Article

Decision makers have one goal they pursue consistently: profitable growth. But the world in which they pursue it is confusingly ambiguous and changing constantly. Security in decision-making and choices of actions? Those are mostly illusions. The world of corporate leaders remains VUCA – and every new discovery or development makes their environment more volatile, uncertain, complex, and ambiguous. This is why in this chaotic world, the yearning for simple solutions arises, solutions that reduce complexity.
The problem: Conventional measures like formulating a new strategy or adapting learned and ingrained value systems have rather the opposite effect.

Beware of dangerous dead ends

In 2008, the financial markets collapsed and – in the first year alone – caused damages of 10.5 billion US$. This changed the world permanently. Since 2015, data exchange happens via a glass fiber cable: in only 59 instead of 65 milliseconds from New York to London, which massively impacts high frequency trading. Since 24 June 2016, the decision about Brexit has been clear – the long-term consequences for Great Britain and the world are not.

In the VUCA context, neither...

• ignorance about developments (as with the heads of Lehman Brothers or Hypo Alpe Adria)
• nor arrogance and cynicism in assessments (à la Dieter Zetsche about the Apple Car)
• or standstill

are suitable methods for being successful in this world. Today, those who are able to decide and act – and remain that way - are the ones who triumph. Those who lose that ability will perish.

How, in this VUCA world, can top leaders' ability to decide and act be enhanced in order to achieve long-term profitable growth?

1. The brand – the best management system for turbulent times

Where do we come from? Who are we – or, asked a different way: Who are we not? And how can we use our existing strengths in a constantly evolving world? The VUCA world demands a great deal of adaptability – but strong brands adapt by not adapting.
"Changing gears in the mind" takes much more energy than making more of something that already exists. To say it clearly: Only very few people are really able to change radically – from couch potato to ironman athlete. Because it takes a lot of time, energy, and discipline.
And yet, top decision makers tend to break with existing culture, even though leaders and employees long for consistency, clarity, and orientation. What they get instead is change. This kind of implementation not only costs money and resources, but creates internal unrest, so that in most cases the newly invented value system eventually withers away into a collection of word husks.
My suggestion: From an external agitation and internal unrest with wishful thinking – to remembering existing strengths and an internal attitude with meaning, with the help of the brand. Why? Because a brand condenses the peak performances of a company into specific values – and thus forms a credibility framework everyone can live within.
With the brand as a fixed star, the whole company develops a uniform understanding and clarity about how every single person in their individual function can contribute to the company's success through brand-centered actions. With a specific and credible value system, the company leader provides a clear and commonly applicable framework for decisions and actions – independent of external conditions and the current strategy.

 2. The more complex the world, the simpler the systems

The "typical" corporate strategies 2020/2025 are supposed to give orientation, but they often increase the level of complexity for managers and employees. Their scope and language create confusion and uncertainty from within. Also, our volatile world requires us to change our thought patterns again and again – so the process starts all over again, even though employees have not even internalized the last strategy.
Accordingly, the idea seems unattainable to compact everything that makes up a company and what it strives for to be successful in one single word. Successful enterprises like BMW (Joy of Driving – Joy), Volvo (safe) or Patek Philipp (heritable) condense their identity into one word or sentence, providing orientation both internally – from purchasing to R&D to HR and all the way to marketing – and externally.
Strong brands condense all peak performances of a company into one single word, the so-called one-word-equity, and thereby reduce complexity for their executive boards, managers, and employees to a minimum. At the same time, a brand, like a magnifying glass, increases energy by bundling all corporate performances and directing this concentrated power onto one point – the common goal.

3. Brand-induced resilience fosters the necessary agility and stability

The term "brand resilience" describes, for one, the ability of top decision makers to systematically increase the stability of their company through the brand, for instance by retaining customers and increasing their willingness to recommend the brand (brand advocacy & cross selling). As a consequence, entry barriers are raised for the competition and sales remain stable. Also, brands offer customers an added benefit beyond the product that is difficult to copy. This makes companies – consider Apple as an example – into indispensable parts of their lives (indispensability), which in turn increases the customer's willingness to pay higher prices (price premium).
For another, brands contribute to a company's agility because among other things they attract and retain the right talent (employee pride). Also, they enjoy the customer's trust, so they can dare to enter new markets – from computer manufacturer to internet sales portal for music, films, etc. (ability to adapt and future sustainability).
So strong brands impact both pillars of resilience – stability and agility – and make companies more robust, which in turn positively influences profitable growth and thus their leaders' ability to take decisions and act.
A company's brand-induced resilience can be measured by means of ten indicators, which BrandTrust identified with the help of over 200 CEOs, top decision makers, crisis and resilience experts from three countries (in studies and "sounding boards"). The crucial factor is for companies to not only master awareness or experience excellence, but work on all resilience indicators and perform at a high level regarding each one. Decision makers can use the brand-trust resilience index as a tool to make their companies resilient against crises.

The brand as beacon in turbulent times

In the financial sector alone, about 3,500 Fintechs are currently attacking the established "top dogs". At the same time, Amazon, Google, and the like are entrenching their positions as all-rounders, conquer one new market after another, and force other companies to change. Over night, the election of Donald Trump to the office of US President has changed the political landscape, which will have as yet unknown consequences for the world economy. Countless external disruption factors are pressuring top decision makers, are hampering their ability to decide and act and thereby their chances of achieving sustained profitable growth. Strong brands counteract this development and make companies resilient on their own in this VUCA world, which makes them better equipped to handle the future.

1. Volatility: Strong brands define the direction and thereby provide orientation in a volatile world – from the executive board and management to the employee.
2. Uncertainty: Strong brands set clear credibility limits and thereby create clarity – Where do we come from? Who are we and who are we not? And where are we going? – for strategic decisions and for everyday business.
3. Complexity: Strong brands as living system create a uniform sense of values and with them a tangible identity – independent of place and company size – working together toward a common goal expressed in the positioning and condensed in the one-word equity.
4. Ambivalence: Strong brands are not created over night in creative processes, but are performance reservoirs which clearly define where a company comes from and what it stands for today, or doesn't stand for. So they clearly define the essential success drivers of a company.

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