Would you rather brand or innovate?

Last month my dear friend and former boss Tom Blackett sent me a revealing annual report from an organization call the WIPO

WIPO is the UN body for Intellectual Property and has been around since 1967. The body recognises the vital role that intellectual property plays at the heart of business and entrepreneurship.

Till recently, intellectual property was largely construed to mean innovation and patents. And a body like WIPO tracks the number of patents registered as a means of assessing growth in innovation. They generate maps depicting the innovation rich parts of the world. This year the focus of the report has switched dramatically,certainly reflecting the times we live in. 

WIPO has been tracking the growth of trademark registration. It is now patently evident that these are no longer merely legal placeholders but strategic assets that power shareholder value . Every good brand is based on a proprietary notion and if there is no protection of that idea (as represented by the trademark) then the copying of ideas would be rampant. This would discourage entrepreneurs from starting new businesses thereby slowing down growth in economies. Those of you who have seen counterfeits of your brands in the market would know exactly how annoying and discouraging this is. 

Trademark registration has soared across the world. As consciousness grew of brands as contributors to economic value (and hence market capitalization), this was not surprising trend.

The World Intellectual Property Report 2013 titled ‘Brands – Reputation and Image in the Global Marketplace’ states that in the US for the first time, investment in brands has surpassed investment in R&D and design. This is a dramatic change in the orientation of what constitutes long term value. A defining moment in the history of the  world's largest economy.

Obviously businesses have recognised that enterprise value does not necessarily come as much from technological innovation (product differentiation) as how their beneficiaries engage with the final outcome.

I would argue that even ‘tech’ companies like Google and Intel use R&D as a means of furthering their brand idea – ‘better search’ and ‘faster chip speed’ perhaps?

Would you tell me what you think?

The Return of the King

Two weeks ago I woke up to a cryptic text from a senior journalist friend of mine: “HE’s BACK…AND HOW!”

Not the most illuminating as communications goes, you would agree, but I knew him well enough to understand his excitement. Mr. Murthy (for whom he has very high regards) had returned to the saddle of the iconic IT firm which he had co-founded. And his return seemed to have bolstered its sagging performance.

It might be premature to attribute INFOSYS’s turnaround to Mr. Murthy's second innings, but it would surprise anyone if that were indeed the primary reason for the turnaround. Because he seems to be in very good company globally.

Howard Schultz, Michael Dell and the redoubtable Mr. Jobs are some of the better known names to have arrested and reversed the southbound fortunes of the firms they founded. If we look hard enough we would probably locate many less celebrated founder revivals.

So why is it that the promoters are able to come back under strange new circumstances, roll back the years and deliver a performance that their highly skilled, well-paid successors were not able to approach, leave alone replicate?

Spare a thought too for those CEOs with wonderful track records who came a cropper after taking the helm at some wonderful, successful companies only to see them flounder despite their best efforts? Remember Disney?

What did these returning kings do differently then?  They just reclaimed their soul. Every successful founder leaves behind a unique legacy. Very often inarticulately.

The troubles of these iconic firms usually begins when new leadership attempts to raise the bar on performance without considering the role and influence of its founding legacy.

Analysts worry about whether Apple will continue to disrupt without Jobs. Can TATA be ethical and fair without a TATA?

While the term ‘soul of the business' may sound esoteric, it is the defining element of strong and durable brands. Customers consider, rebuy and advocate businesses that have a soul that resonates with their own beliefs. And for customers to hold on to that resonance, it needs the organization to bring the soul to work each day. Day after day.

When Howard Schultz returned to Starbucks, he took the tough decision of shutting all the 7100 stores in the US for a half a day as baristas were retrained in the art of making great coffee. It is only now that the analysts and investors get interested. The sheer consistency of performance that comes from single mindedness even in the face of adversity.

Customers weren’t just buying a great cup of coffee, they were buying the passion and commitment of Starbucks employees towards them. Retraining employees was about reclaiming that expertise so as to be able to embody distinct values into a perfect espresso.

Sometimes it takes an outsider like Alan Mullaly to re kindle what the insiders have forgotten about a FORD. Is it surprising really that he was short-listed to run Blackberry?

Founders instinctively know what the soul of their business is. And they know that when the business is floundering, that it usually has lost its soul. The other people who know this are the customers who notice (consciously or unconsciously) that something is amiss.

When founders come back, they Instinctively or otherwise return to reclaim that founding legacy. They remember the recipe with great ease because they discovered it.

Mr. Murthy's memory seems to be in great shape.

What do you think?