I’m currently reading Dan Ariely’s The (Honest) Truth About Dishonesty. Read it – it’s a fascinating insight into how the human mind works, and it has much wider application than honest/dishonest behaviour.

I’m increasingly interested in how behavioural economics is playing a role in challenging some of the tenets of brand building. And I’m also noting that a number of our clients are paying similar attention.

Ariely runs an experiment repeatedly throughout his book that tests our tendency to cheat. The overall conclusion is that humans are all predisposed to cheating a little bit if we think we can get away with it. He then introduces variants along the way to tease out a few related issues to dishonesty.

A number of thoughts have struck me about the results and how they relate to our work at Interbrand. Here are two:

The first was around honour codes and how fragile they are. Ariely runs the experiment with first year students of a well-known US university who have all recently signed an ethics code where they pledge not to cheat. And he then asks these students, after completing the test, to declare that their answers are honest (despite giving them the chance to cheat in a way that they know thy can get away with). The results? The students still cheated.

But he then re-ran the experiment and asked the students to sign the declaration of honesty before completing the survey. The tendency to cheat was greatly reduced. The conclusion seemed to be that you need the reminder right up front and in the moment for the honour code to be effective.

As Areily points out, any industry – for example insurance or tax collection - that relies to some extent on the honesty of its "customers" should look to put the “I hereby declare…” at the start of the form.

I think it has application for us at Interbrand too, in particular where we do a lot of internal engagement with businesses that are looking to embed brand thinking into their organisation as part of a culture change programme. Too often this is treated as a communication campaign that assumes that if you tell employees in a bright and compelling way, the behaviour change will happen. My conclusion is that we’re all inclined to laziness, and need constant little reminders to "do the right thing" rather than a big moment in time.

Honour codes work, but they need constant reinforcement against the human inclination to inertia.

The second theme that struck me was about the social aspect of behaviour change. In Ariely’s experiments he demonstrates that people will cheat if they can, but will cheat more if they see their peers doing it and getting away with it. It’s what Ariely calls "socially contagious" behaviour. Again I’ve got to think there’s a parallel here to the bahvioural change that many culture-led programmes look to engender. The conclusion for me is that we need to work hardest at getting the right behaviours adopted by a few influential employees, and then noticed by their peers, rather than just looking at better company wide communication.

There’s more to come from Behavioural Economics in the brand world.

Fred Burt is Managing Director, Global Accounts, for Interbrand.

Photo from Pret A Manger's website, Working at Pret

Lately I find I have eaten a considerable amount of lunches at Pret a Manger, the London-based pre-made sandwich shop. Thinking about one great experience after another, I grew curious about how Pret continues to over-deliver on my expectations. I did a little research on the company to learn more.

The fundamentals of the business strategy are tight: provide a streamlined menu, prepare food the day of consumption, use local ingredients, charge a price roughly equivalent to a fast food value meal and get the customer in and out of the store in under 5 minutes.

This strategy actually affords the brand an ability to beat the traditional giants on their own promises. Who else can deliver the freshness and speed Pret has to offer?

Beyond speed and freshness, Pret really differentiates itself on the experience it offers. As you approach an army of cashiers on your way out of the store, you are greeted by smiling employees conveying excitement as they help you move through the line at lightning speed.

No doubt, scaling this type of experience at the rate Pret has grown is no easy task. To do this, the company has very strategically aligned its employees to the superior experience it seeks to deliver to customers.

This alignment is present in every phase of the employee’s journey with the company – from the experience of applying for the job through getting promoted. Prospective employees are sent to work in a store for a day where the team in place will, after a few hours, determine if the candidate exhibits the right level of customer orientation to get the job.

Once on the job, the employee finds himself a part of a team that is collectively incentivized to deliver the highest level of cheer to customers possible. When employees receive a promotion, they are given $50-$100 that they are required to give back to the colleagues that helped shape their career along the way.

As the brand continues to grow, no doubt other brands will look to react by pulling on the traditional levers: product innovation, price, and scale. However, pulling on these levers promises only periodic spikes in business performance, not the sustainable value generated from real strategic alignment.

The lesson for brands? Focus more on aligning your employee base behind your business strategy to deliver a richer customer experience.

Dan Spiegel is a Senior Consultant for Interbrand.

Have you ever been asked to explain why something costs so much? Were you ever curious about where all the money went during a project?
Well, now is your chance to find some answers to these questions. The Interbrand brand management systems team has developed a service that gives us the ability to approach clients with a specific eye on branding costs. This cost clarity model allows us to assess a client’s potential brand spend that needs to be set aside for budgeting purposes.

Common brand touchpoints such as signage, fleet, stationery — you name it — are now made easier to grasp and understand financially. Instead of made-up costs or inaccurate reads, we are able to fine tune and make clear the investment ahead. And this can happen with clients during the initial stages of our relationship with them. This is beneficial as clients want to know how much money is involved and why something cost what it does, whether it is a long-term project or short-term project.

Cost clarity brings to light financial implications very quickly
Our cost clarity model is based on a variety of simple client inputs. We start by asking some preliminary questions based on what a client is trying to solve for. We employ a few basic formulas around the collected data: for example, product quantities, employee populations, and even office locations. We then output some high level estimates. We can even further fine-tune these cost outputs if the client has more data to share. Long story short, the end results reveal the money needed to implement any number of chosen brand touchpoints. What we really like here, is that we’re don’t have to gather a plethora of research to understand a client’s situation. The financial implications become very clear, very fast.


Clients are always talking about being able to reach their brand audiences quickly, so having some foresight around what they’ll be spending money on is of huge value.

Cost clarity simplifies and adapts
Another great thing about this initiative is that we can get to an estimate on costs without having spent too much time getting into the nitty gritty details of a full rebrand program. Of even more value to us here is that we can work with any size client, from large to small, since the cost clarity framework is scalable.

Cost clarity helps brands prioritize
For new clients, this is a different way in to engage with Interbrand. It allows for small, directed conversations to happen without being overly intrusive. For existing clients, this is an opportunity to check in on what may have been done in the past and be able to course correct, based on new information. Unforeseen new business opportunities may arise based on the clarity provided to clients -- as it eliminates any confusion or vagueness. Clients are also aided by being able to prioritize what is most or least important to them based on their given budget.

During a time when it’s very much about being smart with your money and being careful where you spend, this cost clarity model can make a huge impact on your brand.

In a recent Harvard Business Review blog post, professor Bill George brings to light the foibles and unethical doings of several high-level leaders of the last year. Among them:

• Dominque Strauss-Kahn – a leading French politician and former head of the International Monetary Fund, charged with sexual assault.
• David Sokol, rumored to be Warren Buffett successor, was forced to resign after violating Berkshire Hathaway’s insider-trading rules and purchasing roughly US $10 million in Lubrizol stock prior to recommending that Berkshire Hathaway purchase the company. 
• Mark Hurd, former Hewlett-Packard CEO resigned post sexual harassment – expenses scandal.

As George points out, what these three leaders have in common is that at the pinnacle of their careers, they jeopardized their position and prestige by abusing their status for seemingly ephemeral gains – money, sex, and power. And at the heart each controversy lies an unexamined self – not bad people, but individuals that have lost their footing and succumbed to the seductions in their path.
 
He suggests that when leaders rely on external gratification for fulfillment versus internal fulfillment and the satisfaction that comes with building a team and doing something greater than oneself, a vicious impetus is produced: a deep desire for more, whether it is more rewards, press, perks, bonuses, stock appreciation, or the like. In turn, this leads them farther from reality. This disconnect means they are likely to act irresponsibly if a problem comes to the surface and put their organization at risk. (For example, Lehman CEO Richard Fuld’s denial that Lehman Brothers was undercapitalized, and his persistent rejection of advice to seek added capital.)

So, how does this relate to Buddhism and branding? At the heart of Buddhist thought is that chaos and suffering emanate from our desires. But if our desires are rooted in compassion, with the ability to see and speak the truth, we’ll be planting seeds of improvement, not chaos.

 
Similarly, as we tell leaders time and again, they play a pivotal role in shaping and defining the values that drive their brand, and more importantly, a brand is nothing without its employees. Any brand leader who loses sight of this is putting their organization and bottom line at risk.

And as George advises, “This requires reframing their leadership from being heroes to being servants of the people they lead. This process requires thought and introspection because many people get into leadership roles in response their ego needs.”

So the next time, a CEO or CMO is tempted to turn left on scandal lane, they should remember what they and their brand stands for, and that an “eye for an eye makes the whole world blind."

No brand wants to confront the news that the U.S. Supreme Court may hear a potential class action lawsuit involving alleged widespread discrimination against female employees. But for Walmart, it’s especially bad news. It’s not simply the fact that the lawsuit could potentially include one million current and former female Walmart employees (that’s one percent of all American females), it’s also that the news has been a springboard for the media to revisit previous stories involving Walmart’s low pay, poor benefits, and cheap and sometimes flimsy products.

Just as consumers evaluate brands based on how they treat the environment (BP, we’re looking at you), consumers also evaluate brands based on how they treat their employees. When a brand declares that it wants to help people “Live Better” by saving them money, it’s only natural that consumers may ask if that brand is helping its employees to “Live Better” as well. Shoppers love a bargain, but as brands associated with child labor have learned, they don’t want to feel guilty about saving money.
 
Walmart would do well to remember that the lawsuit on hand is far more than just a public relations issue: It’s an employee engagement issue. Walmart’s employees stand front and center in its stores wearing vests emblazoned with the words “How Can I Help You?” They are the face and representation of the brand— something that Walmart needs to remind itself.

Now is the time for Walmart to make the link between its many laudable corporate citizenship efforts and its brand. The question Walmart needs to begin asking itself is this: How is Walmart helping its employees “Live Better” today? There is a story to be told. Let’s hope Walmart begins telling it.