As Jeff Bezos once said, “A brand for a company is like a reputation for a person.” Branding is all about personification—giving human traits to a brand.
If you think about it, Nike, Disney, or any other corporation is nothing more than a set of documents filed by a lawyer somewhere. They are legal entities created specifically so that their activities are considered separate from those of the people who formed them (for liability, tax, and other reasons).
The U.S. Supreme Court has awarded corporations the rights and protections of personhood in many respects. But a stack of legal papers can’t make decisions, or have a personality, or do anything but sit there. And we’ve established that the corporation is distinct from the people who created it or who run it; they can leave the company at any time. The only thing that really holds a corporation together is its shareholders—and they’re here today and gone tomorrow as well.
So what is a brand, really? The answer to this question is up to you as a marketer or business leader. The meaning—the “humanity”—of your brand can go as deep as you’re willing to take it.
BRANDS CREATE CONTINUITY
Let me explain. Whenever a shareholder sells his or her stock in a company, the buyer usually has certain expectations of continuity. And the people the shareholders entrust to run the company are expected to maintain (and increase) the company’s value by meeting these expectations—not only in terms of sheer dollars and cents, but by having a predictable business model that shareholders can count on for the long-term.
And that’s where branding comes in. Branding communicates the continuity of a company’s business model. It says, “This is the kind of person we are—if we were actually a person.”
So Disney is family-oriented, fun, and magical. Nike is active, bold, and inspirational. And so on and so on. To the extent that a company’s products, advertising, and other projections of itself support these traits, the brand has continuity—which over time can become a company’s most valuable asset.
In this sense, a brand is like your reputation or mine.
STAKEHOLDER CAPITALISM AND SOCIAL PURPOSE
Despite the best efforts of brands to humanize themselves, however, the truth is that corporations have traditionally been self-centered. They have been created to serve the interests of their shareholders—their owners—and often only those interests.
This approach is called “shareholder capitalism,” and it has held sway with U.S. businesses and economists for the bulk of the past century.
That’s why the emergence of an alternative to shareholder capitalism—what’s known as “stakeholder capitalism”—has been so remarkable over the past several years. Stakeholder capitalism argues that corporations must serve all their constituencies—customers, suppliers, employees, shareholders, and communities—with the goal of creating long-term value rather than maximizing profits.
Many of today’s consumers expect the corporations they buy from to do more than sell products. They want them to have a social purpose—a reason to exist beyond making money. They want them to share and represent their values. Corporations that avoid these broader responsibilities increasingly limit their long-term growth prospects, while setting their brands up for social media backlash and other negative consequences.
It’s a sign of the times that in 2019, 181 CEOs signed the Business Roundtable’s “Statement on the Purpose of a Corporation” and officially committed to leading their companies “for the benefit of all stakeholders.” As IndustryWeek put it: “It’s a sea change that moves companies away from the age-old philosophy that companies’ main goal is to look after shareholders.”
WHY DOES YOUR BRAND EXIST?
Today, when my agency conducts brand strategy sessions with our clients, we don’t simply ask them what their brand does well. We don’t start with features and benefits. We go beyond brand essence, brand promise, and brand personality. We go beyond product differentiation and messaging, too.
We start by asking our clients why their brand exists. We ask how they make the world a better place. And we help them find answers when they need our help.
Before you embark on brand strategizing, ask yourself these questions about your company’s brand, and carefully consider your answers.
The corporations that will be most successful in the new era of stakeholder capitalism are those that align their brand strategy with the interests of all their stakeholders—not just the ones who buy stock in the company.
Scott Baradell is CEO of Idea Grove, a unified PR and marketing agency, and editor of the online publication Trust Signals.