Melanie Stern is section editor of Families in Business magazine
The biggest family businesses capitalise on their family ownership in their brand – a smart move, as family values have the edge in the era of corporate mistrust
When asked what the most successful and most recognised family businesses are, who comes to mind? Ford Motor? Rothschild? Johnson & Johnson?
These companies all have one thing in common (aside from a healthy bottom line): they all capitalise on the family as part of their brand. While many business families recoil in horror at the thought of taking any prominence on the world stage, for the (past and present) owners of these mega-brands, this strategy has undoubtedly contributed materially to their success.
It is a propitious time to examine the power of the family as the company brand. The 21st century has produced little more in the corporate world than a list of organisations whose stellar success on paper amounted, on investigation, to nothing but lies. Accounting scandals, catastrophic bankruptcies and corrupt managers siphoning company funds have destroyed trust in commerce and in those driving it – but juxtaposed, despite this damage, against the increasing power of brands. Branding strategists agree that it is now time to return to corporate basics – knowing one's mission, having a set of key ethics, and one point of reference for a confused and cynical audience. What better vehicle to convey these constituents of trustworthiness than the family?
For Tom Blackett, group deputy chairman for global brand consultancy Interbrand, the package already exists in family companies –they just don't know what to do with it. "The family businesses we have worked with understood that their family was inherently their company's brand and often have a very strong internal culture to draw on influenced by the family, but they need help to codify that for external use," Blackett says. "The difference between a family business and a non-family business is that the former's cultural influence is so strong, even in the case of large multi-generational companies. And some family personalities love to stamp their business with their own personal brand."
The connotations of family for a corporate brand work much like the connotations of family for the man on the street. Even in this day and age they can be idealistic. "Using the family name in your brand projects a feeling of quality associated with the product and is a way to create a relationship with clients by way of the human element. It makes sense to perpetuate the family brand as a mark of quality even if the family no longer has involvement in their company, such as Johnson & Johnson ," Blackett adds. The Johnson empire cuts right to the chase with its slogan, 'SC Johnson: a family company' emblazoned on its products.
"Despite recent family business scandals, it is still a good idea to use the family as part of the brand. The family name conveys the idea that there is a person responsible for the business – it's about corporate social responsibility," says Blackett.
A poll conducted by Deloitte last autumn on family businesses in south-eastern Australia showed that family branding is an idea already in common use there. In the poll 58% of respondents agreed it was beneficial to their company brand to highlight family involvement, while 72% agreed that using that edge as a brand had positively differentiated the company from others in their marketplace.
Family branding is also a clear indicator of pride and confidence in the product. At Ford Motor, the founding family and its managers have never been shy about their edge, having made television commercials featuring CEO and fourth generation Bill Ford talking about the company's cars. Although he was not particularly keen on the idea, it was seen to be a very successful risk.
In 2004 the company is again assessing how it can capitalise on its bloodline. Ford confirmed with Families In Business that it has commissioned a group of researchers to explore ways to take advantage of Bill Ford's role as part of the company brand and spokesperson. "Bill has always said that he sees Ford's employees as part of the extended family and that has a lot of resonance internally. Now we want to see if that has the same resonance externally," Tim Hoyt, an adviser to Bill Ford, says.
Putting individual's names and faces to brands, as well as the family name, is a potent addition to an already bewitching mix. Perdue Farms, one of America's biggest poultry providers, has followed this rule. Second generation CEO Frank Perdue's now legendary television commercial campaign gained him near-cult status for a time with his personal slogan, "it takes a tough man to make a tender chicken". (Unfortunately, the message was somewhat lost in translation for the Spanish, who were faced with the message "it takes an aroused man to make a chicken affectionate".) Current CEO Jim took over the role of company spokesperson in 1991 and his face, and signature, is the newest reinforcement of the family brand.
There are two main reasons companies enlist PR or branding strategists, say the experts: either to shake up financial performance; or with a view to exit. In both cases, they ask for a brand evaluation to be carried out (much like any pre-sale standard business evaluation) to understand the current and future financial contribution of the company or product brands. The they assess the correlation between marketing budgets for brands and their actual performance. "It could be that one of your brands is not delivering financial value and you are wasting money supporting it. You can decide to either put more money behind it in a different way or wind it down completely," explains Interbrand vice chairman Michael Lucas, who managed a long-term account with family-run foodstuffs company, JM Smuckers. Interbrand was partly responsible for the slogan, "with a name like Smuckers, it's gotta be good".
"Frequently, our clients improve their brand visibility so that sales move up a little and then it is ripe to sell off. All brands reach a stage where they've attained their goals and everything that follows is stagnant," says Lucas. "At that point a family can decide either to stick around just to monitor something that they accept won't get any bigger or they can decide to expand. Smuckers came to us having decided to expand and their mandate was to push the brand to new heights by identifying positive brand equities."
Family business owners will find a wealth of large consultancies ready to tackle brand creation, improvement or evaluation. If the most successful family businesses were to be taken as good examples, it would be a wise move to consider integrating the family edge into the company image. A company's brand, says Interbrand's Blackett, is simply a bite of information that should instantly trigger a response in people's memories. "People should immediately understand what you're about. Family business is all about trust to the consumer," he concludes, "You wouldn't expect what happened at Enron to happen at SC Johnson – even in the light of an event like Parmalat."
Even the branding gurus themselves are comforted by the family business brand.