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

J. Yan: ‘Saving Detroit, by Not Making the Same Old Mistakes’, The Journal of the Medinge Group, vol. 2, no. 1, 2008.
PDF version

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 fields 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 definition—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 Efini 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 five 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 difficulty 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-griffin.htm>.

This paper has also appeared in CAP Online.

Thomas Gad
Chairman, The Medinge Group
Founder, Brandflight

Stanley Moss
CEO, The Medinge Group
Founder, Diganzi
diganzi@medinge.org

T. Gad and S. Moss: ‘The Second Wave of Sustainability Hits Swedish Brands’, The Journal of the Medinge Group, vol. 2, no. 1, 2008.

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 fleet 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 difficult 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, specifically 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 first 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.

Tony Quinlan
Chief Storyteller, Narrate Consulting

T. Quinlan: ‘An Introduction to Storytelling in Employee Branding’, The Journal of the Medinge Group, vol. 2, no. 1, 2008.

Introduction
Let’s begin with clearing up a potential misunderstanding. Storytelling is a misnomer. It conjures up the image of a passive audience sitting listening to someone with the charismatic, persuasive power to entrance them. It revolves around a carefully constructed story designed to carry you out of the day-to-day to somewhere else and change your thinking while you’re there.
   To some managers, it sounds like a dream come true. To most of us, however, that would be a nightmare. In an organization, charismatic persuasion and the ability to direct someone’s thinking smacks more of cults and propaganda than modern-day work practices. (And cults are less effective as organizations—they are typically blind and less resilient.) If this was what you were hoping for from this article, please leave those thoughts at the door.
   What is on offer here for proponents of employee branding—or “employee engagement”, its more trendy cousin—is more powerful and more positive than that simplistic view. The real power and opportunity for using stories in organizations is in listening to stories, helping others to create their own authentic stories and making sense of the stories told.

Why stories?
Why tell stories in the organization at all? After so much research and honing of practice, good communications departments are skilled at producing clear messages, good copy and straightforward values or mission statements. With such clear direction, good data and evidence of what to do next, shouldn’t that be enough?
   Sadly not—because neuroscience shows us that people rarely make decisions on the basis of rational analysis of data at the best of times. And when they are under stress, or being measured against a target, or being asked to change their behaviour, rational argument and values do nothing to persuade them.
   Thinking otherwise, though tempting, is trying to lever human behaviour and organizational culture into a process that can be analysed, planned and repeated. We all know from our own experiences that that is patently not the case.
   Instead we know, from Gary Klein’s Sources of Power: How People Make Decisions, that people make decisions according to the cognitive patterns they have created in their heads. Indeed, they don’t even make decisions according to the most appropriate pattern, but rather to the first pattern that the perceived situation fits.
   These patterns can be viewed as internal, personal stories—and understanding these stories will take us a long way towards understanding patterns of behaviour in the organization. By sharing alternative stories, and helping people see the world through the perspective of a different story, we can open up the possibility for others to shift their worldview and subsequently their behaviour.
   A valuable tool in Narrate’s work is the Cynefin framework (Figure 1), created by Dave Snowden, and the concepts behind it. It’s applicable in many different areas, but can be used to distinguish key themes, areas and projects and the recommended approaches to them.

Figure 1
The Cynefin framework

   In a vastly simplified description, culture falls into the Complex domain (for a fuller explanation of the Cynefin framework, read ‘The New Dynamics of Strategy: Sense-Making in a Complex and Complicated World’, referenced at the end of this chapter). Here causality is blurred, many different elements combine to create overall effects and results will never repeat exactly.
   In this domain, control is impossible, influence essential. Here, patterns of belief and behaviour dominate.
   It also requires different actions—trying out certain elements, waiting to perceive the results and then acting to reinforce the emerging patterns or disrupt them if they are negative. It can be about creating boundaries and attractors, by reinforcing desirable behaviours and disrupting undesirable ones.
   By contrast, the complicated domain does have repeatable cause-and-effect chains, although these may be extended through various stages. Here, we can analyse or bring in expert help to identify how results are created and impose processes to repeat them. Too often, we have tried to cram employee engagement into this domain.
   Given the vagaries of human behaviour and belief, I believe organizational culture sits squarely in the complex domain. I suggest that management—based in process, measurement and hierarchy—is more inclined to sit in the complicated domain.

What is engagement?
Not persuasion, for a start. The desire to see engagement as a one-way communication in which “employees are engaged” is evidence of an old-fashioned mindset—power, decisions and control lie high up the organization. Those further down the hierarchy are tasked mainly to obey. Here, engagement is merely a means of persuading people, while giving an illusion that the choice is theirs.
   This view cannot be effective for much longer. Compared with even 10 years ago, people in organizations have changed. The old days of a willing, compliant workforce were an illusion. The truth was always that organizations have no control over people, only levers of influence.
   No longer willing to take at face value what’s being told to them by the organization, people have far greater access to information than ever before, and more ways of expressing their own opinions. Equally, they are more experienced at deconstructing any organizational communications—making them masters of cynicism when it comes to the usual parade of internal communications tools and messages.
   In the ’80s and ’90s, much of the goal of internal communications (such as it was in those days) was to inspire company loyalty—I still remember being asked why I wasn’t more loyal to the organization. Yet the idea of inspiring loyalty was fundamentally flawed—it’s a two-way thing. Once the organization had proved that it was not loyal to you—as most did repeatedly in those of “downsizing” and “re-engineering”—it became apparent to all but the most hardy company men, that loyalty to the organization was not a long-term secure prospect.
   In the ’00s, we’ve abandoned the concept of organizational loyalty, been through internal branding and are now on to engagement—how do we engage our employees? And yet the same applies: engagement is a two-way contract. And while our organizations are very keen to ensure our people are engaged, how engaged is the organization with our people?
   Until the organization becomes engaged and concerned about the well-being of its people, engagement is going to be a limited concept—and one doomed to fail in the same manner as loyalty did.
   To borrow a truism from knowledge management, ‘Engagement can only be volunteered, not conscripted.” But before that can happen, there must be a level of trust, which itself only arises through a sense of being seen and heard.

Working with stories
Although when I first came to using stories in organizations, it was about crafting stories to communicate particular messages, this is a role that has been almost completely dispensed with as our practice and use of stories has developed.
   The Narrate model (Figure 2) sets out the general approach. It begins with a general sense of what the opportunity is, but the first step is then to gather material to map the current perceptions and culture—collecting real, authentic, naturally-told stories. It’s critical to realize that listening to stories emerge is more useful than crafting stories or telling them in the early stages.   No single story will ever give you an accurate picture of the organization—but the patterns that emerge from multiple stories, the shapes of events and beliefs, the archetypical characters that emerge are what provide the most powerful opportunities to view the world as others see it.
   Similarly, few single stories will engage with employees. Better, instead, to support them with multiple viewpoints and perspectives on a situation, and then facilitate them understanding their own roles and stories ahead.
   Having said that, it’s important to note too that even listening or diagnostic events generate expectations among the audience. Every intervention is a diagnostic and every diagnostic is an intervention.
   With all this material, there is then a need for sense-making exercises for key members of the organization. The patterns that emerge may indicate a gap in material which may lead to more story gathering. The patterns may also have implications for the original impetus for the project—which may need reshaping or rescoping as a result.

Figure 2
Process map for narrative engagements

   With a greater understanding of the culture and the opportunity or need for engagement, it’s then possible to identify leverage points in the organization where relatively minor actions will produce significantly larger results. At the same time patterns will have emerged that are healthy or unhealthy and these can be reinforced or disrupted as required.
   From here, all the range of HR, change and communications’ tools can be brought to bear on the issue—with narrative clearly playing a part within that.

Cognitive patterns
One of the great assumptions of communications is that if we give people clear instructions and data, they will change. That is, we as human beings process information to make decisions. As I mentioned earlier, recent advances in neuroscience show that this is wrong—that instead we make decisions by processing patterns, not information.
   This has important connotations for the standard model of internal communications and employee engagement. It nullifies traditional practice of clear messages, well-written copy, etc.
   Far less the frequent approach of quantities of data to prove a hypothesis. If we already have a belief about how the world works, it takes significant quantitative and qualitative data to shift that.
   Our inclination as human beings is to make the information and data we are given fit our preconceived ideas. It is not until there is significant difference between the data and our model that we open to the possibility of our model being wrong.
   So, in communicating effectively—engaging—with people within the organization, we must look for ways to bring their cognitive patterns to awareness. Not to change them, but to allow for the possibility of greater understanding and common negotiation of a shared viewpoint.
   As Burns put it:

   These cognitive patterns are, from one perspective, simply stories or scripts that predict consequences and inform behaviour and decisions—perspective filters that determine how we see the world.

Data, principles, information are usually context-less
One of the other core reasons for using story is the poverty of traditional value lists and mission statements as communications tools. The following story from Wikipedia about US congressman Lynn Westmoreland demonstrates it beautifully:

Westmoreland appeared on the Better Know a District segment of The Colbert Report on June 14, 2006. Stephen Colbert noted the fact that the congressman has co-sponsored a bill to place the Ten Commandments in the House of Representatives and the Senate. When asked to name all the commandments he was only able to remember three; one, “don’t lie,” was only partially correct (the Ninth Commandment is an injunction against “bearing false witness against your neighbor,” not lying per se). Westmoreland’s press secretary claims Westmoreland actually got up to about seven of the Ten Commandments before petering out, but that part was edited out. Said the secretary, “I challenge anybody outside of the clergy to try to (name them all).”

   This reinforces something critical in most organizational communications. The 10 commandments form a solid base for much of the west’s legal, moral and ethical practices, regardless of your personal religion and belief, yet few people can name them.
   That list of corporate values, principles or beliefs that has been slaved over for so long and encapsulates the organizational ethos. What are the chances of remembering them? And what are the chances of actually acting on them?
   Now, parables and stories on the other hand are memorable, understandable and actionable—because they are more in line with the way our brains and behaviour patterns work. But on the surface, they’re just not as intellectually impressive as ‘Thou shalt make the customer thy God.’
   Stories also carry with them context and causality—allowing audiences to determine when and why actions were taken, something that pure principles cannot do, therefore creating the (usually erroneous) assumption that they apply at all times and in all situations. (The reality, of course, is that they don’t apply universally, and most people adopt workarounds when the principles don’t apply. The difficulty, however, becomes when is it acceptable to ignore organizational principles and when is it not? Not is usually the moment just after the work-around has failed and the manager needs a scapegoat.)

An anatomy of stories

What makes up a story?
People talk about stories in organizations frequently, but the object of the discussion is rarely a real example of an influential, appealing story. Too often, it’s a disparate series of supposedly important events that occurred to a faceless group of people. For the sake of those involved, it usually conforms to the standard organization planning process.
   In school, we’re taught that a story has a beginning, a middle and an end. This originally came from Aristotle’s poetics, so it seems to be a solid basis for thinking about stories. However, a beginning, a middle and an end also describes a snake, so perhaps it’s not going to give us much idea of what an engaging story really consists of.

A sympathetic lead character
First, engaging stories are about people. Ideally, a single person is the main character in any story. Someone with enough in common with the audience to help them empathise with the character.
   Organization stories are too often about groups or divisions or, worse still, the overall organizations themselves. But we don’t engage with these stories because we can’t empathise with how it feels to be a corporation or a group. Where stories are concerned, we need single person protagonists. (There are exceptions—sports supporters being a good example of individuals associating with a national or regional identity.)
   A group of people is less interesting than a single person. Someone like me is more interesting than someone unlike me. So, when listening to a story about change, I’ll be more engaged with a story about someone coming to terms with what the change is about, what it might mean day-to-day, what the chances are of being made redundant, how threatened they are at a personal level by the change, rather than a story about meeting stakeholder expectations, returns and principles for the future.

A clear problem
A story without a problem is just a portrait—and not engaging.
   In Hollywood, they talk about ‘the inciting incident’—something that means that the setting of the story can no longer remain the same. In an organization, it might mean a takeover threat, a fundamental change in the market, but not “efficiencies”.
   The inciting incident must matter to the audience (or at least it must obviously matter to the lead character). Without the impetus of good inciting incident, there is no momentum in the story—and the audience has no reason to care.

Tests and obstacles
One of the greatest flaws in most organizational stories is their sense of being sanitized. A good story proceeds from the problem through challenges and obstacles, making and resolving mistakes along the way. Most corporate stories go straight from problem to resolution in a straight line. The lack of mistakes and real obstacles (as opposed to obstacles that are automatically resolved by a new product we’ve just introduced) is what brands these as propaganda.
   In most engaging stories, the obstacles increase in difficulty or complexity as the story goes on—increasing a sense of tension and risk. Interesting, engaging company stories tend to revolve on the “bet-the-company” decisions.
   Robert McKee, the screenwriting guru, talks about story events as being meaningful chosen moments that illuminate the entire life of a character. The same applies to stories in organizations—they must be chosen moments that illuminate something deeper about the culture. In particular, a story reveals character in those chosen moments through the choices made by the lead protagonist—especially when they’re under stress.
   So finally, a good story will feature a choice made in a moment of pressure—and that is when the reader learns about the real values of the character in the story.

References
   G. Klein: Sources of Power. Cambridge: MIT Press 1999.
   McKee, Robert; “Story”; Methuen 1999
   D. Snowden and C. Kurtz: ‘The New Dynamics of Strategy: Sense-making in a Complex and Complicated World’, IBM Systems Journal, vol. 42, no. 3 (available through www.cognitive-edge.com).
   I. Shah: The Exploits of the Incomparable Mulla Nasruddin. London: Octagon Press 1985
   C. Heath and D. Heath: Made to Stick. New York: Random House 2007.
   H. Gardner: Changing Minds: the Art and Science of Changing Our Own and Other People’s Minds. Harvard, Mass.: Harvard Business School Press 2006.
   E. H. Schein: Organizational Culture and Leadership. Hoboken, NJ: Wiley 2004.

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

N. Ind: ‘A Participative Approach to Brand Building’, The Journal of the Medinge Group, vol. 2, no. 1, August 2008.
PDF version

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.

Sicco van Gelder
Placebrands

S. van Gelder: ‘How to Improve the Chances of Successfully Developing and Implementing a Place Brand Strategy’, The Journal of the Medinge Group, vol. 2, no. 1, August 2008.
Microsoft Word version

1. Introduction
Place branding (for countries, regions and cities) is a relatively new discipline and inevitably people have many questions about it. One important question is how to successfully brand a place. This question actually consists of a number of discrete questions, namely whether:

• Branding is more suitable for some places than for others?
• There are pre-existing factors that increase the likelihood of successful place branding?
• There are factors that improve the success-rate of the brand development process?
• It is possible to predict the success of a place brand strategy?

This paper tries to answer each of these questions by describing the criteria and factors that contribute to successful place branding. By assessing the place, the players and the plans they make, it is possible to predict the likely success of a place branding initiative.

2. Should all places brand themselves?
There is a debate whether all places should be actively branding themselves or that the method is more appropriate to some places than to others. There is a perception that places facing some sort of crisis are more likely candidates than places with stable economic, social and cultural settings.
   Although a place that faces a crisis may become acutely aware of the weaknesses of its brand and decide that it is high time to do something about it, there is little evidence to suggest that crises in themselves are a reason to brand a place. This is due to two factors, namely:

• brands are not built (and seldom even destroyed) in a day. Place branding is certainly a long-term endeavour and requires years of consistent and persistent actions for the brand to take shape;
• branding will not help solve the crisis simply because only decisive and targeted actions will do so. The brand will however, provide the context for solving the crises and the brand’s strengths should be applied to the solution. A strong brand will also help to mitigate the effects of a crisis as the crisis will not be (one of) its only claim(s) to fame.

If it’s not places that face immediate calamity, catastrophe or disaster, then which places can most usefully apply branding? Certainly, some kinds of places are more likely candidates for place branding. These include:

• places that face intense and increasing competition. These places are obvious candidates because they need to sharpen their competitive edge to retain or improve their positions. This is currently happening in southern Africa, where the rise of South Africa is putting pressure on the neighbours. In Europe, competition between major cities has increased over the past decade and a place such as Amsterdam finds itself competing with Madrid and Barcelona for visitors, investors, talent and events. Similarly in Asia, Hong Kong is facing more intense competition from the likes of Shanghai and Singapore;
• places that face complex development tasks, such as areas of urban expansion, regeneration and transformation. These places need to have a very strong sense of what they wish to become, what they will offer and how they will function, which is what branding can offer them. Examples are mixed-use waterfront developments that dot the cityscapes around the world: Hamburg, Toronto, Lyon, Melbourne and the like;
• places that face a slow and steady decline. Such places often lose businesses, inhabitants, institutions and events at a pace that doesn’t start the alarm bells ringing until the scale of the problem becomes acutely apparent. These places have the opportunity to stop and even reverse their slide if they act in a concerted effort to shore up their brand. Examples are Southampton in southern England and Cleveland, Ohio in the USA;
• places that have lived through a crisis and need to reinvent themselves. These places have had a major crisis that has completely altered the economic, social and (sometimes) cultural structures. There is no opportunity to reverse the situation and the only thing left is to completely rethink the brand. One of the most obvious examples is Bilbao in Spain that has reinvented itself as a tourist destination after the collapse of its manufacturing base. Other examples of places needing to reinvent themselves are Belfast and Detroit.

3. The likelihood of successful place branding
Not only is there discussion about which places should develop their brand strategies, there is also debate about what preconditions improve the likelihood of success. We find that having the following characteristics contribute to a place’s ability to brand itself:

• unity: the key stakeholders of the place need to agree to come together to shape its future by developing and implementing a brand strategy. This is not a given in most places. Stakeholders have seldom sat together to discuss their shared future and to determine how their views on the subject coincide and differ. And in even fewer places have stakeholders actually decided to act to jointly shape that future. We’ve worked in places where bringing together the stakeholders and getting them to work together was the hardest task of all;
• diversity: places that are more economically, socially, culturally and naturally diverse stand a better chance of developing a strong and effective brand. This is due to the fact that place branding is not an exercise in reduction, but rather one of adding or enhancing layers of richness. Diversity gives such places like Vancouver, Kuala Lumpur and Cape Town their attractive edge;
• initiative: places whose stakeholders already (jointly) undertake (marketing) initiatives. These provide necessary experiences beneficial to the place brand development efforts. This is due to the fact that they have already accepted the need for changes and are taking actions to bring them about;
• experimentation: there also needs to be a willingness to take risks and a certain tolerance towards failure of experiments. Often, accepted ways of working are entrenched and people stick by what they know. Risk aversion is often prominent in some of the large (and bureaucratic) organizations that are key stakeholders of many places.

4. What is required to successfully develop a place brand?
Not only are there existing factors that improve the likelihood of success for place branding. More importantly, there are factors that influence the success of the brand development exercise itself. These are:

• partnership and leadership: a place brand can only successfully be developed and implemented by the key stakeholders of the place. It is not a task to be left to the government alone. The organizations that can shape the future of the place through their actions, investments and communications should come together in partnership and should demonstrate shared leadership in the development and implementation of the place brand strategy. In lots of places, government departments have been tasked to brand and market their city, region or country and the results are mixed at best;
• vision and strategy: the first thing the brand partners need to do is to share and compare their views on the future of the place and make sure that they develop a shared vision of a greater magnitude than the sum of their individual visions. Existing visions often are highly sector-related (in one case we found 23 visions for the same city) and do not rise above the commonplace of a great place to live, with the best possible healthcare and education and jobs for everyone. Once they have agreed a shared vision, the partners need to map out a strategy for the brand of their place that they can jointly deliver;
• appraisal and creativity: the brand partners need to be realistic and understand what has shaped the brand of their place so far, and what has worked in the past and what has not. That should, however, not preclude them from finding new ways of doing things, from developing original ideas and from creating innovations for their place;
• “on brand” implementation: finally, the partners need to involve other stakeholders in realising the brand through actions, investments, attraction programmes and events that demonstrate the brand in action.

There is an immense task here of managing the stakeholders and their activities and communications to ensure that agreed initiatives are carried out, consistently and “on brand”. The brand partners must, therefore, decide how best top organise this task to ensure effective implementation of their plans.

5. When is a place brand a success?
Finally, there is the question of when a place brand strategy can be considered to be successful. In other words, what should the place brand embody of to become successful?

• value and purpose: the brand is a promise of value and one that needs to be kept. The more valuable the place brand is to its key audiences, the more likely they will be swayed by it. The brand also provides a sense of purpose to the place’s stakeholders, as it embodies the things they want to achieve. The stronger this sense of purpose, the more likely that stakeholders will pull together and deliver. Too often the brand of a place does not provide a common purpose, but only a trite slogan: City of Lights (Anchorage), the Friendly City (Orange Country), Get in on It (Baltimore), Every Day Is an Opening Day (Atlanta) and It’s Cooler Here (Edmonton);
• truth: the brand needs to reflect the reality of the place. Place brands are largely built on people’s experiences of the place, on recommendations by trusted endorsers, and on what goes on in the place. Any dissonance between the brand’s promise and these realities harms the place brand’s equity. The experience of the rough immigration treatment meted out to visitors harm the brand of the USA. The scenes of the scores of itinerant labourers sleeping on the streets of Mumbai can come as a shock to a first-time visitor to ‘The Fastest Growing Free Market Democracy’;
• inclusive and for the common good: the brand must appeal to the local community and must provide it with tangible and intangible benefits. Only if the place’s brand is embraced by its population, businesses and institutions will it also be credible to outsiders. In Bangalore local pride groups conflict with what are seen as the “outsiders” of the city’s booming IT industry. In a bid to appease these activists, the city government decided to change the official name of the city to Bengaluru, which is the local pronunciation and the city’s IT companies have started to fly the local flag. Neither move will do much unless the Kannada population of the city feel that they have a stake in the city’s future;
• creativity and innovation: the brand must help to encourage and release the resourcefulness and inventiveness of the stakeholders in their quest for realizing the place brand strategy. The brand should promote new ways of working, investing and communicating and advance new and original ideas, products and services. Newcastle-Gateshead kicked off a flurry of creative activity with the Angel of the North, a huge steel statue along the motorway, and followed this up with the distinct Millennium Bridge, the Baltic Centre for Contemporary Arts and the Sage Concert Hall. All a far cry from its drab and dreary post-industrial past;
• complexity and simplicity: the brand of a place needs to reflect its richness and not try to reduce it to a single utterance or representation. However, at the same time, the core of the brand must be straightforward enough for people to grasp its value easily. Italy stands for style, France for romance and Japan for perfection, but we also know that these places have a lot more to offer that makes them distinctively attractive;
• connectivity: the brand must help to connect up people, businesses and institutions inside as well as outside the place. A brand that allows and encourages people to rally around it stands a far better chance of being successful. In some cases, making use its diasporas’ relationships with the home country help to fan the brand’s flames. Cases in point are Ireland, India and China;
• validity: a brand must remain relevant to its stakeholders and audiences over a long period and it can only do so by delivering consistent value to them. This does not mean that the brand should remain unchanged. The world changes and so do people’s wishes and expectations, the competition (and what they have to offer), and economic, social and cultural developments. It is important to regularly check and preserve the soundness of the brand over time and to take appropriate actions for it to retain its significance.

6. Risks and rewards
Place branding is an intricate activity and chances of doing it successfully rest on a proper understanding of the factors that influence the outcomes. Without understanding the risks involved and how to reduce these to a manageable level, success is unlikely and subsequent failure will simply prove what the (inevitable) critics have said all along: ‘It’s a waste of money that could have been better spent on health, education, housing, infrastructure, etc.’ But if there are possible risks, there are also potential rewards to successful place branding, such as:

• improved and sustainable competitiveness, e.g. for attention, investments, jobs, inhabitants, institutions, visitors and events;
• higher returns on investment, e.g. in real estate, infrastructure, promotions and events;
• coherent development of the place as physical, social, economic and cultural planning join up to realize the brand’s promise;
• pride in the place, as the population, businesses and institutions experience its (renewed) sense of purpose and direction;
• unsolicited praise, approval and endorsement from media, celebrities and (international) institutions;
• increased word-of-mouth among (foreign) target audiences as personal experiences and a wish to be associated with the place create a buzz.

Ian Ryder
British Computer Society

I. Ryder: ‘Issues and Challenges of Developing and Managing Brand Strategy in a Not-for-profit (Chartered) Body’, The Journal of the Medinge Group, vol. 2, no. 1, August 2008.

No brain-food—just a sector anecdote!
The same rules apply: we all know that “rules is rules”, right? Could we try a maybe?!
   I recently (nine months ago) took a new position working in a professional body, one of the largest of its kind in the world, which also happens to be a registered charity and incorporated under a Royal Charter. After a lifetime in the corporate world I can tell you: the rules are different! Not the fundamentals of brand strategy, clearly, but the processes and procedures of development and execution.
   Perhaps a few words of explanation about ‘Royal Charter’ are needed, because this means little or nothing to anyone outside UK shores.
   The only bodies that can award a ‘Chartered’-status professional qualification are those that have been granted a Royal Charter by HM the Queen. Whilst it is a major honour, this has huge implications if you find you want to do anything significant on branding. There are two main issues and several supplementaries.
   First, chartered organizations have a governance structure that requires a Trustee Board (TB) to have oversight and ultimate responsibility for performance. This usually comprises volunteers who are part-time, unpaid, and can come from absolutely any walk of life and any professional background. The TB then delegates authority to a CEO and Executive Board who are responsible for the operational execution of the organization’s strategy (and sometimes they don’t!).
   Secondly, any change to the organization’s range of activities or, critically, name, must be approved by what is called the Privy Council—essentially a sign off by HM the Queen.
   The “supplementaries” include a range of things related to this governance, involving many stake-holders, members included, who feel they can have a say in this and, therefore, not surprisingly there exists the potential for major disagreements between a part-time TB and the full-time team of professionals and EB who, probably rightly, usually believe that they are best qualified to make such key decisions. One of the biggest pains of all, though, are timing and process.
   Often a TB will only sit six times a year and, even then, really substantive issues will have trouble finding agenda time. But it can take a staggering 12–18 months just to get approval for a name change and corporate rebrand, which includes the need for a member-approved motion at an Annual General Meeting followed by a Privy Council seal of approval—not guaranteed, and they only meet twice a year!
   This is not to say that such organizations are not fun to work in and with, or that they don’t share many of the same brand challenges as their arguably more fortunate commercial brethren, with only “normal” governance and market forces to manage. All the issues of needing to generate commercial revenues in a competitive market-place in a service business still apply. This means all our much-loved challenges of positioning, product development and management, customer service management and indeed brand and marketing strategy development and execution, in the broadest sense, still apply.
   The key challenge is that, if you thought your only issue was to convince your CEO and fellow board members who are likely to have both familiarity with marketing principles and have the final decision, then consider the need to first do that, then take it through the process described above. This is where there is a very good chance the majority of your TB–member agreement has to come from people who may never have even heard of the word brand and if they have, it is guaranteed it was in the wrong context and with such limited knowledge that they won’t understand what you are proposing or why.
   Rather than this be just a simple “ramble” about how lucky profit-making commercial organizations are—even those B2B companies that still have far too many “critical but knowledge-challenged” individuals—I thought maybe I’d drop in a brief summary of tips for anyone working in, or agencies considering pitching for, this kind of organization.
   1. Get a really detailed understanding of the fundamental governance constraints, together with a timetable of key Committee, Council and Board meetings.
   2. Understand the background of Trustees so you can see the scale of your challenge, or the extent of your support.
   3. Have a very clear plan and timeline, always important but critical in this case.
   4. Creating a small sub-group of three or four from the TB to take with you on the journey will make the final TB sign-off so much easier—it may even be passed!
   5. Learn to manage uncertainty and develop your proposals and arguments carefully—and make sure you do this a long time ahead!
   6. Exercise enormous quantities of patience.
   7. Whichever god you believe in—ask for help!
   We’re on our journey though, having developed a new marketing strategy alongside the slower development of our brand strategy using a variant of a process model I’ve used before, this time facilitated by one of the really good, smaller brand consultancies, UffindellWest.¹ We will get there, and I look forward to writing up that journey as a case study sometime during 2010.

Note
   1. The CEO and owner of which is one of our own Medinge members.

Patrick Harris
thoughtengine
patrick@thoughtengine.co.uk

P. Harris: ‘We the People’, The Journal of the Medinge Group, vol. 2, no. 1, August 2008.
PDF version

Abstract
This paper considers the importance of employees in the process of building customer experience. The pape