A Declaration of Interdependence for Brand Leadership WE believe that strong brand processes are never managed, always led.
WE believe that meaningful brands are service visions whose purpose is to accelerate the future
WE believe that brands are often a company's only commercial licence to invest in medium-term foresight.
WE believe that brands have rights. Leaders must develop proactive organisational cultures specific to a brand's needs
WE believe that Brand Chartering can keep the brand's accumulation of service knowhow top of mind across the business team.
WE believe that stewardship of corporate reputation must be culturally embedded as the responsibility of one and all.
WE believe that the entirety of a company's brand architecture is appropriately thought of as a megaprocess, ie one which interconnects all of the company's other core business processes.WE believe that future wealth creation resides in strong brand leadership.
|Ray Kroc, founder of McDonald's franchising, demonstrating his vision of cleanliness |
"On his way back to the office from an important lunch in the best place in town, Ray Kroc asked his driver to pass through several McDonald's parking lots. In one parking lot he spots papers caught up in the windscreen of shrubs along the outer fence. He goes to the nearest payphone and calls the office, gets the name of the local manager, and calls the manager to offer to help him pick up the trash in the parking lot. Both Ray Kroc, the owner of the McDonald's chain (in his expensive business suit), and the young manager of the store meet in the parking lot and get on their hands and knees to pick up the paper"
This story is told and retold thousands of times within McDonald's to emphasise the importance of the shared vision of cleanliness. In short your actions in living your vision will motivate your employees to use the vision. Teaching the elephant to dance, James Belasco
|McDonald's - Nature of organisational investment of being an Ambassador to Moscow|
The costs and the time consuming process of meaningful global PR can be immense. Are we getting to the stage where globally branded companies, like nations, may best be served by two sorts of governing bodies - executive managers in charge of business operations and elder statesmen with the status and the time to engage in ambassadorial missions for the company? Consider how The Economist (of 3 February 1990) observed McDonald's Moscow opening.
"True the symbolism is irresistible : the epitome of capitalist consumerism come to the citadel of world communism. But note the extraordinary lengths to which McDonald's has had to go to open its Moscow outlet.
Although the food and drink served by the Moscow restaurant are indistinguishable from that served in McDonald's restaurants from Peoria to Tokyo, the company has had to alter radically the way it does business in order to achieve this feat. Rather than buying from local suppliers, as it does everywhere else, it has been forced to integrate vertically through the local food industry on a heroic scale, importing potato seeds and bull semen and indirectly managing dairy farms, cattle ranches and vegetable plots. It has had to construct the world's largest food processing plant, the size of five soccer pitches, at a cost of $40m. The restaurant itself cost a mere $4.5m.
Worse it has taken McDonald's 14 years of relentless effort to open its first restaurant. In 1976 the company began talks aimed at opening a restaurant at the 1980 Olympic Games in Moscow. That prospect died when western countries boycotted the games after the Soviet Union's invasion of Afghanistan. McDonald's hopes only managed to survive by a fluke; the Moscow McDonald's is being operated not by the American parent but by its Canadian subsidiary. When the deal died in 1980, the Soviet ambassador in Canada was Mr Alexander Yakovlev, a would-be reformer whom Leonid Brezhnev had dispatched into diplomatic exile. Mr Yakovlev told Mr George Cohon, the head of the Canadian operation: "Don't lose heart. At the moment this is ideologically impossible. One day you will be able to do it." Patience was to have its reward when Mr Yakovlev became a sidekick of Mr Mikhail Gorbachev and, for a time, one of the most influential figures in the Soviet Union.Restarted in earnest after Russia's first joint-venture law in 1987, negotiations for this one $50m deal have taken about half of Mr Cohon's time, a huge commitment for a man running a $1 billion-a-year business. If Soviet leaders think that all chief executives can spend this amount of time on a single deal, they will be sorely disappointed."
|IKEA's leaders : meet the coach, not the boss|
(Extract from EIU report : The successful corporation of the year 2000)
IKEA's no-frills management seeks to coach, not boss. Talking with Goran Carstedt, president and CEO of IKEA North America, is to experience management by realism. His office is in a sprawling IKEA store in Pennsylvania, so that he can stay close to employees, customers and products of the world's largest retailer of home furnishings. Mr Carstedt greets guests in an open-plan office, and thinks he is failing at his job if he senses employees are nervous when he eats in the IKEA cafeteria or walks around the store.
For all its financial success, Mr Carstedt stresses that IKEA's philosophy remains low cost, high value - with management practising what it preaches in its everyday dealings. "The mission for IKEA founded several decades ago by Ingvar Kamprad is 'to create a better everyday life for the majority of the people' by offering high quality furnishings to the masses.
"Much is made of the fact that at IKEA there are few titles, no executive parking spaces, and business travel is economy-class airfares and $60 per-night hotels. The reason for this is simple : a low cost structure enables us to provide our customers with the best value. We cannot provide good design at good prices if management costs are high. As managers, we must set good examples and are constantly asking ourselves, 'How do we cut costs that do not add value for the customer?'
We at IKEA are radically decentralised. We are less of a hierarchy than an organisation in which authoritative information can enter the system from one of several points. Our Los Angeles store, for example, could give the lead to the entire global system if an initiative originating there was found to have system-wide appeal. Each co-worker is invited to try new solutions. To increase speed, we have replaced instructions from headquarters with general guidelines on how to recognise outstanding opportunities. By substituting a general strategic direction for specific goals, we give local store managers the power and freedom to recognise stepping-stones that lead in desired directions.
IKEA's corporate structure should be looked upon as a reverse hierarchy. Customers stand on the top rung, supported by local stores who serve them. The stores in turn are supported by regional organisations. Finally, at the bottom - and I mean the bottom - is IKEA's headquarters. This includes me.
Managers should first learn to be servants. This is how I see my role in the organisation : helping the employee who has the most contact with customers to do the best job possible.
Like most people, I read what I like to read and I see what I want to see. In terms of management theories, the one I find most true to corporate life is the learning organisation. You can score in the short-term or make some achievement without being one. But I think to be truly successful, the organisation has to learn and adapt to changes in society. I can give you a few examples of how we have acted upon what we have learned about our customers:
·At IKEA, we have learnt that shopping is now an activity families do together, because both parents work and there generally seems to be less time for families to be together these days. So we set out to make the shopping experience something all family members can enjoy : eg supervised child-care and playgrounds, wheelchairs for the elderly, restaurants and cafeterias to relax in.
·Some customers want to do more for themselves so that they can save money. We offer them instructions on setting up their own furniture. But for those customers who want to buy assembled pieces and have them delivered, we provide those services as well. We constantly ask our customers to tell us what they need, how they want to buy it, how much they want to do for themselves, how much they want us to do for them. IKEA's vision of communication is that it must be straight-forward, informal, authentic and where possible, face-to-face.We see a historical role for ourselves within the industry and the market in which we operate. In many ways we think we are creating the company of the future, and this is very exciting for all involved. This sense of mission enables our employees to transcend the day-to-day details of often mundane work and to see themselves as making a contribution to the wider society. Retailing involves massive attention to detail, to control of inventories, to timely re-ordering, to spotting trends. With so vast an array of numbers, our errors and omissions pass before our eyes in an endless stream. But all we ask is our employees learn from their mistakes. We can all too easily drown in statistics, and so it is vital to share corporate values and to agree on what feedback means about the fulfilment of those values. Only if you are committed to improving trends are statistics meaningful."
|Realisation of the future at Disney|
I've probably thought through every year through the turn of the century. Things take so long to do, you have to plant your flag and build your company around it.
An anniversary forces you to reanalyse your life. It forces you to recommit yourself to your vows and forces you to finish all your projects on time to get tem done by the anniversary...Deadlines are probably the strongest creative tools I know of. You've got to do it. You have to get your act together. The anniversary philosophy is much more than marketing.
|Whose purpose is being served?|
Structure follows strategy, and systems support structure. Few aphorisms have penetrated Western business thinking as deeply as these two. Yet they and the management doctrine they have given rise to are no longer up to the job.
Neither the valueless quantitative terms of most planning and control processes nor the mechanical formulas of leveraged incentive systems nurture employees' commitment or motivation.
In most corporations today, people no longer know - or even care - what or why their companies are. In such an environment, leaders have an urgent role to play. Obviously they must retain control over the processes that frame the company's strategic priorities. But strategies can engender strong enduring emotional attachments only when they are embedded in a broader organisational purpose. This means creating an organisation in which members can identify, in which they share a sense of pride, and to which they are willing to commit Bartlett and Ghoshal, Beyond strategy to purpose, Harvard Business Review, Nov/Dec 1994
|IN THE COMPANY OF WARRIORS|
Circumstances compelled me to view my co-workers' jobs through their eyes, their minds, their hands. And through this perspective, I glimpsed not only my own future, but the future of United Airlines.Alan Cockrell, United Airlines First Officer, published in United Airlines in-Flight Magazine : Hemispheres, February 1995I've watched a hundred sunsets from the cockpit, gazed at a thousand contrails, crossed a million miles of ocean, cruised beneath a billion stars, always musing, pondering how privileged I am to fly these magnificent jets, always thankful for the most fabulous of jobs, with the most esteemed of corporations. But my most profound comprehension of what this job is all about came when I turned my attention backward, into the cabin on a dark lonely night in Nashville, after all the passengers had left.
I must admit it wasn't the sort of lofty ideals of teamwork, loyalty, or even compassion that motivated me to do it. I was commuting back home from Chicago at the end of a four-day trip - I wanted to get home. But my car was having troubles, and I had accepted an offer for a ride home from one of the three ground service personnel who was cleaning the Boeing 737 for its nightly bed-down. My motive was clear : the sooner they got done, the sooner I got home. I did the unthinkable. I - a pilot - rolled up my sleeves and grabbed a dust cloth.
The work was harder and longer that I anticipated. My workmates eagerly supervised my efforts to gather the trash, clean the overhead bins, and wipe the tray tables. They were fussy over the haphazard way I arranged the seat belts. Not neat enough. I had to redo several rows.
Throughout 20 years of military and commercial flying, I've always been meticulously concerned with an aircraft's mechanical condition, but this was something totally new. And if the job was subordinate to the maintenance of the plane's engines and engineering systems, you could never convince my workmates of it.
Yet what impressed me the most were the subjects of their constant bantering as they worked. Rarely had they spoken with a pilot. They peppered me with questions about flying and the mysterious workings in the cockpit, which they had often marvelled at during the still hours of the night shift. But most fervently, they wanted to know how "we" were doing.
"We?" I asked.
"Yeah, you know - the company," one of them clarified. "Do you think we're doing as well as they say?"
I wasn't sure what she meant by "they". Probably company news releases or the news media. I guess to them I was like a soldier returning from the front. "We're doing great", I assured them.
And we are. We're part of a grand experiment, the economists say - the largest employee-owned corporation in history. But to the ground service crew and me, this is not an experiment, this is life. We will live it and make it work. Together.
I had always tried to maintain a proper perspective for my job by being constantly mindful of the lives and trust of those customers seated in the cabin behind me. But from that point on, I resolved to add another dimension to that awareness. I'll always recall the grinning faces that I worked with that night and how they were every bit as essential to United Airlines' success as we pilots are.We finished our work and shut the power off. As we walked toward the employee bus stop, I saw them taking a last glance at their airplane - the sleeping Boeing, glistening in the moonlight. Then I realised how arrogant I had been in presuming to be the soldier returning from the front. The front was there. And I was in the company of gentle, but determined, warriors.
|Leadership sense and system|
Leaders embed clearly articulated, well-defined ambition in the thinking of every individual while giving each person the freedom to interpret the company's broad objectives creatively. Specifically :
·they articulate corporate ambition in terms designed to capture employees' attention and interest them rather than in terms related to strategic or financial goals
·they engage the organisation in developing, refining and renewing the ambition.
·they ensure it is translated into measurable activities to provide a benchmark for achievement and a sense of momentum
|Reputation - king piece in boardroom chess|
Suppose that we are playing chess with the pieces of goodwill that a company owns. Corporate reputation is always your king. In many cases where the company's name is also synonymous with its biggest brand (eg Sony) or visibly marketed as the corporate sponsor of product sub-brands (eg Nestle's Kit Kat), corporate reputation is also your queen.
The most naive kind of move endangers both king and queen, through failure to understand the human dynamics of communications. Not only does every corporate stakeholder (or audience) have a view of the company's reputation. A performance conceived with only one stakeholder group in mind may instigate a chain reaction that endangers the quality of your reputation with all stakeholders.
To the British reader, the most quotable example of such a chain reaction was Gerald Ratner's quip that the durability of some of his company's jewellery had a consumer shelf-life on a par with a Marks and Spencer's prawn sandwich. Although this joke about the crap segment of the jewellery market was actually made to an audience of city analysts, it was pounced on by tabloid journalists. The chain reaction quickly handed on to Ratner's erstwhile consumers - and prospective gift-givers - was that of the emotional let-down which humans feel when a relationship publicly crashes from smart to crap.
Progressing beyond the naive, watch out next for reactive moves and others which exhibit less than complete awareness of the symmetries of the reputation game. These too will often put your king and queen in check as Grahame Dowling's book on corporate reputations from an Australian perspective reveals through a variety of valuable citations including:·The Westpac Letters Affair in which a disgruntled employee (of Australia's second largest retail bank) leaked some confidential letters showing some of the bank's advice to customers on certain types of foreign currency loans was questionable. The gut reaction of the bank's public affairs unit - legally exact but communications insensitive - was to hand the matter over to the lawyers. Although the court finally ruled in favour of the bank against the employee's actions, the impact on the reputations of the bank held by journalists and customers was negative to the point that it contributed to the resignation of the then managing director of the bank.
·Thinking big for whom: "During the 1980s, Australian steel and resource company BHP, called itself 'The Big Australian'. Its management, employees and shareholders liked being associated with Australia's biggest company. Also, the company's public relations group thought that reminding politicians and public servants that BHP was a big contributor to the country's economy was a good idea. For customers of the company's steel products however, being reminded that BHP was The Big Australian was not highly valued. It just reminded them of the power the company used when allocating its steel production to subservient customers".
If combining your king and queen can result in such exposed positions, why do it? Reasons are various ranging between:
·the statesmanship status that is accorded to a company which knows its integrated values so well that it can even initiate best practice responses whilst in the midst of a crisis
·potential problems besetting companies which consciously or subconsciously appear to hide behind their brands
A classic case of corporately branded statesmanship relates to Johnson and Johnson's Tylenol - when this top-selling US analgesic was contaminated with cyanide by an unknown person. Johnson and Johnson's responses to this crisis were immediate nationwide product withdrawal, total corporate sincerity and refusal to relaunch the product until a tamper-proof package had been innovated. Those responses are now regarded as textbook corporate management of a crisis. Here was grandmastership of corporate reputation in action, confirmed philosophically by J&J Chairman Jim Burke's summing up:
Organisations which do not use the company name publicly, (ie where king and queen are not combined) are more prone to neglect corporate reputation. This occurs wherever:
·nobody has integrated charge of corporate reputation
·no measurements of corporate reputation are being monitored across the different stakeholder groups.
Such lack of process leaves you uninsured against two main kinds of eventuality:
·overcoming disadvantages at time of crisis·taking advantage of any trend among consumers or other stakeholders of wanting to know more about the company behind the products"
|People are global when as consumers they have access to information about goods and services from around the world|
Kenichi Ohmae, The Borderless World
|Only truly global companies can achieve "global localisation", that is, be as much of an insider as a local company but still accomplish benefits of world-scale operations.|
Akio Morita, Sony
|·Strategic foresight (focus sphere of business and core competences)|
·Refine ownership and monitoring roles vis a vis brand process and corporate reputation