Nancy Duarte‘s book slide:ology is probably one of the best things that ever happened to presentations. I build a lot of presentations for investors and other audiences, and I cannot overstate how valuable the tools I’ve learned from her book and from seeing Nancy present live have been to me.
But what, you say, does that have to do with linking brand strategy to financial performance?
Well, there is this neat little graphic in slide:ology that illustrates how design driven companies excel against their peers in the marketplace. The graph tracks the share price of 63 “design driven” british companies against the FTSE 100, and clearly suggests that there is a “design dividend” for companies that understand design thinking and make it a priority.
Design driven companies outperform their competitors (Slide:ology, Nancy Duarte)
But the question that arises, then, is what is the link? How can you measure, or make the connection between what happens in the market, and how a company uses design?
But before we answer that, I think it is important to remind ourselves there is a continuum of design maturity. Most people think of design as how something “looks and feels”, but style is actually one of the least interesting and least sophisticated ways to use design. At the most mature end of the continuum, design thinking is involved at the very beginning of a process, to shape the way we look at a problem and help us put the pieces together differently. Design thinkingcan lead to unthought of, holistic, disruptive solutions. It is a tool for change agents. Tim Brown‘s new book, Change by Design, offers a great explanation of this concept.
Sophisticated uses of design go way beyond "veneer". Design helps structure opportunities and frame relationships in order to create change.
Having said all that, it’s still easy to spot the companies that use design in sophisticated ways, and that usually shows up in their business cards, websites and presentations as well as it does in their meeting formats, processes and human resources. A company with strong design skills is almost sure to have a strong brand.
Which brings us back to the question – how does design ultimately affect financial performance.
One framework that I think is really useful in understanding this is Ken Wilber‘s integral model. Wilber has often been described as one of the greatest thinkers of our time. And while branding might not be as important a field as anthropology, psychology, spirituality, ecology and the many others to which integral theory has been applied, some insights that emerge from doing so can help us intuit the relationship between branding and share price. Or, rather, perhaps, how share price is one possible perspective / aspect of a brand.
So here’s the gist: Every phenomenon has four main components, which can be arranged in a simple 2D matrix. On the left: interior, on the right: exterior. Upper quadrants: individual, lower quadrants: collective.
Each of these four different components, or perspectives, emerges in a relationship with the other three. Each one helps to shape the other three. These relationships, obviously then, are non linear; there is not a direct line of causation between any of the quadrants, but yet they are all connected.
(PS: Integral theory goes much deeper than this, but I’m just highlighting one of the more basic aspects for our purposes here).
So how can we see brands through the integral lense?
With Wilber's Integral model, each one of the four quadrants highlights different perspectives or aspects of a brand.
Using this model, we can see many different ways that brands are viewed or understood, and we can begin to intuit relationships or make connections between the different quadrants. I think this framework is helpful to brand managers who want to better understand how they can use the brand to drive the financial performance of their company.
So, for example, in the upper left quadrant, we’re thinking about what an individual experiences when they encounter or recall a brand. To work within the upper left, you might conduct open ended one-on-one qualitative research, try to elicit metaphors, and have a consumer draw pictures of what the brand means. You could also look at different cognitive structures used by different types of people to interact with the world, and segment your brand portfolio accordingly.
In the upper right, we have the actual “stuff” of the brand: logos, swag, vehicles decked out in your pantone colours, etc. We also have consumer behavior. For example, if a quantitative survey was conducted to measure positive vs. negative impressions, it’s really measuring what people say, which belongs in the upper right quadrant, even though it is, in a way, trying to access the upper left.
The lower left is the stuff of anthropologists and ethnographers. Here you are watching how meaning is created in social groups and thinking about the relationship of a brand with cultural truths (and subcultures). You watch people interact in a branded environment, see how they use a product to say things about themselves to the group, etc.
And finally, and here’s where it (after a long, rambling post) all ties together: the lower right quadrant is about the systems that a brand is a part of or has an impact on. These systems can be studied using complexity science – you’re looking for “higher order” properties that emerge when millions of agents interact with each other. The economy, the human brain, cities, and the stock markets are all such systems. Theses systems are comprised of patterns that come into being based on the interaction of massive numbers of humans, or neurons, or what have you. And once these patterns emerge, they in turn have an influence on the actions of the agents, which makes the phenomena very complex and interesting to observe.
But if you see this fourth quadrant in relationship with the other three, and begin to understand how they are all related, it is a big-picture way of linking your brand strategy to its financial strength. I think this approach, while perhaps not as direct as an Interbrand report, perhaps, has its advantages because it helps to arrange all the important aspects in a single map.
