Identifying Symptoms of Identity Malaise
Chajet, Clive, Management Review
IDENTIFYING SYMPTOMS OF IDENTITY MALAISE
In this age of rapid change and business restructuring, corporations have become increasingly vulnerable to "perception gaps." This malady stems from a company's inability to persuade its critical audiences that it is managing change, rather than letting change manage it. Correct identity practices -- the ways a company presents itself to the world -- enable management to shape a company's image and reduce the harmful gap between reality and public perception.
Often, managers associate corporate identity with name changes or radical alterations in visual corporate design. In fact, corporate identity is the most visible element of corporate strategy, and may include visual systems, logotype, nomenclature, and communications systems that coordinate the identity with strategic planning. Not only is the importance of identity misunderstood, it has been misused. Some have treated corporate identity as a vanity issue, tying it to personal esteem by m aking the name sound important. This limited view can cause a company's identity to stagnate. Identity, properly conceived and managed, should enhance a corporation's image, not just the prestige of its senior managers or board of directors.
Inaccurate perceptions can have a negative impact on a company's sales and earnings, its employee morale, its ability to attract talented people and expansion capital, and its performance on Wall Street. These seemingly unrelated problems may be symptoms of an identity problem and perception gaps. For example, the personnel department complains that the wrong people are applying for positions at the firm. Financial managers complain that the wrong analysts are following the company's securities. Senior management observes that sales are slow, while the industry is booming. These problems may mean that the company is projecting the wrong image to its crucial audiences.
Consider what can happen when a company's strong local or regional image detracts from its new strength in national or international markets. Executives at the company once known as Sohio were faced with this problem.
NEW NAME, WIDER APPEAL
Sohio's identity was fused with the regional identity of its gasoline and service stations, creating the false perception that it was strictly a company selling gasoline in Ohio. In truth, Sohio was the 24th-largest corporation in the United States, with the nation's largest domestic oil reserves, among other assets.
The compabny resurrected its former legal name--The Standard Oil Company--from the years before the breakup of the old Standard Oil Trust. The adoption of the name was feasible because all the other companies that once comprised the Trust had abandoned the use of this corporate designation. For example, Standard Oil company of New Jersey changed its name to Exxon, and Standard Oil Company of California became Chevron. The Sohio name, however, was retained and used solely as the retail brand name for its petroleum products sold within the Ohio market.
By becoming The Standard Oil Company, the firm achieved a nearly instantaneous perception of international stature and historic prestige--an image more reflective of the company.
The limitations of a regional identification are clear. Perhaps more frustrating is the discovery that the wrong people are sending out the wrong messages to audiences important to your corporate health. Unless the right security analysts follow a company, for example, it risks being misrepresented to potential investors. Executives at United Aircraft were confronted with this problem.
Unite Aircraft had evolved into a true conglomerate, marketing well-known products, including Carrier air conditioners, Otis elevators, Norden defense systems, and Sikorsky helicopters, worldwide. However, the parent company was followed mainly by a narrow segment of Wall Street security analysts, who inaccurately depicted the company by evaluating it solely on the basis of the volatility of defense industries. …