Airlines

southwest culture

Culture Drives Brand Value – Where Will It Drive Yours?

I recently published an article in Inside Higher Ed describing five strategies of great brands, and how they apply to universities.

One of those five strategies is: brand inspires behaviors – you build a brand by being something, and letting that culture shape the way you behave and communicate. A successful brand strategy must lead to tangible behaviors, ways of thinking and acting that can differentiate you and your company in measurable ways.

Consider FedEx, Southwest Airlines, GE, and other brands that have become legendary for their corporate cultures. They all recognized the importance of defining and articulating not just their customer promises, but their internal behaviors for fulfilling those promises. Customer satisfaction and business success are the rewards that reinforce these behaviors, creating a cycle of growing brand strength.

A recent example of this is San Francisco’s own Salesforce.  Marc Benioff, Salesforce CEO, has fostered a culture of “Ohana” within the company, a set of principles that inspire everyday behaviors against which employees are evaluated. Ohana is a Hawaiian word with deep meaning, which translates very roughly as “extended family”. What it means is that all members of a family, and their greater community, support each other. This culture extends externally for Salesforce – their number one mission is “customer success.”

The emphasis on culture has major effect. Benioff recently said, “There’s all this incredible energy in your company and you can unleash it for good. All you have to do is open the door.”

With this attitude, it becomes evident why Salesforce is one of the world’s fastest growing companies, and is ranked among the “best places to work” wherever it has offices.

Compare Salesforce’s results, and the brand benefits they accrue, to recent events at United Airlines and Uber. These two companies have dominated the news cycles lately, for all the wrong reasons.  Within each story is a tale of bad behavior and poor choices, revealing crippling or even toxic corporate cultures. People who describe these woes as “PR problems” aren’t dealing with the core issue, the deep cultural flaws that threaten the very existence of these two companies.  When United loses $1Billion of market valuation in one day and Uber has over 200,000 customers deleting its app, that threat is clear and present.  These companies need to focus on their cultures at all costs, or they will lose any customer loyalty that remains.

We hope that more companies will take a close look at what promises they really want to make to their employees, customers and shareholders, and what those promises mean for how they act, speak, and treat each other – as well as their customers. Iconic, customer-centric brands like Salesforce and Southwest show strong evidence that placing a priority on building and living a positive culture results in loyal customers, healthy companies and strong brands.

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wells fargo

What happens to a brand when a CEO leaves?

The answer is, it depends. On the:

  • Stature of the CEO in the business community
  • Perceived influence of the CEO on the company – good or bad
  • Swiftness with which a respected replacement takes charge

The recent resignation of Wells Fargo CEO John Stumpf could mean one of two things for the Wells Fargo brand:

  • The company is in trouble and his resignation is symbolic of a bigger problem
  • His resignation signals Wells Fargo’s commitment to fixing what is wrong, and is therefore good news

To employees, investors and customers alike, a CEO’s resignation might result in the loss of some trust in the company, the loss of some competencies and valuable connections the CEO acquired while in office, the loss of some institutional memory, and a potentially demoralizing impact on the organization.

However, these consequences may be overridden by showing that the organization has strong principles, that it holds its executives responsible for their actions, and that it is taking steps to prevent similar problems. The departing executive takes the perceived problems of the organization with him, while the new executive starts with a provisional slate.

When our client Boeing had to let its CEO go in 2003, the action created an opportunity for Boeing to reframe its story and deliver a bigger, more positive vision for the company. By drawing attention to a broader promise and a renewed commitment, the loss of a CEO catalyzed the brand’s ascendancy.

In other cases, the CEO embodies the company brand, and his/her departure signals a major change in the brand’s promise. Virgin America is a shining example of this – while Richard Branson was not allowed to be CEO of the U.S. based airline, he was every bit the personality of that brand. The sale of the company to Alaska Airlines, and Branson’s subsequent departure from the scene, has investors and customers very worried about the future of their beloved airline. Virgin America has done its best to reassure customers through communications and consistency of experience that their brand promise is here to stay. Like Wells Fargo, time will tell if they can fulfill that promise.

Our advice to Wells Fargo in this time of transition is to commit to a new story, invest in making a renewed, valuable promise to your customers and deliver on that promise in actions, not just campaigns. Seize the opportunity to make the brand stronger, rather than just hoping this loss of confidence will be forgotten with time.

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It Never Pays to be a Copycat

It Never Pays to be a Copycat.

A recent WSJ Article trumpeted “Copycats Rule the Skies.” It was about how the three largest U.S. airlines have all become so much alike.

Why are the Delta, American and United brands so much alike? Patrick Moynihan, the former Harvard professor and U.S. Senator had a theory called, “The Iron Law of Emulation.” His theory held that nations that competed against each other became more and more like each other. This certainly seems to be the case with our airlines, hotels, banks, etc.

Moynihan pointed out how the U.S. and Russia once emulated each other: We got the bomb, they got the bomb; we got intercontinental missiles, they got intercontinental missiles; we got nuclear submarines, they got nuclear subs, and on and on.

During my 20 years at Landor, we designed the brand and identity strategies for dozens of leading airlines. Our purpose, always, was to differentiate each airline in a way that was relevant, true and compelling. To create a preference or command a premium, we built on each airline’s unique brand characteristics which were often its national characteristics: British Air was about their understated global competence. Singapore Air was about the pride that Singaporeans take in providing personal service. Alitalia was about Italian style. Hawaiian Air was about sunshine, flowers and relaxation. These identity strategies influenced all the decisions each airline made. Whom to hire, how to train, what kind of fleet to operate, and what passenger offerings and style of operations would reinforce their particular identity.READ MORE

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One word is critical to M&A Success – CULTURE

One word is critical to M&A success – CULTURE

We learned last week that Hewlett Packard Enterprise is merging its enterprise services unit with Computer Sciences Corp (Read the full story). This is a perfect opportunity to talk about the consequences of mergers on identity and brand, and how having a solid strategy for both is key in your merger’s success.

Research has shown that as many as 83 percent of mergers fail to achieve their original business goals. Brand value, or goodwill, suffers right along with business value, often destroying the appeal and premium that might have inspired the acquisition in the first place. Why is this? Because culture, and the purpose behind each organization being combined, is often ignored in favor of the numbers.

These deals are put together by attorneys and investment bankers, who fail to consider the cultural implications of the merger. These people think in terms of “synergy” and 1 + 1 = 3, when the real goal should be 1 + 1 = 1.

READ MORE

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Brands in Crisis: You Can’t Hide

Malaysia AirlinesAfter the back-to-back tragedies of Malaysia Airlines flights MH17 and MH370, we’ve seen some news reports that the airline is looking to rebrand and change its name.

While I can understand why a brand in crisis would want to distance itself from these terrible events, I think it’s a mistake. Here’s why:

The damage is already done: These tragedies have dominated the news for many months, and the misfortunes of Malaysia Airlines are seared into the mind of the world’s population.

Superficial rebranding looks like hiding: When a brand has been through a disaster, a superficial change in identity makes it look like you’re trying to hide something. Instead of helping, it can backfire, provoking condemnation that further sinks the brand’s reputation, revenue and market value.

What really matters is demonstrating integrity: Instead of hiding, brands going through disasters need to demonstrate a real and total commitment to making meaningful change. For Malaysia Airlines this means rethinking every aspect of the airline and implementing major changes in critical areas (safety, management, training, operations, policies, service and transparency). In this way the brand could signal its commitment to ensuring that these tragedies did not happen in vain.

Brands in crisis can turn tragedy to triumph. But doing so requires investment and integrity. Malaysia Airlines could successfully change its identity and name if they introduce these changes as a high-visibility sign of their commitment to completely re-vamp their airline, and to be held to the highest standard. If the airline is truly changed, its identity could be changed. Handled correctly, that’s an opportunity.

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