The Death of Branding and The Rise of Design and Reputation

So take a moment and think of the best work your company does.

When your company does its best work who does it?  How do they do it?

Now hold a picture of that group of people and the work they do, and ask “what qualities or values do they bring to the table that makes this our best work?”  Tenacity? Brutal honesty? Synthetic creativity with others? The ability to connect everything to the business goal?

I think if you answer these two questions—who and how you do your best work– you have the core values of your company.  And if you connect these values to how you do your work—your processes—you have essentially outlined the design of your company, and from that the design of your products and services.

The business of branding products and services is slowly being commoditized as a result of the disruptive technology of social networks.  What is moving in to replace branding is strategic consulting about the design of companies and their products.

I’m pulling together a couple of different threads of notes as I write this:

Paul Isakson is a friend and colleague I check in with regularly, and a few weeks ago we met over coffee at The Spyhouse in Minneapolis.  We talked through the idea that what we as consumers truly fall in love with in a product or a company is the design—and not so much of what is called “branding.”  By design I mean: the structure that governs functioning, developing, and delivery of a product or service.

Think of this:  if you draw a line from the Macintosh, through the Applebook, the iPod, the iPhone and now the iPad you clearly see the power of Apple’s design, how it wins the allegiance of people, and builds an emotional loyalty to Apple.  These are very different products—computers, audio players, telephones, tablets.  But the share the same design philosophy—sculpturally beautiful, incredibly functional and usable, and delightful to use.   They all share a common design structure.

We love Apple because everything they try to do is beautifully designed—so we can clearly see how design is central to Apple’s reputation, and why we therefore (a lot of us, anyway) love Apple, are loyal to it, and are willing to try new products from them.

Take a minute and think about Microsoft’s medicore design philosophy: how Windows works, the GUI of the Office applications, how hard it is to install and operate new applications, the “me too” quality of Bing.

I call the emotional autonomous opinion in the consumer’s mind “reputation” rather than “brand.”   There are elements of what many people call branding—package design, trade dress, logos, naming, sexy television commercials—which may appear to be separate from the product in the design, but these are just another component of the over all user experience that creates a reputation in the customer’s mind about the product and the company.

But “design” and “reputation” are more valuable terms to use today.  If you consider the design of buying groceries at Cub Foods vs. Whole Foods, you can see how the design of each—store locations, store design, food choices, newspaper advertising, Websites—is the soul of the reputation each one has.   And we have different degrees of love and loyalty to these two reputations depending on who we are, where we live, and how we communicate with other people.

I learn I can have faith in some companies because I can trust that what they sell to me is great.  That’s a great reputation.  (I also trust that some companies build crap, and that those products will likely be crap in the future–hence a bad reputation.)

I’m working on a strategic design of a company, working with one of my strategic partners, helping them think through what their products and services should be and how they “position” themselves in the marketplace.  They are an IT firm, which is a field clearly threatened by the two biggest dangers most American businesses face:

  • Commoditization – being forced to compete largely on price
  • Disruptive technology—having the marketplace for products and services disrupted by a new technology that makes the company’s offerings less valuable and then obsolete.

Here are two quick examples of how these forces destroyed a company and an entire industry:

Kodak back in the 1980s thought they were in the film emulsion business.  Management tried to make better film for less money.  Then digital cameras came into the market.  Kodak figured people would print their digital photos, so they still made money on the photo paper the drug stores used to print photographs.   But even that business slowly eroded.  Kodak’s mistake was not realizing that in fact they were in the visual memories business.  While Kodak’s commercials relentlessly played on this idea of “visual memories,” inside the company they were trying to figure out how to make film emulsion cheaper.  What if the price of chemicals went up?  They weren’t focused on the customer, they were focused on what they thought was the business of Kodak.  There was a total disconnect between the brand and the reputation of Kodak when digital cameras and video cameras showed up.  If they hadn’t relied on phony branding   we might all be using $150 Kodak Flip video cameras today.

Newspapers were disrupted the Internet—Monster.com and Craig’s List pillaged the classified advertising monopoly that had provided 30% of the revenue and 80% of the net profit to the newspaper industry.  They can never get that back.  Newspapers weren’t in the news business; they were in the convenient news and advertising business.  When the Internet came along, both of those things could be done much cheaper (and in the case of classifieds, much better).

I’m working with my friends at this IT firm checking in on the design of their company.  They have done a much better job of identifying what truly makes them unique in the IT marketplace.  Many IT firms—as well as interactive and advertising agencies—are just lumps of people doing the best work they can, but losing the battle of why their people working in with their process produce anything more than a commodity.   This firm is thinking through how they can evolve the design of their services so that they are outstanding and distinctive.  If they focus on that—rather than on the snappy slogan or “brand positioning”—they will have changed the company on the inside and planning the communications of this will be much easier because, well, because it will be true.

The advertising agency business is slowly imploding from a Stalinist refusal let go of “branding.”  Marketing is not about awareness, brand positioning, and brand preference.  Put another way, only a small part of what marketing has become is about that–and for that broadcast media can be very useful.  But marketing is now in the sales and customer service businesses as well.  And ad agencies still think it’s about messaging and branding.

Instead, they should focus on strategic business consulting that works with clients to evolve the design of their products and services, and then also focuses on using their creative skills as communicators to invent language to communicate this design both inside and outside the organization—and then focuses on collaborating with clients to professionally manage the communications process.  Ad agencies already do some of these  last two tasks, but they only do it through traditional broadcasting channels (and I include most online advertising as “broadcasting.”)

There’s a lot of people at ad agencies who grew up wanting to make television commercials, and the problem is there are fewer commercials and they are worth less as the communications landscape expands and becomes more social.  Who wants to give up shooting car commercials in Marin County to planning search engine optimization strategy (that will drive actually real business leads?)

And how people communicate inside a company with each other should be the first responsibility of a communications partner.  That has to be based on the truth that is the design of the company.   Communications internally can help evolve the company so that it and its product are better designed.

A communications partner can be the critical ally in helping think through the businesses choices, the language used to frame and discuss those choices, helping communicating that internally and yes, communicate it to the outside world.

That’s not an ad agency.  That’s not a strategic consulting firm.  That’s not a public relations firm.

I think that’s a strategic communications agency.

Here are some books I’m reading that are affecting my thinking about this:

Change By Design by Tim Brown

The Innovator’s Dilemma by Clayton M. Christensen

Tactical Transparency by Shel Holtz and John C. Havens

The McKinsey Mind by Ethan A. Rasiel and Paul N. Friga

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About Rohn Jay Miller

I'm a strategic designer who works with clients who are transforming their business models because of change brought on by the Internet. Solving disruption is often a problem and an opportunity at the same time. Previously I was a founding partner of Ikonic/USWeb in San Francisco, and Senior Vice President--Product & Technology for Knight Ridder in San Jose.

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