Heading into tumultuous times, build the brand with your employees first

If nothing else, the past several years have shown us that companies can weather any storm—from supply chain bottlenecks to a devastating pandemic—as long as they maintain revenue targets. However, in the digital era of democratized access to information, company brands can’t hide behind a great logo and catchy motto. They must operationalize their purpose and values through the people who deliver on the brand promise every day—their employees. 

Whenever there are talks of a looming recession, companies move into overdrive in preparing to cut costs to remain profitable. And, in most cases, the first set of costs to be weighed is headcount, despite there being many options to consider. Recently, we have heard several firms announce plans to cut staff by more than 20%, in line with declining stock prices. Even with a tight labor market and certain skills still difficult to acquire, many companies are starting to revert to a plan of action that cuts people before profits, as the short-term earnings will often outweigh the long-term strategy.

As we have seen with the digital disruption to industries, having an authentic brand that people connect with is what can truly differentiate a company from its competition. Yet, an organization cannot maintain an authentic brand if they don’t consider that it is their people who must deliver on the brand promise. Without a strategy to actively engage employees in what the brand stands for, the marketing function becomes a house of cards, and it takes just one viral incident for the house to come tumbling down.

As a younger, more values-driven generation enters the workforce, businesses are seeing quickly that their brand is no longer just consumer based. It comprises a set of values demonstrated through the company’s behaviors, including how those values are operationalized within the organization and throughout its value chain.

The challenge for the CEO, Chief Marketing Officer (CMO), and the Chief Human Resources Officer (CHRO) is to understand how to implement their brand strategy through their talent management function. If unsuccessful, the company risks poor public reviews by employees, and these reviews can have a much longer—and much more detrimental—impact on the organization than a recession could ever produce. In fact, one survey found that companies with some of the worst corporate cultures tend to also have poor reputations. This too can impact company earnings.

Of course, economic conditions, supply chain issues, and industry disruptions continue to place pressure on companies to fly with clipped wings. How will they operationalize brand strategy through the employee workforce and build stakeholder loyalty?

The answer starts with knowing the company’s purpose, and if it includes words like profit or product, then the organization is missing the point. A company’s purpose needs to lead with understanding why it exists and what impact the organization has on people and the planet. It also should reflect the values most vital to differentiating the business from the competition. Values that can guide business decision making toward reaching its purpose.

However, articulating a compelling purpose doesn’t go far enough. The purpose must be the thread that ties the organization together and shifts its culture toward a shared mindset—one that allows everyone to work together to help the company reach its highest potential.

The way for a company to have a purpose that creates impact is to ensure that its culture is connected to the consumer perception of the brand. Organizations need to make sure employees feel they are doing meaningful work and that the current structures, processes, and practices enable people to work toward a common goal. However, the company must assess how its people and practices are aligned with its articulated purpose, then put the right metrics in place to measure strategic impact.

The figure below illustrates how a company can create meaningful work through its purpose by understanding and aligning the relationship between brand perception and organizational culture. Management and measurement of the impact on its strategic goals will reassure employees that they are working toward the company’s purpose in a meaningful way. “Meaning in Action” stands for the consistent operationalization of purpose, brand, and culture to obtain the desired short- and long-term outcomes. The line of sight expressed by leaders, the operational scorecards, the brand and culture charters, the day-to-day business decisions, the symbolic client satisfaction stories, the valued employees, and the incentives and rewards should all be redesigned to integrate and translate stated intentions into tangible results.

One example of a company with a culture closely aligned to brand perception—enabling it to deliver impact through purpose—is Patagonia, rated by its employees as a great place to work. Patagonia is a brand that espouses values connected to the environment, and which has remained true to its core purpose regarding simplicity and utility, while addressing climate change. (Interestingly, Patagonia’s founder, Yvon Chouinard, recently decided to donate the entire $3 billion valuation of his apparel company to a trust to fight climate change.) Meet a Patagonia employee, and they will likely exude the values of the company, allowing the customer to feel its authenticity and therefore remain loyal to the brand.

The next set of digital-native employees are far more values-driven than past generations, and employers can no longer afford to ignore this societal shift. Companies that want to undergo this type of transformation can begin the process immediately. But it will require a mindset shift on behalf of several stakeholders.

The result of this process will be loyalty on behalf of both consumers and employees. From a marketing perspective, we know that loyalty creates a more effective marketing strategy where all tactics are more successful. Loyal customers will pay more for your product, pay attention to your promotions (while resisting the competition), and seek out your product even when it’s difficult to access. The same can be said for the employees, who will remain more loyal to their organization—empowered to work more effectively and go the extra mile. 

Brand-loyal employees and customers will also be more tolerant of company actions, especially in times of turmoil. Between the pandemic and now a potential recession, organizations have an opportunity to make values-based decisions and build loyalty during difficult times. Reverting to old techniques of making employees feel dispensable could result in damaging the company’s brand. And in today’s fast-paced, digitally enabled market, could a company survive damage to their brand, no matter the economic market condition?

Tessa Misiaszek, Ph.D is head of research at the Korn Ferry Institute and co-author of the new book, Branding that Means Business: How to Build Enduring Bonds between Brands, Consumers and Markets (PublicAffairs). Jean-Marc Laouchez is president of the Korn Ferry Institute.