Businesses exist in a state of perpetual change. They have to adapt and transform themselves at a pace equal to, or quicker than the world in which they exist. Failure to do so ultimately leads to stagnation and extinction.
In the 1950s, Unilever founder Lord Leverhulme said that he knew half his advertising was wasted, but he did not know which half. An MD today could update that statement by proclaiming they knew the worth of brand investment but not its value. At monthly board meetings across the business community, owners and managers address the traditional issues of cashflow, expenditure, investment and capitalisation. Rarely however, is that ‘intangible asset’ (corporate brand) given consideration, despite often being the asset with the biggest net figure set against it on the balance sheet.
BUT WHAT IS BRAND?
What it is categorically not, is an ‘intangible asset’. In reality it is the most tangible entity of any organisation, conveying direction, intention and positioning to all critical audiences from investors to employees. Neither is it a singularly superficial badge of uniformity, a logo, a look, or the founder’s charismatic personality.
A brand is simply the collective perception derived from expectation, image and experience and these are projected through reputation, branding and product.
For embryonic and young growing businesses there is a paramount lesson to be learned from the catalogue of brand failures. To be successful you must have absolute synergy between the building blocks of brand, reputation, and product. Failing on one would result in a business that is ‘synergetically challenged’ and misfiring on two or more would be indicative of a business that was ‘synergetically dysfunctional’.
Take for example the BMW Mini – everything about it is right. The product is a fantastic design of the moment – massproduced individuality. Only two in 100,000 are likely to have the same specification and with exciting derivatives such as the new convertible, the company is keeping its product fresh and ripe for market. The combined brands of BMW and Mini are extremely strong, while the reputation of BMW and its owners the Quant family – although both briefly tarnished by the Rover debacle – is now back to full strength. Result: strong brand, strong product, strong reputation. A real win, win, win situation, and a prime example of a true synergetic business.
Not so the lamentable Rover. This once proud brand – at least in the 1950s, ‘60s and early ‘70s – is a shadow of its former self. The product line-up is too ‘long in the tooth’ and the reputation of those running the business – and therefore the business itself – has been tarnished by fat-cat accusations and ‘noses in the trough’ press speculation. Result: ailing brand, mediocre product, poor reputation. A classic dysfunctional business.
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