Helene Finidori

Close-up on Identity

The connection between identity and performance is coming into light. And that’s good news.

In a new book, Identity Economics, released in February, Nobel Prize economist George Akerlof and Rachel Kranton describe how identity helps explain why people, facing the same economic circumstances, make different choices. In their view, an organization works well when people personally identify with it. Jim Heskett dedicates his March HBS Working Knowledge column to the topic, wondering to what degree identity affects economic performance and whether US corporations are not going through an “identity crisis”. A recent research survey led by the Identity Circle measures the impact of organizational identity strength and the awareness thereof on employee engagement and performance, and establishes identity as a key performance driver over any other engagement boosting activity. Paradoxically, the study suggests, most employees are hardly aware of their company’s identity strength. This leaves quite a lot of room for improvement.

Identity has long been a central element of branding and its definition, the specialty of branding agencies, in particular B2B. Because of the frequent disconnect of marcom with strategy and HR in decision making or resource allocation, traditional branding approaches, although capturing a whole wealth of collective knowledge and insight on identity and potential, have concentrated their focus on serving the external dimension of the Brand -the formulation and communication of the promise to the outside audience- but overlooked how this insight could be leveraged towards internal dimensions -such as strategy and people engagement. In worst case scenarios, strategy, brand and HR are developed independently along three separate processes that hinge on different premises and therefore generate mixed priorities and messages, widening the gaps between strategy and execution, perception and reality, promise and delivery, effective marketing and positive outcomes.

Identity is the substance of what characterizes an organization, the set of unique capabilities and characteristics that brought it where it is and that enables it to create value and formulate a promise. It contains the seeds of what will take an organization to the next level. Larry Ackerman from Identity Circles provides a good definition here.

It constitutes a good platform from which Strategy, Brand and HR can be developed in concert.

In two other posts I elaborate on why Strategy formulation should start with identity and why the Brand has a role to play in aligning strategy and execution.

Strategy. So, where do we start? Identity don’t you think?

 

Strategy? It’s all about defining how you will create and sustain (more or better) value: value for your customers, value for your shareholders, value for your people, and ultimately value for all your stakeholders and for society, whether at the local, national or global level.

By the textbook, your strategy should derive from your organizational vision, position your organization or product portfolio so it can ensure a sustainable competitive advantage, and result in the attainment of your strategic goals. You have several tools and templates at your disposal:  SWOT, PEST, 5 forces, Value chain…; several strategic models: cost leadership, differentiation, Blue Ocean, resource based… as well as planning methodologies that ensure the whole strategy is spelled out and ready for implementation…

But where should you start? What is going to drive your strategic thinking? How will you formulate your vision so it can serve as an inspiration and guiding idea and set you apart as a unique organization? How are you going to define your strategy’s content? And once you have formulated a strategy, how do you ensure that it contains enough impetus to energize your people to make things happen and to navigate through volatile environments?

Many of the models out there are outside-in… and based on a prescriptive and almost “mechanical” approach –strategy as a science- where environment shapes strategy, strategy shapes structure, and structure determines outcome. The major focus is on collecting and analyzing hard facts and data, with little room for intangibles and people factors –more difficult to quantify and modelize- and little attention to leveraging the organization's knowledge… 

Just as the theory of efficient financial markets is now disputed because it leaves out matters related to human behaviors and cognitive processes, theories which claim that with equivalent resources and strategies and in similar environments companies would perform equally have long lived.

Ultimately, all else being equal, it’s in the intangibles – an organization’s capabilities and the way it combines its capabilities and resources to create value- that lies the difference. As much as the niche or breakthrough opportunities that you seize, or the competitive advantage obtained through your positioning or product portfolio, it’s who you are, what makes you tick and how you do things that set you apart. It’s your ability to do it better, faster, consistently, adaptively, relevantly to both your audience's current and future needs and wants -whether customers, employees or other stakeholders- and your ability to nurture relationships in the long term that count in the end.

So a good place to start, at the intersection of business strategy and branding is probably to define your identity. Your identity is much more than the form under which you appear as an organization to your audiences. It is the substance that characterizes you, who you are, who you are not, what is important to you. It is the set of unique capabilities that enable you to create value, that brought you where you are, that shaped your culture, image and performance; your potential to reach the next level, and the roots from which your strategy can grow.

Vision, purpose or mission, are the produce of your identity. Defining your identity is being able to answer the questions: why are we in business, and what does the world need most that our business is uniquely able to provide? The brand, your culture and image are its expression.

Defining identity is central to any branding process. Doing it in an integrated approach to branding and business strategy creates better conditions for a successful formulation and execution of business strategy, in particular when it comes to providing purpose and mobilizing people in operations around shared values and goals.

For more information on brand business integration, read my post Aligning Business Strategy and Execution around the Brand and go to JDBBN website.

Aligning Business Strategy and Execution around the Brand

Few business strategies, even when effectively formulated, are effectively executed. Research shows that in most cases failure is due to the absence of a coordinated approach to strategy and execution, and to an improper planning of the required implementation steps to put the strategy into practice, in particular when it comes to:

• Focusing on what really matters
• Aligning strategic and operational goals and priorities throughout the organization
• Creating an understanding of strategic goals at the operational level, of their impact on operations and of the changes they require
• Allocating and aligning resources (people, processes and technologies) adequately
• Providing evaluation and correction mechanisms
• Allowing flexibility and fast decision making

See Forbes Insights and SAP survey reports on aligning strategy and execution.

In a time of increasing economic volatility and changing market conditions, what is crucial to ensure long term success is not only the value proposition of a business but also how this value is actually created and delivered, and ultimately its capacity to attract and retain, and to create a long lasting bond with the customer, employee or other stakeholder.

In this process, the human factor -interaction, engagement and experience- plays an increasingly critical role that is often neglected or reduced to a collection of hard data; or dealt with in a siloed and prescriptive way.

Companies who develop and execute their business strategy in close relationship with or around their brand and who associate the organization’s stakeholders in the process create better conditions for fostering human dynamics and achieving outcomes.

The brand is the personification of an organization. It is made of both the promise -which drives the value proposition- and the actual fulfillment of the promise through strong delivery at each point of encounter -which ensures long lasting differentiation-. In this respect, the brand is more than just the image projected to the outside, it influences the business just as much as it is influenced by the business, and the internal implications are essential.

Integrating brand and business in the strategic process provides direction and purpose that draw from the organization’s identity and shape in return the vision, culture and the way things are done, thus building up the image. The approach focuses on aligning the brand components and business’s internal capabilities, tangible and intangible, on the triggers and touch points that matter the most, and on assisting in the implementation of the changes required. In particular it seeks to bring together sales/marketing/communications (external focus) and HR (internal focus) to identify and feed capability and to deliver the brand promise along the value chain.

The effective brand is at the same time the connective tissue that reaches every corner of the organization and holds constituents in relation to each other, and the energy fuel that mobilizes the whole organization and stakeholders around shared priorities and goals.

Brand business integration involves that the brand strategy be endorsed if not steered at the executive team level. It requires a transversal approach to strategy implementation that breaks functional barriers  and the valuation –even if hard to quantify- of intangible assets such as employee moral and customer satisfaction, effectiveness of internal processes or quality of output, strength of relationships, corporate values and culture which are the drivers for sustainable differentiation and future earnings and value.

Aligning the Brand

However inspiring, a promise is not enough to build brand value. Ensuring an optimal delivery of the brand promise and the engagement of the people within the organization to make it happen are probably as important as the image built to support positioning and provide customers with buying incentives. This may seem obvious… but too few companies actually go through the process of aligning their brand and business or even realize that the way they conduct their business may impact their brand.

The relevance of brand alignment and the need to “live the brand” internally is however starting to become more generally recognized. A number of branding agencies have taken this on. Having worked on both sides of the client/agency and client/consultant relationship for more than 15 years as a strong advocate of integrating business and brand, I can only rejoice to see this eventually making it at the top of corporate agendas. The activity is still in its infancy though: offering and practices are rather heterogeneous, and there is no standard terminology –call it brand alignment, integrated branding, internal branding etc…-. Here are a few things organizations and branding agencies should have in mind to successfully bring branding to another dimension:

• Brand alignment involves not only the tangibles of the business – the way things are done, deliverables and outcomes- but also the intangible –perceptions, relationships, behaviors- that affect the tangible and performance. It involves not only the external, but also the internal. In all these dimensions, the human component is key. Systems and processes alone can’t shape a culture or foster people engagement. Getting everyone on board is a critical factor of success and must find its place in the process. 

• Brand alignment requires a fully supported cross-functional buy-in. The traditional point of contact of branding initiatives on the client’s side is typically marketing. Influence of marketing –or whichever function will lead the project - on other functions and the rest of the value chain is essential. The promoters of a project must have the power to cross functional barriers in order to obtain cooperation, resources and budget, and must be able to secure top management and organization-wide support for the execution of the project to ensure the outcome. An assessment on the likeliness of this support should take place quite early at the planning stage.

• Brand alignment operates at the confluent of strategy, branding and HR, and along the value chain at each point of contact of the brand with its stakeholders: it requires a broad array of skills. Traditional branding agencies are by essence in the best position to help their clients on the identity/relationships/perception part of the equation, and they are certainly very well placed to combine the use of creative thinking and design techniques with traditional research and data analysis to leverage collective knowledge and produce valuable insight and recommendations. For the alignment to be effective, they must make sure they can team up and coordinate all the required internal and external additional skills in particular in strategy and change management, and that everyone involved in the process has an understanding of the business, its processes, systems, value chain…

• Brand alignment must happen upstream and separately from brand execution, in particular from the scheduling of any physical deliverables. Positioning & revenue models of branding agencies and marcom purchasing habits on the client side may need to evolve. Many agencies pitch on the consulting service -strategy, methodology and outcome-, but ultimately tend to “sell” a product -design & look and feel… - especially if their history and revenue model is strongly dependent on design and production. As an echo to this –cause or consequence?-, clients tend to buy -are willing to pay for- the end product –website, brochure, etc- rather than the thinking. Consulting and strategy needs to clearly be unbundled from design and production.