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Critical Thinking

The Power of Branding as a Change Agent

Critical ThinkingFOXBusiness

Ask 10 CEOs what “branding” means and you’ll get 10 different answers. It’s no small irony that there’s so much brand confusion about the term. And the personal branding hype of recent years certainly hasn’t done it any favors. If nothing else, it’s trivialized and undermined one of the most powerful strategic tools in a chief executive’s arsenal.

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Having worked with and advised many chief executives attempting to reposition, turn around, or change the culture at their company, one thing was consistent across the board: they were all universally skeptical of a brand’s galvanizing effect – it’s power as a behavioral change agent – until they saw it for themselves.

Part of the problem is the word itself. It originally referred to burning or permanently marking with a hot iron. No wonder it’s more closely identified with logos and company or product names than with anything else.

Even Steve Jobs, the consummate marketer, hated the word branding. He didn’t like what it represented in some people’s minds. He wanted Apple’s (NASDAQ:AAPL) marketers to teach customers the value of its products – what they could do and how they could be used – not to push them on people.

Nevertheless, when Jobs returned to the company he co-founded, it was an ad campaign – Think Different – that captured and reinforced a mindset that would lead to a remarkable string of iconic iProducts. It was that philosophy that would transform a nearly bankrupt and beaten company into the most valuable brand on Earth.

It’s a remarkable coincidence that the same year Apple launched Think Different, its arch-nemesis, IBM (NYSE:IBM) – five years into a turnaround of its own – rolled out a bold new vision for transforming the business world in the form of its e-business campaign.

When he first took the CEO job at the floundering giant, Lou Gerstner famously said, “The last thing IBM needs right now is a vision.” But he would later realize that, to leverage all the pieces of IBM’s vast empire into cohesive technology solutions and save the company, he would need to change the mindset of Big Blue’s employees and its customers.

The problem was that IBM was famous for having independent divisions that fiercely competed with each other, both for internal resources and for customers. To change that inbred culture, Gerstner would have to incentivize executives to work together and give them a cohesive goal to work towards. And customers would have to buy into the change, as well.

It was a monumental challenge, to say the least. But the solution, in theory, was to come up with a single credible vision – in the form of a new brand platform – and align all the executive’s goals and compensation accordingly. In time, their behavior would change. And once they started delivering IT products and services as integrated solutions, as advertised, customer behavior would change, as well. Again, in theory.

That’s more or less what Gerstner did. And it worked. IBM would eventually become known as a global IT solutions provider, but in 1997, it was the nascent concept of e-business – that customers could use the Internet to transform key business processes – that helped to galvanize and transform the company and its customers.

I’ve successfully used that same strategy many times, first as a CMO and later as a management consultant. There are three secrets to its success:

First is the vision piece. You have to get the brand platform right. That’s the real magic.

Second is the compensation piece. It’s critical to align the management team’s compensation plan so everyone’s working together toward the same goals.

Third is the communication piece. If the concept makes sense, it will resonate with all stakeholders inside and outside the company. But you’ve still got to communicate it effectively.

That’s how the pros use branding strategy as a galvanizing force to change company culture and customer behavior. As you can see, personal branding is trivial, by comparison. It’s certainly no coincidence that neither Steve Jobs nor Lou Gerstner had much of a public presence outside their respective companies.

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