“Inside my empty bottle I was constructing a lighthouse while all the others were making ships”
Charles Simic
Last week as I mentioned in my blog I had a chance to talk with my sister in law; a very talented communications professional, about iconic brands, connections and related concepts.
We talked about what creates an iconic brand, she felt the elements include among other things:
- A defining brand truth. Think about the concept of a defining brand truth. It articulates value statement not only to your customers, but also to your employees. It allows them to commit rather than merely comply.
- A set of in transient principles. Great brands refuse to compromise on their principles. They may change a process or a look, but they retain their essence. What they represent is foundational and consistent.
- Great brands are iconic. Think about great brands. Brands like Porsche, Mercedes, Xerox, Kleenex, McDonald's, Starbucks and others. They are a benchmark. Their "brand" is instantly recognizable.
- They create and reinforce an experience. Think about that. Great brands literally create expectancy. You don't just go there or dine there; you experience them in a variety of ways.
- They are inspirational and aspirational. As we have talked about with the new definition of engagement a great brand creates a pride of affiliation. Employees and customers take pride in their association with the organization; they champion the product or brand. They become benchmarks.
- Great brands are enduring. They continue to deliver value to their stakeholders; shareholder, employee and community.
We posted our thoughts on the popular social networking site and got some terrific insights and opinions from others as well. They ranged from brand as promise, to brand as purely a marketing tool or tactic. I think there is room for both.
There were also some interesting discussions about whether organizations start out striving to create an iconic brand, or iconic brands happen over time. I believe that iconic brands are deliberate. The “crafter” starts with a premise rather than just a product. I don’t think that can be created by a group of marketing professionals alone, no matter how talented. It must be planned and systemic. I also see a convergence between iconic brands and true engagement.
If you examine some of the things I have discussed previously in my writing about true engagement you come across Pepper and Rogers definition of the old engagement model: the intellectual, behavioral, and emotional model. At the intellectual level people (your employees and hopefully your customers) agree with your vision statement or brand premise. At the behavioral level they start to operate with a sense of brand loyalty, they seek out your product or service. At the emotional level they go further; they recommend you to friends and family.
Pepper and Rogers go on to describe new levels: the levels of best product or service, and the pride of association. To me that describes being a benchmark, and finally achieving almost cult like status. Does every brand seek or achieve that level- no, but I would submit that is what differentiates an iconic brand from a regular brand. Do we really believe that just happens coincidentally? Or that the marketing department can create that kind of affiliation by itself?
Pepper and Rogers also describe that this true engagement can only be built upon a foundation of trust, and that you will never enjoy greater engagement from your customers than you enjoy from your employees.
To be iconic, both your employees and your customers must trust you and what your brand represents. They go further indicating that a 2003 survey indicated that outstanding service represented the compelling “buying” decision in 51% of the consumers surveyed and over 80% indicated they would terminate a relationship because of a bad experience. So to a great extent your employees are your brand.
Is it just me or do you notice a significant degree of correlation between my sister in law’s elements of a great brand and Pepper and Rogers description of the elements of engagement? They both require a huge investment in developing and nurturing relationships.
You might be asking yourself – where are you going with this? Okay, I’ll get to my point. Our future is dependent on trust based relationships; not technology, not product innovation, but relationships.
I want to explore that through a couple of different avenues.
Exploring Engagement
In my last “corporate” job I was an executive with a financial services organization. As a credit union we really felt like we owned the market on the relationship thing. Credit unions like to point out- we are member owned. We have members, not customers. I remember being told we have 90,000 members. Being an outsider and therefore not very bright I asked – “how do we define members?” Boy, did that cause a shit storm!
It turned out that we defined “member” essentially as anyone who had an account with us. We were pretty bummed out when we applied metrics closer to the ones espoused by Pepper and Rogers and found out most of our members weren’t members at all, they were customers, and frankly not all that engaged.
We spent almost three and a half years developing and implementing an engagement strategy. It included all the elements that are included in both Pepper and Rogers and my sisters model. We built it from the inside out. At least for a period of time we enjoyed the fruits of that endeavor, we went beyond a financial organization to creating true engagement with the financial metrics to validate our claim. I won’t bore you with the details. If you are interested they are available in my previous white paper - New Paradigm for Credit Unions. I can’t say whether they have transcended the boundary to iconic or merely enjoyed an interlude. That is for others to judge.
One of the other models I would like to examine is my sister in law’s iconic brand. I won’t specifically identify it, but I assure you, you would immediately recognize it. They have taken it beyond a beverage to creating affiliation and brand loyalty. They aspire to do that with other brands they own and manage. They are doing that through a systemic multi faceted approach that includes both external and internal branding.
A Call for a New Leadership Foundation
In the credit union industry and in fact across financial services we have looked for our “leadership” and new strategies to come from two primary areas- finance and operations. I think if you were to examine the career paths of the vast majority of CEOs in both banking and credit unions you would find that one of those disciplines represents their career path. In fact as a culture I think the U.S. is much more comfortable with leaders coming from these “hard” disciplines. We revere technology and product. We tend to shy away from relationship based strategies. Our labor relations legal infrastructure is in fact one of the most archaic and adversarial in the developed world.
Our top business schools also tend to focus much more on “operational” and financial skills rather than communications and the skills around building trust and engagement. Current headlines are screaming that the MBA degree is largely responsible for the current financial crisis and demise of so much of our economy. How interesting that we absolve ourselves of any responsibility for reinforcing that culture through our hiring and succession planning activities.
I will go out on a limb and make myself even more unpopular by stating that much of what we teach would it in what my colleague Ty Warren would describe as “mapping” skills. We claim to revere leadership, but we teach and reinforce mapping.
I have found that most traditional approaches to engagement are focused almost exclusively externally. We measure customer reaction, loyalty, and satisfaction. We spend billions in crafting marketing campaigns and strategies to capture them. I also find it interesting that the first two areas that organizations usually cut in financially stressful times are marketing and training- the relationship building things.
A few years ago I took a position that the most important “management” functions in organizations were going to be marketing and human resources management. I stand by that premise today and I would like to take through my argument as to how true engagement represents the appropriate hybrid of both disciplines.
The Fall of An Icon
When we think of iconic industries I think few of us would argue that U.S. prowess in the field of automotive development and production doesn’t belong on the list. The automobile is a fixture of American culture. Our expenditures in automobile related areas are significantly higher than any other country by an order of magnitude. For generations the “big three” were cornerstones of our economic system. The “right” of Americans to own and drive personal vehicles continues to be a huge contributor to our dependence on foreign oil.
The relationship between Detroit and the UAW has also been iconic in representing the viewpoint of the collective bargain process to the average American. The lifestyle enjoyed by automotive workers at its peak was a benchmark for unionized employees and a target for those attacking the “excesses” of unions as an institution. I find it interesting that while Americans are angry at the banking system, they are outraged at Detroit. I have seen recent information that indicates Americans are literally boycotting GM and Chrysler because of the government loans and their request for additional dollars. I would also submit that much of the issue at the root of the collapse of the industry is a lack of engagement.
A recent letter to the editor from Lithia Motors, a major national automobile dealership, received a scathing and largely accurate response. The original letter praised the Big Three for their efforts to improve quality, efficiency, consumer safety, etc. He talked about their commitment and vision and leadership.
The largely accurate response was that the majority of those innovations occurred not based on industry leadership and vision, but in response to competition and consumer rejection of their products. The initial response to the competition was restriction of imports and tariffs. Only when those strategies failed to stem the tide did Detroit begin to respond with a more systemic solution.
The reason I fold engagement into this equation is that it was in the automotive industry that we first heard about Japanese management and total quality management. The irony is that “Japanese” management originated at Harvard in the 1940’s. The concepts developed by Deming and others were rejected because we owned most of the industrial capacity following the devastation of World War Two.
I will grant you that much of the principles of “kaizen”, continuous improvement, and related concepts benefit from technology at their base are relationships. Quality circles, sophisticated relationships with single source suppliers and other foundational concepts all involve the participation and commitment of people.
It is also in the automotive industry that “welfare” benefit took on new meaning. The retirement, health care and economic security protections embedded in contracts between the UAW and the big three created an unprecedented level of what I believe is corporate codependency. Literally responsibility for your health and retirement transferred from you as an individual to the corporate employer. We exchanged personal competency for this security, a security that has become economically unsustainable. This wasn’t a relationship based on engagement or commitment; it was and remains largely transactional. We didn’t attempt to forge new relationships with employees and the consumer we tried to rely on technology to reduce the costs and marketing strategies including questioning the patriotism of foreign car buyers to sell the product.
A New Solution
It is easy to blame the unions for where we are and how we got there, but the real issue is the American labor relations model which requires the negotiation on the effects of technology, but not its implementation. The model almost makes engagement in that setting impossible.
It is still interesting for me today to talk with employers and individuals about the “systems” that are going to facilitate our recovery from the current recession. We are still looking for a technological solution rather than a relationship based solution.
My friends Pepper and Rogers say that organizations that successfully embrace an integrated engagement strategy enjoy competitive advantages in three key areas: Productivity, Performance, and Sustainability. I don’t know about you, but those represent my big three! The advantages are in the personal commitment that each person makes to the goals of the organization, not their technological superiority.
Now let’s examine the criticality of the integrated solution. My colleagues in marketing play a critical role in building the baseline of engagement. They gather the information regarding the needs and desires of the served and un-served customer base. They report on our ability to interpret the customer’s requirements and meet or exceed their expectations. They identify the potential opportunities and create the framework for the trust between customer and vendor.
Let’s talk about what they can’t do by themselves. An earlier quote said,”to your customers, your employees are the brand.”
A quote from the Harvard Business Review puts it even more succinctly –
“Too many organizations focus on what customers think – to the exclusion of what employees think. Companies are more likely to be growing if employee’s opinions of the company are better than customers’.”
Guess what, your marketing department can do a great job crafting and shaping your brand, but your management team has to make it real at the individual level.
How important is the manager you ask? Well, that same HBR article puts it this way-
“One bad manager can pollute multiple levels of an organization, and poor management brings down employee morale, which spills over into the engagement level of customers.”
James L. Heskett, one of the authors of the Service Profit Chain says “….But it also requires actions. That is when managers are not managing by the values and cannot be admonished or retrained to do so (which rarely works), they have to go.”
Before you delegate this to Human Resources you need to stop and recognize that this is a systemic issue. In short this is a leadership issue. Too many times I see Marketing or Human Resources being put “in charge” of these initiatives. That is corporate speak for nobody else wants to manage it and address the fact that we may have to make real changes.
I can’t tell you how many times in my career I have seen organizations tolerate management performance that is unacceptable. I hear “He’s really a great manager except for the people thing.” Guess what, the people thing is at the core of engagement.
If we look at the failure of the financial institutions and the automotive industry I believe we will find that the key mistakes were made in these areas of engagement and leadership. It was not technology that failed us, it was people.
So I would challenge you to examine the elements of those sustainable brands and my Compliance to Commitment model™. I would submit you are going to find several common elements:
- They are about congruency.
- They are about clarity.
- They are experiential.
- They are shared by people.
- They are systemic and synergistic.
- They are built on the same foundation, the foundation of trust.
There is no magic solution to the times that we find ourselves in. I believe that only through creating and reinforcing models that incorporate trust, communications, personal competency, and personal accountability at every level will be find our way to a new model.
Melanie and I have chosen to build lighthouses. They don’t chart your path, they light your way. Each person has to plot their own course, but by creating a lighthouse you expose the rocks and the shoals.
We agree with Marcus Buckingham-
“ Today’s most respected and successful leaders are able to transform fear of the unknown into clear visions of whom to serve, core strengths to leverage and actions to take. They enable us to pierce the veil of complexity and identify the single best vantage point from which to examine our complex roles. Only then can we take clear, decisive action.
Effective leaders don’t have to be passionate. They don’t have to be charming. They don’t have to be brilliant…They don’t have to be great speakers. What they must be is clear.”
Isn’t it time to explore a new model before we lose another “icon”?
“Commitment is the act of being physically, psychologically, and emotionally impelled. It means that employees gladly give up other options.”
Ken Matejka, Why This Horse Won’t Drink, 1991