Introducing Brand Leadership
In his most recent bestselling book , globally celebrated physicist and science storyteller Carlo Rovelli tells the story of how in 1925 a young man, working alone on a remote, windswept North Sea island, developed a radical insight that would transform how we think about the nature of things. His thinking didn’t just revolutionise our understanding of the universe; it also shaped the course of modern technology, and reverberates in much of our everyday life – from new computers all the way to solar cells and clinical diagnostics. The island was Helgoland, and the young man – who had retreated there for medical reasons – was a twenty-four-year old physicist named Werner Heisenberg.
Baffled by the inner workings of atoms and immersed in those years’ philosophical and scientific debates, Heisenberg – in a moment of true genius – chose to depart abruptly from traditional approaches in physics and start afresh from a radically new angle. He worked feverishly around the clock to develop that intuition into what was to become a breakthrough paper, laying the foundations of quantum theory – the gateway to making sense of our physical world.
In a recent interview, Rovelli describes quantum physics as ‘an extraordinary radical step. It’s the fundamental way we have found to describe how everything works… and yet it has a mysterious side. It is not intuitive. It looks strange.’
A time to unlearn
The advent of quantum physics serves as a reminder of the fact that, while change is perpetual, there are times when we feel the need to break away from what is comfortably intuitive and leap ahead; when we must challenge our certainties, set aside our deepest held beliefs and make radical departures from what we know. A process, Rovelli says, of ‘unlearning what we previously learned rather than learning new things.’
A look at the current economic debate makes it hard not to think we’re at a ‘quantum moment’, where much of what we know must be unlearned. Shaken by local and planetary crises, our most fundamental convictions about capitalism, growth and the very function of business are rupturing.
Yesterday’s assumptions about shareholder value as a singular goal are today’s relics of a broken paradigm. The role of companies is shifting – and so must our understanding of brands.
In last year’s Best Global Brands report, we highlighted some of the current context’s challenges. Inequality. Economic uncertainty. Resource depletion. Climate change. Health epidemics and pandemics. Overconsumption. Humanitarian crises. Political divisiveness. Conflict. War.
Within this context, corporations have been seen as an inevitable part of our collective problems – engines for consumption prioritising profit above all else. Indispensable but harmful. And yet, clinging on to the ‘necessary evil’ consumerist paradigm seems unviable. So, where next?
To answer this question, we must first understand the role that brands must play in shaping a better path forward.
The world’s most powerful narratives
Societal change is now seen not just by leading thinkers, but by the public too, as being a core function of companies. The business of business is no longer just business.
As a recent study conducted by Edelman, a consultancy, shows, companies have become the most trusted type of institution, ahead of government, media and NGOs.
If this is true, then brands are, by implication, the world’s most powerful narratives.
With trust in traditional institutions dwindling, it is to great brands that many of us look up for true leadership in and beyond crisis. We see them as beacons of change, and expect them to be about much more than the marketing of an offer.
So if businesses have never been so central to societies, then brands – the constructs around which trust is formed – have never been so central to businesses.
Over the past decade, our study of the world’s most valuable global brands has seen the emergence of a new league of brands: a cohort whose growth far surpasses all competition – with no signs of slowing down. This year, the cumulative value of the top 10 brands (1,649 $m) is greater than the combined value of the next 90 (1,440 $m).
Many of the brands in this league do more than offer exceptional products, services and experiences. They take sides on the most critical debates of our times, from Apple’s pledge to privacy to Nike’s stances on inclusion, to many companies’ outspoken protection of their employees’ rights.
This is a radical shift from the times when brands were consistently advised to steer well clear of controversy and focus on commerce. Extraordinary times reward bold moves, not fearful silences. Once seen as the safe way to healthy growth, today neutrality is seen as a failure of leadership; activism, its embodiment.
Doing things right, doing the right things
As a result, today’s most relevant and valuable brands are those that seem to effortlessly balance power and responsibility. As such, they are not just growth engines; they are acts of leadership that shift our expectations in terms of experiences, yes – but ethics too.
We may borrow from the work of Oxford economist Kate Raworth to illustrate this. These brands provide experiences that sit within a ‘doughnut’ – they consistently surpass customer expectations, but within the limits of ethical standards that are deliberately stricter than rules and regulations.
Fall below expectations, and demand and loyalty are at risk. Overshoot ethical standards, and reputation and governance are at risk. By operating within the doughnut, they make the moves that consistently show the way, redefining both what ‘great’ and ‘good’ look like. They show leadership, mitigate risk and sustain growth.
By combining great interactions and meaningful actions, these brands pursue more than purpose and achieve more than sheer growth.
They embrace and show what at Interbrand we define Brand Leadership – they do things right, offering superlative experiences, and do the right things, acting with uncompromising integrity. They make iconic moves that walk the talk to drive change and talk the walk to inspire it, setting the foundations for extraordinary growth.
Growth across Arenas
While the idea that exceptional experiences drive loyalty and advocacy is unsurprising, the emergence of ethics as a key driver of brand growth is intuitively in tune with the zeitgeist – but less supported by studies. To fill this gap, we investigated the subject through a global quantitative consumer study earlier this year . Our regression analysis shows that the correlation between a brand’s ethical credibility and its competitive strength is stronger than ever before – especially on the factors of Affinity, Trust and Participation.
Now, think about a personal relationship. When you meet someone whom you don’t just admire, but who also shares your values, helps solve your challenges or needs, is there for you in the moments that matter (regardless of how big or small), there’s a good chance you want to spend more time with that person – to have them more involved in your life.
The same is true of brands. When we have a strong functional, emotional and moral connection with a brand – when this brand delivers exceptional products, unequalled experiences, and acts with uncompromising integrity – we want to spend more time with that brand; we want it to succeed; and we want it to play a bigger role in our lives. We’re also more likely to trust them as they enter new spaces. We welcome them to ask, What else can I do for you?
This is precisely where the exponential growth we see across the ‘super league’ of brands begins. Built on a foundation of exceptional experiences and strong integrity, these brands can expand in multiple directions, with far more freedom and fluidity than traditional diversification. It’s not a question of ‘we do this, we can do that too’, but ‘you trust us, and here’s what else we might help you do.’
Traditionally, companies would start with a product addressing a singular, specific customer need. These companies would build a brand around a core product and then leveraged its strengths to drive growth, in pursuit of becoming a category leader. Think Coca-Cola, Gillette, Pampers or Colgate.
Now consider Apple or Google. It’s hard to fit them within categories (what they do) – things get clearer when taking the perspective of customer jobs to be done (what they help us do). Apple helps us Connect, Do, Belong, Play, Pay and – more recently – Thrive. Rumour has it that soon it may help us Move, too. Google helps us Learn, Connect, Move – and even Dwell. Nike – not a FAANG – helps us Thrive and Express ourselves. Lego, a 90-year-old brand, helps us Play and Learn, and does so in many more ways than it originally did. The same applies for the likes of Microsoft or Disney.
What these organisations do is place at their core not product, but brand, leadership. And rather than build their brand around a business, they build businesses around their brand. That may sound counter intuitive (and yes, slightly quantum), but at a time when true leadership is far more rare than competences or quality – remember, there are no bad cars any more – there is no more powerful asset than a brand that leads.
So what’s the red thread? Our trust in these companies’ Brand Leadership. Our expectation that, day in, day out, they will do things right; and, when faced with tough decisions, do the right thing. These are the brands we want to help us in new ways.
Providing superb experiences while acting with uncompromising integrity is an incredibly tall order. With mounting cynicism and distrust, scrutiny is incessant. Brand Leadership is hard to build, and easy to destroy – but it’s what sustains extraordinary growth.
These companies leverage their Brand Leadership to drive exponential growth across competitive arenas, where very different players compete for the same resources. Nike, Apple, Philips, pharmaceuticals and a host of other organisations all want to help us Thrive. And Lego, Amazon, Netflix, Roblox, bands, sports clubs and many other diverse players all want to help us Play. Who would have thought. As Columbia professor Rita McGrath writes, thinking your major competition is in your own industry creates some dangerous blind spots.
At Interbrand, we call this Arena thinking. It’s the foundation that allows our clients to make Iconic Moves.
Building Brand Leadership
As we introduce our 2022 Best Global Brands study, it’s worth reflecting on the essential steps through which we help our clients build Brand Leadership.
1. Explore your arena. Consider the needs you’re addressing now and might address next. Identify whom you’re really competing with now and may be competing with next. Look at how you might address better the jobs you’re already helping customers get done now; think about the many ways in which IKEA helps people dwell.
2. Explore possibilities. What other jobs could you help customer get done next, based on your edge, relationships, and the way the context is changing? Think about the way in which Amazon is moving across very different arenas, helping people procure, play, learn, and much, much more.
3. Define your trajectory. Determine the principles at the heart of your experience and ethical leadership that will make your brand a great and good addition to the arenas you want to play in. Be ruthlessly singular and pragmatic about what will make your brand a strong centrepoint for your business. Could your brand become a verb that encapsulates a way of doing things?
4. Make your moves. Walk the talk and talk the walk: make meaningful and visible moves that give your purpose impact and that inspire others to follow your leadership.
* * *
The turbulent times we are facing require a ‘quantum’ reset. We must unlearn the conventions of consumerism and shareholder capitalism, and embrace the new role that brands must play.
For the first time, the 100 most valuable global brands exceed an aggregate value of three trillion. Brands have never had as much power and responsibility, and on such a scale. This is a time to abandon cynicism and small thinking, and accept the influence and legacy that great brands can have on the choices and behaviours of their customers, yes – but also of their talent and communities too, be they local, regional or global.
Now is the opportunity for brand leaders to build stronger relationships beyond transactions, and intertwine constituent participation, public/private partnerships and philanthropy to address global challenges.
Like never before, the world demands businesses to show true leadership and fearless action – because when that happens, new sources of growth materialise, creating immense possibility for all.
Now is the time for business leaders to rethink of their brands as their most influential acts of leadership.
Every time that something solid is put into doubt or dismantled, something else opens up, and allows us to see further than we could before.”Carlo Rovelli, Helgoland