CMO STRATEGY
Edited by
Jennifer Rooney,
jrooney@adage.com
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THAT CRASH OF GLASS:
It would seem as if
CEO Lloyd Blankfein
and his cabal are
hurling stones at the
government glass
house, justifications
of business moves
for which there are no
justification.
LESSONS FROM THE GOLDMAN SACHS MESS
1. ACT FAST, LEARN RAPIDLY. A company’s leadership should inspect
the cause of crisis and raise alarm, not expect easy outcomes
from it.
2. HIDE NOTHING, TELL ALL. From stock options to outright plunder,
recent years have left a train wreck of corporate brand
disasters based on a simple realization that they covered up.
For CMOs, marshaling a rapid response team and a crisis plan
are critical.
3. BRANDS ARE COMPROMISED THROUGH FEAR AND LACK OF ACTION. Any
CMO knows that a brand’s reputation comes from what it
possesses, which in turn derives from what it is and what it
stands for.
4. KNOW YOUR AUDIENCE. All the people, from Main Street to Wall
Street, are stakeholders.
5. BRANDS ARE ABOUT WHO YOU ARE, NOT WHAT YOU DO. Brands are undoubtedly a company’s greatest asset, with more than 80% of the value made up of intangible assets, a substantial part of which is goodwill.
ROGER L. WOLLENBERG
IN GOLDMAN SACHS DEBACLE, REMINDERS
TO CMOS OF THE BRAND BREAKDOWN BY GREED
The ensuing deluge of public attention and scrutiny will prove that in the
world of brands, it’s not about being dynamic; it’s all about being right
; BY DEAN CRUTCHFIELD dean@method.com
IN FINANCIAL MARKETS, crisis is justified
as the price of innovation. And it would
seem as if Goldman Sachs CEO Lloyd
Blankfein and his cabal are presently
hurling stones as large as themselves at
the government glass house, justifications of business moves for which there
are no justification. So his arguments,
that crash of glass, is falling on deaf ears:
Neither the government nor the
American people care. All they care
about is the fallout, and the effect of
Goldman Sachs’ actions will be a series of
deafening explosions in the form of lessons to all marketers about the futility of
selfish, greedy moves for financial gain.
America’s insatiable appetite for
everything has propelled global markets,
but the world now nurtures a deep sense
of insecurity; just as it’s biggest economy
is recalibrating (and Europe is downgrading), Goldman Sachs, a critical part in the
engine of the world’s economy, has now
revealed it may have sought to bury it.
The difference between a rut and a grave
is the depth, and we shall soon see how
deep.
In the past, banks like Goldman Sachs
used to focus on acquiring and protecting
a client’s assets, lending money and making profit out of the assets they had under
management.
This radically altered, however, when
banks transformed to trading their own,
ever more complex products and sacri-
ficed the client. Overnight, the compen-
sation model switched from the volume
of clients managed to the money to be
made by the volume of spurious bank
products sold.
Like many of the
world’s leading
brands, Goldman
Sachs’ reach is
global, its focus
narrow and its
impact colossal.
As Churchill once
proclaimed,
“Play for more
than you can
afford to lose, and
you will learn the
game.”
Dean Crutchfield is
chief engagement
officer at Method, a
brand-experience
agency.
appropriate agent, personified in this case
by a disconsolate Congress. The takeaway: Know your audience. Just because
you’re in a specific category does not
mean you have license for a semblance to
normal everyday business life—just ask
Ford, Johnson & Johnson or PepsiCo, for
example. All the people, from Main
Street to Wall Street, are stakeholders.
And finally, prior to being coaxed
from its somnolence, uncompromising
Goldman Sachs was heralded by the
press last summer for its bold and virtu-
ous actions, which proved no match for
this must-avoid final trait of arrogance.
Brands are about who you are, not what
you do. Brands are undoubtedly a com-
pany’s greatest asset—to which the bal-
ance sheet of the S&P 500 is testa-
ment—with more than 80% of the
value made up of intangible assets, a
substantial part of which is goodwill. On
the bright side, studies have shown that
companies that handled a catastrophe
with high standards have recovered and
even exceeded pre-catastrophe stock
price, but that depends on whom you
listen to:
Al meets his banker friend Lloyd,
and exclaims, “Lloyd! I heard the mar-
ket died!” “Hardly,” says Lloyd, laugh-
ing. “As you can see, it’s very much
alive.” “Impossible,” says Al, “the man
who told me is much more reliable than
you.”
Wit aside, matters have long moved
on from enthusiastic to skeptical and are
now at a division of deep regret. Failures
of this proportion, even if it is a very spe-
cialist business-to-business operation,
present an indication of that brand’s
future performance—and the public has
a memory recall button.
Make no mistake, like many of the
world’s leading brands, Goldman Sachs’
reach is global, its focus narrow and its
impact colossal. The ensuing deluge of
public attention and scrutiny will prove
that in the world of brands, it’s not about
being dynamic; it’s all about being right.
As Churchill once proclaimed, “Play for
more than you can afford to lose, and you
will learn the game.”
