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StrategiCom's Journal of Brand Strategy

The Corporate Identity:


When Do You Change It?
By Lesley Tian, Research Analyst, StrategiCom

BrandBank • MARCH 2010 issue


BrandBank • MARCH 2010 issue

The Corporate Identity:


When Do You Change It?
By Lesley Tian, Research Analyst, StrategiCom
March 2010

The Corporate Identity – An Introduction

In today’s business environment, firms are the mobile phone and a music player. In
constantly seeking ways to stay relevant 2006, the company enjoyed a net profit
with market trends while coping with latest of €143 millions, a 91% increase from the
developments. While staying current with the previous year. The Walkman branded line
business trends within their industries might of mobile phones contributed to a quarter
give a company a competitive advantage of the shipment2. This difference is because
over others, the adoption process could be different companies have different adoptive
painful. Every now and then, management capacities.
has to take the organisation through radical
changes such as developing a new business Whether a firm can completely implement a
model, entering into new business territory particular technology or promptly tap upon
or merging with another company, just a certain market trend depends on many
to prepare for their desired future and the factors. Past studies have identified factors
opportunities which may follow. such as brand/line extension3, organisational
sunk costs4, corporate core competence5,
History reveals that while some revolutions and structural inertia6, among many others
have succeeded, others have failed. For that contribute to a company’s adoptive
example, Xerox, despite the huge amount capacity. While literature explanations are
of investment in technology acquisitions and fair, one of the lesser mentioned factors is
their globally renowned Palo Alto Research a firm’s corporate identity (“CI”). A firm’s
Center (PARC), is still highly associated with CI, when managed properly, can be a
copiers1 rather than other digital products. fundamental contributor of a firm’s current
In contrast, Sony Ericsson created a new and future adoptive capacity.
category through the effective integration of

1
As obtained from: http://brandfailures.blogspot.com/2006/12/brand-extension-failures-xerox-data.html
2
As obtained from: http://www.mobiletracker.net/archives/2006/07/13/sony-ericsson-q2-2006 in March 2010.
3
Ries and Trout, “Positioning: The Battle for Your Mind”, 1981, New York.
4
G. B. Northcraft and G. Wolf, “Dollars, Sense and Sunk Costs:A Life-Cycle Model of Resource-Allocation Decisions,” Academy of Management Review 9, no.
2 (1984): Pp 225-234
5
D. Leonard-Barton, “Core Capabilities and Core Rigidities; A Paradox in Managing New Product Development,” Strategic Management Journal 13 (summer
1992): Pp 111-126
6
M.T. Hannan and J. Freeman, “Structural Inertia and Organizational Change.” American Sociological Review 49, no. 2 (1984): Pp 149-164

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BrandBank • MARCH 2010 issue

Benefits of The Corporate Identity: The Growth & Expansion Impact


The firm’s CI is a powerful concept7. Research solid core from which they can confront a
has shown that it shapes the the views of changing and often hostile environment”10.
members in an organisation on corporate
issues8, and even their personal identity9. For As a case in point, Ace Dynamics Ltd (a publicly
example, a man from a welding company is listed company in Singapore) was known as
likely to develop his sense of self as a welder. a diversified company involved in the supply
When the welding company develops an of welding equipment and consumables,
identity anchored in safety, he tends to pay safety equipment and property development
more attention to the use of new welding for almost 30 years in Singapore and the
technology, proper personal protective wear region. In 2006, its Chief Executive Officer,
and best-in-class safety practices rather than Steven Tham, realised that with the rapid
energy sources or weld-ability in different growth in the offshore & marine construction
environments. and engineering sector, a greater focus
in their welding, safety and welding gas
One of the most important benefits of a CI business was needed. Since Ace Dynamics
is probably the ability to serve as a business was also known for its involvement in the
acceptability indicator for a company i.e. to property sector, Tham sought the support of
gauge how far a company can stretch its his board to change the CI of Ace Dynamics
operations to take on the demands in terms (since the name formed a large visual part of
of customers’ needs and changes, while still the company’s CI). In this case, it was clear
being perceived as relevant and competitive. to Tham that the CI was a hindrance to the
As Porras and Collins argued, “organisations board’s strategy in growing the business of
cannot endure without developing a welding, gas and safety in a focused way.

The Relevance of the CI to Corporate Strategy: Asking The Right Questions


Here are some salient questions that a For business leaders who are sensitive
management of a company and its board about their organisations’ CI, a good
should ask when evaluating the relevance tool which can help to better understand
of corporate identities. A good guide is to and measure a CI is known as a CI
work from the bottom up:- audit11. For companies, especially the
- What is the CI of my organisation? ones that failed to realise performance
improvements despite their continuous
- Is the CI of my organisation well-recognised efforts to solve operational or strategic
and if so, what is it recognised for?
issues, a periodic CI audit may prove to
- Is the CI relevant to my stakeholders in be useful in assessing the company’s core
the context of the strategic intent of the problem(s)12. In the case of Ace Dynamics,
company? a CI audit was commissioned by the CEO
- If not, what steps should be taken? who took a personal involvement in the
audit; something rarely seen in most
- What is the impact in terms of change
management? CEOs.

7
Hamid Couchikhi and John R. Kimberly, “Escaping The Identity Trap”, MIT Slogan Management Review, Spring, 2003, Pp20-26.
8
J.E. Dutton, J.M. Dukerich and C.V. Harquail. “Organizational mages and Member Identification.” Administrative cience Ouarterly 39 (June 1994): Pp 239-
263.
9
B.E. Ashforth and F Mael, “Social Identity Theory and the Organization,” Academy of Management Review 14 (January 1989): Pp 20-39.
10
J.L.Porras, and J.C.Collins, “Built To Last: Successful Habits of Visionary Companies”, New York, HarperCollins, 1994.
11
“The Soul of the Corporation: Managing Your Company’s Identity”, December 06, 2007 in Knowledge@Wharton.
12
Hamid Couchikhi and John R. Kimberly, “Escaping The Identity Trap”, MIT Slogan Management Review, Spring, 2003, Pp20-26.

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BrandBank • MARCH 2010 issue

Know The CI & Do More With It


Similar to a financial audit, which is to add a periodic CI audit is essential since a
credibility to the implied assertion by an company’s product and service range may
organisation’s management that its financial be changed to suit the needs of the market
statements fairly represent the position and from time to time. Conventional wisdom
performance to the firm’s stakeholders13; a should be the trigger as to when a CI audit
company should not be convinced that its is necessary. But when it is commissioned,
current CI is a reasonable representation a structured process is needed. This paper
of its desired position without a logical provides the salient steps any management
and systematic audit. While conducting it should consider when commissioning or
on an annual basis may not be necessary, administering a CI audit.

Step 1: Know the Current Situation of the CI


CI, as a modern management concept, symbolism to internal and external audiences.
has made three main developments in In the case of Ace Dynamics, all three of the
the past three decades. In the seventies, following interconnected components were
CIs were synonymous with organisational included in its CI audit exercise.
visual identifications. Great importance
was assigned to the graphical aspects by 1) Symbolism: to reveal some of the
practitioners then14. One of the more notable basic traits of an organisation’s identity by
of scholars was Olins, whose renowned work interpreting organisational symbolism19
was found in the classification of CIs namely: such as logotypes, corporate signatures,
monolithic, endorsed and branded15. In the typestyles, formats and colours. Here, the Ace
late 1980’s, both graphic designers and Dynamics mark was found not to symbolise
marketers realised the difficulty in projecting any pertinent association to its various diverse
a cohesive image as modern organisations business. Put simply, stakeholders knew that
had to contend with different stakeholder it was a public listed company but few could
groups. Bernstein, among others, argued associate the company to its various natures
the necessity of ensuring visual consistency of businesses.
in a firm’s marketing communication efforts16.
In the 1990’s, scholars like Balmer argued 2) Integrated marketing and communication:
that the CI is rooted in the behaviors of the to ascertain an organisation’s external
members of the firm17, and this forms the marketing and communication efforts20
unique characteristics of the organisation. through a heuristic analysis. This examines
Gradually, the definition of the CI has the organisations’ historical roots and its
expanded to include different components. current areas of internal conflicts21. Ace
Dynamics’ marketing efforts in the last 10
Today, there is no consensus on the definite years (before its CI change) were diverse
definition of a CI18, however it is commonly since the business as a whole was diversified.
understood that an organisation’s identity There was an obvious conflict between what
is revealed through members’ behaviours was communicated historically vis-à-vis the
and communications, as well as through company’s new strategic intent.

13
Obtained from http://en.wikipedia.org/wiki/Financial_audit, as at March 2010.
14
Cees B.M. van Riel, John M.T. Balmer, “Corporate Identity: the Concept, its Measurement and Management”, European Journal of Marketing (2007), 31, 5/6:
Pp340-355
15
Olins, 1978, “The Corporate Personality: An Inquiry Into The Nature Of Corporate Identity”, Thames and Hudson, London.
16
Bernstein, 1986, “Company Image and Reality: A Critique of Corporate Communication”, Holt, Rinehart and Winston, Eastbourne, UK.
17
Balmer, 1995, “Corporate Identity: the Power and the Paradox”, Design Management Journal, Winter, pp.39-44
18
International Corporate Identity Group (ICIG) decided not to give a definition of corporate identity but rather a statement which articulates the multidisciplinary
nature of the area and its difference from brand management. “Strathclyde Statement”, Feb 1995.
19
Napoles, V. (1998), Corporate Identity Design, Van Nostrand Reinhold Company, New York, NY.
20
Gray, E.R. and Smeltzer, L.R. (1985), “Corporate Image – An Internal Part of Strategy”, Sloan Management Review, Summer, Pp73-77.
21
Cees B.M. van Riel, John M.T. Balmer, “Corporate Identity: the Concept, its Measurement and Management”, European Journal of Marketing (2007), 31, 5/6:
Pp340-355

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BrandBank • MARCH 2010 issue

3) Members behaviour: to assess members’ examinations of documentaries (figure 4.1).


behaviors within an organisation. Here, The laddering approach was adopted for
qualitative methods were often adopted. Van Ace Dynamics and it revealed that most staff
Rekom proposed the laddering technique22 only knew what their division was doing as
which relies on means-end interviews to opposed to what the company was involved
reveal the dominant values of employees. in as a whole. This presented challenging
Balmer proposed the “Balmer’s Affinity issues since the strategy was to consolidate
Audit (BAA)”23 which relies on collecting data the welding, gas and safety business; and a
through various qualitative methods such as discontinuance of non-core businesses,
semi-structured interviews, observation and

Figure 4.1.: Conceptual Model Based on Balmer’s Affinity Audit (BAA)

22
As referred in: Cees B.M. van Riel, John M.T. Balmer, “Corporate Identity: the Concept, its Measurement and Management”, European Journal of Marketing
(2007), 31, 5/6: Pp340-355
23
Balmar, J.M.T, (1996), “The Nature of Corporate Identity: An Explanatory Study Undertaken Within BBC Scotland”, PhD thesis, University of Strathclyde,
Glasgow, UK.

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BrandBank • MARCH 2010 issue

Step 2: Determine the Desired Corporate Identity


An organisation is constantly subjected Leeden and with it, its CI. CEO Tham realised
to changes especially in its products and that its new CI would fail without a well-spelt
services and hence, it is advisable to out corporate strategy. In other words, the
periodically assess the degree of fit between vision of Leeden as “The Integration Specialist
the company’s identity and its strategy going for Welding, Gas & Safety” was aligned to its
forward. For Ace Dynamics, the company CI (Figure 4.2).
decided to change its corporate name to

Figure 4.2: Leeden’s Logo and Tagline

To ensure that a CI is aligned to the firm’s


corporate strategy, a variety of methods can
be used:

1) The IDU method: Introduced by Rossiter by the organisations (“D”) and finally those
and Percy24, it aims to discover three important that are perceived as unique, or better (“U”)
pieces of information- the benefits that are when compared to other organisations in
perceived by key external stakeholders as the same category (Figure 4.3).
important (“I”), the ones that are delivered

24
Rossiter, J.R. and Percy L. (1997), “Avertising & Promotion Management”, McGraw-Hill, New York.

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BrandBank • MARCH 2010 issue

Figure 4.3: The IDU Method Example based on Rossiter and Percy, 1982.

2) Bernstein’s Spiderweb25: Generally, an conversations with key participants


external consultant leads this process. It represented at every level and department.
begins with a focus group conducted with This approach aims to generate in a
the firm’s top management. Key attributes representation the salient attributes of the
are extracted and verified within stimulating corporate identity. (Figure 4.4)

Figure 4.4: Bernstein’s Spiderweb Method Example

25
Bernstein, 1986, “Company Image and Reality: A Critique of Corporate Communication”, Holt, Rinehart and Winston, Eastbourne, UK.

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BrandBank • MARCH 2010 issue

Within StrategiCom’s methodology, there corporate identity, namely “relevance” and


are two things which the firm’s consultants “desirability” of the corporate identity:
look out for when determining the desired

1) Relevance: The characteristics of the 2) Desirability: Within the iterative process of


desired corporate identity must be relevant. crafting Leeden’s trademark, key customers’
In Leeden’s case, the lead consultant markets were studied to ensure that
tested the new trademark with key players appropriate colours and symbols were used.
within Leeden’s key customer markets. However, the search for desirable attributes
“Integration” of Leeden’s three business units has to be highly related to the organisation’s
of welding, gas and safety was an important current situation and again, comments were
characteristic for the communication of the derived from the marketplace.
business through the newly designed mark.
Feedback and comments served to evolve
the mark to its final accepted stage.

Step 3: Convergence Study

A clearly defined CI will only become a - “Are the internal and external perceptions
source of competitive advantage when of our CI aligned?”
there is convergence both internally and
- “Are there internal or external signals
externally26. This convergence acts as a
that reflect our CI as blinding us to market
force for bringing people together around a
changes?”
central mission. Therefore, a convergence
study is necessary. - “Which stakeholder group would be
anxious or threatened by a CI change?”
The following are some of the key - “Which stakeholder group would be better
questions organisations should ask during served by a change in our CI?”
a convergence study:
- “Is there internal congruence on the
perception of our CI?”
- “Are we satisfied with the amount of
convergence around our identity?”

26
Hamid Bouchikhi, John Kimberly, (2007), “The Soul of the Corporation – How to Manage the Identity of Your Company”, Wharton School Publishing.

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BrandBank • MARCH 2010 issue

So You Now Know…So What?


A comprehensive CI audit will indicate if is essential. Companies who need to
change is necessary. Generally, there are revamp their current CIs have two options:
two situations when organisations do not evolutionary change and revolutionary
need a CI change. First, when the CI is change27.
strong and relevant. Secondly, when the CI
Evolutionary change refers to a process
is not desired by the firm, but perceived to
during which the CI change is a by-product of
be strong according to other stakeholders.
successive strategic and operational changes
With such audit results, relevance rather
over a long period of time. Shell (Figure 4.5)
than change is what needs to be brought to
alters the shape, color, and typography of its
the current CI.
symbol to keep it up to date. But the basic
However, once the audit shows that the elements have been around for almost one
current CI is weak and undesirable, change century.

Figure 4.5: Evolutionary Changes of Shell Logo

By contrast, a revolutionary change usually took place in the year of 2000. Today,
begins with a swift transformation of the the world’s second largest pharmaceutical
company’s identity and then proceeds with company (by employees)28 boasts a wider
realignment of strategy and operations. The portfolio of pharmaceutical products than
creation of a global giant GlaxoSmithKine ever.

Figure 4.6: Revolutionary Changes of GlaxoSmithKine (GSK)



27
Hamid Couchikhi and John R. Kimberly, “Escaping The Identity Trap”, MIT Slogan Management Review, Spring, 2003, Pp20-26.
28
As obtained from http://www.medibix.com/company.jsp?company_id=9992466 in May 2010.

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BrandBank • MARCH 2010 issue

Conclusion: Changing The CI means


Change Management

Whichever way an organisation qualities of CEOs form only part of


chooses to carry out its identity the story29. In order to facilitate the
change, the process is normally transformation of an organisation’s
painful. Inevitably, resistance will identity, management must be
be felt and change management willing to accept changes, including
needs to be implemented. It takes changes to the management
more than mere political skills for itself. By so doing, they can help
corporate leaders to preempt and internal and external stakeholders
overcome resistance. cope with the identity crisis as an
expected event in a well-prepared
One of the most powerful women environment.
Lesley Tian’s keen interest in in business, Carly Fiorina, probably
organisation and community underestimated how deeply rooted Hence, before any business owner
cultural patterns is reflected in her Hewlett Packard’s (“HP”) identity or corporate leader ever decides to
firm understanding of geographical was in the core values, and hence undertake a CI change; there should
and cultural differences of various did not anticipate the hostile be serious consideration followed
countries, and her research interest reaction of influential members of by the will to take bold initiatives
lies in the branding of companies in the HP families when it came to the to assess congruency between the
the context of different cultures and merger with Compaq. Her leaving CI and the firm’s business strategy
languages. Her skills were utilized in after the fight with HP’s board in before these two critical components
a research study on green energy with 2005 indicates that the personal drift too far apart.
Professor Gerhard Apfelthaler during
her stay in Austria. Lesley interned
with StrategiCom in 2007 and 2008
and joined the firm full-time in 2009
where she worked on clients such as
Swee Hong Construction Engineering,
Marshal Technology and Hu Lee
Impex.
l e s l ey. t i a n @ s t ra t e g i c o m . c o m

29
“Ignoring Your Corporate Identity Can Sabotage Strategic Change”, May 21, 2003 in Knowledge@
Wharton.

about strategicom
StrategiCom is a global B2B brand strategy consulting firm headquartered in Singapore with 11 offices and 110 consultants & researchers
around the world. The industries it serves include Information Technology, Oil & Gas, Petrochemicals, Commodities Trading, Business Services,
Pharmaceutical, Medical & Healthcare, Transport & Logistics, Construction & Real Estate, Precision Engineering and Electronics Manufacturing.
StrategiCom’s consultants, researchers and proprietary methodologies provide the catalyst for companies to transform from traditional
businesses into differentiated brands.

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