Shaping a dynamic future: Why is brand leadership so important? —

by Bastian Schneider
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As a businessman you are used to looking at your activities from a wide range of perspectives: the strategic, legal, efficiency and cost angles, competence and resources, as well as the market and competitive aspects. Each of these perspectives has its own function and makes its own contribution to a successful business. I would like to invite you to view your business from the brand perspective, because in my experience this perspective has great significance for long-lasting business success.  And my experience also shows that many companies pay far too little attention to this important aspect.

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Only two types of companies —

Our times are marked by global competition, increasing dynamic and fundamental, technological revolution, and sooner or later there will only be two types of companies left in the world: two groups, in which more or less every company in every field can be classified.

On the one hand are the companies which are crushed by the future: 

A prominent example here is Nokia. Nokia is a company which has been absolutely steamrollered by the future; for some reason it suddenly no longer understood how to launch the right products that would generate proper sales.

And on the other hand are the companies which usher the future in: 

An example of this species is Apple. These are companies which consistently understand how to interpret the Zeitgeist to create highly relevant products and services and generate a profitable business.

I would like to show you how the brand can provide crucial support in making sure your company belongs to the right group; with the companies that usher the future in, instead of being crushed by it. With the companies that are brimming over with vitality, that radiate viability for the future and that enjoy long-lasting success.

The power of the brand —

First of all we need to understand exactly what a brand really is. Abstract definitions, of which there are very many, are no help at all. In my experience, they cause confusion rather than making things clear. Real understanding is based on experience. For this reason I have prepared an experiment for you. An experiment which will let you sense exactly what a brand is: 

Which coffee will you choose?

You can tell immediately: the decision is not so easy. As a non-specialist you cannot make a choice at all – it would be completely arbitrary. If you were a coffee specialist, you would be able to see that the coffee beans on the left are slightly darker. That may indicate an Italian drum roasting, which could suggest a sharp and lively flavour. But unfortunately not many of us have such expert knowledge.

And which coffee will you choose now?

Can you feel the difference? That is the power of the brand. In brand leadership we are only concerned with one thing: motivating people to make a choice, preferably of course for your products or services.

Brands give us direction and help us to make decisions. This refers of course to the market, the customers. But it is equally relevant and effective within the organization, with your own staff. When the employees know exactly what their company stands for, their decisions and direction become easier, clearer and better – in terms of corporate strategy, for instance.

A brand is an image of a company or product in our heads and hearts. And as you have just seen for yourselves: a brand is power with a great influence on business. It works just as effectively within the organization, with the employees, as it does externally with the customers.

Using the brand for business —

Leading companies use the power of the brand to establish a position of monopoly in the minds and hearts of their customers, partners and employees. This should not be mistaken for the traditional, involuntary monopoly which has a somewhat negative image, representing lack of progress, excessive prices and poor service – that is not what we mean here.

We mean a position of monopoly in people’s minds under free market conditions. A monopoly which people freely agree to, making a company not only their first choice among many alternatives, but their only choice – despite many other effective competitors who may be even cheaper.

There are outstanding companies, such as Apple, who manage to sustain this voluntary monopoly very successfully over a long period of time. But in any branch you can find businesses to which this applies to a certain extent. You will have some such customers or clients of your own - customers for whom your company is already the only choice, faithful customers for many years. The interesting questions, therefore, are also: In what percentage of your customers have you been able to establish a position of monopoly in their hearts and minds? And what can you do from now on to turn more of your customer base into such loyal customers? From my point of view, these are the key questions in brand-oriented management which must be asked - and answered - in every strategic process.

Working on the reasons for brand power —

But how can this be done? How do you actually build up a position of monopoly in people’s hearts and minds? The first thing is to examine the relationship between your business and your customers.

This relationship is built up and defined by all your company‘s products or services which are accessible to the outside world. Foremost are your products, because these are what the customers experience most intensely. But the products are not everything; they are linked to many other aspects of your organization. For example, to the attitude of your employees: are they friendly, polite, and helpful, or do they come across as arrogant? But your services count too: Is advice given? Are things explained? Are complex issues simplified for the customer? 

And how effective are the communication and advertising statements with which you endeavour to attract attention and build up an image? 

All these factors add up in people’s minds to form an image of the company, they build confidence and define the quality of their relationship with that company. But: getting people’s attention in the first place, and then getting them to remember your specific company – if they think it relevant at all – is far from easy these days. Just think about the abundance of suppliers, the variety of communications, and the quite stressful life we lead today. 

This means that, to get people to even bother to notice your company, you need to give them a very special reason: something that really sets your company apart from the vast quantity of other offers, a uniqueness or speciality that can trigger real excitement and enthusiasm. This is the fundamental basis for every strong brand: an ingredient for success which is essential for brand development to work.

Dyson as an example

A good example is Dyson. For about seven years, Mr Dyson worked on new technology which would allow home vacuuming without loss of suction power. Mr Dyson found it extremely annoying that, as the dust bags in conventional vacuum cleaners slowly but surely fill up, the suction power inevitably decreases. After more than 5000 prototypes, Mr Dyson found an innovative solution: how to vacuum without dust bags – and therefore without losing suction power. He then consistently implemented his very distinctive approach to all aspects of vacuuming; for example, in the product design, which lets you know immediately that this is not a conventional vacuum cleaner. In addition, he has showcased himself in communications as an entrepreneurial personality, trying a very different approach and gaining a lot of attention and goodwill, saying: I am an innovative new entrepreneur and am fighting the big corporations and for the customers, so that they can improve their vacuuming at home. I am fighting for a world without loss of suction power.

With this approach he managed to position himself as a «no name» and establish his product in the highest price segment – on the same level as the most expensive competitive products. You would actually think that a «no name» would not have a chance in such a generic, low-involvement, cut-throat market, especially not in the top segment. But manage it he did, with his successful mix of really distinctive products, very lively product design, and a credible story. His entrepreneurial ambitions, however, are far from fulfilled. Based on a sharper brand core “Finding new ways to make things work better” Dyson is gradually capturing one new market area after another – such as hand-held vacuums, hand dryers, or domestic fans.

Nespresso as an example

Another good example of outstanding performance is Nespresso. This company has stopped trying to work out how to get customers to buy 500g of coffee. Instead Nespresso realized that the traditional methods of selling coffee would not be successful in the long run. They changed their approach completely and asked: «Dear Customer, what would it be worth to you to be able to drink a single cup of coffee at home which is as good and as easy to make as you can otherwise only get in a restaurant or coffee bar?».

Based on the replies Nespresso received, they developed a completely new business model and focused every single aspect of their services consistently on this one idea. From the exclusive brand stores where the products are presented in a high-class setting, the wide choice of coffees with changing, seasonal variations, to endorsement by George Clooney – someone who is regarded as classy, with a certain style. All these factors have worked together to strengthen the brand and build up a successful and profitable business.

Brand power by consolidating all company services —

The Nespresso example illustrates particularly well how a company can gain great appeal and competitive strength when it identifies an inspiring and really distinctive feature and then focuses all its efforts consistently on this feature.

Getting there, however, is incredibly difficult, because there are always very many differing opinions in a company, and the competition is not asleep either. Customers can certainly be critical at times. Market developments and technological innovations make future projections difficult. Whatever strategy you commit to could always be just the wrong one.

To identify just one feature, from such a complex diversity of influences, which a company effectively represents and wants to continue to represent in the future – i.e. to anticipate how the market and customer requirements will evolve – is an incredibly challenging problem, but one which can and must be solved if you are not simply to be swept along by the tide. And if you do not want to be pushed into a dead-end situation from which it will be very difficult to recover.

Our experience shows: If you find a really distinctive feature that is clear and tangible, and if you can build up common understanding and identification within management and with the employees, this releases an incredible wave of corporate energy. Then it is suddenly surprisingly easy to completely rethink the many aspects of services in an innovative but distinctive way and to develop the company in an entirely new dimension.

Lego as an example

A good example here is Lego. This company has committed to: «inspire and develop the builders of tomorrow». This mission, together with the familiar Lego building blocks, has enabled Lego to develop a wide spectrum of products appealing to many different target groups, without sacrificing even the tiniest amount of their distinctive strength. Lego is a brand that has positioned itself on a broad base without becoming stretched. Even in partnership with other strong brands, such as Star Wars or Harry Potter, the products still retain 100% Lego DNA and can be connected to other Lego worlds without any problem. Everything at Lego is geared towards one point alone, and this has made the company into one of the most famous brands in the world.

Brand is starting point for growth —

I would even like to go a step further and maintain that a company’s choice of self-image largely determines its future potential. Here is one last example:

Imagine you are running a horse and carriage business at the end of the 18th century. You are the leading horse and carriage business in North America, with the best horses, the most skilled drivers and the most luxurious carriages. And – full of pride – you believe this is true: «We are the leading horse and carriage business in North America.» And you are full of ambition and say self-confidently: «In the future we want to be the leading horse and carriage business in the world.»... Then the railways arrive, bicycles, cars and aeroplanes! If you had really defined yourself as a horse and carriage business at that time, with the change dynamics that characterize our world today: How do you rate the growth potential of your company? How do you see the future opportunities for your company? 

If, on the other hand, you had seen yourself as, for example, an “innovative mobility company” wanting to take people from A to B in an interesting way, how would your future potential have looked then? Maybe you would really have become the leading global mobility concern after 100 years and would manage endless fleets of trains, planes, buses and ships today. Maybe! You can see: The choice of your brand definition, the style of your self-concept, has a fundamental and direct influence on what your company can become and will be in the future. The brand is a key starting point for transformation and growth.

Brand as management tool —

If we accept this fact, then a completely new brand understanding is required. Unfortunately there are still all too many people who really believe that a brand is a logo. And that, if the brand needs working on, or there is a problem with the brand, you contact a really creative agency and plan how to transform your logo.

I wanted to show you here that your brand is a lot more than a logo, that it is a viable management tool which can be of tremendous help to you. If you take all your business decisions – both externally and within the company – in terms of your brand, you can achieve the greatest possible success in your business. There are now many academic studies proving this connection between brand focus and profitability. 

That is why it is no longer enough to understand the brand as a logo. Neither is it enough to understand the brand as a sales tool. Nor is it enough to view the brand as a culture medium within the company. Brand as management tool means: to combine all these aspects into a coherent whole. It means that your vision for the future of your company corresponds fully both with the distinguishing services and messages you have put on the market as well as with your internal self-concept, your values and the mindset of your employees.

Principles of powerful brands —

If you can achieve this, then your company has every chance of being successful in the future. As practical assistance in mobilizing your brand as a management tool, I would like to pass on to you the following principles of powerful brands:

Be 100% clear: In what area, relevant for our customers, do we lead the way? When you have discovered this: Focus all your company’s efforts consistently and without compromise on this area. Be courageous: Define clear limits and display a striking profile. Set your own course.

Beware of trying to reflect the whole market. Do not make unnecessary adjustments. Do not imitate others. As soon as a competitor does something, you do not have to do it too. Review it critically and ask yourself: «What does that actually mean for us? Does it suit the course and the mission that we have set out on?»

Align yourself to your own strengths – in everything that you do. Avoid being dictated to or pushed by influences outside the company – whether they are major dealers, market research findings with alleged customer feedback, or intelligent sounding recommendations from consultants. Be very critical towards any advice from external sources.

And make your special features striking. Be proud of them. Celebrate your specialities. And show them to people at all touch points – both within the company and to the outside world.

Significant action is required —

If you are going to take on this challenge, it will mean a lot of hard work – for the whole organization. But that does not change the fact that this work is important and ought to be tackled. The future success of your company depends on it.

There is significant need for action in many organizations, as shown by the following investigation: Managers of leading companies were asked if they were substantially different from their competitors. They were asked: Do you represent something special? Are you different from the others? 80% of managers replied: «Yes, we are different from the others». And then the same question was put to their customers: Does this company offer something special? Only 10% of the customers agreed. In comparison to the 80% of managers: an entirely different perception. Even if we assume that the managers’ assessment is actually true and does reflect an objective picture of the distinguishing potential of the company, it is still evident that there must be a blatant communication problem – between what the company offers as special features and what reaches the customer outside. It suggests that many companies should be thinking seriously about their communication performance.

The most effective and helpful starting point is your brand. Taken as a comprehensive management tool, it can significantly improve the quality of communications to all internal and external stakeholder groups in an efficient way. The brand can give your company the momentum necessary to drive you positively into the future – and to leave your competitors far behind.

Brand-driven management means shaping a powerful future.