How Can a Corporate Brand Minimize ‘Key Man’ Risk?
Why a firm's brand should be based on the message, not the person communicating the message.
Much has been written about ‘key man’ risk — the danger for corporations that rely on one or a few individuals — and its impact on business value. Fashion firms with a celebrity designer, for example, or asset management firms with a star investment manager, are particularly vulnerable. Yet, even large, global firms can be exposed.
Last year, Larry Page’s lost voice was the silence heard around the world, with the media speculating whether Google’s famous CEO in fact had thyroid cancer. Numerous comparisons were made to when Steve Jobs – perhaps the most famous “key man” of all time – was first diagnosed with pancreatic cancer almost a decade ago. And Google’s vagueness about Page’s illness only fueled the speculation. Even after Page returned to work, Google was tight-lipped with the details of what ailed the co-founder. “He’s still recovering. Larry is doing much better. He was in the office on Monday,” Executive Chairman Eric Schmidt said. “Larry ran the meeting. He is talking, but talking softly.”
It’s easy now to focus on how Google should have approached the situation from a public relations/crisis management perspective. But crisis management is really just a band-aid – a short-term solution to the larger issue at hand. It would be a more productive exercise to take a step back and examine this event not as a public relations challenge but as a brand issue. What should Google be doing from a corporate branding perspective to mitigate this type of mass frenzy going forward? This is something any company vulnerable to key man risk should be doing.
A firm’s brand – the perceptions it holds in the minds of its most important audiences – can be a powerful tool for mitigating this risk. Here are some key questions to use when evaluating whether your brand is built around a company and its value proposition or a individual:
Do key messages address the breadth, depth or specialization of the team’s expertise or just the experience one person?
Have you developed – and communicated – a strong firm culture that does not depend on a “cult of personality”?
Do communications, such as marketing collateral, press releases, websites, videos and emails, feature multiple people at the company or just the key man?
Is it clear that the key differentiators – both tangible and intangible – are institutionalized, a framework of the company, and not all based on the talents and reputation of one person?
We have worked with a number of companies that have strong, very well-known founders. It can be a challenge creating a brand for these organizations that isn’t reliant on the reputation of the founder. (When the founder is deeply involved in the branding process, it can also require chutzpah!) But it needs to be done. In developing a brand for an asset management client, for example, we focused on the firm’s focused, unwavering investment strategy rather than the fame and acumen of its star founder. This took the emphasis away from the individual and placed it squarely on the firm itself. The subtle underlying message: the firm is stronger than any one individual.
Companies spend significant time and resources developing succession plans, operating procedures and other strategic business initiatives to ensure that business success does not hinge on one person. But to truly mitigate key man risk, firms cannot ignore brand strategy. To ensure success, brand and business strategy must be aligned and positioning and messaging must be built around the firm, not the person.
Make it about the message, not the person communicating the message.
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Last week we had the pleasure of participating in Institutional Investor Institute’s 2015 III Senior Delegates Roundtable, an event that brought together senior executives from over 100 institutional asset management firms to discuss the outlook for the financial industry and how best to manage the sales, marketing and distribution functions of their businesses.