Questionable identity: what General Motors can learn from adaptive instability.

Anticipating and mitigating the dramatic impact of organisational inertia on transformational brand programs can help companies better cope with a constantly shifting economic environment. Just ask US car makers.

It’s a key finding from a recent study by Harvard Business School’s Mary Tripsas on the interplay of “Technology, Identity and Inertia” within a new technology company.

While there is a wealth of knowledge around the brand dynamics that contribute to forming identity, Tripsas believes the specific relationships between brand, change and technology and the impact of inertia remain unexplored.

Tripsas’ study challenges the existing zeitgeist by arguing broader brand identities impose fewer constraints on how people view organisations. She believes those with more generic brands are better able to weather a range of changing external conditions because they can align with our wider expectations of what their brands mean.

Broader brand identities and brand architecture create flexibility for a company since they enable a form of adaptive instability.

Adaptive instability works when the external labelling of a company’s brand is fairly constant but enables an internal self label which can reflect internal shifts in a brand. BHP Billiton might be “a mining company” to all of us but it currently self identifies as “a global leader in the resources industry”, reflecting a dynamic strategy. Often it is no more than rhetoric but if a brand is internally viewed as both instable and adaptive, it is able to better respond and adapt to external environmental shifts without having to make major brand changes.

While Tripsas doesn’t say how this can be achieved, there’s been plenty of evidence to support how I believe a robustly formed brand identity supported by broader purpose and positioning statements can. For example, News Corporation has been able to better adapt to the changes wrought by the internet by positioning itself as “a diversified global media company”, rather than as a single media source company.
The same approach has been taken by oil companies such as BP and Chevron in the past few years as they moved away from external “oil company” to more generic “energy company” labels. Conversely, the American car makers such as General Motors (self label: the world's largest automaker) and Chrysler (self label: we build cars and trucks) would have done well to think about how they could be morphing their brands from their focus on pure manufacturing labels to offering broader “transport” options. The prescient Honda already self labels itself as a "mobility" company.

However, Tripsas warns if a brand is too diverse it also runs the risk of not aligning with external stakeholder understanding. It’s why the UK’s EasyGroup is such a great example of what NOT to do. Unlike the diverse Virgin group of companies, which operates against well articulated brand values and personality, I struggle to understand the fundamentals of the Easy brand beyond its ability to apply an Easy prefix to any business category from rental cars to pizza. Does anyone think Coles’ owner Wesfarmers actually has a brand? As an agricultural company it probably did but now its ambit stretches from retail supermarkets to coal mines, its even rendered label-less by its own description as “a diversified corporation”.

Even the brand essence of a company can direct and constrain action and generate inertia. Tripsas defines essence as a company’s “routines, procedures, information filters, capabilities, knowledge base and beliefs” but I call it core self belief. So when an economic downturn challenges an organisation and when pursuing change to meet that challenge violates core brand beliefs, organisations often pull up short rather than face the need for what Tripsas calls “systemic, major reorientations”. You only need to look at Woolworths bungled rebranding to see this in action.

But brand and strategy are not mutually exclusive. Unfortunately most firms have aligned brand to their marketing rather than to their strategy and subsequently ahve limited capacity for change. If a firm’s brand is expressed through elements of its strategy, does this mean a change in strategy necessarily then implies a change in brand and vice versa?

Tripsas concludes brand is not just one more factor to consider when unravelling sources of internal inertia during changing circumstances. A brand is a guidepost. Where a new dynamic such a global recession requires changes to the brand, simply altering routines, capabilities or beliefs without acknowledging the broader implications can be problematic and, in some cases (back to the US car makers), devastating.

This blog was also published in Marketing Magazine Australia on 8 December 2009.

Brand priming or why Reidel glasses make wine taste better.

What makes wine in a Reidel glass taste better? Is it because Reidel is called “The Wine Glass Company” and it claims its glasses make wine taste all the more better than any other? How come a Tiffany diamond engagement ring set the benchmark for all others? And why do people queue for the latest release of the Apple iPhone, when they wouldn’t for any other phone? Does brand exposure influence a wider range of behaviours than we previously thought? Can exposure to specific types of brands and their associate brand messages really unconsciously influence our behaviour?

That’s the inference from a Canadian study Automatic Effects of Brand Exposure on Motivated Behaviour: How Apple Makes You "Think Different", which explored whether our unconscious can be so primed by exposure to certain brands they can create automatic and predictable behaviours and performance.

Published early this year by the University of Waterloo in Ontario Canada and Duke University in the US, the study looked at whether the generally accepted priming effects applied to our social behaviours can be applied to consumer behaviour and how brands can influence this. If so, can so-called brand primes shape our behaviour and how do they does this happen?

Priming occurs when mental constructs are created around or by a particular situation. For example, it’s been well documented that exposure to the “elderly” can often cause behaviour we have already hard wired around this stereotype: so people who have been primed “elderly” may walk more slowly and display poorer memory than those who haven’t primed. Traditionally Most behavioural priming research hasfocussed on activating such these constructs via exposure to related words. If you prime someone with words related to “rudeness” they’ll probably behave rudely.

It is already accepted that exposure to brands can shape consumer decision-making. One US study found that consumers exposed to low-end brand names such as Wal-Mart chose products of higher value but lower prestige in contrast to those people who have been exposed to high-end brand names such as Barneys New York. Another found that as the frequency of exposure to a brand increases, so too does our tendency to choose that brand (this is not the same as frequency of message or frequency of advertising). Yet most research has been limited to exploring the consequences of brand exposure for subsequent brand or product choice. Does the impact of brand exposure end with purchasing decisions or can it actually extend to behaviours unrelated to the products the brand represents? In other words, so if words and exposure to certain people can cause people to behave rudely or walk more slowly, can brands also evoke both cognitive and motivational effects?

Much of the psychological value we get from brands appears to come from their ability to help fulfill our personality and identity. In representing desired personal qualities such as sophistication or manliness, brands such as Tiffany's or Jeep are goal-relevant in nature, symbolizing our aspirations and unattained goals. In particular, some brands may come to represent "be" or ideal-self goals (e.g., to be sophisticated), which describe people's aims to improve themselves. Just as exposure to certain role models such as people who represent success can inspire certain goal-directed actions, so too should exposure to brands that symbolise success at a given goal. Through associations with desired human qualities, goal-relevant brands can trigger these ideal-self goals and shape behaviour. For example, Nike is associated with traits such as 'active' and 'confident.' These characteristics are generally seen as positive, so the brand plays a motivational role, symbolising a desirable future and an ideal self.

Brands are often linked to our personality traits in the same way symbols or representations of people can (i.e.Virgin is a young, fun out-there brand and if we use a Virgin product therefore it may represent who we think we are). Brands can also be symbols of aspiration, representing desired personal qualities such as sophistication or power (Bentley versus Maserati) and brand-priming may well motivate performance-based behaviour. The study wanted to know whether these types of behaviours actually do result from priming by brands.

In a series of lab experiments, the researchers had subjects look at a screen that displayed a series of flashing numbers and kept a running tally of the results. Interspersed between the numbers were subliminal flashes of Apple or IBM logos. The same subject group was then asked to perform a creativity-measurement task, in which they were asked to come up with as many uses as they could for the common house brick. In many replications of the experiment as well as with control groups, the researchers found that people exposed to the Apple brand not only came up with more uses for the brick but that these were also more creative than those exposed to the IBM logo or no logo at all. In effect, Apple made you more behave and think more creatively.

These experiments measured and manipulated qualities of priming but this new research demonstrates that brands can also serve as sources of unconscious performance-based behaviour. Recent theory has it that brand primes initiated goal-directed behaviour only when those brands were associated with qualities desired by the individual i.e. I want to be more creative (Apple) or I want to be more active (Nike) Meaning a brand can affect your output and, in the case of Apple’s brand, it may make you think and work more creatively What these findings may also enable us to predict is when the various types of priming effects occur and what the behaviours are likely to be.

In blind taste tests even the best Reidel glasses, as well as they are made, don’t actually make your wine taste any better than say a $10 glass from Target. Apple’s iPhone looks and performs well but it does is no better on a benchmarked performance basis than a Blackberry Bold or a HTC Touch Diamond. What these brands and so few others have has been able to achieve is what these researchers do indeed prove – regardless of the efficacy of a product or its service attributes, the prospect of superior performance can be primed and can directly our purchase decisions.

Brand priming might help to explain why brand promise is no longer going to be enough; the point of difference is going to have to be buried deep in a brand’s DNA. The saliency of a brand can no longer just be determined by more dominant operational and visual attributes but by triggers that prime our unconscious.

This is a longer version of a blog which originally appeared in Marketing Magazine on November 5. http://www.marketingmag.com.au/blogs

Mass luxury is just another takeout.

Earlier this year DIFFUSION (DIFFUSIONblog 7 May Status Abandonment) wrote about how the democratization of luxury brands seems to be destroying those aspects of a luxury brand (exclusivity, price, access, aesthetic) that denote them.

Now Newsweek fashion writer Dana Thomas's new book Deluxe:How Luxury Lost Its Luster serves to reinforce our belief that the pursuit of massive profit by the world's corpratised luxury goods conglomerates is truely blurring the distinction between luxury items and soap powder.

The gist of Thomas' book is that this pursuit of profit has only served to rob luxury brands of their essence. This is very much reflected in a recent report on the mass luxury market which told how LVMH's Bernard Arnault's decision in 1996 to take the company into the mass luxury market was really a question of both survival and growth.

Arnault argued that like haute couture, which has been static or in decline since the 50s, many of LVMH's luxury brands would eventually go the same way unless it embraced a form of market democratisation.

Thomas' book seems to confirm this, arguing that luxury brand owners like LVMH are well aware that their products have been so conflicted by this change that the drive for both profit and growth will mean it is going to be virtually impossible for them to turn around their vast behemoths and return to what is for many, a somewhat richer past.