Identity – At the Heart of Management

Successful brands convince us by taking a strong stand. To do this, they need a clear identity

Change – even profound change – has always been with us. In the past, however, change was more predictable and thus it could also be managed better. You had the annual plan, the strategic three-year and five-year plans. Companies were able to continuously plan their product development and the resources that would be required. They knew their competitors. They were in a predictable environment with more or less high barriers to entry.

“Everyone has a plan ’till they get punched in the mouth.” (Mike Tyson)

Today’s reality looks different: Both the pace and the degree of change present challenges – and there are no time-outs. Digitization is only one of many closely linked drivers:

  • societal changes, with the keyword being “Generation Y”
  • consumers who strive for experiences instead of material possessions
  • the rise of new economic centers, and the emergence of a multipolar world order
  • robotics, artificial intelligence and big data – and the new opportunities in economic value creation associated with these trends

The consequences are well-known: Emerging virtually out of nowhere, new companies appear and challenge the established competitors. Airbnb in the hotel industry, Tesla in the automotive sector, Amazon in retail – the list of success stories shaking established industries to their very foundations could practically go on forever. The classical instruments of corporate management, tested and proven by generations of managers, are failing: Adjusting the product, sales, marketing or pricing policies seems to have diminishing effect. Permanent change presents itself as the only constant.

What do companies do in this situation? With all their might, they brace themselves against the developments that are threatening them. Finally, they intensify their advertising activities, in order to hang on to their fickle customers. The result: interchangeable products and a target audience that is becoming increasingly deaf and blind to the promises made by advertising.

“The best marketing doesn’t feel like marketing.” (Tom Fishburn)

Consumers today no longer buy only the best product. They are better informed and make their purchasing decisions more critically. They ask themselves why they are doing something. They want to do good and express their values through their purchases. And they want to connect with other people and companies that share these values. What counts for them is substance; that’s the ideal value added. Companies are increasingly being asked to take responsibility for solving problems and positively affecting society as a whole.

At the same time, buyers, understanding the power they have, are turning away from anything that looks like superficial marketing. As a consequence, the power structure is shifting from the company to the consumer.

Identity creates a bond between people and companies

This is where identity comes in. Identity is not a shortterm means of increasing sales or optimizing advertising effectiveness. Identity answers the central question of “Why?” Identity defines what difference the company makes at its core, what differentiates it from its competitors, and what inspires its customers – as well as employees – over the long run.

How can Airbnb’s success be explained? Because the company sets itself apart by a strong identity. And because Airbnb is pursuing a higher objective than simply providing private accommodation opportunities as well as possible. The declared raison d’être of Airbnb is to provide unique travel experiences – from person to person – in a world in which everyone feels they belong. With some three million rooms listed worldwide, Airbnb’s platform is already bigger than the total offer of Hilton, Marriott and InterContinental combined.

Especially in times of profound change and great uncertainty, identity is the reliable anchor point for the way the company shapes its future. Understood this way, identity consists of three fundamental elements:

  • Vision – where do we want to go?

    Visions are achievable goals – “dreams with a deadline.” Close enough that they can be realized, and big enough to generate enthusiasm.

  • Values – what are our beliefs?

    The principles of belief that govern the company’s behavior. Employees identify with the company’s values and let them guide their actions.

  • Competences – what do we know how to do best?

    The strengths that characterize the company. Abilities and experiences that enable it to succeed in the market.

Throughout a company, its identity – comprising its vision, values and competences – steers the way it thinks and acts into a single direction. It is the self-image and binding standard for every contact with its customers. The sum of these individual interactions with customers creates the brand experience – the external image perceived from the outside. The aim of brand management is to bring the self-image and external image as close together as possible. In the words of Wolf Lotter, “The brand is the spirit of the commonality of the company and its customers.”

The employee: the first customer of the brand

Especially in times of change, corporate management must always begin with the question of identity. What is the overarching goal that spurs us on? What values do we stand for? What are the benefits we provide our customers – today and tomorrow?

In order for the identity to be carried and lived by all the employees, a thorough analysis of the identity should be undertaken – a process that should include as many employees as possible. What is decisive is the shared understanding of what constitutes identity, and the will to live this identity in everyday life. Each employee is a powerful brand ambassador in this process – independent of the tasks his job entails or his level in the hierarchy. Together, the employees lead the brand and shape its image in the eyes of the public. Thus, before the company’s identity can be successfully transmitted to the outside world, it must first find acceptance and respect inside the company. Or as Richard Branson says, “Take care of your employees and they’ll take care of your business.”

_Dr. Alexander Haldemann is CEO at MetaDesign Zürich. This article was originally published in the Vontobel Impact 2017/18

Photo credits: Nadine Blum