On a November day in 2008, three automotive-industry CEOs flew from Detroit to Washington, D.C., on a mission they insisted was crucial to their companies’ survival.
They sought a federal bailout to help prop up their struggling businesses. But to the American public and some members of Congress, the CEOs’ lament that they were hard up for cash rang hollow because of their chosen mode of travel—luxurious private jets.
“Their arrogant attitude left people with bad perceptions of the individual car brands, the overall Detroit brand and even the larger brand of cars made in America,” says Larry Light, a global brand revitalization expert and CEO of the business-consulting firm Arcature.
Such stumbles aren’t that unusual, and brands on occasion commit major missteps that risk putting them out of business. In fact, says Light, co-author with Joan Kiddon of Six Rules for Brand Revitalization, some people even claim brands go through a natural life cycle from birth to death, so the eventual demise of any given brand is inevitable. But he insists that’s not necessarily so.
“Brands can live forever,” he says. “The problem is that brands too often get into trouble due to self-inflicted actions of their owners.”
Light says there are probably a dozen identifiable ways businesses can make a mess of their brands. Here are four:
The arrogance of great success
Arrogance is bad for business and bad for brands. “Avoiding arrogance takes character and effort on the part of leaders,” Light says. “The leader who creates a culture of arrogance by letting success go to the head and ego is a leader who is more committed to self than to brand.”
The comfort of complacency
For brands and organizations, complacency lulls people into laziness and inaction, and crushes curiosity and creativity. Eventually, it leads to market-share loss. “The danger is that you stop looking at the changes in the world around you and in your specific market segment,” Light says. “Complacency creates inaction and, eventually, irrelevancy.”
Building of organizational barriers and bureaucratic processes
Bureaucracy and “silos,” where departments don’t share information with each other, can damage the brand’s health and the organization’s health. Silos, for example, create all sorts of bad behaviors, such as hoarding, stopping the spread of ideas, and reinforcement of the status quo, Light says. When silos are combined with mind-numbing bureaucracy, a brand can stagnate.
Focusing on analyst satisfaction instead of customer satisfaction
Too many companies focus on short-term gains and the stock value this quarter. They lose sight of long-term strategies and keeping customers happy over time. A brand needs to satisfy stock analysts and investors four times a year, Light says, but they need to satisfy customers every day. “Yes, corporate boards have a duty to shareholders,” he says. “But those boards need to recognize that there is no shareholder value unless there is customer-driven brand value.”
“Even the biggest brands can fall into trouble, as we see all the time in the news,” Light says. “Sometimes it’s a fast freefall, and sometimes it takes decades. But it doesn’t have to be fatal. It’s possible to change the trajectory from waning to winning.”
Larry Light, a global brand revitalization expert, is co-author with Joan Kiddon of “Six Rules for Brand Revitalization.” He also is the Chief Executive Officer of Arcature, a marketing consulting company that has advised a variety of marketers in packaged goods, technology, retail, hospitality, automotive, corporate and business-to-business, as well as not-for-profit organizations.