Why Brand Architecture is a Critical Strategic Imperative

Editor's Introduction:

Brand Architecture is a key strategic tool to ensure that audiences will understand what you offer and how they can engage. It’s a critical issue for Shared Services, where businesses often resist having control taken away from them, and the general perception of "paying less for service" all too easily translates into "lesser service." Though often overlooked – our 2014 survey showed just 38% of global SSOs are currently leveraging a branding strategy – its impact can be massive. If a picture tells a thousand words, you should all be considering how you present yourselves visually. Branding, of course, is more than a logo, so creating brand ambassadors who represent your mission is equally important.

Here are some lessons from industry, which apply equally to Shared Services, on how to promote your "brand" to encourage engagement.

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The rules for organizing brands today are evolving. There are important forces that have changed how external audiences engage with brands. Probably the most important is technology and how it has enabled people to know more, purchase more efficiently, and decide more quickly. The consequence is that a company and its products and services need to be communicated with a new simplicity so that all key audiences easily understand the business you are in, how they can find what they need, and at the same time understand the breadth of value your company brings. This is the goal of building a strong brand architecture.

Why it is an Imperative?

Muddled Offerings

The most common branding issue we see today is that corporations have a very muddled array of products and services that are not well organized and therefore difficult to figure out. This is caused by a variety of circumstances:

Consolidation through acquisition, merger or organic reorganization Evolution of a business into new areas that are either completely new or adjacent to existing capabilities Expansion into higher margin businesses from a legacy offering Spin-offs that require new levels of explanation.

Need for New Understanding

The shakeout from the economic trough we experienced, while difficult for most businesses, has presented the opportunity to look at the resulting business through a new lens and to sharpen focus to generate new levels of interest and generate higher revenues. This sharpening can have enormous benefit for the stakeholder community, helping them not only understand the business better, but also have more confidence in a company as it moves forward.

Galvanize and Engage Employees

In addition to the obvious value of a clear and easy-to-understand brand architecture, in many cases the employee base doesn't always understand the breadth of what their own operation offers, how the parts are interrelated, and the opportunities to expand customer relationships. Just imagine the power if every employee more fully understood your business and could be a true brand ambassador.

So focusing on a clearer and more understandable framework is an essential task in the new economy. The good news is that there is a disciplined process to determine the best way to organize and communicate a business's offerings to more easily engage with key audiences.

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Organizational Architecture Should Not Drive Brand Architecture Brand architectures should be designed for external audiences [Shared Services’ customers and stakeholders] to "explain" the business so that they can understand and engage. The easier it is for an external audience to understand, the greater the chances they will respond and engage.

Companies are often organized for reasons that may not make sense to external audiences. The drivers of internal organization can include:

Legal requirements Tax circumstances Financial reporting Legacy business history Acquisition complexity Leadership opportunities

But often, these organizational decisions are not the way outside audiences see your business. From their standpoint, they want to engage to find a specific product or service, and really don't care how you are organized. The consequence is that a business needs to have a "brand" architecture constructed from the outside in. While this sounds relatively obvious, getting internal leaders to agree is usually a significant challenge.

Below are some helpful ideas about how to engage your leaders to successfully develop an appropriate brand architecture.

What kind of Brand Architecture? A Brand Architecture is a systematic means of focusing and organizing your brand assets to ensure that target audiences understand the breadth and depth of value you offer them.

There are several basic types of brand architectures that, in a pure or hybrid form, are the underpinnings of clarity. Each is developed by determining the best way to express the business vision through the lines of business.

A Masterbrand Architecture is a monolithic structure where, from a branding standpoint, all business units, subsidiaries and divisions share the same brand. Good examples of this strategy are FedEx and GE. In general, everything carries the FedEx and GE Masterbrand and sub-units are defined by descriptive language.

An Endorsement Brand Architecture uses a common endorsement for all of the operating units, and the parent brand functions in a subordinate manner to each operating unit brand.

A Portfolio Brand Architecture , sometimes called a "Free-Standing Brand Architecture", keeps separate identities for many or all of its brands. This is appropriate where there is sufficient marketing support for individual brands and it is believed the parent does not provide any brand equity that would benefit the individual brands.

An Ingredient Brand Architecture uses a principle brand as a common element in supporting and qualifying other brands. The premise is that if the ingredient is good, the brand it amplifies is better than without it. In the case of purchasing a PC, there is research that indicates that consumers look first for the "ingredient", the (Intel) processor, before the brand it is within.

How do you decide which type of architecture is best? If you remember he golden rule (from the "outside in"), that should be the starting point. You start by determining which are the most important audiences or stakeholders. For most companies it is customers/consumers. The next step is to determine what each discrete audience needs to "hear" or understand in order to engage with your brand. You must look at your company from their point-of-view. This often requires outside help and research so that you can have an objective view. Almost every business has a belief about how external audiences view them, and this view is naturally biased and often incorrect.

How do you engage the line of business and other leaders? Evolving to an external facing brand architecture is a process. It not only requires audience research, but also leadership team involvement so everyone understands their role in how the company speaks outwardly.

Where we have seen the most resistance is in situations where the broad leadership is not deeply involved. Because how a company portrays itself is so critical to the future, developing a strong, outward-facing brand architecture is a strategic mandate. Get the leadership involved and keep them involved.

Who should manage the Process? Development of brand architecture is a strategic initiative and should be managed by the most senior corporate leader who can rise above line-of-business interests. Among other values, strong brand architectures usually signal a new future while creating clarity.

Brand architecture can be a powerful tool to help a company accelerate its growth. If there are any members of your team who think about your business’s brand, you might want to share these thoughts with them.