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Leadership and Branding –The Role of the CEO

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[Photo of Executives Cartoon]A recent report by Goldman Sachs discussed the coming of age of the Asian century. The report analyzed the impending domination of China and India as economic and technological powerhouses in the global scene. With more than 2.2 billion people, economies growing at a combined average of 8% a year, young and educated population, and increasing disposable income, it is no wonder that Asia has become the darling of the world’s corporations. Most of the Asian markets are inundated with a number of local and global brands. The competition has intensified and even though Chinese companies of late have been aggressive in their expansion (Lenovo’s acquisition of IBM’s PC division, Haier’s failed bid to acquire Maytag, CNOOC’s hostile bid to take over Unocal, and the leading Chinese television maker TCL’s acquisition of France’s Thompson to name a few), most often it is the global brand that wins the battle in market after market. This begs the question—what is the secret behind the success of these brands?

At the outset, the answer seems quite simple. Global brands, as the name suggests, are global in their reach. They operate in a number of markets, have huge resources to support their market entry and communication efforts, have the requisite expertise and have deep enough pockets to absorb initial losses. Though this answer seems quite logical, it overlooks one very key component—the role of visionary leadership. Most of the hugely successful brands have had the benefit of being led by leaders who had a vision. These leaders have led their brand from the front, been the brand’s chief ambassador, understood the strategic importance of branding, and nurtured the brand as a favored child. Not many local brands have had this critical success factor to boost their equity. This begs another obvious question—what is the role of CEO in branding and why should branding be treated so carefully?

Understanding the answers to these seemingly simple questions have separated the winners from the also rans. Branding as discipline has evolved over the last couple of decades from being just an addendum to advertising campaigns, fancy ideas of the marketing department, optional function of the elite few to finally being recognized as a boardroom discipline that not only contributes to the top and bottom line of the company but also aids in enhancing shareholder value contributing to the market capitalization of the company. It has been proved that over 70% of the market capitalization of companies listed on the NASDAQ is contributed by the intangibles of which brand equity is the important element. But for companies to leverage on the brand equity, branding must become an organization-wide activity practiced by all functions. Moreover, branding must enable the following:

• Channel internal communications

• Align internal stakeholders around the brand mission

• Fuel innovation to stay on the cutting edge

For branding to play a pivotal role in the company, it has to have a strong support from the CEO and corporate management. Only when the corporate strategy is aligned with the branding strategies will the company attain a unified direction both internally and externally. Further brand equity can be optimally leveraged only if branding is allowed and supported to play the following roles:

• Shaping the organizational culture

• Initiate organization-wide, cross-functional training

• Facilitate leadership

• Nurture the right mind set, skills, and resources

Companies must ensure that everyone in the company is properly aligned with the brand values with the right mindset and belief. The entire company and its multiple and cross-functional actions and activities should be channeled towards this goal.

Internally, this comprehensive task of aligning and managing customer touch points cannot be left to or even controlled successfully by marketing departments alone. The boardroom should take a more active role in the cross-functional orientation of marketing in the Asian organization.

Externally, the Asian business leaders can benefit tremendously by representing and leading their brands by example. Asian business leaders can help to build their brand portfolios by appearing more outside the boardroom and acting as the primary spokesperson of the brand strategy and vision, internally and externally.

In fact, it will require a shift in focus and priority for every functional aspect of the organization aligned around multiple customer touch points.

When the CEO and the corporate management team actively involve themselves in and nurture branding, the above roles of branding can be effectively utilized. A strong brand with a unique identity and personality would help define the culture of a company. It facilitates companies to either be customer-centric or product centric and thereby shapes the internal and external relations of the company with its many stakeholders. But for a brand to perform this role, the presence and backup of a strong leadership is quintessential. By being a strong brand evangelist, a CEO can define and defend the actions of a brand.

For branding to realize its full potential in any company, employees across functions must be educated about the significance of branding and how branding affects each function in any company. Such a cross-functional training would not only allow employees to understand the strategic contribution of their own part of the work but would also facilitate a better participation in various activities. Most importantly such training would allow all employees to realize the huge impact branding makes on every aspect of the business. This realization is crucial for internal branding—a process by which a brand is brought to life within the company.

A disciplined, cross-functional training program would then lead to a favorable atmosphere that would allow a whole generation of leaders to be groomed. As more employees are trained beyond their functional duties, they tend to develop qualities and skill sets that can prove useful in building strong leadership traits.

These implications are indeed very strategic and influence the very nature of business. Such a function cannot be left to middle-level marketing executives who would not understand the holistic perspective and appreciate the greater role branding plays in the larger scheme of things. Moreover, branding viewed in its totality transcends the functional barriers within an organization and thus requires brand guardians to have a much complete view of the business. Only the CEO in consultation with his senior management team can provide consistent teeth to the branding function. The corporate board would have the necessary information to decide on such strategic issues. Going ahead, it will be these strong initiatives from CEOs and corporate boards that would anchor and sustain brands in the highly competitive global market.

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