H-P faces a test of brand character
Great companies lead with their brand. When they fail their brand, everything else comes a cropper. H-P’s current governance crisis is a case in point.
While this ever-expanding affair is troubling for employees and shareholders, it has also become a crucial test of H-P’s brand character, with far-reaching business consequences.
Brand character starts at the top
H-P’s leaders who pushed the limits of the law to spy on company Directors, employees and outside journalists called into question the very integrity of the H-P brand. After all, they are/were among the highest level of brand stewards in the company. Their actions define the character of the brand.
H-P’s internal investigation and its recent executive actions recognize the severity of the problem, and the types of steps needed to restore H-P’s brand character to its expected level. A full resolution will take time, for this has not been a file-and-forget transgression. It’s been a brand character meltdown. Additional developments are expected.
Brand character means business
Just as an employee with character failures may be disciplined or even terminated, a brand that scores low in character can be punished or even terminated by customers. Because a brand
represents the whole company, downstream ripples from brand character deficiencies can erode hard-won brand advantages in customer trust, pricing, and repeat business.
Internally, there’s also a price to pay in damage to employee cohesion, productivity and recruiting. Everywhere a brand returns a benefit, a defect in brand character means more work, more struggle and more sacrifice to re-establish a brand edge.
Brand character vs. “brand personality”
Brand character should not be confused with “brand personality.” The latter is usually a shallow fiction that (lesser) brands use as a front for sales. Brand character is not a front. It’s not make-believe, a happy face, or a charade. It’s what holds the brand together, and what comes to the fore when brand values are put to the test.
Definition of brand character
From our New Brand Glossary:
Brand character is the spine of a company. It’s evident when a company is accountable to the values that make it stand tall. This means accountability in action, not on paper. Brand character draws a line that moral weakness cannot cross.
Companies with character create brands with character. Brands with character lead.
I would add that the values that make a company stand tall are the same values that create customers. That’s the holistic unity between business integrity and business growth. Brand character is more than a gesture or a figure of speech. It’s a business essential.
The Board and the brand
H-P’s Corporate Governance Guidelines define the responsibilities of the company’s Board of Directors. They don’t mention the H-P brand—but perhaps they should, so that policy decisions affecting the brand fall under Board oversight. The H-P brand is certainly vital to the company’s business, and as a valuable corporate asset is certainly important to shareholders. One outside observer has called for a radical re-structuring of the H-P Board itself, stating, “You have a board here right now that is crippled in every way imaginable.” (WSJ, sub required.)
Character and the gold standard for brands
For many years the H-P brand was the gold standard among high-technology companies, with market valuations to match. H-P and “brand character” were practically synonymous. Nothing prevents the H-P brand from regaining those heights—once it passes its current brand character test.