The clouds of corporate scandal that continue to cast shadows over Facebook might be obscuring a wider problem that could be even harder to solve: some of the best-known brands in the West are showing worrying signs of losing their way.
Every two years the FutureBrand Index asks an informed group of 3,000 people all over the world to gauge how well positioned the world’s 100 biggest companies are for future success. The brands in this year’s index that are setting off alarm bells include household names such as Walmart, Roche, HSBC, Facebook, Oracle, Unilever, IBM and VW.
In most cases, the past looks brighter than the future for these struggling brands. But is there anything they can do to reverse the slide?
The likely reasons behind some of the poor index scores are not hard to identify. Facebook and Volkswagen in particular have endured well-documented reputational disasters, sustaining some pretty serious self-harm injuries in the process. The way they’ve reacted to their problems will have a bearing on when – or perhaps even if – they bounce back.
Undoubtedly the VW emissions scandal dealt the company a serious body-blow that may be reflected in poor scores in the index, where it fell 21 places compared to last time. But the signs are that VW is already bouncing back thanks to decisive leadership changes and swift action to control costs – and its recovery will be all the quicker if it follows the lead of one of its sector competitors, Toyota, which did much better in terms of thought leadership, inspiration, and bringing pleasure to its customers.
It remains to be seen whether Facebook will recover from the hit it took following the data privacy scandal, which may be a big factor behind the brand’s fall of 37 places in the Index since last time. Along with the other US tech giants, Facebook appears to be like a teenager struggling with the transition to maturity and has not yet fully embraced its adult responsibilities.
November’s New York Times allegations about the way it downplayed the crisis did little to inspire confidence. But perhaps the appointment of Nick Clegg is an indication that it’s trying to put things right.
But VW and Facebook are outliers in this story. Their crises can largely be attributed to specific scandals. The other brands struggling in the index are losing ground due to a fundamental lack of energy. They’ve all gone a bit flat, and that’s much harder to navigate away from.
Take Unilever, for example – an interesting case because it seems to be suffering from both problems: it’s going flat and sustaining self-harm injuries. On the self-harm front, it dithered over the attempted Kraft takeover and over the proposed move of its headquarters, taking a completely unnecessary reputational hit in the process.
But worse than this, when you look at the huge Unilever mother-brand, it’s hard to see the point of it. Unilever just seems to manage things; it doesn’t make any brave moves or any obvious efforts to link itself to its sub-brands, some of which are really exciting.
Contrast this with Nestlé, which has clear links between all its products and the main brand – not least through the ‘Nes-’ prefix. And it’s embraced the spirit of startup innovation with its Henri Platform, with its aim of teaming up with innovators to ‘tackle projects that will make a genuine difference, not just to Nestlé and our partners, but to hundreds of millions of people across the world.’
Banality is the enemy
This theme of flatness applies to every brand struggling in the index. Across all sectors, there’s a marked contrast between those companies that are admired for their energy, their sense of purpose and their proactiveness, and those that are inactive and are viewed with indifference.
The short-term challenges faced by these companies clearly differ from sector to sector, but every one of them can be accused of banality and a lack of energy.
Nestlé shows that it’s not just young upstarts that are capable of being interesting and energetic and creative. Across the Index there is evidence that size and age are no barriers to a positive perception – after all, the company at the very top of this year’s index is Disney.
Size and experience count for a lot. Despite their poor showing in this year’s index, it would be rash to bet against Oracle, HSBC and even the much-maligned Walmart, which is showing early signs of recovery with initiatives such as its e-commerce offering.
Ultimately, to pull themselves out of the doldrums, to banish banality and to create a healthier long-term future for themselves, these poorly-perceived brands must learn the big lesson of this year’s index: they must find a way to re-energise and consistently align the experiences they create for all their stakeholders with their wider corporate purpose.
Jon Tipple is chief strategy officer, worldwide for FutureBrand