The Corporate Brand – A Competitive Asset
The value of the corporate brand as a competitive asset.
The role of the brand in positioning a company competitively is something that we at Telkom SA Limited, have experienced in some depth over the past year. In this article, we will draw on our experience, packaging it in the form of ten lessons on the value of the corporate brand as a competitive asset.
Lesson 1: There is no noun for complacency in a competitive market.
Our monopoly on fixed-line telephony in South Africa expired in June 2002. During the previous five years of exclusivity, we tackled the issue of becoming a world-class communications company from every angle – cost efficiency, product innovation, operational effectiveness and international benchmarking – to prepare the company for fixed-line competition, as well as fast-growing competition from mobile telecommunication and data service suppliers. The benefits have crystallised in our share price performance but the process continues. There is no room for complacency.
Our competitive strategy and our brand-building efforts are aligned with our five-year business plan and the individual plans of the different divisions. Objectives that individually work towards our goal of world-class performance are the foundation of the reputation that we seek in strengthening our brand and positioning the company for ever-increasing local and global competition.
Lesson 2: Competitive brand management starts at home.
Over the past decade we have successfully undertaken Company-wide campaigns to align the mindset of our employees with our vision and values. We have addressed issues of performance and service excellence and, coincident with the last three years of exclusivity, we have sought to install a competitive mindset. This campaign must be seen against a history of being government-owned and a fixed-line telecommunication monopoly – both conditions subject to major change through the growth of mobile networks, value-added services, the appointment of a Second Network Operator (SNO), and the (then) pending Initial Public Offering (IPO).
Through workshops, toolkits, briefing processes, video conferences and corporate publications, we distributed messages on the theme of change and how we must respond to become a competitive world-class company.
The themes of pre-eminence of customers and customer service; performance measurement and management; innovation in how we do things; a focus on best performance; teamwork; leadership; and change management were issues that were repeatedly communicated through different channels over the campaign duration of nearly three years.
But it is never enough. Credibility, belief and trust in the message, built over years, can be destroyed in hours when the integrity of the process is perceived to be flawed. We faced that threat many times, as decisions to improve, say, operational efficiencies resulted, or were perceived to result in cost and employee reductions.
The rationale for our actions, linked to our vision and values, had to be a recurring message and the effect of operational changes balanced by innovation, reward and recognition programmes emphasised the care the company had for its employees, despite the need to change to meet competitive threats from a position of strength – financially, productively, competently, and through the strengths of our brand.
Lesson 3: Competitive brand strategies must be holistically implemented.
Since the brand is the company and conversely, the company is the brand, every element has an impact on our competitive strength. This is why our CEO is our brand champion, supported by Marketing, Finance, HR, Communication and the customer-facing front-line of our operating divisions. Building our reputation, performance and culture is the responsibility of every employee, a strategy that is constantly repeated through our communication channels.
Integrating brand management initiatives across different functional units is a top-down process, grounded in our vision and values; communicated through line management decisions, messages and behaviour; and implemented through the many touch-points we have with our stakeholders.
In a fiercely competitive market, you are as strong as your weakest link. No stakeholder group can be ignored, although priorities can and do change. Presenting a united front to the market-pace is not simple – the turf wars and internal politics of any large organisation ensure a challenge – and requires continuous communication between functions at all levels, but especially at top management levels.
Lesson 4: Competitive brand management has to be leadership-driven.
Leaders, by definition, have followers. Where we found disconnects or lack of credibility in the messages of the competitive mindset campaign, we often found poor leadership practices – decision-making without prior consultation; compliance rather than commitment; training required in economic and business principles; and inadequate performance recognition.
Conversely, where leaders led with their competitive behaviour, followers followed, and our market research, both internal and external, confirmed that our competitive strategy was built through employee commitment to living the brand.
Living the brand addresses the company’s culture – the way people get work done and relate to each other while doing it; it addresses values – the behaviour expected from our employees, at all levels; it has to be communicated internally and externally with the same messages but through appropriate channels where the more personal the medium, the more powerful its effect; and it has to be incorporated into all employee touch-points so that decisions are influenced by and employees given cause to care about their company.
Lesson 5: To be competitive, the brand must have integrity.
The term brand integrity is used in two quite distinct ways – the protection of intellectual property, as practiced by the legal profession, or, from a communication perspective, as an honest, complete, consistent and integrated approach to building the brand.
In our company, brand integrity incorporates various strategies. It drives the transformation of our culture towards a competitive mindset; it aligns that mindset with our values; it motivates our employees to deliver; it creates customer confidence in our products and services; it increases goodwill and, as a result of all of these perspectives, it supports our competitive position and market share.
The drivers of brand integrity come from several different perspectives – from the financial perspective of the value of the company’s intangible assets; from the imperative of stakeholder relationships; from the alignment of brand with the business strategy; from the integration of cross-functional performance; and from a coordinated approach to risk and issue management.
Lesson 6: A competitive brand continuously monitors its reputation.
Reputation, in relation to the brand, requires us to anticipate, acknowledge and respond to changing values and behaviours on the part of our stakeholders – those who affect or are affected by our efforts to achieve our objectives.
Today, corporate reputation is being taken as seriously as brand management has been over the past 20 years. Brands were once considered a characteristic of packaged goods marketing, based on quality, value, desirability, accessibility and so on. Today, more or less everything is considered as a brand – sports stars, politicians, institutions, suppliers of professional or domestic services, you name it, it can be perceived as a brand.
The reputation of a business is influenced by its financial performance; its corporate social responsibility; its marketing and brand management; its organisational behaviour; and its stakeholder relationships. All of these reputation drivers depend on communication, not one-way, in the sense to distributing information, but two-way communication, or dialogue, that builds shareholder support along a continuum of awareness, understanding and acceptance of the brand’s credibility.
Like the value of brands, reputation exceeds the tangible value of a company’s assets. Where the value of a global brand can represent 90 percent of the company’s assets, the cost of restoring confidence in a deranged reputation can be huge – ask Nike, Coca-Cola or McDonald’s, all of whom have suffered reputational damage in their recent history.
Monitoring a reputation requires stakeholder engagement to hear, understand and fine-tune responses to changes in perceptions. One such monitoring tool is advanced media analysis, which we use to pick up potential or emerging risks which can then be assessed and prioritised, used to shape the company’s position and orchestrate and monitor our response.
Stakeholder engagement – the boundary – spanning role of the communication strategist – is a critical input to competitive brand management.
Lesson 7: A competitive brand is built through performance
You are what you do, and brand credibility requires competitive standards of delivery that meet or exceed the expectations of a company’s stakeholders.
It starts with the vision – an enduring promise, an attractive future state of affairs, typically better than the current condition. It answers the question, what does the company want to become. It is leadership’s purpose for the company but meaningless unless performance delivers on the promise.
From the perspective of competitive brand building it answers the question ‘what you get’ from the company – whether you are a customer, employee, investor, supplier or any other stakeholder. It positions your offering against that of your competitors in meeting the needs of your stakeholders and therefore must be strategically relevant to those needs.
But performance is not a one-way channel. For performance to be structured into a competitive strategy it has to be measured, evaluated and fed-back to management so that recognition can be given where it exceeds expectations, or remedial action taken where it falls short.
Assessing the success of the myriad of touch-points of different stakeholders experience of the company is another way of integrating our competitive strategy and building the brand.
Lesson 8: Using the brand competitively means choosing the battlefield.
Competitors are a fact of life. Often serious, competitive threats are not the most obvious ones. Also, reacting to each and every perceived threat, without regard to its potential impact, or the lack of impact, wastes precious resources that could be more effectively used by analysing the profitability and impact; through better scenario planning of the options; and bringing an integrated focus on implementing counter-actions.
We must assume that competitors will react to our efforts to protect our brand. Our task is to select a battleground of our choosing, one that allows us to play to our strengths and minimise our weaknesses – either actual or perceived.
This means that we must assess our competitor’s goals, assumptions, strategies and capabilities – not only for existing, but potential competitors for whom our market-place might be attractive.
Lesson 9: Competitive brand strategy fails when there are gaps between reputation, culture and vision.
Reputation is stakeholder related; culture is employee related; and performance is leadership related. These are three different constituencies and gaps can and do occur.
Gaps between reputation and culture occur when company functions talk to their external audiences, but not to each other; when the company doesn’t practice what it preaches; and when customers and employees perceive the company differently.
Gaps between culture and vision occur when the strategic direction is not understood or supported by employees; when the vision is too ambitious, with gaps between rhetoric and reality; and when distrust and cynicism of management messages exists.
Gaps between vision and reputation occur when the vision is not what stakeholders want from the company or when performance does not line up with the promise of the vision.
Lesson 10: Building a competitive brand is all about balance.
Balance is the big picture – creating a balance between stakeholders, related to their impact on the company’s objectives; balance in how we react to competitors, choosing to engage in areas in which we are strong and where the battle can be won; balance in responding to the risks and issue of our market, using our resources to best effect; and maintaining a balance in the contributions of different functions to the health and wealth of the company – whether from marketing, finance, human resources, operations, or however the company is structured.
Balance requires alignment, integration, partnering and participation – key concepts for today’s global company. Easily said, but difficult to achieve, without the commitment and cooperation of like-minded leaders.
These are the ten lessons from our experience, and we have the scars and medals to prove it. From our experience we know that the strength of the brand is key to our competitive strategy.
The bottom line is that developing and sustaining a strong corporate brand aids market development; increases barriers for competitors entering our markets; minimises the threat of litigation or increased regulation; creates an attractive counter for investors; aids access to capital; attracts the best staff and suppliers; secures premium pricing for products and services; reduces share price volatility and, in a word, ensures our survival and growth.
That is why the strength of our brand, built on the company’s reputation, performance and culture, is our competitive strength, and becomes a priority for our board, management and employees.
Amanda Singleton is the Group Executive for Corporate Communication on the Top Management team of Telkom.
She holds a BA Communication from RAU and has 20 years experience as a communication professional.
In her current position she is responsible for Telkom’s strategic brand management, including managing the Company’s vision strategy, culture programme and corporate reputation.