Taking Brand Initiative: How Companies Can Align Strategy, Culture, and Identity Through Corporate Branding - Hardcover

Hatch, Mary Jo; Schultz, Majken

Hardcover

ISBN 10: 0787998303 ISBN 13: 9780787998301

Publisher: Jossey-Bass, 2008

Synopsis

Taking Brand Initiative offers a revolutionary approach to corporate branding that looks beyond the marketing value of brands company-to-customer and the HR significance of brands company-to-employee. It places the management of brands at the senior level of management as it radiates throughout the organization. In this groundbreaking book, international branding thought leaders, Mary Jo Hatch and Make Schultz explain how a company's brand is just as important to ÒoutsidersÓÑpoliticians, suppliers, and analysts as it is to company insiders. They show how only the corporate brand can integrate all the company's staff functions and provide a vision for competition and globalization.

About this title

About the Author

Mary Jo Hatch is professor emerita at the University of Virginia's McIntire School of Commerce and adjunct professor at the Copenhagen Business School in Denmark.

Majken Schultz is professor at the Copenhagen Business School.

Hatch and Schultz co-founded the Corporate Brand Initiative, which is funded by the LEGO Group and sponsored jointly by Nissan, Johnson & Johnson, Novo Nordisk, SONY, Boeing, Telefónica, and ING.

From the Back Cover

Praise for Taking Brand Initiative

"In today's media-saturated society, only those who forcefully manage to stay true to themselves leave us with a lasting brand impression. To achieve that you need to work hard to align actions with decisions such that strategy, culture, and identity support each other. This book will help your business follow this difficult but rewarding path to success."
JØrgen Vig Knudstorp, CEO and president, LEGO Group

"An excellent book that details a structured route to getting the increasingly important corporate brand right, with depth and rigor, overlaid with fascinating case studies.?Anyone interested in branding will find this book interesting and informative." David A. Aaker, brand guru and vice chairman, Prophet; author of four brand books, including Brand Portfolio Strategy

"This book truly shows the power of combining insights into corporate culture with an understanding of the practical problems of economic survival through branding. The authors emphasize the importance of embedding corporate brands in the cultural DNA of companies, something that is too often overlooked in branding practice. Through compelling, richly detailed examples, the authors show how companies suffer if the promise of the brand does not match the organizational culture nor cohere with public images of the firm. This book deepens our understanding of both organization theory and strategic marketing, exposing a deeper level of causality of what makes some organizations more effective than others."
Edgar H. Schein, professor emeritus, MIT Sloan School of Management; author, Organizational Culture and Leadership

"Having trouble focusing your organization? Corporate branding and the process of developing and implementing it are the answer.? In Taking Brand Initiative, Mary Jo Hatch and Majken Schultz provide the frameworks, techniques, and examples you need to get both your organization and its stakeholders moving in the same direction.? If you want to create enduring organizational success, read this book!"
Jerry I. Porras, Lane Professor of Organizational Behavior and Change, emeritus, Stanford Graduate School of Business; co-author of Built to Last

From the Inside Flap

Taking Brand Initiative

A corporate brand is one of the most important strategic assets in the corporate portfolio. Companies that manage their corporate brands effectively gain advantage in the highly competitive global marketplace.

Taking Brand Initiative offers a revolutionary approach to corporate branding that looks beyond the marketing value of brands company-to-customer and the HR significance of brands company-to-employee. This approach places the management of brands at the senior level of management as it radiates throughout the organization. In this groundbreaking book, international branding thought leaders Mary Jo Hatch and Majken Schultz explain how a company's brand is just as important to "outsiders" politicians, suppliers, and analysts as it is to company insiders. They show how only the corporate brand can integrate all the company's staff functions and provide a vision for competition and globalization.

Filled with compelling examples from such corporate giants as the LEGO Group, Intel, Nissan, and Johnson & Johnson, Taking Brand Initiative shows what makes corporate brands work and explains how enterprise branding can drive business forward. The book details three practical analytical models and tools to improve the effectiveness of any corporate branding effort:

• Assessing Vision-Culture-Image gaps

• Building organizational identity into the brand

• Taking a company through the four cycles of branding

Taking Brand Initiative examines the management practices and processes involved in a full-scale corporate branding effort. The book offers insight and inspiration for the type of corporate brand practices that can transform any organization, aligning its brand with its unique organizational values.

Excerpt. © Reprinted by permission. All rights reserved.

Taking Brand Initiative

How Companies Can Align Strategy, Culture, and Identity Through Corporate BrandingBy Mary Jo Hatch Majken Schultz

John Wiley & Sons

Copyright © 2008 Mary Jo Hatch
All right reserved.
ISBN: 978-0-7879-9830-1

Chapter One

WHAT IS CORPORATE BRANDING?

Before British Airways was privatized in 1987, and for some time thereafter, people in Britain joked that "BA," the company's familiar acronym, really stood for "Bloody Awful." The joke reflected what were then widely shared images of the airline as operationally incompetent and as indifferent to customers. However, by the early 1990s conditions at BA had improved considerably. Through severe downsizing and corporate-wide customer service training, Colin Marshall, who was CEO at the time, turned a stodgy, military-style bureaucracy into a profitable, respected, and highly competitive enterprise.

The change took shape after lengthy preparations that included repositioning the company around the idea of "the world's favorite airline." The word favorite symbolized the new attention to customers that was to characterize the company's transition to private enterprise. Over the years, BA conducted dozens of change programs aimed at developing a service-minded culture. These programs considerably improved BA's image with its customers, allowing the airline to overcome its former reputation for incompetence and indifference.

Even as BA's reputation for service improved, however, it faced new pressures from the ever-demanding, rapidly globalizing marketplace the airline industry serves. By the mid-1990s, marketing research showed that BA's customer base was shifting: only 40 percent of its passengers were British, and these numbers were falling. An alliance frenzy in the airline industry created another pressure. Along with incessant talk about globalization throughout the business world, and under the then new leadership of CEO Robert Ayling, BA made its move.

The first step was to address BA's strategic vision of being "the world's favorite airline." Ayling and his managers did not see the need for an entirely new vision; instead, they shifted the emphasis from being the "world's favorite airline" to being the "world's favorite airline." Although this in itself may not seem like a major change, implementing this transition led BA to realize it needed to address its market in a less rigidly national tone of voice. To engage its global market more fully, BA decided to incorporate a diversity of national origins and styles into a bold new visual identity for its corporate brand.

The most immediate and controversial aspect of the new visual identity-the tail fins of its fleet of aircraft-were to be decorated with patterns taken from contemporary, original folk art that BA commissioned from artists around the world. A different design was planned for each airplane, making the fleet into a flying art gallery that visually celebrated the world's diversity while it carried BA's message around the globe. To further avoid nationalistic associations, the British flag that had long marked the planes as BA's property was replaced by a design called a "speedmark."

The speedmark, which looks like a twisted ribbon that is blue on one side and red on the other, was conceived as a contemporary symbol that retained the colors of the Union Jack without actually displaying the national flag. According to a company spokesperson at the time, the new airplane livery was "a creative expression of a company, which, both in the letter and the spirit, regards the whole world as its customer."

Using work from artists in different countries to decorate the tail fins of an airline fleet was a radically new way to express strategic vision. In place of a single symbol, style, or color palette, BA's tail-fin displays embraced and emphasized diversity. This idea carried over into other areas of communication. For example, the annual report for 1996-97 was illustrated, both on the cover and throughout, with photographs of BA staff from many ethnic backgrounds. The same message was implied in television commercials that showed people on different continents being reunited with family members from overseas.

But trouble was already brewing. The new look of the repainted fleet did not run very deep in the organization. It didn't even run deep in the airplanes themselves, where British accents, manners, styles of dress, and other expressions of traditional Britishness continued to reign. For example, members of BA staff were expected to maneuver large and heavy traditional metal tea and coffee pots. This was awkward, clumsy, and hazardous, but conformed to a notion of old-world style and correctness promoted by traditionalists as synonymous with being British. Thus there was built-in dissonance between the revamped exteriors of the airplanes, with their message of inclusive diversity, and the interior-where an aggressively deferential service culture, along with the silver tea service, symbolically signaled the continued dominance of traditional Britishness within the company culture. Strategy and culture were at odds, both symbolically and attitudinally.

The pervasive culture of traditional Britishness within BA presented some immediate problems for the airline. For many who reside outside Britain, BA's cultural traditions were a reminder that Britain was once a formidable colonial power. In June 1997, CEO Ayling acknowledged this when he told the Yorkshire Post: "We want to show a modern Britain rather than an imperial Britain." But it was not necessarily associations with colonization that were objectionable. Apparently the passengers targeted by the airline's desire to secure a global image simply did not appreciate the British style of service. In July 1997, the Financial Times reported that Ayling had told shareholders "there were elements of 'Britishness' that were standing in the way," and he was quoted as saying, "We are seen to be slightly aloof."

Meanwhile, at home, the new designs provoked anger and hostility from traditionalists. To the delight of the news media that captured her gesture on videotape, Margaret "Maggie" Thatcher, former British Prime Minister and arch conservative, twisted her handkerchief around the tail fin of a model BA airplane to hide one of the new designs. This clip was seen repeatedly throughout Britain for many months, rallying conservative business class passengers around demands that the Union Jack not be removed from BA's planes.

At the time, Britain was engaged in an extended political debate over the values of Britishness, and the new Labour Party and its recently elected Prime Minister, Tony Blair, showed much interest in finding fresh ways of articulating those values. This concern, to use a popular media catchphrase of the day, involved rebranding Britain as "Cool Britannia." It is likely that this political discussion influenced strategic thinking inside BA. However, while BA's vision seemed to lie with a New Britain, resistance by the Old Britain continued.

Pressure to conform to traditional British style does not fully describe the resistance to change that BA experienced during this period. Immediately following the launch of the new look for the fleet, the U.K. cabin crew union held a seventy-two-hour strike over a new pay scheme and the outsourcing of catering services. Part of BA's effort to be globally competitive involved substantial cost reductions aimed at competing with U.S. rivals. But cost reductions are always difficult internally, and the reaction of the cabin crews at the precise moment of the launch showed that employees were not positively engaged by the new vision nor fully involved in the campaign to promote it. The strikers emphasized the contradictions found between cutting costs internally while spending millions on corporate rebranding.

While the multiracial and multicultural nature of BA has remained an important theme of its communications, the radicalism of its new look came to be regarded by the company as less than successful. This evaluation led to announcements in 1998 that the full series of tail fin designs would never be implemented. Although reasons for this decision were not spelled out clearly, Ayling suggested that resistance among the lucrative and conservative British business class passengers caused BA to cut back on its tail-fin program. The media and many employees at the time believed that the costs of the program were simply too high. Regardless of the logic used, BA, it seems, lost its corporate nerve. It also lost Bob Ayling, who in early 2000 was replaced as CEO by Rod Eddington.

Under Eddington's leadership, BA remained concerned to communicate a sense of belonging to the world and being made up of representatives from many different parts of it. The retreat from repainting the tail fins did not alter the corporation's resolve to have a global image, and for many years the look of BA remained caught between traditionalism and the global diversity of those planes whose tail fins still sported colorful and non-British images. Until the company was again able to afford repainting its fleet, the aircraft that sported the folk-art tail fins stood as testimony to BA's mismanagement of its rebranding effort.

Although today all BA airplanes again wear identical livery, the company, now under the leadership of its youngest CEO ever, William "Willie" Walsh, shows no clear signs of having overcome its problems with connecting its global vision to its many internal and external stakeholders. In fact, BA seems so bogged down in other crises at the moment that Guardian reporter Jane Martinson referred to the company as "the world's once-favourite airline."

Where Corporate Brands Differ from Product Brands

BA's rebranding problems were complicated. Before taking a more disciplined look at what went wrong, it's worth considering what a corporate brand is-and is not. First and foremost, branding an enterprise is not the same thing as branding a product. And, although corporate and product brands share some similarities, assumptions about product branding can sometimes leave the wrong impression of what corporate branding entails.

It can be easy to confuse corporate with product brands due to similarities in their use of imagery. For example, Nike's swoosh and the golden crest on a packet of Marlboros are both graphic symbols bound together with a familiar name and associated with various emotions, ideas, and memories. And both have become significant in popular culture, partly as the result of all manner of marketing, communication, and sales efforts. Yet these similarities mask important differences. Nike is a corporate brand that symbolically integrates the wide-ranging activities of an enterprise that not only provides consumers with sporting goods but also influences how sports are played and shapes the identities of those who play them. Marlboro, even given its global iconic stature and enormous equity, is but one of many products in the Philip Morris empire.

The concept of brand architecture, which explains how multiple product brands owned by a single company relate to one another, helps some people understand the relationship between a product and a corporate brand. For example, product brands may operate independently, the way Procter & Gamble's stable of product brands do (Tide, Ivory, Pampers, Crest, Duracell, Gillette, and so on), or be grouped into brand families like General Motors' Chevrolet, Buick, Pontiac, GMC Truck, Saturn, Hummer, Saab, and Cadillac.

But notice that the GMC Truck brand incorporates the General Motors acronym (GM). In this sense the GMC Truck brand is like Nestl KitKat or Apple iPod. These are all cases of endorsed product brands, where the company name adds weight to the product brand, or in some rare cases, the other way around (for example, the cachet Jaguar and Aston Martin briefly lent to the Ford brand). Endorsement begins to reveal the company behind the brand, but not until a company brands all of its products under one name using a singular style like Virgin, BMW, or McDonald's is there potential for a corporate brand.

We say potential because unity of logo, name, and house style is only one aspect of a corporate brand. Corporate branding involves a great deal more. Points of difference include the scope and scale of the branding effort, where the brand identity originates, the audience targeted, the placement of responsibility for the brand's performance, and the extent of the planning horizon (see Table 1.1).

Product brands typically lavish all their attention on customers and consumers, whereas corporate brands address all the company's stakeholders-not only customers and consumers but also investors, suppliers, distributors, partners, governments, and local, national, and international community groups, as well as employees-in other words, the entire enterprise. In short, branding the enterprise means involving everyone who is important to the company. The leaders of BA, for example, thought about the changing demographics of the company's customer base but failed to consider how the British public would respond to its brand renewal effort, or even how its own employees might react. In effect, BA treated its brand like a marketing problem when it was really an enterprise problem.

Another difference between product and corporate brands is that product brands gain market share through short-lived advertising campaigns invented by marketers. Sometimes these are effective and memorable (for example, the Budweiser frogs), but corporate brands express enduring ambitions and the values and beliefs of all connected with the enterprise. This is how they embody the interests and earn lasting trust among their stakeholders. BA would have been well advised to think about the past (the company's iconic role in the British heritage) and to relate that past to its future, rather than jettisoning it in favor of the image of a New Britain that Tony Blair's government was promoting at the time. A corporate brand cannot focus only on the future; it must connect with what it has meant to its stakeholders throughout its history. Unlike a product brand, which lives and dies with its product, a corporate brand accompanies the firm for life.

Thus a corporate brand targets all stakeholders, inside and out. It influences organizational activities from top to bottom, and it infuses everything the company is, says, and does, now and forever. Heading up such an enterprise-wide and potentially integrative effort must be company leaders. The top team is not there to provide window-dressing; its members individually and collectively make the corporate brand focal within the organization's culture and inspire creative thinking that keeps the brand alive for all stakeholders. Under Colin Marshall, BA had this kind of leadership, but lost it when Robert Ayling failed to grasp the difference between product and corporate branding. Ayling's missteps led to a failure of such proportions that the BA brand has yet to fully recover its lost ground.

When Corporate Brands Work

Whenever you encounter a successful corporate brand, standing behind that brand you will find coherence between what the company's top managers want to accomplish in the future (their strategic vision), what has always been known or believed by company employees (lodged in its culture), and what its external stakeholders expect or desire from the company (their images of it). The basic principle of the Vision-Culture-Image (VCI) Alignment Model-that the greater the coherence of vision, culture, and images, the stronger the brand-is the central message of this book (see Figure 1.1).

Conversely, misalignments (or gaps) between vision, culture, and images indicate an underperforming corporate brand (see Figure 1.2).

(Continues...)

Excerpted from Taking Brand Initiativeby Mary Jo Hatch Majken Schultz Copyright © 2008 by Mary Jo Hatch. Excerpted by permission.
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Edition details

• Publisher: Jossey-Bass
• Publication date: 2008
• Language: English
• ISBN 10: 0787998303
• ISBN 13: 9780787998301
• Binding: Hardcover
• Edition number: 1
• Number of pages: 288