Brands don’t fail – companies do

Brands don’t fail – companies do

News last week that Billabong has been bought by US hedge funds Oaktree Capital and Centerbridge Partners was painted as a win for the future of the organisation. But the long and sad road to this point is a lesson in how brands fail.

Contrary to popular belief, the brand doesn’t fail. It is the organisation that fails and the brand follows quickly out the door. By the time the brand is failing the organisation has been rotting from the inside out, sometimes for many years (looking at you Qantas).

You might think I am splitting hairs. After all, the use of the word brand as a de facto for the company has become so commonplace it’s hard to remember that they are related but not the same thing.

Look behind any of the high profile so-called “brand” failures here and overseas over the last few years and you will find failures of business models, operating policies, management decisions and board decisions. Those failures inevitably lead to the failure of promises, and as day follows night, customers heading for the exits and inevitable decline and death.

When you think about brand as anything but a result of what you do and how you do it, there will be a point at which you feel like “okay, we are done with that for now”. That being the brand. Box ticked, initiative rolled out, announcements made, time to get back to doing other things.

Here’s the problem – those other things, the ones you are getting back to. They are what is building (or in this case damaging) the brand. That decision to move your customer service offshore. To manufacture in China instead of Tasmania. To get maintenance done in Indonesia. To acquire all those other companies to increase your distribution footprint. To ignore online business trends and instead revamp your bricks and mortar…

Going back to Billabong. Any company founded with that kind of passion and cultural mojo needs to carefully honour those roots, even as it grows and tries to take on the world.

Will it survive? No idea. The further it gets from what it cares about, the less likely. And when the discussion gets down to share price in cents and cutting costs it’s about as far from that as it can be and still have a heartbeat.

When those other things I mentioned are done in a way that doesn’t align with what you stand for, with what your customers believe you stand for, then it’s only a matter of time.

In many subtle and not-so subtle ways, companies desert their customers long before the reverse is true. The brand is just collateral damage along the way.

See you next week.

Michel Hogan is an independent brand analyst dedicated to helping organisations make promises they can keep and keep the promises they make.


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