You are on page 1of 1



Surviving Enron: the real

value of branding

OW SHOULD one react to the I am not going to be an apologist for bad
current climate of exposés, moral decisions and poor business timing on the intro-
outrage and requests for honesty in duction of new corporate names. Rather, I will
big business practice? emphasise that good and real ‘brand’ activity
Should we laugh, cry, cheer, shrug? Overall, I generates real (as opposed to manipulated) value
think I favour a wry smile on the surface, with a for customers. It is unfortunate that name
steady determination to feel optimistic under- changes and superficial cosmetic packaging exer-
neath. cises have been termed ‘rebranding’ in media
A wry smile because so many prevailing atti- coverage. As anyone in a good business knows,
tudes in the business world have conspired to branding should be the central organising prin-
bring us to this point. Despite all the ethical ciple to give a business the strongest sustainable
rhetoric, the compelling business case for ‘dou- competitive advantage throughout everything it
Recent ble bottom lines’ and the recognition of the does – from the particular way quality products
need for broader measures of national wellbeing are developed, to a unique style of customer
corporate (illustrated by such examples as the govern- service, to distinctive communication and to
scandals have ment’s ‘quality of life’ indicators), people run- corporate behaviour in the round.
ning quoted businesses will in the end focus on This good brand practice has little to do with
prompted what they are really measured and rewarded by: desperate ‘rebadging’ exercises, which will never
profit and shareholder return. Not a problem in make a bad or confused business better.
no little itself, but if they can’t generate fast and big A good brand is not only the most valuable
soul-searching enough results by the sustainable route (i.e. cus- and sustainable corporate asset, it is also the best
tomer loyalty, innovation and organic growth), protection investors and the community at large
in the business there is a strong temptation to engineer the can have against corporate malpractice, as well
community. numbers to get those results. as the pressure point for positive change. Again,
As a business nation we have even, perhaps if the brand is a company’s most important and
RITA CLIFTON unwittingly, tended to encourage this problem. enduring economic asset, any company in its
It starts from the top. Despite being interested right mind is going to want to maintain and
prefers a wry in broader indicators, the government is proud- build that asset. If that is the carrot, then the
smile est of economic growth and GDP. The manage- stick is seeing how worthless the once proud
ment route to the top of so many companies is names of Andersen and Enron have become.
accounting and financial, rather than through Ironically, all this is a source of optimism.
business generation and marketing skills. We Shocks to the business and human system have a
value the technical expertise of financial and habit of reminding us of basic truths. The most
legal advisers (and encourage the propagation of reliable way of making money legally is by
their impenetrable ‘internal language’) over and building a brand and corporate reputation that
above creative industries, and way in excess of meet and exceed their audiences’ demands. The
those in public duty. quickest way to destroy this money is to destroy
A wry smile also seems appropriate in view of brand trust. In an all-seeing digital world, and in
the sensational treatment by some parts of the a word-processed media environment where the
media of the latest corporate accounting scan- ghosts of past mistakes are never laid to rest,
dals and its similarity with the lampooning of there is no long term hiding place – real or vir-
new corporate names and corporate identities tual – for corporate wrongdoing any more.
over the past couple of years. The extent of the The mention of ‘media environment’ gives a
accounting issue dwarfs ‘rebranding’ exercises in last excuse for a wry smile. Media brands face
financial terms, even using the mischievously great financial strains at the moment, and the
inflated figures quoted for name changes in the pressure to sell newspapers, airtime and chan-
press. A major renaming project would have sev- nels of all kinds is intense. Who is going to
eral noughts after the decimal point in percent- guard The Guardian and its media colleagues?
age comparison with Enron’s ‘missing’ billions . The rather maligned, but ultimately the hero of
the piece, brand itself, and the reputation that it
Rita Clifton is Chair of Interbrand needs to protect with its own stakeholders. ❦

2 Market Leader Autumn 2002