Building brands from the inside-out

BY Michel Nugawela

As organizations grow, mature, and evolve, they often find their identity no longer accurately reflects who they are, what they do, or who they do it for. 

The problem is one of incoherence: to grow and expand, managers target different, larger, or more diverse customer segments by over-diversifying their businesses through brand extensions or over-segmenting their brands with line extensions. But done right, a well-thought-out brand strategy refocuses an organization on where its fundamental difference – or value – lies, and where it has the greatest potential to narrow the gap between its brand image and identity. Finding that point of difference can be hard work. It is certainly one of the most important undertakings when we develop a brand strategy. But thereafter, how the organization delivers what it promises – or connects strategy to action – requires not just looking outward at new customers and markets, but also engaging leaders and employees within the organization to identify and build a brand-led culture of achievement.
Uniqueness of brand strategy

A brand strategy – unlike a brand communications strategy – brings together business units and functions from across the organization to provide an integrative view of their role and performance in relation to customer needs and drivers, and the brand’s competitive position in the market. For example, when Agro Holdings – Carson Cumberbatch’s oil palm interests in Indonesia, later renamed Goodhope – partnered us to develop their corporate identity and brand architecture, our first task was to identify the differentiated value the conglomerate was able to create through its fully integrated operations across the palm oil value chain. Based on our assessment of the category and business, which included in-depth qualitative research across four countries, we asked the CEO and senior managers: was Goodhope to become a “generic expert”, “innovation leader”, or “sustainability champion”? Their preference, which weighed the evolutionary-to-revolutionary spectrum of positions against both category dynamics and the organization’s core capabilities, lay in their legacy strengths of driving operational excellence with a focus on cost, efficiency and scale – the “generic expert” position.

How organizations behave on the inside is inseparable to how they are perceived on the outside

 This would also inform the brand proposition, where each and every employee ensured the flow of value to the customer through “the continuous improvement of sustainable, highly efficient, and reliable production and service delivery processes” that were “trusted by customers to be delivered consistently, accurately, and in a timely manner”. 

Broader customer offering

Yet as Goodhope in organically grew its way to a broader customer offering – from upstream capabilities in oil palm cultivation and milling, to newly-acquired refineries in Malaysia and India which produced value-additions such as the specialty fats that were ingredients in industrial and consumer foods – it was clear that a strong brand could only be built from the inside-out. The conglomerate would have to look inward to connect and develop new capabilities and processes across business units and functions, as well as bring together employees with different backgrounds, skills, and perspectives who would create and champion the products and services that delivered the brand proposition to customers. But each new acquisition also added further complexity: how was the entity to be integrated, what synergies and capabilities were to be leveraged and shared? 

As I mentioned, the objective of a brand strategy is to clearly articulate the differentiated value the organization is able to create, and for whom. In doing so, it also clarifies how employees are engaged, empowered, and motivated to deliver its vital outcomes through a brand-led culture – the values, mindsets and behaviours that determine “how we do things around here”. 

For example, Goodhope’s organizational culture had evolved through the standardized processes and hierarchical decision-making structures of its upstream plantations.  Would it leverage the same culture to integrate the newly-acquired downstream entities? Or, given the prevailing cross-cultural differences between organizations, was it necessary to emphasize a decentralized management structure with a higher degree of autonomy for business units, functions, and locations? Exactly which crucial behaviours were needed and capable of being widely recognized and emulated, to lend credibility to its proposition and support its diversification and integration processes?

Brand-led cultures

Brand-led cultures orient goals, roles, and behaviours to customer needs and expectations. In the case of Goodhope’s “generic expert” positioning, for example, the on-brand behaviours (which became known as “Triple F” within the organization; see inset) were the need to be “focused” – “we respond to the business environment by strategically defining performance goals in relation to our capabilities and competencies”; “flexible” – “we are built to change, which makes us adaptive and agile at all times”; and “fast” – “we move at the speed of business”. (Be wary: translating intentions into actions – or words into desired behaviours – is difficult at the best of times but the task becomes that much more challenging when we work with different nationalities that interpret meaning through their unique cultural perspective. For example, the CEO at Goodhope’s regional office in Jakarta informed us that there was no equivalent word in Bahasa Indonesia for “fast”!)

The objective of a brand strategy is to clearly articulate the differentiated value the organization is able to create, and for whom

Culture is learned behaviour, determined by what the organization prioritizes, the decisions it makes, and the actions it takes. During a repositioning and shift to a new identity, employees look to their leaders – starting with the line manager – to model the on-brand behaviours they are expected to emulate and reinforce at every customer touchpoint. 

Organizations that embrace the connection between brand and culture intentionally reverse the flow and drive management from the bottom-up, encouraging participation and engaging employees to commit to change and the new behaviours. Of course, senior managers bear the final responsibility in providing structure, accountability, and motivation to overcome the typical ambivalence (and when mismanaged, resistance) to change.

 If they use traditional fear-based motivation to ensure “compliance” with strategies and initiatives that are “directed” downwards, and expect change to happen everywhere but within themselves, the desired behaviours quickly unravel. What’s more, while culture may appear to be soft and fuzzy, it is shaped by hard execution-related factors that can be measured and influenced, such as structure, talent management systems, and incentives. For example, if a crucial on-brand behaviour is to act “fast”, or move at the speed of business, senior managers must remove all barriers – including structures, layers, and processes – that undercut its performance, and build performance metrics and an infrastructure that rewards the desired behaviour.

Using culture for change

How organizations behave on the inside is inseparable to how they are perceived on the outside. It is, therefore, essential to strategically use culture as a competitive advantage and accelerator of change. Yet without a proper understanding of what culture “is”, and a robust framework to define its existing and preferred characteristics – including what it must start, stop, do more and less of – it is not really possible to design and develop a more effective culture, nor calibrate it to key people structures, systems, processes, and incentives – let alone ensure it is brand-led. That is what I will discuss in my next article. 

(This is the Part 1 of a 2-part article series. Michel Nugawela is the CEO, MND/Sri Lanka partner for Interbrand)