A very lively, and somewhat lubricated, conversation ensued last night with several friends in the marketing field. After cheering Canada’s narrow win over Latvia in Sochi, we got into a very philosophical discussion on brand value, worth and purpose.
The consensus?
We need a better, more consolidated lens to evaluate business and brands today.
We have several celebrated brand valuation models but, besides being a black box in many ways, they don’t seem to incorporate the new yardsticks consumers hold brands accountable to.
Aspects like societal impact. Or employee cohesion and engagement.
I’ve written previously about brands with purpose or direction. I’ve also written about the underlying ethos driving challenger brands. Brands that have a larger, and more profound, mandate than just financial growth. They are businesses and brands with a core philosophy on the planet – and their place within it.
Within those purposeful organizations, growth and financial success are regarded as an outcome – not an objective.
Outside the organization, today’s consumers are relentless in their demand for brands to be truthful, to be transparent, to have a positive societal impact, to be a haven for employee satisfaction. So in an age where most average consumers no longer deem growth and financial success sufficient aspirations for a business, why do those factors remain the key criteria for determining the value of a brand?
I get that value in a monetary sense is important (just ask Wall Street, 1600 Pennsylvania Ave and 24 Sussex Drive) but shouldn’t we be defining value in a more holistic fashion?
Value = impact
We talk about the impact a brand has on our lives all the time. Why wouldn’t we bring that same thought to brand valuations?
Consider these headlines and tell me the impact these should have on a brand valuation.
Wal-Mart Says ‘Save Money Live Better,’ But Workers Don’t Make Living Wage And Rely On State Benefits
Water for People or Profit? – Coca-Cola Sucks India Dry.
Foxconn Riot: Largest Apple Supplier Suffers Another Violent Outbreak
Tech Giants, Like Telecoms, Have Been Sharing With the NSA
Conversely, consider the impact that headlines like this should have on the valuation of a brand
Google Using Earth App to Help Save Rain Forests
Culture and Openess contribute to value too
We celebrate organizations with strong, progressive cultures regularly. Yet, its interesting that only one organization appears on both Forbes and Interbrands’ respective lists. That company is Google – ranking #1 on Forbes 100 Best Places to Work 2013 and #2 on Interbrands Best Global Brands 2013.
No reader of this blog misunderstands the synergy between strong brands, strong organizational cultures and the ability to attract and retain the very best talent. Why then is there only one company represented on both of these two well-respected lists?
We also regularly congratulate, and vilify, nations based on their respective ranking on the Transparency Index released by Transparency International. The same organization has begun shining a light on corporations too.
While Transparency International pays particular attention to corporate activities like corruption and misuse of public funds, their mandate is really about determining the contribution organizations make to the societies in which they operate.
Contribution is just another word for impact…and impact is another way to measure value.
So it is interesting to see that the Top 3 brands listed on Interbrands Best Global Brands – Apple, Google and Coca-Cola – get a measly rating of 3.2, 2.9 and 5.3 from Transparency International. In other words Coca-Cola ranks 42nd on the list of 106 organizations, Google a dismal 96th and Apple 92nd.
What gives?
Shareholder Return aint enough anymore
I completely get that all the models referenced above are based on entirely different models, analytics, ratios and inputs. And I certainly know that Interbrand, Forbes and Transparency International have way smarter and more analytical boffins poring over data than myself.
My point is perhaps simpler.
Marketers have a responsibility to measure their contributions in more ways than ROI and increased shareholder value.
Our organizations have too profound an impact on the people and the planet to use such a narrow gauge.
If we’re going to be leaders of valuable organizations, we need to broaden the definition of value.
Perhaps if we were to measure brands on the positive impact they make on society, not just on the stock market, we’ll be just that little bit closer.
I fully expect to be taken to task on my interpretation of the various valuation models. My interpretations are based on readily accessible definitions so please broaden my interpretation where I’ve strayed.
I would also like to thank my friends Scott Beffort, Emily Squirrel and Jim Sale for the conversation that inspired this post.
Published with permission
