Editor's note: Larry Ackerman is founder and president of The Identity Circle LLC, a Westport, Conn., corporate brand consultancy. This article appeared in the April 20, 2010, edition of Quirk's e-newsletter.

If you're going to successfully market your company on its own, or via its products and services, you need to start by knowing who the company is and how it creates value. This imperative isn't just a nice-to-have; it's a must-have. Without knowing what that center of gravity is, marketing strategy is subject to changing customer attitudes and shifting management priorities. According to the Identity Impact Survey from The Identity Circle LLC, a Westport, Conn., corporate brand consultancy, which included nearly 2,000 participants across five companies and industries, having a strong sense of corporate identity quantitatively demonstrates the impact of identity strength - organizational and individual - on employee engagement and business performance.
 
By identity, I'm not referring to brand. It is commonplace to refer to brand and identity in the same breath, as though they're one and the same. They're not. Where brand constitutes the promise a company makes to its customers and other stakeholders, identity is the unique combination of characteristics that defines a company's value-creating potential. In short, identity is cause; brand is effect. And, the strength of the former influences the strength of the latter in potentially-extreme ways: 

  • Increases in identity strength translate into predictable increases in revenue, which grow exponentially as group size expands (Figure 1). 
  • 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.
  • Although, organizational identity emerges as a prime performance driver, employees don't typically think that their company actually has a strong identity.

 
The last finding may sound disturbing but actually presents a major opportunity. What it suggests is that there is a significant value gap between how companies are currently performing and how they would perform, were they to close that gap by increasing identity strength - an entirely achievable goal. This fact is dramatized in the Identity Leadership Matrix (Figure 2), which shows where the five surveyed companies fell on this chart and what the implications are, which are called out in Figure 3.

Figure 2: The Identity Leadership Matrix highlights significant room for improvement among all but one survey participant.

Figure 3: The likely outcomes of falling into one quadrant or another. The elements in these different quadrants reflect a combination of factors, influencing leadership success.

Closing the value gap brings me back to brand. If there's one management portal companies have for building identity strength, it's their brand. Not brand as a measure of consumer attitudes, but brand as the vessel that links the company's identity to how it goes to market, starting with how employees contribute to building brand success. Call it branding from the inside out, rather than outside in.

Unearth the source

To make our research findings immediately relevant to the participants, we invited each company to describe a current challenge that the findings might help them meet. Here is one case that illustrates how research results helped a CMO unearth the source of a persistent problem.
 
For an Internet media company, one set of customers comprised television broadcasters in the process of converting their business to the Internet while another set comprised advertisers looking to reach local consumers on the Internet. The main marketing challenge appeared to be creating two different brands and delivering them in a way consistent with the different customers' needs. The CMO, however, saw a more complex challenge. He concluded that the company amounted to two different businesses that happened to share the same name. Priorities were different. Operating philosophies were different. Even cultures were different.
 
Research showed that the organization lacked a unifying identity - a center of gravity around which to make important decisions. The CMO's immediate task? Discern the value-creating identity of the company as a whole and create a corporate brand that could inform divisional product marketing, sales efforts and customer service - all in the name of unifying rather than dividing the organization.
 
The research offered insight into the power of identity as a manageable performance lever. One of the most useful analyses was determining where identity strength comes from. What we learned is that it comes from eight building blocks, which constitute the primary muscles that account for identity strength and resultant business performance. These building blocks include: autonomy, differentiation, change, stewardship, purpose, alignment, brand and sustainability.
 
While brand is ultimately only one of eight factors, it is still the best place to start when seeking to build identity strength. That's because brand reflects and affects all parts of the business simultaneously.

The throes of change

What corporate marketing (and marketing as a whole) is all about is in the throes of change. As important as they are, marketing's traditional activities are no longer enough: market research, positioning and marketing communications (including advertising) don't give marketers the muscle they need to make a concrete, strategic difference. Marketing leaders must liberate themselves from traditional ideas of what constitutes marketing in order to rewrite the rules of success.
 
Companies also must look at marketing through a different lens - the lens of identity, which accounts for how they create proprietary value - rather than through the lens of their products and services. Organizations must liberate themselves from what they make and focus first on who they are. Accomplishing this fundamental change starts with capitalizing on the identity effect. Here are four actions marketers can take now, which will enable them to establish more strategically-relevant goals for the company and themselves:

Start by looking at marketing through the lens of identity rather than through the lens of products and services. While products will come and go, a company's core identity is - or should become - a nearly-permanent fixture in the marketplace, representing how the company creates proprietary value.

Measure the company's identity strength. Do this at the enterprise level, but also segment the survey to assess identity strength across business lines. This will create a revealing picture of where to begin the job of building identity strength, efficiently and effectively.

Marshall a cross-disciplinary team to assess how best to respond to survey results - professionals who would have a natural interest in the identity effect (e.g., HR, customer relationship management, sales, business strategy).

Propose to the CEO expanding the responsibilities of marketing to include leading the identity management process for the enterprise.

Potent marketing force

A company's identity is a potent marketing force is because it unifies disparate operations and initiatives in ways that make it possible to make the right decisions for the right reasons. If marketing executives are going to increase their impact, they have no choice but to expand the mandate of marketing to include the identity discipline.