If there’s trouble, look to the top.

Brand Modeling teaches us that the force most responsible for a dominant organization’s success is the enthusiastic support of its best customers. So what force is most responsible for an organization’s failure? A not-insignificant portion of the time, the answer resides at the top. The Daily Beast recently ran a feature entitled 10 Worst Corporate Boards of the Decade that highlighted some monumental leadership challenges.

It’s not an in-depth piece, but as you flip through it, you’ll see that there are certain traits exhibited by the worst leadership teams that seem to keep cropping up.  Board members are over-committed, inexperienced, and have interests and agendas in conflict with their organization’s health and success.

Sometimes Boards are asleep at the wheel.  Tyco was included on this list because they allowed their CEO, Dennis Kozlowski, and CFO, Mark Swartz to steal over $150 million from the company. Insufficient oversight is perhaps the most generous way to describe what happened there.

GM made the list for other reasons.  A lack of strategic planning and failure to adapt to market changes kept GM from hitting the highway to success. Throw in significant accounting errors that put potholes into GM’s already rocky road, and it’s not surprising that the company went off track.

One common trait unites all of these examples.  There is a fundamental disconnect between the leadership and the companies they were supposed to be directing.  It’s a pattern of behavior as old as time itself; a cultural narrative that has a deep and profound place in our collective unconscious.  Today, we speak about Boards of Directors and pillaged corporate funds.  Two thousand years ago, the story would be that the shepherd has laid down his staff, yet still he cries when the sheep are lost.

Brand Modeling: The Role of Leadership and Brand Vision

What we see happening instead in dominant organizations, time and time again, is the opposite situations. These are companies that are thriving because they exist in a state of alignment. There is what we call Brand Vision, a shared vision of success that motivates and guides decision making. This vision is shared at every level: it’s as familiar to front-line employees as it is to your C-level executives and yes, Board of Directors.

It’s especially important that an organization’s leadership understand and be invested in the company’s Brand Vision. Directors, after all, are there to direct and guide the company in a more successful direction. They are pathfinders, charged with leading the charge up the mountainside. The journey becomes infinitely easier when they know what the summit looks like.

The more dominant an organization is, the more thorough and involved their Brand Vision is likely to be. Knowing what success looks like means understanding how the company is positioned in many spheres: in the relationship with the Brand Lover, as a force or presence in a given market, as an employer or investment possibility. A unity of vision keeps the organization on track. Decisions are made to realize that vision, keeping the leadership, company, and Brand Lover aligned throughout the process.  That’s putting customers first, and that’s how dominant organizations win.

For most organizations, the news that the company inadvertently sent a cannonball careening out of the safe confines of the firing range and through a private home would be a nightmare. Most organizations aren’t Mythbusters. For this wildly popular Discovery Channel show, a ballistic blunder could prove to be a priceless branding opportunity.

Thankfully, no one was injured in the incident. (This statement doesn’t include, of course, Mythbuster’s relationship with their insurance company!) Accidents and mishaps are inevitable in some businesses; productions that regularly do things like test urban legends with high-powered explosives fall squarely into that category.

Almost every episode of the show features a segment where the testing went wrong. If you’re a Mythbusters Brand Lover (one of the legions of ardent fans who never miss an episode, buy Mythbusters merchandise, and participate in online discussion forums, nitpicking every experiment within minutes of its airing), you understand that failure is inherent in the discovery process.

And what a magnificent failure this was! There’s a almost cinematic element to the incident: it’s not hard to visualize the cannon firing; the cannon ball going up, higher than anyone expected; fear and panic rising as the ball went out of sight; the relief upon discovering no one was injured. It’s the ultimate, ramped-up version of the show—a version that no viewer would even know to ask for, because who would believe it possible?

Brand Modeling: Understanding Peak Experiences

Emotional expectations shape the relationship between our customers and our brand. If we meet or exceed those expectations, the relationship becomes stronger.  If we fail in those expectations, the relationship is damaged. A big part of those expectations is what we call the Peak Experience: what is the ultimate emotional state the consumer expects to experience after engaging with us?

If we were to speculate about Mythbuster’s Brand Lovers, we’d guess that their Peak Experience has a lot to do with excitement and intellectual curiosity. These are people who want the answer to the question, “What would happen if…”  Mythbusters has built their relationship with their Brand Lovers by consistently answering that question in an exciting way, steadily ramping the size and scope of the experiments up to satisfy viewer curiosity. This is the team that used a jet engine to flip a school bus.

With a single incident, every bit of emotional payoff Mythbusters Brand Lovers receive from watching the show was just delivered in a super size version. This was the ultimate answer to “What if…?” Slipping free from safety’s bounds showed us what Mythbusters could be, in a world absent consequences.

The Discovery Channel needs to be smart and strategic about how they handle this incident. Of course, there must be an acknowledgment of the safety issue and appropriate compensation to the homeowner who wasn’t planning to have two-cannonball shaped holes installed in their house. At the same time, it’s essential that the sense of gleeful exuberance that comes with discovery (even in the wake of destruction) comes through.

Mythbusters had a catastrophic systems failure, but they failed doing what their Brand Lovers expect them to do, in the way their Brand Lovers expect them to do it.   There’s messing up, and there’s messing up magnificently. Mythbusters has the opportunity to showcase the difference.

Becoming the dominant player in any industry is tough.  Holding onto that premier position is even harder.  Brand Modeling teaches us that it is the leaders of any organization who must have a clear, fully articulated vision of what success means for their company—as well as the resolve and resources to make that vision reality.

That’s why we read this NY Times article about Google CEO Larry Page with great interest. To quote:

Despite the many external pressures on Google, it is dominant in its business and highly profitable. But, when asked at a recent conference about the biggest threat to his company, Mr. Page answered in one word, “Google.”

Growth has consequences.  Google has grown to be one of the world’s largest corporations.  There’s no doubt that the company has a dominant and pervasive presence in our culture.  However, while developing this dominant, pervasive presence, Google has lost some of the essential qualities that made the company so strong in the first place. Namely, according to Mr. Page, velocity and execution.

Why is this a big deal?

Mr. Page believes (and he’s almost certainly right) that a large part of the reason that Google is the organization it is today was the rapid creation and deployment of innovative web tools and strategies.  Rapid is a key word here.  Google had grown to such a size and in such a way that it wasn’t moving fast anymore. They have lost one of the key qualities that made them appealing to their customers in the first place.

Mr. Page is changing that.  He has eliminated more than 25 projects.  The organization is getting a much-needed trim.  Change like this is never easy.  It’s one thing to talk about eliminating projects, but at the end of the day, what gets eliminated is people’s positions. This can create fear, anxiety, and disruption in an organization precisely when it’s most critical to have everyone on the same page.

Fostering Organizational Change

What is the best way for Mr. Page and the rest of the Google leadership team to address this organizational change internally? Clear communication is key. Google’s team needs to know not only what changes are being made, but why those changes are made.  They need to see the larger vision.  Sharing information about organizational changes is more than common courtesy. It provides a much needed answer to what is the top question in every Google employee’s mind: What is going to happen to me? What is my role with the company going to look like?

When employees understand what it will look like when the company is successful, and what role they play in creating and continuing that success, implementing change becomes easier.  You achieve critical buy-in only when employees see that they will benefit from the changes.

Has Mr. Page been doing that? The reports we’re seeing seem to indicate that he’s making a large effort to be more open and communicative, especially in shareholder meetings.  Expanding that trend toward open, transparent communication with his leadership team and employees can help bring the organization into alignment —even when the organization is as big as Google.

On September 29th, Bank of America announced that they were going to start charging debit card users $5 a month for the privilege of using their debit cards. It was a move intended to offset the impact of new limits on swipe fees.  Swipe fees are the charges BofA charged merchants for debit card processing.  Unable to collect from merchants, BofA intended to replace that revenue directly from their customers.

It was a great plan, from BofA’s point of view.  BofA’s customers had another opinion on the matter.  One of the tenets of Brand Modeling is that you must always be aware of and responsive to your best customer’s needs. We tell clients continually that this is  not difficult.  Today’s customers are empowered. Social media has become the platform of choice to share reaction and responses to corporate action.

Molly Katchpole used that power to share her anger and frustration with BofA’s new debit card fee on Change.org.  Part of her commentary read:

“The American people bailed out Bank of America during a financial crisis the banks helped create. You paid zero dollars in federal income tax last year. And now your bank is profiting, raking in $2 billion in profits last quarter alone. How can you justify squeezing another $60 a year from your debit card customers? This is despicable.”

300,000 people agreed with her.  The viral campaign, coupled with a Credit Union National Association report that credit unions had gained 650,000 customers since the September 29th announcement, was enough to change BofA’s mind.  They announced on November 7th that the new fee wasn’t going to happen.

Did BofA blink—or have their eyes been opened to some fundamental business realities?

Brand Modeling: The Value in Knowing Your Customers

This is hardly the first time that BofA has raised fees.  The charge for basic checking has gone up, and there is now a fee for replacing a lost or stolen debit card. It’s $20 if you need the replacement card overnighted to you.  Until September, card replacement and shipping had been free services. Yet there was no outrage over these changes.  How was Bank of America to know that a little $5 fee would provoke such widespread consumer outrage?

They might have tried paying attention.  Brand Modeling tells us that the route to true business dominance is putting your customers first. Identifying your most profitable customers and understanding what motivates their purchasing behavior is easier said than done.  You can’t just look at demographic data or even previous patterns of customer behavior to predict, with any degree of accuracy, how consumers are going to react to an operations change.

Instead, you need to know, with pinpoint accuracy, where your customer’s heads and hearts are on any given day. You can’t rely on general data. You need specific actionable intelligence. What pressures and tensions are your customers facing? What challenges are making their life tougher? How is your brand making their lives better—or worse?

BofA’s customers, the legions of small account holders who rely on debit cards as a way to control both cash flow and interest expenses, are feeling pretty strapped.  Economic pressures are hitting hard.  To be an effective brand manager, you have to understand what tensions your customers are under, and how they’re handling those challenges. You have to know how many straws are on the proverbial camel’s back—preferably before you add another to the load.

BofA didn’t know. Or if they knew, it sure looks like they didn’t care. Piling another fee on customers already stressed to the max was just dumb, no matter how you slice it. Customers are paying more attention to fees and charges than ever before. They are watching every penny, and are fearful about their financial security. Had BofA been following the tenets of Brand Modeling, they would have been aware of the levels of customer tension and bail-out related resentment that made a new fee untenable at this time.  Instead, they had to do it the hard way, imperiling their relationships with their existing customer base and deterring would-be customers from giving them a chance.

Will this wake up call change the way BofA does business? Only time will tell, but one thing is certain. BofA’s customer base is not willing to tolerate many more mistakes.  We don’t think BofA blinked.  We think their eyes were forced wide open. How about you? What’s your take on the BofA fee reversal?

If you have to explain the joke, it might be that the joke’s just not funny. This is conventional wisdom (at least for comedians), but it seems to have escaped the marketing team at Dr. Pepper.  Their latest offering, a campaign for Dr. Pepper 10, declares that the beverage is not for women.  The social media aspect of the campaign includes a Facebook campaign where users can shame their friends for being insufficiently manly and a game that involves shooting at traditionally female symbols, such as high heels and lipstick.

Response to the campaign has ranged from the infuriated to the perplexed. Forbes magazine termed the campaign “bizarre“. Perhaps, they reasoned, the campaign was tailor-made to generate internet buzz and scandal. The resulting boost in name recognition might more than offset any business lost from those shoppers infuriated by the misogynistic overtones of the campaign.

We can’t speak to the intent of the campaign, but it’s not hard to speculate about its eventual outcome.  While the “It’s Not For Women” approach might resonate strongly with the contingent of diet soda drinkers who also believe girls have cooties, it’s doubtful that portion of the market is long enough to support the brand.  Dr. Pepper’s response to consumer criticism of the campaign includes the following explanation of their motives:

We have a huge female customer base that has been satisfied with Diet Dr Pepper as their beverage of choice for years; however we learned through extensive market research that there was a gap in our male audience that was looking for a low-calorie alternative to regular Dr Pepper that lacked the diet imagery. We created Dr Pepper TEN to fill that void. Dr Pepper TEN features steel-grey packaging with rivets and a manly tagline, “It’s Not For Women.”

Here, we see Dr. Pepper identifying a fairly specific opportunity in their marketplace: men who wanted a diet alternative to Dr. Pepper. Diet Dr. Pepper already exists, but these men weren’t buying.  The reason why? Discomfort with the traditional diet imagery was apparently to blame.  Offering those consumers a product without the traditional diet imagery seems like a straightforward conclusion.  The mystery is why Dr. Pepper chose, among the hundreds of thousands of potential ways they could have positioned their new diet soda, as choose A lady-free zone of rugged, macho, hair-on-your-chest awesomeness that’s definitely not for women. Of all of the approaches possible, why did Dr. Pepper feel that this is the approach their customers would find most appealing?

Brand Modeling and the Search for Meaning

Brand Modeling teaches us that the most effective way to capture customer attention, drive sales, and increase market share is to develop a comprehensive understanding of our best customers’ wants, needs, and desires. Thus equipped with in depth knowledge of our customer and what influences their purchasing behavior, we can create products and offerings they are highly likely to adopt with enthusiasm.

Had Dr. Pepper done this, it would have meant exhaustively examining their best customers—especially those loyal, enthusiastic Diet Dr. Pepper drinkers who were also male.  Determining what drew them to choose Dr. Pepper, points of tension where the brand could serve them better, and the most appealing way to package and promote the beverage is all information that would play a critical role in building a new brand extension.

What would the result look like? Chances are the model wouldn’t be quite as exclusionary; not to overgeneralize, but many men do seem to exhibit a strong preference for spaces that have women in them. Using the tools Brand Modeling provides would allow Dr. Pepper’s leadership team to compare, ahead of time, the likely public response to any projected marketing message.  This objective assessment allows apples to apples comparison.

Would Dr. Pepper still have chosen this campaign? Given other, accurate and actionable insight, they may have decided that crafting a brand community that encourages male participation and buy in may become far easier when you invite women in, rather than keep them out.