Branding For The 4th Industrial Revolution

Branding 4.0 for the 4th industrial revolution

In August 2019, 181 of the world's most powerful CEOs, representing corporate giants like JP Morgan Chase, Amazon and Apple, made an extraordinary commitment. This commitment is so revolutionary that it affects all areas of the American company, from finance to governance, law and investment to performance and property. This affects regulation, reputation and relationships. And it will affect you.


These 181 CEOs are committed to running their businesses for the benefit of all concerned.

The statement is so simple; it is easy to overlook how deep the effects are.

What it means

In his 1962 book Capitalism and Freedom, economist Milton Friedman stated:

“There is only one social responsibility of the company to use its resources and participate in activities that aim to increase its profit as long as it adheres to the rules of the game, that is to say open and free competition without deception or fraud. "

Wall Street listened in the 1970s when Freidman's article in the New York Times published "Corporate Social Responsibility Is To Increase Your Profits". Profit was not only the primary business purpose, but also the only purpose most CEOs pursued, the only measure of performance and justification for almost all of the actions they take.

This one-sided orientation has given the United States the longest economic prosperity in existence and the largest economy in the world.

But there were also:

With this statement, these CEOs acknowledge the impact of their organizations on all stakeholders – customers, employees, suppliers, communities and shareholders – and combine the value they offer these stakeholders with the success of their companies, our communities and our country.

These 181 CEOs and their influential organization, the Business Roundtable, state that they will no longer make a profit. Instead, they strive for long-term value for shareholders and will also:

  • Deliver added value to your customers
  • Invest in employees
  • Treat suppliers fairly and ethically
  • Support the communities we work in

With this commitment, companies signal important changes.

Of… To…
Take the customer for everything he has "Pioneers in meeting or exceeding customer expectations."
You pay the employees as little as possible and constantly strive for more performance, production and performance “To compensate them fairly and to offer important advantages. This also includes support through training and further education, which help to develop new skills for a rapidly changing world. We promote diversity and inclusion, dignity and respect. "
Rely on the suppliers to deliver more for less "As a good partner for the other large and small companies that help us to carry out our tasks."
Use communities and environments as resources to be used, exhausted and consumed "Respect the people in our communities and protect the environment by implementing sustainable practices in our companies."

With these changes, these CEOs have committed not only to the success of their businesses, but also to the success of our communities and the United States. While it's not necessarily a new way of thinking – from Johnson & Johson's 1943 credo to Patagonia's long-term mission to Paul Polman from Unilever and Jim Stengel from P&G – it is certainly the first time that such leaders have been stand behind these beliefs. History will tell us whether it was a moment of authenticity or a flash in the pan, the brief glow of which faded too quickly in the course of a fast-moving, demanding global economy.

Why now?

This commitment does not arise from a new feeling of generosity. These powerful executives know that these stakeholders are critical to maintaining their company's reputation, leveraging innovation, nurturing loyal customers, attracting, retaining and retaining critical employees, and increasing brand value.

In the September 2019 issue of Fortune, Alan Murray's article "America's CEOs Are Seeking a New Purpose for the Company," which began with a speech given by Bill Gates in Davos in 2008:

… In his last full-time year at Microsoft, in which he called for a new “creative capitalism”. As Gates told the World Economic Forum, the "genius of capitalism" lies in its ability to use self-interest in helpfulness and sustainable ways. “But the benefits inevitably come from those who can pay. "To enable the poor to rapidly improve, we need a system that involves innovators and companies in a much better way. Such a system would have a dual mission: to make a profit and to improve the lives of those who do nothing," he said. Make full use of market forces. "

However, the Business Roundtable declaration was published over ten years later. It is clear that other factors are driving this change.

income inequality

There's always talk of the strong economy and low unemployment, but ask the person next to you in the cafe, and it's likely that they have multiple jobs and are still struggling to cover their monthly expenses. The promise to pursue his passion in the gig economy meets the reality and the stress of inconsistent income and unreachable housing costs. In the past 40 years, wage growth in the US has been nominal despite a strong and growing economy, and purchasing power has remained almost unchanged after adjusting for inflation.

If you compare this reality to the increase in income and wealth of the top 1 percent of American households, a movement arises: #IncomeInequality. Since 1979, the top one percent of American households have seen earnings before taxes increase almost seven times faster than the bottom 20 percent, according to CBO analysis.

There is no end in sight to this trend. According to a recent analysis by the British Financial Studies Institute, wages in 2021 will still be below the 2008 level. People work hard and companies make big profits, but workers don't add to the wealth they create.

Fluctuating support for capitalism

While corporate leaders continued to ignore issues such as income inequality, voters in the US election and the British Brexit referendum signaled that they were unwilling to accept the status quo. Campaign topics focused on an alleged economic threat from outsiders and the need to regain control of borders or economic forces. They also attacked so-called “elites”. These issues were clearly well received by voters.

If we look at the impact that shareholder value theory had on corporate investment, we can see that the threat is likely to be our current model of capitalism rather than an external force. Instead of investing in their employees, suppliers and communities to ensure future growth and innovation, companies have put money in their pockets.

And millennials are fed up. Her parents promised that if they "worked hard" and received a good education, they would be rewarded. Enter another movement: #okboomer. Her parents' promises failed and the millennials do not accept guilt. Deloitte's millennium poll in 2018 found that 63 percent of millennial workers believe that the primary purpose of businesses should be to improve society rather than make profit, signaling strong support for a new form of capitalism.

And it's not just millennials. In recent years, Harvard Business School professor Michael Porter has been pushing capitalism, which he calls "shared value," and Whole Foods co-founder, John Mackey, has suggested "conscious capitalism." Salesforce CEO Marc Benioff wrote a book on "compassionate capitalism"; Lynn Forester de Rothschild, CEO of the family investment company E.L. Rothschild began to organize for "inclusive capitalism"; and the Conference Board research group, which works for free companies, called for the maintenance of capitalism.

Considering that only 55% of Americans are shareholders but 100% of Americans are consumers, it is easy to understand why, according to the shareholder value theory, so many Americans feel excluded from the benefits of capitalism.

The power of the individual

With the advent of social media, individual voices can become powerful movements within days or minutes. CEOs can no longer hide anonymously behind a logo. Inconsistencies in brand experience, brand promise failures and corporate misdeeds are often first broadcast on social media.

Many companies start marketing campaigns proactively to demonstrate their commitment to their stakeholders and the issues and causes that are important to them with good reason. In a global survey, 91 percent of consumers said they were likely to switch to a brand that supports a good cause if the price and quality were similar. However, any indication of misalignment of the mark with the cause can lead to a backlash. Twitter will love it. Your brand won't.

The power of individual voices on social media means that leaders are aware of the importance of authenticity, transparency and accountability.

Technology driven uncertainty

It is estimated that up to 47 percent of U.S. jobs will be potentially automated over the next 20 years, primarily due to advances in artificial intelligence, cognitive computing, and automation of repetitive, rule-based tasks. Future of Work experts said, "Every job will change due to AI and cognitive computing." The impact of these technologies on employment and employment has created uncertainty. Workers are concerned not only about their continued employment, but also about the unforeseen effects, such as inherent bias and privacy creep. They worry about how they can keep up with the training and who will pay for it.

climate Change

Regardless of your views on climate change, climate events are more extreme, more common, and have a significant impact on corporate results. For this reason, companies are increasingly disclosing the specific financial implications that they may experience as the planet warms, such as: For example, extreme weather conditions that disrupt supply chains or stricter climate regulations that could affect the value of traditional energy investments.

An analysis of the CDP's submission of 215 of the world's 500 largest companies showed that these organizations may have to pay around $ 1 trillion in climate change costs in the coming decades unless they take proactive preparatory measures. The company estimates that a large part of these financial risks could arise in the next five years.


In our digital economy, ecosystems play an increasingly important role in shaping consumer and brand behavior and determining the desired results. "An ecosystem is a community of interactive companies and individuals that develop together and tend to focus on the desired actions of one or more central companies" (McIntyre and Srinivasan 2017).

Of course, companies have always valued long-term relationships with customers, suppliers and partners. However, the network effects and transition costs associated with products of the digital economy make ecosystems significantly more important than before. A common example is that Nokia and its Symbian operating system have largely lost the mobile phone war against Apple's iOS and Google's Android because Nokia was unable to convince a sufficient number of developers to launch applications on its platform create. Former Nokia CEO Stephen Elop said in an email to employees:

“The battle of devices has developed into a war of ecosystems, in which the ecosystems include not only the hardware and software of the device, but also developers, applications, e-commerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors do not take up our market share for devices. They take up market shares with an entire ecosystem. That means we have to decide how to build, catalyze, or join an ecosystem. "

In the past 18 months, all of these factors have come together to focus on the immediate need for action, and the 181 CEOs of the Business Roundtable have strengthened: The unique corporate focus on profits has been expanded to provide everyone with added value for companies.

What's next?

Many who may have been informed through research into the British Academy's Future of the Corporation program cite a renewed focus on branding – or the purpose of the company – as the way forward. And of course the purpose is crucial. Larry Fink, founder of BlackRock, says: "Purpose determines culture, provides a framework for consistent decision-making, and ultimately helps maintain long-term financial returns for shareholders."

However, the purpose is a decidedly internal concept of organization. Culture, decision making and shareholder returns belong to the company and its shareholders. Purpose is important, but only part of the way forward.

One of the most unfortunate consequences of this relentless focus on profits is the dehumanization of workers, suppliers, customers and communities. We have treated workers and suppliers as "assets" or "capital" to make them more efficient while reducing investment. And communities were treated as resources that needed to be exploited or overcome. It's a game of falling returns, especially with technological advances like AI and machine learning. Above all, workers and suppliers are fed up with repetitive tasks, work for “the man” and are afraid of winning the race to the bottom. Communities are concerned that they will lose their unique culture and the impact of climate change on their local environment.

The concept of stakeholder value or benefit is not purely financial. For customers, it could be more a sense of belonging. For example, in its early days, Airbnb organized host meet-ups to promote a sense of community and drive growth. For employees, it can be less about achieving a 10 percent salary increase than about developing a sense of appreciation through meaningful work. Suppliers and ecosystem partners may appreciate self-fulfillment through creative partnerships that lead to innovations.

Because brands take responsibility for providing value, all expressions of value need to be examined. From the experience of a customer with an employee to the feeling of belonging and the ability of an employee to find meaning in their work, the value is particularly personal.

The conclusion for brand, marketing and communication leaders

Little of this thinking may be new or new to those who have been involved in the targeted brand and transformation world. EY's move to building a better world of work in 2013 is a barometer of how this thinking has left borders and entered the mainstream.

Where “purpose” used to be seen as one of many possible brand positioning opportunities, today it is difficult to find many organizations that have not planted their flag in this fertile soil in one way or another.

What is needed is a completely new way of thinking about the brand, based on offering everyone involved a value that is important to everyone and recognizes the importance of human needs: belonging, appreciation and self-actualization.

We suggest that this convergence of social, economic, political, and environmental factors requires a new perspective on brand architecture and integrated marketing communication that activates a brand within the company with its key stakeholders and broader ecosystem.

Kevin Keohane developed the Branding 4.0 model, which simplifies this complexity and allows many of these variables to be taken into account and addressed. It's as simple as a three-circle venn diagram – but has been used successfully by at least one organization to rethink and redefine how it brings its mission to the world, for its people, its audience, and its communities.

The diagram creates seven focus areas – with the brand in focus, in the market, in culture and in the ecosystem as different focus areas, but taking into account the critical areas where these areas overlap. When you add a "filter ring", which we call "inclusive capitalism" for short, you have a powerful way to distill the need for focus and consistency for your brand along with a decision filter to ensure that you take a variety of factors into account that do not take into account traditional approaches to brand architecture and segmentation (including hypertargeting).

By Catherine Hedden with Kevin Keohane and Derrick Daye.

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We created a strategic workshop for the leading leadership teams of brands in all business categories and stages of development, along with a manual and a business simulation game as part of a portfolio of practical tools to activate this fourth wave of branding. Please email us for more.

Branding Strategy Insider is a service from The Blake Project: A strategic brand consultancy that specializes in brand research, brand strategy, brand growth and brand building

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