A New Role for Branding
The Lego Group is an interesting example of open innovation, but it is more than that. It indicates a significant shift in the way we think about brands and points to a future that will be radically different — one in which brand building will involve all stakeholders, and where managers will have to give up the idea of control over a brand and accept instead a fluid, uncertain world where a brand evolves in dialogue with others. This in turn will require both openness and trust.
Although we might argue that the very essence of brands is about trust — in the sense that consumers should be able to trust the promise that a brand name makes — in reality trust has often been missing. Organizations have trusted neither their customers nor their employees. As Francis Fukuyama notes in his book Trust: The Social Virtues and the Creation of Prosperity (Free Press, 1995), the “assumption that trust does not exist in the system” contributes significantly to the high cost of doing business in certain business sectors and societies. When there is a want of trust, organizations spend much time and effort watching and monitoring what people do. Brand delivery is jeopardized by the constraints placed on employees, who respond to the lack of trust either by finding ways around rules and procedures or by telling managers what they want to hear.
A similar situation exists with regard to consumers. Rather than being open and participative with consumers, many organizations assume that the people buying their products and services can’t be trusted. Not surprisingly, this is reciprocated. The market research firm Young & Rubicam found that the percentage of brands that consumers consider trustworthy plunged from 52 percent in 1997 to 22 percent in 2008. (See “The Trouble with Brands,” by John Gerzema and Ed Lebar, s+b, Summer 2009.)
How, then, can trust be engendered? Trust has to be earned over time through the experience of promises delivered, which means less of a focus on telling people about how great your brand is and more on building relevant content. This requires openness. Some businesses already do this. Patagonia Inc., the outdoor sportswear brand, trusts its employees and its customers, because it understands that all stakeholders are wedded to the vision of the brand, and it encourages them to take part in an open dialogue about the organization. Rob BonDurant, Patagonia’s VP of marketing and communications, says that honesty is what built the Patagonia brand both with employees and customers. He argues that the culture of honesty helps to tear down silos internally and to connect the brand with its customers. Another example is the Dutch insurance company Interpolis, which decided that instead of asking customers to provide receipts and questioning their claims, it would trust them. Former Interpolis executive board chairman Piet van Schijndel (now a member of the board of directors of Rabobank) said in a speech that the company “had to let go of the old-fashioned concept of an organization built on mistrust and rules. Instead, we started focusing on trust between people; between ourselves and our customers and between the management and the staff.” The result was not only greater operational efficiency, but also a decline in the number of claims.
We would suggest that brand executives, instead of relying so much on the rhetoric of persuasion, should instead work to trust those around them and become active participants in nurturing brand dialogue by fostering brand communities and sharing the knowledge gleaned from these encounters inside the organization. The 2009 Spanish, European, and World soccer club champion, FC Barcelona, practices this approach. The club, which is owned by its 170,000 members, encourages interaction. Chief Executive Joan Oliver i Fontanet says that who runs the club and how the team plays is determined in a dialogue with members. The club’s slogan, més que un club (“more than a club”), recognizes this strong sense of community and involvement. This approach moves brand building beyond marketing, and integrates it into the very fabric of the organization and how it connects with the outside world. If branding can be re-branded, so that it comes to be seen as both substantive and trustworthy, it will help to better connect organizations with customers and other stakeholders.