Brands that succeed have ambition. They are driven by a passion to reach new heights through meeting and exceeding the aspirations of their customers. But there is another, crucial dimension. Successful brands are also rooted in society, respectful of their obligations, and mindful of the effect they have on everyone they engage with. They are accepted, and trusted.
The essential foundations of all great brands
But earning this trust is hard, and losing it is far easier. To be trusted, brands also need to demonstrate a quite different set of capabilities: strong, value-creating performance; financial transparency; responsible, sustainable business practices; equitable and conscientious employment practices, and the fair treatment of customers. A key feature of these capabilities is that they are measured against a set of norms and standards that are determined at a societal, rather than market, level, so adherence is more about demonstrating similar practices and behaviours, rather than distinctive ones. Although their importance is often underestimated in our industry, nevertheless these attributes are the broad, essential foundations of all great brands.
When brands fall short in this regard, it can cause significant, lasting damage. From Enron and Arthur Andersen, through the collective moral failure of the financial crisis, right up to the growing social unease around the ethics of Big Tech, the issues that have arisen are not about the appeal of these brands, but about behaviours that contradicted what they claimed. And these problems are not isolated in the business world. The ongoing crisis of leadership and ethics in the charity sector is a painful demonstration of this.
In some ways, this is not a new challenge. What’s different now is the pace of change in societal attitudes, and the increased uncertainties and pressures this is causing. These heightened expectations are also no longer a feature only of those groups who are suspicious of, or hostile towards, business. There is a growing acceptance among all stakeholder groups that basic human values – honesty, compassion, fairness and a sense of collective purpose – must be practiced by brands, rather than merely paid lip-service. And this broader convergence of attitudes is aligning expectations across stakeholder groups whose agendas have previously been rather different. Evidence of this can now be found in an audience typically portrayed as rather sceptical of these softer values - investors.
A sea change in sentiment
For many years, the prevailing wisdom has been that investors are largely uninterested in brands - unless they can put a price on them (a belief that investors have been quite happy to encourage themselves.) If brands were about the power of a single-minded idea to bring people together, investors were only concerned with whether there was money in it.
But now this mindset - the doctrine of the primacy of shareholder value - is increasingly seen as outdated and potentially damaging. Investor sentiment has become far more positive about the importance of the softer, ‘non-financial’ aspects of a company’s performance and positioning. Factors such as purpose and the approach taken to Environmental, Social, and Governance (ESG) matters are increasingly considered an integral part of the investment decision making process, rather than just a bolt-on.
This is being driven by several factors. Regulators - whose function is to act as the proxies of society - are now far more active in encouraging investors to act as better long-term stewards of their client’s assets. Pension funds, who safeguard all our financial futures, are asking more questions about how companies consider these softer values, especially from a risk perspective, as they are increasingly directing capital specifically towards ‘responsible’ investment funds. And investors themselves now recognise far more that a strong purpose and sense of stewardship can not only help to build resilience, but ultimately help a company to outperform over the long term.
This is a change of sentiment that may well have lasting significance. If investors are beginning to make hard decisions – important capital-allocation decisions - based on the power of the brand to influence organisational performance, then this will increase the pressure on businesses to ensure that what they claim is truly backed up by what they do. And as an industry we need to be aware of this changing dynamic. It would be ironic if we started to think of purpose as a bit of an overdone concept, just at the time when it might gain a whole new level of traction.
How we help clients meet these challenges
Superunion Corporate is designed specifically to help clients meet the challenges posed by shifting societal expectations. We draw on forty years’ experience, first as Addison Group, now refreshed and enhanced to help clients make sure their brands are built on strong foundations.
How do we use this expertise to help clients adapt and succeed in this changing environment? First, we understand that the responsibility for building enduring brands is shared across a far wider range of client personnel, including those whose job focuses on managing relationships with audiences other than customers. Second, we appreciate that the currency of these relationships is information. Our clients work in a content-heavy world, and they need agencies who understand this content, get why it’s so important, and know how to work with it. Thirdly, we take an approach to creative problem-solving that we know clients expect, and value. One that puts a premium of making the complex simple and gives them the practical tools – increasingly driven by technology - that enable them to effectively engage with their stakeholders.
"It’s a challenge to build a meaningful, enduring brand. It needs to be compelling and distinctive, but it also needs to acknowledge its place in society. It requires everyone in the organisation behind the brand to work together and share a common aspiration and common set of values, whether their focus is only on the customer or on the wider stakeholder base which collectively grants it social licence. And it’s also why Superunion Corporate is an integral part of Superunion: because if success requires our clients to make a collective effort, then it requires us to make one too."
– James Brock, Managing Partner, Superunion London