The Identity-Based Brand: New Criteria for Creating value Through HR

By Larry Ackerman Dec 3, 2009
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For nearly 30 years I’ve had the opportunity to help some of the world’s most influential organizations build successful corporate brands that have become magnets for talent, revenue and capital. Clients have in​cluded Fidelity Investments, Maytag, Ingersoll Rand, Dow Chemical, State Farm Insurance and Lockheed-Martin. For all the business diversity these companies represent, however, they all have one thing in common: a powerful, immutable identity that is the source of how they create value in the world. That identity is the foundation of their brands.

Case in point: Some years ago Dow Chemical faced a multifaceted brand challenge. The company needed to spur top-line growth beyond its 3-4 percent tracking of gross domestic product (GDP), wanted to strengthen its relationship with its up-and-coming talent and strived to deepen its bonds with the communities around the world where the company had major investments. Dow’s management understood that the brand, to be authentic and relevant to all stakeholders had to reflect how the company created value—that is, how Dow, as one enterprise, made a unique contribution in the marketplace.

Cracking the code on Dow’s core identity was the place to begin. The identity discovery process included an analysis of the company’s history as well as its present-day operations and led to the conclusion that Dow was driven to improve constantly what is essential to human progress by mastering science and technology. In short, while chemicals, plastics and agricultural products might have been what Dow made, that wasn’t what business the company was in: Dow was in the consumer essentials business. This insight led to changes not only in Dow’s value proposition to major customers, such as Procter & Gamble, but also in the basic values the company adopted to help align its culture with its identity, in its competency modeling system and in leadership development practices. As the foundation of its new brand promise, Dow’s identity also became a platform for reframing its relationship with key communities globally.

Over time, I have come to believe that identity—the unique characteristics that define a company’s value-creating potential—is the key to understanding, and even predicting, business success, and that a company’s and its employees’ “identity strength” is what drives value creation. Consequently, companies and individuals with strong identities should fare better than those that lack this important, if elusive, asset. But, despite the positive results identity-based branding has produced over the years, the ability to quantify—and thus “prove”—the impact of identity has eluded me. Until now.

A year ago, we launched a research study—the Identity Impact Survey—to test the hypothesis, quantitatively, that identity strength influences employee engagement and, in turn, business performance. The survey included nearly 2,000 respondents across five companies selected for their ability to meet the following criteria:

  • Industry diversity: business-to-business and consumer.
  • Size: Large (greater than $8 billion) and small (less than $100 million).
  • Ownership structure: publicly owned and privately owned.
  • Geography: global and domestic.

The companies participating in the study represented a range of industries including global vision care, regional health insurance and managed care, global industrial manufacturing, Internet media, and institutional food services.

The hypothesis proved correct. The correlations among identity strength, employee engagement and business performance were very high. The notion that a company’s identity drives value creation is no longer just a conviction; it is a fact. Here are five key findings that reinforce this conclusion:

  • Identity strength is a leading indicator of business performance, given its significant, positive impact on employee engagement.
  • Increases in identity strength translate into predictable increases in revenue and other economic benefits.
  • Organizational identity strength is more influential than individual identity strength in driving employee engagement and business performance. Their combined effect, however, is greater than either one alone.
  • When it comes to employee engagement, identity strength is the proverbial “elephant in the room”—a precondition to engagement that transcends specific workplace practices.
  • Although organizational identity emerges as a prime performance driver, people don’t typically think that their organization has a strong identity.

For human resources professionals, the results of this survey hold far-reaching implications for how organizations that adopt identity-based branding can take employee engagement and business performance to a new level. In fact, in light of the research, the very notion of “human” resources takes on fresh, new significance, given the now-proven connection between identity and human performance.

If there is a secret to why identity affects engagement and performance so powerfully, it is because identity aligns the interests of the company and the interests of its people in ways that benefit both. Identity-based branding fuses the deepest needs of organizations with the deepest needs of human beings—the need to create value in the world and to be rewarded for it in return.

In looking to manage identity proactively, human resources executives should pay particular attention to the IdentityIQ™ scores of their companies. Based on the survey, IdentityIQ provides, in a single number, a reliable window onto a company’s current level of value creation—and, also, on “what’s possible” going forward. Moreover, IdentityIQ can be linked to strength or weakness on a number of key leadership measures, including financial performance, strategy deployment, innovation, brand, culture and even investment value.

Through the lens of identity, HR has the opportunity to provide leadership that can affect and fine tune corporate strategy, as well as operational effectiveness, directly. Whether the goal is to become a good or better place to work, a good or better corporate citizen, or a fundamentally better-performing enterprise, adopting identity-based branding as a core discipline will help HR professionals achieve that objective.

Larry Ackerman is a leading authority on organizational and personal identity. He is the founder and president of The Identity Circle LLC (http://www.theidentitycircle.com/), an identity consulting, education and research firm based in Westport, Conn. He is the author of the report “The Identity Effect: Cracking the Code on value Creation.” E-mail lackerman@theidentitycircle.com, or visit www.theidentitycircle.com for a free copy of the report.

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