Identity in action - corporate identity

Communication World, Sept, 1990 by Laurence D. Ackerman

IDENTITY IN ACTION

Getting the most from the marketing dollar is still a priority whether your market is made up of 20 countries thousands of miles apart or 10 towns, each within one-half hour of the other.

Meeting these and other challenges in the '90s requires that CEOs use identity to its full potential as an integrating force across three areas: strategy, marketing and culture. Looking ahead, it is reasonably safe to predict, based on experience over the past decade, that identity will serve a number of important purposes in this regard, specifically:

* Identity will provide a means of counterbalancing fractioned corporate images resulting from decentralized, far-flung global operations... it will be a mechanism for linking employees by establishing a common view of quality and reinforcing shared values that transcend different foreign languages and national customs;

* As the frenetic short-term mentality of the '80s subsides, identity will become a "best friend" to every CEO interested in reinforcing his company's commitment to the long-term and sending a clear signal to would-be raiders that the company isn't for sale;

* As traditional product brand loyalty erodes, identity will add a new dimension to consumer marketing that changes how goods and services are differentiated and even why they're purchased;

* Identity will become a recognized means of capitalizing early on economic trends which invariably lead to opportunity for some competitors and vulnerability for others.

In the 1990s, corporate identity will become a principal means of meeting the need for: swift, compelling communication; distinctive, transnational corporate images and greater management control in a more complex world.

Lessons from the '80s

In looking back over the past decade, there are many companies whose experience collectively has laid the groundwork for managing identity in the 1990s. Here are six useful examples:

BOC Health Care:

Think Globally, Act Locally

In the midst of a burgeoning health care market, The BOC Group, a UK-based world leader in industrial gases, had acquired a diverse group of health care businesses--in anesthesia equipment, pharmaceuticals, disposable hospital products and home health care. Each operation marketed products and services under a different identity--some companies, in fact, used different names in different geographic regions. Fragmented identification practices were hurting business in important, highly competitive markets around the world. Customers who purchased more than one BOC product were now confused by multiple identities, employee performance was suffering because of uncertainty about the corporation's long-term commitment to health care and communication expenditures were being duplicated unnecessarily.

A three-part strategy was developed that addressed marketing and cultural needs simultaneously; In short: 1) create one "BOC Health Care" image that would span North America, Europe, the Middle East and Asia and become a global anchor for decentralized businesses; 2) streamline product and service identities from market to market and 3) create new names for merged operations where a unified identity would strengthen competitive position.

On the strength of this strategy, BOC Health Care has succeeded in building recognition and sales in some of the most attractive markets for health care worldwide. It has also managed to integrate numerous disparate cultures into four distinct organizations which today are the backbone of the enterprise.

Sara Lee Corporation:

Use Identity to Signal

Distinctive Value

"There will be less pressure (in the 1990s) on corporate managers to maximize (short term) shareholder value." This prediction was made by Leon Cooperman, chief executive of asset management at Goldman Sachs this past January. It reflects an era far different than that of the 1980s; a period when short-term stock value could dictate corporate survival.

In the mid '80s, John Bryan, chairman of Consolidated Foods, recognized the need to build stock value and, in so doing, preempt the notion that the company was fair game for takeover.

Consolidated Foods was virtually an unknown entity to all but those investors, customers and, of course, employees who had close, vested interests in the concern.

The main challenge in management's eyes was to reposition the company from being viewed as a broadly diversified food company, to being recognized as a brand-driven consumer products enterprise--a move which would focus attention on the value inherent in the organization and, if successful, spark growth in corporate reputation and stock price.

An analysis of price/earnings ratios among consumer products companies revealed that those which used a leading brand name as their corporate name had consistently higher stock prices. A study of Consolidated Food's many brand names--among them, Hanes, L'Eggs, Sara Lee--showed that the name Sara Lee, in particular, was gold in the marketplace. It had built an image that meant "overall quality," not just cakes and sweets.