Banding Together, Branding Together

“If a team is to reach its potential, each player must be willing to subordinate his personal goals to the good of the team.”

At the 2013 Annual IEDC Conference, I attended a session entitled “Banding Together, Branding Together: Finding Common Ground through Regional Marketing”. The focus of the session was to share real world examples of how collaborative efforts between EDOs (and other organizations) can help strengthen the brands of all involved.

The session was great. But two questions came up that I thought might be useful to address in a blog post.

Banding Together, when does it make sense?

I think this is a question that needs to be asked and answered before any collaborative effort gets underway. It is important to realize that collaboration is a strategic organizational choice to achieve a specific objective. It is not necessarily a right choice for every challenge.

The goal of any collaborative effort is to create an integrated and mutually reinforcing set of capabilities that underpin the where-to-play and how-to-win choices made in your community’s strategic development plan. The collaboration seeks to leverage each organization’s individual activity system. Logically then each participating organization should have an activity system that supports the choices in some way. If there is nothing in common among these activity systems, it is a sign the organizations may not be a good fit for a collaborative effort.

For perspective, Michael Porter is the genius behind activity systems. He noted that powerful and sustainable competitive advantage is unlikely to come from any one capability, but rather from a set of capabilities that reinforce each other. The visual depiction of those capabilities is an activity system.

In less academic language, you need to have a clearly articulated objective. Then you need to convince yourself that it will be easier and/or more cost effective to achieve through a collaborative effort than trying to go alone. Once you have determined this is the case, you need to identify organizations that bring capabilities to the table that are required to achieve the objective and capable of reinforcing each other to deliver a superior result.

The required reinforcing capabilities can be thought of as reinforcing rods shared by the organizations in the collaboration. Each organization will have other capabilities used to achieve their individual missions, but it is the reinforcing rods that are the focus of your collaborative effort.

In the book “Playing to Win”, this reinforcing rods concept is illustrated using P&G’s business strategy as an example. Every brand within P&G has a unique activity system required to successfully compete in its market segment. But each brand benefits from being able to leverage the unique capabilities (reinforcing rods) of the category team and the corporate team. Note, the rods represent capabilities important at all three levels.

In a similar way, you should be able to draw relevant activity maps for each collaborator (this will help you understand the capabilities each brings to the collaboration), and identify reinforcing rods that help describe the capability alignment that is expected to provide competitive advantage. Note, sometimes collaborators bring capabilities that are missing at other levels (e.g. a local EDO can bring a 1:1 understanding of a company’s needs while the Region and State may contribute industry knowledge). The reinforcing rod in this case is typically described as a broader capability (sticking with the example – customer understanding) that encompasses the related but unique capabilities of the collaborators. Creating activity maps and finding the reinforcing rods is more than a paper exercise. It encourages a deeper dialogue around what the benefits of collaboration are. Sometimes, you find unexpected benefits that can and should be realized with a little extra attention.

The most important thing is to be able to articulate the reason for the collaboration. This allows you to assess if there are missing capabilities that need to be filled by seeking additional collaborators, and it allows you to establish performance metrics for the collaboration that every member can agree to.

Branding Together, is it a good idea?

This is a strategic question, and the answer lies in understanding the fundamentals of brand architecture. The three options are a branded house, a house of brands, or a hybrid model.

In a branded house model, the benefit is derived from bringing together multiple geographies under a single, strong brand. Geographies leverage brand recognition and reputation of the house brand. In a branded house, all members must share the same brand promise. The advantage is economies of scale. It is a strategic choice that relies on synergy where the whole is greater than the sum of the parts. The disadvantage is it can be challenging for individual geographies to establish a separate image. Companies that have been very successful with this model include Microsoft, McDonalds and IBM.

In a house of brands model, the individual geographies are more distinct and widely recognized than the parent collaboration. Each collaborator has its own unique identity, while the parent collaboration identity is virtually unknown. The benefit is letting collaborators manage their own identity. The downside is the collaborators derive no benefit from a strong parent brand. To be clear, there still needs to be a strategic reason for the collaboration (e.g. cost sharing or risk reduction). And to be successful, the collaborators must truly be unique otherwise the overall collaboration may fail as a result on internal competition. Procter & Gamble is frequently cited as an example for this model.

The third model is a compromise position – Blended House. It is a design that walks the fine line of providing collaborators with flexibility to establish their own image, but still derive value from a brand established for the overall collaboration. GE is a good company example of a blended house. The company offers a wide range of products that are seemingly unrelated but all benefit from the GE brand image of being a high-quality technology company. The downside of the blended house it that it is the hardest of the three models to manage well. It requires definition of an overarching brand promise each collaborator can align to and is willing to use to set parameters for their own branding.

In economic development, the choice of model will depend on the scope of the geography under consideration. Even at the community level you could elect to pursue a branded house where the community is the dominant brand, a house of brands where neighborhoods establish and maintain their own images, or a blended house where both neighborhoods and the community work together to establish their respective brand images. There is no right or wrong answer. But, often the budget available will guide you in a particular direction.

When I was responsible for branding Ohio, we elected the blended house model. We recognized that there are certain venues where the Regions would benefit from competing under the State umbrella, and other venues where competing as a Region would be more effective. In my experience, the further upstream you were in the site selection process, the more valuable the State brand was to the collaboration. For example, foreign missions offered a real opportunity for collaboration. Regions could cost share by participating in State led missions, and schedule separate company visits while in-country. Done right, the State uses its position to open doors with companies that might be more difficult for the Regions to open on their own. Similarly, attending Trade Shows (like CoreNet) with a State exhibit allowed for creating a bigger presence than going alone and by cost sharing ends up being less expensive than going alone. We also invested in Wall Street Journal advertising to communicate Ohio’s sweeping tax reform and the core State brand promise. Important information that the Regions could not afford to promote as widely, but helped open doors for Regional meetings with business executives looking to make a capital investment. Each marketing investment was assessed in advance to determine if it was best done individually or by the collaboration.

Bottom-Line?

Don’t band or brand together simply because it sounds good. Make an informed strategic choice. Know why you are doing it, and measure the results of the collaboration directly to ensure the desired benefits are actually realized. If you create a new organization to support the collaboration, set crystal clear expectations and align them with the performance measures you select.

Remember, collaboration takes resources and leadership to work. If you are thinking of using a collaborative approach to accomplish your objective, it would be wise to heed the advice of fabled coach Yogi Berra –

“Yogi saw three of his players in the locker room wearing Cone Head hats. Yogi said, Those guys make a pair.”

If you decide to move forward, then please read this post –

Ten Tips For Successful Regional Collaboration

Discussion

As corny as it might be to say, the choice of banding and branding together really isn’t rocket science. It is simply common sense. But, unfortunately funding availability rather than strategic thinking more often drives the decision. The typical scenario is that business executives frustrated with the current economic development in their community, pool money to make a difference and voila a new organization or initiative is started. It is the old “whoever has the gold makes the rules” principle. Generally speaking, this creates more confusion than help.

I’d love to hear your experience with banding and branding. What are the hurdles you see? What are the benefits you may have derived in your EDO? What are the typical questions from Your Board that you have to answer? Is a banding and branding exercise in your EDO’s near-term future?