Interactions between organisational cultures and corporate brands

The Authors

Leslie de Chernatony, Birmingham Business School, The University of Birmingham, Birmingham, UK

Susan Cottam (née Drury), Birmingham Business School, The University of Birmingham, Birmingham, UK

Abstract

Purpose – This paper seeks to consider the interaction between corporate brands and organisational cultures within less successful UK financial services organisations to provide guidance about better managing corporate brands.

Design/methodology/approach – A total of 41 in-depth interviews were conducted within less successful UK financial services organisations from a grounded theory standpoint.

Findings – Given the link between culture and employee behaviour and the criticality of employee behaviour in services brands, organisational culture was perceived by managers and staff as being key to brand success. However, amongst the corporate brands studied, the cultures were not brand-supportive and a misalignment was noted between culture and brand. The study found that the organisational cultures were confusing and inconsistent, were undergoing a process of change, were focused on quantitative performance targets, were averse to innovation and in one case were unnecessarily “tough”.

Practical implications – The results highlight the need for managers to be attentive to the consistency and congruence between values in the organisational culture and corporate brand, to ensure that cultural change is managed appropriately, to adopt a holistic approach to brand management and to empower employees. A model is posited of the cultural pitfalls to avoid when managing corporate brands.

Originality/value – The value of the paper is that it can help financial services brands achieve their potential by allowing them to manage the interaction between culture and brand so as to optimise brand performance by avoiding the pitfalls encountered within less successful brands.

Article Type:

Research paper

Keyword(s):

Financial services; Brands; Organizational culture.

Journal:

Journal of Product & Brand Management

Volume:

Number:

Year:

2008

pp:

13-24

Copyright ©

Emerald Group Publishing Limited

ISSN:

1061-0421

An executive summary for managers and executive readers can be found at the end of this article.

Introduction

I think the culture has a big part to play in the brand (Customer Service Representative, L3).

The culture is fundamental to the brand (Marketing Director, L4).

These comments from employees of less successful UK financial services corporations illustrate the perceived criticality of organisational culture to corporate brands. Based upon 41 depth interviews conducted with employees of varying seniority and functions, we explore the impact of organisational culture on brand performance from a grounded theory perspective. In four high profile UK financial services organisations, we investigate the link between organisational culture and brand performance.

Corporate brand owners are striving for sustainable attributes to differentiate their brands, yet successful brand differentiation is not clearly understood. Barwise and Meehan (2004) advise against focusing on points of differentiation if the brand does not satisfy customers' core motivators. They advocate a “back to basics” approach, emphasising that companies “ … must focus on what matters most to customers, usually the generic category benefits that all competing brands provide … and not unique brand differentiators” (Barwise and Meehan, 2004, p. xi).

Whilst it could be argued that the generic category benefits of financial services are based upon product features, at the heart of a financial service brand is the service provided by employees at every contact point. As Dobni (2002, p. 42) notes, “Outperforming the competition in the financial services industry rests on the ability to create and sustain employee behaviours that allow organisations to perform differently from their rivals”. This parallels Barwise and Meehan's (2004) argument of first excelling on generic category benefits. It therefore follows that services brand success is more likely when the brand is supported by an appropriate organisational culture which is able to evolve as customers change (Kotter and Heskett, 1992).

Underpinning this is the importance of the values within the organisational culture being aligned with the values of corporate brand. This helps ensure the brand delivers a coherent and unified customer experience and is critical for services organisations, as the brand and the corporation are often so intertwined (Balmer and Greyser, 2002). Without this alignment, conflicting employee action (e.g. Griseri, 1998) may lead to brand-inappropriate behaviour and brand inconsistency.

While there is literature linking corporate culture to corporate success, there is a dearth of literature directly and convincingly linking corporate culture to corporate brand success, although a link has been postulated (e.g. Flamholtz, 2001). As links have been identified between culture and organisational performance we could hypothesise a connection between the latter and the success of corporate brands. Foundations for this come from Kotter and Heskett (1992) showing corporate culture as a driver of organisational success. Also, significant evidence of the impact of culture on an organisation's “bottom line” was found by Flamholtz (2001). This paper explores how an understanding of the interaction between organisational cultures and corporate branding contributes to brand performance. We investigate the nature of this interaction within less successful brands, specifically in financial services. Just as successful brands have distinctive patterns of interaction between organisational culture and brand, so are less successful brands. In this way, brand managers can appreciate which strategies and cultural characteristics should be avoided in their brand planning.

The paper opens by explaining the methodology and research perspective adopted, i.e. depth interviews within less successful UK financial services organisations from a grounded theory standpoint (Locke, 2000). In keeping with grounded theory, the knowledge gained from the research is discussed in the context of the literature. The importance of organisational culture to brand success and the misalignment between culture and brand are explored. The other main issues discussed are that the cultures of the brands studied were confusing and inconsistent, undergoing a process of change, focused upon quantitative performance targets, averse to innovation and in one case unnecessarily “tough”. In the final section, we draw conclusions, address implications and posit a model of the cultural pitfalls to avoid when seeking brand success.

Methodology

This research was approached from a grounded theory perspective. Grounded theory, which grew from the work of Glaser and Strauss (1967), is qualitative research which is inductive. Inherent in this methodology is a commitment to discovery through direct contact with a phenomenon, rather than a priori theorisation. Therefore, from the data we identify emerging patterns and develop a theoretical framework, rather than testing hypotheses formed from existing theory. Grounded theory is particularly appropriate for this research given its ability to capture complexity and to support theory development in “new” areas of research (Locke, 2000). With limited, albeit growing research into branding in the financial services sector, (e.g. Veloutsou et al., 2004; de Chernatony et al., 2004; O'Loughlin and Szmigin, 2005; Devlin, 2004; de Chernatony and Cottam, 2006) the objective was to gain a new perspective rather than starting from findings and assumptions. When conducting grounded theory research, once data is collected, incidents within the data are compared and categories/themes formed. These theoretical categories are integrated, organised and the relationships between them clarified. Through this process of analysis, theories can be developed which are truly “grounded” in the raw data collected.

The data were collected using depth interviews with a topic guide. The issues in this paper result from one topic, i.e. respondents were asked to describe the influence of their organisation's culture upon their brand. The data resulting from the discussion of other topics during the interviews will be used as the basis for analysis of different topics for subsequent papers. In total, 45 respondents were interviewed (with 41 addressing this topic area) and their responses transcribed. Access was gained to 4 financial services organisations with less successful brands (henceforth referred to as L1, L2, L3 and L4). As the organisations would only allow participation if their identity was not revealed, we had to mask their names. However, they represented leading high street names in the UK consumer financial services market.

The value of the paper is that it should help financial services brands achieve their potential by providing them with the insight to not follow particular strategies which are associated with less successful brands, more specifically to manage the interaction between culture and brand so as to optimise brand performance by avoiding the pitfalls encountered within less successful brands. Given the multi-facetted nature of brand performance, these less successful organisations were selected by triangulating (see Denzin, 1989; Flick, 1998; Blaikie, 1991) a range of measures. This facilitated a holistic assessment of the relative lack of brand success (for more information see de Chernatony et al., 2005). A review was conducted of the existing literature, including brand equity (e.g. Ambler, 2003; Feldwick, 2002; Keller, 2003; Washburn and Plank, 2002), the recommendations of experts and the Market Research Society's database of brand consultancy firms. A range of measures were identified leading to the conclusion that there is currently no one comprehensive methodology to identify less successful corporate brands. Rather, there are a number of techniques based on different assumptions, which individually provide helpful pointers, but together give a richer insight through the use of triangulation (in line with Doyle, 1992). A summary of the measures used can be found in Table I. Essentially, the “less successful” brands selected were those which, whilst they were sufficiently successful to be captured by the measures in Table I, were rated as comparatively less successful in the rankings used. We were less interested in those brands whose low performance meant that they did not even feature in the rankings; rather, we wished to investigate the reasons why certain brands which, although could not be considered failures, were not reaching their full potential.

Two of the techniques provided financial measures of brand performance (Interbrand 100 Top Global Brands and FT Global 500 report) while the remainder used non-financial indicators. The issue of whether short-term financial or longer-term, non-financial measures are most appropriate has been addressed in the literature (e.g. Ambler, 2003). We consider that financial measures alone are insufficient; whilst brands may be successful in monetary terms, at least in the short-term, this may bear little relation to the strength of the brand itself. Brands are multi-faceted entities, and a weak brand may still be financially successful. For example, it may no longer attract new customers as it has grown stale, but due to a core of loyal consumers, its sales are largely unaffected in the short term. One argument for the use of both financial and non-financial measures is that this reflects the reality of brand management, as CEOs, with their concerns for self-preservation (Wade et al., 1997), are often concerned with achieving improvements in share prices rather than building brand equity. The measures detailed in Table I reflect a number of different stakeholders' perspectives, in line with Greenley and Foxall's (1997) view that organisational success or failure is dependent upon the interests of multiple stakeholders. A further advantage from combining methods is that both the current status of a concept and its future potential can be assessed. While the majority of measures focus on the status quo, the data provided by Interbrand and the Y&R BrandAsset Valuator relates to the future potential of the brand. The MT Britain's Most Admired Companies Report measures elements of both potential and current brand performance. While existing and past brand performance is important, there is value in looking to the future. As an additional measure, an online survey was conducted with the Chartered Institute of Marketing (CIM) to assess marketing professionals' interpretations of services brands' relative success or failure.

Modern brand management is largely a team based activity (Veloutsou and Panigyrakis, 2001) and to reflect this in each firm we interviewed Brand Deciders, Brand Influencers and Brand Enactors. In the case of Brand Deciders we interviewed CEOs or MDs. For Brand Influencers, we interviewed Directors of Marketing, HR and Operations and key figures in agencies advising these firms' branding activities. We focused on these three functions as they are central to services branding with Marketing making the external brand promise, HR providing the infrastructure to enact the brand promise and Operations seeking to deliver the brand promise. For Brand Enactors we interviewed Managers of Marketing, HR and Operations along with Customer Service Supervisors and Customer Service staff. Whilst it was not always possible to follow this design exactly, it was adhered to as closely as possible. Table II shows the sample. Following the principles of grounded theory, as a theme emerged during the interviews it was investigated in more detail in subsequent interviews.

Data analysis adhered to the recommendations of leading writers in grounded theory (e.g. Strauss and Corbin, 1998; Glaser and Strauss, 1967). Incidents within the data were compared with other incidents, and also to theoretical points from both the literature and the authors' experience (Locke, 2000). This allowed for the identification of similarities and differences and ultimately the categorisation/coding of data. Both authors coded the data separately in line with accepted practice (Krippendorff, 1980). The inter-coder reliability was calculated, using the co-efficient of agreement, at 88 per cent. Any differences in interpretation were resolved through discussion and reference back to the transcripts (Miles and Huberman, 1994). By ordering and integrating the codes and categories, the issues regarding the nature of successful financial services brands were identified, as next reported.

Organisational culture: what is it, why is it important and what does it have to do with the brand?

The abundance of definitions of organisational culture is noteworthy (e.g. Denison, 1996; Deshpandé and Webster, 1989). However, a common theme encompasses the notion of culture as an amalgamation of values which give rise to behaviour. For example, Hankinson and Hankinson (1999, p. 136) view organisational culture as “ … a company's overall philosophy, a set of values and beliefs that shape the way people think and behave”. Deshpandé and Webster (1989, p. 4) similarly define culture as, “the pattern of shared values and beliefs that help individuals understand organizational functioning and thus provide them norms for behaviour in the organization”. Both of these echo Schein's (1984) representation of culture as artefacts, values and basic assumptions. All these conceptualisations give rise to the notion of the values which form the culture being a driving force characterising the way employees interact with consumers. This is vital to the brand, as it is the behaviour of employees which give the brand substance and influences perceptions (e.g. Alloza et al., 2004; Bitner et al., 1990; McDonald et al., 2001; Gabbot and Hogg, 1994). Without an appropriate and supportive organisational culture, there is little chance of employees “living the brand” (Schultz, 2003). There was widespread awareness of this amongst respondents, as can be seen in the following comments:

Culture is about the way we do things around here, the way we are … this naturally influences the way our people deal with our customers (Marketing Director, L2).

Ultimately culture is everything that goes on in within the organisation and all the people that exist with it … (Head of Market Research, L1).

The brand is nothing more than what people decide to do … a brand is delivered by the people, people are the brand, or manifestations of what becomes the brand (Marketing Director, L4).

… it's the essence of the brand … nothing would be known of the brand without the culture (HR Director, L2).

I think culture is a intrinsic part of the brand (Marketing Director, L2).

If you don't have people at the front line who in their blood operate in a way that you want to emote with that brand then you are completely wasting your time … (Director of Operations, L1).

It could therefore logically be anticipated that corporate culture contributes to brand success. Within the literature, the connection between culture and organisational performance has been documented. For example, Kotter and Heskett (1992) found that corporate culture was a factor in organisational success; specifically, strong, strategically appropriate and adaptive cultures were positively associated with long-term economic performance. Deshpandé and Farley (2004) found a link between relatively open, externally oriented organisational cultures and better performance. Significant evidence of the impact of culture on an organisation's profit was found by Flamholtz (2001), and whilst noting that the link is difficult if not impossible to prove, Hofstede (1998, p. 491) took the view that, “ … there is little doubt that organizational culture affects performance; in the long run, it may be the one decisive influence for the survival or fall of the organization”. The findings of Denison and Mishra (1995) also give weight to the premise that the cultures of organisations have an important influence on organisational effectiveness.

Approaching the issue more tangentially, culture has also been found to influence employee retention rates (e.g. Sheridan, 1992), which given the centrality of the employee-customer interaction in services will also affect the success of the brand through consistency of delivery from staff who stay with a corporation for a notable time. Literature directly linking organisational culture and corporate brand performance is relatively rare, but examples include de Chernatony and Cottam (2006), Papasolomou and Vrontis (2006) and Hankinson and Hankinson (1999).

For organisational culture to have a positive effect upon brand performance, the values of employees should be aligned and compatible with the brand values (e.g. Rubino, 1998). Without this, employees may experience tension between the actions they would naturally take as a consequence of their personal values and the espoused brand values (e.g. Griseri, 1998). A similar problem can arise if the espoused corporate values differ from the actual corporate values, leading to employee distrust and unwillingness to support the brand (Yaniv and Farkas, 2005). Both scenarios may lead to brand-inappropriate behaviour and/or inconsistency between employees delivering the brand. The wider implications of this can be appreciated from the person-organisation fit literature. For example, both O'Reilly et al. (1991) and Ostroff et al. (2005) note that the fit between personal values and organisational values is positively related to commitment, satisfaction and turnover, whilst Siegall and McDonald (2004) found that a lack of congruence between employee and organisational values led to negative outcomes including “employee burnout” or stress. Amongst the less successful brands investigated in this study, a large number of respondents acknowledged there was value inconsistency within the organisation which in some cases caused conflict. They referred to ongoing efforts to bring their culture in line with the desired brand, for example:

The brand defines many things about what our culture should look like at a high level. The issue of discussing how people should behave in order to live the brand is part of defining our new culture (Director of HR, L1).

… if the brand wants to try and tell me the culture I should have in my department, I think again there could be potential conflicts around, “Well this is how I run my business, don't come and tell me how to do it”. So I think the two need to be intertwined (Head of Customer Service, L1).

That's what the brand values and brand behaviour is all about, it's about creating the right culture … briefing everyone and getting the brand embedded into things like the performance management processes and people's development plans so that everybody is going in the same direction (Head of Marketing, L3).

The culture and the brand are interlinked. I think you couldn't grow your brand if you didn't think about the culture … I don't think you could have a brand that was sustainable unless you aligned the culture to it (Director of Customer Services, L2).

… it's certainly far from perfect, the way people live the culture (Customer Information Manager, L2).

Culture-brand misalignment is a significant issue for the organisations studied. Although this was widely recognised within the organisations and efforts were being made to change the cultures to more brand-supportive, it is notoriously difficult to change culture (see later for further discussion).

Inconsistent culture

Adopting an integration-based, consensual perspective one would anticipate that a culture with some inconsistent values, or having multiple subcultures which have conflicting values, would not encourage brand success. This is backed by a number of studies supporting the link between value consistency and organisational or brand performance. Kotter and Heskett (1992) identified a link between strong cultures and organisational performance. They defined a “strong” culture as one in which “ … almost all managers share a set of relatively consistent values and methods of doing business” (Kotter and Heskett, 1992, p. 15). Furthermore, when this was appropriate for the market and could evolve to match the evolution of markets, so the correlations became higher. Deal and Kennedy (1982) also argue that a strong culture has a positive effect on performance. Similarly, Gordon and DiTomaso (1992, p. 794) found that, “ … both a strong culture from the standpoint of consistency, and an appropriate culture from the standpoint of content, will produce positive results, but a combination of the two is most powerful”. Sørensen (2002) considered the link between strong corporate cultures and reliability of performance, finding that strong cultures help achieve higher performance levels and reduce performance variability. Brown (1995) discerns three main arguments as to how a strong culture leads to exceptional performance; it facilitates goal alignment, it leads to high levels of employee motivation and it enables the culture better learn from its past.

A number of studies have also gone beyond the link between values, cultural consistency and organisational performance to more directly explore the relationship between brand success and value consistency or cultural strength. Hankinson and Hankinson (1999) found that managers of the “top 100” brands perceived their corporate cultures to be stronger than did the managers of less successful brands. Burmann and Zeplin (2005, p. 281) found that, “The strength of a brand … is determined by the consistency of the different brand identity components”. They note that as customers” experiences of the brand are influenced by consumer-brand touchpoints, it is essential that “ … all employees need to be familiar with the brand identity concept and be committed to live the brand internally and externally”.

Consistency in the way the brand is expressed to stakeholders and consistency between the various brand elements has also been found to be an important factor in brand success (e.g. de Chernatony and Segal-Horn, 2003). What is promised by the brand via brand communications should be consistent with what is experienced by the consumer at each point of contact, which is driven by culture. Ideally therefore, organisational culture should be both internally consistent (i.e. a unified culture) and also consistent with the brand.

Given the literature that consistency in values and other cultural elements is likely to facilitate brand success, it may be the case that inconsistency in cultural elements is detrimental to brand success. Comments from respondents which reinforce this, in light of the relative lack of success of their corporate brands, include the following:

You would not find a common culture across the various head office sites, across the various call centres and branches (Customer Services Director, L4).

At the moment I personally think the culture is still very inconsistent, I don't think there is a culture across the brand. I think there are a number of little cultures within little functional silos (Head of Marketing, L3).

I could show you several different cultures within the same business unit … I think one of the problems with our culture is it can be very localised, so in pockets it's extremely good, in other areas it probably isn't (Head of Customer Service, L1).

There have always been different cultures … but they tried to do the same thing … now there is more of a gap between the cultures (Relationship Manager, L3).

Changing and evolving culture

As the values in society change over time, it has long been argued that a brand's values and those values characterising an organisation's culture will need to gradually adapt, in line with societal values (e.g. Rokeach, 1973). Kapferer (2004) differentiates between the “kernel” of the brand which should remain constant and the peripheral values which are from time to time refreshed. Collins and Porras (1998) refer to core enduring brand values and less central values, reflecting societal change. Davidson (2002) distinguishes between constant “moral” and changeable “performance” values. Similarly, Kotter and Heskett (1992) identified an adaptive culture as being associated with long-term economic performance. A static and rigid organisation culture is as harmful as an inconsistent and divided culture, because an evolving brand cannot be delivered through an intransigent culture.

There may be scenarios where a drastic step-change in culture is necessary if the culture is inappropriate and outdated as it has not adapted sufficiently to changes in societal values. The once Unilever subsidiary Quest exemplifies this as does the transformation of Cellnet to O2. Respondents from the less successful brands studied referred to current or planned cultural change efforts, and one organisation in particular was undergoing a major change initiative at the time of the study. Comments illustrating these efforts include the following:

I think it's been broken and it has to be fixed, if we don't fix it we won't “do” the brand … I don't suppose it will be easy (Director of Marketing, L1).

We've done a lot of work over the last two years on the actual values that the organisation has (Customer Services Representative, L2).

[Culture change] is one of the things on our “to do” list at the moment. The internal understanding of the brand and the internal confidence in the brand is something that still requires quite a lot of work (Marketing Director, L4).

We did an analysis of what the culture was … one of the issues going forward is around creating a culture that lives the brand. So we know the kind of values and the behaviours we want, what we now need to do is create a culture that supports that (Director of Brand, L1).

Figure 1, based on this research, models the process of organisational culture change in response to changes in societal values to achieve brand success. As societal values change over time, unless the organisation adapts naturally to this change a crisis point (Brown, 1995) is reached whereby organisational culture is no longer synchronised with societal values. Without efforts to change the organisational culture, the culture will continue to stagnate and the brand suffers. The culture change efforts within the organisation are mediated by a number of factors which either impede or facilitate change (discussed further below). If the culture change efforts are unsuccessful or are not maintained over time, the original crisis point will again be reached whereby societal values and organisational culture are nonsynchronous. If efforts to change the culture are successful, then the model remains in balance until societal values again change significantly.

It is hard to change an organisation's culture. Burmann and Zeplin (2005) note the difficulty changing corporate culture as it emerges from social interaction. Harris and Metallinos (2002) found that whilst management may take control of relatively shallow cultural change, deeper attitudinal change is more difficult. Mike (2004) observes that the change culture process is likely to be lengthy and there is a tendency for small victories to be mistaken for a successful overall change. Possibly the most serious impeding factor is the reaction of employees. Grugulis and Wilkinson (2002, p. 190) found that employees' “ … responses will be influenced by a person's experience of work as a whole and employees are more than capable of noting discrepancies between managerial promises and organisational practice”. Ogbonna and Harris (1998) differentiate between “resigned compliance” and “authentic willingness to change” – this parallels superficial and genuine changes in the values of the culture. As can be seen below, the difficulties are well appreciated by respondents:

I think one of the difficult areas for anybody who is trying to effect change is the middle management layer. Quite often they are people who have been around the longest and quite often are the most cynical (Brand Programme Director, L1).

It's changing very much, but if everyone doesn't feel the same way then it's not going to work. It's obviously very difficult, as it is much harder to change a culture than to change a process (Customer Information Manager, L2).

I've seen [the company] doing change before and effectively they design a process, a product and tell everyone it's in on Monday and therefore change has occurred … and there's been no cultural change at all (Director of Operations, L1).

As well as impeding factors, a number of factors will help facilitate the success of a cultural change initiative. Causon (2004) emphasises the importance of well-prepared and strong leadership. Similarly, Chatman and Cha (2003) stress that the example set by leaders carries more weight with employees than codified policy statements. Brown (1995) reviewed extant models of cultural change, finding that leadership was a universally important factor. An example illustrating the criticality of leadership to cultural change is:

What I think is helpful is that we've had a change of Chief Executive who is beginning to say things a little bit differently to the previous Chief Executive. I think that there is a level of cautious optimism in the general body of staff … if we can start to see some things being delivered on that, then we can see it will be changing for the good (Brand Programme Director, L1).

Thornbury (1999) emphasises the importance of communication, of involving everyone within the organisation as much as possible, and of ensuring the organisation's leaders are fully behind any change effort. D'Aprix and Tyler (2006) also note that for culture change to be successful, it needs to be based on effective communication. The following comments reflect the perceived importance of communication to the success of cultural change initiatives:

They had a culture change a while ago apparently, but I don't think anything changed … one of the ways to make it happen is to have a flagship visionary idea. I really think that's what the advertising does, it's a big beacon for the employees as well (Advertising Agency Representative, L1).

One of the challenges is trying to bring [the brand] together and bring people with us. It is about roadshows, talking to people, explaining how we've got to where we are and where we are trying to go to (Head of Customer Services, L1).

I think it's all about internal communications … you have to create the culture … it's how you define a culture amongst 60,000 staff … (Advertising Agency Representative, L4).

Culture focused on quantified performance targets

Achieving quantified performance targets has traditionally been the primary focus of financial institutions. As Valentine (2005) notes, “selling” as many financial services products as possible, accompanied by the requisite performance goals for employees is still the central driving force. This is compounded by the tendency of senior management to focus more upon improving quantified indicators such as share price, rather than focusing upon the brand (e.g. Wade et al., 1997; Maltz et al., 2003). This overlooks the fact that the “soft” intangible components of brand equity, e.g. reputation and personality give rise to the “hard” quantified performance metrics. A large number of respondents noted the emphasis upon quantified performance targets within their organisational culture, as illustrated by comments including:

There is a real push around the high performance organisation, performance focus, expertise (Marketing Director, L4).

High performance, great performance … higher achievement is now much more celebrated then it has ever been and delivery of that great experience is much more differentiated and rewarded than ever before (HR Director, L4).

We talk a lot about a high performance culture internally as well, so that's something that has been a focus, but again exactly what that means [is not clear] (Head of Market Research, L1).

… there is an extremely tight focus on where money is being spent and wherever there are manual processes there are big question marks … There is a strong push to reduce the cost base (Relationship Manager, L3).

As the financial services sector evolves, an overriding emphasis on short-term financial performance at the expense of other longer-term and more holistic goals (for example, consumer satisfaction or brand image) is not likely to engender a brand supporting culture. Moreover, a short-term financial performance focus is not conducive to building successful brands, and may result in “brand destroying strategies” (Berthon et al., 1999). According to Hankinson and Hankinson (1999), managers of successful brands are more likely to take a long-term view, measuring success in broader terms such as image ratings or position in category. Managers of less successful brands tend towards favouring more short-term financial indicators and are less concerned about brand reputation than a fear of “ … losing ground, even on a temporary basis” (Hankinson and Hankinson, 1999, p. 152). A balanced perspective, whereby managers encompass both elements of long- and short-term performance is advisable (Kaplan and Norton, 1992; Doyle, 1992; Schiemann and Lingle, 1997). In line with this, respondents highlighted the conflict or trade off between the best interests of the culture supporting the brand and the achievement of quantitative performance goals:

There are elements of the culture which are quite aggressively sales-focused. That is not necessarily what customers would want it to be, but nonetheless that is what has made us commercially successful. So there is a bit of a trade off there (Head of Market Research, L1).

The existing culture, I don't necessarily see it helping a lot because it's very much a sales driven culture (Brand Programme Director, L1).

Going back quite a few years, it was very much a case of productivity is all that counts … get as much out the door as possible, it doesn't matter if it's wrong, you can do it again later. That took a long time to break through; in fact we haven't got there yet because a lot of measures in a lot of departments still focus on getting it out the door … certainly it's changing to the idea that, no, getting it out the door wrong is a complete waste of time because it comes back in again and you lose face with the customer (Customer Information Manager, L2).

I think the organisational culture is entirely unhelpful when it comes to growing the brand. We are structured as business units organised into clusters which are profit accountable … so the incentive for any individual business to invest back into the brand is slight in the extreme. Because you maximise your profit short-term, you're actually not bothering in investing in the brand … (Marketing Director, L4).

In addition, a culture strongly focused upon quantified performance targets, rather than empowered employees, is likely to lead to a lower quality of working life and increasing workforce dissatisfaction. Long-term, this is not a brand-enhancing strategy.

Culture based on longevity and tradition which is averse to innovation

Hankinson and Hankinson (1999) found that successful brands were significantly older than less successful ones. Aaker (2004) highlights the importance of a brand's heritage. From this, one might postulate that there would be a positive relationship between longevity and tradition and the culture of the brand. The brands studied were all “legacy” brands, established over a century ago. However, we did not find a positive linkage between longevity and appropriate organisational culture. Indeed, a number of respondents referred to the adverse influence of longevity and tradition upon their organisational cultures, as can be seen below:

It is a more traditional risk management planning type organisation. They don't necessarily have the passion, the pride, the direction etc. I think what you see is the culture which has come from that traditional boring, staid, reliable type of organisation … We are not a very entrepreneurial organisation … that does give an issue in terms of a brand (Marketing Director, L4).

… it has been around for a long time … (Head of Brand Development, L3).

… I would describe it as boring … A lot of people, no disrespect but they do work here a long time … nothing changes. They need to liven it up (Customer Service Operative, L4).

The issue seems to be that many long-lived cultures have traditionally exhibited a lack of brand innovation and new brand ideas. Scholz (1987) identified five major culture types, based upon how cultures change over time, and how the internal and external circumstances of an organisation affect its culture. Cultures such as these represent Scholz's (1987) “stable” cultures, in that they tend to be introvert, backward-looking, risk averse and not accepting of change. Insightfully, Aaker (2004, p. 10) notes that the challenge for such large organisations is, “ … to make sure that the right spin is placed on the brand by dialling up innovation and success, creating an image of being dynamic and adaptive rather than one of being slow-moving and clumsy”.

“Tough” culture

One of the organisations has a particularly “tough” culture. This raises the question whether there is a link between this and its relative lack of success. A tough culture is likely to negatively affect employees and given the importance of employee behaviour to the brand this could adversely impact performance. By a “tough” culture, we mean a culture which is unnecessarily hostile, punitive and unsupportive to employees. Two comments illustrating the existence of a tough culture within organisation L4 can be seen below:

At the moment I would say the culture doesn't help grow the brand. We don't have a supportive culture whereby we encourage people to progress and learn. At the same time, we are much tougher as a culture than we need to be (HR Director, L4).

There is a culture of fear … people are looking over their shoulders, a lot of people getting beaten up. Have you heard the words “beaten up” quite a lot? It's a negative culture. I really and truly believe if you create a positive culture where people feel valued and supported then you will absolutely deliver what you want to deliver (Head of HR, L4).

The issue of tough cultures is touched upon in the literature. Bruhn (2001, p. 2) differentiates between “tough” and “easy” cultures, with the former being “ … cultures that are out of touch with their members' values and keep value conflict suppressed”, and the latter being “ … cultures that are sensitive to and responsive to members” values and deal with value conflict openly”. Organisation L4 appears to fall within the “tough” category in that value conflicts are suppressed by a non-democratic top-down management approach. Davies et al. (2004), in their work on the dimensions of organisational character, noted that the dimension “ruthlessness” was negatively correlated with employee satisfaction. Baker et al. (1999) found that to increase organisational performance, “ … managers should create organizational cultures in which information flows freely within the organization, employees are provided some degree of autonomy, and in which creativity and entrepreneurship are rewarded” (Baker et al., 1999, p. 43). As can be seen from the respondents' comments, organisation L4 is adopting a punitive rather than rewarding culture. Instead of a culture where employees live in fear of “getting it wrong”, Hankinson and Hankinson (1999) found that the managers of top brands are more likely to feel less pressured to “get it right first time”, and were more committed to a learning orientation than managers of less successful brands. We therefore suggest that a “tough” culture may adversely affect brand performance.

Implications and concluding remarks

This research provides insight into the interaction between organisational culture and brand success in those financial services brands in the UK which, whilst successful in certain respects (primarily financial), cannot currently be classed as truly great in branding terms. Weak brands may impede the attainment of even higher financial performance. Given that the majority of the literature focuses upon successful brands, research into less successful brands is essential to counter the dearth of work approaching the issue from the opposite viewpoint.

Organisational culture was perceived by respondents to be key to brand success. It was recognised that the organisation's culture is a powerful driver of employee behaviour, and as such strongly influences the way the brand is “delivered” to stakeholders. The values characterising the organisational culture need to be congruent with the values for which the brand stands, or conflict will occur (as was often the case in the organisations studied). It is essential that efforts are made to mesh the values of the culture as closely as possible onto the values of the brand. If a change in the nature of the brand is desired, it is important that this is reflected in the organisational culture.

In addition to consistency between the culture and the brand, managers also need to consider internal consistency between the brand values and those of the subcultures within the organisation. A problem amongst the brands studied was a high degree of inconsistency and multiple, diverse subcultures which resulted in considerably weakened brands. Whilst it can be argued that subcultures are always likely to exist in large organisations, work should be done to help the subcultures be as similar, complementary and brand-supportive as possible.

All the organisations studied spoke of either initiating cultural change or planning to do so, with the intention of bringing about a positive effect on the brand. However, it was noted that such change was far from simple to implement successfully. In order that the change effected be genuine and not superficial, cultural change initiatives must be consistently reinforced, widely communicated, supported from the top of the organisation and realistic for the organisation's circumstances at that time.

Cultures focused upon the achievement of quantified, predominantly financially centred targets were common across the organisations studied. A tendency towards a “hard sell” culture can only have a negative effect upon the brand in the long-term, as other facets of the brand become neglected. Managers are advised to avoid this trap by ensuring their organisational goals encompass a variety of both soft and hard, short- and long-term targets, reflecting a more holistic approach to organisational success.

Linked to the focus upon quantified targets and the issue of value conflict, another finding was that an overly “tough” culture is unlikely to characterise a highly successful corporate brand. A culture of fear, where risk and new initiatives are discouraged and punished is not conducive to allowing employees to enact the brand to the best of their ability, adapting to meet the demands of customers whilst still basing their behaviour upon the brand values. Rather, this results in a stuffy and rule-bound culture within which employees are forever looking over their shoulders. In a related vein, the long history and traditional nature of the organisations studied coincided with a tendency for them to be highly risk averse and less innovative. Employees should be empowered to take risks (within reason) and innovation should not be stifled by tradition.

In conclusion, this qualitative study has identified a number of cultural characteristics which are common to less successful financial services brands in the UK. Figure 2 shows the cultural pitfalls to be avoided when seeking brand success.

This provides a valuable starting point for managers concerned about the effect of their organisation's culture upon their brand. Unless the issues discussed within this paper are addressed, it is unlikely that the brands will achieve their potential. A replication of this study on a larger scale would provide valuable additional evidence and insight, giving managers further opportunity to better tailor their strategies regarding organisational culture and their brand.

Figure 1Organisational culture change in response to change in societal values to achieve brand success

Figure 2Cultural pitfalls to avoid when seeking brand success

Table IMethods used to assess different facets of brand success

Table IIResearch sample

References

Aaker, D.A. (2004), "Leveraging the corporate brand", California Management Review, Vol. 46 No.3, Spring, pp.6-18.

Interactions between organisational cultures and corporate brands

The Authors

Leslie de Chernatony, Birmingham Business School, The University of Birmingham, Birmingham, UK

Susan Cottam (née Drury), Birmingham Business School, The University of Birmingham, Birmingham, UK

Abstract

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Introduction

Methodology

Organisational culture: what is it, why is it important and what does it have to do with the brand?

Inconsistent culture

Changing and evolving culture

Culture focused on quantified performance targets

Culture based on longevity and tradition which is averse to innovation

“Tough” culture

Implications and concluding remarks

References

Further Reading

About the authors

Executive summary and implications for managers and executives

Non-alignment between culture and brand: candid observations from the UK financial services sector

Introduction

Inconsistency rules!

Bringing it together