What’s in a Name? An interview with Wally Olins (Part 1)
The following article previously appeared in Pipeline 37 and was conducted by Philip Algar and Chris Caffyn in 2003. Some recent corporate name changes in the UK have, at once, provoked media ridicule and concentrated attention on the background to the relatively little considered subject of branding. That said, when Kelloggs tried to rename one product in Europe and met customer resistance, the group invited customers to vote on their choice of name and one million hits were registered. Pipeline secured an exclusive interview with Wally Olins, widely acknowledged as one of the world’s most experienced practitioners of corporate identity and branding. He spoke to Philip Algar.
Some 700,000 words have appeared thus far in Pipeline in the last 10 years. To the best of my recollection, not one has been attributed to William Shakespeare. It is time to rectify that. Othello said: “O! I have lost my reputation, I have lost the immortal part of myself, and what remains is bestial”. Readers may ask the relevance of that to branding and corporate names. The former is defined in my dictionary as a trademark, but it is much more. In an increasingly complex and competitive world, companies acknowledge the enormous value of reputation. Global groups realise that adverse publicity in Western Europe, for example, can weaken sales almost immediately on the other side of the world. Consequently, many devote time and resources to ensure that, in such a situation, damage to the corporate reputation can be minimised, as we have discussed in previous editions of this magazine. Reputation is conveyed succinctly in a company name or brand.
In 1987, the shipping group P&O bought Townsend Thorensen, partly because of the goodwill attached to the latter’s name. Within weeks, the accident to the cross-channel ferry, the Herald of Free Enterprise, had caused the loss of 193 lives, forcing the new owners to abandon the name of Townsend Thorensen.
According to Enterprise IG, brand and identity consultants, the number of name changes registered in 2001 fell by only seven per cent despite a decline of about 50 per cent in the number of mergers and acquisitions. Indeed, the UK was second only to the US in the number of name changes.
COMPANY NAMES AND BRANDING
Company names, part of the overall brand, convey a range of facts and emotions to the outside world but Wally Olins stressed that companies should change their identity only when absolutely necessary and that, given the proliferation of big companies, the phenomenon is relatively rare.
“Our main activity, over the years, has been examining and re-positioning organisations that have been well known for a very long time.
“Most name changes are done with great reluctance, after very considerable thought and very often by organisations that are terrified of the end result. Taking a new name means jettisoning all that the previous name implied, good (and bad), and that can upset customers. In some circumstances, it might be preferable to add a new name for a specific product or service. Changing your name is an extremely high profile activity which can be extremely expensive, even if the estimates of the cost are usually grossly exaggerated in the media.
“When working with companies on name or brand images, we try to help them to present the idea of what they were trying to be and what they were trying to become. This is particularly relevant in relation to all the people with whom they are and hope to be associated. That must include staff and customers. Many companies overlook customers at their peril as this group is becoming more articulate. Groups may feel that they own their brands. They do not. Who’s in charge of mobile phone brands? 15 year old children.”
Wally Olins warned companies against changing names merely to avoid previous adverse attitudes. That can even accelerate a company’s demise when customers realise that only the name has changed. When nothing else has been altered, a name change can be extremely controversial and some invite mockery. To have any prospect of success, a name change in these circumstances must be accompanied by, and be seen to be accompanied by, a change in business practices and policies. “Take a poor low-profile company and give it a high profile. What have you got? A poor high profile company which goes broke more quickly than a low profile company.”
Olins was not surprised that both Skoda and Marks & Spencer retained their names despite commercial difficulties. Both had problems, not of identity but of the products and this was a problem that could be, and was, solved.
POSITIVE REASONS FOR CHANGING NAMES
There are many positive reasons for companies adopting new names, ranging from the repercussions of mergers, diversification, the arrival of new technology and new markets, perhaps opened up as a consequence of deregulation, and the desire to re-position the organisation.
NEW BRAND
Some organisations, such as those which entered the UK telecomms sector, may want to launch an entirely new brand. The products and services are similar but companies wanted to differentiate themselves from the competition. New brands, such as Orange, with which Wally Olins was involved, were created. “This is a powerful brand which derives its strength from what people feel about it and their expectations generated by recognition of the brand. The reality is that Orange is not particularly different, functionally, but it makes individuals feel that their relationship with the brand is personal and individual. It makes people pleased to be associated with the idea. That is what happens when a brand is created from scratch. One reason that Orange is successful is that its staff deliver what the brand promises.”
NEW MARKET
“Some long-established organisations may want to do something new. They may have become more ambitious. Equally, their business context may have changed at the behest of one or more factors such as new technology, deregulation or globalisation.
“For example, BT (British Telecomms), like others in the sector in Western Europe, were fixed-line operators enjoying a monopoly in their home countries until the 1980s when deregulation changed everything. Then, instead of dealing with one kind of technology, they were confronted by several forms so had to reinvent themselves in an effort to meet the challenge. Huge advances in technology and the opening up of a global market place meant that their home base, once a cosy monopoly, was being invaded by others. Some groups have had very serious problems in coming to terms with this revolution.”
REPOSITIONING
Repositioning is an important reason to change an organisation’s name. “If I recall correctly, my first major job in the financial services industry was for the Industrial and Commercial Finance Corporation. This was an organisation owned by the major banks, originally inspired by the post-war Atlee government, now known as 3i. We were treated to the usual cacophony from ignorant journalists making the usual kinds of idiot noises but the change of name positioned 3i in the new venture capital industry. It was no longer identified with a government-sponsored body designed to help small businesses. All involved felt differently after the change.”
“The retail gasoline sector in Spain, effectively an oligopoly, was dominated by state company Repsol. When the European Union required the liberalisation of the market, it meant Shell and others would be competing effectively in a market of 40 million people. Repsol had to change and compete or see its market position eroded. We worked hard to ensure that Repsol was still perceived as Spanish, because we wanted to appeal to national instincts but it was also important that it was seen as competitive with the best brands in the world. That was difficult because Spain was not then perceived as a global leader.”
MERGERS AND TAKEOVERS
Wally Olins cited two examples from the international oil industry. He was consulted on the first discussed below. “When Kuwait Petroleum bought the Gulf Oil retail gasoline network in 1983 the agreement required the new owners to change the name on the retail gasoline filling stations within two years. In any event, Kuwait had no wish to keep the name and wanted to say something new to customers in a flat market, albeit that the product had not changed at all. Q8 was remarkably successful and I think that sales increased by a quarter over the first two years. It was one of the very few cases in which I have been involved where nothing else changed. The products, locations, environment, prices and people remained the same as under Gulf control. All that changed was the brand name and the positioning of the group in the different markets across Europe.”
“In a relatively short period, BP acquired Amoco, Arco and others. Their brands had to be integrated and the group then tried to re-position itself so that it seemed different, from, for example, ExxonMobil. I would think that the widespread perception now is probably that BP is an environmentally-friendly organisation which is quite different from the geopolitical structures that were created in the industry over the previous 70-80 years. In seeking this perception, the group has tried to anticipate public opinion. They’re not doing it for entirely altruistic reasons: they think that this will enable them to sustain their power base.”
Another factor was that the earlier name of British Petroleum reflected their UK base but now the group wishes to distance itself from the past and to stress its international perspective, hence the name of bp. In a different context, when British Midland Airways became more international, they changed their name to BMI.
MOCKERY AND DERISION
Pipeline suggested that some name changes, mocked more by the UK press than by its counterparts overseas, reflected not just a new name but some of the exaggerated and fanciful language that accompanied the “re-launch”. For example, the new name proposed for the consulting arm of PriceWaterhouseCooper was Monday and we were told that it conjured up images of “fresh thinking, doughnuts and hot coffee”. The media had little difficulty in lampooning the words. The name was dropped when the group was acquired by IBM. Olins, saying that his former company was responsible for the new name, argued that it was a bold and imaginative idea that would have worked very well indeed.
“If I’d said to you, as I did to people some seven years ago, we’ve produced this new name and new branding, for the last mobile phone company in the market place, and it’s to do with optimism, to do with feeling good about the world and it’s called Orange, I expect that you and many others would have said that was about as barmy as Monday was.”
“Branding is about seduction. The nature of branding is about perception and emotion. It’s not rational. So it’s very easy to describe it as mendacious, which it frequently is, exaggerated, which it certainly is, and ludicrous which it sometimes is. I think that all those are perfectly appropriate words to use occasionally. That doesn’t mean that the words don’t work. Consider the phrases used around Orange. ‘The future’s bright, the future’s orange’ is a completely idiotic phrase. It doesn’t mean anything but it has passed into the language.”
Wally Olins claimed that the reality is that 99 times out of a hundred when a name changes it happens and that is that. “For example, Arthur Andersen and Andersen Consulting were two arms of a company that shared the original parents. For many reasons, Andersen Consulting agreed to change its name and eventually Accenture, suggesting that the accent was on the future, emerged. It was greeted with hoots of derision all over the world. Two years later, Andersen, as it then called itself, was identified with fraudulent and scandalous behaviour. Accenture was not even slightly damaged but, if it had retained the old name, the company would have suffered. No newspapers praised them for changing their name. There was no interest in that, the value is only in mocking and in making derisory observations.”
A CYNIC MIGHT SAY THAT THAT WAS A HAPPY COINCIDENCE
“It certainly was a coincidence but what was important was that they had earlier understood the need to separate themselves totally from Andersens.” Many name changes, criticised at the time, were subsequently seen as good corporate moves. Guinness, which merged with Grand Met, to became Diageo, was an example of this.
Pipeline noted that Marketing Week had derided the name of Consignia but Wally Olins argued that there were misunderstandings which caused ill-informed criticism, although he did not think that it was a very good name. It was always intended that it should only apply to the parent company but this was not reported so customers thought that the Post Office in the UK was to be given a new name. The group had planned to become an international business, then abandoned the idea and reverted to being a domestic company and the name is now the Royal Mail Group plc. “Royal Mail is a fine name for a domestic group, like the Post Office, but the former name cannot be used internationally. Whose Royal Mail is it?”
Was one reason for derision on name changes the indiscriminate use of upper or lower case letters and the strange and unfamiliar names adopted which alienate people? “These are fads, whims and fashions in design and it’s just as pronounced in this business as in any other. The trick is to do make changes gradually, so they’re not noticed but then you’re criticised for spending big money on something that people can’t even see, so why do it? If you change dramatically, you’re attacked for wasting money. Personally, I don’t particularly like the current fashion for lower case type which is very tiresome but it is changing.” Would following fashion in this way date the companies that embraced it?
“They will have to change about every 15 years or modulate what they do. Some companies have done extremely well over the years without making dramatic changes. Renault, Michelin or Shell have all modulated what they do very carefully.”
Pipeline wondered whether one source of irritation was that, in contrast to earlier years, some company names fail to indicate their activities. Similarly, some UK trade unions, such as Amicus, Prospect and Unison, not involved in the consequences of deregulation, new technology or globalisation, have also changed their names.
“That may be a common view but many long-established names, such as Kodak, invented in 1880, do not indicate the group’s function. Volvo, meaning ‘I roll’, offers no clue on the company’s activities and other names, of course, may give illusions of power, such as Jaguar. You don’t necessarily need to know what Selfridges sell. Many old names have persisted for a long time. The point about brands, whether they are commercial, charity or national brands is that they build relationships with people over a long period.”
