Brands are valuable. I know, this isn’t new thinking, as companies have – for years – poured time and money into enhancing brands. But more and more, companies are looking to quantify the value of their brands in terms that are consistent with measurement of other corporate assets and results. This, however, remains far from an exact science, with no standardized measurement in place. Our own client EY started the discussion about the valuation of intangibles almost 20 years ago. More recently, EY has written about monetizing intangibles like brand in the context of the International Integrated Reporting Council’s (IIRC) effort to define integrated reporting.
According to the IIRC, “an integrated report is a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term.”
Our corporate sibling, Interband, creators of the World’s Most Valuable Brands annual ranking, has helped popularize the IIRC’s work. And ironically enough, while the largest concentration of global marketers resides in the U.S., some claim the U.S. is behind in adopting integrated reporting.
Clearly, this is an important concept for businesses to figure out. Ultimately, the creation of a single, integrated view of corporate value is an important tool for all stakeholders, because an inclusive, integrated approach will provide a more stable platform for the evolving discussion about the relationship between businesses and society.
But while it’s important to continue to look for accurate ways to standardize the measurement of a brand’s value, companies must continue to take actions that increase sustainable business results, quarter by quarter, year by year, for the benefit of all of its stakeholders.
As business leaders focus on optimizing every driver of value, intangibles like brand, customer relationships and innovation are essential elements. As we see in our work with hundreds of organizations around the world, these levers of growth are the focus of enormous investments of money, time and content. Looking across these elements, we recognize an increasingly important additional factor that can magnify both risk and return. That factor is reputation, and its impact is growing more distinct as the environment in which companies operate becomes more transparent, immediate and global.
Today, every facet of an organization’s operations are increasingly known to the public. It has become critical for credibility and success that leaders personally demonstrate the promise and values behind their brands. Previously, the mandate was to be “on message” – have a consistent and specific narrative delivered in support of the strategic goals. But this needs to continue to evolve. Leaders, most notably CEOs, must be “on message” and “on brand.” But being “on brand” must truly align with the attributes of the company that generate expectations among all of the company’s stakeholders. There cannot be a gap between the promise of a brand and company and leadership behaviors, between stakeholder expectations and the experiences. In other words, if we want to be “on brand,” and to be trusted, first we must make the commitment to “be as we wish to be seen,” – a principle that has stood the test of time since Socrates first talked about it, and is even more powerful today.
Messages and actions should reinforce the equities of the brand. Whether it’s during an earnings call, a product launch or any speaking opportunity, CEOs and other company leaders should demonstrate a deeper alignment between leadership and brand promise. Home Depot’s chairman, Frank Blake, did this exceptionally well as CEO, and did so “from the inside-out,” giving the newly minted CEO, Craig Menear, a good legacy to continue.
So remember, brands are valuable, and the intersection between brand and reputation is a critical junction for value creation. Someday, we’ll be able to quantitatively detail this, and showcase it in integrated corporate reporting.
In the meantime, though, leaders should increase brand value by being on brand AND on message.