Breaking the Law of Inertia with Brands and Businesses

Breaking the Law of Inertia with Brands and Businesses

Refreshing a brand sometimes requires a whole lot more than cosmetics. It may require rethinking the entire business. This is especially true when the reason for the rebranding effort extends beyond novelty or staying relevant. Instead, the repositioning must help the company stay alive.

Such a case may require fundamentally rethinking both the business and brand strategies to better meet changing market, competitive and customer landscapes and to better capture new opportunities and mindshare.

With so much at stake, there can be no room for misguided ideas originating from “dominant logic.”

Flawed Thinking

Drs. C.K. Pralahad and Richard A. Bettis originated the concept of dominant logic in 1986 in their study of strategic management. Simply put, dominant logic refers to a set of mental assumptions widely shared among key members of a group. It is the “accepted” way of thinking within an organization.

Over time, the thinking becomes so embedded that it creates a filter or blinders that affect the way an organization interprets and processes its place in the world. Consider the implications of flawed thinking:

  • What if the assumptions supporting the dominant logic fail to account for incremental changes in the competitive landscape or recognize major changes in the marketplace that have caused value to shift somewhere else?
  • What happens when dominant logic creates an environment of false harmony, in which a team plods along in a direction that individual members may believe is wrong, yet do not speak their minds to avoid confrontation or friction?

Without a rigorous way to challenge, verify and validate its dominant logic assumptions and how these are manifested in its brand, an organization risks embedding a mindset that misinterprets the surrounding world. And, it risks creating a brand that actually repels, rather than attracts customers.

That’s why smart business and communications executives make it a point to systematically challenge their company’s dominant logic on a regular basis. This ensures that their worldview is in line with the current reality, and positions their business and brand to take advantage of changes in the marketplace and competitive landscape.

And there is no better time to challenge your company’s orthodoxy than during a rebranding.

Psychological Inertia

According to Dr. Gordon Hewitt, professor of business administration at the Ross School of Business, University of Michigan, dominant logic is neither good nor bad. It is simply the way companies make sense of the world, which is usually driven by a set of assumptions that are often reinforced by other players and key constituents in a given value chain.

The assumptions tend to fall in three areas:

  • the unspoken nature of the game (industry model)
  • the perceived economic rules of the game (business model)
  • the belief that a company has an established way of doing business to maximize the game (organizational model)

Three Assumptions in Dominant Logic[i]

Hewitt says that dominant logic lives in the overlap of these assumptions, which can lead to group think. He goes even further, saying that much of the conventional wisdom about managing change and evolving businesses and brands ignores the fundamental challenge of overcoming inertia.

Barring significant external forces, Hewitt believes it is the tendency of any system to remain stuck in an existing state.

At the center of it all is psychological inertia. This is the force which dominant logic attempts to explain.

Psychological Inertia[ii]

Of all the possible factors leading to a resistance to change, psychological inertia is the most difficult one to evaluate, largely because it is invisible.

While we can readily observe visible forces (e.g., inefficiency, lost sales, low morale, reduced productivity, ugly logos), it is very difficult to readily see and understand the psychological factors. This is because their roots lie in the minds of an organization’s people and set their frames of reference about the world in which they live.

The negatives of psychological inertia can also manifest themselves in the brand – as they become an underlying part and reflection of the way employees think about, express and live a company’s value proposition and brand promise.

Deeper Exploration

At G&S, we’ve found that regardless of the triggering event, the process of refreshing a brand leads to a fundamental pressure testing and rethinking of the business. Even isolated exercises can spark discussions and debate beyond the brand strategy to address the underlying business strategy.

What often may start as a desire to update an aging brand iconography, help create consistency and bring order to a brand architecture quickly moves to a deeper exploration of business and brand strategies. And, it often starts with the simple yet hard-hitting questions of, “Why? Who? How? And do they really care?”

Viewing the world from the perspective of your “customer’s customer,” prompt yourself to redefine your company’s value proposition by asking: “What do they care about?” and, “what do they require to be successful?”

G&S recently teamed with Dr. Hewitt on a dominant logic workshop designed to help a brand reinvent itself in the marketplace. The workshop included a discussion about one of the most powerful global companies and iconic brands of the 20th Century: IBM.

Breaking the Box

IBM had suffered serious financial problems as the world of computing – especially what was once their core business of mainframes – experienced major upheaval. The dominant logic of IBM at the time was firmly rooted in the “old competitive game,” and resistant to seeing, hearing, or adapting to new realities. Big Blue, after all, was Big Blue, a world-class computer company.

The IBM dilemma was eventually confronted by a new CEO, Lou Gerstner, who came from outside the company and industry. He forced the company to start fundamentally rethinking what its business was about and what its brand stood for.

So, while other traditional competitors remained stuck in the dominant logic and have since disappeared, IBM successfully moved its brand away from mainframes and computers. Today, IBM is a big data, “thinking” innovator whose software, services and systems are helping transform industries as diverse as agriculture, banking and healthcare.

Dominant logic is not easy to break. In the case of IBM, the industry, business and organizational assumptions had boxed the company into a set way of thinking about itself, customers and competitors. Executives had to move their thinking and the company brand from a mindset of selling hardware to that of a service company enabling clients to use knowledge gained from data.

Disorder is in Order

With the introduction of IBM Watson, the company found a new way of creating value through a personalized product brand. Fundamentally repositioned as a value creator, IBM successfully transitioned from “selling machines” to “selling services.”

IBM has been able to successfully leverage its global brand reputation to become a different kind of company – a true information company, rather than one focused on data or computing.

Today, IBM is no longer focused on the incremental functionality of its machines. Its most compelling brand messages emphasize relatable benefits for customers and customers’ customers:

  • Helping customers get the most out of cloud computing, no matter where they are on their journey – from initial strategy development to building their first app.
  • Creating new partnerships between people and computers that enhance, scale and accelerate human expertise.
  • Helping customers tap into and integrate the vast amounts of data available – from their own business, IBM and third parties – to gain unprecedented insight and advantage, regardless of industry.

Mustering the courage to break the law of inertia is not easy when invisible forces are at work. To paraphrase Newton’s law, change will happen when an “unbalanced force” disrupts ideas at rest or in motion. To enact positive business change, sometimes, disorder is in order.

G&S Vice President Brad Bremer contributed to this article.

 

 

[i] Dr. Gordon Hewitt, professor of business administration at the Ross School of Business, University of Michigan.
[ii] Dr. Gordon Hewitt, professor of business administration at the Ross School of Business, University of Michigan.

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    Steve Halsey is Managing Director, Business Consulting, G&S Business Communications. Global businesses and brands seeking a competitive edge rely on Steve to find the best paths forward. In his role, Steve helps launch new products; build, protect and manage reputations; explore new concepts and models; and map out winning strategies that allow clients to increase their market share. He challenges conventional wisdom for B2B and B2C companies, providing clients with increased brand value, awareness with target audiences and loyalty. Steve also oversees the agency’s digital and social media initiatives as well as research, insights and analytics teams, and he established G&S’ proprietary I Power™ strategy and messaging service. He is a member of the International Association of Business Communicators and Public Relations Society of America. An avid rugby player, Steve moves with agility to execute projects with powerful models that elevate brands.

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