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(originally published by Booz & Company)


The Situational Leader

S+B: What companies have recently benefited from that type of strong brand leadership?
I think Coach has done a very good job. Originally, that brand was established by quality leather products. And then, years ago, the brand slid. It became tarnished, lost its image. But if you walk into their stores today, they reinforce that original essence of their brand, with the traditional products very well-made and well-merchandised. And then there’s exciting marketing around it that builds new legs for the brand for the future. They send a core message, and they’ve reinforced it. That gives them license to build around the edges, to expand the brand. The company’s done terrifically. And I think their CEO must have played a role in leading that process; it’s apparent that the core message of the brand is well understood throughout the organization, and that carries through to consumers.

On the other hand, think about the Oldsmobile brand. When I was growing up, it was a very fashionable, elite symbol. Well, that brand did not keep up, and it wasn’t rejuvenated. It wasn’t reenergized. Too late, it was decided that there would be a marketing campaign, which you may remember: “This is not your father’s Oldsmobile.” It told you what it wasn’t, but it never really told you what it was. And my father’s Oldsmobile was great, in its time. So I think they missed it conceptually, and they certainly never redefined what that brand could look like and should look like, so the brand died.

S+B: There’s a trend toward greater interaction among corporate leaders and their counterparts in the civil and public sectors on issues such as global health, infrastructure, and the environment. How do your ideas help guide leaders through this complex environment?
Those changes are prompting organizations to broaden their goals. Fundamentally, business leaders just need to set a destination for their organization and plan the actions that are required to get from here to there. But one of the things that I talk about is the importance of responding to your constituencies as you set that direction — the constituencies that are important to you and to your company. Clearly identifying these constituencies is a prerequisite for intelligently prioritizing your resources in the organization. Ten or 20 years ago, the obvious constituencies were your shareholders, your retailers, your consumers, and your organization. Today the number of constituencies has broadened dramatically, particularly for far-reaching companies and organizations. They now include communities, governments, and nongovernmental organizations, all of which are playing a greater role in the dialogue with businesses.

Wal-Mart, for example, is beginning to do a very effective job of listening to that wider community. They’ve thought about their role in the environment, and it’s causing them to have very different, more proactive relationships with communities and governments around the world. And they’re implementing programs that support that idea. For example, they’re requiring their suppliers to adjust their packaging to eliminate waste. That’s done in response to the demands of a broader community. They’re doing a great job.

Author Profiles:

Matthew Prewitt ([email protected]) is a contributor to strategy+business
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  1. Mark Gerencser, Fernando Napolitano, and Reginald Van Lee, “The Megacommunity Manifesto,” s+b, Summer 2006: A framework for understanding how and why business leaders are listening to a broader range of constituencies. Click here.
  2. Victoria Pao and Steve Lawrence, “The Internal Impact of External Branding,” s+b enews, 1/27/03: The importance of communicating brand ideas within organizations. Click here.
  3. Randall Rothenberg, “Noel M. Tichy: The Thought Leader Interview,” s+b, Spring 2003: The University of Michigan leadership teacher, who worked with Jack Welch in engineering GE’s 1990s transformation, talks about his teaching techniques, which are designed to foster responsibility and engagement at every level of the organization. Click here.
  4. Jack Stahl, Lessons on Leadership: The 7 Fundamental Skills for Leaders at All Levels (Kaplan Publishing, 2007): A straightforward guide to success in the essentials of business leadership. Click here.
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