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The
CEO as Brand Guardian
by Christian Sarkar and W. Rodgers
In
study after study, the role of the CEO is tied inextricably to
the brand. Sometimes, as in the case of the celebrity-CEO, think
Martha Stewart, Richard Brandson, or Donald Trump, the CEO
is the company. Of course, this is not always a good thing.
The
key is to strike a balance, where the company benefits from an
appealing public personality like Martha Stewart, Donald Trump
or Michael Dell, while it builds a strong identity that doesn't
entirely rely on the individual. To
learn more about how companies feel about the CEO role
in company branding, we asked them to tell us about their
views. As Part I of an ongoing study, we surveyed over 100 global
companies.
In
this article, we share our findings for three companies in very
different industries: Southwest Airlines, Nissan, and Hermes.
What is instructive is the shared sense of importance all three
companies place in the CEO's role as brand steward.
Southwest
Airlines
 Herb
Kelleher the legendary chairman, co-founder and former CEO of
Southwest Airlines, has embodied the spirit of Southwest Airlines
for over 30 years.
We've
learned that Kelleher's approach to management is a paradox. Although
Southwest Airlines has set industry records for maximizing shareholder
value, Kelleher has always placed the needs of shareholders last,
after employees and customers.
We
asked him about the brand, and his response speaks for itself:
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Herb
Kelleher
Chairman, Southwest Airlines
The
role of the appropriate CEO is, in my opinion, most important
in both creating and guiding the brand and, to this
end, I met about once per month with our Marketing Department,
advertising agency, and Public Relations Department in creative
sessions.
The
objectives of my participation were manifold:
1.
To license participants to be creative, rather than mechanistic
and bureaucratic in approach;
2.
To license participants to be daring, rather than humdrum
in approach;
3.
To help ensure that our advertising and PR content were
congruent with our strategic and operational intentions,
our corporate values and Culture, and our ethical standards;
4.
To help ensure that we were paying contextual attention
to changes in societal mores, interests, and trends;
5.
To help ensure that our advertising and PR resources were
being spent and expended in a manner appropriate to our
allocation of aircraft seats; impending competitive confrontations;
and potential service opportunities;
6.
To help ensure that there was continuity and consistency
to our advertising and PR over a span of years;
7.
To help ensure that our advertising and PR had the potential
for a substantive and lasting impact, rather than just an
insubstantial, ephemeral presence;
8.
To help ensure that the creative process was both uncontrained
and a barrel of fun.
Caveat:
I wrote "appropriate" CEO above because some CEOs,
regardless of their merits in other areas, might deaden,
rather than enliven, creative sessions.
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Nissan
One
of the highest-ranking Americans in the Renault-Nissan alliance,
Steve Wilhite is the vice president of global marketing
for Nissan Motor Co., Ltd. (NML). He's responsible for building
the Nissan and Infiniti brands on an international scale and developing
marketing campaigns for all Nissan products worldwide.
 Wilhite,
who drives a Nissan Z sports car,
aims to convey the Nissan brand to customers, from the United
States to Europe and now China. "The notion is best captured in
the line [CEO] Carlos Ghosn said in Detroit in 2002, that everything
we touch, we shift - and everything we shift, we try to make better
and uniquely Nissan," Wilhite says. "People have started to realize
that it's not just a tagline, but a manifestation of who we are."
Here's
his take on branding and the CEO:
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Steve
Wilhite
Senior VP of Global Marketing, Nissan
I
basically agree with your premise that the CEO should
guide brand development and be the lead "brand evangelist".
That said, this depends entirely on the capabilities and
marketing skills of the CEO.
Steve
Jobs is a brilliant marketer who plays a critical role in
all aspects of brand strategy, brand development, and brand
implementation at Apple. His instincts are fantastic and
he has developed exceptional marketing skills over an extended
period of time. The same could be said of Meg Whitman at
eBay, Michael Dell, or Jeff Bezos at Amazon.
Unfortunately,
the same cannot be said for many CEOs, some of them capable
leaders but not gifted marketers. In my opinion, Ferdinand
Piech saved Volkswagen. He is a brilliant engineer, has
excellent design instincts, and is a powerful business leader.
He is not a particularly gifted marketer or brand builder.
Although he created the opportunity for Jay Mays and Freeman
Thomas to bring their design to life (after Uli Seifert,
then head of design, tried to kill it), he also approved
the Phaeton, and bought Lamborghini, Bugatti, and Bentley.
When he bought Bentley, he failed to negotiate the purchase
of the Rolls Royce brand.
Jack
Welch is generally recognized as an exceptionally effective
CEO. The financial results at GE over an extended period
of time are remarkable. I don't believe that even he would
consider himself a great marketer.
I
think there are two keys in responding to your question.
The first is that the CEO should clearly understand the
value and importance of powerful, clearly defined brands.
Unless they are leading a low cost supplier in a commodity
business, brand leadership/stewardship is a critical business
function and core competency of their business. Second,
regardless if they have the expertise and instincts required,
they need to surround themselves with capable brand marketers
just as they need to surround themselves with capable engineers,
finance specialists, or legal experts.
The
CEO's responsibility is to make sure that there is a clear
brand strategy in place and that all functions in the organization
understand it, embrace it, and are aligned with it.
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Hermès
 The
world of fashion and design is tough business. Since
1837, Hermès International -- the French luxury brand famous for
its silk ties, H-logo belts and Kelly bags -- has been run by
a succession of family managers. While conglomerates such as LVMH,
PPR SA's Gucci Group and Prada snap up struggling fashion houses,
Hermès
has taken a difefrent road to growth.
Hermès
has been extending its own brand, according to the Wall Street
Journal -- at times into unusual product categories such as
baby clothes and beach linens, in addition to more traditional
areas such as watches and perfumes.
The
WSJ reports that "acquisitions have served to enhance
Hermès' core products."
Hermès
bought crystal maker Cristallerie de Saint Louis solely to produce
goods for the Hermès label's home collection. "Everything is done
to support our key business -- the name Hermès -- and under this
name, we can ... nourish our internal growth," says Patrick Thomas
an external manager who became co-chief executive alongside Jean-Louis
Dumas - Hermès chairman since 1978, when he took over from his
father, Robert Dumas.
We
received a note from Patrick Thomas on the subject of the CEO
and the brand:
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Patrick
Thomas
Managing Director, Hermès
Mr.
Jean-Louis Dumas and I received your letter ... and we appreciate
your consulting us on this topic which is extremely dear
to our heart.
The
end of the ninteenth century and the beginning of the twentieth
century have been the era of industry and of industry heroes
who were real chief branding officers, and who were
focusing on their products, their development and marketing.
The end of the twentieth century will appear in history
as being the era of finance at a time when the products
have been massively underestimated at the profit of financial
interest and short term profit. To get a long story short,
finance might very well kill industry forever. The
reason for being the CEO of a company, and in particular
a company in our industry, is to keep the signature of
the product alive, be it printed on silkwear or stamped
on fine leatherware. There is no role in any single company
more important than the product it delivers or the service
it offers to its customers. It does not mean that offering
or branding makes hundred percent of the job of a CEO, but
it means that he cannot be a "state of the art" CEO if
he is not able to develop the vision of what his product
and his brand will be in the future.
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The CEO as Guardian of the Brand
We
find common themes among these companies:
- the
CEO helps create and nurture the brand
- the
CEO is the guardian of the brand, protecting it from
short term actions which may result in longer-term value destruction.
- the
CEO safeguards the continuity of the brand, ensuring
consistency across time
- the
CEO is the architect of the future of the brand
We
leave you with an insight from David Larcker, professor
of accounting at the Wharton School of the University of Pennsylvania,
who calculates that a 10% positive change in a CEO’s reputation
results in a 24% increase in the company’s market capitalization.
In
a global world with increasing cost pressure, it is the intangibles,
the brand itself, that makes the biggest difference. Sustained
performance comes through sustaining a strong brand.
Christian Sarkar is the founder an Internet
branding and marketing consultancy. He is also the managing
editor of this site.
W.
Rodgers is a principal at SHR Perceptual Management, an integrated
brand-building practice.
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