The corporation as brand: an identity dilemma.

The payoff of adopting a new identity--a package that includes a company's name, brandmark, and marketing pitch--may be access to hitherto hard-to-penetrate consumer groups and greater market share.

What's in a corporate name? Could be plenty. Consider the following scenarios:

* Providian Corporation, formerly Capital Holding, was originally the parent corporation of a number of traditional home-service life insurance companies. But over time, the company acquired a direct-response insurance business and a small non-bank that now issues credit cards, and built an accumulation business with financial products and services for both institutional and retail customers. At the same time, the corporation's management structure evolved from one of highly autonomous business units to one that is far more integrated. The word "holding" could not convey the corporation's mission and structure or the breadth and scope of its operating companies' products and services.

* Market research revealed that Geo. A. Hormel & Co. was perceived by consumers to be an old-fashioned pork butcher with products that failed to appeal to the health-conscious. Updating its product line, the $2.8 billion company sought a fresh image.

* Kentucky Fried Chicken, too, faced problems as consumers eschewed fatty foods. Expanding its menus, the company, a division of Purchase, NY-based PepsiCo, sought to retain its distinctive red and white logo, while abandoning the word "fried."

In each case, the solution to the business problem was a new corporate identity, an entity that comprises visual components (name, logo, colors, brandmark), and thematic elements, including an advertising slogan or tag-line. Not all identity changes are successful: For example, take the decision by United Airlines-parent UAL to change its name to Allegis, or Beatrice Foods' decision to "brand the corporation," placing its name on unrelated divisions and products. But as competition stiffens in industries across the board, a company's identity--like the brands it underpins--may be a key source of competitive advantage, leading to greater marketing clout, access to hitherto hard-to-penetrate consumer groups, and increased sales and market share.

"The new identity has been instrumental in integrating Hormel's diverse product portfolio," says CEO Joel W. Johnson. "Coupled with more appealing packaging, this has contributed to bottom-line performance."

"With a consolidated name, everything became less costly, from signage to advertising and$printing," says William M. Crozier Jr., chairman, president, and CEO of $10.5 billion-asset BayBanks, originally the Boston-based parent of 11 individually named suburban Massachusetts banks, which over the past decade completed the transition to a single identifier. "With a single voice, our brand has become a major corporate asset."

DIAGNOSTIC TOOLS

The circumstances listed above by no means form a complete list of the reasons corporations seek an identity overhaul. Consider this diagnostic checklist, prepared by our identity consultant, Interbrand Schechter.

* Have you recently completed a major acquisition, merger, or divestiture?

* Must you quickly and forcefully convey a positioning change--perhaps a shift in focus--to all your audiences?

* Do customers and prospects understand relationships between your operating units, and the company as a whole?

* Does your visual identity reinforce your name? Are your employees proud to wear and display your logo?

* Do you want to signal renewal after weathering rough times?

* Is your company undervalued by the capital markets, or have your productivity and innovation gone unnoticed?

If the answer to one or more of these questions is "yes," an identity make-over may be the way to send a powerful signal to all your relevant audiences.

EVOLUTION OR REVOLUTION?

Yet the question remains: How much change is the right amount? Should it be subtle or striking? Should changes be adopted all at once or put into play a little at a time, in a modular fashion?

The correct answer depends on your relationship with the marketplace and on precisely whom you are trying to reach.

In terms of your corporate profile, if your name and identity are well-known and highly regarded, you should retain existing elements whenever possible, making only judicious modifications. If your identity is inappropriate or poorly regarded, you may consider jettisoning all elements and starting anew. If you are relatively unknown, you enjoy maximum flexibility; you are free to consider all possibilities.

For your marketing focus, if an identity serves mainly to identify your company within the financial and investment communities--narrowly defined and easily reached audiences who are already curious about you--your options are nearly limitless. Conversely, selection of a name that will function successfully as a marketing umbrella--literally branding your corporation on a broad scale--is trickier and more restrictive.

Sometimes evolution breeds revolution. Companies often begin with modest change, paving the way for later transformation.

Providian's corporate identity change has been nothing short of revolutionary. Our experience may be instructive to other companies seeking a new look, whether or not they are in the financial-services business.

RESEARCH-DRIVEN PROCESS

After a series of acquisitions, the name "Capital Holding" no longer effectively described our $22.8 billion Louisville, KY-based organization. Nor did the name convey our corporate mission: to be a dominant competitor, providing a range of insurance and financial products and services. We wanted satisfied insurance customers who needed credit to know we could meet that need. Simply put, we placed increasing emphasis on collaboration and synergy among our business units with hope of cross-selling our products and forging stronger relationships with customers.

Toward that end, Interbrand Schechter suggested we adopt a single brand "umbrella." Extensive research found that few of our customers and prospects were familiar with the Capital Holding name. Therefore, the marketing approach that endorsed our business units as, "A member of the Capital Holding family," did little to increase the probability that a banking customer would become an insurance customer, or vice versa.

Research helped us define the kind of company with which our customers and prospects want to do business: We presented lists of business attributes to target groups and asked for ratings in order of importance. The feedback was clear: Financial strength, stability, and a commitment to relationships were deemed most important.

The next steps were creating naming alternatives and testing them once more with target audiences. Ultimately, we determined that our mission and positioning strategy could be expressed with a single word: "provide." Thus, after an exhaustive trademark search to ensure that the name was legally available, we coined the name "Providian." The visual component (our Provider symbol) was a logo of a human figure holding a torch (see graphic), which symbolized our position as a caring, responsible partner.

THE INSIDE STORY

I was convinced the identity change would be effective. However, my endorsement was by no means the final word. Over several months, the identity team--which included staffers from both Capital Holding and Interbrand Schechter--introduced the new package and the thinking behind it to our top corporate officers, our associates, and finally to the board of directors.

Our initial presentation to the board raised many questions. At first blush, some thought the identity change too dramatic. The questions were appropriate. I, too, had needed time to absorb and embrace the research and logic behind the proposed change. But how best to condense the experience of a painstaking, year-long process and communicate it to the board?

We decided our first marketing campaign under the Providian name needed to take place inside the corporation. A campaign of 10 mailings to board members was developed, the first nine related to each of the letters in Providian, and the 10th integrated them all, referring to the whole word. Each letter stood for an attribute of Providian's products and services, and was accompanied by a tangible symbol of that attribute, along with a letter from me describing the benefit inherent to our customers in that attribute. For example, P stood for "Protection," and it was accompanied by an umbrella, along with a brief discussion of Providian's ability to "protect" our customers from loss through our insurance products. O stood for "Options"--the right products to meet their needs--and was accompanied by a Swiss Army knife, symbolizing the right tool for the job.

Each mailing was sent with envelopes and letterhead embossed with the Providian name. This enabled board members to see the name in action and to get used to its appearance in a marketing capacity. It was an innovative, fun approach that proved highly effective. By the time the board met again, it voted unanimously to support the change to Providian Corporation.

TRANSFORMATION TRAILBLAZERS

In considering an identity change, remember that one size hardly fits all. Nonetheless, the following case histories--presented along a spectrum beginning with subtle change and ending with total transformation--are broadly indicative of strategic problems facing businesses and the identity-driven solutions used to respond to them.

Hormel: Geo. A. Hormel & Co. of Austin, MN, founded in 1891 as a purveyor of fresh and processed meat, broadened production to include hundreds of wide-ranging products, from microwave soups to frozen foods and salsas. All were stamped with the Hormel brand, which increasingly was linked in the minds of consumers--particularly women--with products that weren't particularly healthy.

To make Hormel's flagship brand more relevant to its primary consumers, several changes were made: First, the company modified its brandmark, streamlined and italicized the typeface of the name "Hormel," and repositioned a parsley sprig to make it more prominent. The oval border surrounding the name also was thinned, and the color black was dropped, making the border entirely green--typically seen to represent growth and health. Completing the package was a name change to "Hormel Foods Corp."

KFC: Faced with slowing sales and profits in its mature markets, Louisville, KY-based Kentucky Fried Chicken expanded its menus, modernized its restaurants, and sought new customers. Despite these initiatives, executives increasingly perceived the corporate image as out-of-date.

To revitalize the brand without abandoning its marketing icon, Colonel Sanders, or its bi-colored logo--a distinctive bit of Americana--the name "KFC," a nickname already used by many customers, was adopted.

"This image shift has attracted a much broader base of customers," says Peter J. Foulds, vice president of advertising. "It has contributed heavily to increased sales."

BayBanks: Over a decade, the parent, a low-profile financial holding company consisting of 11 suburban Massachusetts banks with different names, gradually introduced the BayBank brand to its consumers. For example, the Middlesex Trust Co. became BayBank Middlesex, and now is known simply as "BayBank"--as are all the other banks.

ARAMARK: Originally a food-services operation called Automatic Retailers of America, the $4 billion Philadelphia-based company evolved into "ARA" as it grew and expanded its portfolio of services to include uniform services and magazine and book distribution; and medical, educational, day-care, and emergency-room services. Yet ARA was in a sense "invisible." In fact, the company's customers and employees could not even agree on its pronunciation.

Customer and employee-focus groups revealed that coupling the ARA prefix with a strong new word and sound would successfully unite many lines of business under a single corporate brand.

"Our new brand name is a logical next step," says Joseph Neubauer, ARAMARK chairman, president, and chief executive. "It will better reflect the quality and breadth of services we provide around the globe and help position us to enhance customer partnerships by introducing new value-added services that can increase our customers' productivity and profitability."

BEWARE OF BACKFIRE

Clearly, identity change isn't always successful. Investors can be confused and their loyalties compromised.

For example, Beatrice Foods sought to establish itself as the premier marketer of consumer products worldwide. The company decided to brand the corporation, stamping its name on every product and operating division. The Beatrice name superseded those of Playtex, Tropicana, Samsonite, and others. While the name indeed added value to the company's foods-divisions products, it quickly became confusing to the consumer how a company that made orange juice could also turn out quality luggage and women's undergarments. The company's diverse product mix simply was not conducive to corporate branding. Ultimately, Beatrice lost control to Kravis, Kohlberg and Roberts, and was broken into a number of pieces.

The UAL/Allegis make-over, meanwhile, ran into problems more because of a flawed, underlying corporate strategy than because of poor identity planning. Capitalizing on its position as the owner of United Airlines, Hertz Rent-A-Car, and Westin Hotels, UAL CEO Dick Ferris wanted to reposition the company as a one-stop travel service. Thus, the Allegis name replaced UAL. While the new identity effectively trumpeted Allegis' strategy, the strategy itself ran aground. Eventually, the company's board of directors decided that some individual businesses were worth more than the whole, and Hertz and Westin were sold separately.

Ultimately, Allegis ran into trouble, because management failed to integrate its parts effectively, and because the board failed to embrace Ferris' strategy.

KEEP YOUR EYES OPEN

In some cases, problems you already are familiar with are easier to deal with than those you aren't aware of. In other words, look before you leap.

Having said that, there are several ways to avoid missteps in moving to change a corporate identity.

First, determine whether a simpler marketing intervention--an advertising or public-relations campaign, internal communications, or a charitable program--cannot effectively communicate your marketing or strategic message.

Second, be sure that you, as the CEO, take a hands-on approach to managing corporate identity.

Third, be sure to involve key employee and customer groups in the planning that precedes any changes.

Fourth, monitor your investment in a new identity through ongoing market research. Carefully planned implementation systems and identity guidelines, and ongoing employee education, help to ensure the consistency and strength of your corporate image. Providian requires centralized approvals before new communications are developed, and it has established implementation teams within its business units to build understanding and credibility, securing compliance without resorting to a "corporate-cop" routine.

But perhaps most important, be sure that your own employees understand the reasons for change--and turn them into its most ardent advocates. That's perhaps the most important prescription for successful identity programs.

Irving W. Bailey II is chairman, president, and CEO of Louisville, KY-based Providian Corp., a $22.8 billion company with operations in insurance, banking, and financial services.

Alvin H. Schechter is chairman and CEO of Interbrand Schechter of New York and vice chairman of Interbrand plc. of London, a global branding and identity consulting firm.