The Strategy Behind Brand Transformations

Transcript:

Elise Orlowski:

I am Elise Orlowski, a Senior Video Director here at Cramer.

Tripp Underwood:

And I’m Tripp Underwood, a Creative Director at Cramer.

Elise Orlowski:

And at Cramer we work with so many incredibly fascinating people from all over multiple industries.

Tripp Underwood:

We have so many great conversations, many that are just too good to keep to ourselves. So now, we’re sharing them with the world.

Elise Orlowski:

Right here from Cramer Studios.

Tripp Underwood:

This is Pivot Points.

Elise Orlowski:

Cut.

Tripp Underwood:

Hi. Welcome to another episode of Pivot Points. I’m your host Tripp Underwood, and today we’re going to be taking a look at brand strategy or more specifically, brand transformation, what it means, why it’s done and how to do it right. And to break it all down for us, we have Ted Nelson who’s Co-Founder and CEO of Mechanica. Ted’s a brand transformation expert. He’s worked with a lot of Fortune 500 companies, has more than a few Effie Awards to show for it. So I’d like to welcome Ted and thanks so much for being here, my friend.

Ted Nelson:

Thank you, Tripp. It’s a real pleasure.

Tripp Underwood:

Not a problem. So Ted, I’m wondering just to start it off, if you could tell us a little bit about Mechanica, the kind of work you do, how long you’ve been around, that sort of thing. Some housekeeping.

Ted Nelson:

Mechanica, the name came out of an exercise in rethinking the mechanics of branding to really create a very different kind of purpose-built resource that’s really tailored to these times that we live in that are quite different from the times of the relationship that consumers and brands had in the Mad Men era. And we’ve been in business for 19 years. We’ve led the charge on about 10 to 15 brand transformations a year. So you do the math, we’ve transformed a lot of brands. And we were born out of a fundamental reality that the nature, the relationship between consumers, whether it’s B2B or B2C, and brands has gone through a fundamental shift. And that shift really happened about 19 or 20 years ago when we were launched, coming out of the first dot-com boom, which seems so long ago. And really, the rise of this notion of the age of the pivot.

And that’s the name, coincidentally, of this podcast series. But it used to be if you were unlucky enough to take marketing classes in the 1980s or 1990s, the strength of a brand was defined around its consistency. And the contract, the consumer contractor, and the brand and its customer was based around this notion that you’re not going to change. So the value of a Walmart or the value of a Dunkin’ Donuts was born out of the fact that you knew what to expect. It was constant. And then digital disruption happened, the first dot-com boom, and all of a sudden the notion of the pivot and the notion of evolving along with your customers became really, really important. And that was a big shift. It was less about consistency and more about, what have you done for me lately? Are you staying ahead of me? Are you out ahead of my needs? Are you meeting new things for me?

Think about brands like Amazon, and Starbucks, and Virgins, and those are brands that are super dynamic and constantly changing. And the challenge with that is, as a brand, is frequently your business outgrows your brand. And your brand, instead of being out in front of your business creating opportunities for you, managing expectations, setting expectations, surprising and delighting, your brand is trailing and holding you back. The problem is it’s easier to create a glitzy, new ad campaign, or a new website, or a new PR program than it is to actually transform your brand, because that becomes a C-suite exercise. It opens a Pandora’s box of everybody in your company, a leadership position, in getting involved. It can take a long time. It can be needlessly painful.

So we felt there was an opportunity to create an organization, a company, a process, a methodology custom-built for this age of the pivot, custom-built for the reality that brands need to transform themselves every five or ten years to stay on track with where their business is going and where their customer needs to take them.

Tripp Underwood:

So walk me through, if you will, the difference between a brand transformation and a brand refresh. Obviously, we’re talking more than just redesigning a website or updating a logo here and there. What is the difference between a brand transformation and a brand refresh and when does it become needed in your opinion?

Ted Nelson:

It’s a great question. It’s useful to start with a definition of, what is a brand? And the way we define a brand, and we would argue the correct definition of the brand is the sum total of interactions across all touch points. It’s not the logo. It’s not the website. It’s not the ad campaign. It’s not the most recent sales pitch or conversation you’ve had with the salesperson, but the sum total of all those interactions and what those accrue to and how those shape impressions. And so a brand refresh is let’s tweak the logo. Let’s tweak the website. Let’s evolve our ad campaign. It’s incremental. It’s evolutionary. Brands are constantly refreshing themselves. It’s primarily a marketing-driven exercise. It fundamentally lives in the world of tactics rather than strategy.

A brand transformation is when you say, “Let’s stop for a second. Let’s pull the camera back. And let’s look at what’s going to be involved in strategically transforming or significantly evolving the brand experience across all touchpoints.” And that becomes a very different exercise. All of a sudden it becomes more of a C-suite led exercise. A CMO might bring us in. We’re as likely to be brought in by a CMO as we are by a CEO or a private equity firm. But the exercise is strategic in nature and it’s designed to impact all touchpoints. It’s designed to impact the vision, mission, values of a company, the talent brand and the attraction and retention strategies, what the head of sales and what his or her sales are saying out on the front lines and building their brand on a daily basis.

Certainly, the marketing, the demand gen, thought leadership, really much broader, much fuller spectrum and is much more about process and organizational alignment as much as it is about creative deliverables. So that’s really that the magnitude is significant. You might say that a brand transformation process is in order of magnitude, 10X more challenging, more comprehensive than a brand refresh.

Tripp Underwood:

Okay, great. So you said a word that’s near and dear to my heart. And you talk a little bit about the strategy behind some of this thinking. So at Cramer we’re very diligent about making sure that all of our creative projects are really informed by some kind of strategic thinking [inaudible 00:06:07]. Here’s what we’re suggesting and here why we believe in the idea kind of mentality. What kind of different strategies do you employ when either suggesting a brand transformation or an acting one? Because I imagine it touches many different aspects of a business, which means you have to be very in tune with a lot of different people and make sure they’re all kind of singing the same song, so to speak.

Ted Nelson:

It’s a great question. It’s usually catalyzed by a shift or a disruption in some area. And on our website we sort all of our case studies into five or six sort of fundamental things that catalyze it and that usually has a huge influence over the nature of the exercise. But to your point, the exercise by its very definition involves all cross-functional stakeholders. So typically, it’s a group of eight to ten of the leadership members of the organization that are involved. But it’s typically triggered by one of several things. One of the big ones is new audiences. So you decide to go after a different audience. Or for example, we do a lot of work with cybersecurity firms. And cybersecurity used to be sort of the engine room, the Chief Information Security Officer and the Security Operations Center. The SOC is where that lived, very technical stuff.

And no one sort of really wanted to get their hands dirty except for people who are experts in that world. Well, the magnitude of breaches that are happening have all of a sudden made cybersecurity a C-suite and a board issue. So all of a sudden, if you’re a cybersecurity company, the CEO and the board of directors is an audience as well. So that’s a new audience, so that calls for a very different kind of brand. One was catering to a very technical constituency, and all of a sudden you also need to cater to a business audience. So I think that’s one example. Another trigger frequently is a category disruption. All of a sudden Amazon steps into your turf and all bets are off. So all of a sudden you’re competing with a bunch of niche players. You’re competing with Amazon. It’s a different brand altogether required to do that.

Competitive perforation or consolidation, we have a lot of situations where we work with a company that was an early mover in its category, perhaps even created the category. And so it was all blue skies for a while. So all of a sudden a lot of other companies noticed the category they created. And so you go from being in a set of one, in which case your brand isn’t really that important. It’s really about what you can deliver functionally that nobody else can deliver. All of a sudden you get some traction and you get 50 million, a hundred million in revenue and all of a sudden you have eight different competitors that sort of come out of nowhere. So all of a sudden your brand matters a lot and being differentiated and not just functionally relevant, becomes a big deal.

Product service innovations, you’re rolling out a new product, a dramatic new offering, and your brand was tied to a legacy offering. So all of a sudden you need to entirely rethink your brand. And frequently mergers and acquisitions, we do a lot of work for private equity firms where they acquire five different companies in a space. They roll them up into one. And all of a sudden they need a brand to wrap it in, to really go to market with their enhanced proposition. So I think any one of those triggers has a profound influence over the nature of the investigation and the kind of research that you do. But ultimately, the cross-functional leadership team that has to live and breathe that brand after the exercise is completed is the same group.

Tripp Underwood:

What does a successful brand transformation look like? Given any one of the cases you just outlined, internal buy-in, external buy-in and walk me through a little bit of what you think a successful brand transformation, how that affects everybody that it touches.

Ted Nelson:

So there’s really two criteria that I look at and we look in assessing this. The first is organizational alignment around the new brand, and the second is the ability to which that is fully activated, that the organization is living and breathing the brand. And that’s really about breadth and depth of activation. So the alignment piece is coming out of an exercise. Do all of the leadership members in the organization understand what the new brand position is all about? Do they understand what the core values are that animate that? Do they understand how that informs their interactions in whatever their respective domain area of expertise is? Does the Head of Sales understand it? Does the CEO understand it? Does the CMO understand it? Does the Chief Human Resources Officer understand it?

But more important than just understanding it is do they possess a shared sense of ownership of that? Do they actually feel like they helped to create it? And a core part of our process, and we’ve learned over doing this for 19 years or so, is it’s not enough to just try and sell someone on the brilliance of a solution. They need to feel like they were a part of creating it. Look, you’ve got a lot of smart people leading these companies and they all have a lot of skin in the game and they need to really feel a sense of shared ownership around whatever that positioning is. So sort of test number one is, do you have a leadership team who doesn’t just understand but actually has a shared sense of ownership and is excited to activate it in whatever their area of expertise is?

Then the second sort of demonstration of success is breadth and depth of application. It obviously always hits the website. That’s the first impact. It usually hits the sales kickoff, the SCO event. It usually hits the first big event. It usually hits whatever the next big ad campaign or demand gen program is. And those are kind of the obvious ones. Equally, if not more interesting ones is, does it inform how the Chief Human Resources Officer positions a company to prospects and employees? The battle for talent now is unprecedented and in many instances one of the key triggers is issues with acquisition and retention of talent. So does it impact that? Does it impact product and service innovation? Does it impact thought leadership initiatives?

So really looking comprehensively for the impact of the brand activation beyond the usual suspects. And so really trying to nail both of those. The leadership team is totally engaging around it and they’re actively bringing it to life across the entire spectrum of interactions an organization has with the outside world.

Tripp Underwood:

Because in my world, working with brands, I use so much of that terminology of what do we need to do to make sure you get the proper buy-in from stakeholders? And I think this notion of what do I need to do in order to get you the proper amount of feeling of ownership among those stakeholders there’s a much better way to position that and look at it. Because it is this idea of it can’t just be a good tagline. It can’t just be a really good logo. People need to make it feel like it’s actionable and identify with it. And I do think that requires a different layer of thinking.

Ted Nelson:

That exactly is right. And you really honed in on what is one of the core sort of pieces of cracking the code on these successfully is that shared sense of ownership. And it’s not about coming in as an outside consultant with the tablets and the brilliance of all your smart people, and here’s the answer. Because there’s no single answer that’s absolutely right. There’s three to five possible solutions and one of those that all meet the criteria. And the one of those that’s the right solution is the one that your leadership team can agree upon and really get behind. So orchestrating that process so they feel like they help to not just identify it, but actually help shape it, that’s the big win.

And that’s why one of the biggest problems organizations make and they ask me, what have you learned in terms of what the biggest mistakes are? And I say, “Too many people or not enough people.” So getting that number right, which is typically sort of six to eight senior leadership team members, is really critical to engendering that shared ownership.

Tripp Underwood:

Because a lot of what we do is also so subjective too. There’s a lot of thought. There’s a lot of research. There’s a lot of strategy. But at the end of the day, sometimes there’s, I like the way this sounds versus I like the way this sounds and getting enough people in there to make sure that we’re hearing all voices and all paths are being considered.

Ted Nelson:

And that subjectivity isn’t really subjective at all, but it really is the culture, that hard-to-define living, breathing [inaudible 00:13:43] of an organization. And does this feel like us? We may be going into a new space with our brand, but it still has to have a genuine, authentic connection with who we are as a group. And no one can necessarily define that. We try to, but you can’t fully define that. But you know it when you see it.

Tripp Underwood:

And it’s a process. Tell me about success. We’re talking about success, what this looks like. Any personal case studies that you can share that your team has done of brand transformations that you think have been particularly impactful or you’ve seen really great results with?

Ted Nelson:

It’s a big database to reflect back on and in our annual offsite.

Tripp Underwood:

Good problem to have.

Ted Nelson:

Yeah, it’s a nice problem to have and we like to reflect and think about, what are the most successful ones and how would we define it and why? The ones that I’m proudest of, and I think overall we’re the proudest of, is the ones that really help engineer a real state change in what an organization does, when you actually couldn’t pull this off if you didn’t transform your brand and so really, brand transformation in the purest sense. And there’s a couple that are sort of favorites. One is the greatest hits from about 10 years ago, and it was Abt, A-B-T, a Cambridge-based, really highly-esteemed, public policy organization, sort of one of the first movers in the 1960s in terms of bringing together a hundred really well-intentioned, brilliant PhDs to help figure out how to solve worthy problems.

How do we wipe out illiteracy in Washington DC? Or how do we reinvent the water system in this country in Africa? And how do we put real brain power against that? So Abt grew and grew and grew. And then all of a sudden the biggest growth part of their business became the international development part. So if the public policy part was the big brains thinking about models and solutions, the international development was boots on the ground, around the world and across America’s cities actually implementing these things. And their organization grew from a couple hundred people to a couple thousand people worldwide.

And they had a new CEO and she came to us and said, “Look, I’ve got a problem. I’ve got two apps. I’ve got super practical, hardworking people around the world digging trenches and teaching classes. And then I’ve got these PhDs in Bethesda and Cambridge who are thinking big thoughts. And they’re two different worlds. And I want one Abt. And we can’t continue to grow and compete against firms like McKinsey and Bain, who are now in our space, unless we’re one Abt.” So it was a massive brand transformation undertaking. And it’s where we broke the rule of eight I said earlier, because everybody in the company, and the organization was a nonprofit, all had an ownership stake in it. And you had lots of really smart people. So we had to orchestrate this thing.

So about 30 or 40 people could be involved in the process and get to a non-compromised output. So instead of taking three months, it took nine months. But we got to a really powerful place, a total re-imagining of the brand, and we called the governing brand idea, was bold thinkers driving real world impact, a total re-imagining of the visual look and feel of the brand. And they’re still using every bit of those elements 10 years later, and it’s had a huge impact on the growth of their business. So I love that one, because Abt’s a great organization. But also, the notion of bringing together two Abts as one through brand transformation is really exciting to me.

Another recent one, which is kind of fun, we’ll all relate to, especially those of us who are over 50 or over 60, was a billion-dollar company, Five Star Senior Living, one of the largest players in terms of retirement for all economic classes across the country. And so their business was historically a real estate business. And when sort of proceeding generations retired, there was a point in time when the significant percentage said, “I want to go to a retirement home now. I want to have things be easier. I don’t want to be responsible for running my own own house,” et cetera, et cetera.

Well, big shifts happened with boomers, the subsequent generations. So they don’t want to go to a retirement home. They want an age in place. So all of a sudden Five Star Senior Living needed to evolve their core business from being one of real estate to one of services. And they had learned a lot in terms of helping people age. So how do you bring that to their homes? How do you bring that to where they are? And they weren’t leaving the real estate business, but they needed to add to the services business. And Five Star Senior Living as a holding company name certainly didn’t work for that. So it was a big grand transformation exercise that came out with a AlerisLife, a new name. It’s still going on right now. There’s a lot of pieces to it that I can’t talk about.

But I love the dynamism of a disruption in the category, from people going to retirement homes to retire, our core business is real estate, to people who wanted to age in place, our core business becomes services. And all of a sudden your brand, from your legacy, just doesn’t make sense in terms of where you’re going. So really, really proud of that one.

Tripp Underwood:

And I love this idea of taking knowledge and information that’s foundational to the brand and what the brand does, and then being like, how can we apply this to the new situation either being forced on us internally, actually? This idea of we’ve worked so hard to collect this information and it still has so much value, we just need to think slightly different about how we communicate it, how we process it, how we package it, and, ultimately how we share it. But it’s this idea of a transformation as opposed to a complete rebuild of shifting thoughts to apply.

Ted Nelson:

And that is absolutely right. Clients come to us. They can afford us, because they have businesses that are of significant scale. They’re looking to selectively leverage those legacy attributes that are relevant to their future while adding new attributes that are required to seize the opportunity in front of them. So it’s this blending that has to happen, but the legacy attributes are always the most important ones. Those are why you have permission to go after something new. No one would care about what a AlerisLife is doing if it wasn’t, because they have a 40-year track record of helping millions of people retire very comfortably. So they have credentials unlike anything else.

The trick is those credentials aren’t fully, as they were packaged, relevant to where they’re going. So all of a sudden it’s less about homes and more about we understand how to help people age comfortably. And it’s a higher order of set of attributes that comes out of that legacy, but really creates really significant new opportunities for where they need to go.

Tripp Underwood:

Brand equity is everything, and it’s just the idea of recognizing that it is a movable, evolving thing. It is not something in time that doesn’t move, is what separates the leaders from the followers, I guess.

Ted Nelson:

Yep. Yep.

Tripp Underwood:

Great. Well, awesome, Ted. That’s all the time we have today, but I want to thank you so much for joining us. Super interesting conversation. Appreciate all your insight and to everyone listening and watching at home, thank you so much for joining us. It’s been another episode of Pivot Points.

Ted Nelson:

Thank you so much. Really appreciate it.