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Managing the Brand for Outstanding Performance Written by Peter Hutton from BrandEnergy Research
Brand management is changing.
Increasingly it is recognised that managing the brand and managing the business are the same thing. The key to outstanding business performance is attaining a company-wide customer focus that evolves as the customers’ needs and tastes evolve, developing a corporate culture that focuses all the delivery and support functions on meeting customers’ needs.
This requires managers to adopt a highly integrated way of thinking in which goals, systems, information and performance indicators are shared buy all the functions of the business, rather than isolated in the traditional departmental silos of marketing, HR, finance, IT and production.
Since Henry Ford, each of these silos have struggled to produce their own models of what drives business performance. They have largely failed because they have confined their focus to the variables that relate only to their areas of responsibility.
Attempts to link these different areas are hampered by silo-based mindframes and lack of consistency of data categorisations, such as work units, timeframes or revenue streams, across the different functions. The first step to addressing this is to recognise that there is a problem.
The next is to redefine the business in terms that all functions can buy in to.
This was the starting point for Kaplan and Norton’s ground-breaking work on the Balanced Business Scorecard. Businesses were under performing, particularly relative to Japanese competitors, while staff in different functions were frustrated at the apparent inability of, predominantly finance-trained, top management to recognise the potential value locked up in the assets they were responsible for. IT was generally seen as something that could only save costs by increasing efficiency, not something that could create additional value in its own right. Staff were all too often seen as a cost to be cut rather than a critical source of revenue growth.
The key step change in management developed by Kaplan and Norton was not what most would associate them with – Key Performance Indicators (KPIs) – but the far more profound realisation that most businesses are highly dysfunctional. The different functions pursue quite different, and often conflicting, strategies which significantly constrains the effectiveness of the business. The real value of the Balanced Business Scorecard approach is in the process by which these conflicting strategies are made explicit, examined openly and redefined in such a way that everyone can buy in to them.
Out of this comes a much more holistic view of the business and one which more accurately reflects the way in which businesses really work.
What is needed are new measures, diagnostics and KPIs that enable managers to manage the business as a whole, rather than different facets of it, as if they have no relationship to each other.
And this is the main focus of research agency BrandEnergy Research, recently launched by Peter Hutton, ex-deputy managing director of MORI. Having spent the last 29 years researching the views of different business stakeholders, he was struck by the fact that businesses with high scores among one stakeholder group, like customers, tend also to have high scores among other stakeholder groups, like employees, investors and the media.
The highest employee job satisfaction score MORI has ever recorded in a consumer goods company, was for Allied Domecq, which owns a large number of high-energy brands which can command a significant premium over less energised brands in the market.
The concept of Brand Energy was born out of an association with organisational energy consultants, Stanton Marris, and leading management consultants, Accenture, not least with William Gordon, co-author of the book Brand Manners. Both organisations set out to identify and manage the intangibles that drive value creation, Stanton Marris by identifying the blockages to energy utilisation within organisations, Accenture across a wider stakeholder base. The concept is designed to convey the idea that ultimately all organisations need to aspire to maximise the amount of positive feelings and activity across their stakeholder base towards both their products and services and towards themselves as corporate entities.
Traditionally the Chief Executive has been faced with having to take an overview of all the different business functions: marketing, HR, IT, finance, etc and make sense of how effectively they are working together. But most of the information he has to work with relates to each function independently. Moreover, most of it is about outcomes, not drivers.
What drives business performance is a multitude of individual actions not least by customers, staff, and suppliers, but influenced by others such as investors and the media. These in turn are affected by how these groups think and feel about the business’s products and services and the business behind them – the brand behind the brand.
The focus of Brand Energy research is to understand how these different stakeholders work together as a system and, in particular, the issues that need to be addressed to remove the blockages which are stopping the system working to its optimum.
The shift towards a more holistic view of what a brand is has made companies realise the critical nature of the internal culture of the business in enabling it to deliver its brand values to the market. In leading companies the HR and marketing functions are increasingly working together to find ways of ensuring a consistency between the internal culture and what the marketers are trying to deliver to the customer.
Brand Energy may provide the simple key to the very complex problem of integrating the different functions of the business and unlocking their full potential.