focused on the customer experience with every product and service - it must be simple and beautiful. In addition, he brought back his evangelist, Guy Kawasaki, to be the internal brand ambassador, ensuring everyone at Apple knew and believed in the Apple purpose. This refocus and dedication to Apple's original purpose led to a stronger than ever cult-like following of customers and its stock price increased 1,000+ percent over the next 10 years! Focus on purpose is essential!

Then there is Starbucks, who hasn't been doing too great over the past few years. Howard Schultz launched his European inspired coffee shop into stardom in the 80's when the out of home coffee consumption industry was plummeting - who would have thought. But Schultz had a dream to create the 'Third Place' - the place between home and work for people to relax and/or meet friends & family. Starbucks was to be a place to sit down and enjoy a special customized cup of coffee - and it was! Every detail of the store experience was planned out perfectly - the aroma, seating, sounds, etc. It all had to be perfect. Starbucks knew its opportunity to build customer loyalty was in-store, so that's where it dedicated its resources.

Unfortunately, as time went by, Starbucks lost its dedication to creating the best in-store experience and started focusing solely on efficiencies. So, it became faster to have coffee beans delivered already ground in flavor locked packaging, losing the beautiful coffee aroma in the store; and it was faster for Baristas to use automatic espresso machines, which sacrificed the flare when making beverages - these compromises affected the experience of buying a Starbucks coffee, which made customers begin to think "Why am I paying $4.00 for a cup of coffee again?"

In an effort to remind people why a Starbucks cup of coffee IS worth $4.00, Starbucks has begun to focus back on the experience introducing the Mastrena espresso machines to bring back some of the Barista flare while ensuring some efficiencies exist to minimize wait time for customers. It has, also, begun to focus more on its employee retention and training programs so that Baristas stick around longer to get to know the customers and make them feel special. Although Starbucks has additional improvements to make, its refocus on the in-store experience to revitalize the 'third place' are promising actions to turn itself around!

Organizations just need to focus on their purpose and remember why they are in business and why it matters to bring themselves back on track!

Google - A Great Young Brand

I want to start this post by thanking everyone for reading my blog, and to those who have been leaving such great comments! I really appreciate it! As I mentioned in my first post this is a topic I'm extremely passionate about. So to read such engaging comments is a real thrill. Thank you very much!

Today I want to talk about Google, an extremely young brand that has been experiencing unbelievable growth in users, brand value, etc. To think Google's extensive and loyal user following has been the result of word of mouth with virtually no advertising - this is very impressive. And Google's brand value has grown approximately 45% year-over-year for the past 3 years. In 2007 it was ranked 20th on Interbrand's Top 100 Global Brands Report; and in 2008 it jumped to #10 with a value of $25.6 billion.

Even with all this phenomenal growth and loyal following, there is still questioning as to whether Google will have long-term standing power as a great brand. It's a valid curiosity as Google is still a very young brand. However, tying back to my previous post, I believe Larry Page and Sergey Brin have built a clock - a great brand with a strong foundation. To have built a clock (aka a great brand) means you have an organization that will be able to pursue its purpose and remain focused throughout the ages - so, even though CEOs, executives and employees may come and go, the purpose of the organization always remains consistent.

What Google did to begin building their clock was to have focus - making search better. And from that initial idea came their guiding purpose: Organize the world's information and make it universally accessible and useful. In everything Google does, you can see they are set on pursuing their goal, from creating a free email service that takes users right to their email and not cluttering the experience with weather, news, etc., to capturing the entire world on Google maps. Even in the development of their latest innovations, people have access to Google Labs, so they can learn about the next great thing from Google. Google is all about making information easy to find and use!

So to ensure 'Googlers' (what Google calls its employees) are able to execute on the company's purpose it has created its "Ten Things". This is a list which breaks down Google's philosophy/core values. So when a Googler goes to do something, he/she can ask themselves "Is this doing good?" ... "Is this making information easier to access?". By asking these questions and following the 10 Things, it is easier for employees to make decisions without having to rely on top level management. However, Google has done a good job not to make their guiding principles too focused. This allows for flexibility, which is always good for the longevity of an organization as you may not know how your business will change 10, 20, 50 years down the road.

Even the way Google hires and fosters its employees aids in the development of its clock! Google embraces intellectual curiosity and passion with its employees - Google encourages it staff to be themselves. To help foster innovation, Google has a 20% Time Program which gives engineers 20% of their time at work to pursue personal interests. It is these kinds of programs that help foster innovation, and it's innovation you need when you are trying to accomplish such an audacious goal as Google is! 

Google's exciting purpose, its 10 guiding principles & employee programs are what makes me believe that Google has built an amazing clock - a brand that, I think, will be around for many more years! But that's not to say Google will never have any hiccups, I'm almost certain they will as most brands do! I'll talk about that next time...

Thanks GK for the inspiration for this post based on your last comment!

Building a Clock vs. Telling Time

I've recently begun reading the book Built to Last by Jim Collins and Jerry Porras. Having only read a few chapters, I honestly feel this is a book after my own heart. This book is all about branding, yet it doesn't mention branding once. It does however talk about the importance of having a core ideology (purpose + core values), and ensuring that the entire organization is focused on living up to its ideology. It also discusses how visionary companies aim for both profits and purpose, but profit maximization isn't the primary focus. I particularly like this quote from the book:

"Profitability is a necessary condition for existence and a means to more important ends, but it is not the end in itself for many of the visionary companies. Profit is like oxygen, food, water, and blood for the body; they are not the point of life, but without them, there is no life."

This quote reminds me of what I often say - Organizations make money to stay in business, but it's not why they are in business.

Another aspect of the book I enjoy is their analogy for Clock Building versus Time Telling. Jim & Jerry mention how leaders in organizations should be focused on building a clock versus telling time. What they are referring to is the idea that business leaders shouldn't be too focused on creating the latest and greatest thing (telling time). Rather, those leaders should be focused on architecting the organization so that after he/she leaves, the organization will still be able to uphold its core ideology (building a clock) so that it can tell time over time.  

One of the examples used in the book was Wal-Mart vs. Ames. They discussed how Sam Walton had a passion for change, experimentation & continual improvement, so he built in mechanisms that enabled the entire organization to create change and constant improvement. This way every employee is able to contribute to the organization and uphold the core values that Walton built into the company. Where as Ames dictated change from above disabling employees from being able to take initiative. Walton believed in future Wal-Mart leaders and staff to improve and change the company, whereas Ames only believed in market share - the right now. Ames did not build a clock - Wal-Mart did!

Another example was Disney vs. Columbia Pictures. Walt Disney told time and built a clock! Walt told time buy personally creating many of Disney's masterpieces himself, but he also developed many processes that would ensure his company created happiness for long after his days at the company. He established art classes for all the animators, instituted the "You Make Happiness" training program for all Disney employees, etc. which helped him build the Disney clock. Whereas, Harry Cohn, at Columbia Pictures, was too busy creating a name for himself. As mentioned in the book, "He became the first person in Hollywood to assume the titles of president and producer". Yet he did little to prepare Columbia for the days when he would no longer be around, and sadly the company went into disarray after he passed away.

So, this book has got me thinking about Apple computers - an incredible brand with an incredible leader. But has Steve Jobs been only telling time, or has he been building a clock in the background for when he's no longer around? 

The first time Jobs left the company in the 80's, he had, clearly, only been telling time. There couldn't have been any processes in place to uphold Apple's purpose to change the world by developing tools for the mind that advance human kind, because John Sculley, Jobs successor, began creating computers that looked like everything else on the market. There was no more one-box design or focus on the user - the purpose was gone! 

As an Apple fan myself, I hope Jobs has not only been telling fantastic time with products that are truly changing the world (who would have thought that a computer company would beat out Bertelsmann in music distribution 15 years ago?), but has, also, been building a clock so his organization can continue striving towards accomplishing its crazy and exciting purpose!

In the mean time, I can't wait to finish this book, Built to Last! I'm sure I will have more to report on it! 

If you haven't read this book yet, I would highly recommend it!

The Brand is the Organization

I created these diagrams to help clarify how branding can impact an organization. The key take away is that brand is not an output of the marketing department. Rather, it is the guiding force behind an organization - it becomes the fundamental building blocks & expression of the organization's existence. In fact, I think it's fair to say that the brand and the organization are one in the same.

The typical organization sees the brand as an output of its marketing initiatives. It sees the brand as the logo, color scheme, tone of voice, etc., and as I explained in my second blog post, this is not what branding is all about. Branding is more than a logo - it is the organization.

The trouble with seeing the brand as an output of the marketing department is that it creates an unfocused and meaningless organization. The purpose is unable to permeate throughout the entire organization. Therefore, the brand itself becomes meaningless, or worse, meaningful but in a negative way. One of my marketing professors once said, "If you don't control your brand, the market will". By seeing the brand as a marketing output, places the organization's reputation (the brand) in a vulnerable state. If any of the organization's actions counter what the marketing department has been communicating, people will instantly question the organization and an air of distrust will emerge. Unfortunately, chasing profits leads to business departments acting out of unison, resulting in miscommunication to consumers who then become disloyal to the brand.

So really, marketing should not be the only department to execute the organization's brand/purpose. Rather, it should be the work of the entire organization.

Well-branded organizations enable the brand to influence the organization's strategy, because here, it can make more of an impact. Every business function is focused on accomplishing the organization's purpose, which encourages them to live it every day through their actions. So, when the company goes to invest in something, not only should it be financially viable, but it must also help satisfy the organization's purpose. When new people are hired, they need to believe in the purpose, or they are not worth hiring. This is what Izzy Sharp, the founder of the Four Seasons, did - those who did not support the organization's goal for unprecedented customer service, even if they were good at their job,  were let go, because the organization needed to be working towards the same goal.

The operations & product development must, also, be inline with the organization's brand. Often, people think of a product or service as the brand - but the product or service, for great brand organizations, is a result of the organization trying to satisfy its purpose - not the other way around. To be clear, an organization may begin with a product or service, which leads to the purpose.  But once that purpose is instilled, any subsequent products/services/etc. are developed to satisfy the purpose.

By having the brand/purpose influence the organization's strategy, it is able to create consistent brand experiences at every customer touch point. This consistency leads to consumer trust & loyalty. The brand becomes the fundamental building blocks for the organization & the answer to WHY the organization exists.

Brand Heritage - The Compelling Idea

How fantastic - while reading my daily branding blogs, I came across this post, The Importance of Brand Heritage, which ties nicely to one of the brand qualities I mentioned in my last post - The Compelling Idea.

In this post Mark Ritson talks about the importance of looking back on your organization's history (the initial idea that got the company/brand going) to help inspire the organization's future actions & initiatives, or as he wrote:

"To truly understand brand heritage and respect it is to use that knowledge at the very heart of every major brand decision."

This is similar to what I was referencing the other day. All great brands (and most organizations for that matter) begin with a great idea/product/service. And growing out of that compelling idea is the organization's purpose - how the great idea will make the world a better place.

For example, as I mentioned the other day, Google started with the simple idea of making search better. That dedication and focus on improving search grew into its crazy audacious purpose it has today - organize the world's information!

By keeping the organization's humble beginnings in mind, you will be able to see and understand the brand's purpose, which will focus your initiatives creating brand consistency.

Qualities of Great Brands

Based on my research and personal experience, I believe great brands share five key qualities:

1- A compelling idea
An organization begins with a great idea/product/service that will satisfy an unmet consumer need in the marketplace. Google began with the simple idea of making search better.

2- A core purpose
As mentioned in my second post, this is the crazy hairy audacious idea/dream/goal that guides the organization. The purpose usually falls from the initial compelling idea.

3- Consistent brand execution
In order to substantiate the purpose and truly live it, every member of the organization should ask themselves this question prior to moving forward with any initiative or action: "is this going to help us accomplish our guiding purpose?" Brand consistency is usually instilled by the founder of the organization - the person with the initial idea and created the organization's purpose. Steve Jobs is a great example of a strong brand compass for his organization. The moment he left Apple in the mid-80s, the organization instantly lost it's focus and purpose to change the world. But when he rejoined the organization 10 years later, Apple was back on course - back to the one box design and a focused product line up that was ready to change the world!

4- Innovative & relevant
The organization's brand purpose should never change, but the world is always changing, so the brand must remain relevant and meaningful to its changing customers through innovation. Nike has done an impeccable job at remaining relevant to it's customers by leveraging digital technology. In its effort to help people achieve Authentic Athletic Performance (Nike's purpose), Nike partnered with Apple to create Nike+ revolutionizing the running culture. By combining an individual sport with people's digital lifestyles, Nike has been able to create the world's largest running club. And according to Interbrand, it is Nike's digital initiatives that has helped raise its brand value over the past year.

5- Differentiated
In order to stand out and be truly great, organizations need to break through the clutter and remain unique amongst its competitors. The organization needs to carve out a unique positioning within its market creating a category of one. A great brand who has done this well is IKEA. When looking into IKEA's direct competition, I was surprised to learn there are none! IKEA has no direct competition. No other furniture company is willing to make the same kind trade-offs IKEA makes to balance low price and respectable design - it's usually one or the other! IKEA's dedication to its brand purpose - Democratic Design - that has allowed it to truly become a category of one.

Note: Image from Interbrand's 2008 Best Global Brands Report