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David Kincaid is the Founder and Managing Partner of Level5 Strategy, a brand consultancy, and the author of “The Brand-Driven CEO”.
As the world awakens from this pandemic-induced slumber after what seems an eternity, brands will be facing a very different looking marketplace. A fatigued consumer population, whose buying habits have been warped by a succession of lockdowns, is likely to emerge from their cocoons with a changed outlook on life. Whatever brand loyalties they may have once felt are likely to be severely frayed. Brands will need to work extra hard to shore up these loyalties, assuming they are even recoverable after so long a period of dormancy.
The brands that succeed will be those that remain relevant to the lives of the people they serve. Those are the brands powered by a commanding vision that unites everyone in the company. Responsibility for shepherding the brand is shared across every business unit, not just the marketing department. And the most vocal evangelist is always the CEO or Founder. Think Apple. Cisco. Amazon. Proctor & Gamble. Coca Cola. Warby Parker. All brands that continue to thrive, even in tumultuous times like now.
Yet most companies today are not governed by any kind of unifying brand vision and purpose. They exist primarily to serve the interests of shareholders. Brand building is seen as a marketing expense. Even a frivolous one. They confuse it with advertising. The language of branding mystifies board members. Terms like unique value proposition, mindshare and brand equity are alien to them. The CFO scoffs at attempts to treat the brand as worth something. Unable to put a dollar sign on brand name recognition, the value of the brand gets lumped together with other intangible assets like intellectual property under the heading of “goodwill” on the balance sheet. Never mind the fact that the market value of a brand could be worth many times the physical assets combined.
Brand management, as a discipline, grew out of the business practices of the major consumer goods companies in the mid-20th century. Companies like Proctor & Gamble, Unilever, Colgate-Palmolive, General Foods, and Kraft developed rigorous product lifecycle methodologies to develop, launch, nurture and retire brands. As the discipline matured, it became tightly integrated with financial and operational planning. Brand managers were schooled in all aspects of business, not just the marketing side of it. And as they moved on to other commercial sectors and industries through their career, they introduced that same planning model to other organizations.
At the start of this century, however, the strategic focus of most companies had swung from brand building to maximizing shareholder value – from investing in long-term growth to seeking short term profits. Marketers were now being asked to prove the link between brand building, shareholder value and the bottom line. And when that proof failed to materialize, or was unconvincing, brand budgets were deemed to be a discretionary expense, subject to cutbacks. And that’s largely been the story of the past two decades, as many businesses were taken over by CEOs with a financial mindset. Today the attention of CEOs is riveted on driving up stock value (in large part because their generous pay packages are wrapped up in stock options).
If companies are to survive the uncertainty and disruption that lies ahead, the brand must be the face of business strategy, as David Kincaid argues in his new book “The Brand-Driven CEO”. A long-time branding expert, whose early career was spent learning his trade at General Foods, American Express and Labatt during the glory years of brand management, David has witnessed with growing alarm the declining influence of brands. He urges CEOs to transform their businesses into brand-driven organizations and cultures. In his book he lays out a roadmap for CEOs to operationalize brand strategy and shelter their companies from the post-pandemic fallout.
I started the interview by asking David whether his message was aimed at the CEO who doesn’t take branding seriously, or the CMO who isn’t being taken seriously by the CEO.
David Kincaid (DK): Well, it’s a little bit of both. And Stephen, thank you for having me I’m really enjoying. I can’t wait for this discussion. Let’s put it this way. I wrote the book probably driven more by an observation over my 40 years in the brand management world, and how the understanding of the concept of a brand had changed, how the accountability for managing that asset had changed, and ultimately, the confusion or lack of understanding of the brand as an asset. You know, as I say, to most CEOs, your brand is probably the most misunderstood and underleveraged asset sitting on your balance sheet. And a lot of them kind of give me a, “What? But we just did a new website”. And it’s like, “Well, that’s good, but that’s your marketing. That’s not your brand.”
So, the reason I wrote the book are those three driving factors, but it’s all rooted in the world that I started in, which was a classic brand management-driven organization. In the ’70s and in the ’80s, you know, the old stalwarts, like Procter and Gamble and Colgate-Palmolive, these were brand tight – they managed the assets. And I was fortunate enough to be given an opportunity despite not having a business degree to be brought in by General Foods.
When I started there, I actually started my first day and they said, “Well, you’re going to work on Maxwell House coffee.” And I thought, okay, well, I’m not a big coffee drinker, but I’ve been seeing a lot of ads for Maxwell House coffee with Ricardo Montalbán as their spokesperson. And for those of us old enough with the gray hair to remember, you know, he was very popular on a show called “Fantasy Island.” And then he did a lot of “Star Trek.” And I thought, wow, this is going to be great; I get to start, and I get to meet Ricardo Montalbán at an ad shoot. This is going to be wonderful. And I quickly had that balloon popped. I was traipsed down to an office. There’s a little hole with a single light bulb. It was almost like a holding cell. And back then, you know, there’s no computers and everything wasn’t digital, and they would pound these big pads of paper down in front of me. And they’d say, “Here’s your AC Nielsen reports. “Here’s your volume shipment reports. Here’s your warehouse withdrawals. Here’s your manufacturing and inventory control report. And I’m going, “Okay, good.” But you can’t look stupid on your first day. And I’m thinking, well, this is great. I’ve got all these reports, and I was this close to saying, “When do I meet Ricardo Montalbán?” And my boss, who became a colleague later on in my career, said, “So, welcome to General Foods. Here’s all this information. You’ve got a week, you know. The coffee and the kitchen is down the hall. Find out where the washrooms are. Meet some of your teammates and look over all of these big stacks of paper. And I’d love to get some ideas that you might have after looking at them on how you might suggest we add half a point to the merchandising margin on roasting ground Maxwell House.” And I went…
Stephen Shaw (SS): And you said, “Say what?”