Brand New View

Bluster is not Evidence, Revenge is not Justice

There is considerable momentum these days in favor of supporting an argument with firm evidence. Several news reports earlier this week about the ouster of JC Penney’s CEO Johnson after only 18 months on the job stated that his ideas were based on gut instinct, rather than evidence or testing. While there are undoubtedly many other factors that led to his dismissal, investors and boards take a dim view these days of leaders who operate solely on belief. That’s not to say that instinct isn’t important, or that Johnson isn’t talented (he is, and remains respected for his retail prowess). But today’s hyper-driven, high performance expectations business world does not have patience for those that cannot quickly deliver results (right or wrong). Providing evidence to support claims lends credibility to the author. At the same time, bold new ideas should be encouraged, so the challenge is how leaders are able to tie the uncertainty of their proposed innovations with the realities of what their organizations have confronted--in effect, using evidence to build confidence. 

On the political front, we’ve seen how evidence can be sidetracked by bluster. Witness the sheer volume of protests from the NRA in its efforts to derail gun control legislation. Evidence, like science, is hard to refute, yet gun advocates are using bluster to support their case. Shouting is not evidence...it is just loud and, like any noise, people will eventually turn down their volume controls when it becomes irritating, which is one of the reasons a dozen or so GOP senators that tried to filibuster the gun control legislation yesterday, in an attempt to prevent debate on the Senate floor, were defeated. Gun rights advocates would be better served with a reasoned, evidence based argument, allowing their perspective to be more thoughtfully considered in comparison to the point of view from gun control advocates. 

With respect to leadership, Harvard b-school’s Rosabeth Moss Kanter wrote a piece in HBR online back in February in which she quoted General Douglas MacArthur, who said that “revenge is not justice”. She adds that revenge is also not strategy. As we watch the NRA make threats of revenge against those in Congress who support gun control legislation, one has to wonder how effective such a scorched earth tactic will be in furthering the long-term aims of 2nd amendment absolutists. Kanter points out that many of the great leaders we admire gain their respect, and place in history, because they forgive. It is unlikely the NRA will forgive those who vote for gun control, but is revenge the best response? Missing from their arguments is a sense of controlled, thoughtful persuasion based on evidence. And their credibility is further hampered by evidence that its own leadership has contradicted its position over the years, from once supporting background checks to reversing this stance in more recent times.

Wherever one stands on the issues of the day, it seems clear that evidence and forgiveness are a useful combination for helping to build credibility, and trust. A key test of leadership is knowing how to use these two ingredients to create value, while consciously resisting the temptation to shout or use revenge, which risk destroying value.

Inspiring Design Can Reap Significant Rewards

I worked at Nike when the company moved in the early 1990s to its now famous world headquarters campus in Beaverton, Oregon. Moving from buildings once scattered across the Portland region to a central campus was important by itself, since it brought people together regularly who previously interacted only intermittently, stimulating new ideas and greater camaraderie. Just as exciting was the design of the campus. Personally, I had never seen anything like it before--stunning buildings named after iconic athletes, a state of the art fitness center, running trails, tennis courts, a lake, a fantastic set of restaurants, barber shop, child care, and more. It was a self-contained city. The offices were almost zen like in design (there were few actual offices with doors and walls, most were Nike’s unique interpretation of portable cubes...), with open spaces everywhere. There was an energy about the place that was positive, electric, competitive. The design elements were an essential part of the company’s overall mission to create the best sports products in the world. Why? Because deadlines were real (you NEVER missed a deadline) and the pressure was intense to make sure your product lines were the very best, even when compared to the other sports categories, so the design created an open atmosphere that was highly effective at fostering rapid decision making. This relentless atmosphere is not for the faint hearted, but for those who love sports there is no place like it, and the company’s campus is vital to supporting the overall brand experience it seeks to promote. I loved it.

Great design is found in my current line of work as an academic as well. Stanford Graduate School of Business’s new Knight Management Center opened in 2011 and showed how sustainable design can be used to create practical, and beautiful physical architecture. The Lundquist College of Business at the University of Oregon added the Lillis Business Complex in 2003, using photovoltaic cells in the building’s design to provide energy, and subsequently won the prestigious LEED-NC award (NC=new construction) for its environmentally friendly design. SP Jain School of Global Management has three superb campuses in Singapore, Sydney and Dubai, each architecturally unique and consistent with culture in which it is located. Students benefit from these world class facilities, as do faculty and staff.

There are many more examples of great design, from centuries-old wonders like Ankor Wat and European cathedrals, to modern marvels such as Singapore’s Marina Bay Sands, London’s Gherkin, and Seattle’s Public Library. Dubai is emerging out of the economic malaise of the past few years and returning to its ambitious plans for designing stunning, and sometimes head-scratching, buildings. The Burj Khalifa, Dubai World, and Dubai Palm Island are well known and more recent additions to the world of unique design. Dubai’s Meydan Racecourse, completed in 2010, is yet another contribution to the world of breathtaking architecture. To be sure, each of these are designed to capture the public’s imagination, but they must surely be interesting and even compelling for those who work there. Design by itself does not create great corporate cultures that inspire employees to do their best work--it merely provides the house in which great work is possible. But humans are inspired by their colleagues as well as their surroundings. Design is vital to creating a great brand experience for people inside and outside the organization.

Developing a Brand Culture

Among the companies studied for my book Competitive Success-How Branding Adds Value, was Samsung. Their dramatic growth since 1993 was the result of intense focus on quality management, including emphasizing a very specific corporate culture that would support every facet of the firm’s ambitions. In 1993 Samsung was a lower tier manufacturer and essentially unknown outside Korea. Today it is the global market share leader for smartphones and is doing very well in other electronics products as well. Bloomberg Businessweek features an excellent article by Sam Grobart about Samsung’s rise, including the transformation of the company’s culture. From the Competitive Success findings, we were able to categorize brand culture into four components, two of which are individual and two are group:

Individual

1. Competencies--These are the formal individual skills and ‘must-haves’ top performing brands seek in their employees. Some companies saw these as the minimum costs of entry to the firm, others saw these as a dynamic baseline benchmark that drove the development ongoing employee training and education programs; but in all top brands, the search for talented people with unique competencies was paramount. McKinsey, the global consultancy, is well known for hiring the best and brightest from top business schools with specific skills. 
2. Behaviors--I describe these as the Five Ambassadors, which I have discussed in previous posts and my books. These are the informal characteristics sought in employees--essentially things that are typically intrinsic to each person individually, although these qualities can be learned over time as well. Former Xerox CEO Anne Mulcahy described this as the company’s search for people with “horizontal experiences” that were illustrative of their desire to do more than just climb the corporate ladder.

 Group

1. Organization--This represents the formal side of the firm. Business schools usually teach various organizational structures such as hierarchical, matrix, or flat (there are variations beyond this). These are useful frameworks, but important nuances and adaptations are often overlooked in organization classes when examining individual firms. In the top brands studied, more often than not organization was less about the rigidity of structure and more about the use of organizational structure to facilitate the kind of dynamic communication each company required to fulfill their strategic plans and support their reputation development goals. Organizational structure was more like a set of guidelines and not absolutes. This was done to minimize bureaucratic roadblocks and accelerate decision making. This approach also tended to discourage/deemphasize territorialism and encourage/reward those people who brought others together to achieve something good. P&G has been adept at restructuring its organization periodically to improve the dynamic communication between businesses and functions, while still using formal organizational structures to create clear lines of authority and decision making.
2. Social fabric--Social fabric describes the informal conversations that permeate every organization. We typically see this reflected in comments like “here’s how we do things...” or “our approach is...”. The proverbial water cooler conversations are part of this milieu. In effect, social fabric animates the company’s culture in ways that formal structures cannot. Social fabric is a magnet for talent, attracting those people whose interest and personality are a good fit for the firm, and it is also why some employees are better suited to Apple vs. Lenovo.

Samsung’s growth has had hiccups along the way, but there is no doubt that a primary reason for the company’s impressive gains the past twenty years is the relentless effort to build a culture that enabled the company to first beat Sony, then Apple--both considered formidable, if unbeatable competitors, at the time.

Too Much of Brand Building is Still Stuck in the 20th Century

I came across this article in the Business2Community website about why branding is so important. Indeed, the author, Lisa Ostrowercha, lays out a well known list of brand building ingredients and she is to be commended for highlighting these factors. If nothing else, marketing succeeds partly by repetition, and her article reaffirms several important elements in successful brand building. But they’re no longer the only components. As a complement to her article, let me discuss the strategic themes that guide long-term brand direction that add sustainable and measurable value to firms. In my book, Competitive Success: How Branding Adds Value, we studied the brand development activities of more than 300 companies around the world and have identified four themes that separate the superior brands from the merely good ones. The research revealed that these companies define their brands as the entire organization as seen through the eyes of their stakeholders, and even society at large. The top performing brands focus on:

1. Brand Destiny--this describes having a clear sense of why they are here and what their ultimate contribution to society will be if they succeed. Southwest Airlines’ emphasis on making air travel fun and affordable; Johnson & Johnson’s Credo; and even the Olympic Games are each examples of entities that understand why they are here and what they contribute.
2. Brand Distinction--the top brands work exceedingly hard to create recognizable, and meaningful, distinction for their offerings. They do not view this as making incremental feature improvements on products, but on fostering a reputation that the market recognizes as unique. Mexico’s Grupo Modelo; Fast Company Magazine; TED talks and TEDx; the International Rescue Committee; and Tesla are among many fascinating, and imaginative, examples of organizations with distinctive reputations.
3. Brand Culture--creating a strong brand culture means a focus on hiring talented people who can stir things up and get things done. Culture is not just a term to describe the unique qualities of countries; it is also a key descriptor of companies and their internal environment and the rich set of ongoing social interactions that occur regularly. MAS Holdings in Sri Lanka; Four Seasons Hotels; IDEO; and Trader Joe’s are each leaders in their respective markets with deserved reputations for fostering internal cultures that inspire people.
4. Brand Experience--As Ostrowercha describes, the best brands are more than products and services; they are experiences. Apple’s stores are often highlighted as examples of this, but the list of top performers in this area also includes a number of remarkable organizations: from Singapore Airlines to Joie de Vivre Hotels to Dubai’s Burj Khalifa.

Interestingly, these four themes are, by themselves, not obvious to many of today’s companies because, on the surface, they are not related to conventional notions of branding (i.e. they are not advertising, logo, or slogan driven...). Instead, they are related to the overall structure and philosophy of the organization--characteristics that then animate the direction of the brand for the future. Furthermore, an important and positive by-product of building brands with these four themes in mind is an increase in measurable brand value, as I discuss in my book Measuring Marketing: 110+ Key Metrics Every Marketer Needs. It would be a wonderful world if successful branding were really as simply as making colorful ads and memorable logos, but it’s not. The world’s best brands are incredibly good at paying attention to the details embedded in each of the four themes I describe above.

The Value of Living Small

A recent article in Bloomberg Businessweek discussed the emergence of micro- apartments as a trend capturing the interest of singles of all ages. And the trend is also beginning to catch on with couples seeker cheaper accommodations in cities. The idea is simple: develop apartment buildings comprised of units that are about 200-300 square feet in size. Sound too small? Not when you consider the design innovations that hide the typical bulky furnishings like beds and desks in wall units (think Murphy beds, but with an ultra-modern aesthetic). Efficiency, cost, convenience are among the many benefits of micro-apartments. While the U.S. has been slower to pick up on this trend than residents in major Asian or European cities, interest is increasing. As more people leave the sprawl of the suburbs, or even the open space of ranch properties, it is inevitable that we’ll see more micro-apartment developments in major cities around the U.S. and this is good for society. Part of the benefit is the ability for urban planners to more easily and efficiently manage infrastructure costs by concentrating investments around geographically contained areas. Another benefit relates to social needs--with more people moving into cities and learning to live together, the greater the potential for ideas to be shared and communities to flourish. The micro-apartment trend does not mean the end of the single family home in manicured suburban developments, but it can mean that suburban planners will be compelled to rethink how they make their future developments more sustainable and eco-friendly from now on. Having personally lived in Asia for years in high rises, the growth of micro-apartments in the U.S. is a positive trend that may well lead to some remarkable design innovations in the years ahead, revitalyzing high density urban areas many people had otherwise written off.

Lessons for Success from...

...Silicon Valley, and my own work on top performing people and organizations. Let me explain. Fast Company Magazine has an article about 6 lessons Hollywood can learn from Silicon Valley. The lessons are born out of ongoing success from tech entrepreneurs who have learned how to create value for millions, while also creating wealth. The article goes on to say Hollywood has been stuck in an old business model that included massive spending up front with an uncertain payday upon a new movie’s launch. The culprit? Hollywood emphasizes cash, whereas Silicon Valley emphasizes equity. It is an interesting article and the 6 lessons are instructive. 

Let me add 5 other key lessons that are useful for not just for Hollywood but for other industries seeking ways to create long-term value. These lessons are a by-product of my work with leading executives and companies around the world the past decade, and they are specifically about the behaviors of successful people. I call these lessons the 5 Ambassadors, and as my students and readers of my books know, the 5 Ambassadors have been an important part of my work in how sustained value is created by people and organizations. The 5 Ambassadors are perhaps better described as behaviors since they are most evident when top performers are, well, doing those things that make them more successful than their colleagues and competitors. 

 The 5 Ambassadors are:

1. Brand Ambassador

This is the behavior top performers exhibit when they are representing their organization (or themselves, for that matter). Being a Brand Ambassador means a person does a superlative job conveying the virtues of their organization through verbal and visual imagery. The ‘brand’ is the top performer’s organization, or themselves as individuals.

2. Imagination Ambassador

This behavior is demonstrated when the top performer combines relevant resources, often in novel ways, to benefit customers (both internal and external) and even society overall.

3. Relationship Ambassador

Top performers view relationships as having life-time potential, not one-time transaction-only benefits; top performers nurture client relationships whether an immediate need exists or not.

4. Knowledge Ambassador

This behavior is exhibited by the deep knowledge top performers have of their customers, markets and broader business conditions overall; top performers then translate this knowledge into creative, effective solutions.

5. Experience Ambassador

Finally, top performers regularly apply the wisdom gained from trial and error to creating great experiences for customers.

These are just the summary explanations of the top performer behaviors. There are deeper and more penetrating insights about each of the 5 Ambassadors that I both teach and continue to write about, including how people can practice each of the 5 Ambassadors to become top performers in their own right. Most importantly, top performers become the best because they do all five of these well, not just one or two. That is the most challenging lesson of all, but it also leads to the greatest rewards.

David Beckham's Brand Value Remains Strong

A blogpost on CNN today ascribes David Beckham’s ongoing value as a professional athlete at the ripe old age of 37 to two factors: a strong image; and his winning ways. These are not terribly insightful conclusions, but they do highlight that brand longevity is due to sustained and consistent positive performance, at least in part. Again, this is not a rocket science revelation. Yet time and again we see how individuals and organizations struggle with these qualities. Unfortunately, the concept of image gets painted with a broad brush of superficiality, and winning ways confines success to one measure of productivity: having more wins than losses. Let’s look at these. First, the idea of image usually evokes visual imagery (does the entity in question--David Beckham in this case--look good?), leaving image born from quality (does the entity have a depth of credible content and character that breeds confidence and reassures the public of its ongoing commitment to excellence?). Winning ways does take care of part of the quality image issue, insofar as wins are a signal of excellence. However, wins can be gained a number of ways, not all of which are good and honorable. Witness the cheating and doping scandals that have plagued cycling for decades. Sure, Lance Armstrong was a winner. But since it was confirmed he won by cheating the system, a vast hole was blown in the public’s trust of Lance and, by extension, the entire sport (although the sport has been suffering for years from doping scandals). In Lance’s case, two decades of effort to build a high quality reputation was wiped out in the span of a few short days in Fall 2012. Trust is essential to success in anything. Without trust, the institutions and norms of modern society and the business practices within are for naught, which risks tossing all measurable value out the window. Let’s bring this back to David Beckham’s continued high brand value. Assuming he is not later revealed to have achieved his professional success through doping or other similarly unethical means in the years ahead, then his status as a premier athlete will make him bankable for years to come, if not for the rest of his life. For companies seeking sponsorship of high value sports entities, David Beckham has not just endured, but succeeded at the highest levels by winning championships in five different international leagues: EPL, Serie A, La Liga, MLS and Ligue 1. That is remarkable and, as the CNN blogpost points out, is due to Beckham’s work ethic (he works really hard to always contribute and add value), and to his integrity (despite his celebrity, his focus has been ensuring he works well in a team, bearing few if any grudges to the organizations for which he works--in other words, he doesn’t burn bridges or display prima donna-like demands to be treated specially). These are desirable qualities for any brand, whether it is an individual or organization.

Is Hosting an Olympics Affordable?

An article by Liz Farmer asks the question whether U.S. cities have the economic wherewithal to finance the 2024 Summer Olympics. Her question comes in the wake of the United States Olympic Committee’s (USOC) recent outreach efforts to 35 cities asking if they would be interested in bidding. Unlike previous bidding efforts, the USOC is taking a more conversational approach to assessing potential host city interest and capability this time around. The reason is due partly to the cost: in years past the right to bid cost as much as $10 million, and this did not guarantee you would become the U.S.’s candidate city. This time the USOC wants to engage city officials, local companies, and interested citizens in a lively discussion about their interests and concerns. The economic meltdown of 2008 has understandably dampened enthusiasm from cash-strapped cities, and many of the 35 cities targeted by the USOC have already said a flat-out no. But a few are keeping their options open. Since the USOC does not need bid submissions until 2015 prospective cities have time to weigh the merits of hosting. As a true fan of the Games, I remain optimistic that the International Olympic Committee (IOC) will find a way to develop updated guidelines encouraging prospective bid cities to submit cost-effective proposals geared toward generating economic returns for years and even decades past the Games. As I wrote in my February 28 post, the IOC must support bids from cities that offer a multi-level plan describing how they will create a true, blended platform emphasizing both sport and culture, including:

1. A plan for creating post-Olympic communities that promote sport (and a healthy lifestyle) for generations to come;
2. A plan for using the Olympics to ignite greater societal interest in cultural pursuits (arts, music...) and the concomitant value such activities create;
3. A plan for how the host city will use their Olympic investment in long-term education programs that can increase access to education for local communities;
4. A plan for leveraging the investment in new facilities for post-Olympics business and entertainment growth serves to create increasing economic returns;
5. A plan for how the Olympic Village and Venue designs will be models of sustainability.

One may reasonably ask why cities can’t do all of these things on their own anyway, thereby saving local taxpayers the headaches associated with constructing the Olympic site. One key answer is that the Olympics provide a laser sharp, galvanizing focus for planners that a series of independent, diffused plans cannot, creating a much greater chance the host city will reap significant long-term gains that make it not just a better tourist destination, but a global model for living, economic vitality, and innovation. The Olympics have significant meaning for athletes and fans everywhere. Being an Olympian means more than trying to win a Gold Medal...it means one represents the Olympic values of Excellence, Respect and Friendship. As the IOC and prospective host cities contemplate next steps in the bid process, I am hopeful that these Olympic values will remain at the forefront of planning, reminding everyone that the Games’ rich historical legacy emphasizing a blend of sport and culture is essential to ensuring future generations can reap significant rewards that make them Olympians in life.

 

What Singapore Can Teach Us About Creating Value

Columbia University professor and economist Joseph Stiglitz wrote an op-ed piece in today’s New York Times on what Singapore can teach the U.S. about creating greater economic equity. Having lived there for 7 years, I witnessed first hand how Singapore has built a remarkably vibrant society with greater economic opportunity than we have in the U.S. Relating this to my work in measuring business and marketing success, Singapore has created significant value for its residents and, increasingly, for the world through its investments in education, advanced technology, and over a dozen other industrial areas that are central to the country’s long-term economic policy. Stiglitz discusses many aspects of Singapore’s success in detail in his article, so I won’t belabor his points here, but it is important to recognize that the discussion of economic growth in the U.S. is mired in superficial issues about which political party understands the needs of the country better rather than substantive discussions about realistic economic policy for the long-term. In essence, the U.S. is stuck in a simple-minded world of politics and political messaging rather than working hard to address the more complex world of policy making. An example is the current effort by the GOP to ‘rebrand’ itself. Republican National Committee (RNC) Chairman Reince Priebus announced over the weekend that the RNC will spend $10 million on an outreach campaign to improve the communication of conservative principles. Truth be known, this $10 million expenditure is not much of a value-adding activity, beyond benefitting the lucky few marketing communications firms and media companies that will receive the $10 million in payments for these ‘get the world out’ efforts. Having one-hit wonders like Sarah Palin give silly speeches, like the one she gave at the CPAC conference over the weekend in which she mocked Michael Bloomberg’s ban on 16 ounce soft drinks in New York City, only contributes to her reputation as a vacuous politician lacking substance or sense, and further hampers the GOP’s efforts to be taken seriously as a political party that understands how to formulate policies that genuinely develop lasting social cohesion and economic growth. To be serious about improving its contribution to U.S. society, the GOP should consider reviewing its policies rather than merely trying to use outreach tactics to spread a message that most people already know. If the lessons of the last election are reviewed earnestly by its leaders, then the GOP should recognize the growing chasm between its principles (and, by extension, its policies) and everyday people. It’s not a lack of awareness of conservative principles that resulted in the GOP’s poor election results and low popularity, it’s the lack of connection between its policies and the needs of a very diverse and always changing U.S. society (both in economic and social terms). But the RNC is steadfast in its belief that the real culprit is a lack of clear messaging. This is akin to a company thinking that the best way to improve the reputation of its poor quality products is to be louder and more creative with its communication rather than improving the product itself. The analogy of the Suidae family of even-toed ungulates and certain lip-enhancing cosmetics comes to mind here. How does Singapore relate to this? Well, having a single dominant party as Singapore does with its People’s Action Party (PAP) is not what one should conclude we need in the U.S. That works in Singapore for unique reasons owing to that country’s development as an independent nation since 1965. Instead, the GOP, and U.S. economic policy makers more generally, should take a careful look at how Singapore has enabled more people to participate in that country’s economic success for the past 48 years. The continuing sluggishness of the U.S. economy is not due to poor messaging. It is due to a lack of coherent policy, combined with an ongoing focus on the wrong issues (deficit control during economic downturns, and cutting taxes--which only worsens the deficit) instead of substantive policy that encourages growth (including short-term government spending) to keep the economy strong while also developing a tax policy that enables more people to participate in society. Here, Singapore provides instructive lessons. But will anyone in the U.S. listen?

Making B-School Learning More Compelling

After years in business I moved into academia over a dozen years ago. I have been fortunate that I have loved what I do, whether in business or academia. Maybe I am easily entertained, but I get a real thrill from new challenges, from turning abstractions into actions. I have noticed a common pattern to enjoying what one does-find ways, no matter what it takes, to overcome hesitation. In essence, dive in, swim hard, make adjustments, and improve. Oh, and be prepared. These are not terribly original ideas, but they may seem contradictory to many. After all, diving in is different than preparation, since the latter implies practicing to improve, thereby reducing the risk that failure will occur, whereas the former suggests one must simply leap into action. I believe both are a necessary part of an ongoing process I call ‘learn by diving’. I am not suggesting one abandons all rationale thought to pursue risky endeavors. Just because you think brain surgery is a more interesting challenge than being an accountant doesn’t mean you should dive in and start operating on your colleagues. Exercising reasonable judgment remains an invaluable hallmark of successful people. Of course, one’s definition of ‘reasonable’ determines risk tolerance. I mention these ideas because I believe ‘learning by diving’ is something business schools around the world must begin to practice. Thomas Friedman discusses the challenges and opportunities ahead for universities in his column in today’s New York Times. As you read, you will either find comfort or despair in his points, depending on your view of higher education. Personally, I agree with Friedman. Business schools serve multiple constituencies: students, employers, donors, alumni, faculty, staff, and the broader academic and business communities. Each of these audiences have expectations in common (a shared interest in business education that helps us understand how businesses can add value to society), yet they also have differing expectations about how to do this. In support of Friedman’s points, the one-way-from-professor-to-student learning model is far less relevant to the needs of society today. Students need to wrestle more directly with ambiguity and abstraction. They need to be comfortable with incomplete data and information. They need to look beyond just the numbers to the bigger picture (“what impact will my decision have on the company’s success?” “how will our actions today add value to society tomorrow?”). I have written numerous books on measuring marketing, so I am not naive or ignorant of the importance of measuring performance. But crunching numbers is far different than the courage it takes to pursue innovative ideas, especially when the numbers suggest being conservative. Society will gain when business school students have academic experiences in which they are directly engaged in solving problems and testing ideas. In essence, the business school classroom needs to be more of a dynamic business laboratory in which the students are able to put their ideas to the test, as opposed to merely being asked questions on a test. In essence, students must learn by diving.