When Corporate Brand Strategy & Company Culture Collide, Culture Wins
Hal King of King Brown Partners has said of corporate brand strategy, “When strategy and culture collide, culture always wins.”
Those words ring true in today’s marketplace. Having a corporate brand strategy is essential for a business, but it is not enough if the enterprise is unwilling to embrace change and modify behaviors to align with customers’ needs, to keep the brand relevant.
Two stalwarts of the consumer products industry have recently suffered the fallout of the strategy/culture collision, and yet another appears to be facing a similar fate. Kodak recently filed bankruptcy, Sony posted its worst annual operating loss in company history, and now Best Buy is on the ropes with a huge first-quarter loss.
Neither Kodak nor Sony was ambivalent about changing times. Both companies made strong statements about where they needed to go, yet neither appeared prepared to steer their corporate cultures in that direction. On the other hand, Best Buy continues to cling to the culture that earned the retail giant its reputation of a big-box powerhouse in the 1990s, ignoring major changes in consumer buying habits in the process.
Kodak’s downfall was blamed on its inability to make the leap to digital media. But Kodak has been positioning itself as a digital imaging company for more than a decade. Why was it unsuccessful? Because at its core, Kodak is a chemical company whose culture embraced film coatings and processing. When digital media came along, Kodak rebranded itself as a digital imaging company, but the move took it further away from its chemistry-based roots, and company culture could not adapt.
The Sony brand faces similar challenges. Sony has spent billions of dollars marketing itself as an entertainment company, yet has not been able to make the transition in the eyes of the consumer or its employees, who still see it as a manufacturer of premium hardware.
Best Buy may be next. The culture of the company is deeply rooted in consumer choice and selection at its retail stores, but it is exactly this choice that dooms the company; consumers now choose to buy their movies, music, and electronic equipment online. They no longer comparison shop in stores, they comparison shop on the internet, and Best Buy is not a value leader in online sales.
In contrast with these companies is Amazon. Amazon has grown from the world’s largest bookstore into the world’s largest retailer, and is now extending its brand to hardware (the Kindle e-Reader) and cloud computing and storage. Since it began, Amazon’s brand strategy and organizational culture have always been aligned with customer satisfaction, scale, and delivery. This enables them to remain a global player, even in changing economic conditions.
We believe strongly in brand-driven business strategy. What that means is, a solid corporate brand strategy should inspire a company to be have in a certain way. This requires cultural resonance. If those new behaviors aren’t imbued or embraced, the strategy will likely fail. The longevity of a brand relies on a culture within the corporation that thrives on meeting customers’ needs at every level, while at the same time retaining core values.