Monday, December 14, 2009
By: Jean-Claude Saade
“Vanity is my favorite sin” – says John Milton – the “Devil played by Al Pacino – in the Devil’s Advocate. To put this in a branding perspective, we need to examine the role of Brand Vanity in the current economic crisis. Taking the necessary learning and corrections will be necessary for the recovery. Is Vanity the worst sin a brand or a company can make? Is this related to the very high prices that many brands and businesses have already paid during the groundbreaking events of the past year? More importantly; how to recognize Brand Vanity and deal with it?
Under the Rubble
The shock magnitude was of disastrous scale and its wave did not stop at the borders of an economic sector, a country or a continent. It has reached the level of a full global crisis. The economic rubble has buried big corporate names with their factories, sky-scraper-head-offices, big bonuses, corporate private jets and divine attitudes. Also was buried in rubble the savings, jobs and economic security of millions of consumers, employees, families and retired people.
This is a large scale disaster that reached literally everybody on the globe in their daily lives, future and dignity. This is the kind of events where billions of people are paying for the cumulative decisions of a relatively small number of economic and corporate leaders. An “all-in-one-boat” situation, or better, an economic Titanic, where few people take the wrong and the bad decisions but everybody sinks in the dark cold ocean.
The results of the crisis touched every one of us in our lives, careers and plans, even with various levels of significance. Therefore, the recovery cannot be complete without a real understanding of the roots and causes of this crisis. From the dysfunction in the existing systems and regulations to questionable practices driven by greed, unfairness and mostly Vanity.
Let us look on few examples of the practices that lead us to the current economic crisis and we will start with greed. Over the years, mortgage lenders were happy to lend money to people who couldn’t really afford their mortgages. But they did it anyway even if they knew that it is only a matter of time till problems will happen. These lenders were able to charge higher interest rates and make more money on sub-prime loans and when the borrowers defaulted, they simply seized the house and put it back on the market to make even more money. Moreover, mortgage brokers packaged bad mortgages with other mortgages and were reselling them as investments. Many of these mortgage backed assets were ticking time bombs. And they just went off.
Credit is a great economic tool when used wisely. It can be used to start or expand a business, which can create jobs and positive economic growth. However, when it used in a bad way and at a large scale it has started a chain of problems that hit the local and global economies very hard.
We will leave the analysis and explanation of the purely economic reasons and cyclical market movements and trends to the experts in the field. However, and at the root of this crisis there was toxic assets and investments but also toxic attitudes and practices that fall in the realm of Brand Values, Brand Personality and Business Principles and need to be studied from a branding perspective.
Economic and business reasons cannot alone explain all what we have seen in terms of questionable corporate behavior. Ignorance, dishonesty and malpractice need to be added to the long list of reasons. However, we are mostly interested in shedding some light on one dangerous factor that we assume it had an important contribution to the crisis: Vanity.
Brand Vanity takes many shapes and faces; and here are some examples that make us suspect its crucial role in the crisis:
A brand that is managed as if it is more important than the life and future of its customers.
A company that pursues its own interests at the expense of any social, economic or environmental considerations.
A CEO or a manager who will influence corporate policies and decision to suit his/her own personal interests and to feed personal arrogance and greed.
The list of examples can easily continue beyond the business and economic circles to any public role and organization…
Politicians who consider themselves more important than the people who elected them and the country that gave them the chance to occupy their public roles.
Media organizations and media “stars” who consider themselves more important than the events they cover and the people they are supposed to inform and entertain.
These are only some of the manifestations of Brand Vanity that can ruin companies, economies, and countries; and trigger a world-scale crisis like the one we have experiences over the past 18 months. A real disaster that will continue to cause massive losses in financial markets, jobs, opportunities, and dreams that will take years to recover.
Vanity & Brand Promise
Vanity: noun (pl. vanities) (1) excessive pride in or admiration of one’s own appearance, qualities, abilities, achievements, etc. (2) the quality of being worthless or futile. (3) Lack of real value; hollowness; worthlessness: the vanity of a selfish life. (4) Something worthless, trivial, or pointless. — Latin origin vanitas, from vanus “empty, without substance”.
One of the most accurate “Vanity Tests” for brands and companies is a comparison between their “Promises” to their real delivery and contributions over a certain period of time; especially through at least one economic downturn. Let us look at few examples from around the world.
Merrill Lynch: “"Merrill Lynch is bullish on America”; “At Merrill Lynch we’re bullish on the future”
– The gold standard of financial companies just vanished, and saved at the last minute when bought by another brand. How the interests of customers, shareholders and employees were served through this kind of attitude and behavior?
AIG’s official slogan was “The strength to be there” – and the new one could be “the shame to be here”.
Lehman Brothers: “Where vision gets built” – What kind of vision were you building? – A vision that couldn’t see the deep abyss that the company and all its stakeholders landed in?
Nakheel: “Where vision inspires humanity” – We would have expected the company that represented the vision of Dubai to survive the first economic shock and to have more attention to the human factor while talking about “inspiring humanity”. Should we ask the hundreds of laid off employees or the tens of thousands of disappointed customers how inspired they are in their relationship with the brand.
Big corporations taking unfounded business decisions that leads to economic disasters; CEOs will multi million price-tags leading their companies to cheer bankruptcy and still cashing astronomical bonuses and golden-hand-shakes. But if we check their corporate websites and brochures they are all flashing out very inspiring brand missions and promises.
Can we blame all this on just the behaviors and attitudes of few corporate leaders? – May be not; but when brands and companies ignore the basis business ethics and principles and forget why they exist and whom they serve we will be face-to-face with Brand Vanity. It is a dangerous phenomenon that works against the whole concept of brand building and it is very important to be aware of it first then to fight it.
The Right Focus Point: “It Is Not About You but about the Consumer”
Companies that have a genuine desire to build Great Brands have to realize that the focus should always be on the Consumer and not on them. Their own importance and value is a direct function of the positive role they can play in people’s life (through their products, services, CSR programs, community development, etc.)
In many companies and organizations the focus has clearly shifted to the interests and aspirations of the people behind the steering wheel before anything else. Yet all corporate communication will still be talking about sunny vision and mission statements. This is a clear indication that the brand is falling into the Vanity trap.
“It is not about you but about people and consumers”
We have to always remember and religiously apply this basic principle if we want to keep the Right Focus Point (RFP) for a brand, a company or any other organization that is offering products and services of any nature to the public.
The Right Focus Point of a company is its stakeholders, not its management.
The Right Focus Point of a school is the students and not the School management and teachers.
The Right Focus Point of a political party is the public who adhere to its principles and support its ideas and not the interests of the leaders and their close circles.
The Right Focus Point is not only a management technique but also a corporate attitude and culture that can transform a company and lead it to greatness when respected and applied religiously across the organization.
Having said that, we are not asking companies to forget about profit, growth or to put on the side their business objectives and turn into charitable organization. The only change we are recommending here is to keep the focus on Customers and everything else will follow. What differentiates between a healthy brand and another that is touched by the Vanity Virus is not the drive for success and money but the internal focus point of this brand and the value system that guides the organization.
The Right Focus Point (RFP) is again not some kind of mysterious Zen business practice; it is the very simple and basic internal compass that tells a company or any organization at every moment where the top priority should be and whose interest is to be served first and according to which standards. It is simply the Brand Definition translated into actions and management style.
A brand can easily keep The Right Focus Point when it has a clear definition (Vision, Values, Guiding Principles, etc.) and it is living these core definitions on a daily basis. Keeping the right focus and living the brand core definition will give the organization and the best immunity about Brand Vanity. However, the risk will still be there with every new business day, with every change in management and with any opportunity or threat that comes from the market.
In the early years of the 20th century, Theodore Roosevelt, then president of the United States, said:
Corporations are indispensable instruments of our modern civilization; but I believe that they should be so supervised and so regulated that they shall act for the interests of the community as a whole.
Yes we want corporations to work for the interests of the community with one difference with what Mr. Roosevelt has said; we want a self-regulation that is driven by the brand values and ethics before any kind of external regulations that might be necessary in certain cases.
Human mistakes and irresponsible pursue of self-interests that are despised on a personal level could be totally disastrous on a corporate and public levels where the results of these actions will reach millions of people. Therefore, going back to basic ethical paradigms will give us plenty of insights and answers for personal situations as well as for business, public and even to political decisions that can affect the fate and the future of large group of people.
The mistakes of few people have taken the world economy into the crisis, but going out of this crisis will need a collective effort from everybody: individuals, companies and governments.
Companies that will adopt responsible business approaches and live their Vision, Mission and Purpose internally and externally will keep themselves away from the trap of vanity and toxic corporate practices.
To support the efforts of self-regulation by brands and companies, governments can play a key role in creating progressive business regulations that encourage healthy practices and prevent malicious minds from taking companies and economies too far in the wrong ways without being detected. Media, business schools, social and civic organizations and NGOs can also contribute to the building a more responsible business environment and society at large.
Facing brand vanity will need a real change in business thinking and practices. However, we will possibly need a whole new generation of corporate leaders that are not corrupted by negative ideas and soulless business styles.
Bill Bernbach said that “The great mistakes are made when we feel we are beyond questioning”.
With solid brand values and responsible business models companies will have a great deal of immunity against vanity and other corporate misconducts. However, some healthy levels of control and “questioning” will be very useful in avoiding big crisis like the one we are dealing with at the moment.