The Branding Logic Behind Google’s Creation of Alphabet Kevin Lane Keller August 14, 2015 – Harvard Business Review!

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The Google brand is one of the most valuable brands in the world. In 2014, Interbrand placed a valuation of the brand at $107.43 billion, only trailing the Apple brand in value.

A reasonable person might ask, if the Google brand is so well-known, why muddy the waters by introducing a new parent brand, Alphabet? To help answer this question, the stories of two other iconic brands – Starbucks and Virgin – are instructive.

Starbucks

Starbucks offers a cautionary tale. There is a danger to any brand from diluting its brand promise or overextending into areas where that brand promise is not relevant.

At the turn of the century, having experienced two decades of spectacular growth, Starbucks began to view itself as more than a brand about coffee or a coffee experience, but as a “lifestyle brand” that transcended those roots to reflect more of an attitude that would be relevant to many other categories. Reflecting this broader viewpoint, the company began to expand its market footprint, by, for instance, investing in a start-up that planned to sell furniture via the internet.

Concerned about the company’s lack of focus, Wall Street hammered the Starbucks stock, resulting in a drop in share price of 28% in one day – a $2 billion loss in the company’s market capitalization. Hearing the message from the financial analysts, Starbucks went “back to basics” to focus more on its core business of coffee and a coffee experience and reaped the rewards, maintaining their price premiums and profit margins throughout the subsequent economic downturn.

However, as the decade wore on, the company made a series of decisions – using bagged coffee rather than freshly ground coffee, no longer scooping fresh coffee from the bins and grinding it fresh in front of the customer, blocking the visual sight line customers previously had to watch their drink being made, and so on – that collectively resulted in a significant loss of the personal experience that consumers had with Starbucks and its baristas. By failing to deliver on the Starbucks brand promise of providing the “richest possible sensory experience,” sales naturally slumped as unhappy customers chose to go elsewhere.

Again, Starbucks responded by going “back to basics,” making a number of changes such as introducing new coffee-making machines and selling coffee paraphernalia in stores again, bringing back freshly roasted coffee and introducing new blends (Pike Place & Blond), and famously closing all 7,100 U.S. stores in February 2008 for three hours to re-train baristas. As founder Howard Schultz remarked, “We lost the focus on what we once had, and that is the customer.”
Through these different episodes, Starbucks has come to appreciate the importance of keeping a tight focus and delivering on its brand promise.

Virgin

Virgin has taken an entirely different tack from Starbucks by directly expanding its corporate brand into an incredibly diverse set of industries. Internally, their businesses are organized into seven categories: Entertainment, Health & Wellness, Leisure, Money, People & Planet, Telecom & Tech and Travel. In all that they do, Virgin’s brand promise is to be the “champion of the consumer” – to go into categories where consumer needs are not well met and to do things differently and do different things to better satisfy them.

Such an abstract brand promise has potential relevance across a vast array of categories. Actually delivering on that promise, however, has proven to be extremely difficult, as evidenced by the problems or even failures the Virgin brand has encountered across a whole set of product and service markets. Consumers evidently felt their needs were met sufficiently well enough that they didn’t need a cola, vodka, or bridal apparel from Virgin, among many other products and services which Virgin has introduced and subsequently withdrawn. The danger to Virgin of continuing down that hit-or-miss path is that as young, hip or cool as their brand might be now, repeatedly violating their brand promise will raise doubts in customers’ minds and weaken their bonds to the brand over time.

Think of the equity of a brand in terms of a bank account. When the brand does “good things,” such as introduce a highly innovative new product, a deposit is put into the brand bank account. But when the brand does something “bad,” such as introduce a new product that fails to satisfy or excite consumers or even fails, that results in a withdrawal from that account. Virgin has benefited from the launch of some highly successful new products through the years –Virgin Megastores, Virgin Atlantic, and Virgin Mobile among others – that placed huge deposits in their brand bank account. If they are not careful, however, they run the risk of drawing down that account with too many compromises of the brand promise. The recent tragic crash of a Virgin Galactic test flight underscores the dangers associated with adopting such an expansive corporate brand strategy and the potential tarnishing of the brand that could result.

In contrast to Starbucks, the Virgin brand strategy is a high-wire act that requires incredible management and marketing skill and creativity.

Google

Google is wise to learn from these two brand histories. Up to this point, the company has employed both a “branded house” strategy, where they have used their Google corporate brand one way or another across a broad range of products (such as Google Glass and Google Play), as well as a “house of brands” strategy where they assembled a brand portfolio of different brands where the Google brand is not present (such as with Nest, Calico, Fiber, etc). Hybrid brand strategies are not uncommon, but it is important to ensure that all aspects of the brand strategy are designed and implemented properly.
In Google’s case, they have no doubt come to the realization that as strong as the Google brand is, like all brands, it has boundaries and takes on more meaning and value in certain areas. Just as a “rich, rewarding coffee experience” is at the core of the Starbucks brand, “relevant, available information” is at the core of the Google brand, following directly from its stated corporate mission “to organize the world’s information and make it universally accessible and useful.” Their search product exemplified that brand promise as well as the related different extensions that followed, maps, books etc.

As Google moved farther and farther afield, however, into areas such as driverless cars and curing diseases, the relevance of that brand promise and corporate mission seemed remote and fairly removed. The brand was being associated with too many different areas, potentially blurring its meaning and creating confusion as to its purpose for both consumers and financial analysts.

With the creation of Alphabet, Google has codified and clarified this dual brand strategy that allows them to have the best of both worlds – a tight focus with the Google brand, as well as a broad portfolio approach with the Alphabet brand. Alphabet will allow the Google brand to focus more directly on its corporate brand promise and mission. That sharpened focus will benefit their business partners, drive profitability, and be rewarded by financial analysts.

Separation also allows the Alphabet brand to serve as an umbrella brand over a diverse portfolio of individual brands. The Alphabet brand would be in the background to the individual brands making up the portfolio, although it could be used, if desired, as an implicit or explicit endorser brand.

Fundamentally, brands survive and thrive on their ability to deliver on a compelling brand promise – to provide superior delivery of desired benefits in ways that can’t be matched by another other brand or firm. By aligning their brand architecture strategy with their brand promise and product development strategies, Google has brought needed clarity to the consumer marketplace and to financial markets.
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Kevin Lane Keller is the E. B. Osborn Professor of Marketing at the Tuck School of Business at Dartmouth College and the author of the best-selling textbook Strategic Brand Management.
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You’re Already More Persuasive than You Think – By Vanessa K. Bohns – Harvard Business Review.

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It’s amazing the opportunities we miss because we doubt our own powers of persuasion.

Our bosses make shortsighted decisions, but we don’t suggest an alternative, figuring they wouldn’t listen anyway. Or we have an idea that would require a group effort, but we don’t try to sell our peers on it, figuring it would be too much of an uphill battle. Even when we need a personal favor, such as coverage for an absence, we avoid asking our colleagues out of fear of rejection.

Yet our bosses and peers would be more receptive to our comments and requests than most of us realize. In fact, in many cases, a simple request or suggestion would be enough to do the trick. We persistently underestimate our influence.

To get a sense of how far off people are in judging their influence,consider a set of experiments I conducted with Frank Flynn of Stanford: First, we asked each research participant to estimate how many people he or she would need to approach before someone agreed to fill out a questionnaire, make a donation to a charity, or let the participant borrow a cell phone.

Later, when the participants went out and made these very requests, strangers turned out to be twice as likely to say “yes” as the participants had expected. When they returned to the lab, many participants expressed surprise at how willing people were to go along with their requests. (In a separate set of studies, I found that the same holds true even when people ask others to engage in unethical behaviors, such as vandalizing a library book.)

This disconnect between expectations and reality is a particular problem in the workplace. Because most companies emphasize the rigidity and formality of their hierarchies, employees tend to assume that their influence is dependent upon their roles or titles — that if they lack official clout, they can’t ask for anything.

In research by Frances Milliken of New York University and two colleagues, the majority of 40 employees at knowledge companies reported having concerns about such issues as workflow improvement and ethics — but not speaking up about these issues to their supervisors. The belief that raising the issues would make no difference was the third most frequently cited reason. Said one employee: “Even if I did comment on the issue, it was unlikely to change anything.”

A major part of the problem is that employees tend to forget that managers are people too and that the dynamics affecting all relationships exist even in a boss-subordinate relationship. Bosses care about whether employees respect them, and they feel guilty and embarrassed if they let their direct reports down. However, people generally are unable to put themselves into the mindsets of those on the receiving end of requests. They don’t realize that the social pressure to comply with a request is very, very strong. It’s often harder for people, even bosses, to say “no” than “yes.”

To illustrate, imagine yourself in the following scenario: What would you do if you saw that the president of your company was failing to comply with a simple safety regulation? Would you stand up and ask her to comply? Or would you assume that as president of the company, she would simply brush you off? A team led by Joanne Martin of Stanford report a story of an assembly line worker who got up the nerve to ask her company president, as he was touring the production facilities, to put on his safety goggles. The president’s reaction? He turned “red with embarrassment” and quickly complied. This very human reaction suggests that the same self-conscious emotions and social pressures that drive students in a laboratory to comply with a request to borrow a cell phone affect everyone, right up to the president.

You might assume that if social pressure forces compliance, then succeeding in getting someone to agree to a request amounts to a hollow victory. After all, wouldn’t a person who gave in to social pressure, or was driven to comply out of guilt and embarrassment, end up resenting the asker? But that’s generally not the case.

Like all human beings, people who comply with requests unconsciously generate justifications for their actions. “If I granted this person’s request, I must like him,” is basically how the unspoken thought process works. So rather than feeling resentment, the person who complies with a request ends up feeling good about the asker. In fact, research suggests that the best method for smoothing over a conflict with someone may not be to offer help, but to ask for help. The target of the request is likely to comply, the justification process will follow, and feelings of positivity will start to restore the relationship. Try it. Or consider the coda to the story of the worker who asked the president to put on goggles: The executive eventually returned to tell her how impressed he was with her “guts.”

But again there’s a disconnect that stems from our inability to put ourselves in others’ mind-sets. We don’t realize that a request for compliance will stimulate a positive reaction. That’s partly because these unconscious processes aren’t widely understood, but it’s also because when we ask for something, we tend to focus too intently on our own feelings — of embarrassment, weakness, or shame — and don’t give enough rational thought to how others perceive us. We assume that persuading people will provoke enmity.

What this all adds up to is untapped potential: to influence others, to effect change, to blow the whistle on wrongdoing. We don’t venture to transcend our formal roles. We fail to benefit from others’ cooperation.

What happens when people do embrace the influence they didn’t know they had? They ask for things more readily. They don’t worry so much that people are going to refuse their requests. In a sense, they become more powerful — or at least they learn to acknowledge their latent power.

Take the story of Elizabeth, a part-time employee at a major New York City cultural institution whose boss and department head left in the middle of a massive organizational restructuring. Elizabeth herself had the expertise to take on the role, but she had an 8-month-old daughter at home and didn’t want to take on full-time work. Yet, given the organizational climate at the time, Elizabeth was worried that the senior management would simply cut her whole department — and programs she cared deeply about — rather than bring in a new person to run it. She had an idea for what to do, but she wasn’t sure whether the senior management would be willing to consider it. Despite her reservations, she came up with a proposal. She wrote out a job description in which she would take on the responsibilities of maintaining the department’s core programs, with the stipulation that her work hours would never exceed 30 hours a week and would be completely flexible.

The organization’s situation was extremely tenuous at the time, and Elizabeth was nervous approaching senior management with such an unorthodox proposal. “I felt incredibly vulnerable,” she said. But to her surprise, the management team agreed to all of her terms. “It wound up being the best job I could imagine,” Elizabeth said. “I had essentially hand-crafted it to meet my needs and utilize my skills. And I got to take my daughter to the park every afternoon. It was absolutely worth the risk and vulnerability of asking”

Similar stories emerged when I polled my friends and colleagues — stories of asking one’s boss for a title change, a higher salary, a budget increase, or even just a smart phone — all accompanied by a sense of surprise each time at that magical response: “Yes.”

I find that my research has affected my own behavior: I’ve become more attuned to the things we don’t attempt, out of fear of being rebuffed. Because we’re not attuned to others’ motivation to help us, we limit our ambitions.

I’ve also learned to recognize the responsibility that comes with this latent power. Our words have surprising impact. Not only do we need to be careful about a throwaway comment’s possible unintended consequences — say something negative about someone’s recent absence, and another person in earshot might cancel plans for a needed personal day — but we also have an implied role when we see wrongdoing or room for improvement. Like it or not, we all have a powerful tool for making change: simple direct language.

How does all of this translate into getting what you need when you need it? Research my colleagues and I have conducted offers some practical suggestions on how to make requests.

Just ask. The number one mistake people make is psyching themselves out before even asking for something.

Be direct. Another common mistake is asking indirectly by dropping hints (“Hey Bob, what are you doing this weekend? I’m going to be working on a big project. I wish I had some more help…”). We think we’re being polite by doing so and that people will therefore be more likely to agree to our requests. But my colleagues’ and my research shows that people respond more positively to direct requests. (“Hey Bob, would you mind helping me out with a project this weekend if you have time?”)

Go back and ask again. Another assumption people make is that you shouldn’t ask a person who has previously said “no.” After all, if they said “no” once, they are likely to say “no” again, right? But another line of research by my colleagues and me shows that this assumption is not necessarily true; in fact, saying “no” can sometimes make people more likely to say “yes” to a subsequent request because they feel so guilty about having previously said “no.”

Incentives are not needed. Finally, we tend to think we need to offer someone something in return for a favor — a few dollars for the trouble. However, my research shows that people are just as likely to comply with certain requests for free as they would be in exchange for an incentive. People feel good when they can do something to help someone else out.

We tend to have a lot of misconceptions about influence — how much of it we have, the best way to wield it. Fortunately, the reality is more encouraging than we imagine. The power of a simple, direct request is much greater than we realize. ________________________________________

Vanessa K. Bohns is an assistant professor of Organizational Behavior at the ILR School at Cornell University.