I recently came across an article in the Harvard Business Review that implores the effects of companies stressing about revenue and growth while putting branding and differentiation on the back burner. While I think the author’s claim —that this lack of prioritization is what caused “52% of the Fortune 500 to be acquired, merged, go bankrupt, or fall off the list since 2000″— is a bit overrated, I think his point in general is very valid.
Ray Wang, CEO at Constellation Research and the author of the HBR article, argues that, just like human needs were hierarchized by Maslow, business needs follow the same pattern. According to Maslow, one cannot achieve the top of the hierarchy (i.e. ego and self-actualization) without establishing a good base (i.e. physiological needs like food, water, etc…). The business’ hierarchy of needs, according to Wang, starts with a strong base of regulatory compliance, moving up to operational efficiency, revenue growth, strategic differentiation, and finally on top of the pyramid, brand.
By prioritizing quarterly performance benchmarks, business owners and decision makers are ignoring, twisting, and/or tweaking their business’ internal bible, their brand positioning and differentiating strategy. While this rarely puts frontline employees in any trouble, it jeopardizes the overall well-being of the company.
Wang’s solution? Flip the pyramid upside down. By putting less resources into the bottom of the pyramid, companies free up both time and money to focus more on high-value branding exercises with huge business growth potential. Wang suggests automating regulatory compliance and relying on technology for better operational efficiency, both changes leading into better sales and better consumer information.
In a previous post, I defined the outward-facing brand as “a perception that exists in the minds of your constituents about your relevance and promise of value. Your brand is the sum total of the impressions formed through exposure to your touch points.” Internally, your brand should be the organization’s steering wheel that leads it onto greener pastures.
Moral of the story? Sort out your brand and good business will follow..