Why do CEOs hate branding?

Posted on Aug 31, 2011

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.

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14 Comments

  1. Elizabeth Kraus
    August 31, 2011

    This 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

    Reply
  2. Bob
    August 31, 2011

    I 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.”

    Reply
  3. Jerry Scharf
    September 1, 2011

    Excellent 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!

    Reply
  4. Sumit Roy
    September 1, 2011

    People 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.

    Reply
  5. JF Raymond
    September 2, 2011

    Interesting topic! I agree with the above, however Jerry I’m curious to hear how you objectively measure your “branding” efforts?

    Reply
  6. David Hensley
    September 2, 2011

    Your 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.

    Reply
  7. rich leivenberg
    September 2, 2011

    Branding 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.

    Reply
  8. Luise
    September 3, 2011

    @JF Raymond. I am very curious to hear the answer, too!

    Reply
  9. anna
    September 5, 2011

    One name: Warren Buffett.

    The man spends more on branding and advertising than any business leader. Geico commercials are the epitome of recognizable brand icons.

    Reply
  10. Dan Christopherson
    September 7, 2011

    What 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.

    Reply
  11. tim hill
    September 8, 2011

    A 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.

    Reply
  12. Derrick Hesser
    February 20, 2012

    As 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.

    Reply
  13. Bob
    February 20, 2012

    Absolutely spot on. Well put.

    Reply
  14. David J Dunworth
    February 20, 2012

    CEO’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.

    Reply

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