What Does Your Corporate Brand Stand For?

BY: Stephen A. Greyser and Mats Urde
FROM THE JANUARY–FEBRUARY 2019 ISSUE – Harvard Business Review

Companies are extremely good at defining their product brands. Customers, employees, and other stakeholders know exactly what an iPhone is and means. But organizations are often less sure-footed when it comes to the corporate brand. What does the parent company’s name really stand for, and how is it perceived and leveraged in the marketplace and within the company itself?

A clear, unified corporate identity can be critical to competitive strategy, as firms like Apple, Philips, and Unilever understand. It serves as a north star, providing direction and purpose. It can also enhance the image of individual products, help firms recruit and retain employees, and provide protection against reputational damage in times of trouble. Many firms, however, struggle to articulate and communicate their brand.

Consider the €35 billion Volvo Group, which sells a broad portfolio of trucks, buses, construction equipment, and marine and industrial engines. After its new CEO decentralized the organization, turning its truck brands (Volvo Trucks, Mack Trucks, Renault Trucks, and UD Trucks) into separate units in 2016, questions about the parent company’s identity became pressing. Because that identity wasn’t well defined, people in the group were uncertain about how they should strategically support the “daughter” brands, and people in the new brand units had trouble understanding how the group’s mission, values, and capabilities extended to them—and even how to describe their brands’ relationships with the Volvo Group in marketing and investor communications.

But using a process we’ll detail in this article, Volvo was able to clarify its corporate identity and the roles and functions of its daughter brands. That alignment resulted in greater corporate commitment to the brands, sharper positioning in the marketplace, a stronger sense of belonging to the group, and more-coherent marketing and communications.

The approach we used to help Volvo achieve this turnaround is the product of 10 years of research and engagement with hundreds of senior executives in organizations around the world and across several sectors, including manufacturing, financial services, and nonprofits. At its core is a tool called the corporate brand identity matrix. As we’ll show, many companies have adapted this tool to their particular circumstances and used it to successfully define a corporate identity, align its elements, and harness its strengths.

Introducing the Matrix
The framework we’ve developed guides an executive team through a structured set of questions about the company. Each question focuses on one element of the organization’s identity. There are nine elements in total, and in our matrix we array them in three layers: internally oriented elements on the bottom; externally focused elements on top; and those that are both internal and external in the middle. Let’s look at each layer in turn.

Internal elements.
Forming the foundation of a corporate brand identity are the firm’s mission and vision (which engage and inspire its people), culture (which reveals their work ethic and attitudes), and competences (its distinctive capabilities). These things are rooted in the organization’s values and operational realities. Consider Johnson & Johnson’s credo, which is carved in stone at the entrance of the company’s headquarters and is a constant reminder of what J&J’s top priorities are (or should be). It describes J&J’s ethos of putting the needs of patients (and their caregivers) first; how it will serve them, by providing high quality at reasonable cost; and a work environment that will be based on dignity, safety, and fairness.

External elements.
At the top of the matrix you’ll find elements related to how the company wants to be perceived by customers and other external stakeholders: its value proposition, outside relationships, and positioning. Nike, for instance, wants to be known for helping customers achieve their personal best, a goal that shapes its product offerings and is captured in its marketing tagline, “Just Do It.”

Elements that bridge internal and external aspects.
These include the organization’s personality, its distinctive ways of communicating, and its “brand core”—what it stands for and the enduring values that underlie its promise to customers. The brand core, at the center of the matrix, is the essence of the company’s identity. Patagonia’s is summed up in its promise to provide the highest-quality products and to support and inspire environmental stewardship. Audi captures its brand core with the phrase “Vorsprung durch technik” (“Progress through technology”). 3M describes its core simply: “Science. Applied to life.”

When a corporate identity is coherent, each of the other elements will inform and echo the brand core, resonating with the company’s values and what the brand stands for. The brand core, in turn, will shape the other eight elements.

Mapping the Elements
The exercise that follows can reveal whether your corporate brand identity is well integrated and, if it isn’t, show where problems and opportunities lie and help you address them. While this process can be tackled by an individual, it’s most useful when undertaken by an executive team.