Emory Marketing Institute


The CEO as Brand Guardian
by Christian Sarkar and W. Rodgers

In study after study, the role of the CEO is tied inextricably to the brand. Sometimes, as in the case of the celebrity-CEO, think Martha Stewart, Richard Brandson, or Donald Trump, the CEO is the company. Of course, this is not always a good thing.

The key is to strike a balance, where the company benefits from an appealing public personality like Martha Stewart, Donald Trump or Michael Dell, while it builds a strong identity that doesn't entirely rely on the individual. To learn more about how companies feel about the CEO role in company branding, we asked them to tell us about their views. As Part I of an ongoing study, we surveyed over 100 global companies.

In this article, we share our findings for three companies in very different industries: Southwest Airlines, Nissan, and Hermes. What is instructive is the shared sense of importance all three companies place in the CEO's role as brand steward.

Southwest Airlines

Herb Kelleher the legendary chairman, co-founder and former CEO of Southwest Airlines, has embodied the spirit of Southwest Airlines for over 30 years.

We've learned that Kelleher's approach to management is a paradox. Although Southwest Airlines has set industry records for maximizing shareholder value, Kelleher has always placed the needs of shareholders last, after employees and customers.

We asked him about the brand, and his response speaks for itself:

Herb Kelleher
Chairman, Southwest Airlines

The role of the appropriate CEO is, in my opinion, most important in both creating and guiding the brand and, to this end, I met about once per month with our Marketing Department, advertising agency, and Public Relations Department in creative sessions.

The objectives of my participation were manifold:

1. To license participants to be creative, rather than mechanistic and bureaucratic in approach;

2. To license participants to be daring, rather than humdrum in approach;

3. To help ensure that our advertising and PR content were congruent with our strategic and operational intentions, our corporate values and Culture, and our ethical standards;

4. To help ensure that we were paying contextual attention to changes in societal mores, interests, and trends;

5. To help ensure that our advertising and PR resources were being spent and expended in a manner appropriate to our allocation of aircraft seats; impending competitive confrontations; and potential service opportunities;

6. To help ensure that there was continuity and consistency to our advertising and PR over a span of years;

7. To help ensure that our advertising and PR had the potential for a substantive and lasting impact, rather than just an insubstantial, ephemeral presence;

8. To help ensure that the creative process was both uncontrained and a barrel of fun.

Caveat: I wrote "appropriate" CEO above because some CEOs, regardless of their merits in other areas, might deaden, rather than enliven, creative sessions.

 

Nissan

One of the highest-ranking Americans in the Renault-Nissan alliance, Steve Wilhite is the vice president of global marketing for Nissan Motor Co., Ltd. (NML). He's responsible for building the Nissan and Infiniti brands on an international scale and developing marketing campaigns for all Nissan products worldwide.

Wilhite, who drives a Nissan Z sports car, aims to convey the Nissan brand to customers, from the United States to Europe and now China. "The notion is best captured in the line [CEO] Carlos Ghosn said in Detroit in 2002, that everything we touch, we shift - and everything we shift, we try to make better and uniquely Nissan," Wilhite says. "People have started to realize that it's not just a tagline, but a manifestation of who we are."

Here's his take on branding and the CEO:

Steve Wilhite
Senior VP of Global Marketing, Nissan

I basically agree with your premise that the CEO should guide brand development and be the lead "brand evangelist". That said, this depends entirely on the capabilities and marketing skills of the CEO.

Steve Jobs is a brilliant marketer who plays a critical role in all aspects of brand strategy, brand development, and brand implementation at Apple. His instincts are fantastic and he has developed exceptional marketing skills over an extended period of time. The same could be said of Meg Whitman at eBay, Michael Dell, or Jeff Bezos at Amazon.

Unfortunately, the same cannot be said for many CEOs, some of them capable leaders but not gifted marketers. In my opinion, Ferdinand Piech saved Volkswagen. He is a brilliant engineer, has excellent design instincts, and is a powerful business leader. He is not a particularly gifted marketer or brand builder. Although he created the opportunity for Jay Mays and Freeman Thomas to bring their design to life (after Uli Seifert, then head of design, tried to kill it), he also approved the Phaeton, and bought Lamborghini, Bugatti, and Bentley. When he bought Bentley, he failed to negotiate the purchase of the Rolls Royce brand.

Jack Welch is generally recognized as an exceptionally effective CEO. The financial results at GE over an extended period of time are remarkable. I don't believe that even he would consider himself a great marketer.

I think there are two keys in responding to your question. The first is that the CEO should clearly understand the value and importance of powerful, clearly defined brands. Unless they are leading a low cost supplier in a commodity business, brand leadership/stewardship is a critical business function and core competency of their business. Second, regardless if they have the expertise and instincts required, they need to surround themselves with capable brand marketers just as they need to surround themselves with capable engineers, finance specialists, or legal experts.

The CEO's responsibility is to make sure that there is a clear brand strategy in place and that all functions in the organization understand it, embrace it, and are aligned with it.

Hermès

The world of fashion and design is tough business. Since 1837, Hermès International -- the French luxury brand famous for its silk ties, H-logo belts and Kelly bags -- has been run by a succession of family managers. While conglomerates such as LVMH, PPR SA's Gucci Group and Prada snap up struggling fashion houses, Hermès has taken a difefrent road to growth.

Hermès has been extending its own brand, according to the Wall Street Journal -- at times into unusual product categories such as baby clothes and beach linens, in addition to more traditional areas such as watches and perfumes.

The WSJ reports that "acquisitions have served to enhance Hermès' core products."

Hermès bought crystal maker Cristallerie de Saint Louis solely to produce goods for the Hermès label's home collection. "Everything is done to support our key business -- the name Hermès -- and under this name, we can ... nourish our internal growth," says Patrick Thomas an external manager who became co-chief executive alongside Jean-Louis Dumas - Hermès chairman since 1978, when he took over from his father, Robert Dumas.

We received a note from Patrick Thomas on the subject of the CEO and the brand:

Patrick Thomas
Managing Director, Hermès

Mr. Jean-Louis Dumas and I received your letter ... and we appreciate your consulting us on this topic which is extremely dear to our heart.

The end of the nineteenth century and the beginning of the twentieth century have been the era of industry and of industry heroes who were real chief branding officers, and who were focusing on their products, their development and marketing. The end of the twentieth century will appear in history as being the era of finance at a time when the products have been massively underestimated at the profit of financial interest and short term profit. To get a long story short, finance might very well kill industry forever. The reason for being the CEO of a company, and in particular a company in our industry, is to keep the signature of the product alive, be it printed on silkwear or stamped on fine leatherware. There is no role in any single company more important than the product it delivers or the service it offers to its customers. It does not mean that offering or branding makes hundred percent of the job of a CEO, but it means that he cannot be a "state of the art" CEO if he is not able to develop the vision of what his product and his brand will be in the future.


The CEO as Guardian of the Brand

We find common themes among these companies:

  • the CEO helps create and nurture the brand
  • the CEO is the guardian of the brand, protecting it from short term actions which may result in longer-term value destruction.
  • the CEO safeguards the continuity of the brand, ensuring consistency across time
  • the CEO is the architect of the future of the brand

We leave you with an insight from David Larcker, professor of accounting at the Wharton School of the University of Pennsylvania, who calculates that a 10% positive change in a CEO's reputation results in a 24% increase in the company's market capitalization.

In a global world with increasing cost pressure, it is the intangibles, the brand itself, that makes the biggest difference. Sustained performance comes through sustaining a strong brand.

published: NOVEMBER, 2005

Christian Sarkar is the founder of a consultancy focused on thought-leadership and marketing innovation.

W. Rodgers is a principal at SHR Perceptual Management, an integrated brand-building practice.


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