Topic: Maintaining a brand
Kevin Clark: Companies need to stay true to their core relevance even during times of economic distress. You find the ability to oscillate between surviving and succeeding. They're both forms of innovation, and brand innovation needs to follow the context of that relevance in an economy when it's booming; you need to be prepared for great opportunities to grow. And then when things are less so, you need to be able to project that relevance to be able to survive and be sustainable so that when things start to pick up you're well positioned to grow in both share and to have captured customer loyalty during the time when you made their dollar go further.
Topic: The transforming customer
Kevin Clark: Customers are using slightly different strategies. There are things that they choose to continue to do. It might be very important to, you know, the type of automobile you drive. Or it might be very important to maintain the kind of eating habits that you might have had in the past. So there are certain luxuries that people will continue to invest in while they cut back on other activities. We've seen that even some of the most affluent customers are going to big box retailers to cut back on certain types of discretionary spending and to make their dollar go further. So I think that the appropriate strategy to pursue as a brand-oriented organization is to think about the experience being delivered to customers and to maximize that experience in both good times and bad and to provide some continuity between both environments.
I don't think that customer loyalty is a thing of the past; although, measures which talk about lifetime customer’s value and lifetime customer loyalty, I think that you have to earn that loyalty again and again and again. It's not a given. You have to be able, at every step, to manage the experience that you're having with that particular brand so that people want to return and want to be part of that. The repertoire can be as fast and as narrow, as laundry detergent, where you're buying it on a fairly regular basis or something that's more considered. I spent ten years of my life as the brains behind the IBM ThinkPad Notebook computers. That was before the Lenovo transaction. In the more considered purchases, you need to be able to stack up because the ownership experience that you had was so powerful, was so salient that you limit your consideration set back to not which notebook would I like to buy, which ThinkPad would I like to buy.
I think that that's exactly what happens in the Apple franchise, alright, for people who are part of the more creative class. They don't think about now which notebook computer or which computer will I buy, they're thinking about which Apple will I buy next?
Question: Which companies are branding well?
Kevin Clark: Well, there are examples of companies -- take Bank of America, for example. Bank of America was at one time NationsBank in Charlotte. They went through and acquired Bank of America. Note that the company that did the acquiring was NationsBank. And they went through and wanted to find out, well, what is the best strategy that we might have for a new name for the combined entity? And it turns out that Bank of America tested very strongly, so they had the maturity to go ahead and adopt that name and use it across their new combined network in the United States.
Question: Rebranding the fallen
Kevin Clark: Simply renaming a company or an entity is not the first thing that you have to do. You have to start with what are the fundamental processes that we have to change that will make the business more viable, more desirable to our customers? And then perhaps a name change that matches to the new positioning, to the new vibrancy of the organization, would be appropriate. An example of a company that had very good marks in terms of brand strength was Enron. But Enron -- even if you renamed Enron, right? The legacy of how the company behaved would have followed it even with the new name. So naming itself is insufficient. You have to start foundationally at the positioning, the behavior and the experience, and then the appropriate name can follow.
I think if you look at what has just happened, Ford Motor Company has done an extremely good job of getting through this, gaining market share and it didn't require any additional funding from the government to maintain its visibility in the marketplace. The overall umbrella of the American auto industry versus the audio industry in general. I think that there's been a wakeup call and that wakeup call is about innovating on a set of axis that will be important to customers and that you're inventing things that they will need in the future, as opposed to simply fulfilling current wants and needs in the present which can change pretty rapidly; we've seen that.
So I think that the auto industry is taking a point of view that we need to provide leadership in terms of showing people paths forward in terms of transportation that will be useful, not only in terms of personal ownership but they're also starting to experiment with things like what you see with Zip Cars; “Can I own a portion of a car in a community and get the kind of car that I need for that particular day?” versus personal ownership. You're starting to see that in urban settings, and I expect those kinds of trends to continue and that the auto manufacturers will be fueling that and being part of the conversation going forward.
Topic: Be intentional
Kevin Clark: “Be intentional” is a very short statement that sums up one of the most important things I think that people need to understand about branding and customer experience. You need to be fully connected to the intent of the business. The business needs to know why we're here, what we do, and why that's important. And then once you have that and you're fully grounded in the business's strategy and intention, now you have the basis to make a promise. A promise is exactly what a brand is: it's a very short thought about what people believe and what they expect from a brand. And then that finally needs to be connected to the experience that's actually delivered. So intention connected to promise connected to what the business actually does, creates the strength of very, very strong and enduring brands. And we find that those that are doing this extremely well are the ones that are growing fastest on the Interbrand survey that's published annually.
My former employer, IBM, is doing an extremely good job of this. It's reflected in both their financial performance and the ability to continue to grow and maintain that growth even during this kind of economy. It's reflected in the stock price. I think that one of the companies that people generally look to as a customer-based franchise that's very good with design, which is regularly cited, is Apple. Apple is something that is very, very well thought of and they have an extremely good grasp of how to serve their customers and do that extremely well across a number of different categories. I might finally mention a company in the business-to-business category like Caterpillar, which makes heavy industrial equipment around the world has extremely good reputation with its customers in its ability to serve them, not only at the front end, but when those devices and heavy equipment needs service, they provide an extremely high level of service, and they talk about being able to keep that equipment running better than anyone else in their category.
Topic: The Nokia Effect
Kevin Clark: If you look at the top ten brands around the world, eight are based here in North America, one is in Japan, and then one is in Europe. And the single European brand is Nokia. Nokia was basically a dry goods and forestry products company in its early era, and it decided it wanted to grow and go into some areas that are new. And as Nokia became a global telecommunications presence, mostly for customers who were buying wireless handsets around the world, that single company put the country of Finland and its culture on the map. I think that that effect -- what I call the “Nokia Effect “-- is something that will likely be replicated in other emerging economies around the world. If you look at the top 100 brands, most of those are North American and European today.
I think that the next 10 to 15 years will start to see portfolio rebalancing take place. This is what I call Globalization 3.0, where new brands will start to emerge in Asia and in places like Philippines, Malaysia, Singapore, Vietnam, Thailand, there will be a single brand that will raise those cultures up onto the world stage. And an example I would use is, look at Fiji water. Single company that is making, you know, the Fiji Islands visible in places around the world.
Topic: Sustainable investments
Kevin Clark: The closer the category itself, where green is relevant, such as a Prius car or marketing solar technology for people to use in their home where it might supply electricity or heated water, there you can make a very direct connection between the category and the purchase and how the company is behaving and its characteristics in driving a green movement.
Now a little bit further afield, we see that companies that are doing a good job of managing resources and talking about it -- General Electric, for instance, with their EcoMagination campaign was one of the first to talk about this across their portfolio of offerings. It's a little bit more difficult to make the direct connection to what I bought in green, but I would point out to the work that's been done in cradle-to-cradle. Not cradle-to-grave, but the notion that I can design something that at end of life can actually be reused, the components, is now driving awareness to a new level of not just sustainability but thrive-ability. Something that is more important than simply getting by but cradle-to-cradle is about being able to do something that is positive, that has momentum in the future. So when I think about green, I think about green in terms of being thriveable.
Question: Do all brands peak?
Kevin Clark: No, I don't think so. If you look broadly at what is a brand, one of the first organizations that had a structure that we might consider similar to a contemporary company -- is the Catholic Church. The Catholic Church has been around for a long time. You can talk about what kind of a brand is that, but it's a fairly salient persistent organization. In terms of commercial activity, there are department stores such as a Daimaru in Japan that are almost a thousand years old. We wouldn't think of them in contemporary terms as brands that change.
The oldest brand probably in your kitchen is Kikkoman Soy Sauce, the symbol of the turtle that's highly stylized goes back to the Kikkoman family making soy sauce all the way back into the 1200s. So that's a very old brand. It's been very pervasive and persistent in delivering quality that was appropriate in Japan and is still appropriate in your kitchen today.
Topic: Social networking
Kevin Clark: I think it's extremely important for companies to engage, but I want to remind people that online is not the only way to do it. If you have known someone personally, in person, I think the quality of online engagement is so much stronger when I've had a face-to-face meeting or I've known you for awhile. The pure online world is relatively flat without the personal engagement and face-to-face relationships. So what I want to remind companies is that as you make these investments, online is -- it's a miracle what we can do today in terms of connecting with others, but it's just that much stronger and the emotional ties really come from the face-to-face personal engagement that we have with others. So we need to blend both the physical world and the virtual world together to have the most powerful impact.
Question: 30-year career
Kevin Clark: Went very fast. Thirty years went much faster than many people would imagine. You know, some people to achieve variety in their career will move from one company to another and find that what they're doing is their asked to do the same thing that they did at the previous company, do that again for us. During my 30 years, I had the ability to have at least seven or eight separate distinct careers because I would master something, decide that that was great but I'd like to try something else. The IBM company is diverse enough and interesting enough and flexible enough that if you express that interest, they let you go take it.
In the last 20 years out of a 30 year career, I actually never took another person's job. I stopped looking for jobs and started to create roles; roles that I would be interested in and that's kind of the dirty secret of Kevin's career at IBM is that they were kind of paying me to do what I like to do anyway. Now I'm continuing to do that on my own.
Question: What’s one mistake you made?
Kevin Clark: One of the mistakes that was made -- and I was just talking about this at lunch with someone, in fact -- was not taking full advantage when we reorganized after the chaos. Sometimes you would land in another area and you would have had the ability to maybe make a different kind of change and you didn't really act fast enough to take advantage of the chaos. Sometimes you would end up reporting to someone that you didn't know. Almost every time that I was discouraged in my career, it was because I was working with someone where we had a little bit of friction. I kind of agree with the phrase, "People don't quit companies, they quit managers." Those are the times when I should have acted a little bit more quickly to get into a good situation. I started to get much better of that later in my career than I was earlier.
Question: What’s the worst advice you’ve received?
Kevin Clark: I guess the worst advice that I received was you need to become extremely deep in one thing and become good at that and stick with it forever. Although, I have developed some areas of expertise where I'm known, really the strength of my background and career is through the diversity of things that I'm interested in, that I continue to learn and I never considered my education to end. I actually have started a group where we teach each other; I knew that my executive education days were over and professional education, so I have started my own professional education self-help group.
By looking at many, many things and continuing to include and transcend known categories, it keeps me fresh, it keeps me interested in what I am doing, and makes me more valuable to the clients that I serve and just keeps me energized for waking up and tackling the day.
Question: Who was your best manager?
Kevin Clark: I remember several managers that were quite good. We had just gone through one of the reorganizations that I talked about. This particular gentleman sat me down and said, "I don't know who you are, or why you're reporting to me now, but I just have a few things that I want to share with you early on. I have every confidence that you're going to do fine here because we hire great people in this company; however, I've got two relationships with you. The first one is professional, the second one is personal. In our professional life, you're either going to do great here and I'll appraise and rate you accordingly or, if not, I'll let you know. Then on the personal side, we are either going to get alone and we're going to be friends or I'm not going to like and that's alright because if you're doing a good job and I don't like, you'll still get the raises, you'll still get the performances, but if I do like you and you're not doing the work, you'll get that signal too."
So I thought that was a very clear three-minute description, or less, of what it was going to be like, what his expectations were, and it just imprinted on me. I still remember those first few minutes with him and thinking how clear that was. I immediately stole it and used it as I became a manager and I had four other people who came to work for me.
Recorded on: August 25, 2009