brand driven ceo - embedding brand into business strategy_dec 2016_ print final

THE BRAND-DRIVEN CEO

EMBEDDING BRAND INTO BUSINESS STRATEGY

LEVEL5 LEADERS FORUM SERIESISSUE 1, VOLUME 8

DECEMBER 2016

IN PARTNERSHIP WITH

LEVEL5 LEADERS FORUM SERIESTHE BRAND DRIVEN CEO - EMBEDDING BRAND INTO BUSINESS STRATEGY

BRAND-DRIVEN CEOS EMBED THEIR COMPANY’S PURPOSE, VISION, VALUES, COMPETENCIES AND PROMISE INTO THE BRAND.

AT-A-GLANCE

In this white paper you’ll collect key insights about:

• Why brand management needs to start at the top – with the CEO

• How embedding corporate purpose into the brand expands brand value

• How to drive brand accountability by what you measure

• The importance of creating consensus and communicating brand value to stakeholders

DECEMBER 20162

LEVEL5 LEADERS FORUM SERIESBRANDING AMONG THE UNBRANDED

BRAND AS A STRATEGIC ASSET

Creatingvalueandsustainingprofitablegrowthhasbecomemoredifficultthanever in today’s increasingly complex, disruptive and constantly changing business environment.CEOsarefacedwithfindingandsustainingcompetitiveadvantageandprofitablegrowth,whileat thesametimedeliveringshort-termprofitsandenhancing shareholder value. Empowered with technology and social media, consumers are becoming increasingly connected and well-informed – and they expect more from brands and from the products and services they purchase. Strong, consistent brands are more important than ever in helping organizations achieve sustainable, competitive advantage.

Don’t justtakeLEVEL5’swordfor it.Theworld’sfivemostvaluablebrandsandtheir brand values in U.S. dollars, according to Forbes’ 2016 ranking, have some familiar names on the list 1:

• Apple–brandvalue$154.1billion

• Google–brandvalue$82.5billion

• Microsoft–brandvalue$75.2billion

• Coca-Cola–brandvalue$58.5billion

• Facebook–brandvalue$52.6billion

Each of these global leaders has a recognizable brand, and it didn’t get that way by accident. It got that way through clear and consistent commitment to managing the brand as an asset by each company’s most senior executives. At these companies, brand is guiding not only what the company sells but also how the company is run. In the process, they are moving their margins up, changing their conversations with customers from prices charged to value delivered, and extending the impact of their offerings from the utilitarian into the emotional and experiential.Andeachhasrealizedsolidfinancialimpactsasaresultofitsbrand.Unfortunately, the reality is that for every Apple and Google, there are a myriad of companies who struggle to understand (and subsequently manage) their brand as a strategic asset. Consequently, brand remains one of the greatest untapped assets that CEOs have at their disposal to drive long-term sustainable growth.

While most CEOs conceptually understand that their brand is an asset, few know how to begin to manage it as one. The natural tendency is to relegate management of the brand to the marketing department and to view it as a cost on the income statement. Instead of bringing the organization’s full power to bear on the brand’s growth and success, they handicap themselves and squander a powerful competitive advantage — often at great cost!

How, then, does viewing a brand as an asset change the way brands are managed? For starters, brand-driven CEOs see their brand not as a function of their marketing department but as an important, value-creating business asset that must be nurtured and protected.

1 http://www.forbes.com/powerful-brands/list/

It’s a holistic exercise, not a

marketing exercise, that needs

to start with the leadership

teamdefiningwhatthebrand

stands for.

- Joe Natale,

former CEO, TELUS


DECEMBER 20163

Employee

On October 5th, 2016, LEVEL5, in partnership with Spencer Stuart, hosted our eighth Brand Leaders Forum series power breakfast to offer Canadian business leaders a new way to think about and manage their brands as assets. Ken Wong, renowned professor at Queen’s Smith School of Business, moderated discussions with four prominent brand-driven business leaders who have embraced the concept of Brand as a Business SystemTM and, as a result, unleashed extraordinary new value for their organizations:

• AllanMacDonald,President,CanadianTireRetail

• JoeNatale,formerCEO,TELUS

• AnaDominguez,President,CampbellCompanyofCanada

• MichaelJones,President&ChiefExecutiveOfficer,EquityFinancialTrust

This white paper distills the six success factors our panel focused on to transform their company into a brand-driven organization and culture:


1. PURPOSE OnlyaCEOcantrulydefineanorganization’spurpose—itswhy

2. LEADERSHIP

3. CONSENSUS

4. CHANGE

5. ACCOUNTABILITY

6. COMMUNICATION

Brand management always begins at the top

C-suite agreement drives alignment across the organization

Organizational transformations that succeed are brand-driven and led by the CEO

Brand measurement drives brand performance

The brand promise must be clearly understood by both external and internal stakeholders

DECEMBER 20164

ONLY A CEO CAN TRULY DEFINE AN ORGANIZATION'S PURPOSE - ITS WHY

Customers don’t buy what you sell; they buy why you sell it. Brand-driven CEOs know this, so in order to get clarity on their particular why, they constantly ask themselvesafundamentalquestion:Whatbusinessarewein,andwhy?Justtwoyearsago,AnaDominguez,CampbellCanada’snewPresident,begantoraisethatquestion with her team after research told her that “the younger generation was not buying our brand.” Why weren’t they buying, she wondered? After all, Campbell’s® Healthy Request line—which focused on the benefits of a healthy heart—hadbeen a popular go-to supermarket brand for over two decades. But Campbell Canada's research revealed something even more useful: Millennials cared less abouthearthealth than theamountoffibreandpreservatives theyconsumed.Since Millennials represented Campbell’s® future, something had to be done.

As it happens, Dominguez and Campbell Canada were “the thin edge of the wedge”—they were charged with developing Campbell’s global strategy. “We knew we had to develop a whole new way of managing our brand inspired by an understanding of what a new group of consumers wanted,” Dominguez said. “So wemobilizedeveryaspectofthecompany.”Butfirsttheyhadtogobacktobasics.When the team at Campbell Canada asked themselves what business they were in, they realized they weren’t in the soup business; they were in the nourishment business, and if they wanted to attract a new generation of customers, they had togoastepfurtheranddefinetheirbusinessandtheirbrandtoprovideReal Food that Matters for Life's Moments to Canadians. The company worked hard to make significantprogressinlivingintothispurpose—fromworkingtoeliminateartificialcoloursandflavoursinitsfoods,BPAinitspackaging,antibioticsinitschickensupply, to adding vegetables and whole grains, and embracing transparency from farm to family. "Our purpose became our burning platform and transformed everything we did—from our marketing, to our supply chain, to operations."

JoeNatale,formerCEOofTELUS,Canada’sthird-largestcommunicationscarrier,believes that purpose should drive every activity that takes place within a business. “I think more than ever, organizations need to really embed their sense of purpose into the brand and business system.” As the saying goes, it’s not about having the best drill, it’s about helping the customer make the best hole, which is why at TELUS everyone learned they weren’t selling cellphones, they were selling an important life connection. Thatbenefits-basedperspective trulydefineswhatabrand-driven CEO is all about.


We had an iconic brand that

wasn’t relevant to a whole

new generation of consumers.

We needed to reinvent the

company, so we began by

redefiningourvisionandour

brand.

- Ana Dominguez,

President, Campbell Company

of Canada

ORGANIZATIONS NEED TO REALLY EMBED THEIR SENSE OF PURPOSE INTO THE BRAND.-JoeNatale,formerCEO,TELUS

1. PURPOSE

DECEMBER 20165

BRAND MANAGEMENT ALWAYS BEGINS AT THE TOP

Threeyearsago,AllanMacDonald,PresidentofretailingstalwartCanadianTire,realized that the company’s iconic brand was slipping. “We had failed to create an identity with the next generation of customers. We had been 'everyone’s go-tostore' forso long,wedidn’t realizeourdefinitionof 'everyone’wasshrinkingrapidly.” Although the company has close to 60,000 employees and nearly 500 "big box" stores across Canada, MacDonald and his team knew it was time to rethink the brand at the executive level, so they began by establishing a Brand Committee of the Board. This was not some powerless bureaucratic subcommittee—"it was basically Canadian Tire’s entire Board," said MacDonald.

Canadian Tire’s top executives were tasked with examining and reviewing the health of all of the company’s major brands (including its private label brands) and measuring their performance against a series of brand metrics. MacDonald knewthecompany’sfutureprofitablegrowthdependedonstayingastepaheadofan aggressive group of global retailers, so they invested heavily in connecting a younger generation of target customers with the iconic brand, to help them fall in love with Canadian Tire the way their parents did before. It began with identifying what those younger customers valued most — quality, style and design and strong brands—thenfulfillingthosedesires.Theydevelopedhigherqualityproducts,newand exciting private brands and entirely new digital experiences that showcased the assortment: like the fully omnichannel (paper+digital) catalogue, or the in-store virtual patio builder and wiper selector tablets. "Technology has absolutely helped us to rebuild our brand with Millenials and other consumer groups, but it’s always anchored in the brand experience we want to create; to drive conversion and sales growth," says MacDonald.

WhenMichaelJoneswasappointedthenewCEOofEquityTrustFinancial(ETF),heknew that the only way he could restore the brand was to focus all his efforts on the stakeholders, beginning with his managers and employees. “Brand management has to come from the top or else everybody’s left to interpret what the brand really means. When brand management is left to the head of marketing, it can become ambiguous for everybody else.”

“Brand-buildingstartswiththeleadershipteam,”agreedJoeNatale.“Wehavetobe on the same page as to what the brand stands for and why that matters—both to customers and to our employees. That means we need to create a sense of focus and alignment. It may seem obvious, but that is not always the case." The entire extended executive team needs to spend at least a full day together each month focusing on customer issues and priorities. Brand leadership is important, but so is culture change, says Natale, "because I see culture as the emotional wrapper of a brand."


Brand management has to

come from the top or else

everybody’s left to interpret

what the brand means.

– Michael Jones,

CEO, Equity Financial Trust

2. LEADERSHIP

DECEMBER 20166

BRAND CONSENSUS CREATES ALIGNMENT ACROSS THE ENTIRE ORGANIZATION

Because brand building is such a long-term, organization-wide endeavour, consensus on what the brand means and what it stands for must be forged at the top. “We don't have a marketing department, we have a senior management team,”Jonesnoted,“andthatseniormanagementteamhadtoreachaconsensusas to what the brand is.” Consensus loomed large at Equity Trust Financial because if there wasn’t a clearly understood consensus, ETF’s brand repair and rebuilding processwouldquicklycomeofftherails.Fortunately,EFT’sdefinitionofconsensusisquiteasimpleone,saysJones:“Itmaynotbemyidea,butwhenIleavetheroomI’m supporting it or we’re in trouble.”

The brand promise at TELUS is "The Future Is Friendly," but Natale pointed out that a lot of people on the executive team didn't always understand what that really meant. “They were living the thoughts that they believed the brand meant, not what it actually meant. To help create consensus around its brand, I believe it's importanttosendmanagersoutintothefieldtoexperiencewhatisactuallygoingonwithcustomers.Spendingafulldayinastoreorwithafieldtechnicianatoneof the call centers helps team members understand what if feels like to execute on brand."

BRAND-DRIVEN CEOS ALWAYS LEAD MAJOR ORGANIZATIONAL CHANGE

Successful brand-driven CEOs understand that they must personally oversee the changeprocessiftheywantthebrandpromisetobecomefirmlyentrenchedintheorganization. When Campbell Canada transitioned from being a soup company to a food company offering Real Food that Matters for Life's Moments to families, Dominguez and her team had to engage in “a lot of training, a lot of conversations and reorganization.” And that included their retailers. “We totally changed how we engaged with them. We moved from a very transactional relationship to a more strategic one that was more anchored in our purpose and our brand.”

ETF’sMichaelJonesmanagedthechangeprocessby"givingourpeopleclarity"about where the company was going and what they were trying to achieve. They had a whole list of strategies tailored to different aspects of the branding "depending on who we’re talking to. To make the change effective and lasting, we had to get agreement across the board as to what the brand was all about and what we were trying to accomplish."


Brand is part of the way you

operate. A lot of people on the

leadership team don't always

understand what that really

means.

- Joe Natale,

former CEO, TELUS

3. CONSENSUS

4. CHANGE

DECEMBER 20167


BRAND MEASUREMENT DRIVES BRAND PERFORMANCE

Brandscan'tbemanagediftheycan'tbemeasured,saysJones,whoseownbrandmeasurement system is about creating as much value as possible. "We call it organizational effectiveness. It's a fancy phrase for making sure that everybody has a numerical performance agreement that's reviewed three times a year, and everybodycomesupwithascore.”EveryquarterJones’scoreispublishedsothewhole company can see it. This kind of accountability goes all the way down through ETF’s organization. Even the office administration staff have a performanceagreement just like Jones (with different performancemetrics attached). Therearenounderlapsoroverlapsinaccountability,saysJones.“It’sacriticalprocessfor us.”

Canadian Tire’s brand metrics are anchored in the relationships they have with no less than eight different stakeholder groups. A Brand Health and Wealth dashboard empowers management with an "always on" view of the metrics as theyhappen,andtheyhavebeenquitedeliberateinquantifyingthebenefitsofdigitalinvestmentsthroughacceleratedtest-and-learncycles."Paceandtimingare critical when it comes to digital as a mass retailer; you don’t want to be too far behind, or too far out front either; both are poor investments for driving the brand and the business." Over the past three years Canadian Tire has modernized its digital platforms like the website, updated to advanced logistics systems, and developed new data-driven performance management capabilities. This has led to a shift in some funding away from more traditional investments to new areas of growth, guided by a robust set of brand-based metrics. “Now, when you see our adsandtheyresonatewithyou,it’sbecausethey’reveryspecificallydesignedtodrive a certain brand metric.”

For Campbell Canada, the key metric is: How successful are we in driving the consumer experience? “Some of our team members asked us, what are we after—salesorprofit?We'reaftersalesandprofit,”Dominguezpointsout.“Ifitwasjustone of the two, it would be easy. Everybody can do one. It's about how we organize ourselves to achieve our goals and deliver value. We make assumptions when we launch our promotional campaigns as to what metrics should be moved, and in what direction and to what magnitude. If we don’t achieve our goals, we learn why, and then we readjust. That has been a huge shift for the organization.”

At TELUS we created a

single metric—‘likelihood

to recommend.’ That metric

wound up on a scorecard which

measured the results.

- Joe Natale,

former CEO, TELUS

OUR ADS ARE SPECIFICALLY DESIGNED TO DRIVE A CERTAIN BRAND METRIC.-AllanMacdonald,President,

5. ACCOUNTABILITY

Canadian Tire Corporation, Ltd.

DECEMBER 20168

Brand performance and measurement are at the core of long term success, says Natale. Telus has created more shareholder value over the past fifteen yearsthananyotherglobaltelecommunicationsfirm,andgettingeveryoneacrosstheorganization accountable for delivering brand value is one of the key reasons why. “At TELUS the focus was on— ‘likelihood to recommend, a net promoter score equivalent'—which everyone could rally around.”

That metric wound up on a scorecard which measured the results.” In fact, over 50 percent of variable pay and compensation was tied to customer metrics in one way or another.

THE BRAND PROMISE MUST BE CLEARLY UNDERSTOOD BY BOTH EXTERNAL AND INTERNAL STAKEHOLDERS

Brand is all about trust, and trust begins and ends with good communication. Torebuildtrustwithitskeyplayers,Jonesandhisteamtooktheirnewbrandingmessage to the mortgage brokers who distributed their lending products. “Our vision and goal was clear,” said Jones. “We wanted to be the first choice forbrokersandborrowersinthenon-andnear-primemortgagemarket.”Jonesnotedthat brand is not just about what you do but how people perceive what you do. That’s why along with actually lending money to people, they had to deliver a clear message as to who they were, what they were and what they stood for. “We were very careful about how we told people what we were doing.”

To reinforce what the brand stood for with employees, TELUS set up webcast-like town hall meetings and broadcast them to all employees. At these meetings, Natale and his team took questions from everyone in the organization to get “clear and honest” discussions around company issues and create a more transparent environment. “I really tried to turn them into Oprah Winfrey-like, frank and honest discussions of the business,” said Natale, “and reinforce the message that this is something that we're all doing in this organization.”

DomingueznotedthatoncetheyhaddefinedCampbell’svisionofhowtheywantedto bring their brand to life in Canada, they were “very clear” about how they communicated that vision to their retail partners. “‘This is the new Campbell’s that you’re going to see,’ we said to our retailers. ‘This is how we’re going to drive our brand going forward, and this is how we plan to be a very different partner to you in order to revitalize the centre store.’” The results have been dramatic. “The numbers show that we’re actually helping drive growth with retailers who had been experiencing years of continuous decline.”


We were very clear about how

we communicated our new

vision to our retail partners.

- Ana Dominguez,

President, Campbell Company

of Canada

6. COMMUNICATION

DECEMBER 20169

ARE YOU A BRAND-DRIVEN CEO?

A common theme throughout the Brand Leaders Forum was that the CEO is ultimatelyresponsiblefordefiningthebrand’spurposeandensuringthateveryonewithin the organization understands their individual role in bringing this purpose to life. Below is a series of questions to help you evaluate whether you’re on the right track to transforming your company into a brand-driven organization and culture:

As the leader of my organization, I am the guardian of our brand—not just an ambassador or spokesperson.

I have created a clear sense of purpose, direction and vision for our brand that allows tough choices to be made more objectively.

The responsibility of managing your brand begins at the top with me—the CEO—along with my C-suite team: CFO, COO, CMO and even board members.

I consistently make important organizational decisions through the lens of my brand—hiring,firings,restructuring,resourcing,etc.

My organization has a culture that permeates the organization, uniting employees at all levels with a common purpose that they understand, feel part of, and are passionate about achieving.

Employees understand their contribution to the brand’s success, whether or not they interact directly with the customer.

I have a clear understanding of the value that my Branded Business SystemTM creates for various stakeholders.

My organization employs a common performance management system that signals success and how each department/team contributes and is rewarded for it.


As our four panel espoused, building and managing a strong brand begins at the top, with a deep understanding of the business' purpose and a willingness to, as Natale stressed, "really embed their sense of purpose into the brand."

The primary objective of LEVEL5's Leaders Forum was to offer senior executives a new way to think about and manage this process. At LEVEL5 Strategy Group, we are committed to helping our clients drive dramatic business results through the power of their brand. Given LEVEL5’s perspective that "Your Brand is your Business System™,” in future Forums we plan to continue exploring how CEOs are managing and integratingkeypeople,processandpartnershipdecisionstobecomecentraldriversoftheirbrand’sprofitablegrowth.

LEVEL5 invites you to continue the conversation on this white paper. Send us your comments or inquires to:

[email protected].

DECEMBER 201610

18 KING STREET EASTMEZZANINE LEVELTORONTO, ONTARIOM5C 1C4

416 361 3468

LEVEL5STRATEGY.COM

ABOUT LEVEL5 STRATEGY GROUP

LEVEL5StrategyGroup™isafirmofexperiencedmanagementconsultantsthat advise organizations on realizing their potential – achieving the highest level of performance – by identifying, creating and unlocking value from their most important asset…their brand. Our successful track record of growth for organizations is driven by our unique perspective on brand management and the practical application of insights that comes from havingwalkedamileinyourshoes–allofourPartnersareformerc-suiteexecutives. You shop in LEVEL5 stores, make family meals with our products, ride our transit systems, enjoy our concerts and have your check-ups in our healthcare facilities. We invite you to learn how brand and digitally ledtransformationcometogethertodriveprofitable,sustainablegrowth.Smart. Brave. Action.™ LEVEL5™.

ABOUT SPENCER STUART

SpencerStuartisoneoftheworld’sleadingexecutivesearchfirms.Privatelyheld since 1956, Spencer Stuart applies its extensive knowledge of industries, functions and talent to advise select clients — ranging from major multinationals toemergingcompaniestonot-for-profitorganizations—andaddresstheirleadershiprequirements.Through53officesin29countriesandabroadrangeofpractice groups, Spencer Stuart consultants focus on senior-level executive search, board director appointments, succession planning and in-depth senior executive managementassessments.WewerethefirstglobalexecutivesearchfirmtoenterCanadain1978,helpingclientsacrossthecountryachieveoutstandingleadershipsolutionsfortheirorganizationsfromourofficesinToronto,MontrealandCalgary.

Formoreinformation,[email protected].


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brand driven ceo - embedding brand into business strategy_dec 2016_ print final

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