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Understanding the meaning of corporate identity and how it should be used to its best advantage

By Professor Stuart Read (November, 2006)

Excerpt from webcast: Untangling Your Corporate Identity And Your Brand (9:20)

Do you understand the meaning of corporate identity and how it should be used to its best advantage? Professor Stuart Read sheds light on the corporate identity enigma and explains some important do's and don’ts...

In a recent study we interviewed fifty people and asked them to define “corporate identity”. The results revealed a great deal of confusion on the subject.

Many respondents had no concept of what corporate identity is, others decided it “sounded expensive” but could articulate no further than that. The nearest to the mark knew that “a group of corporate marketing people” was responsible for corporate identity but had no idea what they did and did not see how it would involve them.

What is corporate identity?
Corporate identity is the persona of the corporation. It is a set of values and principles held by the firm. And it is the way these values are communicated verbally, in writing, and graphically in the corporate logo, design and colors. You put all of these elements together and you get an image of the corporation - the corporate identity.

If done well, the corporate identity provides a meaningful umbrella for the corporate brand, the set of products or services that the corporation offers and any endorser brands.

Do you need to have a top brand in order to have one of the largest companies in the world? No. Only around one third of the 100 largest firms in the world own one of the top 100 most valuable global brands. So it is possible to have a large, successful firm without having a strong brand.

But is corporate identity associated with a valuable product brand or a set of product brands? Absolutely. Of the 100 top most valuable brands in the world, 84 of them are associated with strong corporate identities. So you don’t need a strong brand to have a strong company, but a strong corporate identity is tightly linked to a strong brand, or family of brands.

There are a number of ways a well-managed corporate identity can benefit you beyond building a corporate brand asset that helps to differentiate your products or services. It can create a tie to customers that share common or complementary values. It can enable new opportunities with potential partners that relate to the aspirations articulated by the identity. Internally, corporate identity can provide a platform that inspires employees. And a good corporate identity can also cut total marketing costs by leveraging marketing activities across products and divisions.

It also tells you what you are NOT. For example, the Hilti brand is found on construction and industrial sites. It would be unlikely to put its name to, say, pink frilly dresses. By having a clear identity, the company has a sense of which products and services fit and which don’t.

How do you build corporate identity?
My research has taken me to a number of experts in the field including Mark Andersen. Head of Mark Andersen Design in Silicon Valley, Mark has worked on corporate identity for a range of corporations including Apple Computers. From my interviews, I have extracted five key points on successfully managing corporate identity:

  1. The personality of the corporation has to be captured completely and authentically. Starbucks claims to be environmentally conscious and this is reflected in its business. If Starbucks were to claim, “we’re about high fashion” it wouldn’t fit.
  2. The identity should appear spontaneous. Again look at the Hilti logo. It is strong, bold, and looks at home on a construction site. Is that an accident? Of course not. It probably took many hours to get it right.
  3. “Learning from Picasso to un-learn.” According to Mark Anderson a lot of people say something like, “we want a corporate identity like IBM but orange”. He tells them to go back to the drawing board, to unlearn all the things that are already out there, and to focus on their own company’s personality.
  4. Be strong. Don’t wander from your corporate identity. Don’t put your name to a product or service that is not consistent with your identity, no matter how lucrative it might be.
  5. Think broadly. Communicate your corporate identity in everything you do. Take Apple: identity is reflected in its products, its press releases, its people, and of course in the famous iconic logo.

Finally, set yourself a test. Can you distill your corporate identity into one or a handful of words? The key is to find words that are descriptive and meaningful, and will provide a good umbrella for all of the activities you undertake.

Hewlett Packard built its corporate ID around the work “invent”. 3M has tied its identity to “innovation” encouraging innovation within the company and providing innovative products. And Jaguar has spent the last two years creating its corporate identity around the word “gorgeous” - a very strong corporate identity that is value-focused.

Avoiding the pitfalls
There are many things that can go wrong when trying to build a strong identity. So what are the pitfalls?

Not having one at all: Altria, a Fortune 100 firm, is all but unknown. And while the firm owns brands such as Marlboro and Kraft, it gains no leverage across those assets as it has no higher-level identity.

Confusing it with product: Look at Visa. You associate it with your Visa card. Is it a valuable brand? Absolutely. Is it a brand that is going to be hard to translate into other products? Yes because the identity of the brand is product focused not value-focused.

Building a confederation: LVMH is recognized for having acquired brands like DeBeers and Givenchy, but has no identity beyond that which is associated with the individual brands that make up the name (Louis Vuitton, Moet Henessey).

Straying too far from the market. Sony has been so successful at building corporate identity that it has almost created a universe of its own, with products that no longer inter-operate with the broader industry. Try using a Sony memory stick in an any IBM-compatible computer and you can’t do it. However, if you can avoid the pitfalls, a well managed corporate identity is closely correlated with company success.

Involve everybody
When you have corporate identity “right” it will touch on everybody in the company, from the person who answers the phone to the CEO. While the logo and the company look is important, the way you and your employees communicate with customers, how you project the firm’s values day to day, how you manage your team - that is what builds corporate identity.

The secret that lives in the corporate marketing office is out.

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