Honesty is sustainable

July 2, 2010
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First, it was the Pony Express; now it’s the Internet: News travels increasingly fast. The Internet and social media have perpetuated the need to know it all — right now.

Whether companies know it or not, they are being held accountable to the general public in new ways. How they approach that accountability can impact their overall brand and their profits.

Yang Kim and Kevin Budelmann are the wife and husband duo behind People Design, a Grand Rapids firm. The couple, along with People Design copywriter Curt Wozniak, will release a book this fall titled “Brand Identity Essentials.”

“The big lesson so far has been that honesty is sustainable,” said Budelmann. “Prior to websites when companies had a single front door, it was easier for companies to have multiple faces. Not that a company would explicitly aim to deceive, but you might be a health care person one day and an education person the next, because your main communication was your brochure. That became really complicated the moment a single company had to figure out what to put on the homepage of their website.”

Budelmann said that simply considering what to put on a homepage have caused internal conflicts between departments over which should receive more attention. These conflicts beg deeper questions about the strategic positioning of the company.

“That’s an element of basic transparency to begin with,” he said. “What is the makeup of this company? Now in the last few years with social media. … you get into another magnitude of transparency.”

Kim noted that transparency can affect the emotional connection a consumer has with a brand. She gave global specialty retailer Gap Inc. as an example.

“When the whole online thing was a big deal, you may or may not have known that (Gap) owned Banana Republic and Old Navy, but once you go online, all three are there in the same space. They clearly are related, and so what does that do to their customer basis, the different demographics for each of those three? Then they keep adding things like Piperlime and Athleta. Once you thought, ‘This was an exclusive brand to me. Now they own all these other ones, so I don’t know if I like them as much.’

“Being transparent led you to knowing that it was a bigger deal than you thought. Who knows if it’s a good thing or a bad thing?”

Kim offered BP as a different kind of example. The company now infamous for its oil spill would not initially allow cameras to tape their animal-cleaning efforts. Once the company realized that restriction only added to its bad press, it changed its policy.

“(BP) is probably the kind of company that was not very transparent. They didn’t have to deal with things like (the oil spill) before. Now that everyone’s talking about and blogging about it, it’s all over the place,” said Kim. “Things are happening very quickly and they’re out there before you can control your message.”

Because so much information is circulating that is beyond a company’s control, there is an added stress for companies to match their actions with the image they are trying to present, Budelmann said. The best way to confront the effects of transparency, he said, is through strong internal communication on the actions, beliefs and values of the company.

“I think that companies need to act more like people. You have to accept that there is information out there about the firm that you can’t control. The first thing is to not freak out,” he said.

“You’ve got to be able to respond in a way that is human. Don’t immediately turn on the corporate robot: ‘That wasn’t us!’ It’s a lot like personal relationships. You have to think about the fact that people are fallible and people are generally accepting of mistakes if you own up to them.’”

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