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External Branding’s Internal Impact

(originally published by Booz & Company)

Conventional wisdom says branding is for external communication; it aims to influence current and prospective customers. But this view is too narrow, especially when a company is trying to fundamentally alter its business strategy. Companies in the throes of dramatic change need brand communication to affect their employees as much as it does their customers.

For the many companies attempting to make the shift from selling lower-margin goods and services to offering higher-margin customized solutions, branding can serve a powerful internal purpose. When we were faced with this very challenge, our branding strategy was critical in uniting formerly divided business-unit and product-oriented management factions behind new shared goals and strategies to deliver solutions.

Five years ago, we established the Construction Information Group to tie together the six strong, existing brands representing McGraw-Hill’s construction-related service companies and publications: F.W. Dodge, Architectural Record, Sweet’s Product News, Design-Build, Engineering News-Record (ENR), and Our strategy at the time was to loosely endorse each of the brands in association with the Construction Information Group name. But we rapidly found that just creating an organizational layer and tacking it onto our brands was not enough to motivate our people to collaborate, or to gain new attention in the market.

Building product manufacturers (BPMs, companies that produce windows, doors, paints, etc., and that sit in the middle of the commercial construction food chain) are less and less interested in buying products or plain-vanilla services. Increasingly, they want integrated solutions, including help in marketing their products through our advertising vehicles online and offline, projecting information through our databases that will help them target leads, and distributing product information to various end-user segments. The trouble was that managers handling each of our existing brands continued to pursue their own goals independently, leaving the “solution sale” out of the discussion with the customer.

To provide solutions, a company must cut across business units to customize offerings — content, objectives, and pricing — for individual customers. We weren’t organized to do that. Each of our account managers called on BPMs independently, and focused on selling products only under their brand. There was limited information sharing or effort to help drive cross-product sales. There was no single point of contact for the BPM customer.

After surveying our customers on their perceptions of our brands in the fall of 2001, we looked at three options to strengthen the collection of brands associated with the Construction Information Group:

  1. Use one of the strongest existing brands — Sweet’s Product News or F.W. Dodge — as the name of the entire collection.
  2. Create a new name for the collection of brands, an appealing way to signal major change internally and externally.
  3. Use the most recognizable brand name — McGraw-Hill — in the new name, strongly emphasizing its value above the prior collection of brands.

After some testing, we concluded that the first option risked creating winners and losers internally, a dubious way to achieve collaboration. It also didn’t supply a sufficiently strong external message about our new approaches. And creating a new brand looked to be expensive. The McGraw-Hill name already had an image with the broadest range of customers, and had the best potential to pull the separate business units together. Choosing the third option, we came up with the name McGraw-Hill Construction. With it, the equity of the old brands remained intact in a system designed to channel future equity into the single brand.

Clearly, promoting a cohesive image to the outside world was only a first step: We needed to unify our operations so that everyone internally (1,700 professionals worldwide are employed at the company) identified first with the enterprise as a whole. Key customers needed to see a unitary brand before they encountered a subbrand (i.e., McGraw-Hill Construction Dodge instead of F.W. Dodge) every time a sales or service person contacted them. We needed to accomplish this while continuing to leverage the equities in our existing construction publications and information-company brands.

Internally, we had to introduce specific structural changes and inducements to promote unity, not simply ask for it. To do this, we:

  • Articulated a clear vision and mission statement.
  • Rolled up individual brand financial targets into group targets, making them internally public for the first time.
  • Created a new Integrated Solutions and Consulting sales team to bring group solutions directly to customers.
  • Created new product platforms to connect content from our different business units.
  • Consolidated and centralized customer invoicing and customer service processes.
  • Launched new advertising, marketing collateral, trade exhibits, and internal communications that for the first time demonstrated a unified image.

These changes would have been impossible without the new McGraw-Hill Construction brand, which ties together our people, products, and value proposition. It has given us the vehicle to organize internal change and the credibility we needed when approaching our key customers with offers to solve their problems. 

Five years ago, we had separate business silos pushing independent product lines to meet standard customer needs. Today, we have collaborative sales teams operating under a single brand offering product and service bundles to solve selected customer problems. Our branding initiative was the key activity behind these improvements, which are now paying off in double-digit annual growth in profits.

Why is branding critical? Because it gives us a competitive advantage in challenging economic times. And because internally it reinforces our strategy and motivates our people to be focused on clear, shared goals.

Victoria Pao,
Victoria Pao is vice president of marketing and business development for McGraw-Hill Construction and is responsible for implementing marketing and new product development strategies for the group.

Steve Lawrence,
Steve Lawrence is executive vice president/partner at Straightline, a New York–based corporate brand consultancy. Mr. Lawrence is responsible for the firm’s brand and identity strategy development assignments, as well as client service.
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