Stanley Moss
DiGanZi
diganzi@gmail.com

Pierre d’Huy
Experts Consulting
ph@ph8.fr

The Journal of the Medinge Group, vol. 5, no. 1, 2011

Parisian subway riders careening through the tunnels of the 3rd arrondissement barely notice a particular stop, one whose name contains a clue and potential warning as to the direction culture is headed in the coming era. The name of the station is Arts et Métiers, Art and Technology. It’s a name born of the era known as the Belle Époque, which occurred during the last decades of the Industrial Revolution, approximately 1880–1910.
   There’s a distinct arrogance emanating from a period of time whose inhabitants refer to it as a ‘beautiful era’. To make such a claim alone implies a single-minded confidence in the righteousness of one’s own actions. But the Belle Époque was sincerely powered by noble aspirations, a religion of progress, which held high hopes for the marriage of technology and art, and the sense that with such a conjunction everything was possible. Contained in this unbridled optimism was the powerful notion that beauty could be given to all at the same time. And that such beauty could be dispensed on any scale, with the orchestra as a meme for the simple model of progress, subdisciplines intersecting to create a harmonious whole. In today’s language we would call the phenomenon good management of new technologies.
   In the new millennium, we regard the visual style called Steam Punk—rivets and girders and turning gears—inseparable from Belle Époque’s worldview. Our conception of the era recollects Verne, Eiffel and Méliès. The submarine-builder, the tower-maker, the lunar explorer scientists. Theirs was a religion of progress, poised at direct odds with the church of Mother Mary. Technology had become the primary vehicle of faith, in which all grand aspirations were invested. It was an era that canonized its own creators.
   The transmission of knowledge mattered heavily to the technocrats of Belle Époque. Even the original lycées built during the era look like castles, lofty temples of enlightenment, unmistakeable semiotic statements about how human intelligence and potential were venerated. It heralded the heyday of the École des Beaux Arts, and the flowering of Art Nouveau. Great improvements were made in public education, resulting in concurrent elevation of literacy levels. Across the Atlantic the spirit of the times infected the consciousness of Andrew Carnegie, who in his lifetime built 2,811 libraries throughout the US and English-speaking world. The direct result could be gauged in the success of self-education pursued in libraries by individuals like Thomas Edison.
   So Belle Époque was real, the beginning of a new era, and it paid in discernable dividends. It was an age of notable advancements in public health, hygiene. longevity, nutrition, in the eradication of disease, and the completion of monumental public works like the Panama Canal. In 1908–9, during construction of the Parisian underground Number 4 Line, excavation for the tunnel crossing under the river Seine was effectively achieved by freezing the river, and involved the installation of two huge refrigeration plants which allowed the movement of supercooled brine to stabilize the saturated ground. In a world whose dreamers felt nothing was impossible, every great challenge like this one could be met, and every guiding mind was thought of as un marchand d’espoir, a dealer in hope.
   Belle Époque occurred during a long period of unprecedented peace in the western world. Its accomplishments, albeit remarkable, ended with the assassination of Archduke Franz-Ferdinand in 1914. What followed the era of such a religion du progrès was all the more surprising for the horror it brought, monumental demonstrations of the brutality of humanity which deployed the very technology once worshipped for all the good it promised. Over the next seventy-five years the world would experience WWI, Nazism, the Shoah, Hiroshima, the genocide in Rwanda, 9-11, the international financial collapse of 2010 and the epidemic suspicion that something unsavoury and sinister is at play with the globalization of our industrial economy. Perhaps we are poised at the threshold of a rebirth.
   The recent passing of Steven P. Jobs was followed by a wave of soul-searching and deconstructionist thinking about what made for the success of the Apple brand under his leadership. What had Jobs known, done, understood, achieved that explained the rise from a two-man start-up founded in 1976 in a garage to a company briefly rated the world’s most valuable in 2011? What explained the massive outpouring of grief for a man who gave the world devices: the iMac, iPod, iTunes, iPhone and iPad? More than once the consensus turned in the direction of a successful intersection of art and technology, arts et métiers. We had been here before. The products Apple continually created brought the best of both universes together in the interest of progress and hope. Steve Jobs had demonstrated good management of new technologies.
   All the same signs are here again: visionary people deploying new technology, merging it with humanistic and artistic vision. If we are witnessing the beginning of a new and beautiful era, let it proceed like the last one. But let it not be followed by a gross abuse of the power, or the leveraging of these advancements for greater horror. The opportunity is here to push the reset button, to launch a renaissance of humanistic thought that optimistically celebrates the intersection of arts et métiers.
   Let’s think of it as a Belle Époque 2·0.

The article is a version of a paper published in the Journal of Brand Management (2011).

Jack Yan¹
Jack Yan & Associates
jack.yan@jyanet.com

The Journal of the Medinge Group, vol. 5, no. 1, 2011

WEB 2.0 AND SOCIAL NETWORKS have been hailed as the next media for marketing, its proponents pointing to the presence of politicians and actors on Twitter and Facebook. Since mainstream media pointed out that actor-writer Stephen Fry was on Twitter, there was a sudden growth in subscribers in the UK. A further mention on The Oprah Winfrey Show saw some talk about an ‘Oprah effect’ on Twitter, spurring growth Stateside. The most complimentary publicity for Twitter, however, was for then-Sen. Barack Obama’s presidential campaign, with some crediting the service for his success.
   Each one of these statements has an element of truth to them. There is no doubt that celebrities have managed to harness social media to broadcast to their fans, bypassing the press and setting the record straight. Fans feel somehow connected, as though their idol is talking to them directly.
   The Obama campaign, meanwhile, tapped in to a group of voters who are computer-savvy. The campaign managed to mobilize people who might not have voted, giving the senator an edge that his principal opponent, Sen. John McCain, did not consider.
   But how real are these phenomena and how do they impact on branding?
   Aside from setting some ideas for future research, this paper aims to provide an examination of blogs and social networks, considering their branding potential and what organizations need to consider to build their brands using them.

Why brand online?
The case for online branding has been set elsewhere, with the conclusion that most of the same rules apply. Brands still need to be differentiated and communicated to audiences, and it was found that successful online firms in the late 1990s tended to have strong CEO involvement in their websites.² As the web mainstreamed, countless exceptions emerged: there was no longer a talent vacuum when it came to managing website relations with consumers, and CEOs could step back from answering feedback forms. Staff who grew up in the web era understood how to deal with online questions; databases with copy-and-paste answers were developed; and, in some cases, “knowledge bases” looked for keywords in a submitted question and fielded prepared answers without human intervention.
   In essence, the promise of the 1990s’ World Wide Web began disappearing: once seen as a democratizing force where stakeholders could speak directly to company heads, especially in the small- to medium-sized enterprises that went online in the early days, it became just another medium.
   Blogs were seen as the next step: Chua and Parackal have done some incisive research into CEO blogs,³ which give some leaders a chance to provide audiences with an idea of their philosophy. But in an era of competing media and short attention spans, Facebook updates, fan pages and Tweets became part of the branding lexicon.
   Facebook’s commercial potential was always present, from the minute founder Mark Zuckerberg took the service away from its North American college-campus roots and allowed non-students to create profiles in 2006. It has become more commercialized (and arguably less concerned with user privacy)⁴ since then, in order to capture business and profits through advertising. Originally a site that aimed to connect friends and contacts, Facebook broadened to include groups and fan pages for organizations, creating a closed network of 400 million (and rising) users who advertisers might wish to pitch.
   Many flock to the service. Facebook allowed blogs to be imported, forcing more users to stay on the site rather than go to the source. It gave the impression of direct engagement: companies could, for instance, communicate directly with their supporters. It attempted to bridge the gap between organization and audience again, much like the web and email once did.
   In politics, the author is currently in a bid for the mayoralty in Wellington, New Zealand. A Facebook fan page has been set up, and the same behaviours are apparent: supporters seldom head to email to ask political questions. They field them on his Facebook fan page. Some of his opponents have set up rival pages, and other cities’ mayors and mayoral candidates have done the same in this election year. Interaction is often rewarded with additional supporters.
   Outside politics, the author has observed the growth of the designer Tamsin Cooper, whose Facebook page, set up during the first quarter of 2010, has brought 658 fans at the time of writing. Cooper lives in a town, Arrowtown, New Zealand, of 1,700: the Facebook page has been a way for her to centre her international marketing activities, complementing her website and online sales. Importantly, it allows Cooper to interact directly with her supporters and clients.
   Twitter, which claims to have Sen. Barack Obama as a user—though later it emerged that the ‘Tweets’ were those of his campaign team⁵—is less formal. One user Tweets a statement of 140 characters, usually an update of what that person is doing. In terms of the Obama campaign, the Tweets pertained to the senator’s political speeches and campaign ideals, and followers could ask questions and engage with him.
   It was a masterful use of the service. While it was not Sen. Obama himself on there, it gave the illusion of his presence. It certainly reflected his views. Secondly, his campaign team was careful to follow back as many supporters as possible—Twitter users can see who has become a “follower”, giving them an option to return the favour. This, too, satisfied netizens’ feeling of being engaged: that there was a genuine belief of a two-way street in communication with the senator.
   The desire for engagement is not limited to the United States. The Residents 2010 conference in Wellington, New Zealand, brought residents’ associations from around the country together for a day, discussing issues that were pertinent to them. The Hon Peter Dunne, MP, stated early in the conference that such organizations need to ‘band together’ to fight for their communities, acknowledging that ‘power resides in the community, with their representation and their engagement. Community engagement is not political … local democratization is occurring more in residents’ associations.’
   Showing a video from author John Ralston Saul,⁶ it was stressed that one of the causes of community alienation stems from specialized managers who are employed to solve various problems. But their specialization restricts citizens who have other ideas, which combats the democratic nature that one expects.
   Other comments heard include, ‘The Local Government Act does not empower local representatives to represent local people’; ‘Councils will become less representative, because their business objectives will alienate citizens’; and ‘As [local issues] become more pressing, how can we activate the public response?’
   In another speech, New Zealand’s native Māori population was a victim of “ticking the boxes” when it came to their needs, trivializing and indeed restricting what they were about. (Parallels were drawn with the rights of women and blacks in the US in earlier centuries.) There was a general fear of politicians losing power through engagement, and talk after talk highlighted that engagement was not happening early enough with citizens.
   If there was one sector where engagement was called for consistently, it was in local politics. In her concluding conference speech, New Zealand Chief Ombudsman Beverley Wakem stated, ‘The internet’s tools are important [in describing] how to mobilize and educate people regarding their rights and the legislation.’
   Short of an Obama-style campaign engaging the public, New Zealand’s local political scene was in dire need of politicians and political processes that could engage the public. In the wake of the American presidential election, citizens’ feeling of alienation could quickly be dealt with through social media.
   The author is currently in a bid for the mayoralty in Wellington, New Zealand. A Facebook fan page has been set up, and the same behaviours are apparent: supporters seldom head to email to ask political questions. They field them on his Facebook fan page. Some of his opponents have set up rival pages, and other cities’ mayors and mayoral candidates have done the same in this election year. Interaction is often rewarded with additional supporters.
   Far more trivial, though no less interesting from an academic perspective, is the Twitter account of a fictional character, Jim Keats, from the recently finished television show Ashes to Ashes. An unofficial account, it was set up in January 2010, long before the character was introduced on the show. After the show commenced, the Keats account (at twitter.com/jimkeats) attracted an average of 100 additional followers per week, of fans wishing to supplement their television viewing with Tweeting—even if it was with a fictional person. Very few of the 900 followers the account attracted were bots, surprisingly. ‘Jim Keats’ interacted with other fictional characters on the service, all role-played by other fans. It helped take the programme’s brand on to Twitter and provided viewers with an additional access point to the TV show.
   In most cases—those in which fictional characters are not involved (!)—blogs, Facebook and Twitter are helpful in revealing the thinking of the people behind the brands. They satisfy a need: the desire of engagement with a brand they wish to be associated with, or, to put it in Engeseth’s terms, to feel “one” with the brand.⁷ Their motives are connected to the idea of corporate citizenship and how successful brands promote its ideas.⁸
   Engeseth’s theory is that the separate nature of many brand relationships—the “them” and “us”—is obsolete. Companies need to collaborate with consumers not just for R&D, but for everyday marketing purposes. Examples he cites includes Linux, where the user base collaborate on developments to the operating system and become evangelists in the process. WordPress, the blogging platform, is another. Engeseth also points out that Michael Dell spends 40 per cent of his time dealing with Dell computer customers directly. As does Ingvar Kamprad, the founder of Ikea.
   Brands cannot be controlled centrally or in a top-down manner in these circumstances. Coinciding with these developments has been the rise of virtual working, of people expected to unite under a single banner with a uniform brand despite being based in homes or in spread-out offices.
   But Linux is a real collaboration: the results speak for themselves. The real fear with brands in the social networking era is that they will fall into the same traps they did with email and the web, where the interaction with those in charge is gone. Facebook and Google, two brands that rank relatively highly in surveys, are notorious for being opaque: Facebook’s privacy changes frequently prompt criticism, while there is virtually no support for the free users of Google, unless they are lucky enough to find a person in authority. Both companies may provide tools for online interaction that can aid transparency, but neither practises it when it comes to their core products.
   Above, the author has pointed out that Barack Obama’s Twitter account, during the presidential campaign, was not manned by him. Thus, it is as easy to obscure one’s identity with these services as it is with any other medium.

   An analysis of some of the top celebrities and politicians indicate that they are not engaging their fan base, undermining the use of the Twitter service. There is little or no engagement by some of the most-followed users of the service, including Ashton Kutcher, Oprah Winfrey and Al Gore (Table 1). For them, Twitter is a one-way service, an extra broadcast channel where the relationship with the audience matters less than their own message. However, President Obama, Britney Spears and Stephen Fry have better ratios, indicating more engagement, or at least, a greater intention to engage. (The ideal number is 100 per cent, although this is impossible to expect, especially when a Twitter account acquires mass following over a short period of time.)
   Given this, are they genuine tools for transparency and the sort of “oneness” preached by Engeseth? And what advantages can organizations get from using them?

Brands and social networks
The theory behind social networking is sound. Brands must be genuine. Those that are “surface” are soon uncovered. It is no different from a government offering sound bites that seem pleasant to the public ear, but whose policies differ from the electorate. It is a sure way of being unelected at the polls the first chance voters get.
   By going to blogs and social networks, people can understand the personalities behind the scenes. In fact, this can prove more useful for the smaller organization because the principal can be the one who writes, updates the Facebook fan page, or Tweets. It allows that organization to be more responsive to audiences and consumer demands. It also allows the chief decision-maker in the organization to grasp the prevailing mood of the public.⁹ They are more cost-effective media than above-the-line advertising or even formal PR,¹⁰ and go some way to levelling the playing field for small- to medium-sized enterprises.
   Brands that are unsupported by additional media can fail because they are not letting their stories shine through. The importance of “legends” inside the organization have been shown by many writers and researchers to be important, providing a hook for brands to be understood internally and externally. Therefore, even the less well presented company, lacking the budget to look as swish as a richer competitor, might be able to exploit a competitive advantage by telling a story without the interference of a communications’ department.
   The personalities can come through: a traditional law firm might still Tweet but do so in a formal way—writing in complete sentences, never abbreviating or using internet acronyms, and providing useful knowledge to its followers. It would have to stop short at revealing any privileged information, but its personality can still come through. At the other end of the scale, a musician might provide samples of her work online, downloadable through a blog, and connect that blog automatically on to her Facebook page and Twitter account. Regardless of the situation, a unique voice can emerge, one that is sufficiently differentiated from competitors. The organization manages to solve not only the question of differentiation, but those of transparency, engagement and accessibility.

Issues
   With an increasing amount of activity happening in the social media sphere, it would seem prudent to examine how to incorporate the media into a brand strategy.
   Along with his colleagues at the Medinge Group, the author participated in writing Beyond Branding,¹¹ which dealt with the growing consumer desire for transparent brands. There is nothing to suggest that that desire has lessened in the last seven years: anecdotally, it has grown as social media have.
   It would suggest, for many organizations, a total change in how they communicate, abandoning the top-down process for something that accepts inputs from audiences to drive strategies.
   When many authors discuss transparency in branding, it is not simply about ethics. There are obvious savings in communicating the same message to internal and external audiences. By being open, every audience has the same potential access to the same information. Perhaps most importantly, stakeholders feel that sense of corporate citizenship and oneness, which helps build brand loyalty and grows awareness.
   Issues for practitioners will include:

• how to include this level of transparency into a branding strategy, and whether the organization itself can handle the added work. As part of the vision-setting for the organization, organizations must ask themselves if they desire extra scrutiny. Questions will include whether principals are willing to schedule in regular entries on to a corporate blog, and work alongside their communications’ department. The structure is flatter. They might want to consider whether they wish to read the feedback personally. Ideally, they will need to ensure that it is their voice and not one that has been too sanitized by communications. The organization has to consider whether these statements appear in a corporate account or a personal one, and the relationship between the two;
• it will have to look at researching its audiences and whether they demand the level of interaction that social media provide. Some businesses might not need it because their audiences are not connected online: those targeting elderly audiences might find conventional media to be more useful. The author notes that a growing number of clients are finding that their audiences are demanding, at the last, a Facebook presence;
• the organization will have to look at extending the rules surrounding its brand usage in to new media. It will also have to consider whether it is to influence the appearance of personal accounts. If personal blogs and Twitter accounts have already been set up before the organization has created its own, it needs to ask itself how official they are;
• the organization needs to consider how to measure the success of branding in social media, either through surveys on whether audiences believe transparency has increased, or using other measures, such as brand equity constructs, revenue, market share, or follower or fan numbers.

Challenges to transparency
   Labour malpractices, child exploitation and environmental harm have nothing to do with branding, even if, in the eyes of Klein¹² or Quart,¹³ the profession is complicit. Equally, the misuse of blogs and social media are not due to any inherent problem with the platforms. If certain parties choose to use Twitter as a one-way channel, then it is their choice: there is no rule book that governs the service. But it would be a wasted opportunity, doing little to promote interaction and understanding audiences. Instead, those that use the technologies as top-down media risk making themselves look separate, going against transparency and oneness. In an era when both are valued, the brand, whether personal or organizational, is weakened through appearing “above” one’s supporters.
   Secondly, there is the problem of having someone other than the claimed person behind the blog, Facebook or Twitter account. The organization should ensure that in the case of a shared blog or Facebook fan page, the identity of the writer is known; but ghost-written media can prompt criticism; this can only undermine the brand.¹⁴
   The looming problems are also technological. Each medium starts off being exclusive. The programming that appears on that medium appeals to that exclusive audience. But as it mainstreams, that exclusivity is lost.
   For the most part, there is nothing wrong with this diffusion of an innovation. Television would be useless if TV sets cost the equivalent of a motor car; motor cars would have failed to transform society if they remained the playthings of the rich.
   But with the democratization of technologies, they have become utilitarian. Email was once exclusive; it is now a tool, with few business people using it for leisure as they did 20 years ago. Along the way, spam threatened to make email useless; email newsletters risk being caught in spam filters.
   The same tendencies are emerging in the blogosphere, with some websites generating fake entries. Blogger, the blogging platform owned by Google, has been using a bot to detect fake blogs that are created using automated scripts. A small percentage of legitimate blogs have been deleted including, for a brief period in 2010, one for the respected UK firm Minale Tattersfield, which was out of action for two weeks. Vox, the blogging service owned by Californian firm Six Apart, is a target of many “sploggers” (spam bloggers).
   Twitter, which is much harder to patrol and easier to manipulate, has its share of fake accounts, with programs adding followers and Tweeting fake messages. Reports of Twitter’s growth stagnating have surfaced in the technological press during 2009 and early 2010.¹⁵
   Facebook, meanwhile, is turning off a small minority of users fed up with its privacy changes—although the carrot of 400 million users is too great for many organizations to abandon it.
   All may well turn users away at some point, especially when they feel they can no longer have the sense of engagement and oneness with the brand.
   Therefore, while these tools are useful, they may well be replaced by others in the 2010s. Perhaps those tools will integrate visuals and the person’s voice, things that are (at this point) harder to automate. For now, they are real, and they need to be considered in a branding strategy.

Conclusion
   Audiences have demanded greater ethics and transparency from brands for many years. However, that demand has become far louder as audiences found their voices through the internet, in particular, driving a greater awareness of social responsibility in the 2000s. Alongside those demands have been ones for transparency, forcing organizations to work more closely with their audiences. People want to know that they have some influence over the brands they connect with.
   As technologies change, social media are where audiences can interact with those brands. They have their pitfalls, with many organizations not building them into their overall branding strategies, or failing to use them to interact. In neither case is transparency increased. Technological problems limit their appeal.
   Nevertheless, if used correctly, blogs and social media can be useful tools for differentiation as they allow a company’s personality to shine through. They also provide means for audiences to engage and access brands. Importantly, they can provide greater transparency, a behind-the-scenes look at the thinking of organizations, giving their brands greater relevance and appeal.

Notes
   1. LLB, BCA (Hons.), MCA. CEO, Jack Yan & Associates (http://jya.net); Founding Publisher, Lucire (http://lucire.com); Director, the Medinge Group (http://medinge.org). Copyright ©2010 by Jack Yan & Associates. All rights reserved.
   2. J. Yan: ‘Online Branding: an Antipodean Experience’, in Kim, Ling, Lee and Park (eds.): Human Society and the Internet. Berlin: Springer 2001, pp. 185-202.
   3. A. P. H. Chua, and M. Parackal: ‘Co-creating value through corporate blogs: a proposed research framework’, 5th National Conference on Computing and Information Technology (NCCIT), Bangkok, Thailand, May 22-3, 2009.
   4. B. Krishnamurthy and C. E. Willis: ‘On the leakage of personally identifiable information via online social networks’, Workshop on Online Social Networks (WOSN), Barcelona, Spain, August 17, 2009.
   5. M. Kirkpatrick: ‘Obama: “I have never used Twitter”‘, ReadWriteWeb, November 15, 2009, <http://www.readwriteweb.com/archives/obama_i_have_never_used_twitter.php>.
   6. Cf. J. R. Saul: The Collapse of Globalism and the Reinvention of the World. Camberwell, Vic.: Penguin 2006.
   7. S. Engeseth: One: a Consumer Revolution in Business. London: Cyan-Marshall Cavendish 2005.
   8. N. Ind and R. Bjerke: Branding Governance: a Participatory Approach to the Brand Building Process. Chicester: J. Wiley & Sons 2007, pp. 51-7.
   9. An example of a responsive CEO is Christian von Koenigsegg, who made modifications to his company’s sports car after criticism on the TV show Top Gear. A new model was ready for testing within weeks. A larger company would have added the criticism to a longer improvement cycle and the modification might not have been seen for years.
   10. S. Engeseth: The Fall of PR and the Rise of Advertising. Stockholm: Stefan Engeseth Publishing 2009.
   11. N. Ind (ed.): Beyond Branding: How the New Values of Transparency and Integrity Are Changing the World of Brands. London: Kogan Page 2003.
   12. N. Klein: No Logo: Taking Aim at the Brand Bullies. New York: Picador 2000.
   13. A. Quart: Branded: the Buying and Selling of Teenagers. Cambridge, Mass.: Perseus Publishing 2003.
   14. Especially in politics: opponents of the two high-profile politicians in the 2008 US presidential election, Barack Obama and Sarah Palin, flung accusations about ghost-writing.
   15. D. Gross: ‘Has Twitter peaked?’, CNN.com, January 26, 2010, <http://edition.cnn.com/2010/TECH/01/26/has.twitter.peaked/index.html>.

Stanley Moss
DiGanZi
diganzi@gmail.com

Pierre d’Huy
Experts Consulting
ph@ph8.fr

The Journal of the Medinge Group, vol. 5, no. 1, 2011

GENERATIONS AGO in the time of the Ancients, and long before the current era of peace, two kingdoms lived side by side, separated by a mountain range and unending war. They had been enemies for as long as anyone could remember. People had forgotten what started the quarrel in the first place. There were years when an uneasy truce would prevail, but one side or the other would eventually break it, causing the kingdoms again to lay siege on each other, advancing, retreating, attacking, defending, plundering. They understood nothing but perpetual struggle.
   Finally, in the Year of the Hawk in the 10,000th Dawn, the advantage fell to the kingdom of the west, Jandrigar. They had worn down Indrigar, to the east. The ruler of Indrigar was an elderly monarch known as Karek the Wise. It was his misfortune to have presided over a disastrous campaign, which left the countryside in ruins, his subjects starving, his fortress surrounded. His councilors and generals were summoned, but they were of no help, and he dismissed them in exasperation.
   He had the further disadvantage of an impatient and disrespectful son named Prince Lorono. This short-tempered youth knew one day the throne would be his own. This particular prince kept his head in the clouds, and had a romantic notion about the power of political causes. He would often admonish his legions, urging them on with the hollow words claiming that together they could change the world. He pretended that he trusted and believed in his father, and falsely asserted that he knew in his heart there should always be hope.
   But behind closed doors, in the dark throne room of the king, amidst the light from torches hung upon the stone walls, and in desperation of their dire circumstances, he accused Karek. ‘You led us into this battle, and it is because of you we suffer now. We have no weapons left.’
   ‘Weapons will not win this war,’ his father countered. ‘We need to listen to the ancients.’
   ‘Will the ancients feed our families?’ the son asked. ‘All the food is gone. We have no sorcerers.’ He shifted his heavy shield to the other arm, and moved his sabre to the opposite shoulder. ‘How do we live today?’ the prince asked. ‘How do we live when your solution is not working? In the world of the ancients the king ruled, and you do nothing but recite the old words. Your father used to tell us, let the throne look to the mirror. I’ve looked in that mirror a hundred times and I don’t know what it tells me. I am trying to find acts which can change the world, or at least learn a way to behave in this situation.’
   ‘You don’t know what to think,’ the king said. ‘You don’t remember the great heroes—so how do you expect to act if you do not study our legends?’
   ‘Exactly,’ the prince thundered. ‘I am looking for a solution, any solution. I seek the ancient knowledge.’
    ‘The greatest person is the one who holds the blue box,’ the king said wearily. ‘It is so written. Let the throne look to the mirror. The person who holds the blue box will not be touched. Look to the mirror,’ the king repeated. ‘The truth is in the mirror.’
   The prince said, ‘That old story had been often repeated, but it does not help us with the invaders outside our walls.’ He knew the words by heart from childhood, yet the meaning eluded him. Still, he decided to placate his father, so he said loudly, ‘Yes, I think I begin to understand. We are supposed to look deep inside ourselves for the wisdom, as in a mirror, and the blue box represents the answer.’
   ‘The answer,’ his father said, ‘is something you deserve to get. You receive it at the moment you need it. Soon a secret will be revealed to you.’
   The Prince could take it no longer. He thought of the ragged people huddling along the walls, starving, frightened, sleepless. He remembered the army encamped outside the city walls, its bonfires blazing, war machines at the ready. Soldiers standing in a menacing line along the western horizon. He thought of the hardship of the war campaigns.
   ‘There is nothing left to do!’ he shouted. ‘Nothing left to think! I have seen enough of the mirror!’ And saying that he hurled the heavy shield at the mirror, which broke into a thousand shiny pieces. Behind the space where the mirror had been they could see the entrance into a chamber. Inside the chamber, all could see that the legendary blue box rested on a mountain of gold.
   ‘All you needed was the right key,’ Karek the Wise said.
   ‘We are saved,’ Prince Lorono exclaimed, and ran to the treasure, taking the blue box in his hands. He reached the parapet, where he stood facing the enemy. Then he held the blue box above his head.
   The enemy knew what had been written, that peace would come from the blue box. Nobody really believed in the legend any longer. But the time had come to sue for peace. One by one, the enemy put down its arms.
   Three days of feasting reunited the kingdoms of Indrigar and Jandrigar. And thus from the frontiers of the kingdom of the East to the deepest ends of the kingdom of the West began an era of lasting peace and joy.

Enric Bernal
Co-founder and partner, Pinea3
enric.bernal@pinea3.com

The Journal of the Medinge Group, vol. 5, no. 1, 2011

PEOPLE CONTINUE TO ASK: ‘Will the economic crisis be going away anytime soon?’ Well, I hope not. I hope it will stay with us a bit longer until we all learn the lessons that we have to learn from it. Recently, I heard a radio commentator on a radio programme saying something like: ‘We have to take measures so that if a similar crisis comes to us again in the future, we will be prepared’. While many of us might be saying things like this, there is something fundamentally wrong in the way this person was talking. The so-called ‘crisis’ did not suddenly arrive without warning; the crisis is the system’s reaction to previous actions. Actions made by all of us, not by any evil third-party entity. As active contributors we need to assume our share of personal and collective responsibility.
   In periods of crisis people tend to look for strong leaders with clear answers and decisions; people who appear to know where we ought to be headed. But, significant problems like the ones we face today are not simple enough for any one person to solve. We need leaders who raise questions as well as, and perhaps even more than, providing answers. We need leaders who will challenge us to face problems in order to learn and grow from them. To make progress in solving the current set of problems requires more than just leaders who provide answers from on high, but also leaders who help us change our attitudes, behaviours, and values. This is a different concept of leadership that will also affect the correlated social contract because we need to redefine our civic life and the meaning of citizenship. We need to bring this renewed consciousness into our organizations.
   The topic of this article is conscious leadership and when I use the term leadership I am not only referring to the organization’s highest ranks; but to everyone, at every level. Leadership should be made available to all those who want to empower themselves to act as agents of transformation because we can all be leaders whether as a leader of a team, a division, a family or in our own lives.
   Today’s issues need a more conscious leadership that develops a more holistic approach to organizational issues. Elevating the level of organizational responsibility is the best way to improve an organization’s prosperity and performance and in this article I propose a clear, three-step methodology for doing so.¹

Is leadership a value-free concept?
Perhaps we think of leadership as being value-free and there are many scholars who will side with this connotation, since this perspective lends itself more easily to analytic reasoning and empirical examination. However, the concept of leadership itself carries with it implicit norms and values. We cannot say that we both desperately need new leadership while also proclaiming that leadership is value-free. Ronald Heifetz argues in his book, Leadership without Easy Answers,² that all the leadership theories developed over the past 80 years have their hidden values and this is so whether we talk about trait, behavioural, or situational theories of leadership. Further, recent supposedly value-fee, theories such as the transformational, charismatic, and authentic leadership theories, also all have implicit values within them.
   Conscious leadership explicitly implies that core values and principles should be part of the construct of leadership and as such it should be a focus for future leadership research. While there is not a universal set of core values and principles that everyone can agree with, the concept of conscious leadership assumes that leadership cares about the organization’s economic well-being as much as it cares about its social implications (internally and externally), and the environmental impact of its business and practices. This triple-bottom-line concept is a good starting-point for identifying an organization’s core values regarding both its economic well-being and the social and environmental implications of its activities. The United Nations has bravely proposed measuring companies against a triple bottom line—economically, socially, and environmentally.³ These measures are known as the ‘3 Ps’: Profit, People, Planet.
   This article postulates that the most successful 21st-century organizations will be those which consciously embrace the triple bottom line and hold themselves and their teams, accountable to its values and principles.
   If leadership has not been operating as a value-free process, then how did we end up in such a globally chaotic state during the past few years? The answer is this is much more a crisis of values than one of economics and ‘the crisis’ will continue until we change our behaviours. We have to modify our value set and incorporate new values into the ways that we approach business as a whole.
   Twentieth-century success meant making as much money as we could, as fast as possible so that we could retire early and then supposedly enjoy life. This is an old paradigm, through which the corporate world promoted consumption at all costs in order to meet the expectations of analyst–investor quarterly results. However, there is another way. There is a way of understanding life and business which redefines the term success by putting short-term gains into perspective with more balanced longer-term returns together and sustainable prosperity, The term prosperity should not be restricted to economics as it was in the old paradigm; prosperity should also be defined in social and environmental terms. We need to leave behind excessive consumerism and its attendant ills and instead connect to a new era of recycling and alternative energies.
   In the 20th century, our concern with people was how they fit within a set of job descriptions, instead of jobs that might fit people’s needs. We promoted competitive advantage by off-shoring and low-cost manufacturing instead of promoting Fair Trade and accounting for bottom-of-the-pyramid considerations. In the last century, we embraced rationality in management. We forgot to include emotions, intuition, love and spirituality in management concepts and this leaves us now in to find their place in 21st-century management practices. To succeed in the 21st century, we will need to develop a more harmonic approach of cooperating and co-existing in the world, and accept higher levels of personal and organizational responsibility. Lastly, we will need to empower ourselves and our organizations to behave with a higher value set than we did in the last century. What we need is more conscious leadership.

Where is my profit?
Some organizations continue to look, first and foremost, for profit in economic terms and although some momentum remains in this approach, with each passing day these sources of profit will disappear. Customers in the new era will not legitimize companies that only focus on increasing their profit without showing social and environmental respect.
   Some organizations still look for a “magic pill” to solve all their problems, as if they were fighting evil viruses. These organizations don’t see themselves as part of the problem and even less as part of its causes. They just want their normality back while they blame just about everyone else—the banks, the government, high employee turnover, competitors, or maybe even the low cost of foreign manufacturing. I have even heard some organizations turn to blaming their customers. All that I can do is wish these organizations good luck in their fight against imagined evil viruses.
   Companies that insist on finding their sources of revenue the old way will continue to experience the symptoms of the “crisis” as if it was a disease of the “old species”. They operate in a two-dimensional world: the pursuit of profit against an axis of time. What is missing for these organizations is the axis of consciousness. New sources of prosperity—triple-bottom-line prosperity—can only be attained by organizations that elevate their level of consciousness to a higher position. The alternative of taking such a path is to accept the decline of the organization. For those who accept the idea of needing to embrace a higher consciousness, what to do then? How should organizational leaders proceed and what are the next steps to raising the level of consciousness of the organization?

Living organizations
Before discussing what to do to reach higher levels of prosperity, it is important to establish a common concept and language to illustrate the path forward. As such, organizations can be thought of as living organisms⁴ with a life cycle in which they are born, develop, mature, and eventually die. Most Fortune 500-type companies don’t last longer than 50 years, as they are not able to adapt to the changing environment. This analogy of considering organizations to be living entities has been successfully used by others. A prominent example is Arie de Geus with his best seller, The Living Company,⁵ in which he proposed the keys to managing for a long and prosperous organizational life. De Gues identified four critical characteristics for organizational longevity, one of them being the company’s sensitivity to their environment in order to be able to learn and adapt.
   When we accept the concept of living organizations, then by extension we can speak of an organizational state of health. At any given time, an organization can be in a different state, which can dramatically affect their performance. Like a human body, when an organization is ill or wounded, it does not perform at its maximum potential. An organization that is interested in achieving higher levels of prosperity will first need to be in a healthy state. From this point of view, all organizations need to embrace a healing process of some sort. Who today would dare to say, ‘My organization is as healthy as it could possibly be. We are performing to the maximum of our capabilities’? As with the human body, organizational health—good or bad—is a continuous process. It is not something that is done once and then forgotten. Health should be promoted for the entirety of an organization’s life.
   Why do we talk of healing instead of curing? Healing refers to inside-out actions which lead to living a healthy life and it has very little to do with the removal of symptoms. Healing is a systemic approach that encompasses every aspect of the being. Healing is about harmonic alignment, wellness, and wholeness. On the other hand, curing is a much more utilized western term and refers to using external actions to fix the internal problems. In other words, the magic pill that is sought to fix our problems while this often means merely addressing the symptoms and not the fundamental causes.
   Typically, people enter the health care system when indications of illness can no longer be ignored. They tend to look for a cure for a specific issue when it arises, rather than maintaining good health through regular exercise, eating a healthy diet and other actions that contribute to our overall state of wellbeing. Similarly, organizations will only react when the symptoms of under-performance are too painful to ignore. In response, CEOs will be replaced, factories will be closed, and major restructuring will be implemented. Instead, what are the equivalent wellbeing exercises for organizations? How does an organization eat a healthy diet and practice yoga?
   The reality is that there are a number of actions that an organization can put in place to embrace a healing process and work towards prosperity. These actions address the four key elements of a living organization’s being: physical, mental, emotional, and spiritual. For example, a company should balance the pursuit of financial health (physical), with the development of efficient decision-making processes (mental), with the harmony of people’s personal interests (emotional), and with the respect to the community (spiritual).
   The process of healing and steering the organization towards a healthier and more prosperous state is a transformational journey that happens in stages. At each turn, we elevate the level of consciousness a notch higher. Organizations are not likely to make a quantum leap from a low to a high state of consciousness. Like the human body, the organizational system evolves by attaining these stages of health. Donald Epstein proposes in The 12 Stages of Healing⁶ that there are 12 stages of consciousness that a person must go through in order to heal to their maximum potential. Similarly, an organization’s ability to heal is directly proportional to its ability to ascend a spiral of consciousness. Each strand of this spiral represents a crisis and, yet, growth is not possible without it. As in human life, suffering is needed to learn and grow. If we want to reach higher levels of health and prosperity in our organizations, we will have to embrace crises and take them as opportunities to learn, grow and transform.

In search of prosperity
The first step towards a higher level of consciousness is not outwardly focused. Looking for and caring for customers, and the environment, will be a definite outcome of the process, still it must start with an inward look. This is why prosperity cannot be purchased; it has to be lived and experienced. Organizations have to first develop an awareness of their own state of health. What is working and giving energy currently to the organizational system, and what is not? As self-awareness is the key to taking the first step in any leadership development programme, so, too, the organization’s governance needs to analyse and understand the different parts of its being.

• Are the values, the mission and the purpose of our organization well founded?
• How do we make decisions?
• How well do we cooperate between divisions and departments?
• Is our vision inspirational and shared?
• How do we express our truths to the market?
• Is the organization’s foundational moment giving or taking energy from our current operation?
• How are emotions lived in the organization?

   As an organization begins to answer these and other important questions, it will become aware of potential blockage points to higher levels of performance and success. As in a personal development programme, higher levels of organizational consciousness will inevitably bring us to choose certain areas to be worked on and developed further. Therefore, the very first step towards prosperity is for the governance body to increase its awareness of how their organization is run, where the energy flows smoothly, and where it does not. This crucial first step provides a self-diagnosis of organizational performance in terms of energy.
   The second step towards prosperity consists of developing the organization’s capabilities and commitment for change. This process starts by assuming that we have some degree of influence over what happens to us and that we accept our share of responsibility for the situation, even if it is minor. There will always be excuses for us to avoid taking responsibility and while it is fair to say that we are not always in control of what happens elsewhere in the world; still, the question is: do we really not have any influence over other events? For those of us tempted to say, ‘No,’ I would ask you if there was anything that you might do to that could worsen a situation? If the answer is ‘Yes’—there are ways of making things worse—this implies that we do have a certain amount of influence. We are empowered. This necessary self-empowerment will help us to look for solutions instead of focusing on blaming external factors and others.
   During this phase the organization’s governance body needs to identify and empower a group of key senior and middle management individuals, to embrace the change at hand and to play the role of internal transformation agents. Organizational change is about modifying behaviours, which implies the modification of values and beliefs. Without a shift in vales and beliefs, organizational change programmes are often unsuccessful. Many of us have seen or lived through organizational change initiatives and know that without a group of empowered transformation agents from within, the changes will not stick. How many agents of change are required to create the critical mass needed to shift the balance? The answer obviously depends on the scope of change, the size of the organization, and the timing or resources we are willing to invest.
   The third step towards prosperity is to provide a catalyst and to facilitate a sustainable transformation of this living organization. With an accurate diagnosis and after having empowered our core team of advocates for change, we can advance and focus more specifically on all the necessary alterations for truly transforming and healing our organization. The length of this phase depends on the organization’s current state of health, as well as how much change is desired. This is potentially a long phase as organizational change is not something achieved in a few weeks, nor can transformational change simply be purchased. This deeper focus is an experience that the organization has to undergo in the first person., There are no short cuts to transforming an organization, changing corporate culture, improving inter-personal cooperation, or to establishing a sustainable business model that is respectful of the environment and social needs.
   In summary, the transformation journey towards healthier organizational states and higher levels of prosperity happens in spirals where at each turn the organization is becoming healthier. Organizational healing can be achieved through:

• developing organizational self-awareness about its own state of health;
• empowering a group of internal transformation agents that will enforce the change objectives throughout the organization;
• spreading the change plan and rolling-out the necessary workshops in order to reach the critical mass necessary for change to occur.

   Conscious leadership is about challenging the status quo to face the problems in order to learn and grow from them. It is about bringing transformation into organizations that otherwise will be outperformed by their competition. It is also about elevating the level of consciousness to the standards of our century. Doing so will benefit not only organizations but also the greater world and our own individual societies.

Notes
   1. E. Bernal, J. Cos and X. Tarré: Pinea3, Living Organizations, at www.pinea3.com.
   2. R. Heifetz: Leadership without Easy Answers. Cambridge, Mass.: Harvard University Press 1994.
   3. Sustainability: from Principle to Practice. München: Göthe-Institut, at www.goethe.de/ges/umw/dos/nac/den/en3106180.html.
   4. E. Bernal, J. Cos and X. Tarré, op. cit.
   5. A. de Geus: The Living Company. Boston: Harvard Business School Press 2002.
   6. D. Epstein: The 12 Stages of Healing: a Network Approach to Wholeness. Novato, Calif.: Amber–Allen Publishing and New World Publishing 1994.

Adapted from the book, Meaning at Work, by Nicholas Ind. Published by Cappelen, 2010.

I CAN FIND examples of both freedom and happiness within 400 m of where I live. First there is a women’s clothing shop, which also sells Swedish Gustavian-style furniture, that proclaims in its window, in a nice hand-written script, Shopping makes us happy. I’m never quite sure if this refers to the owners of the shop or is aimed at would be shoppers—perhaps, in a recognition of mutuality, it is both. Anyway, once I have contemplated, or even experienced, happiness, I only have to walk down the road to arrive at my nearest 7-Eleven. This is a shop that is defined as a convenience store and sells a limited range of everyday items, but the advertising banners inside the shop shout one thing: freedom. An interesting use of such a fought-over and argued-about word. Is this the same freedom that John Stuart Mill wrote about or Gandhi protested for or Che Guevara died for? Seemingly not. It is, in fact, the freedom to shop early in the morning and late at night. That such diversity can be contained in one word is perhaps a problem of the inadequacy of language, but it also points to a problem in our world: the inadequacy of ourselves. In other words, we too often fail to spot the difference between the significant and insignificant. It may be true that my 7-Eleven offers me some sort of freedom, but it is not in any way a profound freedom. Similarly, maybe purchasing a nice Gustavian table might give me a temporary lift (if I did indeed covet such a piece of furniture), but that happiness will be impermanent. When we think about finding meaning at work, we face the same problem—how to find that which is enduring and significant. This requires us to unpick the meaning of such ideas as freedom, happiness and fulfilment and to understand their relevance for our working lives. ¹
   Freedom is something that we seek and chafe against when we don’t have enough of it. Its denial seems particularly important for us, for as the philosopher, Isaiah Berlin argues, freedom is a requirement of humanity: ‘to surrender one’s freedom is to surrender oneself, to lose one’s humanity.’ ² Indeed, Berlin argues that the only reason we should submit to authority is for utilitarian reasons—because it seems to make sense to do so. Much influenced by Mill, Berlin argues that individuals should be free to follow their own interests, to ‘allow more spontaneous, individual variation (for which the individual must in the end assume full responsibility) will always be worth more than the neatest and most delicately fashioned imposed pattern.’ ³ What Berlin is reacting against are totalizing systems that seek perfection and that require individuals to conform to an ideal. We might judge that rather than accepting the dictates and directives of an organization, we ought to have the courage to be sceptical and questioning. This is not an argument for sabotage, because the point Berlin makes about responsibility ought to be at the front of our minds. It is the attitude we adopt when we challenge that is important. The idea of responsibility is not a cover for only making the right conformist choice, but rather for choosing with courage. ⁴ If we are part of an organization, we ought to assume a minimum of alignment of values—a degree of mutual interest. Yet, the result of this identification should not be passive acquiescence in the seeming certitude of managers, but a positive participation that is driven by the desire to improve the organization, together with others. This way of thinking is not about individualism as such, but the individual seeking change for the betterment of all. Managers might groan at the thought of all this unfettered freedom. If everyone takes up the opportunity to challenge—even if they are thinking of the good of the organization—might it not generate a state of anarchy and destroy the unity of the organization? It certainly might be messy and require a lot of dialogue—even perhaps a need for what Deirdre McCloskey calls ‘sweet talk’⁵—but it has the real virtue of utilizing the intelligence and creativity of all of an organization’s members, rather than just a select élite.
   Yet the challenge here is that societies, organizations and communities can place the commitment to unity above the integrity of the individual. Sometimes they might be right to do so, but the repression of individuals may be the result of a desire to preserve what is convenient and comfortable. A common theme that we see, for example, in Ibsen’s drama, is the constraint imposed by a society that tries to hide the unpleasant and the unpalatable—and the consequences of avoiding difficult truths. It’s a theme we see surface again and again in films and books from Charles Dickens to Ingmar Bergman to David Lynch—the superficial veneer of outward well-being and conformity that masks deceit and violence. It should be a strong reminder to managers of the need for openness and freedom; to not repress individual desire, but to give it some focus. Berlin gives us a guide as to how to manage this by making a distinction between negative freedom—the degree to which individuals are free from man-made barriers—and positive freedom—the degree to which individuals are free to determine how they do things and their ability to self-organize. ⁶ For the organization to have some degree of unity and to distinguish it from the unstructured world around it, there must be some limit to freedom from. Freedom to, on the other hand, comes from the desire of the individual to be master of their own life and not dependent on the will of others; to be free to realize potential. The issue here for the organization is how freedom from and freedom to are dynamically determined, for organizations all to some degree try to coerce, manipulate or encourage the individual to adhere to certain goals and a way of doing things. Generally we accept this Faustian pact because freedom from is an instrumental freedom in that it enables discovery and creativity within specific constraints. However, it does of course depend on the space of freedom. There is a specific metaphor I sometimes use to explain this: a framed painting, by the semi-abstractionist, Howard Hodgkin. Hodgkin spends a lot of time—sometimes several years—on his paintings, returning to them periodically as his ideas and perspective change. He also paints on the frame of the picture, exploring its boundaries. The frame signifies the area of negative freedom. An individual can explore and create within that boundary and can also explore the extent of the boundaries, questioning the frame of freedom from. The painted area represents that which the individual has mastery over—the domain of positive freedom, where we generate content and a sense of meaning.
   As with all metaphors, while the idea of the picture attunes us to certain ideas, it also closes down others. It misses out the sense that this is a picture that is painted in an organic way together with other members of the organization (and even interested and influential outsiders). It is also a rather static metaphor in that ideally the frame itself should change shape to reflect the dynamic nature of freedom and the likelihood that our space will be invaded by the incursions of others. We might even argue that a lot of the time we are not consciously painting, but simply daubing without real thought. And yet, in spite of these limitations, Hodgkin’s paintings remind us that we exist in different worlds. In other words each individual participates in several pictures which vary depending on the space of freedom. The sports team we belong to, the community we are part of and the place where we work all offer different spaces. Additionally, the picture space changes depending on the organization. For someone who works in a call centre or in a logistics organization, where the rules and policies are perhaps more tightly defined, the canvas might be quite small, whereas for an academic or an innovation consultant, where there are fewer constraints, it might be quite large. Yet, we should always argue for maximizing the space for the benefit of the organization and for the individual as a means of self-discovery and self-realization; to provide the opportunity to overcome a sense of alienation and purposelessness and to create something of value. That the space of freedom is rarely maximized in practice seems largely to do with blinkers. Organizations fail to trust their people sufficiently, preferring the security of control and continuity to the adventure of freedom, while individuals are inured to the possibilities of thinking differently. If we only use the freedom that we have to do the mundane, the obvious and the superficial, it is not much of a freedom. Nietzsche sees the way people use their freedom in terms of a dull morality that trains them to follow the herd.
   We might conclude that freedom creates opportunity, but how we use that opportunity at work determines whether freedom has any larger relevance both for the organization and ourselves as individuals. The issue then becomes what ‘relevance’ might mean. Traditionally for the organization that has meant that individuals use what freedom they have for the greater good to deliver a certain level of performance. Economists and analysts like this type of relevance because it is easy to measure. However, some question where the individual is in all this. They suggest that it is all well and good to have an employee benefiting the organization, but what about the individual’s happiness. Shouldn’t work contribute to happiness? And wouldn’t happier workers also contribute more? We might answer yes to both these questions, but I think there are several problems with the concept of happiness. Frankly, happiness is over-rated.
   The first problem with happiness is to determine what it is. We might argue that is a feeling of well-being, of satisfaction, perhaps of euphoria. Yet, we should also note that happiness tends to be a temporary condition. We might on balance look at our life and say we have been happy, but there will undoubtedly have been ups and downs. Richard Layard in his book Happiness (2005) asserts that it is not possible to be both happy and unhappy at the same time—that we move from one to the other and back again. When we talk of happiness we might think about how it seems to lift us above our normal state, but while we can perhaps share some common notions of happiness, it’s always an individual experience. We can analyse brain activity and we can conduct research into the attributes of happiness, but I cannot exactly communicate the feeling, nor is it easy to judge the happiness of others. When it comes to work and happiness, the concept feels misplaced. I might be able to correlate work and being happy, but what drives me at work is more about fulfilment. If we think about people such as Mark Rothko or Ingmar Bergman or Samuel Beckett we do not see a quest for happiness. Rothko’s life, for example, was full of challenges, anguish and only the realization in late middle age of his artistic potential. If Rothko was happy at some point it was as a result of his finding meaning in his work. Happiness then is a result, even a by-product, of the discovery of meaning. It derives from our failures, wrong turns and miscalculations as much as our successes. Indeed, misery can contribute just as much to our fulfilment as happiness. It is when we try and make happiness the primary focus that we end up pursuing the wrong things—by which I mean experiences that lack any substantive resonance in our lives. We can see this in John Logan’s Red (2009), a play which weaves a narrative around the real life commission of Mark Rothko to produce a series of large scale paintings for the Four Seasons restaurant in the iconic Seagram Building on Park Avenue, New York. Rothko, who has been commissioned by the architect, Philip Johnson, is excited about the status the paintings will give him. In the play he walks around his newly acquired downtown Manhattan studio happily musing to himself, ‘Rembrandt and Rothko … Rembrandt and Rothko … Rothko and Rembrandt … Rothko and Rembrandt … And Turner.’ His vanity has been stirred by his sense of outdoing his peers and he justifies doing the commission by arguing that his paintings will not just be decoration for ‘the richest bastards in New York’, but ‘will transcend the setting.’ However, stirred by the challenge of his assistant, Rothko comes to realize what he is doing is pointless and superficial. He might be enjoying the accolades, but he is not being true to himself and his quest for fulfilment. He calls Philip Johnson and tells him he will return the $35,000 he has been paid (equivalent to $2 million today) and keep the pictures himself. As he hangs up the phone his assistant says, proudly, ‘Now … now you are Mark Rothko.’ ⁷
   The desire to uncover a deeper meaning in what we do is, I believe, widespread. Take, for example Randy Hodson’s ethnographic study of individuals. It features numerous examples of individuals who bemoan the lack of opportunity to find meaning at work. In the words of one, ‘There isn’t anyone among us who doesn’t resent how the factory is operated so fast and sloppy, because there’s no way to respect what we’re doing and what we’re making. In fact, most people here like it best when things don’t work right and production goes to hell, and I’m right along with them. And that’s a crummy way to waste your working time.’ Hodson concludes that ‘meaning and satisfaction in work are grounded in doing quality work … employees prefer to act positively at the workplace and do so whenever the workplace situation allows positive action.’ ⁸
   The second issue I have with happiness is that it has become our god. We pursue it blindly and we try to restructure our worlds so that happiness is somehow contained within everything we do. The philosopher, Alenka Zupancic points out that ‘it has become imperative that we perceive all the terrible things that happen to us as ultimately something positive … negativity, lack, dissatisfaction, unhappiness, are perceived more and more as moral faults—worse as a corruption at the level of our very being or bare life.’ Life must encompass challenges and failure and rather than wishing it were not so, we should rather accept and learn from it. Of course, when we fail to learn from experience it becomes either tragic or comic, or perhaps both. If we simply try to make everything and everybody happy we must distort the world and the way we see it. It is suggested by some that all we need to make our lives happier is the power of positive thinking; that we can overcome adversity by attuning our minds to success. Yet this ignores the importance of questioning ourselves and those around us. We should not accept things at face value and we should understand that the negative things in life are as much a part of our being as the positive. Positivity might encourage us to try new things and help us to persist in the face of adversity, but we might also end up arrogant and deluded. We ought to have the courage to confront the new, but some cynicism helps us to get through life.
   The third failing of happiness is that organizational happiness must be seen collectively. My vision of greatest happiness might be total freedom to pursue my own interests, including spending every afternoon watching films, while my colleague might like to work very hard and be completely dedicated to working life. These and all the other countervailing ideas that co-exist in an organization need to be managed. In most contexts there needs to be order and constraint, so the absolute individualism of happiness must be denied. Individual happiness must be tempered by the principle of the greatest happiness. Yet this view, which was espoused by utilitarian thinkers such as Jeremy Bentham and James Mill, seems particularly difficult to apply. We might look at statistics of happiness and see that certain groups or nations are particularly happy, but we would still have to pose the question as to how we might actively create and maintain happiness. There might be some argument here about the value of equality—that as many people as possible in a community share in both the decision-making and the rewards that result—but in practice collective happiness seems both dubious and simplistic. We might imagine a scenario in an organization where industry over-capacity has led to consistent losses. The business logic here might be to cut volumes and people, yet this would clearly make a large number of people unhappy, in favour of perhaps the happiness of a limited number of institutional shareholders. The greatest happiness principle would argue that large numbers of employees should not be made redundant, yet by continuing with high levels of production, the long-term sustainability of the company is undermined and perhaps in time, everyone will lose their jobs. Also we might raise the more complex issue that if institutional shareholders suffer, then that would have an implication for the pension funds (and the individual pensions within the fund). The connectivity of different audiences and the length of time over which the issue of happiness is viewed, create significant problems. We might also wonder: who is best positioned to be the overall objective judge of happiness? Who enjoys a perspective over all the impacts of a decision and is sufficiently disinterested to make the right choice? It’s an impossible call to make, for even if we accepted happiness as the determining principle, we cannot decide what happiness might mean for every singular person in a multiplicity. As the narrator says in Conrad’s Lord Jim ‘It is when we try to grapple with another man’s intimate need that we perceive how incomprehensible, wavering, and misty are the beings that share with us the sight of the stars and the warmth of the sun.’ ⁹ The only antidote to these problems is to let individuals decide their own route to nirvana, but with the proviso that their quest must take account of the needs of others and the entity that is the organization.
   It is my belief, based on the arguments above, that happiness is an illusory ideal which is neither the basis for working in an organization nor for managing it. Organizations exist for a purpose—and the purpose is not based on the greatest happiness principle. That people might enjoy their work is a result of a belief that a positive working environment is conducive to success; that we work harder when we feel connected. Yet this is far more than happiness. And far more than freedom. It is more about the quest to find meaning in our lives and to attain a sense of fulfilment.
   How might we define this idea of fulfilment? It clearly connects to the idea of meaning in the suggestion of something beyond an immediate experience. It is the feeling of lightness, of pleasure, of enlightenment, of expressivity that is generated when we go beyond our perceived limits. There is in this a sense of fulfilment as liminal and as connected to Bataille’s ideas about challenging boundaries, such as when Rothko stepped out of his derivative past and into originality when he painted No. 1 in 1941. ¹⁰ To fulfil we must exceed. Whether fulfilment comes because of our active involvement in a political group or in the writing of a novel or in the leading of an organization, we must surpass our expectations. Anything less is just satisfaction or well-being—a sense of having done what was expected of us. This does not create fulfilment, but rather a cosiness that we might find comfortable or reassuring. Fulfilment is something different in that it can derive from discomfort, from destruction, from disharmony, from danger, from necessary suffering and from the tragic. We seek fulfilment because in exceeding we extend our sense of self, and we find that which gives a life meaning. Fulfilment is thus connected to memory, because it is the recall of past euphoric moments of fulfilment that drive us to seek future fulfilments. Fulfilment is born of restlessness; a desire not to repeat but to find difference, to find the new. An apt example of this was Igor Stravinsky’s 1951 opera, The Rake’s Progress. When it premièred in Venice it was accorded respect, applause and plaudits across Europe. Stravinsky, then 69, should have been pleased; it was far removed from the booing, fights and riot that had accompanied the first performance in 1913 of his seemingly shocking, The Rite of Spring, which challenged the accepted norms of classical ballet. W. H. Auden, who was the co-author of the libretto of The Rake’s Progress, wrote later of Stravinsky, ‘Once he has done something to his satisfaction, he attempts to do something he has never done before.’ After 1951, Stravinsky set out to reinvent himself and to challenge the expectations others had of him. He borrowed the ideas of atonal twelve tone serialism that had originally been devised by Schoenberg and melded it with what the biographer Stephen Walsh calls his ‘vibrant physicality,’ ¹¹ to create a new style that was distinct from that of his younger rivals. This sense of the need to go beyond the comfortable accolade of critics and others is also given voice by the artist John Baldessari who, when accorded critical acclaim and a Whitney retrospective, suggested, ‘It’s a bit scary to have acceptance. You wonder what you’re doing wrong.’
   We might say that people like Stravinsky and Baldessari, while exemplifying a quest for fulfilment, are very individualistic; yet both of them, while exploring their own limits, were fully aware of the participation of the viewer. Indeed, whether the individual is a software developer, a sales assistant or a composer, one cannot but be affected by the thoughts and actions of others. Our sense of responsibility should extend to those around us. The danger is that in seeking our own fulfilment, we deny the potential for fulfilment of others. Here we could use the word ‘ought’ to make a judgement that we ought not inhibit others and we ought to be aware of the mutuality that exists in our working lives. Kant believed we should ‘act on that maxim through which you can at the same time will that it should become a universal law’¹² while Karl Popper in The Open Society (1945) refers to the value of reciprocity (do unto others) in terms of ‘the golden rule is a good standard which is further improved by doing unto others, wherever possible, as they want to be done by.’ ¹³ Yet the power of these ‘oughts’, while carrying weight with some people, is not always reflected in practice. People do act out of self-interested motives and sometimes actively work against others. To counter this we should stress the performance benefits of working together because it maximizes the knowledge and skills of organizational members.
   The challenge with this whole way of thinking is the impossibility of universalizing fulfilment. When we little know how to generate our own self-fulfilment, how can we make judgements about it for others? Fulfilment is an individualized experience, even if it is generated with and for others. If, for example, a group of people come together to form a new business, they perhaps do so with a broadly common perspective, but it may be that one member is concerned primarily with the organizational cause, another with an individual quest of finding meaning through action and another with the social goal of working with like-minded and interesting people. All these motivating desires are potentially realizable within the group, but in realizing the business opportunity, some needs may be catered for more than others. As the business evolves and develops, choices must be made and some of the founders may leave as it ceases to meet their needs. The implication of this is that there needs to be a strong emphasis on communication within the group—a dialogic approach that helps to produce thought in common that brings meaning forward. Rather than focusing on an end state, we should concentrate on the journey.
   It is in the way we interact with others and create a world that we each become ‘we’, and the ‘we’ creates new and previously unseen links. If we are open we can move beyond the narrow confines of our own thought and gain new insights—together. In this way ‘we’ act ourselves into organization—the ‘ment’ of fulfilment indicating action or process. This is not about compromise, but about creating the movement that leads to deeper understanding, which rewards each individual and benefits the organization. As John Shotter says, ‘if Wittgenstein is right, meanings are not hidden in people’s heads, but occur out in the ceaseless flow of living language-interwoven relations between ourselves and the other and othernesses around us.’ ¹⁴ This Wittgensteinian idea feels true to experience. In our social world, most of us do not sit thinking about the meaning of things and developing theoretical frameworks. Rather we think and act with others. We uncover ideas through writing and speaking to others and in hearing and seeing their responses.
    Yet the caution we have to exercise here is that we have to be receptive to moments of discovery. When we work with others, if we approach a problem believing we already have the answers, we close down the flow of thought. Meaning cannot be uncovered by adopting a fixed perspective, but only through participation and openness to others. When working cultures lack the means to adapt and prevent the vitality generated through questioning and new ways of thinking, it reduces the opportunity for new ways of seeing the world. Working with creativity may not always be comfortable for managers, but curiosity is something that should be encouraged. It is a source of energy for the individual and innovation for the organization. As Noam Chomsky says, ‘a fundamental element of human nature is the need for creative work, for creative inquiry’. ¹⁵

Notes
1. Böhm and de Cock write in their paper on the Slovenian philsopher, Zizek, that there are certain fantasies that sustain the hegemony of the global capitalist system including, ‘you are free to do anything, as long as it involves shopping.’ S. Böhm, and C. de Cock: ‘Liberalist Fantasies: Zizek and the Impossibility of the Open Society’, Organization, vol. 14, no. 6, 2007, pp. 815–36.
2. I. Berlin in H. Hardy (ed.): The Crooked Timber of Humanity: Chapters in the History of Ideas. London: Pimlico 2003, p. 222.
3. I. Berlin in H. Hardy (ed.): Liberty. Oxford: Oxford University Press 2005, pp. 92–3.
4. Zizek argues that freedom with responsibility is a variation on forced choice. You have freedom as long as you make the right choice. He also argues that in the west, ‘oppression itself is obliterated and masked as free choice.’ S. Zizek: Violence: Six Sideways Reflections. London: Profile Books 2008.
5. D. McCloskey: Knowledge and Persuasion in Economics. Cambridge: Cambridge University Press 1994.
6. I. Berlin in H. Hardy: Liberty, op. cit., at pp. 166–217.
7. J. Logan: Red. London: Oberon Books 2009. First performed at the Donmar Warehouse, London, December 2009.
8. Hodson, Randy. (2001). Dignity at Work. Cambridge: Cambridge University Press p. 257.
9. J. Conrad: Lord Jim. New York: Bantam Classic 2007, p. 134. (Originally published by Doubleday 1900.)
10. ‘Suddenly the middle-aged balding chain smoker (Rothko) who, on the strength of everything he had done up to that point (1949), would have been remembered at best as a mildly interesting, derivative talent, produced eye-popping miracle after miracle.’ S. Schama: Power of Art. London: BBC Books 2006, p. 415.
11. C. Fox: ‘Igor the Great’, The Guardian, May 1, 2009.
12. I. Kant (tr. M. Gregor): Groundwork of the Metaphysics of Morals. Cambridge: Cambridge University Press 2004.
13. K. Popper: The Open Society and Its Enemies. London: Routledge 2002. (Originally published by Routledge & Kegan Paul, 1945.)
14. J. Shotter: ‘Peripheral Vision’, Organization Studies, vol. 26, no. 1, 2005, pp. 113–35, at p. 130.
15. N. Chomsky and M. Foucault: The Chomsky-Foucault Debate on Human Nature. New York: the New Press 2006, p. 37.

THE EMERGENCE of Corporate Social Responsibility (CSR) has been both rapid and significant. Twenty years ago it was a subject of marginal interest to businesses, but now every organization of any size has a policy on CSR. The growth of CSR is a reflection of the continuing (although sometimes resisted) move to a stakeholder view of capitalism. Some well established businesses had long practiced this philosophy based on an understanding of the inter-connectedness of all their stakeholders; that social well-being, engaged employees, satisfied customers and suitably rewarded investors were inextricably linked. However, for many, CSR has been seen as more utilitarian: a sticking plaster that could heal a company’s reputation and improve its appeal. The challenge here is that in such organizations, CSR is a peripheral activity rather than core to business thinking.

Getting to the core
Organizations often see CSR as a tool to improve the legislative climate, enhance media attitudes and inspire current and potential employees. As a consequence, business television and newspapers are awash with advertising that makes claims for the social virtues and long-term perspectives of corporate brands. Yet most of the activities, while laudable in themselves, remain superficial. Scratch the surface and you find that CSR does not run very deep. When it comes to facing up to dilemmas about doing the right or the expedient thing, there is a temptation to take the easier option and satisfy the short-term needs of shareholders.
   Lorna Tilbian, Executive Director of the London-based bank Numis stresses that reputation-building is about being principled and having a long-term perspective—both of which are subject to pressures. She says, ‘Short-termism influences the managers of the company to cut corners to keep performing on a quarterly basis. The only test that really matters is the test of time.’
   For a business to really commit to CSR, it has to be truly integrated into strategic thinking. This seems to be easier for organizations which are not publicly owned. For example, the privately owned, outdoor sports clothing business, Patagonia, has a long-term perspective and a mission statement that says, ‘to use business to inspire and implement solutions to the environmental crisis.’ The ideal implied here has led the company to move out of businesses that it believes are environmentally damaging, to provide customers with a lifetime guarantee (on the basis it’s better to keep the product you have rather than buy a new one), to provide full traceability on all its products, to develop new materials that are recycled and recyclable and to support actively environmental causes. At Patagonia environmentalism is not an add-on—it permeates everything the company does and says.
   When the whole organization (and its customers) is engaged in adhering to a principle, then it creates a focus for decision-making and moves idea about CSR to the core. At Patagonia there is no CSR department as such, although there are individuals specifically concerned with looking at CSR based issues, rather every person from the receptionist (who developed a frisbee from recycled materials) to the designers (who are driven by environmentalism) delivers on the mission day-in, day-out. It’s part of the reason that Fortune magazine labelled Patagonia the coolest company on the planet.
   Similarly, the Dutch financial services’ group, Rabobank, which has 60,000 employees and 9·6 million customers, has long adhered to policies that are designed to connect it to all its stakeholders. This is not surprising given that it is a cooperative bank that is owned by its members. The continuous dialogue the bank enjoys with its customers and other stakeholders helps ensure it delivers on broader social needs as well as meeting its performance goals. As a symbol of this closeness and the integration of its audiences, anyone who is approved by the bank can visit its new headquarters and wander freely throughout the building.
   Both Rabobank and Patagonia are adept at balancing and integrating different stakeholder needs, but you have to search harder for publicly quoted businesses that deliver on this score. The requirement to deliver ever-increasing returns to shareholders tends to hinder a full-blooded commitment to CSR. We might, for example, look at the Norwegian oil company, Statoil, and its approach to extracting oil from the sands of Northern Alberta in Canada (a contentious issue) and argue that they have been socially responsible in consulting with communities and using sound extraction methods, but we could also counter that true social responsibility would argue against being there in the first place and avoiding the environmental damage.
   One business that has been trying to tackle the dilemma of competing interests, head-on, is Unilever. Last year, CEO Paul Polman stopped providing earnings guidance to investors, in an attempt to move the focus away from short-term returns. Seeing his mandate as more concerned with long term success, he also railed against hedge funds, when he said, ‘They would sell their grandmother if they could make money. They are not people who are there in the long-term interests of the company.’
   Unilever has been integrating its approach to sustainability across its brand portfolio, focusing on renewable resources (such that all the palm oil it sources will be from renewable supplies by 2015) and thinking about the implications not only of the act of purchase but also the use of product.
   Unilever has 400 brands that are used 2 billion times a day around the planet, with about 70 per cent of the greenhouse gas imprint occurring during use. Encouraging sensible and environmentally responsible use of products, therefore, can have a big impact. As Santiago Gowland, VP of Brand & Global Corporate Responsibility, argues, ‘Marketers, with their expertise in innovation and behaviour change, can, and should, be making a significant contribution towards societal goals by enabling consumers to make more conscious choices and encouraging people to adopt conscientious consumption habits.’

Conscientious brands
At the Medinge Group, our annual awards, known as Brands with a Conscience tries to uncover and reward organizations that have integrated corporate responsibility into the core of their thinking: brands such as One Water, that exist to give all their profits away to water projects in Africa, the Swiss private bank, Pictet et Cie that demonstrates a long term perspective and a commitment to environmentalism and Merci, the Paris-based lifestyle retailer whose very existence is based on the idea of improving the lives of people in Madagascar. These brands are all genuinely people-focused and reap benefits in terms of highly motivated employees, committed customers and supportive communities. The interesting challenge is to see whether more businesses (especially larger organizations that can have a significant impact) can fully integrate CSR and become truly conscientious.

Stanley Moss
DiGanZi
diganzi@gmail.com

In the canon of English-language writings on brands and brand management, few documents possess the stature of the legendary McElroy Memorandum known as “Brand Man”. Authored in 1931 by a a 27-year old Proctor & Gamble promotions executive, it inserted into the practice of brand-building seven directives which shaped our perception of brand’s purpose and function in the ecology of the marketplace. This single manifesto created the modern Brand Manager. For more than seven decades its enduring words were regarded with a reverence like that for the Holy Grail, and perpetrated a set of attitudes which beg to be re-examined in the face of brand world today. McElroy is at heart a strategic marketing document. It prescribed dynamic relationships be instituted within teams, and dictated a rigid hierarchical schema for the organization. Its application helped P&G separate brand managers into parallel teams, with each team competing internally with other brands in the company’s portfolio. Teams were mandated to market their own products to the sales force.

While the youthful Neil McElroy understood a brand to represent a cold-hearted economic entity, such a narrow presumption no longer holds exclusively true. The McElroy memo was simply the first step in codifying brands as instruments of an evolving, organic process. The memo limits its focus to fast-moving consumer goods (FMCG), those rapidly-produced products with short shelf lives, which need to be sold in large quantities in order to be profitable; in this particular category new-product creation factors mightily, competition is uppermost in everyone’s mind, and only good performance guarantees brand survival. Business schools, take heed. If McElroy is the foundation for all brands of the future, then we are in for rough waters. That’s because brands are no longer simply tools of marketing departments, or receptacles which hold psychological levers for creating demand and moving product. The equation has upended. Marketing today is a fraction of the brand equation.

We now understand brands to be deeper, broader, more dimensional entities than ever before. But a look at the memo shows why brands became the distorted commercial entities which later came back to haunt Brand Men, and why the discipline engages in such soul-searching, especially in Post-Globalization world.

McElroy’s point 1 shows us clearly where his priorities stand: he directs his Brand Men to take careful heed of units shipped. In the hierarchy of formalization we are dealing with a classic bean-counter mentality. It’s a short-term, simplistic directive which assesses quantity moved as of primary importance. It implies that sheer numbers dictate the highest imperative for brand evaluation. Nothing else takes precedence. There is no future, only an opportunistic present.

Point 2 instructs the Brand Men to examine carefully where brand development is heavy and “progressive”, an interesting and provocative term, especially taken in its historical context. In 1931 “progressive” might have inferred Communist leanings; today the term smacks of fringe cases at the periphery of political movements, possible techno-libertarians advocating secession from the union, free love and anarchy. McElroy asserts that numerical growth is the highest objective, that Brand Men should apply successful treatment to comparable territories. Today’s brand specialist focuses on greater sensitivity to local culture, and pays more attention to local need before overlaying some proven marketing strategy simply because it has worked to sell product elsewhere.

In point 3, McElroy gives five sub-directives for underperforming brands, what he refers to as “light” brand development. He charges his team to study past advertising and promotional history, then evaluate it in the context of the local territory both on supply and consumer sides. Find out the trouble, he writes mysteriously, employing a vast euphemism. Once the weakness has been uncovered, he counsels, make a plan. It’s a statement of pure brute economics, with managers warned to be certain that money budgeted will produce results. Abide by the corporate hierarchy, he goes on, clear it with the District Manager, get buy-in on the local level. In other words, tell your local manager what to do in his own back yard and tell him how to do it. Get him to agree. Next up: hype the sales force, keep them hammering the territory. Write everything down, document, evaluate, assess. In no place does McElroy ask, Is this product needed, redundant, obsolete? Does somebody else make a better one? Do consumers really want it? What consequences does its consumption carry? In 1931 fewer channels of mass media existed for oversight, there was no conception of a problem with disposability and waste, few corporations thought about notions of community, and the term sustainability would not be coined for 40 years. Listen up, brand managers: the world has changed.

Point 4 pins total responsibility on the Brand Manager for the concise communications connected to his brands. This presumes that anything the organization cares to say about product is apt. There is no reference to accurately reflecting product claims, or any consideration of ethical underpinnings. As long as what is said works, it is permitted.

Point 5 addresses the manufacturer’s expenditure at point-of-purchase, quantifying marketing effectiveness at the retail level. We see no recognition of the universe of stakeholder communities which are touched by a product’s existence. Today we acknowledge that advertising adds to mass sensory overload, a form of pollution in an overcrowded environment. McElroy believes if you put the message in front of the consumer, it will be consumed. This is the fundamental corruption of traditional advertising writ large.

Packaging is addressed, but only superficially, in point 6. The Manager is counseled to experiment with and recommend wrapper revisions. We are again firmly in the terrain of marketing, insisting that the package jump off the shelf, differentiated from its competitors, ramping up the claims, doing anything necessary to grab the impulse-driven buying decision. Not a lot of ethics here, and certainly not abiding by Massimo Vignelli’s famous dictum that “the best packages are invisible.”

By point 7, McElroy is back into his corporate ivory tower, advising his Brand Men to see District Managers a number of times a year to discuss any “faults in promotion.” Here is the crux of the unreality: as long as promotion is correctly tweaked, the brand becomes invulnerable. All hinges on the success of promotion, the product lives in a universe independent of any considerations except its own self-interest. Is it any wonder, with subtext like this, that society drifted into a delusional and mindless consumption-driven consciousness?

History is an odd and elastic commodity, which lurches ahead, but mostly plods along, and we have had seventy years of McElroy’s calculating marketing strategies laying claim to the brand. While McElroy is frozen in time, a kind of Peter Pan of brand theory, brand has grown up around the memo. Brands are our silent partners, devices which deliver inspiration, carry promises, help us create our own identities, and stand as symbols for who we are and what we believe. It’s no longer a case of simply selling more units than your competitors. The challenge for Brand Men today is to reflect an understanding of a bigger world out there than one driven by unenlightened self-interest and short-term profits, and that the time is now to focus on truth-telling, to advocate for the greater good, and to always consider the deeper ethical implications of our commercial conduct.

Jack Yan
Jack Yan & Associates, PO Box 14-368, Wellington 6241, New Zealand
jack.yan@jyanet.com

Executive summary
Detroit has not ever used a brand orientation in its automakers’ marketing strategies, and it talks of trimming brands and numbers to allow it to compete. The author believes in being more focused on brands and not losing economies of scale, and building more of what consumers want. The tools are there, such as consumer-targeted blogs, but manufacturers need to use them.

Introduction
Motown has been in trouble constantly since the 1970s. That time, it was its failure to see how the imports were gradually conquering North American market, and when the Arab-Israeli War forced up fuel prices in 1973, the Japanese were already there with models that had great gas mileage. When the second oil shock happened, US companies were still largely ill equipped. Then-Ford president Lee Iacocca noted that sales of its full-size cars were going up, leaving Detroit’s number two without many economy models.¹ The Japanese won again.

Similar patterns began emerging in the 1990s. Then, Detroit was obsessed with trucks and SUVs. It is generally regarded that there is some financial wisdom behind building these large vehicles, as they generate plenty of profit in an industry where US automakers have massive costs, especially relating to union workers’ pensions and healthcare. But it was becoming obvious to only a few that Detroit was leaving its economy models behind, while the Japanese, once again, were sweeping in with up-to-the-minute variants of their Toyota Corolla and Honda Civic.

The author wrote of this folly at the turn of the century, including DaimlerChrysler’s decision to abandon the low-cost Plymouth marque²—in case low-cost, cheap cars became necessary again. In both these cases, the latest (2008) fuel crisis, driven by high prices and speculation, have proven him right. Detroit is scrambling once again, as it did in the 1970s and early 1980s, wondering how to fix itself. And its ideas smack of repetition—since some of them have been proven to have failed the industry before, in other nations.

The problems are long-term ones that cannot be fixed by short-term adjustments. The truck and SUV obsession was a short-term fix, a quest for profits which Chrysler Corp., in particular, rode very well with its Dodge and Jeep lines in the 1990s. But it left Chrysler weak in passenger cars.³ It is to be expected, however, since Wall Street itself has an obsession: that of the quarterly result. This, however, does not bode well for corporations that have to last generations.

Japan seems to lack this problem as investors are perfectly happy for their companies to see out a longer term. While there are exceptions, Toyota has been mostly left to its own devices, its management opting for a gradual evolution of its strategies, cutting costs of manufacture and appointing westerners to the board. It builds, for instance, the Camry and Corolla in more locations than any one US model.

It would be foolhardy to say that Toyota is impregnable. It has weaknesses, in that its cars are considered the equivalent of domestic appliances: reliable but uninspiring. Detroit had attempted such cars before, often with Japanese input. And it found that these models were not true to the various brands owned by Chrysler, Ford and General Motors.

The brand orientation, which necessitates long-term thinking, is what Detroit needs.

This is a bold statement as GM-watchers may be able to point to a failed era where the company did just that. Buick, Cadillac and other GM divisions were, the company claims, run as brands. But this is not true, at least not branding as most professionals understand it. GM made the classic mistake of equating sales to branding: all it did was to regroup into a geographical sales structure and expected its regional heads to maximize sales.⁴ Little consideration was given to the meaning behind each brand, nor was there feedback from consumers. The experiment was deemed a failure.

Others may also point to the failure Ford has had with its brands, even if it has been credited with being a good brand steward of properties such as Volvo and Aston Martin, two which it had acquired in the 1990s. Jaguar, it is pointed out, was always a division that kept needing investment, never making anything for Ford, despite it paying US$2·5 billion. But there, too, Ford misunderstood the Jaguar brand, lumbering it with passé designs that the marque’s customers did not want. While it never wound up merely badge-engineering Ford cars, it cannot be easily argued that Ford’s failures were due to brand management.

The talk around Detroit is of rationalization and killing off brands, getting its costs and sales more into line. GM, it is argued, may have to be content with being a global number-two, and Toyota can remain in its top spot. Retrenchment seems to be the theme.

It’s true that the Big Three need to leave or at least reconsider sectors where they have not created products that the customer wanted. But are they listening? There are enough tools out there on the blogosphere to show that, for example, Ford buyers would prefer the latest European Focus rather than the model it is currently selling. But only GM has made any headway in blogging and listening directly to consumers’ feedback. Ford is blinded by the fact its old-tech Focus is selling well, without realizing that the same behaviour turned the original Ford Taurus from class leader to a has-been model line in less than a generation.

Most of the techniques have existed for decades. Retrenchment and rationalization were pursued by British Leyland in the 1970s on. The company now exists, other than the Jaguar and Land Rover businesses, as an independent company making one MG model, as a division of Shanghai Automotive Industry Corp. Jaguar and Land Rover are owned by India’s Tata Motors.

Toyota, the darling of the motoring press, particularly for its hybrids, does not pursue retrenchment. It is easily argued that it does not have to. But it has been clever in filling niches and using a minimal number of platforms to create a wide variety of cars—something Detroit’s Big Three were once credited with doing and needs to again. Right now, it’s looking at ways to cement the lead, especially in a cost-cutting programme—in the belief that it’s better to do this calmly than being forced to.⁵

This paper deals first with some of the ideas being bandied about the US auto industry for starters, then groups them into techniques that could save the Big Three.

Troubling thoughts in Detroit
Ingrassia⁶ points out that the Big Three have shed 269,440 employees since 2000 and lost a combined $67 billion in the last three years—and that’s not even counting Chrysler for all 12 months of 2007. But at the same time he points out that Fiat turned itself around and posted record profits. Nissan went from lossmaker to profitable in 2001. Chrysler itself was turned around by Iacocca in the 1980s.

The industry, he says, has at least made moves on the union front, which is one of its biggest hurdles.

But some of the ideas that he has found executives mentioning in Motown show the usual maximize-profits-now mentality that landed the automakers into trouble in the first place.

GM
GM has eight brands, and it is believed, some need to go. In fact, GM has more than eight, once one starts counting Opel, Vauxhall and Holden in its overseas arms. Ingrassia reports very geocentric thinking from Detroit: ‘If you’re shopping for a midpriced sedan, for example, G.M. has six. Buick by itself has two. Toyota, by comparison, has just one—the Camry, which sells nearly as many vehicles each year as all six of G.M.’s offerings combined.’⁷

It’s not totally true. Even in the US, Toyota has a Lexus sedan costing what a well equipped Camry would cost. In its home market, Toyota ?elds more than six mid-priced sedans, selling to a smaller total population. While this is a straw-man argument—foreign automakers have a small share in Japan and Toyota nears 50 per cent⁸—the quantity of entrants in any sector is generally not a problem.

The important thing is that each brand is well defined enough without cannibalization. Ingrassia indicates that GM CEO Rick Wagoner is trying to consolidate sales’ channels without trimming the brand line-up. This makes total sense, because there is nothing that suggests that one manager could not oversee two or three brands. The Japanese have generally kept trim structures for its brands. Toyota itself manages three. Having one divisional head oversee two or three brands can work if there are no favourites and each brand’s positioning is well defined and understood.

The short-term thinking is that Saab, Buick, Pontiac, Hummer and Saturn should die. This is the same thinking at DaimlerChrysler that led to Plymouth’s demise. But it is not the same thinking that led to Oldsmobile’s, a GM division, at the turn of the century.

Oldsmobile became an untenable brand for GM because it occupied a very similar market niche—price-wise and psychographically—as Buick. Purists will be able to nit-pick that argument as there were differences between the buyers: Oldsmobile ones sought American quality and tradition, while Buick ones sought presence without arrogance. However, the reality inside GM was that Oldsmobiles were not really given a distinctive character and given that one of branding’s core tenets is differentiation, the brand had failed.⁹

Plymouth, however, was on its way to becoming a distinctive brand with its own design language. Chrysler had already débuted the Plymouth Prowler, a hot rod acting as a halo car for the brand. The next model, the PT Cruiser, was about to be launched, débuting a retro design. The remaining Plymouths, developed as Dodges with different trim, were given scripted badging that hinted at the brand’s more youthful, lively positioning for the 21st century.

A Plymouth division, had it not been for its cancellation under DaimlerChrysler, would have expressed American youthfulness—the PT Cruiser’s initial success illustrated as much—while Chrysler itself would have remained premium, and Dodge sporty.

Instead, Plymouth products were rolled into the Chrysler marque, confusing that brand—diluting it and forcing a repositioning into a sort of American Volkswagen. At least then it posed no greater threat to some of Mercedes-Benz’s lesser models. But Chrysler lost a distinctive brand with value-leading models—which would have helped it today in an age of high fuel prices. Plymouth had stayed away from SUVs and trucks—a great brand image for 2008.

The brand-trimming argument is what caused BL to kill Triumph’s saloons and MG’s sports cars a generation ago. The thinking was that Triumph and Rover saloons competed in the same sector—based on price, they did.¹⁰ Based on brand, they didn’t. There was similar thinking that led to the closure of MG—because Triumph, it was decided, already had a corporate sports car.

The consequence that played out over decades was that BL’s successors lost their economies of scale.

BL was starved of investment, however, which meant it could not have realistically fielded two identical cars with different badges for long. But it had already made steps to group Austin and Morris together, then Jaguar, Rover and Triumph. One divisional head could have overseen well defined brands, putting a sporting version of one saloon into Triumph’s range, and a traditional one into Rover’s. Experts generally agree today, with hindsight, that the failure to understand the distinctive brand attitudes and brand loyalty behind each BL brand caused credible models to be axed.

Even Toyota has been careful in Japan. It fields, for instance, mid-sized front-wheel-drive sedans such as the Camry and rear-wheel-drive models such as the Mark X. They look fairly similar. But it understands that they appeal to different buyers in a market where consumers are likely to be loyal to model lines in the way US buyers are loyal to brands. If this holds true, then Chevrolet, Saturn and Pontiac can coexist, for example.

There is no need to ape Toyota just because it fields just three brands in the US. No US automaker can afford to rationalize its range to that extent, because none has been able to show that a single American brand can sell twice the volume of two defunct brands. A Chevrolet Cobalt might not be able to fill its own shoes as well as that of a Pontiac G5’s, if Pontiac were to be axed. It’s just as likely that those Pontiac buyers would go to the imports. Historically, did Oldsmobile and Plymouth buyers remain with GM and Chrysler after their parent firms killed them?

Brand axeing should take place in cases of overlap or ill de?nition—and a recent example in Japan would be that of Mazda, which bid farewell to many of the marques it tried to create in the early 1990s (such as E?ni and Eunos).

Saab is a distinctive brand that has been starved of new models for years, but it certainly isn’t in as bad a shape as any of Mazda’s old marques. It has two sedans on Opel Vectra platforms, by themselves not that successful. An SUV was put into the range to stop buyers from leaving the marque. Saab’s problems are not down to a brand that has a strong aircraft heritage, the warmth of Swedish culture and a history of innovation—messages that are still continued in its marketing. Saab’s problems are due to the dearth of new models, which means that it fails as a BMW or Mercedes-Benz rival.

It has no ready overlap in the GM universe, and all the brand really needs are new models. GM has made some headway in putting Saab development with its German company Adam Opel. What it needs Stateside is to look at Saab alongside a non-competing GM brand—and any are compatible. In Australasia, Saab is sold alongside HSV and Hummer, two other premium GM brands.

Modern communications could see a very effective platform engineering programme, which GM is already putting in place anyway. This means one team is working on the Opel Corsa E and Daewoo Gentra replacements, which will be sold in the US as the Chevrolet Aveo successor next decade. GM Europe is working on mid-sized cars such as the Opel Insignia and the next Chevrolet Malibu. And GM’s Australian arm, Holden, created the full-size platform underpinning the Holden Commodore and Chevrolet Camaro.

This programme simply needs to be extended further to creating niche vehicles for Saab as well as replacements for its current range—and there is evidence that GM already got that memo. Buick should benefit from this, too: a Lucerne replacement could easily have been developed alongside the Commodore.

Similar arguments could be made in support of Buick’s presence. While that brand has trimmed models in recent years, what it does field is distinctively styled and its brand, too, is well defined. Sheetmetal might cost money, but the majority of R&D goes into automotive architecture—stuff that customers cannot see. Buick and Hummer appeal to very distinctive buyers who are not catered for elsewhere, and Hummer itself is leading the charge into international markets.

That leaves Pontiac and Saturn, which is already benefiting from globalization. Pontiac fields two rebadged Holdens: a large sedan and a truck. Saturn is becoming the American name for Opel: it can easily go from import-fighter to import-seller, provided it keeps its no-nonsense approach to retail, one of its main differentiating factors.

GM has used the rebadging idea well in some markets. In Britain, most Vauxhalls are really Opels—in most of the range, the model names are even the same. For years, Holden used the same method, though now it rebadges several Daewoo models (Daewoo is another GM brand). There is no reason for Pontiac not to have some Holdens, with the rest of the range selling extreme-performance models made in the US. It would increase economies for Holden. Saturnized Opels would also help Opel in Europe reach greater economies there.

If there is one thing that history has taught us is that tastes are cyclical. Muscle cars may be wrong for 2008 but they may be right for 2012. If Pontiac is killed off, can GM successfully deal with that sector then?

The above are cursory brand analyses only. No one should say that that Saturn’s only differentiator is a no-nonsense retail approach. There are plenty of other reasons that Saturn is distinct from Chevrolet or the other automakers’ brands. And those other reasons, especially considering the buyer, probably won’t overlap as greatly as a mere financial, BL-style analysis would suggest.

In fact, Aaker’s ?ve brand equity targets¹¹ are instructive and it is not impossible to maximize all of them, propelling every GM brand to varying degrees of success. GM and its investors need to remember history and why Britain still has a car industry, just one dominated by Japanese and foreign makes.

GM needs to begin by defining its brands and engaging consumer help to get there. It has a good enough support base via its blog, Fast Lane, to which Bob Lutz, its product czar, contributes. People believe their ideas are being heard and Lutz has been making many of the right moves by enlisting the help of global GM divisions. That can only be enriching to brand equity.

One brand that has escaped criticism for the most part is Cadillac, which has at least sorted its design language and styling out, produced products that Americans (especially style-conscious younger consumers) want,¹² so either GM got lucky—or GM has the skill set already within its company.

GM’s other great asset, which it is finally using now with Lutz’s top-down endorsement (another necessity in branding), is its global divisions.¹³ Each has been made a centre of excellence. Each is part of a greater global structure, entrenched in GM behaviour over decades. Toyota centralizes a lot more of its product development, but GM may be able to have each centre work in tandem and bring products to market more quickly.

Ford
Ingrassia is more optimistic about Ford, which has been slimming down, selling Aston Martin, Jaguar and Land Rover. But he is critical of the company’s product range, and rightly so.

At the time of writing, Ford has been enjoying healthy sales in the US with its Focus compact car. However, car enthusiasts have been critical of this model, since it uses an old platform. Even México has the new-platform model in its range, leading some to disbelieve Ford’s reason that the newer model would be priced too highly to be competitive in the US. (Ford also sells the Mazda 3 in the US at a competitive price, and that is on the newer platform.) Alongside the Honda Civic, the Focus seems old hat.

However, expensive fuel and Ford’s widespread US dealer network have meant that the Focus is being snapped up. Some of this is probably due to brand loyalty, too: those that stuck by the company in the days of the truck and the Explorer SUV are looking at the Focus as a simple, bugs-ironed-out model.

As mentioned earlier, strong sales are not always an indicator of long-term brand strength. Should fuel prices come down and people begin repeating their less considerate, energy-consuming behaviours, will they turn to Ford? Many Taurus buyers did not return to the company when they wanted another mid-sized sedan: they went to Toyota and Honda. There are only so many years that a company can sell an old-platform design, and in the age of the internet, car buyers are more savvy than ever.

Ford has a bright spot, says Ingrassia: its CD338 line of sedans (Ford Fusion, Mercury Milan and Lincoln MKZ). He is right, as these have also managed to be sold in South America as well, as premium models. Using an old (but revised and competitive) Mazda Atenza platform, CD338 was developed with good savings, showing that single platforms can be adapted further. The current Taurus, using a Volvo platform, is another example.

But Ford could trim its platforms further and make use of its international divisions. The Ford Mondeo’s European development duplicated that of CD338, and enthusiasts have been supportive of the European car. Ford is ending the duplication with its next B-sector (supermini) car, the Fiesta, which will be sold in Europe, North America, Asia and Oceania.

Ford’s problems in the past were linked to internal politicking, leading many to dismiss the global model. They cite the CDW27 project of the early 1990s to be an example of a car developed in Europe and failing in the US. Its size was often blamed. The reality was that CDW27 was under-marketed, especially as BMW continued to earn sales in the same size segment.

Facing troubles, and with a new leader in the form of CEO Alan Mulally, Ford may well have realized that being a united company has its benefits.

It could do more, as Australian commentators are quick to point out that their countrymen’s big-car expertise is not used sufficiently. But it does make use of Volvo as a safety centre of excellence, and there are signs of change.

From a branding point of view, Ford may well have sorted things with its core brand, steadily sorting its product range out in what appears to be a medium-term plan leading into the mid-2010s.

It has generally been regarded as a good brand steward for Volvo and Land Rover. Jaguar’s problems were detailed earlier and they seem to have been an (expensive) exception rather than the rule. Aston Martin grew under Ford as well.¹⁴

Volvo has been engineering class-leading platforms for the company, it has a well defined brand centring around safety and Swedish design, and it’s a rare case where the (profitable) status quo should be observed. Mazda is Ford’s sporting brand, and seems to trade well on its Japanese origins and philosophy, with halo cars such as the MX-5 and RX-8.

Its problems rest with Lincoln and Mercury. Lincoln was once a proud brand, but with the demise of the Town Car, no longer fields a large luxury model to rival the large Lexus LS and the top Cadillac. Instead, its models are warmed-over Fords, making sense from a cost perspective. Lincoln buyers are indeed different, brand-wise, from Ford ones. But surely they are discerning enough to notice that what they drive does not look that special?

The good news for Lincoln is that it has downsized, something that it failed to do in the 1970s until GM had already made its move. However, Ford is falling into a trap with cars that do not support the Lincoln brand well, and it can hurt the company in the long run. A brand vision was once developed and show cars built (such as one called the Mark IX), demonstrating a renaissance and a design language for the brand. Little seems to have come of it other than adopting the grille design. It shows short-term thinking and Lincoln is being hurt until it can launch more interesting cars. It seriously needs a brand strategy outlined.

If Lincolns are not special, then what of Mercury—which has languished for over a generation? The brand is nearly invisible, it sells cars that are considered upscale Fords, and the company’s financial problems meant that any distinctive models (such as the Cougar) were cancelled.

Mercury could be fixed if Ford simply examines its Japanese affiliate’s range at Mazda, which develops more models than US consumers see. If the brand were defined as a quality import-fighter, it could have a chance at distancing itself from its warmed-over-Ford image. An obvious candidate for “Mercurization” would be the next Mazda MPV.

Chrysler
Chrysler, the smallest player, is now under a private equity firm’s control and is not particularly well positioned. Once a highly respected company in the 1990s, Chrysler had lean R&D processes, exciting niche models and the admiration of American businesses. Forbes called it the Company of the Year.

This was appealing to Daimler-Benz AG of Stuttgart, which took over Chrysler in the late 1990s. As discussed, the Plymouth marque was a casualty. But the takeover was poor in other areas: there were cultural clashes, the brands were never defined to begin with, and the newly merged DaimlerChrysler found dif?culty getting economies of scale with the platforms. Lean R&D suddenly seemed more cumbersome. And the resignations of many of Chrysler’s old bosses—Bob Eaton, Bob Lutz, François Castaing, inter alia—did not do much for the workforce.¹⁵

Dodge was an easy brand to define, alongside Americanness and sportiness. However, Chrysler went from innovative American luxury—its LH big cars were highly acclaimed, as were their successors—to a sort of Volkswagen, having low-priced models such as the Neon and PT Cruiser sitting uncomfortably with the 300 large car.

Brand-wise, Chrysler is all over the place. Ingrassi is right that the company has not fielded a true luxury car for years. It is cooperating with Chery of China on a small car—which might be too little, too late, when it is launched.¹⁶ And when it is launched, where will it go? It would have been ideal for Plymouth.

Meanwhile, Nissan is building a subcompact for Chrysler in South America. Chrysler is building a minivan for Volkswagen at a Canadian plant.

One scenario is to kill Chrysler off, which would dilute Dodge’s brand—since models such as the Chery joint-venture vehicle will have to be absorbed. It would fit as poorly there in buyers’ minds as the PT Cruiser did with the old LHS and 300M large cars. Dodge, after all, has just released a sports car, the Challenger, a retro-design exercise meant to recall an age when its brand was well defined and proud. The Chery JV model could well look sporty—but if it is an economy model, will Chrysler be tempted to put another marque on it?

Having fewer brands will do Chrysler no favours with its future models. Any disease the parent brand has will simply be passed on. Its saving grace is Jeep, which has not been tarnished greatly; in fact, Chrysler has been quite good at managing that brand and, for the most part, delivering the right product.¹⁷

While it might make some sense to streamline further, buyers make their decisions about a brand quickly. Brands are shortcuts so consumers can grasp their message quickly, hence the need for recognizable brand “attitudes”.¹⁸ And Dodge and Jeep have distinct characters that shouldn’t be tampered with for fear of turning consumers away from that easy recognition and brand equity. Chrysler can be redefined as a quality marque, one with a dose of snob appeal but everyday prices—if it can really deliver that quality. Taking the halo effect of the 300, its most recognizable model, and bringing it on to smaller models isn’t a bad idea—but it remains to be practised.

It will never be a Cadillac rival in the foreseeable future, unless some of those rapid R&D and tight inter-business relationships can return to make it a lean niche-filler. Those glory days weren’t that long ago.

The solutions
First, each of Detroit’s Big Three has some homework to do, in understanding their brands’ visions, what they mean, and what they can mean. They can involve the public via the blogosphere, in a country that has high internet penetration. This will show transparency and a willingness to engage with the American car buyer, whom each company needs to win back. Or, they can do the exercise internally with cross-functional groups, but properly¹⁹—there is no more room for a lip-service nod to branding as there was in the 1990s.

Secondly, the Big Three need to understand just what makes their cars appealing. Aaker’s brand equity elements are a good start but the quest for them needs to be constant.²⁰ The Japanese may have used W. Edwards Deming’s principles over decades to get their quality up. American companies need to leap-frog that by being more engaging, being open where Japanese companies act closed. Continued understanding of consumer tastes via the blogosphere is one method; using that to inform future tastes is another. Feedback is important, and it has only recently played a part in the marcom end of the Big Three. Prior to that it only had customer clinics.

Thirdly, there is an untapped generation, namely the young people who are either too young to drive or getting into their first cars now. What has informed their choices? The author is willing to bet that while there are some who love muscle cars, there may be many more impressed by models that conserve energy.

Fourthly, US automakers are among the heaviest R&D investors—and they need to bring more innovation to the market more rapidly.

Fifthly, they need to realize the effect of a loss of economies of scale. The historical models are there. The key is to build the cars consumers want²¹—something that GM and Ford actually do quite well in Europe. If Levitt is right and there is a homogenization of tastes²²—BMW and Porsche operate on this notion, and Toyota does in the mid-sized and subcompact sectors—then foreign bases need to be used more effectively. It’s not about shutting factories and firing personnel, but being more sincere about delivering for future consumers.

Summary
Killing brands, as any observer of British Leyland has demonstrated, is not a solution when those brands are well defined, contribute to economies and have brand loyalty, recognition and perceived quality. Even if a brand contributes to economies alone, it can be saved through repositioning.

The US automakers need to put in play longer-term thinking. Chrysler is most dire at the moment, and Ford, while leaner, could do more with Lincoln and Mercury. Ford itself has excellent product and needs to show it can overcome regional politics. In neither case should they feel forced in delivering short-term results. In Chrysler’s case it may be able to demonstrate to its owners that it can do well without the pressure of share prices.

General Motors has all the necessary ingredients for survival. It has shown a willingness to engage consumers, find ways of making use of its foreign operations and look at ways of retaining brands and economies of scale.

Being true to their brands can help US automakers get back to a strong position. Setting one’s sights lower and claiming easy victories was certainly not the way Toyota rose to number one. Honda climbed from obscurity to Japan’s number two—and it has one of the US’s top-selling models—by setting higher goals. British Leyland should be a constant reminder of what not to do—unless the Big Three want to wind up being subsidiaries of foreign firms, their marques mere reminders of better times.

Notes
1. L. Iacocca and W. Novak: Iacocca: an Autobiography. New York: Bantam Books 1984.

2. J. Yan: ‘Where Is DaimlerChrysler Heading?’, CAP Online, February 12, 2000, <http://www.jyanet.com/cap/2000/0212ob0.shtml>.

3. J. Flint: ‘Company of the Year: Chrysler’, Forbes, January 13, 1997, pp. 83 ff.; q.v. E. A. Robinson: ‘America’s Most Admired Companies’, Fortune, March 3, 1997, p. F-2.

4. M. Kerbs: ‘G.M. Will Pare as Many as 1,000 White-Collar Jobs’, The New York Times, August 5, 1998.

5. P. O’Connell (ed.): ‘The Man Driving Toyota’, Business Week, July 22, 2005 (also online at <http://www.businessweek.com/bwdaily/dnflash/jul2005/nf20050721_7169_db053.htm>).

6. P. Ingrassia: ‘Who Will Survive?’, Condé Nast Portfolio, June 2008, pp. 86–95.

7. Ibid., at p. 93.

8. I. Rowley: ‘Toyota Set to Top 50% Market Share in Japan’, Business Week, ‘The Auto Beat’, November 1, 2007, <http://www.businessweek.com/autos/autobeat/archives/2007/11/toyota_tops_50.html>.

9. See, e.g., E. Shapiro: ‘Is Oldsmobile Name a Marketing Lemon?’, The New York Times, October 29, 1992.

10. The Triumph brand is owned by BMW, which understands that from a branding perspective, it poses a threat to its core range.

11. D. A. Aaker: Managing Brand Equity. New York: Free Press 1991.

12. J. Yan: ‘The Brand Attitudes of Automobiles’, New Age Branding: Concepts and Cases, vol. 1. Hyderabad: ICFAI Press 2002, pp. 101–13, at pp. 105–6.

13. Remaining divisions such as Cadillac simply need to get the product right: the author understands that its much-lauded CTS sedan, for example, still falls well behind its German rivals on the interior. Meanwhile, Opel does acceptable interiors. This is a single example of GM’s unused assets.

14. J. Yan: ‘The Brand Attitudes of Automobiles’, op. cit., at pp. 111–12.

15. Ibid., at p. 111.

16. Not every company has been successful in cooperating with Red Chinese companies. Chrysler has had some experience with its Beijing Jeep venture, among others, but not with Chery.

17. Some cannibalization has been risked with models such as the Jeep Commander, and its low-end passenger-car spin-offs have questionable appeal for the brand long-term.

18. See, e.g. J. Yan: ‘The Brand Attitudes’, op. cit., and W. Olins as quoted in J. Yan: ‘The Attitude of Identity’, Desktop, October 2000, pp. 26–31.

19. See, e.g. J. Yan: ‘The Brand Attitudes’, ibid.

20. Toyota’s success factors are discussed in ibid., at pp. 108–9.

21. See, e.g. G. Green: ‘Meet the Inspirational, Indefatigable Geoff Polites’, Car, June 2008, pp. 130–3, at p. 132.

22. T. Levitt: ‘The Globalization of Markets’, Harvard Business Review, vol. 61, no. 3, May-June 1992, pp. 92–102; cf. M. Griffin: ‘From Cultural Imperialism to Transnational Commercialization: Shifting Paradigms in International Media Studies’, Global Media Journal, vol. 1, no. 1, fall 2002, <http://lass.calumet.purdue.edu/cca/gmj/fa02/gmj-fa02-grif?n.htm>.

This paper has also appeared in CAP Online.

Thomas Gad
Chairman, The Medinge Group
Founder, Brandflight
thomas.gad@brandflight.com

Stanley Moss
CEO, The Medinge Group
Founder, Diganzi
diganzi@gmail.com

When Scandinavians read news about global warning, it somehow does not feel like news to them. It is more like a repetition of something they have heard and feared for years. A long-standing awareness that environmental protection of unique natural resources was necessary has been under discussion at home for decades. They understood the threats, the consequences of pollution and the price to be paid for damaging the richness and variety in flora and fauna. They knew this in turn would severely change the climatic conditions on earth. How did they know this? Because it was a part of their education at elementary schools in Scandinavia for the last 20 years.

Energy saving in this region has a long history as well. During cold winters, when electricity produced in local clean-water generated power stations was insufficient to cover the demand for electric heating, Scandinavians were forced to buy power often from dirty coal-fuelled power stations in eastern Europe. Events like these were a part of their upbringing and it created a deep-rooted understanding of the issues and consequences. Sustainability has never has been such a dramatic story as it now is in world media. Scandinavians find it rather boring, a presumption they probably share with the Germans. After all, the influential German Green Party was established 1985 and Scandinavia has had its own green parties and powerful political factions for as long as people can remember. Thus, last year’s environmental warnings did not really shake anyone up. People simply shrugged their shoulders and said, it had to happen some day in the face of all the reports about global warming. In essence it was old news to them.

What impresses branding professionals is how powerful the concept brand, ‘Climate Change’, has become and how quickly it developed. Another surprise: how strong the personal brand ‘Al Gore’ has got, certainly more potent than if he had simply become another president of the USA. It does demonstrate to Scandinavians the abiding importance of the USA in world opinion-making. Scandinavians have the conviction that this time climate warnings may finally be for real. There is hope that at least it leads to global action.

Inaction by the rest of the world was precisely the problem previously. Nordic citizens felt alone in their vanguard interest about sustainability issues, ahead of their time. It was they and the Germans and possibly the Californians (with smog-stricken Los Angeles) who concepted the first models of responsible thinking. This perhaps sprung out of the New Age movement, which also emerged in Sweden. Nobody else seemed to take it seriously. Swedes later felt sceptical towards the USA for not signing the Kyoto protocol, an erosion of trust over the inability globally to decrease carbon dioxide emissions. After all, the biggest and most consuming nation in the world had turned its back on the crisis after contributing so significantly to its creation.

Sweden’s responsible environmental consciousness is largely political and grew up in combination with the social-democratic tradition and the idea of a welfare state. Government always takes responsibility in setting the rules for social issues. This may explain one reason for the world’s highest rate of income taxation. In Sweden, this so-called Swedish model has lately been under attack, and the new non-socialist government has it on the agenda to adjust the model, so as not to wreck it all together.

There is still a widespread consensus across all political parties about the fundamental principle of governmental responsibility. This consensus about collective responsibility naturally translates over to Scandinavian brands. Scandinavian companies are good at following the rules. At the same time these are nations with small domestic markets and who need to export to survive. They have always been aware of global competition. Scandinavian industries have complained that the social responsibility they have borne has been excessively one-sided, and that it has made Scandinavian products more expensive. This causes Scandinavian jobs to be threatened. Yet, as there are few changes in the policies, so Scandinavian industry has long been compelled to accommodate the expenses of social and environmental responsibility in its operations and costs.

The Nordic paper industry, a world leader, has manufacturers like SCA and Metsä-Tissue and strong European consumer brands like Lambi, Libero, Libresse, Serla and Katrin. These brands are good examples of companies who not only adjusted to the sustainability rules, but developed environmental policies far beyond what the regulations required. They invested in new technologies to turn dirty production into a cleaner one, for minimal impact on nature.

The strong global sustainability trend has led into more self-critical discussion. Industry and government ask: are the brands and businesses in Scandinavia more progressive than the brands in the rest of the world, or have they lost their competitive advantage? Global attitudes move quickly now. Scandinavian brands feel threatened on their own ideological home turf.

Veckans Affärer, the biggest weekly business magazine in Sweden, published its second yearly “green” issue in 2007. The big question posed concerned national sustainability leadership. They asked: who is leading? The magazine editors concluded that there is a “wait-and-see” attitude in Sweden and in Scandinavia at present. What does the widespread global alarm require companies and brands to do more than they are already doing? And how deep will be government’s role in this new climate? The government in Sweden for the first time in more than a decade leans non-socialist and more liberal, a new political landscape. What exactly will this government do, how much will it regulate, and how much responsibility will it delegate to industry?

Scandinavian brands historically regarded green issues as a way to get PR and nurture better image domestically, but the message was not promoted abroad. Companies felt the public out there did not care that much. Now the situation is different. Most serious companies and brands in Europe have some kind of visible sustainability strategy. Green issues have moved from an “extra” to something “included”. Companies and brands are subjected to greater scrutiny over the reality of their sustainable credentials.

Experts today acknowledge how much more difficult it is to stand out using sustainability as a branding tool. The question is now more one of accountability; what do the companies behind the brands actually do, not simply intend to do?

Today, companies feel a pressure to demonstrate anything, and it can often turn into something resembling a bad joke. When Air France desperately offers a ‘carbon footprint calculator’ prominently on their website home page, so that you can calculate the carbon footprint of your flight with the airline, little can be done with that information. All airlines confront the consequence of a basically dirty technology and no real light at the end of the tunnel.

For a large polluter like an airline, every reduction is a positive one and proper action demonstrates the sustainability of your brand. A good example of this hands-on Scandinavian approach, a kind of imperative to impress the national audience, is Scandinavian Airlines’ (SAS) very successful Green-Landings programme. Advanced communication and coordination between aircraft navigation computers and the computers in the air traffic control system have been developed. This yields the capability to calculate the most environmentally friendly flight path. SAS has already performed over 1,000 green landings, and every landing saves 100 kg of fuel and 200 kg of carbon dioxide. SAS knows that once all its planes systematically participate in the programme carbon dioxide emissions will reduce by 90,000 tons per year, equalling emissions from 20,000 cars driving 15,000 km yearly on average. SAS, after three near-to-crash incidents, is resolutely selling off an entire ?eet of Bombardier de Havilland DASH-7 aircraft, costing the company an estimated €250 million and damaged credit ratings. This is being done to preserve SAS brand equity, for which responsibility, reliability and safety are key values.

Another Swedish brand, H&M, has taken a leading position in sustainability issues and earned a degree of acclaim for it nationally and internationally. The company operates in 28 countries and has more than 60,000 employees all working to the same philosophy: to bring the customer fashion and quality at the best price. The brand is now one of the most identifiable, visible and valuable of Scandinavian marks. H&M has leveraged its brand equity from cheap clothing into fashion brand by co-branding with famous designers like Karl Lagerfeld, Stella McCartney, Victor & Rolf and Roberto Cavalli. Alongside its commercial success, this company demonstrates solid principles of entrepreneurship and a strong sustainability positioning, all the more dif?cult in a business where unnecessary over-consumption, cost-shaving, and issues of ethical production will be the inevitable accusations. H&M has grown into one of the most demanding fashion producers in the world, through determined sustainability policy, hard work, and not just sweet talk.

Today the company stands as a benchmark for the industry. H&M’s active code of conduct encourages compliance with local labour law, statutory pay and working hours, the right to organize and bargain collectively, a ban on child labour, a ban on discrimination, a ban on forced labour, health and safety in the workplace, and compliance with local environmental legislation. All suppliers are monitored by independent auditors. H&M is such a major buyer that this ripple effect has been felt throughout the entire supply side, especially in China. Status as an H&M supplier has become a crucial demand when negotiating production contracts and prices with these suppliers.

Many discussions occur about how to engage the alarming global warming scenario. Scandinavia has a social tradition which encourages state-initiated consensus between politicians and industry, with a reliance on entrepreneurial creativity. This got a boost during the dot-com boom, when mobile phone development, largely achieved by Nordic engineers, resulted in the establishment of world-leading brands Ericsson and Nokia.

Sustainability is not exclusively concerned with environmental questions, but also with issues of public health. Traditional Swedish controls on alcohol, a severe anti-drug policy, high taxes and state-shop-monopoly contradicts the reality that the state owns one of the most high-profile Swedish brands, Absolut Swedish Country Vodka. This brand first began to gain international prominence in New York at the time when Russian vodkas were banned, a response to the Soviet invasion in Afghanistan. The ban came to include the Canadian brand Smirnoff for the simple crime of having a Russian name, thus driving more vodka-drinkers to alternative labels. Propelled by a rise in the global demand for clear spirits, its popularity in gay culture, trendy bars, with the art community, by clever artistic advertising and a clean, almost-medical design, Absolut came to personify the Swedish attributes of purity and political and environmental cleanliness, represented by a bottle. The current Swedish government has put Absolut up for sale, and all the world’s spirit conglomerates are lining up to bid. Some nationalistic Swedish investors would prefer to keep this iconic national brand Swedish.

IKEA was rewarded last year by the international branding think-tank Medinge Group with one of their yearly Brands with a Conscience awards. The award referenced IKEA’s anti-corruption stance, speci?cally citing its business in Russia, where 300 invited guests for the launch of a new Moscow store were unceremoniously turned away from the celebration. Official permits had not been delivered, owing to IKEA’s refusal to pay bribes to the authorities. In Sweden, IKEA’s homeland, the company is considered to be a sustainability leader among Scandinavian brands (together with H&M and Volvo). IKEA’s strict environmental policy aligns closely with founder Ingvar Kamprad’s sparse and lean management principle—no waste in the economics of the business, environmentally or with energy. IKEA took the initiative to promote low-energy products and is today the leading distributor of low-energy light bulbs. ‘Good design for everyone’ is one of the founding principles and the attitude generally is very democratic and Fair Trade-oriented concerning suppliers, employees and customers.

With this much history in place, sustainability in Scandinavia appears equivalent to a hygienic factor, and consequently a bit boring. Once the claims have been made, actions are more important than words. Companies have discovered it is critical to communicate value beyond sustainability itself. A good example of how this works can be seen in instances where organic food and sustainability are considered in tandem. It is not enough to create the impression of responsible conscience with the consumer. One must deliver more to ensure commercial success. With organic food, the good feeling and the perception of better and more natural taste is important. Svenskt Sigill, an ingredient brand for a variety of different Sweden-produced food products, emphasized its Swedish origin and the good taste (‘Home-made’ is the slogan), with greater prominence than the fact that its line is produced to stricter sustainable standards than ordinary food.

The importance of combining sustainability values in the brand with higher product performance can be seen in the Swedish start-up EcoMarine’s ?rst non-toxic biological paint for boats. Toxic paint has long been a problem for environmentalists in Scandinavia. Boating is a uniformly popular pastime; in fact, most households in Sweden have at least one boat, sometimes several. Frequently these are rather large sailing or motor craft. All existing paints for boats are either toxic to repel growth of algæ and sea grass on the hulls, or non-toxic but lack the repelling effect. Toxic paint is forbidden, since it releases amounts of pollutants into the sensitive waters of the Baltic Sea and the otherwise pristine lakes in Sweden. Recently EcoMarine introduced a paint formulated with natural bacteria, which not only keeps algæ and vegetation off the boat hull, but also creates a slimy surface which increases performance and speed of the boat. Environmentally speaking, it decreases the amount of energy needed to drive the boat through the water.

The performance argument is always the winning one. It is a similar position to that which promotes biofuel ethanol, which increases the performance of the bio-powered car, in comparison to gasoline-fuelled engines of the same size. Saab successfully employed this concept in their brand building, until the argument lost some of its lustre when it became widely known that ethanol (although itself non-carbon dioxide-producing) requires objectionable quantities of energy and carbon dioxide emissions to produce and distribute.

The combination of good conscience and good performance is the wave of the future in Scandinavian sustainability innovation and branding. Swedbank-Robur’s highly successful fund management has shown the market-place real dedication to sustainable investments for 15 years. They consistently argued that such investments could perform very well, or at least as well as non-sustainable ones. Swedbank-Robur has proven that a combination of doing good with good financial performance is a winning proposition. Proofs like these of a successful balance between the opposing sides of the sustainability discussion will always make a huge impression on performance and consensus-seeking Scandinavians

This paper has introduced the argument that Swedish brands have moved beyond other countries’ positions on sustainability. There are lessons to be learned here about the implications for other brands. It is clear that non-Swedish brands will follow the same trajectory, raising their awareness of challenges, solutions and consumer attitudes. Countries without the social democratic model may find it more difficult to follow Scandinavia’s lead, but with the volume of alarm raised every day in world media, and the UN’s recent report which documented the urgency of global warming awareness, velocity towards sustainable behaviour can only increase.

Somewhere out in consumer world there is an opportunity to develop an area of research which evaluates the effectiveness of how sustainability incorporates into the real fabric of organizations. This could be a sustainability orientation measure, which considers the extent to which sustainable thinking is central to decision-making. A project done in Sweden called Brand Orientation Index looked at the degree of brand orientation of 500 Swedish companies; perhaps this is the model to replicate on the course to a global sustainability orientation index? Where else but in Sweden will vanguard thought like this occur.

This paper also appeared in the Journal of Brand Management.

Nicholas Ind
Equilibrium Consulting, pb 5822 Majorstuen, 0308 Oslo, Norway
nind@equilibriumconsulting.com

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The argument of this paper is a simple one: creating value for customers is an organization-wide responsibility. This is a step removed from most approaches to the subject, which see marketing as an instrumental function and give emphasis to marketing as the primary, if not the sole, driver in building a brand. In this line of thinking, marketing is what marketers do to customers when they take what the company produces and re-present it. Yet marketing is not a department but a process by which the organization connects with the world around it. Also marketing theory and practice should not only be concerned with the external and marketing communications but also with the difficult internal reality of aligning the different parts of the organization.

When marketing only has limited organizational influence—when it is disconnected from other activities within the organization—the challenge of delivering a coherent offer is that much harder. Functional areas push in different directions and the appearance, functionality and presentation of the products begins to lack clarity. Alternatively, if marketing is connected with the rest of the organization; indeed if the whole organization is involved in delivering the brand, coherence is much easier to attain.

If this sounds theoretical, this scenario applies to an actual case: the launch of Apple Computer’s strategy based around the metaphor of a ‘digital hub for a digital lifestyle’. This metaphor, announced by Steve Jobs at Macworld 2001 in San Francisco, expressed a new vision for the brand and encompassed several new Apple products: new computers and integrated hardware for recording CDs and DVDs, iTunes and iMovie. Soon afterwards the metaphor heralded the launch of the iPod, Apple’s expansion into audio products and services and the introduction of Apple’s own retail stores.

At the time, Fortune magazine (November 12, 2001) was moved to compare Apple’s success with Intel’s problems: ‘Why in the world would Apple want to jump from the frying pan of the virtually profitless PC industry into the roaring fire of the hypercompetitive consumer electronics business? After all, just a few days before Apple’s splashy introduction of the iPod, Intel announced that it would close down its own disappointing consumer electronics division, which made, among other things, portable MP3 players, digital still cameras, kiddie videocameras, and a much ballyhooed digital microscope. For starters, the iPod fits right into Jobs’ so-called Digital Hub strategy for the Macintosh.’

The vision encapsulated in the strategic metaphor was not only was a driver for internal cohesion so that the organization could focus on those areas that best delivered the idea but it also became a widely used phrase by the media, such that each new service and product innovation launched by Apple was integrated into the metaphor. The whole process thus became a self-reinforcing circular movement that has enabled Apple to be consistently interesting and interestingly consistent.

One of the developments within marketing thinking that has tried to deal with the problem of marketing’s overtly external emphasis which too often leads to disconnected thinking, has been the emergence of the concept of ‘market orientation’. This approach extends the role of marketing by suggesting its role should be not only to sense movement in the environment but also to shape the organizational response by connecting with other business functions and departments. This indicates the role of marketers: to face simultaneously inwards and outwards and connect the organization and its audiences.

The principles of market orientation
Although the underlying ideas of market orientation have been around since the 1960s, it was two pairs of writers in 1990, who began to define and refine the concept: Narver and Slater¹ and Kohli and Jaworski.² Rather than simply focusing on the point of interaction with customers, they turned inward to explore how organizations could use customer knowledge to build organization-wide responses. Kohli and Jaworski saw the concept as referring to ‘the organization-wide generation of market intelligence, dissemination of the intelligence across departments, and organization wide responsiveness to it.’ Narver and Slater (1990) featured some similar elements, seeing market orientation as: (1) customer orientation; (2) competitor orientation; and (3) interfunctional coordination. However, Narver and Slater’s emphasis is on market orientation as organizational culture.

The virtue of market orientation is that it stresses the importance of connecting the organization together to deliver value to customers. It seeks to overcome the problem of siloization that is prevalent in organizations. Jaworski and Kohli in a 1993 paper addressed three specific questions: (1) why are some organizations more market-oriented than others?; (2) what effect does a market orientation have on employees and business performance?; (3) does the linkage between a market orientation and business performance depend on the environmental context? Based on two national samples the researchers came to the conclusion that market orientation is related to top-management emphasis, the risk aversion of top managers, interdepartmental conflict and connectedness, centralization and the reward system orientation. Moreover, a market orientation is related to overall business performance (but not market share), employees’ organizational commitment, and esprit de corps. And even more important, the connection between market orientation and performance appears to be consistent across environmental contexts that suffer from varying degrees of market turbulence, competitive intensity, and technological change. We might conclude from this that there are no environmental reasons to prevent market orientation and plenty of benefits.

Yet there is one area of market orientation that has been underplayed: implementation. A market-oriented culture is not only about interfunctional coordination or the type of organizational factors that enhance or impede the implementation of the business philosophy. Rather market orientation is a consequence (although it in turn reinforces) of a supportive organizational culture, HR and leadership. To develop this line of thinking we have developed the concept of participatory market orientation: a fusion of internal and external market orientations with an emphasis on realising the potential of market orientation.

Participatory Market Orientation (PMO)
A participatory market oriented philosophy aims to help the organization to become more participatory, such that it involves both its employees and customers actively in the process of brand development. This belief in the value of participation should steer the way investments are made in both internal and marketing activities and recognizes their connectivity. It suggests as a principle that rather than an over-reliance on traditional marketing communications to build a brand that funds are allocated to become entrained (synchronized) with customers and to integrate a relevant organizational response encompassing communications and actions.

An example of this entrainment process at work is the Grathak Katha (consumer’s voice) events held by the Bangladeshi mobile operator, GrameenPhone. GrameenPhone is the leading mobile telecom company in Bangladesh with a 48 per cent share of the market and 16·5 million customers (2007). This is a high growth market, but to take account of low incomes, GrameenPhone’s business model is designed to work with customers whose average spend on mobile telephony is $2 per month.

To better understand its customers and develop innovative ways of selling its services, the company conducts regular market research studies into the performance of its brand and particularly the delivery of customer service. However, in addition to this research, GrameenPhone has initiated a process for removing the distance between the company and its customers. This participative approach involves regular meetings between employees and customers in an environment that is both social and businesslike. The idea is to obtain direct interaction with customers both as a way of enhancing the reputation of the brand and as a means of learning about and learning with customers.

At the event itself, GrameenPhone matches the attendees one-to-one with employees so that there is the opportunity for personal dialogue. On these occasions research is conducted and results presented, new products are discussed and customers provide ideas on new opportunities. The idea is to mix the formal and the informal and such has been the momentum behind the process that music performances at the events are by groups that combine employees and customers playing together.

GrameenPhone has discovered that the quality of the feedback is high and the comments are genuine. Customers are not concerned with trying to either attack or please GrameenPhone, they just try to offer input and to relate their experiences. In one year the company conducted more than 300 events with over 200,000 participants. The key to maintaining the interest in the process both within GrameenPhone and externally with customers is the rapid processing of information, the actions taken as a result of input and the feedback provided.

Marketing Director, Rubaba Dowla Matin, argues that the success is due to the organizational capability to validate, categorize, analyse the data and to involve the relevant teams in the organization. It is these cross-functional customer management teams that play the vital role in determining the nature of the insight and generating action and communication. This investment into deep and direct insight and the willingness to encourage organization-wide participation have been the catalysts behind the success of the initiative and the company’s burgeoning reputation as an innovator.

Overall, when such external–internal investments as that made by GrameenPhone are managed effectively it increases its brand equity, which in turn enhances brand value. This final linkage is based on the premise that enhanced awareness and customer loyalty to the brand is the best indicator of the security of future cash flows. This way of thinking goes beyond market orientation because of its explicit link with brand value and because of the emphasis on engaging audiences to ensure that a market orientation leads to effective action.

Marketing’s role then shifts subtlety in this scenario. When the overall organizational goal is to enhance customer value there is a requirement for an organization-wide commitment to customers and a supportive culture, style of leadership, governance and human resources policies. Partly marketing must have an internal market orientation to help achieve this organization-wide perspective and partly it must be a key element in building bonds with customers and sharing knowledge about them inside the organization; externally sense-making and internally sense-sharing. This internal–external approach builds the brand.

The value of this twin perspective is endorsed by a study of Sweden’s 500 largest companies³ that shows organizations with the highest brand orientation index (BOI), where branding is the hub of operations, are characterized by an ability to combine both an internal and external focus. Interestingly, the profile of high brand-orientation companies is found in roughly the same frequency among business to business and business to consumer companies (50–50) and goods to services (57–43). This study reinforces the link between brand orientation and profitability, by demonstrating the correlation between the two with the group of leaders in terms of orientation showing operating profits almost double the lowest brand orientation group: ‘the most important outcome of this study is that we have been able to establish a clear link between brand orientation and profitability: the more brand-oriented a company is, the more profitable it is.’

In spite of the BOI research, most operationalizations of marketing ideas are developed around products and external markets. Yet it should be clear that a focus on human capital and on enhancing brand delivery capacity is of vital importance in delivering customer value in both products and services.

In recognizing the importance of human capital and internal market orientation, it is clear that external market orientation must be kept in focus. It may be important to ensure that employees are truly engaged, but it must be remembered that the value of this engagement is in the delivery of value to customers. Thus the marketing department should cooperate with the HR department in developing the brand, while it should also work at being finance-orientated to improve understanding of the connection between investments in marketing activities and financial performance. Equally, responses to events, such as a change in competitor activity, a move in market share or new patterns of customer behaviour all require the organization to work in an integrated way across internal boundaries. The ability to do this effectively requires a participatory market orientation (an outside-in, inside-out way of thinking). This is something that the organizational culture has to encourage and that leadership must demonstrate by its communications and actions. Something the BOI study endorses with its (not surprising) discovery that in the most brand-oriented companies, the executive management group is very active in brand-related activity.

Notes
1. J. Narver and S. Slater: ‘The Effect of a Market Orientation on Business Profitability’, Journal of Marketing, vol. 54, no. 5, October 1990, pp. 20–35.
2. A. K. Kohli and B. J. Jaworski: ‘Market Orientation: The Construct, Research Propositions, and Managerial Implications’, Journal of Marketing, vol. 54, no. 2, April 1990, pp. 1–18.
3. Brand Orientation Index: a research project on brand orientation and profitability in Sweden’s 500 largest companies. Label AB in cooperation with Frans Melin, 2005.

Adapted from N. Ind and R. Bjerke: Branding Governance. Hoboken, NJ: Wiley 2007.