Who's governing the brand?

• Author: UNDERHILL, RODNEY W.
• Position: Brief Article

Here are some pointers on making discussion of your brand a regular board agenda item.

A BRAND HAS an intrinsic value that a mere business lacks. The higher the brand's relative value, the higher the profit margin and the higher the goodwill on the balance sheet is likely to be. Ironically, Wall Street understands this better than most companies do! It is one reason some stocks sell for much higher multiples than their competitors who have not made the transformation from building a business to building a brand.

The brand is your future. Of all the strategic assets your company owns, nothing is as enduring. Founders die. Factories burn down. Stores get outdated. Technology becomes obsolete. Patents expire. Competitors imitate. Management turns over.

Only one thing cannot be copied and never expires...a brand. Your brand. Woody Allen spoke for me when he said, "I don't want to achieve immortality through my work. I want to achieve it by not dying." But the fact is, your directorship and all our careers will end someday, one way or another. A brand, however, lives on. Your brand may be the most enduring legacy you can leave.

The word "brand" is kind of like the word "sexy"--everybody has some idea of what it is, but they'll all define it in different ways. A brand can be defined very simply. It is not a person, even the founder of your company. It is not your company, regardless of the size. It is not your product on a production line. It is not your name, nor is it your logo. If it's not these things, then what is it?

A brand is a promise. It is a promise that is conveyed by everything people can see, hear, touch, taste or smell about your brand...the name and logo, size and shape or color and typography of your package, the way constituents are treated by representatives of your brand, signage, storefront, billing statements, the press they read, your Web site, and advertising, if you do any.

By clearly making a promise and then keeping it, a brand builds a reputation. To a customer or prospect, your brand should be just like a person. It should have a certain character and personality that predict what you can expect. When you know a persons reputation, what does it tell you? It lets you know what that person is likely to do or say (or not do or say) in any given situation.

Because a brand is a promise, each contact with your brand either keeps or breaks the promise. Therefore, each contact either enhances or erodes your most valuable...