Corporate jargon is pretty miserable. Executives use euphemisms and empty phrases to cover up the truth. Reading an earnings report is sometimes the equivalent of nails scratching on a blackboard. The generic puffery of language – employed to dull our senses and calm our expectations – is numbing.
Corporate C-suites, Wall Street, and adjacent analysts tend to find similar, exaggerated phrases and words and then overuse them.
From a brand standpoint, there are serious consequences for verbal shenanigans and the overuse of hyperbolic language.
Think about the word “turnaround.”
One of the most played-out, hackneyed brand phrases today is “turnaround.” A brand turnaround was once a big deal; a strong word indicating a plan to fix incredibly poor brand mismanagement. Turnaround was a term designed to emphasize the urgent plan to lift a brand out of crisis. Turnaround was not an ongoing plan. Turnaround had a life of 3 years, maximum. Now, “turnaround” is so prevalent, overused, and enduring that one wonders just what is happening at the “turnaround” storied brands and why Wall Street and its shareholders are so acquiescent. One need not read deeply into the business press to find multiple brands using the concept of turnaround.
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Starbucks, Intel, Southwest Airlines, Estee Lauder, Stellantis, Coty, Target, Kraft Heinz, Cracker Barrel. There are more. When the performance news is unsettling, the word is turnaround. Turnaround usually arrives with a new CEO, a new ad agency, a new agenda. How many times have you heard a CEO tell you that after 2 years, the turnaround is taking hold, gaining momentum and showing positive performance?
If all the brands undergoing turnarounds need turnarounds, why is that? What is the matter with brands today? Why are so many brands in so much trouble that a turnaround is the default plan?
When a brand business is in decline, the first priority is to reverse its trajectory. A turnaround plan is different from a growth plan. Before a business can focus on growth, the immediate goal is to earn the right to grow. A turnaround strategy is a business approach for a brand that is going in the wrong direction at an accelerating pace. It is a plan of thinking and action that immediately moves to stop a deteriorating situation. It is short-term. It focuses on what is strong and aims to reinforce these strengths. What is working? Why? How can it be improved? What is not working? Why? What do we need to do differently? The goal of a turnaround plan is to focus on the immediate requirements of the business. For a troubled brand business, an aggressive turnaround plan is not an option. It is an imperative. It is not a long-term plan. It is a short-term plan for business revival. It has specific short-term objectives. It has specific actions designed to achieve those specific objectives. It has a specific timeline.
- Stop the bleeding
- Galvanize the organization
- Focus on the core
- SMART objectives
- Get on the Right Track
If you subscribe to AI synthetic learning about why so many brands are currently in turnaround mode, you will learn about the multiple external factors that dragged down brands, cratering brand value. “It is not our fault, shareholders. It is the weather. It is the customer. It is because of things we cannot control.”
For example, digital entities provide blame-game lists such as this: “Brands are launching widespread turnarounds right now because rapidly fragmenting consumer habits, tighter economic pressures, and digital disruption have left legacy identities outdated.”
Or, digital sweeps are citing sources that offer these reasons:
“Changing Consumer Demographics: Companies are aggressively pivoting to capture Gen Z and Gen Alpha, whose media consumption habits and values differ drastically from older generations.”
“Post-Pandemic Volume Slump: After a temporary artificial boost during COVID-19 lockdowns, many major food, retail, and apparel groups face a permanent downward drift in sales volumes, forcing structural changes.”
“Digital and E-commerce Disruption: Traditional wholesale and brick-and-mortar models are losing ground to digital-first competitors, forcing historic names to rethink distribution and presence”.
Only one AI source (the last on the list) suggests that brands may have forgotten their core brand identity.
Of course, not keeping up with the changing world is death-wish marketing for brands. But brands also forget some critical brand actions supported by essential brand actions. Blaming the outside world when the problems are in your brand’s inside world is just a bandage for future decline.
Revitalizing and growing brands takes discipline and proper brand management education. There are rules for revitalizing and growing brands while overcoming brand mismanagement behaviors.
First, the organization must be focused on financial discipline, operational excellence, leadership, marketing, and the brand’s purpose and goals. Become customer-focused, not supply-focused. The finance community says that cost-cutting is the answer. But there is no enduring growth of the bottom line unless there is quality growth of the top line. At some point, there is nothing left to cut. Focus on improving experience quality, retail environments, product quality, and service quality. Create an effective and efficient balance between meeting customer expectations and minimizing waste. Delight customers with a branded experience so that a growing percentage of customers look forward to purchasing from the brand more often. Operational excellence decreases costs and improves customer satisfaction. Attract new customers to the brand, encourage current customers to purchase more often, and increase customer loyalty. Know the direction of the brand. What is the world in which your brand will win? Is the entire organization rowing in the same direction?
Second, the brand must be perceived as relevant and differentiated through the development of the brand promise. Remaining relevant and differentiated in a changing world is critical to a brand’s health. Relevance is a key driver of purchase intent. Relevance means the brand is up to date and current in customers’ minds. To be relevant and differentiated, there must be thorough knowledge of the market, a viable market segmentation, and a compelling brand promise. How well does the enterprise know the core customer? Does your enterprise know how to develop, conduct, and synthesize data from a needs-based, occasion-driven market segmentation? Knowing how to properly craft a brand promise is a skill that requires a complete understanding of the customer and of what the brand team sees as the brand’s future.
Third, the promised brand experience must be activated through innovation, renovation, and a focus on building true brand value through the Trustworthy Brand Value Equation (which includes knowing the total brand experience relative to the total brand costs and the trust level of the brand). Innovation and renovation are crucial. Innovation and renovation must begin with the customer’s need or problem. When we first arrived at McDonald’s for the 2003-2005 brand revitalization, executives wanted a new chicken sandwich. But a chicken sandwich did not solve the biggest customer problem. Moms with kids could not find anything to eat on the menu. Moms picked at their kids’ fries and drank coffee. Chicken Caesar Salad with Paul Newman salad dressing was the new product solution. Knowing the brand’s total brand experience and the brand’s total costs and the brand’s drivers of trustworthiness allows brand management to generate pricing that customers perceive as fair.
Brand should strengthen competitive position, pricing power, and enterprise value. The Blake Project helps make that happen.
Fourth, the brand team must focus on creating and activating a results culture based on developing the key measurable milestones, the elements of the Balanced Brand Scorecard, and the program for employee rewards and recognition. What are the results that you wish the brand to achieve by when and by whom? How will you design the Balanced Brand Scorecard? It may sound trite, but it is true: People manage what management measures, recognizes, and rewards. The Brand-Business Scorecard has three key business performance measures and eight key brand performance components:
- Bigger— Familiarity, Penetration
- Better— Brand Reputation, Overall Satisfaction
- Stronger— Brand Loyalty, Brand Preference Ladder, Trustworthy Brand Value, Trust, Brand Power
Fifth, building/rebuilding brand trust is critical. Do you know how to earn trust? Trust is a critical marketing issue. Trust takes time to grow. Brand trust intersects with customers in many ways. Do people trust your brand? Do people see your brand as a trusted source of information? Do people trust what your brand claims? Do people trust that you are doing the right things in the right way? Do people trust what you say about social responsibility? Trust is a multidimensional idea that underpins and drives relationships. Trust is not a single question. Multiple trust-driven research studies over the decades show that trust cannot be determined by simply asking, “Is this a trustworthy brand?” Do you know your brand-relevant “attributes” of trustworthiness? Trust is also a determinant of organizational worth. Are you accruing Trust Capital?
Sixth, to achieve global alignment (or national alignment), the brand must create and adhere to a Brand Framework that uses the principles of Freedom within a Framework and a Plan to Win, and adopt a collaborative global model of responsibilities.
These six action areas are more than mere internal and external steps for brand health and longevity. Brand building for enduring profitable growth is not a checklist. Brand building for enduring, profitable growth must be ingrained in the culture of the enterprise, with cultural commitments emanating from the highest level.
Disregard for these six action areas can plunge a brand into an abyss of leadership and performance loss. It is likely that ignoring these six actions has created a world in which the default for brand mismanagement is a brand turnaround.
Of course, external factors affect a brand’s health. But brand mismanagement is usually the cause of the problems. How a brand responds to external forces depends on its discipline to be strategically limber and committed at the same time.
Turnarounds should not be an everyday event. Turnarounds are short-term. Be wary of a turnaround plan that is taking over 3 years. The fact that business is seeing so many turnarounds indicates that there is something inherently amiss in how we understand brands. For every Starbucks turnaround success, there is a Cracker Barrel conflagration.
Contributed to Branding Strategy Insider by Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
At The Blake Project, we help leaders turn brand into a disciplined driver of financial performance — strengthening pricing power, competitive position, and enterprise value. Email us to start a conversation about enduring profitable growth. For The EBITDA.
Branding Strategy Insider is a service of The Blake Project, a strategic brand consultancy focused on turning brand into pricing power, growth, and enterprise value.
