Brand management: how to create a cross-government/sector structure?
A few key takeaways:
- Having the government on board is important, as it is an overarching entity under which various sectors will benefit from place branding initiatives, especially in tourism.
- The brand management should be separate from politics and should have active participation from the private sector.
- A public-private partnership is ideal as both partners bring a wealth of information to the table which helps to come up with creative ideas and strategies for place brand implementation.
- Funding has to be taken into account when there are multiple players.
- Independent decision-making and fair representation of players is a must.
- Creating a consistent narrative across all entities is imperative, as all the collaborators have their own identity.
- Depending on the objective, collaborators can opt for any of the three models in brand management – branded house, house of brands, or blended house. Each of these provides collaborators varying degrees of recognition and flexibility.
- Decision-making with a cross-government/sector structure can be time-consuming.
It is crucial to find a common basis not purely based on reciprocal trust but also based on political legitimacy. There should be mutual recognition of political legitimacy so that different parts can sit together and effectively start to work with each other in a possible common project.
Political legitimacy is, however, materializing differently in different contexts and sectors (for example, in different countries, but also governmental functions). For this reason, it is important to analyze the political feature of the partnership, its structure, and its location.
My own experience of being at the Cement Manufacturers Association, India, has provided me deep insights into sectoral brand management. It has also led me to revisit my own views on what should precede: nation or sectoral branding.
In sharp contrast to nation/place branding where the focus is on external audiences, sectoral branding necessitates, first of all, creating a consistent perspective on the sector across all entities within the country. It needs to build on research-led branding. It is highly demanding and intense, with policy advocacy at its core.
Moreover, management of policy and perception at both the federal and provincial levels calls for strategy and consistent engagement at all levels. Stealth strategies for its promotion can only emerge when understandings are reached between the government and the industry on sectoral priorities and its role for the development of the nation.
I think clear lines of communication and a clear hierarchy are essential. Clear KPIs (indicators) and clear outcomes.
Clarity would be my keyword for such a structure, to ensure a positive outcome. It must drive any cross-silo collaboration for effectiveness.
This is a strategic question, and the answer lies in understanding the fundamentals of brand architecture. The three options are a branded house, a house of brands, or a hybrid model.
In a branded house model, the benefit is derived from bringing together multiple geographies under a single, strong brand. Geographies leverage brand recognition and reputation of the house brand. In a branded house, all members must share the same brand promise. The advantage is economies of scale. It is a strategic choice that relies on synergy where the whole is greater than the sum of the parts. The disadvantage is that it can be challenging for individual geographies to establish a separate image. Companies that have been very successful with this model include Microsoft, McDonald’s, and IBM.
In a house of brands model, the individual geographies are more distinct and widely recognized than the parent collaboration. Each collaborator has its own unique identity, while the parent collaboration identity is virtually unknown. The benefit is letting collaborators manage their own identities. The downside is that the collaborators derive no benefit from a strong parent brand. To be clear, there still needs to be a strategic reason for the collaboration (e.g. cost-sharing or risk reduction). And to be successful, the collaborators must truly be unique, otherwise, the overall collaboration may fail as a result due to internal competition. Procter & Gamble is frequently cited as an example of this model.
The third model is a compromise position – Blended House. It is a design that walks the fine line of providing collaborators with the flexibility to establish their own image but still derive value from a brand established for the overall collaboration. GE is a good example of a blended house. The company offers a wide range of products that are seemingly unrelated but all benefit from the GE brand image of being a high-quality technology company. The downside of the blended house it that it is the hardest of the three models to manage well. It requires the definition of an overarching brand promise which each collaborator can align to and is willing to use to set parameters for their own branding.
In economic development, the choice of model will depend on the scope of the geography under consideration. Even at the community level, you could elect to pursue a branded house where the community is the dominant brand, a house of brands where neighborhoods establish and maintain their own images, or a blended house where both neighborhoods and the community work together to establish their respective brand images. There is no right or wrong answer. But, often the budget available will guide you in a particular direction.
When I was responsible for branding Ohio, we elected the blended house model. We recognized that there are certain venues where the Regions would benefit from competing under the State umbrella, and other venues were competing as a Region would be more effective. In my experience, the further upstream you were in the site selection process, the more valuable the State brand was to the collaboration. For example, foreign missions offered a real opportunity for collaboration. Regions could cost-share by participating in State-led missions, and schedule separate company visits while in-country. Done right, the State uses its position to open doors with companies that might be more difficult for the Regions to open on their own.
Similarly, attending Trade Shows (like CoreNet) with a State exhibit allowed for creating a bigger presence than going alone and by cost-sharing ends up being less expensive than going alone. We also invested in Wall Street Journal advertising to communicate Ohio’s sweeping tax reform and the core State brand promise. Important information that the Regions could not afford to promote as widely, but helped open doors for Regional meetings with business executives looking to make a capital investment. Each marketing investment was assessed in advance to determine if it was best done individually or by the collaboration.
It can be tough to get organizations with different priorities together. Local pride can be the key here – your branding project is about telling the story of a place. Although organizations might have different priorities, locals always want to tell the story of their hometowns.
Another point is functional partnerships. Think tourism: the government has a stake in tourism (through many offices ranging from local law enforcement to taxation). The hotel industry has a stake in it, local airport/train station/bus station will benefit. Restaurants and bars will benefit. Place branding objectives that appeal to the sense of place and belonging can cut across sectors and can bring different players together.
The key to success is cooperation on all levels and to put up an effective public-private initiative with clear authority and organization around it. I don’t think anyone has found the best case formula yet.
In Iceland, we have been putting up a new structure for export and marketing that we hope will be a good case for the future. In September 2018, some structural changes were made to the laws of Promote Iceland. We have the aim to improve the competitiveness of Icelandic companies in foreign markets and to stimulate economic growth through increased export (incl. tourism).
At that same time, a new marketing and export council was established which involves: four ministers and ministries (Foreign Affairs ministry as leader of the council, Fisheries and Agriculture ministry, Innovation, Industries, and Tourism ministry, Culture, and Education ministry), Confederation of Icelandic enterprise and the Icelandic association of local authorities. In the group, there are 30 people coming from the private and public sectors to set the strategy of branding, export, and marketing of Iceland for the next 5 years.
We also have an active conversation within the country and over 350 people have been involved with the strategy. For the future, we also have advisory groups that are public-private from different sectors that will be decided in each case, for instance, tourism, green energy, fishing, creative industries, and food. The new strategy will be published on November 2019.
This is highly dependent on the country-specific aspects – especially because of budgeting and property.
Here in Russia, the practice of Regional Agencies is spread – formally they are part of some local ministry, usually accountable for tourism. But they could spend money via public procurement procedures (which gives transparency) and engagement (as they need to organize events and invite various stakeholders). I am not sure that this is the best option, but we are tightly limited by the law.
Nation branding and other place branding initiatives that will succeed in the future are those with a politically independent structure. This way, both the brand executive team and the strategy itself are not negatively impacted by any government changes, and will not lose importance to other public projects and policies. This is already the case of Israel, where Vibe Israel, a non-governmental and non-profit organization is in charge of managing the Israel Brand.
Nevertheless, it is important to find ways to get the government on-board as the success of the strategy also depends on how well the public and private sectors can collaborate. This can be done in several ways (as long as the structure’s political independence is assured), such as including government representatives in the advisory board or executive team, appointing a politically-recognizable figure as the Nation Brand president, or establishing a private-public partnership.
The government must always be present in a country branding project. That gives it legitimacy. Ideally, it is the one that sets the rules and contributes to its financing and administration.
But for it to be sustainable and separate from politics, the private sector should be in charge of country brand management.
Cross-government structures are not easy to create, mainly because of conflicting political objectives and hierarchical nuances that trouble many governments. My recommendation would be that such a structure should be initiated at the very beginning of the brand-building process, even before the official start, to create widest possible consensus on the brand.
The composition of such a structure depends largely on the brand vision and its objectives. However, it seems reasonable that the representatives of key sectors – such as tourism, investment, science, foreign relations, economy, etc. – are included.
Further, such a structure should have some degree of authority in brand-related issues. Otherwise, it will have a purely ‘decorative’ function.
We envisage a foundation-type structure established and financed by the government, but with independent decision-making and freedom to allocate funds to support and invest in industries that will take a place brand forward.
The structure will depend on the resources available to the local champion of the place brand – it should be one of the teams of the officials who initiated and led the place branding project. They are committed to it and will work out the best routes to get adequate resources and funding. That said, I do not think there are blueprints to follow.
The key to creating a cross-government approach and engagement is to ensure the stakeholders you need involved are either co-funding the program, are represented on your governance board, or you’re delivering so much value to their activities that you become an integral partner in their success.
In our situation in New Zealand, each of our key government stakeholders is a funding partner and is represented at the Advisory Board at a senior level. This sets the scene for engagement.
It needs political support to restructure such a structure – and money. Only if the place brand management unit has a decent budget and can give funding to other governmental units to help in their communication, there is an incentive to follow this new structure.
It also needs time. For instance, the restructuring process for the brand in Hamburg (Germany) took nearly 5 years.
You can legislate it, but if you aren’t adding value to every government department they will begin to ignore you and initiate their own, invariably random brand activities. In the absence of a strategy, a new logo or a new “brand” feels like work. You can point to it, when it is finished, and say you did something and a certain number of people liked it on social media and then you can go back to whatever you were doing before… until it’s time for a new logo.
This is why I like a bottom-up, client-service approach. People tend to be good at what they do and relatively bad at selling it to their own audiences. This is where a place brand can offer a unifying strategy to everyone – in the private sector, in the public sector, in the arts, and in the broader community.
Again, if you do your research well you will understand the problems you can solve together, with your place brand.
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