Of Bricks and Brands:

From Corporate to Enterprise Branding

MARY JO HATCH MAJKEN SCHULTZ

B rands have changed over the years. At first, theywere a means of dressing up products. Created

and managed almost exclusively by marketers, theywere a designed means to attract and retain custo-mers, justified by the price premiums the mostrespected brands enjoyed. Substantial price premiumsmade luxury brands the ideal, but soon corporatebrands gained ground. The first corporate brandscan perhaps be traced to international fashion houseslike Dior and Chanel, and to automotive product man-ufacturing with brands like Mercedes and BMW.

The move to branding the company rather than itsproducts gathered momentum from shortening pro-duct lifecycles. This trend was pronounced in the fastmoving consumer goods markets (e.g., Procter & Gam-ble, Kellogg, Toyota) where product branding had itsroots, but really took off in the rapidly expandingelectronics industry (e.g., Microsoft, Sharp, Intel, Dell).As product lifecycles shortened, investment in productbrands lost support because it became harder torecover the costs of creating and promoting multipleproduct brands. Globalization in the second half of the20th century played a role too, as companies thatbranded all their goods under a single name, likeIBM and McDonald’s, realized competitive advantagesfrom global recognition at the same time that theyreduced costs savings by promoting all their offeringsunder one corporate brand.

Another change that had taken place, particularlyin the U.S. and Europe, also figures into the historyof branding – the shift toward service economies.Services are always tricky to brand because theydepend so heavily on the behavior of the employeeswho deliver them. It is one thing to brand products,whose quality is at least predictable, it is quiteanother to invest in brands for which human varia-bility is a significant factor. So, as brands grew into theglobalizing economic situation, the problem ofemployee brand delivery rose in importance. Internalto organizations, this shift moved corporate brandingbeyond the domains of product branding and itsassociated marketing and external communicationfunctions, and into the territory of human resource(HR) management.

Trouble was, even though internal and externalcommunication specialists joined forces under thebanner of integrated communication, most HR depart-ments have never had a great deal of productive con-tact with marketing. As a result, turf wars preventedmuch progress toward aligning employees with cor-porate branding efforts. Still, the expansion of brandmanagement within the firm created potential forinternal integration at around the same time thatmany companies were fragmenting for other reasons,namely globalization and the outsourcing of key func-tions, such as training and development, benefits andpurchasing. Corporate brands started to have appeal asa means to communicate the strategy of the organiza-tion to its own employees. Internal marketing wasborn.

As the idea of branding the company spread, theneed to retain intimacy in the employment relation-ship was revealed to be an important strategicweapon. In order to communicate the meaning ofthe brand to employees in a way that allows themto understand the important role they play in branddelivery, brands need to speak not just to existingemployees, but also to potential employees. Strongbrands like Apple, P&G, IBM and Southwest Airlines,were clearly winning the war for talent, and HR pro-fessionals seem to like the idea of developing their ownversions of the corporate brand, known as theemployer brand. Employer branding is now a hot topicin HR circles, but when these efforts take place inisolation, independent of corporate branding pro-grams going on in other parts of the firm, they canlead to fragmentation of the brand.

Employer branding is just one example of howbrands can become fragmented, since any fracturelines caused by functional specialization can lead toconfusion in the marketplace. How can a brand say onething to one group of people (e.g., potential employ-ees), and something else to another (e.g., consumers),particularly when a single individual may belong toboth groups? What is more, in a globalizing world,many stakeholders meet brands when they travel. Themessages broadcast abroad can be quite different fromwhat they see and hear at home. The Dutch global

Organizational Dynamics, Vol. 38, No. 2, pp. 117–130, 2009 ISSN 0090-2616/$ – see frontmatter

� 2009 Elsevier Inc. All rights reserved. doi:10.1016/j.orgdyn.2009.02.008

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financial services corporation ING Group, for example,uses its corporate name in every market it serves –except the Netherlands!

Segmenting stakeholder groups may be fine foranalyzing the different interests that affect a brand,but when used to develop targeted messaging, thosewho belong to multiple groups can hear conflictingmessages. For example, the same person may be anemployee, an investor, a local community member, acustomer, and an environmental activist. Imagine a fewyears back hearing endless advertising messages aboutBP being a green oil company, while at the same timeknowing that most of its extraction processes andmanagement practices were far from environmentallysustainable. At the turn of the 21st century, such brandincoherence became an issue for many companies. Theysoon realized that saying you are a particular kind ofcompany does not make you one. Seeing that employeesbelong to other stakeholder groups and carry images ofthe company along with them into these other domainsmade authenticity a growing concern.

Today more change is afoot. As branding expandsits domain from the product–consumer relations ofproduct branding to company–stakeholder relations, amuch bigger picture emerges. Brands no longer repre-sent only the products and services that they adorn, orthe companies that stand behind them. They are com-ing to represent the vision and all the interests thatunite a disparate group of stakeholders in the pursuitof common cause, whether that cause be – for exam-ple, Novo Nordisk leading the fight against diabetes,Unilever PLC’s efforts to promote vitality, or GeneralElectric Co.’s (GE’s) ‘‘ecomagination’’ to find solutionsto the world’s toughest problems (e.g., affordable andaccessible water desalinization technology).

In our recent book Taking Brand Initiative: How to

Align Strategy, Culture and Identity through Corporate

Branding, we suggested that this latest development inbranding might be called ‘‘enterprise branding’’ todifferentiate it from the more organizationally focusedterm ‘‘corporate branding,’’ which, in turn, takes a stepbeyond ‘‘product branding.’’ The corporation is only apart of the enterprise it serves. When the entire enter-prise is included in brand management practices, thecorporate brand is transformed from a tool of self-promotion into a symbol that focuses attention onwhat the company’s stakeholders value and a set ofactions expressing and realizing those values.

The term ‘‘enterprise branding’’ implies that brandscan no longer be considered simply financial assets, orbranding only a tool of management. Brands are, andalways have been, interpreted and judged by all whotouch them. Branding practices determine how muchof this diversity of meaning is accepted and cherishedas part of the brand within the corporation. Productbrand management focuses on the customer and cus-tomer facing employees but not other stakeholders.

Corporate brand managers expand the focus to includeall employees, from top to bottom, but generally do notinclude stakeholders other than the customer. Theenterprise brand manager is willing to embrace allof it.

Grasping how brand managers move down thepath from corporate to enterprise branding involvesreaching into the deepest layers of a company’s reasonfor being. At the same time it demands extending theboundaries of the organization to include all stake-holders. To explain why it is necessary to enlist insideand outside, past and future, and all levels of thehierarchy in the branding effort, and how this canbe achieved, we place organizational identity at thecenter of brand thinking.

W H A T ’ S I N A B R A N D ?

Brands have traditionally been defined by the symbolsthat represent them. The Swoosh logo and the overallstyle associated with the Nike Inc. brand offer oneexample, the M-shaped Golden Arches of McDonald’sCorp. another. Much time, effort and money have beeninvested in designing the right symbols to commu-nicate brand promises, in the case of product brands,or strategic vision and corporate style, in the case ofcorporate brands. But defining brand management inthis way misses a central point – brands need toauthentically express the identity of the firms theyadorn. Today this is as true for product brands as it isfor corporate and enterprise brands.

S y m b o l i c M e a n i n g

Brands are much more than visual symbols. Forbetter and worse, they are comprised of the meaningsmade by those who use their symbolism. Some ofthese meanings will be flattering to the organization,others will not. Think of the horrific images of McDo-nald’s left in the wake of Morgan Spurlock’s film Super

Size Me. But all meaning-making that occurs around abrand informs the organization about how its manystakeholders see it.

The images stakeholders form and communicateamong themselves are mirrored back to the organiza-tion, providing important feedback that can help a firmto know itself. Thanks in part to the uproar created bySuper Size Me, for example, McDonald’s is now acutelyaware that it needs to adapt to an increasingly obeseworld. Just as individuals who try to operate outsidesociety become less than human, organizations needto listen to their constituencies in order not to go awry.

That identity depends upon social processes wasfirst suggested by social psychologists at the beginningof the 20th century. One of them, George HerbertMead, explained the identity of an individual asa conversation between the ‘‘I’’ and the ‘‘me’’ (see

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Fig. 1). In childhood, the ‘‘me’’ forms in response towhat others say about it: ‘‘you are a good girl,’’ ‘‘you are amessy boy.’’ The ‘‘me’’ is what allows the child to for-mulate the notion ‘‘mine!’’ which informs other ideassuch as ‘‘my nose,’’ ‘‘my toy,’’ and so on. The child startsto figure out that behind all that is ‘‘mine’’ stands ‘‘me.’’This produces an embryonic sense of self that is basedon what others say about it. The ‘‘I’’ starts developingsoon after, in reaction to the ‘‘me,’’ as the child learnsthat it can resist what others say. Those terrible twos areall the evidence most parents need to grasp Mead’sconcept of the ‘‘I’’ as a counterbalance to the ‘‘me.’’

It is important to recognize that the ‘‘I’’ can resist,conform to, or negotiate with the ‘‘me,’’ but no matterin what combination these efforts are made, there is aconversation between the two parts of identity. Iden-tity emerges from this conversation, implying thatidentity forms and reforms continuously throughoutlife as new inputs to the ‘‘me’’ are provided and as the‘‘I’’ formulates new responses to them.

However, if the identity conversation tilts too far inthe direction of the ‘‘me’’ then the individual’s identitymay be overly influenced by others, as often happens inadolescence. When this occurs, individuals tend to losethemselves in efforts to please (or to displease, as in

deviance). Conversely, if the identity conversation tiltstoo far toward the ‘‘I,’’ as can occur when someoneenjoys too much early success in life, then the conversa-tion becomes egocentric and the individual can fall preyto narcissism. The key to a healthy identity is keepingthe conversation in balance. Mature, well-adjusted indi-viduals are able to sustain balanced identity conversa-tions over long periods of time even though everyidentity goes through periods of imbalance.

O r g a n i z a t i o n a l I d e n t i t y

The same processes that form identity at the indi-vidual level occur in organizations, though with fargreater complexity due to the number and variety ofpeople involved in the identity conversation (seeFig. 2). Like individuals, organizations receive feedbackfrom their environment. To maintain a healthy iden-tity, they must learn to balance what they hear aboutthemselves (that which produces the organizational‘‘me’’ or ‘‘us’’) against what they know themselves tobe (the organizational ‘‘I’’ or ‘‘we’’). Organizations suchas Toyota Motor Corp. and GE that maintain a balancedidentity conversation do not simply respond to everydemand placed upon them. They first reflect on new

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FIGURE 1 MEAD’S TWO ASPECTS OF AN INDIVIDUAL’S SENSE OF SELF: THE ‘‘I’’ AND THE ‘‘ME’’

information in the context of their organizational cul-ture and values and decide what response would betrue to both their heritage and their aspirations. In thisway the identity conversation is neither overly focusedon the ‘‘we’’ nor on the ‘‘us.’’

Of course every organization will go through per-iods of imbalance during which it must adjust itsidentity conversation if it is to avoid the more extremeproblems of narcissism and hyper-adaptation. If cor-rected in time, these problems will not bring direconsequences. But if extreme imbalance occurs, anEnron Corp. or AT&T Corp. may appear. Narcissismdestroyed Enron when this company convinced itselfthat it could ignore what others thought about it. Eversince its breakup in 1984, AT&T has battled hyper-adaptation, trying to be something for everyone, asreflected in its most recent slogan – ‘‘Your world.Delivered.’’

When an organization’s ‘‘we’’ responds authenti-cally to the influence of others by tapping self-knowl-edge, the organization has a good foundation forbuilding a strong brand in the alignment betweenits culture and the images its stakeholders commu-nicate. Thus, at the heart of any corporate brand youwill find the organization’s identity. If that identity ishealthy, the corporate brand has a chance to be strong.If there are identity problems, then corporate brandingis likely to magnify them.

V i s i o n

There is one more piece to the corporate brandingpuzzle, however, and it is the one that is most manage-able – strategic vision. With the addition of a clear andrelevant vision, branding becomes a process of align-ing vision, organizational culture, and stakeholderimages (see Fig. 3). But beware, simply driving visiondownward through the organization and outward tostakeholders can become self-insulating, or even nar-cissistic. Many top managers have this in mind whenthey start contemplating corporate branding.

What the identity component of branding makesclear is that, if it is to have any real and lastinginfluence within the enterprise, strategic vision needsto be part of the organization’s identity conversation.Some years back, Jim Collins and Jerry Porras devel-oped what is today one of the most familiar models ofstrategic vision. The model has four elements: corevalues, shared purpose, BHAGs (big hairy audaciousgoals), and vivid description of the desired end state.

Placed within the VCI (vision, culture, image) fra-mework, the elements of the Collins and Porras modelmap onto organizational culture (core ideology = corevalues + shared purpose) and strategic vision (envi-sioned future = BHAGs + vivid description). Thus weinterpret Collins and Porras as saying that whenorganizational culture supports top management’s

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FIGURE 2 THE ORGANIZATIONAL IDENTITY DYNAMICS MODEL

envisioned future, strategy will more likely besuccessfully executed. This is only partly true. Inour view, without alignment between vision and sta-keholder images there is no guarantee that executinga strategic vision will contribute to organizationalsuccess.

Enterprise brand thinking (i.e., brand thinkinginformed by communication with all the organiza-tion’s stakeholders – internal as well as external)shows that vision is as much an outcome of identitydynamics as it is an input. Top managers need to listenand respond to both internal and external stakeholdersif they want to formulate a strategy that employeescan and will deliver, and that other stakeholdersunderstand and support. Of course this approach tobranding sacrifices a considerable amount of manage-ment control.

I F Y O U C A N ’ T C O N T R O L A B R A N D , W H A TC A N Y O U D O ?

Since brands involve systems of symbols, managing abrand implies managing symbolic meaning. We knowfrom widespread failures to control organizationalculture how difficult this can be. People make theirown interpretations of events, objects and symbols.

The best managers can do is to engage in the processesof meaning-making with them. This will allow someinput, but certainly not control. We say this in spite ofthe fact that many companies desperately seek mea-sures with which to gain the upper hand in the man-agement of their brand’s meanings. While there areproven methods of measurement in the world ofbranding (e.g., brand awareness, intention to buy,brand equity), their underlying logic cannot explainhow the meanings carried by brand symbols translateinto affection and support for a brand during its life-time. This knowledge can only be acquired by contactwith those who make the brand’s meaning what it is –the internal and external stakeholders who are thetrue owners of the brand.

Most important, when working with brand symbo-lism, managers need to be aware that any real engage-ment with symbolic meaning is an entry point toorganizational change. Like it or not, communicationis a two-way process, and brands are communicativesymbols – as McDonald’s learned with respect to theobesity crisis. Respect for the meanings brand symbolscarry, and involvement with the processes by whichthese meanings shift and change, keep an organizationin touch with its stakeholders and give it the best chanceto respond to inevitable changes in expectations intimely and appropriate ways. This openness to outsideinfluence brings internal change. The companies westudied significantly reformed their organizationalstructures and management practices as a result ofresponding to their stakeholders’ images. Some arenow feeling the effects of these changes as they flowinto their products and their business models.

The changes made in response to stakeholderexpectations and desires should complement the cul-ture of the organization. If the culture is lost, so too isthe balance in the identity conversation, and brandingwill suffer along with culture loss. The balancing actoccurs in the alignment of vision, culture and images –you are juggling three balls. The first involves lookinginside and outside, that is, at both internal culture andexternal images. The second involves looking both upand down, from involving top managers to engagingall employees throughout the hierarchy. The third is abackward and forward move that requires looking tothe organization’s heritage and to its future at thesame time by asking both ‘‘Who have we alwaysbeen?’’ and ‘‘What will we be in the future?’’

With this juggling act in mind, how do you influ-ence a brand? The best way is to let your organizationbe influenced by your brand, both inside its own wallsand throughout the larger enterprise of which it is apart. Start with simple things, what you do everyday asa manager. How might you redesign your daily activ-ities so that they communicate the spirit of yourbrand? Is everything you do representative of thebrand at its best and most creative? For example, is

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FIGURE 3 VCI MISALIGNMENT CAN OCCUR

IN MANY DIFFERENT WAYS, BUT ALL OF

THEM WILL AFFECT THE OVERALL

PERFORMANCE OF A BRAND

your recruiting done in a way that expresses what yourorganization stands for without having to name it (i.e.,reel off a list of proclaimed values)?

Southwest Airlines Co. famously illustrates whatthis looks like with a story they tell about recruitingpilots. Southwest, whose brand exudes playfulness,often improvises during interviews with recruits tosee how their potential employees will react. One storytells how, on a hot August day, several pilots came infor a group job interview. They arrived wearing typicalpilot attire: black suits, white shirts and ties. Seated ina hanger at the start of their day, a manager gave hisintroductory pitch. Seeing them suffer the heat in theirbusiness suits, the manager offered each recruit a pairof Southwest-issue Bermuda shorts from a pile on anearby table. A few of them made the change in spite ofthe fact they looked a little silly in the combination ofshorts, black socks and dress shoes! At the end of thelong day, it was the pilots who changed their clothesthat were asked to work for Southwest.

If you are someone who cares more about comfortthan how silly you look, Southwest is willing to bet youwill pitch in when bags need to be unloaded in a hurry,or when a customer has a problem. While many pilotshave become used to standing on ceremony andasserting their status, the Southwest recruiter’sbrand-relevant improvisation on a sweltering Augustday served to identify those most likely to fit into thecompany’s ‘‘we’re all in this together’’ culture. Expres-sing the brand in this situation paid off immediately byallowing the recruiter to assess the job candidates.Their responses to the offbeat offer to wear South-west-issue shorts demonstrated their likely compat-ibility with the organization’s culture.

Ask yourself: How might each and every job andtask within my company be touched by brand spirit?Start with yourself: What can you do to express yourorganization’s brand and culture as you go about thenormal routines of daily work life? The list will beendless, particularly when you consider that, in abranded company, you do not need or even want todo the same task in the same way every time. Whenemployees are encouraged to create new expressionsof the brand every day, their interest in work remainsactive and the brand lives. But getting employees towork the brand into their daily tasks demands evenmore loosening up on the notion of control – control-ling how employees perform their jobs in relation tothe brand will suck all the fun and motivation right outof your organization. Licensing creativity around theuse of the brand is key.

B R I N G I N G B R A N D I N G T O L I F E I N S I D E T H EO R G A N I Z A T I O N

The recruiter who improvised in the pilot interviewsituation was thinking like the Southwest brand: how

can I do this routine aspect of my job in a way thatexpresses the heart and soul of Southwest Airlines? Inputting the brand’s spirit and style into this task, therecruiter demonstrated a tacit understanding of theSouthwest brand. Otherwise he could not have impro-vised on its core meaning in the moment of a hotsummer day. If he had stopped to design this inter-vention, it would have felt contrived rather than play-ful and thus would have communicated the wrongmessage (‘‘Southwest makes you figure out a way towork the brand into everything you do,’’ versus ‘‘Youare directly experiencing what the Southwest brandmeans in daily life around here’’).

Because the Southwest recruiter felt licensed to becreative with the brand, he was able to do what feltnatural in the moment – to have some fun withpotential recruits. Style such as this will not be easyto achieve if your organization is better known for itscontrol of employees then for their creativity or inno-vation. Nonetheless, working with the brand permitsinput from employees. If this input clearly inspireschange, it can go a long way toward realizing the kindof employee-backed brand performance SouthwestAirlines enjoys.

In part, the first lesson is just good old role model-ing, but it is something more. It is your commitment tolet branding become a key symbol within the organi-zation’s culture. If it is done well, you will not have toask your employees to emulate your behavior, or setup reward systems to get them to do it; they will do itbecause it is obvious and because it is satisfying. Toomuch work is demotivating because it stifles enjoy-ment and creativity. Corporate branding, because itconnects everyday culture with strategic vision, pro-duces meaningful work. People are no longer justdoing their jobs; they are realizing a larger purposethat they have had a hand in defining.

Remember, when it comes to branding, step awayfrom traditional management control practices. If youput brand thinking into your management practices,then employees will catch the spirit and embrace thestyle. And, if you license employees to make choices inhow to do their jobs creatively to better express thebrand, chances are many will be inspired enough toachieve things you would not dare to expect fromthem. A few kind words about their efforts or simplytelling stories about what they have accomplishedwill likely spread the process to holdouts. Beforeyou know it, you will have forgotten all about con-trolling brand expressions and will be heavilyinvolved in helping employees find more and better

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Lesson 1: Put the brand behind your employees before

asking your employees to get behind the brand.

ways to express the brand in their own unique ways.You will be amazed at how much fun and motivationthis adds to work.

This may all sound utopian or even dangerous. Ifeveryone does his or her own thing with your brand,how will outsiders recognize it? A paradox is at workhere. You need to both control the official brand mes-sages emanating from your organization AND sharethe power to communicate the brand with youremployees. It is important that you repeat the officialmessage about your brand often enough for it to beunderstood and remembered. But insisting thatemployees repeat that message rather than interpret-ing it in their own ways is just silly. For one thing,demanding consistency of message is not practical inthe digital age, where every blogger has a platformfrom which to speak his or her mind. For another,forced messaging will never lead to responsiveness inthe identity conversation. You need to demonstrate toemployees and other stakeholders that you under-stand they are part of the conversation that decideswhat the brand means; that you respect their role. Andyou must mean it. Do all this with brand style and youwill produce a winner.

C a s e i n P o i n t : L E G O G r o u p

LEGO Group learned to do this, in part, through atraining program they developed known as LEGOBrand School. At first the Brand School was designedin typical top-down fashion to get employees toalign themselves behind the LEGO brand. They werepart of a larger rebranding effort the company hadstarted in the hope of renewing a tired brand image.But the program’s backers felt something was miss-ing when employees complained that the BrandSchool did not give them enough insight into howthey could do their jobs in brand-relevant ways. Theemployees felt they needed more direction thanseemingly endless discussions of brand values weregiving them.

As a result of the feedback, program leaders rede-signed the Brand School to include a segment whereparticipants communicated their feelings about theirjobs and the company – using constructions made ofLEGO bricks and mini-figures. They understood thatto get employees engaged enough to pull this offmeant permitting and encouraging them to formimages of what the brand meant to them, personally.Putting the beloved LEGO brick into the training pro-cess was intended to help employees express them-selves in ways that would extend to the dailyexecution of their roles within the company. It did,but this experience did something else as well. Theobjects the second-generation students createdpointed to the employee’s quite serious concernsabout the company’s future. ‘‘We killed our cash

cow,’’ proclaimed one of them. ‘‘We got hung up bythe security net,’’ stated another. ‘‘There are too manyskeletons in the closet,’’ observed a third.

Around the time that the second-generation BrandSchool model was rolled out, a new chief executiveofficer (CEO) was appointed to turn the companyaround. By this time, company profits had been downfor several years, and hopes for the future were nothigh. Fueled by changes in children’s play due to atrend known as KGOY (kids getting older younger),increased competition from globalization, newentrants to the toy market coming from the electronicsindustry, and company policy that encouraged brandextensions to run wild, the company was in direstraights.

As part of his preparation to take over leadership,the new CEO and his top management team attendedseveral second-generation LEGO Brand School ses-sions. There they learned how employees viewedthe company’s problems. As a result, their decisionsmoving forward were informed by what the employ-ees could see needed to be done. Saving the brand wasclearly a shared concern, which made tough decisionsinto a heroic effort to preserve the iconic LEGO brand.The Brand School helped the new top managers seethat the brand was among the company’s most valu-able assets.

Though the program to retrain employees in BrandSchools started out as one-way communication of thebrand, putting the brand into employees’ hands (quiteliterally with the imaginative use of LEGO bricks)meant giving them the chance to talk back to thecompany and to be heard. Because that feedbackwas in the form of LEGO brick constructions, it hadthe important quality of being ‘‘LEGOized.’’ Becauseeveryone was talking through the brand, so to speak,the common symbolic ground focused the conversa-tion on the company instead of throwing blame. Thebrick made it possible to say, ‘‘We are gravely con-cerned’’ without sounding like complaining children.Sharing power within the Brand School, though per-haps not initially intended, led to authentic commu-nication between employees and their new topmanagement team. On this foundation of a healthyinternal identity conversation, a difficult turnaroundbegan.

Although other actions figured into the turn-around of the LEGO Group and its brand, the BrandSchool was certainly part of the success story. Theschool experience shows that you cannot plan every-thing where corporate branding is concerned, andthat too much control is counterproductive. Every-thing you do with your brand needs to be adapted toan identity conversation that emphasizes listeningand responding from within the context of your orga-nizational culture. With this type of two-way com-munication, employees will always be a part of the

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picture managers see when it comes time to formulatestrategy or vision.

R E C O G N I Z I N G T H E L I F E O F T H E B R A N DO U T S I D E T H E C O M P A N Y

LEGO Group’s new CEO brought with him curiosityabout and a willingness to connect with brand fans anduser groups. Jorgen Vig Knudstrop was only 35 whenhe became CEO, and he is a member of a generationthat gets new media in their bones. When a group ofLEGO employees made a case for connecting withLEGO brand communities, he instinctively went alongwith them to see what was up.

At the time, adult fans of LEGO (AFOLS) were not ofmuch concern to the company. They were considereda shadow market – interesting, but too small to beworthy of corporate attention. However, some ofthese fans had created an active Web site known asLUGNET (LEGO User Group Network) whose member-ship was expanding rapidly, particularly in the AFOLsegment. A few LEGO employees had been champion-ing LUGNET as a source of input to company decision-making, and the new CEO decided to attend one of theLEGO BrickFests that LUGNET members organizedannually.

Along with his family and company owner KeldKirk Kristensen, who also happens to be the grandsonof LEGO Group’s founder, the new CEO appeared at aBrickFest gathering in Washington D.C. There he gavea short talk and held a question and answer sessionwith attendees. Through this engagement, supportedby a few days filled with experiences of LEGO playoffered by some serious fans, he learned firsthandwhat an amazing resource they were. The fans hadmore and often better ideas about how LEGO playmaterials could be used than did the company itself,and they had been sharing these ideas with each otherfor years using the Internet. As a result, the fans weremore familiar with new media applications than wasthe company that provided their much loved playmaterial.

Knudstorp and Kristensen easily recognized thatseveral of the fans’ ideas could make successful newproducts. The LEGO Group had already learned thatsome of the AFOLs had the knowledge and skills tohack the software that operates LEGO Mindstorms, thecompany’s robotics line. Within a few days of thelaunch of the original Mindstorms series, a group ofenthusiastic fans cracked the product’s software code.But rather than suing them as other companies mighthave done, LEGO Group gave its users a license to hack.

Once it became clear that LEGO fans had much tocontribute with respect to new product ideas andtheir applications to play, it was natural to extendtheir involvement. LEGO Group directly involvedtheir fans by inviting four American brand fans towork side-by-side with LEGO employees to developthe next generation of Mindstorms products. Over aperiod of 11 months, the four fans collaborated clo-sely with the R&D (research and development)department, motivated only by their dedication tothe brand. As one of them, John Barnes, said to Wired

Magazine: ‘‘If it had been any other company thanLEGO, I wouldn’t be here.’’ LEGO Mindstorms NXTwas launched in 2006 and, with the help of the LEGOfans, grew into the world’s most popular line ofrobotic tool kits. It has since inspired other fan-involved LEGO developments, including books andnew programming languages as well as company-sponsored online brand communities and eventsfeaturing applications of LEGO robotics and otherproduct lines.

One of the company’s most recent co-created pro-ducts displays the names of the fans who helpedcreate it. The packaging for these products announcesthey were ‘‘Designed by LEGO fans.’’ In this case, LEGOGroup invited 10 LEGO enthusiasts to participate indeveloping the new LEGO Hobby Train product thatthe company launched in 2007. The LEGO managersgave the fans the basic premise for a LEGO trainsystem and specified how many LEGO elements toinclude in the full play experience. The rest of thedevelopment was left to the fans, who decided what aLEGO train should look like through on-line interac-tion – or rather they created 15 different train modelsthat can be created from the same set of bricks.Who knows what future users will bring to thisnew product.

Through these and other experiences, the companylearned that they could allow customers to use theircomputer-aided design system – the one that LEGOdesigners use to create the LEGO sculptures on displayat LEGO retail stores and at LEGOLAND Theme Parks(no longer fully owned by LEGO Group) – to designtheir own creations. The computer system not onlytells users what bricks they will need and how toassemble their designs, it will place an order and alloweach user to customize the box in which the LEGObricks are delivered.

With so much help from fans, one of Knudstorp’srecent interviewers suggested that LEGO Group mightsoon consist of its CEO and two assistants! Knudstorpassured him he would not go that far. In fact, LEGOGroup has just decided to in-source their manufactur-ing, after having left it to world manufacturer Flex-tronics for the past three years. There will be manymore examples of employee–stakeholder collabora-tion to come.

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Lesson 2: Always engage the identity conversation

before (re)formulating strategic vision.

I N T E G R A T I N G I N S I D E A N D O U T S I D E

Thinking about branding from the inside as well asfrom the outside brings us back to our initial point:ultimately brands need to relate to the entire enter-prise of which the company is a part. One of LEGOGroup’s stated core values is Playful Learning and thecompany has long contributed to knowledge aboutchildren’s play through the research it sponsors. Soit knows how play with the LEGO system aids childdevelopment – it provides the user with a tight logicbuilt into the way the bricks fit together – but withinthis logic users can build anything their imaginationsallow. The company refers to its value for this type ofplay as Systematic Creativity.

Toward the end of the 20th century, the LEGOGroup lost its way. It had forgotten the heritage thatproduced the LEGO brand. In spite of, or maybebecause of winning not one but two Toy of the Centuryawards for the LEGO brick, the company had notstayed current with the kids on whom its successultimately rested. Kids found the brand dusty andold fashioned. Parents still believed in the brand andthe power of the LEGO system of play to help theirchildren develop creativity, but if the kids did not fancythe products, then the brand was missing out on itspotential and possibly undermining its future.

The hard work of turning both the brand and thecompany around rested on admitting that too many endusers did not respect the brand. LEGO Group came to thepainful conclusion that the world had changed whilethey were looking the other way. Its marketplace hadaltered with the incursion of electronics companies;LEGO’s efforts to compete with them head-on led thecompany into products that were well beyond its reach.Overextension of the LEGO brand in this and otherdirections was rampant by the end of the 20th century,when the company finally returned to its core in con-struction play. It was a niche market perhaps, but thismarket had made the LEGO brand into a global icon.

By re-establishing its identity as a constructionplay company, LEGO Group embraced enterprisethinking. Focusing all products on construction playand its developmental benefits (enabling PlayfulLearning and Systematic Creativity within a structuredand logical system of constraints), became a guidingprinciple for decision makers. Products and otheractivities that did not fit the brand had to go in theinterests of focusing the company on what it standsfor. The identity became central to internal discussions

as the brand helped guide the company out of trouble,backed of course by a CEO who recognized its enor-mous value to LEGO stakeholders.

Inside the company today, new LEGO employeesare trained in a version of the Brand School thatincludes LEGO Ambassadors, a group of LEGO fanswho volunteer for this service on behalf of theirbeloved brand. This practice provides another vehiclefor fan involvement in addition to consulting withproduct designers. As the result of their presenceinside LEGO Group, employees have become accus-tomed to including stakeholders in their internalconversations about the company and its products.And CEO Knudstorp continues to attend BrickFests –where these days he is treated almost like a celebrity,though this does not mean he is exempt from hearingcriticisms if LEGO Group tries to do something thatdispleases brand fans.

H O W T O O R G A N I Z E F O R B R A N DM A N A G E M E N T

Managers always ask us how best to organize in supportof their brand. Should branding be located in market-ing? Communication? HR? Should it be a function on itsown? Behind this query lies a mental model of theorganization as a set of responsibilities to be dividedand delegated rather than shared. You might hope tomanage the brand from within a new department or anexisting functional unit, but ultimately you will learnthat, to succeed, your brand needs to represent a diver-sity of interests. Such learning typically leads companyexecutives to the use of a cross-functional team. Butmanaging a cross-functional brand team effectivelyrequires that you understand why so much of brandingslips between functional cracks (see Fig. 4).

Think about all the change management programsyour company has put in place over the last five to 10years. Your business development team has likely cre-ated several programs aimed at improving your strate-gic vision, while human resources enrolled employeesin numerous training and development activities aswell as some culture change efforts. HR probably alsosponsored multiple programs for attracting the rightpeople into your talent pool. Simultaneously, your mar-keting folks have doubtless been involved in severalefforts to refine the style of your advertising and sales toreach more customers and to delight the ones youalready have. Meanwhile, the communication team

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Lesson 4: Listen and respond to your employees,

brand fans and critics and you will develop your

organization in directions you might never have

anticipated but that will sustain your business for

future generations.

Lesson 3: Welcome brand fans as volunteers, make

them part of your management and decision-making

teams and give your employees access to their ideas

and wisdom.

has developed numerous programs to better respond tothe media, investors, your local communities, and otherkey stakeholder groups. But are you getting full valuefrom all the work that is being done in these areas? Areall these programs dovetailing to realize synergies, orare they independently conceived and possibly inco-herent from the perspective of serving the brand?

Chances are, when the managers of these pro-grams get together, they do not focus much energyon considering how the effects of their programsmight interfere or compete with the effects thatother programs are having. This is why teamworkis required to manage a brand. Once you put a cross-functional team in place and ask them to bring newsof what programs the company is currently runninginto their discussions of how to apply brand thinking,you will begin to see benefits from shared knowledgeand experience across the firm. Of course your chieflearning officer has been promoting programs to dothis for years, but without the brand symbolism toremind everyone of what is at stake and what trulymatters, it is difficult to coordinate so many movingparts.

Any natural barriers to communication betweenthose running your myriad change programs will beamplified by the turf wars that almost always comewith functional specialization. To integrate the func-tions that need to get behind branding you willneed to identify and address any gaps that existbetween your strategic vision (V), organizational cul-ture (C), and stakeholder images (I). The issues toaddress in regard to VCI alignment are numerous,and some companies try to formalize this complexprocess by specifying all stakeholder touch points anddeveloping systems for monitoring and managingthem.

We find it more useful to keep asking the threecentral questions of the VCI model: Who are we?What do others say about us? Who do we want tobe in the future? and What will our stakeholders thinkabout us along the way? Of course there is nothingpreventing you from doing both. But, no matter what,you must find and correct any VCI gaps that threatenyour brand.

While companies use many different techniques toobtain the knowledge needed to diagnose VCI align-ment, we describe those we have found to be mosthelpful in Table 1. Each of these tools is used by one ormore of the companies we have worked with, and theycan all be used in combination, provided you have therequired resources and your managers are ready forthis much input. Otherwise consider working up to acombination by adding first one and than another toyour brand assessment repertoire.

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FIGURE 4 DIFFERENT CORPORATE FUNCTIONS NEED TO COMMUNICATE IN ORDER TO ACHIEVE

VCI ALIGNMENT. SILOS AND TURF WARS CAN DISRUPT THE IDENTITY CONVERSATION

Lesson 5: Never let corporate branding become new

turf to be conquered in your company. Keep branding

in the domain of the total enterprise by sharing

responsibility and creative imagination with your

employees and other stakeholders.

T H R E E P A R A D O X E S O F B R A N DM A N A G E M E N T T O D A Y

Throughout this article we have emphasized managingbrands across the boundary between an organization’sinside and outside, showing how internal (employees)and external stakeholders share ownership of themeanings that brands carry. We have shown howand why managing a brand effectively involves look-ing both inside and outside the company – and howand why paying attention to employees and theirorganizational culture helps to align a brand. Butaligning culture and images by accepting the paradoxthat an organization’s inside and outside are inter-twined is only one of the paradoxes of brand manage-ment.

Much managerial advice, such as that given by JimCollins and Jerry Porras in Built to Last, emphasizeslinking vision with culture. Similarly you can find loadsof advice about linking stakeholder images with stra-tegic vision. For example, according to Kevin Elliott,vice president for merchandising at 7-Eleven, Inc.,customers relate to brands with emotions that triggeror block a person’s commitment to that brand. But fewnotice that linking vision with both organization cul-ture and stakeholder images creates the foundation forgreat brands like those of LEGO Group, Starbucks Corp.,

Southwest Airlines and JetBlue Airways. These brandsall reflect visions with an intrinsic appeal for employ-ees and other stakeholders – they are enterprisebrands.

For example, Southwest’s vision to ‘‘democratize’’the skies has fueled tremendous loyalty to its brand onthe part of its customers, but also serves to inspireemployees who find that they are not just working foran airline, they are helping to create a better world.And it does not stop there. Such inspiration spreads toinvestors, partners, regulators, unions, special inter-ests and other stakeholder groups comprising the fullenterprise to which this brand relates. The movementtoward customer focus is only one step in the directionof aligning vision, culture and images. Maintaining ahealthy identity conversation with all stakeholderswill build your brand and allow it to reach its fullpotential as an enterprise brand. But involvement atthe top levels of the organization is important too.

A strong brand requires the involvement of topmanagers just as it benefits from the engagement ofall employees throughout the hierarchy. Thus it is asecond paradox of brand management that you mustcontinuously look both up and down the hierarchy.Branding is not just a matter of communicating thevision of the company to employees and encouragingthem to carry it out; all companies do this to some

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TABLE 1 VCI ALIGNMENT ASSESSMENT TOOLS.

TECHNIQUE ACTIVITIES INVOLVED CHALLENGES

Survey stakeholders

(including

members of your

organization)

Compare reputation and market research on different

stakeholder groups with regular surveys of employee

perceptions of the company and confront any

disparities. What does each group think of us as a

company, what we stand for, what we deliver and to

whom?

Make sure the way you measure performance and

stakeholder perceptions matches the vision and

identity for your brand. All too often inside and

outside data are not comparable and/or do not

tap the uniqueness of your brand platform.

Dialogue between

middle managers

from key business

functions

Bring together a team of middle managers from the

functions most essential to your corporate brand and

let them diagnose any VCI gaps your company faces.

Include at a minimum representatives from the

functions of corporate marketing, corporate

communication, human resources, business

development and sales.

Different functions use different concepts – often

referring to the same ideas with different terms.

Therefore, you must develop a framework and a

language that everyone can use when talking

about the corporate brand. Make sure all

managers understand that no single function

controls corporate branding, it is a shared

responsibility requiring shared leadership.

Dialogue between

brand managers

and stakeholders

Look for or invent opportunities to bring the people living

and experiencing your brand together in conversations

about what the brand means to them and how well it

fulfills their expectations and desires. Find the

stakeholders who can make the biggest difference to

your brand – your most enthusiastic supporters and

critics.

Instead of talking about how others perceive your

brand, invite them to meet your management

team or take your management team to visit them.

Do not avoid criticism, but be clear about how you

will respond; promise no more than you can

deliver. Link these conversations to internal

change processes and to internal debate about

strategic vision.

Create events and

establish routines

that connect

stakeholders to

each other via

your brand

Locate the most critical events and routines that deliver

your brand promise. Confront top management with

the day-to-day realities of how your brand is executed

in ‘‘moments of truth,’’ both inside the company and

across its boundaries. Learn how stakeholders

experience your brand, what makes them feel like they

belong, and what makes them feel like they don’t.

The truth about your brand is often found in

everyday details. If you never experience these

details yourself, how will you know your brand?

How will you influence it? Very often managers

get distanced from stakeholder experiences of

the brand. Get them back in touch.

extent. Branding can be a vehicle for communicatingup as well as down the chain of command, as the LEGOBrand School demonstrated so powerfully. When thisaspect of branding is done well, the vision of thecompany aligns as much with the values the organiza-tional culture holds dear as the other way around.

The key for managers in regard to handling theparadox of managing up and down the hierarchy islistening and responding to employees and under-standing and participating in their organizational cul-ture. When you work side-by-side with youremployees you absorb their ways of understandinginto your formulation of strategic vision. As youbecome accomplished at incorporating an understand-ing of organizational culture into your decision-mak-ing, employees will appreciate your concern for theirvalues and most will be willing to reciprocate byworking your vision for the future into their thinkingand the brand’s style into their behavior. They will alsohave the benefit of seeing how their culture supportsstrategic vision, which will make that vision easier forthem to understand and implement.

The paradox of managing backwards and forwards– considering the old alongside the new – involveslooking for the organization’s future in its heritage.Corporate brands ask not just ‘‘What do we want to beand how do we want others to see us?’’ but also ‘‘Whohave we always been?’’ Coping with the old–newparadox requires that, when thinking about the future,managers consult the company’s heritage all the wayback to the founder’s vision and business principles. Ifthe future seems to demand that your companybecome socially responsible or environmental sustain-

able, for example, then your brand can help you findappropriate ways to envision this future, waysinspired by what the company and its brand havealways stood for.

When Danish pharmaceutical company Novo Nor-disk wanted to globalize its brand, they divested theirbio-detergent business and returned to their roots indiabetes to focus attention, not only on their organiza-tion, but also on the enterprise of fighting this crip-pling disease. In this way they established a clear linkbetween the company’s heritage of care for diabeticsand what it was going to be and do in the future.

While it is never easy to juggle all the moving ballsof branding, keeping your eye on each of them as theothers move up and down will push you beyond themechanics of catching and releasing balls and into theart of juggling. Over time, listening and responding tothe different interests that comprise your stakeholdermix will lead you from corporate branding to enter-prise thinking and eventually perhaps to an enterprisebrand. The learning process needs to be distributedthroughout your organization, eventually reaching outto all of your stakeholders, so you will need to accli-mate to managing with the paradoxes this complexitybrings. Keeping your focus on VCI alignment, and thedynamics of the identity conversation that underpin it,will lead you to enterprise branding.

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SELECTED BIBLIOGRAPHY

This article is based on Taking Brand Initiative: How to

Align Strategy, Culture and Identity through Corporate

Branding by Mary Jo Hatch and Majken Schultz (SanFrancisco: Jossey-Bass/Wiley, 2008). The ideas aboutorganizational identity were inspired by GeorgeHerbert Mead in Mind, Self and Society (Chicago: Uni-versity of Chicago Press, 1934). The first version of thebranding model shown in Fig. 3 was published in MaryJo Hatch and Majken Schultz, ‘‘Are the Strategic StarsAligned for Your Corporate Brand?’’ in Harvard Busi-

ness Review, 2001.For discussions of corporate branding and identity

written from a marketing perspective that comple-ment the views set out in this article, see any of severalbooks by Wally Olins. We particularly recommendCorporate Identity (London: Thames and Hudson,1989) and Wally Olins: The Brand Handbook (London:Thames and Hudson, 2008). The many books by DavidAaker, Eric Jochimsthaler and Nicolas Ind are alsohelpful. Try David Aaker’s Brand Portfolio Strategy

(NY: Free Press, 2004); or Nicolas Ind’s Branding Gov-

ernance: A Participatory Approach to the Brand Building

Process (Chichester UK: Wiley, 2007).For a strategic perspective on corporate branding,

see Eric Joachimsthaler’s Hidden in Plain Sight

(Cambridge, MA: Harvard University Press, 2007).We also recommend Jim Collins and Jerry Porras’sbook, Built to Last – Successful Habits of Visionary Com-

panies (New York: Harper Business Essentials, 1994),for its many insights on vision and organizationalculture. On culture itself, Edgar Schein’s Organizational

Culture and Leadership, Third Edition (San Francisco:Jossey Bass, 2004) is the industry standard. The articleby Chip Jarnagin and John Slocum, ‘‘Creating CorporateCultures Through Mythopoetic Leadership,’’ Organiza-

tional Dynamics, 2007, 288–302, illustrates how lea-ders can use stories to tie culture, values and corporateidentity together.

If you would like to listen to LEGO Group CEOJorgen Vig Knudstorp speak about the company andits branding efforts, go to: http://www.monocle.com/sections/business/Web-Articles/QA-with-the-CEO-of-Lego/ (last accessed 8-8-2008). The four brand fansinvolved in the development of NXT were Steve Has-senplug, John Barnes, David Schilling and Ralph Hem-pel. They were featured in the cover story of Wired

Magazine’s February 2006 issue and in Koerner’s fea-tured article: ‘‘Geeks in Toyland.’’ Access it at: http://www.wired.com/wired/archive/14.02/lego.html (lastaccessed 7-18-2008).

Mary Jo Hatch is C. Coleman McGehee Eminent Scholars Research Professor, Emerita, atthe McIntire School of Commerce, University of Virginia. Now retired, she is an adjunctprofessor at the Copenhagen Business School in Denmark and lectures and consultsinternationally. In addition to their book Taking Brand Initiative: How to Align Strategy,

Culture and Identity through Corporate Branding, she and Majken Schultz have published:The Expressive Organization: Linking Identity, Reputation and the Corporate Brand (withMogens Holten Larsen, Oxford University Press, 2000) and Organizational Identity: A

Reader (Oxford University Press, 2004). The second edition of Hatch’s textbookOrganization Theory: Modern, Symbolic and Postmodern Perspectives was published in2006 (Oxford University Press), and articles by Hatch appear in numerous academic andpractitioner journals including: Organizational Dynamics, Harvard Business Review,California Management Review, European Journal of Marketing, Academy of Management

Review, Administrative Science Quarterly, Human Relations, Journal of Management Inquiry,Organization Studies, Organization Science and Strategic Organization. Hatch also co-authored The Three Faces of Leadership: Manager, Artist Priest (with Monika Kostera andAndrzej Kozminski, 2005, Blackwell) (Tel.: +1 978 356 8742; fax: +1 978 356 8742;e-mail: mjhatch@virginia.edu).

Majken Schultz is a professor at Copenhagen Business School and partner in TheReputation Institute. In addition to her books with Mary Jo Hatch mentioned above she

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has co-edited Corporate Branding Purpose/People/Process with Yun Mi Antorini & Fabian C.Csaba (Copenhagen Business School Press, 2005) and written On Studying Organizational

Cultures: Diagnosis and Understanding (Walter de Gruyter, 1995). Schultz has published innumerous academic and practitioner journals including, Harvard Business Review,California Management Review, Academy of Management Journal, Academy of Management

Review, European Journal of Marketing, Organization Studies, Human Relations, Journal of

Management Inquiry, British Journal of Management, Corporate Reputation Review,International Studies of Management & Organization, Strategic Organization, Journal of

Marketing Communication. She serves on several company boards and is a regularcolumnist in the Danish local newspaper Boersen (www.majkenschultz.com)

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