Designers in the C-Suite: creating value, wrecking havoc

Gatorade Two items in the Wall Street Journal caught my eye today.  Both show us the American corporation as it struggles to divine the mysteries of American culture.

1) General Motors is about to appoint Bryan Nesbitt at the head of its Cadillac unit.  Typically, John Stoll tells us, brand chiefs come from sales or marketing.  This appointment suggests that GM is mobilizing to improve its grasp of the American consumer and culture.  After all, designer often have a competence here.  They listen to the zeitgeist.  They pay attention to the forms and surfaces of the contemporary world.  They have a feeling for our culture, an ear to the ground.

2) But not always.  Sometimes designers are tone-deaf when it comes to culture. Peter Arnell demonstrated this in his redesign of PepsiCo brands.  His redesign for Tropicana provoked criticism from consumer, and PepsiCo withdrew the package. 

The question: was the Tropicana redesign the one bad apple.  Or was Arnell's redesign of other PepsiCo brands flawed in a deeper, more systematic way?   Sales results for Gatorade are now forthcoming, and things look grim.  According to Bauerlein of the WSJ:

Sales of Gatorade … have slid this year despite a flashy new marketing campaign that simplified the product's label to "G."  […]  Gatorade lost a 4.5% share of the sports-drink market and volume slipped 17.5% in the first six months of this year, according to Beverage Digest estimates.

We might see this as the result of a weaker economy.  But, no, the figures for Coca-Cola are not as bad as this, and there is some evidence of still more consumer unhappiness.

[…][C]onsumers complain they are confused by the Gatorade "G" campaign, which was meant to reverse a sales slump that began in 2008. In January, Pepsi replaced the Gatorade name on its label with a big letter "G" and shrunk its signature lightning bolt.  […]  The idea was to make the brand cool again but it misfired. "They asked 'What's G?' and the problem was, people weren't sure," said Bill Pecoriello, chief executive of market researcher ConsumerEdge Research LLC.

The root of the Arnell debacle is clear.  Designers like Arnell confuse "culture" with "cool."  They insist that the brand needs to be "edgy," "hip," "out there."  And sometimes this is exactly right.  A careful execution of cultural meanings on the very edge of our culture is exactly what is called for.  (Snapple managed this in the 1990s.) 

But if the only thing designers know about culture is cool, we have a problem.  After all, cool makes up something like 2% of the cultural meanings in circulation at any given moment.  To be sure, they are the most conspicuous meanings, the ones with the greatest attention.  But if all the designer knows is cool, he or she has extraordinarily partial knowledge.  And eventually the partial view will exact a penalty, preventing the designer from speaking to the deeper currents of American culture, and preventing access to the full range of creative resources at his or her disposal.  Designers who only know cool are in some literal sense of the term incompetent.  Marketing malpractice is just a matter of time. 

Edgy is easy.  If you live in the right part of town, read the right magazines, and consort with the right colleagues, it is not so very hard to capture cool.  How much more difficult it is to master culture!  Now, the designer must actually learn things that are badly out of fashion, to talk to Americans who have dubious taste in clothing and eyewear, to talk about things that are never talked about in hipster Brooklyn. 

I believe good designers have always had a way of escaping the 2% approach to culture.  And I believe the profession is mobilizing to look at culture much more broadly.  As one case in point, IDEO uses ethnography to investigate the consumer in ways that take them (and the client) beyond "cool" into the details of daily life and the meanings of culture.   We shall see if the rest of the profession follows suit. 

3) We should expect a "course correction" from PepsiCo, an acknowledgment that Arnell's project was ill advised.  Bauerlein's article is the first one I've seen that puts the blame for the Arnell debacle directly at the feet of the PepsiCo CEO, Indra Nooyi. 

Gatorade's recent makeover, launched in January, marks the second marketing stumble in six months for the company under Chairman and Chief Executive Indra Nooyi, who pledged last year to boost weak North American beverage sales with hipper marketing.

But Nooyi has yet to signal a shift in philosophy or personnel.  In her conference call, she choose instead to blame the victim.  She said:

"Clearly some of those [former] users switched to cheaper alternatives" and in some cases soft drinks.  "They didn't have a right to exist in the Gatorade world," they just liked the taste.

"Didn't have a right to exist in the Gatorade world"?  Since when did PepsiCo think of itself as a night club?  It is hard to tell from this wee fragment what Nooyi has in mind exactly, but it does rather look as if cool has infected not just the mind of the designer but the C-Suite itself.

Clearly, Nooyi needs to give a recantation.  It is time to clear the decks and start again.  Rumors now circulating suggest that the Arnell debacle will get steadily worse.  First, Tropicana.  Now, Gatorade.  Can Pepsi and Mountain Dew be far behind?  The "Arnell Affair" has the makings of a scandal.  It is time for the classic techniques of crisis control and a public reset.  This could even be an opportunity for Nooyi to promise us "cool" that comes from culture instead of the designer's lofty self regard.  She might even wish to appoint a Chief Culture Officer. 

These are interesting times…and odd ones.  GM, that great dinosaur of a corporation, appears to be leaning in the direction of a new, more robust cultural intelligence.  (And if this is the work of CMO Robert Lutz, hat's off to you, sir.  See my discouraging words on Lutz's appointment as CMO.)  And Pepsi, that darling of the daring marketer, appears to have lost its way.

The take away:  Designers are a way that culture gets into the corporation, and GM is stronger for its Nesbitt appointment.  But they can also be a wrecking crew.  The trick, I believe, is to repudiate the inclination to make cool all the designer (and the brand) knows about culture.  The American corporation must learn to stop pursuing the first at the cost of the second.

References

Bauerleign, Valerie.  2009.  Pepsi Sweats Over Gatorade.  Wall Street Journal.  July 23.  [All quotes in this post are from this article.]

McCracken, Grant.  2009.  Tropicana: When CCOs Go Wrong.  This Blog Sits at the Intersection of Anthropology and Economics.  April 21.  here.

McCracken, Grant.  2009.  Chief Culture Officer.  New York: Basic Books.  (Forthcoming this fall.  Preorder at Amazon here.)

Stoll, John.  2009.  GM to Name New Cadillac Chief, More Board Members.  Wall Street Journal.  July 23, 2009. 

12 thoughts on “Designers in the C-Suite: creating value, wrecking havoc”

  1. I agree wholeheartedly with this post, but it raises a few questions:

    1) How do you know when to push the cool button and when not to? Passively following customer surveys and attitudes can lead to danger as much as overly aggressive “design.”

    2) I’m not sure you can blame Arnell. It sounds like Nooyi more or less ordered him to push the cool button. Perhaps he talked her into it, in which case it is on him too, but the buck has to stop with the CEO.

    3) Isn’t the real problem here the cult of perpetual growth in marketing? I tend to think of products as having a profit-maximizing long-run equilibrium sales level, with a dynamic growth curve leading up to that point (obviously all of this conditional on the size of the potential customer base, number of rivals, etc.) When you get to that maximum point trying to goose things by drastic changes to product, marketing messages, or distribution is likely to be counterproductive–the new sales you get are more than outweighed by the lost sales in the existing customer base.

    4) I think the reporter or Nooyi garbled the quote/context with respect to having “a right to exist” in G-world. She seemed to be talking about the brand’s growth before the redesign, when during the economic boom they picked up a lot of new, low-adhesion customers who really weren’t resonating to the Gatorade brand in general. It’s a pretty poor choice of words in any case.

  2. I think this requires a deeper look into what does cool mean. As a completely lay person here I put forward the theory that “cool” is the same as “fashionable” only it is more fashionable now. And what is really the role of fashion in our society? Why would people follow the designers?

  3. The Tropicana thing, definitely Arnell. Gatorade’s decline in sales is due to “watering down” their product. How many variations of “G” or Gatorade do we need? What athlete or weekend athlete would drink PINK gatorade? Was there really a need for animated commercials or parody of the Knights of the Round table? This is a sign that the brand manager lost their way, and doesn’t understand what the product is and why people use it. Combine that with a need to be “cool” and you get their state of affairs

  4. Grant, Insightful and thought provoking as always. Another fundamental issue on the part of the designers in these cases was leaving the base consumer behind by confusing them, by not having design cues that somehow connected them with the new packaging. In the case of Tropicana, they created a lovely looking package that was unrecognizable and even changed the naming conventions for the product options. People just would not go through the “work” to purchase.

  5. Hm. I always thought the name “Gatorade” was the only good thing about the drink. Can’t help thinking you remove a mascot at your peril. (Would Penguin change its logo to a P?) Last time I went to Gainesville (before the Democratic nomination) there were posters everywhere: Gators for Hillary! Gators love Obama! A drink named after the Fighting Gators makes you want to like it, and wish the drink met you halfway.

  6. Today’s WSJ has a short piece on the major turnover in management of marketing for the North American beverage businesses at PepsiCo. It seems like they’re dumping all their beverage veterans in favor of industry outsiders. Perhaps that will work out for them but I’m a bit skeptical.

  7. The problem with most creatives and leadership members is that they consider brands to be some creative endeavor. Of course, it is, but is time for them to realize that brands are really a fifth kind of capital, in addition to land, labor, money, and materials. Nobody in their right mind would just go for “cool” in the case of the traditional kinds of capital. So, why is it so hard to understand that brands too require careful consideration how their equity may be leveraged, repositioned, extended, you name it? Why would anybody hand over their capital/equity to a creative shop without any strategic upfront work? Well, it happens everyday.

Comments are closed.