Why do CEOs hate branding?
Actually, only a few CEOs hate branding. Many more distrust it. And for good reason.
Finance and Operations, the career paths of most CEOs, involves stuff you can control within your four walls. You can lead; people will follow. You can establish procedures; they’ll be in place. Hire, fire, budget, steer the ship. You have control, to one degree or another.
But marketing/advertising/branding? Most of what matters there takes place outside the walls of your office or factory or store. It involves out-of-control, seemingly irrational customers, clients and prospects who may be unaware of – or even choose to ignore – your messages. This is especially true if your messaging is inwardly focused.
If you’re a CEO, get over it. Your biggest lever for growth lies in understanding how prospects Out There regard your brand.
Tags: advertising, branding, marketing
18 Comments
Elizabeth Kraus
August 31, 2011This is an interesting take on branding but it also shows the disconnect common to so many leaders in business. They want the world to believe that they provide extraordinary customer service and experiences, because they say so, rather than because they do so.
CEOs that hate branding, hate branding because they can’t control it. And they can’t control it — because the “brand” of an organization is built, perception by perception, experience by experience, in the customer (or prospect’s) mind, each and every time they come into contact with a business or any of its representatives. And you can’t control perceptions.
What you can control are behaviors, and we know this to be true: Companies that really and truly provide extraordinary customer service and unique, irreplaceable customer experiences, are those companies whose top management (there are those CEOs again) are OBSESSED with the customer experience. They hire people who share this value. They train and train and train again, all employees, to understand how their jobs impact customer satisfaction, and they empower their employees to make decisions and solve customer problems at the lowest possible level.
For what it’s worth!
Elizabeth Kraus – 12monthsofmarketing.net
Author, 365 Days of Marketing
Bob
August 31, 2011I agree 99%.
The only quibble I have is the idea that “you can’t control perceptions.”
Particularly with regard to prospects, I’m reminded of the words of Bill Bernbach that “we worry so much about measuring public opinion that we forget we can change it.”
Jerry Scharf
September 1, 2011Excellent post and comments.
I heartily agree, though, in my experience, the reason the C-suite folks most distrust “branding” is the number of “experts” out there who either don’t know what they are talking about or are trying to obfuscate and complicate it to justify fees.
Branding is essential and highly measurable. “Experts” who can’t clearly explain that last sentence should be shown the door!
Sumit Roy
September 1, 2011People listen to those who offer value.
Customers are as good as employees once you work out the value you offer beyond the money they pay you to keep your business running.
They win, you win.
Fortunately, even those who grow to become CEOs after careers in Finance or Operations have a right brain. And a heart.
Once they understand a brand creates measurable value “outside the value created in the factory”, all CEOs get it.
It’s brand pundits who believe that there is nothing beyond branding who don’t.
JF Raymond
September 2, 2011Interesting topic! I agree with the above, however Jerry I’m curious to hear how you objectively measure your “branding” efforts?
David Hensley
September 2, 2011Your observation that many CEOs and C-suite executives distrust branding is, I fear, true.
However, I am not convinced that they distrust it because they can’t control it. I think that distrust is because they don’t understand it.
I agree that this is connected with the fact that most CEOs have come through finance and operations, but I think that it is more related to their engineering or accounting discipline mindset. This will have served these CEOs well through their careers, but the soft, creative side of branding and marketing doesn’t easily fit within this model.
I think that marketers and branding people have not helped this situation when they have taken a “believe me” approach to their brand campaigns.
When we have found ways to connect creative activities and customer experiences to commercial results and model the impact on shareholder value we find the C-suite understand the value of branding and become very engaged.
rich leivenberg
September 2, 2011Branding is an elemental part of any company, regardless of whether they deal in products or services, are non-profit or for profit, even if they produce private label products. A company immediately brands itself with its first email, phone call, text message or Howdoyoudo. That said, I have to question the managerial expertise of any executive who discounts it. Yes, they may not quite understand it and its value, as Jerry says, but it remains an indisputable part of any company. Without it, the financial guys may not have much of a job. Of course, as branding folks, we believe in its value and necessity. If we brand ourselves correctly, we should be able to educate those who have issues with it.
Luise
September 3, 2011@JF Raymond. I am very curious to hear the answer, too!
anna
September 5, 2011One name: Warren Buffett.
The man spends more on branding and advertising than any business leader. Geico commercials are the epitome of recognizable brand icons.
Dan Christopherson
September 7, 2011What I have found in branding sessions involving C-level execs is that their idea of the brand is, in reality, aspirational instead of actual, regardless of whether they came up through the financial management ranks. “A brand exists in the mind,” is one way to define a brand, and that goes for the minds of the C-levels, too.
I don’t think we should disparage all financial types. but there are those few to whom this saying applies: “An accountant knows the cost of everything and the value of nothing.” And that includes the value of the brand.
tim hill
September 8, 2011A company and its CEO can still be in ‘control’ of their brand and its reputation. They just need to loosen the straight-jacket of old marketing techniques. CEOs who can embrace the new world of peer-to-peer communication will win the hearts and minds of consumers.
Derrick Hesser
February 20, 2012As someone who has used my right brain as a CEO and CFO, I can say that the biggest problem is not mistrust or misunderstanding, it is share prices and meeting quarterly targets. There is so much pressure from shareholders, banks, owners and private investors to show short-term profits and profit growth that the long-term initiatives that are hard to quantify are deprioritized. Building a brand is hard. It takes discipline, it takes faith and most of all it takes time. I have seen far too many companies start a branding or marketing project and then kill it after 6 to 9 months because of lack of progress. How much brand equity is built in 6 months for a large company? Then the CEO and CFO tell the CMO to try “immediate” projects that often involve price discounting and/or promotions. What started as a way to position your project as “premium” brand is now offering a “2 for the price of 1” discount to clear inventory. Not the way to position yourself as a premium brand.
All the goals of the company should be clearly articulated and marketing should be no exception. A new CMO needs to plant their feet and quickly establish what they are doing to feed both long-term and short-term profits. CMO’s need to be their own best advocates and clearly explain to the organization what building brand equity entails and set clearly defined benchmarks for how some of these intangible goals can be met and measured. CEO’s and CFO’s are not wrong in pressuring CMO’s to create shareholder value, but on the other side they need to understand that a well-run marketing department will help the company build long-term sustainable business and raving fans that are much more likely to create the long-term profits they crave.
Bob
February 20, 2012Absolutely spot on. Well put.
David J Dunworth
February 20, 2012CEO’s may not hate it, but the vast majority don’t understand it. They were raised by the numbers, and until the CMO can relate to the boss through numbers, there will be a disconnect.
The perfect CEO may not be a former CMO either. The cut-throat mentality of the typical CEO doesn’t mix well with the creative mindset so necessary in marketing. Some sort of hybrid must evolve for the two to operate in the same hemisphere of the brain.
Steven Mason
February 20, 2012@Derrick’s post is very insightful, but there is one issue he adumbrates but doesn’t directly address – an issue that explains not only why brand-building fails in the short-term but why the philosophy behind brand-building is flat out wrong: the rise of the quants.
Too many MBA schools, not just Wharton, Sloan and Chicago’s, teach that everything can and must be measured and quantified at every moment, as though branding were equivalent to integrating a continuous function and then admiring the curve produced. Too many believe that every marketing activity, whether concrete or abstract, must produce a specific, concrete result in order for that activity to have value. This is great for an A-B on a direct mail campaign, but deadly for branding.
CEOs who have come out of a finance/operations background; a McKinsey/BCG/Bain background; or a rigorous MBA/product management background don’t believe this — rather, anything not quantifiable at every step in the process is dead to them. The reason is that most of these people are tactical, not strategic, thinkers. And branding is strategic. So their careers, their mentalities, their Weltanschauungs — these have all prepared them for tactics and processes, wherein every step is clearly serialized and enumerated.
Building a great brand is not the result of some arcane alchemy or the invocation of magical incantations, but it is also not a linear, tactical, process-oriented, measurement laden activity. It is a process, too, but one closer in metaphor to Einstein’s discovery of his theories of relativity (and proving them later) — or to playing chess — than it is to charting an optimal route from point A and point B (which is basically graph theory) — or to playing checkers.
The only way I have ever seen to persuade CEOs with the predispositions I have described is to a) agree with them that their approach seems to make the most sense, but then to say that, mirabile dictu, b) in my experience, I have seen failed brands that result from such seemingly logical processes and I have seen them revivified by using a different approach which, on the surface, wouldn’t seem to work — and, oh, by the way, the market capitalization doubled, tripled, etc. — something that will always get their attention.
george
February 20, 2012Few CEO’s come from the marketing world (not sales) and few have trouble with branding in my experience. However marketing is far grandr than just branding and that is where the distrust comes in (I think) First they do not understand the depth and breath of marketing and second the marketeers have done little to improve their sucess rates in doing their jobs.
They use too much opinion and feeling and very few actual measurable analysis. For it to gain the prestige it deserves the tools need improvement. I have found tho that these folks are very defensive and not scientific about their passion.
Jean Saghaard
February 21, 2012If is challenging to count with CEOs in Marketing/Branding is not to Marketing Executives to blame, we can do a better job.
There are, and with the advent of the web, many alternatives to bring quantitative information regarding the power or the value of a brand and marketing initiatives (such as Search Engine Optimization – SEO analysis). It is up to us to set a strategy, aligned with the business strategy, and learn how to up-date progress for the C-level.
If we do not explain, and do not know how to share our knowledge regarding Marketing/Branding it will mean only an abstract cost, so CEOs will hate it (and understandably).
It is up to as to think about the business and stakeholders as a whole, design a strategy and a path to make the strategy happen, and continuously build confidence and a learning atmosphere with the C-level.
With good reasoning, even not always crystal clear, we will have CEOs advocating Marketing/Branding as a key function for any company.
Peter Drucker “Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
Jann
February 29, 2012Re: the comments above citing Warren Buffet, more than the any commercials, the value he places on branding is the shown in the fact that he names his son to oversee the brand and its core values. He gave this as much consideration as naming the person who picks their investments!
I think we need a new word for branding, which sounds like something a marketer comes in a does. I’ve dropped that word from most of my discussions with C-Suite people.