In The Eye

Volume 10 - May 2005

Having a celebrity CEO, does add a vital punch to a company’s branding strategy

Technology marketing and brand management have undergone a massive transition in the past decade. The intense competition and commoditization of technology services have left companies grappling to find an ideal means to create effective service differentiators for their offerings. The onus to create proper service differentiators and a distinct brand identity is even more so in the case of Indian companies who are constrained to create a credible value proposition and enhanced brand equity in the face of scores of vendors showcasing similar or even identical capabilities and value propositions.

The advent of The Celebrity CEO

In their quest to hone in on optimal branding strategies the CEO’s of technology companies have emerged as brand ambassadors who encapsulate the moving spirit and soul of a technology brand. This phenomenon was not wholly unexpected. Technology companies have always been characterized by the entrepreneurial drive of their founders and the spectacular successes and the wealth they have created for their shareholders and employees have made their founder’s public figures and consequently brands as big as the companies they have created.

This affinity to a people led branding strategy is manifested even more so in the case of Indian companies as opposed to their western counterparts. This could partly be attributed to the fact that most successful Indian companies with the exception of say TCS have at some stage or the other been struggling start up’s which have then gone on to become success stories way beyond the wildest expectations of their founders. Such an expansive creation of wealth naturally caused an arousal in public interest and willingly or unwillingly these technology CEO’s found themselves thrust under the adulation of the public eye.

In sharp contrast to the people led strategy opted by their Indian peers, western technology companies have opted for a branding strategy that is predominantly organization centric. The reason for this approach could partly be due to the fact that these companies having been in existence for far longer periods, the mystique and the charm of an entrepreneurial start up was largely lost on them. Additionally the people at the helm of affairs rarely being the ones who have founded or nurtured the growth of the organization, there remained constraints to creating a compelling people branding strategy. Also the sheer scale and capabilities that they have built over the years in themselves proved to be significant branding differentiators thereby not necessitating the need for a people led branding strategy

As far as Indian technology companies are concerned they have been fast to recognize the enormous brand equity such a people led branding strategy holds and are building on strategies to harness their branding potential by aligning the brand value of the celebrity CEO in the context of the broader branding imperatives of the organization itself. The logic for this move is as simple as it gets. To the external stakeholders the CEO (usually the entrepreneur himself) is so very identifiable with the organization in terms of its values and visions, thereby enabling the company to tap on the emotional quotient of the association by providing a humane face to the organization. Most of Indian IT companies have been quick to exploit the potential of such a people led branding strategy. Today people like. Narayana Moorthy, Azim Premji, Ramalinga Raju and Jerry Rao are as big brands themselves as they companies they represent.

While such a celebrity status and accompanying corporate association might appear as an inadvertent fall out of being the public face of the organization the truth remains that such a status is a result of a concerted effort in image management, after all the companies in concern only very well realize how easier it is to sell their CEO as opposed to the organization itself.

Having a celebrity CEO, does add a vital punch to a company’s branding strategy. The celebrity CEO doubles as a human face of the organization and drives a latent association of the charisma and the other traits inherent in himself with the company. This association becomes even more pronounced in the case of technology companies where the CEO was also at some stage, the entrepreneur who was the moving spirit behind the company’s success. This halo effect of the CEO’s charisma also has a positive impact while dealing with prospects and customers. Technology purchases being significant business decisions are largely affected by the credibility of the vendor. The presence of a charismatic CEO leading from the front reassures customers and prospects as regards the prospects of the organization and nurtures a feeling of a mutual “buy in” into each others futures.

CEO branding – How prudent is this strategy

This can be better illustrated with the example of Spectramind, the BPO division of Wipro Technologies. As far as a potential customer is concerned there is a great deal of comfort in being associated with vendor who has at the helm of affairs someone like Raman Roy who is widely touted as the father of the BPO industry in India. As one of the pioneers of the BPO industry in India and his relationships with early proponents of the outsourcing initiative such as GE and American Express does a great deal to assure customers as regards the smooth execution of their processes. Similarly in the case of Infosys you have Mr. Narayana Moorthy ,.so often projected as a paragon of virtue that customers and prospects alike are utmost comfortable at the prospect of partnering with Infosys. Very often the presence of Mr. Moorthy and his personal reassurance to the customer has been the key to clinching many a deal for Infosys.

For smaller IT companies who do not have the luxury of large marketing budgets a people branding strategy helps immensely to enable the company gain the requisite exposure and build brand equity. In this context adopting such a people led strategy becomes even more important for smaller organizations. The prospect of having a high profile CEO who commands certain respect in industry circles is a sure shot way to bring the company and its solutions to the spotlight. Similarly such unaided awareness also aids the business development efforts of smaller companies in a big way. As far as a prospect is concerned there is always an enhanced level of comfort in partnering with a company which is headed by an individual who is well known in public circles as opposed to the prospect of partnering with an anonymous entity headed by an equally anonymous individual no matter what their capabilities may be

While this strategy of having the Celebrity CEO leading from the front as the brand ambassador and driving the brand equity of the organization has immense potential it is not without its pitfalls. For one thing being a public figure and having all your moves under the scanner of the public eye thrusts a great deal of responsibility on the celebrity CEO. The celebrity CEO is constrained to make efforts at remaining politically correct and shying away from any actions that could be perceived as being at odds with the corporate image so carefully nurtured. Just as easily as all the positive associations are created by the branding effort you could also have the effects negative publicity on the part of the CEO spilling over and tarnishing the brand image of the organization.

Another pitfall to this strategy is that the increasing prominence of a single individual as the face of a organization also creates concerns as to the organization becoming increasingly dependant on the goodwill generated by a single individual. The sheer focus of the exposure on a single individual as the face of the organization also inadvertently renders the next line of management to be projected as inconsequential. Such a scenario has widespread consequences for the organization in the sense external stakeholders reach a stage where they tend to accept only what the celebrity CEO states as coming on behalf of the organization. In addition this issue also raises concerns while planning strategies for succession management within the organization. Companies have to realize that the brand association driven through single individual no matter whoever it may be can never be enduring and hence the branding strategy too has to make provisions for the inevitable departure of celebrity CEO and further on. The classic case of Steve Jobs acrimonious initial break up almost sounding the death knell for Apple stands testimony to the potential risks that a people led strategy holds to an organization. Very often for the external stakeholders the association with the brand ambassador is so powerful the departure of the concerned individual also marks a departure of the organization from the vision, values and the spirit it previously stood for.

The issue of succession and passing the mantle becomes even more complicated in the case of technology companies that have been so perceived as marching behind the charismatic leadership of the entrepreneur CEO. Because the company is so prone to be viewed externally as being aligned with the vision and spirit of the celebrity CEO, his departure throws up a feeling of uncertainty as far as the external stakeholders of the organization are concerned. These issues need to be managed in a proactive manner and here again it takes careful planning and strategizing to ensure that the people branding strategy is balanced to make sure that the next level of management too is given their due share of branding exposure to ensure that the organization is not left at the lurch in the event of departure of the celebrity CEO. Companies like Infosys are examples for how the people branding strategy has been managed effectively to ensure enduring continuity of the brand equity. For instance at Infosys the company has been carefully nurturing the image of its next line of management carefully to ensure that it has not one but multiple brand ambassadors whom it can turn to while at the same time leveraging the aura around the more prominent personalities like Mr. Moorthy and Nandan Nilakani amongst others to the advantage of its branding strategy.

To conclude people led branding strategies adopted have so far been very successful as far as the Indian IT majors are concerned. However it should be remembered that they have to take adequate measures to ensure that their branding strategies are balanced with care taken to ensure that brand equity of the organization is not solely linked to any specific individuals nor to any specific associations.