Forgotten Powerhouse: Brand Culture an Untapped Competitive Edge

When creating a brand, we often think about how we'll be perceived or what impact we'll have, but something essential is often overlooked: Culture. 

A brand is forged from the inside out to be reflected on the outside.

In a landscape where companies are constantly seeking competitive advantage, brand culture represents a significant opportunity that companies have largely forgotten: According to a study by the Inter-American Development Bank (IDB), Mexico ranks 12th out of 19 countries in terms of quality of employment.

The importance of brand culture lies in its ability to bring to life what defines the company's being and doing; to overcome fragmentation and ambiguity and translate them into actions that shape how others perceive us. It creates the desired positioning and differentiation.
Or as the popular saying goes: "You are a reflection of the values you learned at home.”

Those who understand brand culture as a strategic differentiator are one step ahead.

What is brand culture?

It's the reflection of what the company says and does, the set of beliefs, values, and promises that influence how members of an organization interact with each other and with the outside world, creating a sense of belonging.

Just as a brand builds external perceptions, it must do so internally, and brand culture is the vehicle.

If we understand culture as the engine of the company, capable of driving the company's relationship with its external environment, it is the first step that every company must address and organize before worrying about external factors.

If this engine is not in good condition, progress is still possible, but how much faster could the journey be? How much smoother would the ride be? How costly will it be to continue the journey until it affects other areas?

Placing values on the office wall, focusing on the aesthetics of the furniture, or verbalizing the purpose or vision to employees at every opportunity – to name a few examples – isn’t working on culture. Implementation from the structural level is required, otherwise these changes will be temporary and superficial. The organization will tend to return to its previous state because the deep values and beliefs remain the same.

Tangible Impact on Business

It's surprising how most companies worry about and allocate significant budgets to marketing, advertising, and resources that impact on the outside, but overlook ensuring that their members understand, connect, and live the brand. If employees are unable to make a connection, they will struggle to authentically communicate it.

Some data that reflects their impact:
- 70% of people trust what employees say about the company more than what the company says about itself. - Branding Business
- Companies with high employee engagement are up to 21% more profitable. - Gallup

Successful organizations such as Southwest Airlines, Walmart, and other market leaders didn't necessarily have traditional competitive advantages, but rather distinctive organizational cultures.

"Train people well enough so they can leave. Treat them well enough so they don't want to" - Richard Branson, Virgin Group

Don't pretend. Be Culture-Centric

In brand culture projects I've worked on, some answers are repeated almost automatically: "People are the most important thing here," "This is a place for employee development," "We always ask them how they feel about the company," and so on. 

In many cases, these are genuine intentions, but the reality is that employees often have different perceptions than managers. Saying that company members are important while neglecting culture is like talking about being customer-centric and then having your reputation damaged by the "fine print."

As companies and teams define themselves as customer-centric, we should think more in terms of being culture-centric. Just as teams work externally to attract and win every prospect, the HR team should do the same internally, aligned with strategic goals.

To align business and culture, we at Naoz use a methodology that allows us to first identify the types of organizational cultures and their health.

A. Innovation Culture: Characterized by a visionary, agile and entrepreneurial culture. It prioritizes innovation and change. Generally found in startups.

B. Family Culture: Characterized by dynamic relationships, fluid and close communication, with less emphasis on structure. A culture found in small, family companies or in their early stages.

C. Market Culture: Focuses on what is happening externally, mainly on competitors, sales, and the constant search for differentiation. Its weakness is that it is the type of culture that most minimizes the internal view and lacks self-awareness and alignment.

D. Structuring culture: Focused on coordination, processes, and organizational structure. It's a culture that seeks efficiency and consistency, but can also create dependencies.

No culture is perfect on its own; the value lies in identifying dominant characteristics and properly aligning business, brand, and culture. Finding the balance in each one, according to its business goals and maturity, means integrating the vision under a single direction.
 

Gaps Between Internal Culture and Delivered Promise

What can lead to a misalignment between the internal culture and the promise that is delivered to customers?

Here are some of the most common:

Integration: Culture doesn't take its place as a strategic element, becoming a lower priority compared to other issues, but especially without considering the vision of employees at different levels and in certain strategic decisions to gain perspective and business reality.
According to a study carried out by AON, 50% of companies in Mexico claim that employee care is not a priority due to lack of support from senior management, a proportion 3.8 times higher than the global average.

Incoherence and inconsistency in implementation: Driven by quantity, culture initiatives are not built from a strategic sense of the brand and for the employee, so the actions don't reflect the true identity of the company and results in a loss of engagement.

Principles versus values: The role and purpose between these is confused. Concepts such as Innovation, Leadership, and Quality are principles that define (in a certain way) the company, while values are the actions that build the behaviors of the culture. Principles: external; values: internal.

Internal misalignment: The absence of Brand DNA creates multiple internal definitions of the company, which have external repercussions due to the lack of clarity about expected behaviors.

Transforming Brand Culture

When transforming culture, one of the biggest challenges is bringing to life Brand DNA and business-relevant meanings. How to combine the elements, along with proper activation and implementation, will allow building a culture plan.

At Naoz, we work on this in four key phases. Building a culture that Understands, Connects, and Lives the brand. Finally, we have added the Closure and OffBoarding phase, which is often considered "unnecessary" by companies, but can impact the entire employee journey if neglected or handled poorly.  According to Daniel Kahneman, the last 10% of the experience influences and defines 90% of the overall perception.

Each phase allows us to build and reflect what the brand needs, and to track and measure it. To know what to do, how to do it, and most importantly when to pivot and/or evolve.

Culture is a responsibility that cuts across all areas of the organization. While human resources is responsible for proper management, it is not the only one. The role of leadership is fundamental in this process. Leaders must act, speak, and behave in ways that are consistent with the brand promise, truly believe in the values, and model their behavior.
At its root, cultural change is closely tied to individual change.

A recent study by AON shows that 39% of executives support culture initiatives, but only verbally. Another 33% provide passive support for actions. Only 25% of leaders have a commitment between what they say and what they do.

There is a vast opportunity to not only differentiate yourself externally, but also to begin by strengthening internally, reinforcing the direction in which the company is built.

Actions everyone could take:

1. Audit the existing culture to identify gaps between the current state and the desired state.

2. Identify the culture needed to achieve business goals and build internal cohesion

3. Create culture initiatives and actions inspired by the Brand DNA

4. Implement a culture activation plan that resonates and connects at all levels

5. Build and measure the levels at which employees connect, from awareness and engagement to relevance.