Fall 2011: by Brent Banda, MBA

Branding During Succession

Your brand is your company's reputation. For many ownermanaged companies, the owner's personal identity is a significant component of the company brand. Managing the owner's public profile during succession of ownership has a direct impact on your company brand.

Companies can evolve in several ways during succession of ownership. It is important to carefully manage your company's brand during this process.

Customers, suppliers and even employees tend to place a great deal of credibility on the ‘face' of the company. The owner is often the natural person for this role because owners tend to be dynamic and have strong personalities. Also, as owner, the spokesperson will naturally be perceived as the primary decision maker - someone with the authority to make good on company promises.

In most situations, it is useful to separate the exiting owner's reputation from that of the company. Each company is unique, so the process must be approached in a customized manner. The following are a few examples of how my clients have tackled this in the past.

Pick a new spokesperson
This is usually the next generation of ownership. Of course the new owner must have the personality to represent the company in order to pull this off. And there may be some troubles down the road when this new person leaves the business and the same problem is sure to arise again.

One alternative that is appropriate in some situations is to avoid a single spokesperson, and alternatively place several key employees in the public eye.

These people can be rotated based on the nature of the advertisement or public message that must be presented. As long as a consistent impression is left with the public (i.e., these are quality people that stand behind the product) this approach is highly flexible and can work extremely well.

Transfer key relationships
We most often consider a company's brand to be a relationship between the company and a mass market. But it is useful to also consider relationships with certain people. When managing your company's brand image, transfer the owner's relationships with key business contacts to others within the company.

As an example, a company's distribution agreement with a key supplier may simply dissolve once the founder leaves the business because it was based on a handshake deal 25 years ago. In a situation like this, it would be crucial to phase in the new leadership (son, daughter, or key manager) into that relationship.

Business is based on trust, and people must trust the company once their primary contact leaves.

A second example would be with a key customer. It is natural for key customers to question whether they should seek out other suppliers once their long-term friend gets out of the business. Customers usually have multiple contacts with alternative suppliers, and this is a rare opportunity for your competitors to steal your business. If you protect the relationship, you are protecting the company's brand.

A third example can be found in a company's connection to its industry. Many times a founder will serve on the board of an industry association or a local business association. The company's new leadership must take over this responsibility and continue to build relationships in these organizations to ensure the company maintains its profile.

Keep the same message
Consistency builds credibility. If the company was promoting timely delivery as its primary competitive advantage before the founder left the business, then continue this message after the founder steps back from the spotlight. This consistent message will help consumers and suppliers feel they can continue to trust the company after the leadership change.

Promote the business in new ways
In some situations, it is appropriate to take the focus off the founder leaving and instead put the emphasis on the company itself.

Essentially, we are packaging the removal of the traditional spokesperson with the launch of an entirely new method of promoting the business.

For example, a company could launch a new advertising campaign that promotes the company's traditional message (as mentioned above) but in a new and creative manner. This campaign may not in fact use a spokesperson at all. People may or may not notice that the spokesperson is missing from the ads, but if the creative is high quality, the message will still resonate with the audience.

Respect the previous generation
This rarely is a problem, but it emerges occasionally when an extremely young and inexperienced person is handed the keys to the business. He or she naturally wants to put a unique stamp on the company and may not have the track record to understand the history of decisions made in the past. Also, sons and daughters tend to have a deep understanding of their parent's faults but are less likely to grasp the true value of the parent's strengths.

Customers and suppliers will usually have good relationships with the outgoing leadership, and therefore be most comfortable with a leadership transition when this person is given an appropriate level of respect for how they have run the business.

The departing owner must buy in
People will read the departing owner like an open book. The owner will exude confidence if he or she is comfortable with the successor's ability. Clearly, people will take this signal as a baseline to form their own impression of the incoming leadership.

The easiest way to build genuine confidence in the incoming leadership is to work at it over time.

Create a situation where the next generation would be given greater decision-making responsibility over the course of several years. The reason is simple. It takes time for someone to learn how to make good senior-level decisions. It also takes time for the existing owner to feel comfortable with the younger generation's ability - a successful track record of good decisions is needed.

The pinnacle of this process occurs when both generations are sitting at the same table making joint decisions in the business. This is particularly true when a founder's children take over the company. The parent usually has final say on the decisions by the nature of the familial relationship, but once the two generations can see each other as peers, the owner can more easily step back from the spotlight.

The personal dynamic between incoming and outgoing leadership in any organization can be complex. It is even more complicated in family businesses. However, it is worth the effort to build a necessary level of trust.

A relaxed and orderly departure where the outgoing owner clearly supports the incoming leadership will have a positive impact on the company brand image.

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