Innovative Leaders Develop Unique Brands

Developing a strong brand is a key factor for sustainable growth and allows organisations to innovate and diversify new products and services; and take them to market as an extension of their existing brand status. This is a powerful competitive advantage and significantly improves the chances of early market success for these new product or service offerings.

In 1982, with a revenue of $693 million, Nike only produced running, tennis and basketball shoes for male teenagers and adults in the US, this then grew over the next 25 years to a revenue of $18 billion, where Nike produces shoes, clothing and sports equipment for all sports, in countries all over the world. As Kevin Keller and Donald Lehmann (2009) highlight, “the ability of the Nike brand and its brand promise of ‘authentic athletic performance’ to be leveraged across many product categories, market segments and geographical markets has been extremely valuable to the firm” (p.7). It was the ‘Just Do It’ campaign that transformed Nike overnight into the leader in athletic apparel.

Branding has now developed beyond the organisation, its products and services; where today you’ll find political leaders seeking to develop branding concepts around countries and cities; and also where employers seek to develop their own superior brand compared to competitor organisations.

Employer branding, for example, has received specific attention from leaders and organisations over the last few years, as part of their talent acquisition and retention strategies. If you can create a brand image around your organisation you can attract the best talent, and ensure that you retain and motivate this talent pool. As Lara Moroko and Mark Uncles (2009) state, “when a firm undertakes employer branding as a strategic activity, the ‘product’ they are branding is the employment experience that the firm offers, and the ‘customers’ of this brand and product are the prospective and current staff” (p.183). Of course understanding your customer segmentation is just as important with organisational branding (as with product branding), as recent graduates, for example, are likely to have different requirements that will attract them to an organisational brand, compared to other employee segments.

In today’s global competitive marketplace it takes innovative and visionary leadership to build a unique brand and image, and to identify latent market opportunities. As Keller and Lehmann mention, “many brands have latent brand equity that is never realised because of the inability or unwillingness of a firm to consider what the brand could and should become in the broadest sense” (p.7).

Remember a successful brand is associated with an image that resonates a distinctive form of quality with its customer base; where they are attracted to the brand as it meets their needs, exceeds their expectations and gives the customer ‘a feel good factor’.

Growing a brand can relate to the latent brand value that exists to develop new products or services that appeal to new target markets and customers, in the present and the future (Keller and Lehmann, 2009, p.9). The ability to grow the brand is not a guaranteed success as it depends on having the resources, in respect of capital and skills, to transfer the opportunity into a market reality.

Finally Keller and Lehmann mention that, “a good brand vision and positioning strategy has both a foot in the present and a foot in the future. Brand vision needs to be inspirational so that the brand has room to grow and improve in the future. The trick in developing a brand vision is to strike the right balance between what the brand is and what it could become and to define the right series of steps to get it there” (p.8).

So take a moment to ask yourself if you have identified all the potential opportunities for your brand?

References

Keller, K.L. and Lehmann, D.R. (2009). Assessing long-term brand potential. Journal of Brand Management, Vol. 17, Issue 1, p.6-17.

Moroko, L. and Uncles, M.D. (2009). Employer branding and market segmentation. Journal of Brand Management, Vol. 17, Issue 3, p.181-196.

Career Transition: The Key to Success

“Life isn’t a dress rehearsal” though, occasionally, we probably wish that it was. We have to be constantly alert to see the opportunities that exist and grab the ones we want before they pass us by, (Kerry Packer).

In respect of careers, there are two key steps, firstly finding the right opportunity, either within your existing organisation or elsewhere, and then making a successful transition into the new job.

While keeping alert for your next opportunity and when planning the transition, it helps to know yourself first, “knowing whether you tend to be left-brained, the logical arithmetic type who likes formal structured activities, or right-brained who is more intuitive and relies more on the feel and sense of a situation. This all has a good deal to do with the type of organisation you will be more comfortable with,” (Kanter, 2003, p.45)

A 2009 survey found that “87% of the 143 senior HR professionals who responded either agreed or strongly agreed with the statement – ‘transitions into significant new roles are the most challenging times in the professional lives of managers’. Further, 70% agreed or strongly agreed that – ‘success or failure during the transition period is a strong predictor of overall success or failure in the job,” (Watkins, 2009, 47).

Michael Watkins found that “leaders in transition reflexively rely on the skills and strategies that worked for them in the past; after all, their previous successes are what propelled them to the new opportunity,” (p.48) – yet Andrew and Valerie Stewart remind us that the relationship between performance and potential is not a simple one; and that the best performers are not necessarily those of high potential. Promotion solely on the basis of past performance almost inevitably leads to promotion to the person’s level of incompetence.

Transition isn’t just challenging for senior roles, it’s challenging for any job change, where part of the problem in preparing for the transition is finding the time to plan and also knowing what to plan for. Kanter (2003) suggests that you set yourself four to six success criteria that link to your new objectives. But transition isn’t just about performance objectives, it involves getting to know the people, the new teams you’ll be operating with, the expectations from different individuals in the organisation and creating the right first impression – as you don’t get a second chance at a first impression.

There are pros and cons of promotion and transition from within and some may think internal transition is easier than transition from the outside. Yet the problem with internal transition is that your reputation precedes you, which can be good (or not) – especially if the new role requires you to manage personnel that were previously you friends and colleagues. The problem is that the person being promoted, often assumes that since they got on well with their team while they were part of it, the team will automatically accept them as their new boss – which, if not planned as part of your transition, can be your first big mistake (and one that you may not recover from). With internal promotions you must plan a detailed communication strategy as part of your transition to discuss your expectations and those of your team.

Transition into a new role is critical at any level as it set’s the ‘tone’ for your future – a poor transition is likely to lead to a less than optimal future. During your first few weeks you should establish priorities, define strategic intent, engage with your new team, identify your internal suppliers and customers, identify where you can achieve short-term successes in line with your goals and objectives, and meet and greet all your key collaborative partners, inside and outside the organisation (Watkins, 2009).

Don’t take your future career opportunities for granted; and when they come, remember to plan your transition carefully to make sure that your next job is a resounding success.

References

Kanter, J. (2003). Planning and Managing Your Career. Information Strategy: The Executive Journal, Vol. 19, Issue 2, p.43-48.

Watkins, M.D. (2009). Picking the Right Transition Strategy. Harvard Business Review, Vol. 87, Issue 1, p.46-53.

Social Responsibility: Who's Got it Right and Who Hasn't?

Only 3% of 4,238 business executives surveyed by McKinsey believed that their companies were doing a good job of being socially responsible (cited in Glavas and Piderit, 2009, p.54). “There are four domains of corporate social responsibility (CSR): economic, legal, ethical and philanthropic. The basic idea of CSR is that business and society are interwoven rather than distinct entities; therefore, society has certain expectations for appropriate business behaviour and outcomes, (Lee, Fairhurst and Wesley, 2009, p.141-142).

CSR is becoming a ‘hot’ topic of research and debate, yet is there more talk than action - are organisations really trying to become socially responsible or simply playing to their audiences?

Marjorie Kelly and Allen White highlight how some organisations are changing their fundamental design to embrace the effective principles of CSR and site the examples of Novo Nordisk, Organic Valley, and the John Lewis Partnership.

These organisations have evolved to integrate business principles with social responsibility; Novo Nodisk, for example, is a multi-million dollar pharmaceutical company, with a turnover in excess of $7 billion, based in Denmark that is owned by a foundation whose primary aim is to find a cure for diabetes. Organic Valley, in the US, with a turnover in excess of $300 million, has established a co-operative that is owned by the 1,200 farmers who produce the organic products; and the John Lewis Partnership in the UK, with a turnover in excess of $9 billion, is a 100% owned by its employees, and its stated purpose is ‘serving the happiness of its employees,’ (Kelly and White, 2009, p.25).

Yet at the other extreme you have organisations like BHP-Billiton who often rank high in formal CSR surveys (such as the Global Reporting Initiative) but aren’t similarly supported by many environmental/sustainability groups, because of their perceived impact on the environment.

Timothy Devinney (2009) highlights a more complex problem with L’Oreal, a company that engages in limited animal testing, but who owns the Body Shop, which of course actively promotes its animal-friendly orientation. Devinney raises the question; “is society not better off with a schizophrenic L’Oreal rather than no Body Shop at all?” (p.45); yet what does this say about an organisations commitment to CSR and where does it leave the consumer. By supporting the Body Shop, like it or not, the consumer is supporting L’Oreal that engages in animal testing.

At Nike and Proctor & Gamble (P&G), “social and environmental considerations are deeply embedded in decision making; where corporate responsibility is one of Nike’s nine strategic goals. At Nissan North America, 99% of the staff have gone through green training to gain understanding and sustainability awareness, which the company views as integral for acceptance of CSR initiatives”, (Epstein, Buhovac and Yuthas, 2010, p.44-45).

However, what seems to be clear is that most organisations are moving too slowly in embracing the true values of CSR and are now able to blame the current global recession, for their slow progress in this important area.

In a 2009 report, Lee, Fairhurst and Wesley, confirm that many organisations and researchers are confident that “there is a positive relationship between CSR activities and corporate performance citing that often the costs are small while the benefits are potentially high.” They cite research from Waddock and Graves in 1997; Margolis and Walsh in 2001; and Price Waterhouse Coopers in 2004, that confirm that CSR positively influences profitability, through factors including, improved customer loyalty and employee job-satisfaction, (2009, p.144).

So let’s hope more organisations make corporate social responsibility a strategic priority in the months ahead.

References

Devinney, T.M. (2009). Is the Socially Responsible Corporation a Myth? The Good, the Bad, and the Ugly of Corporate Social Responsibility. Academy of Management Perspectives, Vol. 23 Issue 2, p. 44-56.

Epstein, M.J., Buhovac, A.J. and Yuthas, K. (2010). Implementing Sustainability. The Role of Leadership and Organisational Culture. Strategic Finance, Vol. 91, Issue 10, p.41-47.

Glavas, A. and Piderit, S.K. (2009). How Does Doing Good Matter? Effects of Corporate Citizenship on Employees. Journal of Corporate Citizenship, Issue 36, p.51-70.

Kelly, M. and White, A. (2009). From Corporate Responsibility to Corporate Design: Rethinking the Purpose of the Corporation. Journal of Corporate Citizenship, Spring, Issue 33, p.23-27.

Lee, M-Y., Fairhurst, A. and Wesley, S. (2009). Corporate Social Responsibility: A Review of the Top 100 US Retailers. Corporate Reputation Review, Vol. 12, Issue 2, p.140-158.

Service Loyalty Creates Customer Loyalty

An organisation’s “primary focus should not be to merely attract customers, but to obtain their loyalty and, thus, their patronage, not only for the present, but also for the long-term. While organisations attract their customers through their promise, the customer’s decision to purchase is founded on the trust that the firm will fulfil their needs,” (Kandampully, 1998, p.436).

In an era when customer service seems to be something that is sadly lacking for many – there are unique opportunities for organisations to gain market share and create a competitive advantage, through focusing, not only, on offering service but on the creation of customer loyalty as well.

Two of the basic theories in customer satisfaction include disappointment theory and prospect theory. The theories are based on the premise that our reaction to service; which can be described either as, disappointment, neutral or elation; is based on the service we receive in relation to our expectations. Disappointment theory states that, “the greater the disparity between outcome and expectations, the greater is the person’s disappointment or elation;” whereas prospect theory states that “the evaluation of satisfaction will display diminishing sensitivity. That is, marginal values of gains and losses decrease in size with increasing levels of satisfaction and dissatisfaction,” (Homburg et al, 2005, p.87).

Customer service is not just about exceeding your customer expectations on a consistent basis, (rather than a transaction specific event), but also about understanding and meeting their future needs and future expectations. This takes time and effort, and presupposes that your organisation already has the relationship with your customers, where you can engage with them to discuss and understand their future needs. As Kandampully mentions, “the primary objective of the service provider is identical to that of the tangible goods producer, i.e. to develop and provide offerings that satisfy customer needs, thereby ensuring their own economic survival”, (p.432).

Another advantage of offering superior service on a consistent basis is that research has shown that it can lead to the customer being willing to pay more for a product or service. Homburg, Koschate and Hoyer’s, 2005, research supports “the managerial belief that satisfied customers – those receiving higher quality service or who feel better about the product – are, in fact, willing to pay more for it and that the relationship is non-linear. The results suggest that the measurement and enhancement of customer service should focus on cumulative satisfaction rather than on transaction-specific satisfaction,” (p.94).

Focusing on service loyalty to create customer loyalty is either part of your organisations culture or it isn’t. A culture of service loyalty only exists and works in practice, when the whole organisation embraces and owns the principle and it becomes part of their daily routine in all interactions, both tangible and intangible, with existing or potential customers. The principle of service loyalty becomes part of the organisations ‘brand and image culture’ and brings with it a distinct competitive advantage.

As Kandampully states, “a customer’s loyalty and trust is gained by the service personnel’s commitment to seamless, consistent and superior service, which manifests itself, to the customer, as ‘service loyalty’. It is through service loyalty that an organisation achieves customer delight and customers’ honest participation (customer voice) in the relationship – this is, indeed, the key to continuous improvement and sustained superiority,” (1998, p.439)

References

Homburg, C., Koschate, N. and Hoyer, W.D. (2005). Do Satisfied Customers Really Pay More? A Study of the Relationship between Customer Satisfaction and Willingness to Pay. Journal of Marketing, Vol. 69, p.84-96.

Kandampully, J. (1998). Service quality to service loyalty. A relationship that goes beyond customer service. Total Quality Management, Vol. 9, No. 6, p.431-443.