|
|
|
4Ps
FOR THE NAMESAKE
Can a mere name change help erase the past perception of a company in the minds of stakeholders, especially in the case of PR disasters a company might have faced? Or is a complete restructuring of the management, operations and structure required to make an impactful comeback? Ratan Lal Bhagat investigates the india connection
|
| |
 ‘What’s in a name?’ wrote William Shakespeare in his historic love saga Romeo and Juliet more than 400 years ago; but the question still remains the same even today. Can a corporation change the perception of various stakeholders with a simple name change? Or is there something much beyond that, that would have the final impact? Perhaps to analyse the correlation, let’s see the most extreme cases; in other words, international companies that have been caught at the wrong end of the legislators stick at some time or the other.
When the Enron saga occurred, US policy makers moved towards a separation in consulting and auditing arms (where they professed that an entity should never double as both the consulting firm and auditing firm for a client); a move that resulted in Anderson Consulting legally separating from Arthur Anderson. But then something happened; Anderson Consulting changed its name to Accenture in 2001 but not before a mudslinging non payment dispute of $1 billion that Accenture slapped on it. The question is, would Accenture have remained as profitable as now even if it had retained its earlier name? For a more recent conjecture development, did the insurance behemoth American International Group rechristen itself as AIU Holdings Limited in March 2009 with a desire to wipe out the forgettable past and start afresh? Can a simple name change help AIU recreate its future?
I decided to bounce back to India to test my hypothesis. And where better to start than the most recent Axis Bank. The question is, did UTI Bank – after its split from the erstwhile UTI – change its name because of the fact that UTI was famously (or infamously) associated with the killing US64 share imbroglio, that even led to UTI suspending the sale and purchase of US64 shares at one time? When I catch up with Sony Bhasin, Axis spokesperson, he parries sweetly, “It has been almost 2 years since we became Axis Bank and we would like to now look ahead and not back.”
If not Axis, perhaps the answer can be better seen in the just occurred example – the rebranding of the infamous Ramalinga Raju’s Satyam Computer Services Ltd, post acquisition by Anand Mahindra led Tech Mahindra. The tainted software services provider unveiled its new brand identity as Mahindra Satyam, with an effort to infuse new life into a maligned and dead brand. But why did they then retain the name of Satyam? Doesn’t that completely destroy the very reason the name change should have occurred? “This rebranding exercise symbolises an amalgamation of the Mahindra Group’s values with Satyam’s fabled expertise, even as it retains that
part of Satyam’s identity which signifies commitment, purpose and proficiency of the organisation and its people,” explains Anand Mahindra, Vice-Chairman and Managing Director, Mahindra Group, while unveiling the new identity.
|
| |
 “Just a change in the name cannot be significant enough to undo the past deeds. The new name has to accomplish a noticeable and significant change in the ways the business entity under the new brand name would function,” Anand Halve, Co Founder, Chlorophyll, a brand consulting firm, enters the war room with all guns blazing. Does that mean that a name change is not enough, but is still a necessary factor to change the perceptions prevalent in the various stakeholders? Then why is it that Cadbury India, when it was hit by the biggest controversy some years back [monikered the worm controversy: some consumers found a few chocolates of Cadbury non palatable and some, even worms in those chocolates] and registered a gut wrenching decline in its sales, never changed its name but came up with a new marketing strategy [it roped in Amitabh Bachhan as a symbol of trust] to regain its customer base while revamping critical touchpoints in the packaging process of its chocolates?
“That’s because an organisation’s name carries value; it’s monetised globally and it’s called brand value,” says all India head of ICMR, Namita Chhetri, “For example, a globally top ranked Superbrand like Coca Cola would never change its name despite pesticide issue because though controversies scrape off brand value, if at the end of the tunnel the brand value remains significantly positive. That’s the case with Cadbury too!”
It is true that the Mahindra-Satyam management is undertaking tactical restructuring steps to make the most out of the situation and to win back the faith of its existing stakeholders and prospective investors. “With the current initiative, we will witness steps by the management to adopt and inculcate the values of performance, ‘customer first’, good corporate governance and citizenship, which are drawn from the Mahindra Group,” envisions Vineet Nayyar, Executive Vice-Chairman, Mahindra-Satyam Board. But still, many experts do comment that the Mahindra Satyam name change is actually not a perfectly positioned move as the name Satyam, after the controversy, has acquired too much of a negative value [Disagrees Nayyar, “This is a significant milestone towards the recovery of the company. We are optimistic that this new brand will re-energise the organisation and will be well received by all our stakeholders”]
Accenture’s initial public offering in July 2001 got a heartwarming response as on the very first day, it raised a record $1.7 billion approximately. And much of it perchance thanks to the new name. Axis Bank, with its great marketing strategy, has evolved as a renowned brand in itself and has made considerable financial advances (an increase of 69.4% in its net profits for FY09 at Rs.1,814 crores) since it rebranded itself. In this case, although branding helped considerably, it is true that even restructuring contributed at large to the increase in profits.
In the case of AIU and Mahindra Satyam, it’s yet early days to gauge the aftermath of their recent re-jig. But if one were to take away the biggest learning, from this exercise, it would surely be that there is ‘much ado about something’, and that’s the name. A name change does go a long way in reorienting a corporation’s positioning within stakeholders; but only in the case when a corporation’s past name has negative brand value... Think about it; if I were to change my name, would you still read my articles? Hey, do you even know my name in the first place?
|
|
Ratan Lal Bhagat
|
|
|
| |
|
