Six steps to keep the brand alive when the economy slides

>>By Gavin Johnston (VP of research and strategy, Two West Inc.)
Published by TheWiseMarketer.com

When the economy slides, most companies try to cut back on what they see as a cost centre: marketing, branding, and advertising. But there's a clear-cut way to win against the odds...

With a drop in expenditure on awareness campaigns, maintaining or revitalising a brand often falls to the company's greatest potential marketing tool - the employee. Of course this is rarely a conscious decision on the part of management, and when it is a conscious effort, it is typically a huge success or a dramatic failure, and there's often very little room for anything between the two.

An old, faithful strategy?
Rebranding at the beginning of an economic downturn is nothing new. As concerns over an unstable economy grow, companies often feel compelled to reinvent themselves and build new interest in the hopes of generating revenue. They also turn to employees to get the message out. This is particularly true of internal projects that are meant to bring about greater productivity, commitment and support from employees as the company deals with the ramifications of declining profits, lay-offs, and employee ambivalence that matches or exceeds that of the general public.

It is frequently something of a "catch 22" situation, because employees are losing (or have lost) faith in the company and its leaders at the very point when they are most needed to embrace the brand and live the brand. But, fortunately, there are strategies to mitigate dismissal by the employees of internal branding or a rebranding project during economic uncertainty and looming lay-offs. Without embracing such strategies, these projects will probably end in failure, no matter how creative they are.

Preparing for rebranding
When preparing for a rebranding or internal brand awareness project, it is imperative that the company should wait until after any necessary lay-offs have been made. The reason for this is that, when groups are under significant stress brought on by unstable conditions, they cease to believe what management are saying. Any attempt to "put a smiling face" on such a bad situation results not only in dismissal of the project by employees but often flat out hostility toward the company and its leaders.

In the social sciences this phenomenon has been documented repeatedly from early social theorists to anthropologists and organisational psychologists (such as Armbruster in 2006, Baba in 1986 and 2005, Foucault in 1988, and Weber in 1997). On the business side this position has been discussed directly and indirectly by well known practitioners such as Paul Falcone, Linda Trevino, Rodd Wagner, and a host of others. In short, the necessary process can be summarised thus: "Launch before the lay-offs and reorganisation and you will see very little buy-in from employees, no matter what you say. But launch after the lay-offs and reorganisation, even if only by a single day, and you are likely to see a successful response to the effort".

Cold as it may sound at first, a company needs to use lay-offs and poor performance to its advantage if it hopes to turn the company around. But how?

Six key steps
Realistically, this could be achieved through a sense of fear among employees, but that is an incredibly bad idea. It would inspires neither long-term commitment from employees nor turn them into brand ambassadors. Consequently, the whole process needs to follow the following six steps to take a gentler, kinder, and ultimately more successful path:

1. Deal with financial realities
   As uncomfortable as transparent, open communication may be, leaders (and particularly those at the uppermost levels) must relay information about the company's financial position and forecast to the survivors, establishing priorities and expectations for future decision making. Employees must be made to feel that they are part of a team, not expendable parties. They must feel that the success of the company rests partly in their hands. Doing this creates a belief that if everyone comes together and everyone knows the situation, it won't happen again. And if it does happen again, it isn't the company at fault, it's everyone. Yes, this actually works. Human beings have a remarkable capacity for embracing challenges. People also have a remarkable capacity for getting involved when they believe that they actually have something to lose beyond money. Stating the company's situation in terms that highlight the financial realities draws employees closer and helps them to develop intense loyalty even when things look gloomy. As strange as it sounds, it is rather similar to the war-time "we're all in it together" phenomenon.
    
2. Communicate with the remaining staff
   Remaining employees may feel that they will be the next in line to lose their jobs. Whether they believe it is a month away or two years away, the fear becomes ever-present. The result is usually abandonment of commitment to the company and lower productivity. Some will feel guilty (or sometimes even angry) when colleagues have lost their jobs, and they will view any attempt to get them excited about the company as being based on lies and deception. Be honest about what you know and what you can share with them, and include it as part of the branding effort. This not only minimises concern relating to employees' own job security but also diminishes the power of the all-powerful "rumour mill". This technique also goes some way toward establishes that the people at the top are trustworthy and capable.
    
3. Reposition the effort as the beginning of better days to come
   Understand that people have lost friends and will no doubt have their own anxieties about the future. Get people refocused quickly on any brand message, internal restructuring, job or function changes, and any other changes that are underway or looming on the horizon. Focus on the positives by acknowledging what has happened (e.g. agree that it was necessary evil, but the new branding effort is a path to brighter days ahead). The key here is to admit that problems that existed cannot be overlooked. Acknowledging these means acknowledging the humanity, involvement, and importance of the employees. It also makes the idea of better days ahead significantly more realistic and believable.
    
4. Make sure you take a bottom-up approach
   No matter how good a job management does at making employees feel heard and included, they're still suspected because it was the management who had to "pull the trigger". Only managers with direct, frequent contact with middle and lower level employees have rational and emotional credibility. While an individual vice president or director may be believable, management as an overall institution is always suspected (i.e. employees may know they have a good manager in their own departments, but all the rest are obviously heartless, opportunistic, and looking out for themselves). What matters is that the people who have a stake in the company on a day-to-day way are supportive.
    
5. Get top-down support
   While the rebranding effort needs to get the bulk of its drive from the base of the company, it is helpful to have a CEO or chairman who also champions the cause, particularly if they can tie it directly back to any major changes in management and policy. This, however, is difficult and will depend entirely on the top management being seen as taking a populist, no-nonsense approach to the business. If the head of the company is seen as simply carrying on a tradition of undirected change and business as usual, little will change at the lower levels. If the head of the company is seen as a having a dynamic, uncompromising, innovative approach to dealing with company problems, employees tend to believe that change for the better is attainable, and they will embrace a new internal branding effort.
    
6. Remember that logic and reason may take a back seat
   The bulk of employees understand and can articulate the ramifications of lost revenue and brand disintegration, but that does little to ease internal tensions. There is a tipping point at which reason and logic take a back seat, as worry, fear, and cynicism assert themselves. This means that any brand initiative needs to account for this heightened sense of emotional distress and recognise that employees will not be thinking about the well-being of the corporation if they do not see it tied to their own well-being on a very personal level. Making a reasoned financial case is generally irrelevant when people are in "personal survival mode". Consequently, while being transparent about the economic realities of the business is essential to a successful campaign, it is equally important to acknowledge emotional distress and react to it openly and honestly.

References...

• Armbruster, Thomas - 2006 - The Economics and Sociology of Management Consulting. Cambridge University Press. Cambridge, UK.
• Baba, Marietta - 2005 - Managing continuous improvement and culture change. Modern Casting. American Foundrymen's Society, Inc. v83, i6, p78.
• Baba, Marietta - 1986 - Business and Industrial Anthropology: An Overview (Napa Bulletin 2). American Anthropological Association. Washington, D.C.
• Falcone, Paul - 2001 - The Hiring and Firing: Question and Answer Book. American Management Association, NY.
• Foucault, Michel - 1988 - Madness and Civilisation: A History of Insanity in the Age of Reason. Vintage Press, NY.
• Trevino, Linda - 2006 - Managing Business Ethics: Straight Talk About How To Do It Right Wiley, NY.
• Wagner, Robert - 2008 - Corporate Reputation: 12 Steps to Safeguarding and Recovering Reputation. Wiley, NY.
• Weber, Max - 1997 - The Theory Of Social And Economic Organisation. Free Press, NY.