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How CFOs Support CEOs in Building a Brand (and Business)
CEOs rightfully recognize their primary role as business builders. However, they often understate or don’t recognize their closely related role as brand builders and why that role is so important. Blind spots regarding other leaders’ brand-building roles also persist. In building a business, a CEO typically sees the CFO as an indispensable ally. In building a brand, a CEO can be prone to mistakenly thinking that the CFO doesn’t really have a role to play.
Whether they realize it or not, CEOs drive a brand’s direction by the decisions they make, the culture they set, and the behaviors they exhibit. Effective CEOs embrace the responsibility of the “Chief Brand Steward” role because they understand how brand strongly correlates to broader business outcomes and health. Here, we break down essential elements of CEO brand stewardship, explore how CFOs support CEOs in building a brand (and business), and reflect on branding wins and failures.
Staples of Stewardship
A CEO can’t just abdicate accountability for shaping and protecting the company's brand to marketing or PR. A company’s brand goes far beyond logos, slogans, and color schemes. Brand encompasses how the organization is perceived by stakeholders, employees, and customers alike, and extends even to areas such as where the company spends its money and who they spend it with. That means the CFO (and other leaders) need to be in lockstep with the CEO and carry out their work in alignment with brand (and business) direction.
A strong corporate brand that threads throughout the organization builds trust, positively differentiates the organization, and is an instrument for long-term success. CEOs inform and affect their company’s brand in virtually everything they do, including:
- Charting the Course – The CEO first sets the tone for the brand in articulating the strategic ground the business aims to occupy and what customers should expect. A focus on lower prices, basic needs, and few frills (e.g., Timex)? A focus on quality, luxury, or premium amenities (e.g., Rolex)?
- Leading by Example – Culture and brand both start at the top. A CEO’s words, deeds, and actions should exemplify the company’s culture and brand values, not run counter to them. At the same time, the CEO should set expectations and demand that same alignment from others.
- Managing Crises - Transparent communication, accountability, and swift action can reinforce brand integrity, build loyalty, and strengthen resilience while crisis missteps (denial, blame-shifting, lack of empathy) can lead to lasting reputational damage.
- Engaging with Stakeholders – Effectively communicating with employees, customers, investors, and other stakeholders builds trust and shared understanding of the brand. Monitor and actively listen to how the company is being perceived.
A CEO who effectively embodies brand stewardship helps ensure that customer and stakeholder expectations are met, the company's reputation is protected, and consistency is achieved across all company or brand-related interactions.
The CFO’s Role in Brand Stewardship
CEOs can’t go it alone. CEOs rely on their CFOs to go beyond core functions like financial reporting and stakeholder management and be an integral partner in building and smartly steering the organization’s brand. The CFO will take a lead role in guiding Business Performance Management (BPM) to set and monitor KPIs and metrics to measure progress toward goals, identify trends and potential risks, and inform decision-making. Today, CFOs also need an intimate understanding of operational variables across the company to properly weigh and assess the likely impacts of strategic brand-related decisions. CFOs are also tasked with evaluating the pace and extent of brand-related actions to ensure that acceptable levels of risk are maintained and that brand initiatives can be sufficiently funded. A fractional CFO is a great option for organizations that aren’t yet ready to bring on a full-time CFO.
Brand Stewardship Gone Bad
You likely don’t need long to think of a brand or business that’s suffered mightily from reputational damage or a failure to steer their brand effectively. While some are able to weather the widespread setbacks and ultimately regain (or reframe) their reputational footing, others never recover. These notable examples serve as cautionary tales:
- JCPenney’s sudden and CEO-driven shift in 2012 to an “everyday low prices” strategy was rejected by customers accustomed to frequent sales and promotions, leading to a sharp decline in sales and store traffic.
- Blockbuster’s reticence in recognizing the shift toward digital streaming and dismissal of early opportunities to invest in subscription-based models led to the failure of its brick-and-mortar business and once mighty brand.
- Volkswagen’s “Dieselgate” scandal involving emissions test manipulation flew in the face of the brand’s environmental-friendly positioning and resulted in billions of dollars in penalties, recalls of millions of vehicles, a significant drop in stock value, and wide reputational damage.
- Gap’s 2010 move to upend its company’s brand and long-standing iconic logo elicited widespread backlash from customers and the design community. Gap reverted to its old logo less than a week later, but not before losing an estimated $100M.
The list goes on and the lessons are clear. Opting for a hasty brand revolution over careful brand evolution and is a recipe for disaster. Enabling and/or poorly responding to any instance of an organization breaking its brand promise or violating its values can have equally dire effects.
Examples of Effective Brand Stewardship
Companies such as Apple, Costco, Chick-fil-A, Starbucks, Toyota, and more are at the positive end of the brand stewardship spectrum. However, your company doesn't have to be on or near the Fortune list to practice and reap the benefits of brand stewardship. I learned this firsthand in the restaurant business.
Earlier in my career I built out the chain of Salt Grass restaurants in Texas serving as both CEO and CFO. Our steak-centered restaurants occupied a space in the casual dining niche at a time when competitors like Outback Steakhouse, Texas Roadhouse, Logan’s Steakhouse, and Longhorn Steakhouse also dotted the landscape. We echoed many of their casual elements – similar menu features, peanuts on the floor, and servers adorned in t-shirts and shorts. With a somewhat static $3M/year revenue average across our 5 restaurant units, we revisited our brand values, assessed our strategic positioning, and set out on a course to become the quality leader in Texas as we grew to 25 units over the next five years. It didn’t happen overnight or haphazardly. We gathered extensive customer feedback to test our hypotheses, carefully assessed financial impacts, and allowed ample time for our brand’s evolution. Of note were upgrades from choice to ‘Top Choice Certified Angus Beef’ to our beef, much more rigorous service trainings, employee uniform standards, menu options, and restaurant aesthetics – all aligned with our strategic shift. All of this was done in lock step with our financial projections and understanding of where we could best invest our capital and our efforts for optimal returns. Our efforts paid off with more satisfied and loyal customers and a rise in average unit revenue to $4.2M/year. The seismic shift in the company’s financial metrics also enabled us to attract more talent, improve our locations, and obtain capital for further growth.
Building the Brand is Building the Business
Every CEO should intentionally and enthusiastically embrace their role as the organization’s Chief Brand Steward. The CEO’s position atop the business amplifies the importance of their every action and directly impacts (for good or for bad) how others perceive the organization. Every CEO must rely on their CFO and other key leaders to be brand builders too, carrying out their respective roles in a way that’s consistent with how you wish the company to be viewed. Building the brand… is building the business.
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