According to this ISR report, top brands underperform financially and have poor levels of employee engagement. They have compared companies rated by Business Week as having the highest brand value with a set of "high performing" companies - and the branded businesses are found seriously wanting. Conclusion?
Many top brand companies are vulnerable. They are performing poorly on the cultural dimensions that deliver success under a brand/image strategy. This exposes them to low levels of employee engagement and to inferior levels of financial performance.Now I take these kinds of surveys with a large pinch of salt, since there must be so many variables affecting ratings, and there's some danger in averaging the ratings of what are very diverse businesses. Nevertheless, I find it very intriguing that ISR identifies a low level of employee engagement in top brands. Could it be that these highly image-conscious organisations have become so mesmerised by their outward appearance that they have lost sight of satisfying their own staff. Are they, perhaps, experiencing the emptiness inside that afflicts all narcissists?
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Comments (3)
It could be that a top brand wouldn't be performing at all without their top brand status. Where would Apple be without their cult following which they spare no expense to cultivate? They'd be gone.
It would be interesting to look at the business categories of the top financial performers. It would be just as enlightening to explore which path to dominance they utilized to achieve their results.
The flip side of the story is that you don't need a top brand to make money unless that's what your strategy calls for.
March 8, 2004 14:25 Permalink for comment
John, I read that as being about brands in categories with fairly inealastic demand--the staples, groceries, etc. Hence the real threat of In-house brands they quote.
If so, I think there's a bit of semantical sloppyness--top just means product moved, awareness etc. Not necessarily "valuation" of those brands. If I'm correct, then those companies aren't so much branding as they are trolling for customers--bottom feeding maybe. Slotting fees, couponing and other promotions are the religion for these companies here in the US. Many find themselves reacting to a pressured, nano-thin margined retail/distribution structure.
March 15, 2004 06:40 Permalink for comment
I think these comments highlight the limits of this kind of research... there are always lots of untested assumptions and a lot is hidden in an averaging process. Still, the findings do, intuitively make sense to me: for every Apple - a brand driven by innovation and courage - there are a great many dreary me-too brands that promise more than they can possibly deliver. It makes sense to me that those ones fail to engage employees.
March 15, 2004 09:30 Permalink for comment