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The CEO: A Brand's White Knight or Detractor

Ryan Rieches

The recent headlines about the 87-year-old grandmother who sued Donald Trump made me think about the CEO’s role in corporate branding. In the week-long trial, Jacqueline Goldberg claimed fraud involving investments she made in a Chicago skyscraper the Trump Organization built. Although she lost the lawsuit, Goldberg said “I exposed him for what he is.” On the other side, Trump’s people concluded “The Trump brand is stronger than ever.”

Or is it? Earlier in the week, Trump made headlines by turning the courtroom into a reality show by preaching from his own agenda and was reprimanded by the judge on multiple occasions. Trump’s other reality show and very a public life have painted him as a hard-nosed, greedy CEO looking out for his own best interests and not his shareholders. When a CEO is this public and controversial, I really don’t think he is doing the corporate brand any favors. In reality, this example of a self-serving ego becomes a brand detractor and limits the brand’s potential.

On the contrary, other outwardly public CEO’s have enjoyed a favorable impact on their organization’s brand. Think Richard Branson and Virgin. His reputation as an extreme adventurer is closely associated to what the Virgin brand stands for — rebellion. He repeatedly introduces brand extensions that become successful independent companies — but all bound by the idea that the new business must be able to shake up the existing industry through a rebellious new strategy. The success of these new companies and the consistent use of the Virgin logo have reinforced awareness and increased acceptance of these new offerings.

In other cases, CEOs have built brands, left, and were later asked to come back and save the brand. Perhaps the most famous was Steve Jobs who was ousted by Apple’s board in 1985 but returned in 1996 — ultimately taking Apple from near bankruptcy to profitability in 1998 and in 2011, Apple became the world’s most valuable publically traded company. Known as the “Father of the Digital Revolution”, Jobs had the vision and set the standard for what the Apple brand stands for today. Although very respected, he was a “design perfectionist” and incredibly demanding of his team, constantly pushing the boundaries. Although extreme in his management style, you can’t argue with his success. In many ways, Steve Jobs was the brand and represented what Apple stood for — innovation. Tim Cook, his successor, although incredibly talented has struggled in leading Apple’s new product innovation and subsequently their stock has taken a significant decline.

Howard Schultz started out as a Director of Marketing for a small coffee shop in Seattle called Starbucks. When the owners didn’t agree with the growth strategy he had for the company, he left to form his own coffee shop in 1985 and eventually bought the Starbucks brand in 1987. With a clear vision, keen insight in real estate and a belief in not franchising the brand, Schultz built a powerfully consistent global brand. In 2000 he stepped down as CEO, but came back in 2008 as the company was on a downward trend. His subsequent book, Onward: How Starbucks Fought for its Life Without Losing its Soul outlines the dramatic efforts he deployed in re-establishing his core beliefs of the customer experience. That branded experience is what built Starbucks reputation. Great leaders have the gift of a future vision and the ability to do two things, stay on course but also evolve to remain relevant.

Not all returning CEOs are as successful. Michael Dell stepped down as CEO of Dell Inc. in 2004. Mr. Dell returned as CEO in 2007 at the request of the board. In 2010, Dell Inc. agreed to pay a $100 million penalty to settle SEC charges. With intense global competition, the company is struggling to remain relevant and profitable. In February 2013, Mr. Dell began the process of trying to take the company private. This leveraged buyout started a bidding war with billionaire investors and private equity firms but the process also exposed the company as vulnerable. The first quarter results showed sharp deceleration with net income falling 79% from the previous year. If Dell is to be successful in the future, it is clear that its charismatic CEO will need a new vision and competitive strategy.

In other recent headlines, we see J.C. Penny rehiring Myron Ullman after a 17-month experiment with Ron Johnson. Although Johnson was very successful in retail operations at Apple and Target, he made fatal branding mistakes in his attempt to revive the 111-year-old retailer. Although I applaud Johnson’s courage for taking risks and shaking up Penny’s stale image, he made radical changes too quick. And more specifically he tried to change the company without changing the internal culture. Great leaders know that a brand is built from within, not by external marketing. Think back to the example I gave earlier about Howard Schultz. He rebuilt his brand by closing every Starbucks store on earth for a global training and brand summit. That is how you get people’s attention. Johnson didn’t realize the power of an established culture and didn’t take the necessary steps to get the right people in leadership who could be his brand champions. Retail moves incredibly fast, but you can’t short cut the essentials of building a great team around an inspiring vision.

In summary, CEOs can have a polarizing effect on an organization. The CEO sets the vision and the tone, but success comes only when the entire company is united. Culture and brand must be linked together or the promise is never realized.

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