Curing Brand Schizophrenia
January 28, 2016
Removing a Growth Inhibitor: Curing Brand Schizophrenia
For years, big players in financial services and enterprise technology have rolled up organically built and acquired businesses under a single, overarching corporate brand.
This plan made sense when originally conceived. Of the alternative models, this approach generated the greatest efficiencies, provided the most consistency, was the easiest to manage and sustain.
The advantage to this approach lies in its economics. By leveraging a single overarching brand, firms are able to concentrate their media spends and generate significant economies of scale. It’s easy to understand why it has been so widely embraced.
Unfortunately, this approach has its downside.
With limited exceptions, these roll-ups suffer from muddled market perceptions. Just look at the biggest banking and enterprise IT firm brands today. Distinctiveness is sacrificed by basing the collective positioning on a common denominator across the business. This compromises the ability of individual business units to compete effectively with more focused, relevant and agile competitors.
The resulting “brand schizophrenia” inhibits growth.
By trying to be multiple things for multiple people, these brands make it extremely difficult for customers and prospects to appreciate the relevance, credibility and value of individual competencies.
Even worse, in some cases unforeseen channel conflicts have created insurmountable barriers to growth.
In response, some forward thinking organizations have embarked on strategies to replace these “roll-up” structures with far more focused pure play models that separate unrelated competencies into distinctly branded, stand alone entities. This refined strategy fuels growth by focusing resources, clarifying market positioning and eliminating channel conflict.
Doing It Right: The IO example
IO is an innovative enterprise IT organization that faced head-on the challenges of “roll-up” structural constraints. The company built world class competencies in IT infrastructure services and IT infrastructure technology, but was increasingly frustrated by results that did not live up to forecasted market potential.
A thorough review of the challenge revealed that these two seemingly synergistic competencies were actually inhibiting growth under a single brand. Customers for the service company failed to appreciate the added value of the technology competency and because the most lucrative market for the technology was other service providers, the structure created an inherent channel conflict that completely impeded growth.
Management took the bold step of splitting the company into two distinct entities to eliminate constraints and fuel growth.
Doing it Wrong: The HP example
Confronting similar challenges, HP embarked on new strategy to distinguish its consumer technology business from its Enterprise IT organization.
Unfortunately, this well considered strategy is compromised by poor execution. The resulting new brands are too closely aligned. They share the same name and the same original visual style.
How to do it right?
If you’re going to do it, then really do it.
The key learning from reviewing HP’s mistake is that success in such an endeavor requires pushing the businesses and brands apart to create two distinct entities.
This means examining the strengths and weaknesses of each entity and building the respective brands on the basis of the strengths that are unique to each. Shared strengths will help with operational success, but for brand building purposes we need to focus on the strengths that each business owns uniquely.
Building the Brand BluePrint
If you going to do this, the key to success lies in how you frame the strategy. The goal is to define the focused brands as distinctly as possible to avoid confusion in the marketplace.
The easier this is to do, the more comfortable you can be that the separation decision is right for the business. Conversely, if you’re finding it difficult to distinguish the brands then the separation strategy is probably not the best solution for the challenge you are attempting to solve.
To build such a strategy, we employ a simple, yet effective model to shape the foundation for the brand. Our “Brand BluePrint” model starts with the business challenge and focuses the brand strategy to solve this challenge and enable opportunity.
The key components of this model include:
It’s all about crispness
In the end, the key to eliminating the constraining impact of brand schizophrenia lies in defining the individual brands a crisply as possible. This new clarity will free the businesses to compete more effectively with pure play competitors and will eliminate the hurdles of channel conflict.
Success starts with an effective strategy. If you’re going to do it, drive the brands apart as far as possible. The crispness will make it easy for targets to embrace the value.
Introducing Catalyst Branding
October 19, 2012
I believe that expertise must be regularly refreshed. True experts must expand their POV based upon what they learn from their work. Assumptions need to be challenged, the impact of prior strategies must be weighed and data sets should be updated.
This is especially true in the field of branding. There’s so much new to learn and so much we can do better to help our clients be more successful.
I learn most everyday from the work I do with clients, the research I do and the material I watch and read. Learning is what keeps me from being old. While my body betrays this fact, my mind is still as young as it was in graduate school, when everyday was full of new insight.
This year I celebrated my 30th year in the business by launching a new company with my wife and some good friends. After 20+ years serving as one of the leaders of Interbrand, I formed Catalyst Branding to do what I love the most – to create and hone new and better ways to serve the needs of clients, who in-turn become good friends.
I’ve been having a ball working with a handful of great clients who enjoy the benefit of our pragmatic approach. Along the way, we’ve learned a lot together, explored new ideas and implemented some very interesting solutions.
In the process, I keep learning and in several cases this learning has challenged some of the conventions I’ve grown up holding fundamental in much of the work I’ve done.
For the last several years my good friends have encouraged me to start this blog to share my observations. After months and months of resisting their advice, I’ve finally screwed up the courage to start. My intention is in the weeks to come, to share what I’ve learned in the course of each week. It will be there on record for you to use or ignore, validate or refute.
I’ll have fun. I hope you enjoy. Let me know what you want more of and what you want less of. I’ll try to accommodate your requests. In the meantime, thanks for paying attention.