Any corporation can be forgiven being a little anxious these days. Everyone's confidence is being tested.
I interviewed Debbie Millman over the weekend, and she helped me see an unexpected connection between this confidence and the brand.
When the corporation loses it's nerve, it ceases to take chances. It begins to white-knuckle its way through the world. It begins to lean towards stasis. The consumer may too.
Debbie sees a value cascade at work. In the positive version of this cascade, confidence begets confidence. The confidence of senior management becomes a confidence in the corporation. This in turn becomes a confidence in the brand. And this in turn becomes a confidence in the consumer. Confidence ends up as a part of the augmented brand. But only if it is there in the head and heart of the senior manager.
The negative version of the cascade is, well, what you would expect. The senior manager loses his or her nerve. This carries into the brand and this carries into the consumer. In effect, the consumer is infected by failing confidence of the corporation.
Whoa, Nelly. This is a radical proposition. It has several implications. One of them is that if corporations want consumers to start spending again, they have start spending too. More to the point, the corporation has to begin acting like there is a future in the future. Because here, as in so many things culture, wishing makes it so. Economies, like cultures, have a performative quality.
References
See Debbie Millman's website here. Recording of the interview to follow here or on Ning for Chief Culture Officer.
Post Script
Thanks very much to all of those who voted yesterday. (Polls are still open for those who haven't yet.) It looks like we had around 140 votes with a dead heat between Covers 1 and 2. I will keep you posted on the outcome. A decision has to be made soon!
Grant, you have been such an inspiration throughout the past few years. And I understand blogging is no haute couture. But this argument for the relationship between “brand” and “confidence” is really no big deal 🙁
Tomas, sorry! something about it struck me as revelation, esp. as a way of
breathing new life into nervous nelly corporation, but they may have just
been the wine talking (listening?) over dinner! Grant
Companies are just people that share a common purpose and culture, right? Meaning, I would *expect* the confidence of employees to have a significant influence on the quality of the output and the halo of the brand, especially in a day and age where it’s easier, more powerful and indeed, scarier, for companies to lift the veil of the corporation to highlight their employees.
Could you explain further “One of them is that if corporations want consumers to start spending again, they have start spending too.” Is spending the only way for a company to display confidence?
Taylor, No, certainly, spending isn’t the only way, but it is the root from
which so many other things follow. These days some people have seen their
brands disappear from the airways and descend into cost cutting. Spending
makes many other things happen. I like the way Ford is advertising in the
WSJ today. Recession? What recession? Cadillac too. Thanks.
I think this IS a big deal, Grant! Thanks!
One example of these effects at work was the sudden collapse of Enron. Because the company’s share price began to fall, its customers began to wonder if it would still be in business when their transactions were to be completed. Who were these customers? The counter-parties to the various options and futures contracts Enron was signing across a range of industries. As customers began to wonder if Enron had a future, they became less willing to do business with it. When word spread back to the stock markets, its share price fell again, in a fast, negative spiral to the ground.
Peter, well said, the system is hydraulic in so many ways! Best, Grant
Wasn’t this the theme of the Wizard of Oz? Not to mention Vaihinger’s philosophy of the “as if”? Oh, and AA’s mantra: “fake it ’til you make it”? An odd trifecta! Anyway, acting the way we want to become and then becoming what we’ve acted is pivotal to change and success.
And, I want to cast still another vote for cover #1!
That’s very neat—a company performing a successful brand gets consumers to buy into this perceived success as something they’d like to index with their consumption, which in turn makes the brand successful.
Taylor: I think especially publicly traded corporations have to be significantly more than just a collective of people who share a common interest and culture, because of the enormous structural pressure for continuously increasing profits… Ira Bashkow really needs to get his Prickly Paradigm Press monograph on the subject published!
I like Peter’s example of market psychology as a practical example of the frailty of a brand’s vibrancy and it’s ubiquitous effect. Wow, that sounded tedious, but too late to change it now.
Grant, it’s easy to slough off what you describe as mere leading by example or, as the recovery crowd calls it: “Fake it till you make it” meaning you may not have all the confidence you need but act as if you do and the placebo can work.
But can I offer another take/tangent? So many companies are structured and psychologically denominated (?) in that they can only muster the “courage” and “confidence” they need when there’s a tidy pile of cash available as their metaphorical armour and adrenaline. I use the scare quotes because that’s assisted bravery or gumption not the real thing. I maintained several years ago to Tom Guariello that GM was doomed because they had too many options, uncategorized and unprioritized, too many excuses that their then reasonably still-tall pile of cash afforded them. They had no reason to risk anything by confidently declaring, as Daimler did recetly that they were swearing off fossil fuels in the next 15 years. A bold and confident statement borne, likely, of their sometimes annoying faith in calipers and white coats. But GM? Their courage and comfort were elusive and increasingly about the numbers not the body panels and exhaust note love, as we came to see this last year, and their soul–true worth and purpose–would only be revealed, or not, when they ran out of that money as buffer to real decision-making. Confidence is really devil-may-care wrapped in expertise or resourcefulness and those are things that Wharton and HBS do not yet teach as far as I nknow.
I guess it’s kinda like Nietzsche’s abyss except object in the windscreen are terrifyingly closer than they appear. But you cannot flinch.
Joe: why can’t a common interest and culture be incredibly significant, even powerful enough to fuel an internal desire to meet internal and external pressures to increase profits?
Grant: Good point, but it all depends on how the spending is directed. Spending to chase fallen pillars only highlights a lack of thought and inspiration. True inspiring change can come without conspicuous spending; harder, but perhaps more meaningful.
Dude, wonderful, thanks! Grant
The key issue is exactly what the company and the consumer are supposed to have confidence in.
If a company’s splashy, optimistic marketing convinces some consumers that the economy in general is about to revive they might spend more money but not on the advertiser’s product. In that case there there is a public goods problem for all companies–they all benefit if all expensively signal economic confidence, but the free-rider problem is severe.
On the other hand, it it is confidence specifically in the company or its value proposition that is increased by spending on marketing, then the company that spends is more likely to appropriate the gains. But that only works if a lack of confidence in the company specifically, rather than conditions in general, is what is holding back incremental purchasers.
Taylor: I suppose there isn’t any principal by which it would be impossible. But I think what I was trying to get across is that thinking of a company as just a group of people who share a common interest and culture excludes from analysis some important things, among which are structural constraints/impetuses.
Steve, I guess what struck me about Debbie’s thinking was that it opened
things up in an interesting way for me. I think of the connection between
marketing and brands as a pour of meanings from the first to the second. It
hadn’t occurred to me that unintentional meanings were being made further up
stream, meanings that proceeded further down stream. No one wants false
confidence, but the corporation can hardly expect consumer enthusiasm when
it is ruled by fear. And as Debbie says in the full interview she has never
seen managers more fearful. Thanks, Grant
Well, I’ll try again given Steve’s pushback. Grant, maybe I’m missing something but Debbie’s profundity really boils down to some awfully basic stuff. 1) Advertise or increase awareness when the clutter is down–when others are too chicken or diverted to spend and show. 2) the fake-confidence thing: when all appear to be fearful, there’s great mileage in being a beacon of optimism since “confidence” is precisely what’s in short supply.
Dunno what you made of my previous comment, but #2 has its challenges because fake confidence, the kind requiring massive piles of cash conveying a feeling of overwhelming force is not really confidence, it’s the reed thin and fragile courage of the bully. Most companies do not have a natural confidence within their *cultural* DNA that says, come what may, dynamism is life and we WILL handle whatever comes our way cuz that’s *why* we exist. This is exactly the opposite ethic of the prevailing managerial mindset which crafts its models and metrics to control, control, control. All of Debbie’s managers are fearful because they are so rarely exposed to real executive bravery that an open barn door seems a threat.
Interesting perspective on this economic climate. I think in situations such as this, it is essential to remain confident in your brand and corporation. Like Debbie said, “confidence begets confidence.” These times are great to reassess your corporate goals and look for new opportunities to tap into new demographics.