Alpha Waves - September 07
Brands and Brains
Magnus Spence offers an extract from a recent study. He argues that differences between right and left brain activity shed light on the development of brands in the European Asset Management industry. The old notion, he says, that left brain investment professionals and leaders would reject right brain marketing techniques has now been shown to be an outdated stereotype.
Since the 1860s we have known that the human brain is separated by a longitudinal fissure, separating it into two hemispheres, which are each responsible for different manners of thinking. There is no such thing as right or left brained person. We are a mixture, but we tend to be weighted to some degree towards one side or the other.
People who are strongly weighted towards the left brain are said to be strong on logical, rational, analytical and objective thought, usually do things in a planned orderly way, often appear to be considered and serious, are almost never absent minded, and are skilled at sequencing ideas.
People strongly weighted to the right side are said to tend to favour more intuitive and subjective thinking, enjoy clowning around, can be absent minded, frivolous, spontaneous and unpredictable. They like to dream and be philosophical.
Scientists don’t like people like me using left and right brain distinctions in this sort of context, but I find it a useful shorthand or metaphor. If an industry can be said to have a cerebral tendency to the left or right, and if you will indulge a (right brain) tendency to generalise again, then the asset management industry must be one of the most logic-driven and left-brain businesses it is possible to imagine.
Branding on the other hand has often existed, or is perceived by left brainers to exist, in a right brain dimension. Brand processes and outputs are seen to be intangible and subjective, even frivolous.
The neat minds of left brainers don’t like the intellectually casual approach of the branding world. For example, there is no consensus on what brand is, and not much evidence of one being achieved in the near future. Definitions of branding range from the poetic (“Brand is a rallying cry”) to the prosaic (“Brand = Product + Position + Personality”). The range of possibilities is endless. For every person who says “Brand is a promise”, there will be another who says “Brand is about delivery”.
The problem for left brainers is that branding often works on many levels, as does most human interaction. We are now all very familiar (aren’t we?) with the idea that communication is not just about the words, but also depends on the way that the words are delivered. Malcolm Gladwell (‘Tipping Point’) is one recent and well known promoter of this notion. He suggests that “we need to look at the subtle, the hidden and the unspoken” in the way that we consciously and unconsciously exchange information with each other. He referred us to ‘cultural micro-rhythms’ which are the tiny gestures we make that prompt unconscious reactions in others when we communicate.
Brands often register with their audiences in just these subtle, hidden and unspoken ways that are quite intuitive to right brainers, but which leave left brainers very uncomfortable: ‘where are the measures?’ and ‘what is the ROI?’, they ask, quite legitimately. And ‘what do I get in return for all this outlay and how quickly’?
The high priests of brand in the wider world have been classic right brain advertising creative people wearing funny glasses and purple suits, whose more casual attitudes and demeanour have always been anathema to the more restrained left brain approach of the dark-suited financier. The difference in culture, right brain vs left, investment professional vs brand professional, lies at the heart of the debate on this issue. Neither side has in the past fully understood or indeed wanted to have much to do with the other.
I say ‘in the past’ for a reason. These stereotypes are now increasingly out of date. Just as asset managers have dressed down and removed their ties, so the world of branding has, as it were, started to put one on. Branding in the wider world outside asset management has itself changed in recent years, in effect moving from being a right brain to a more recognisably left brain activity. “Today,” Mhairi McEwan of leading UK consultancy Brand Learning tells us, “marketing is a robust, rigorous discipline that grows business taking a demand-led ‘topline growth’ perspective.” Stung by a series of recessions during which branding was not given the funding it required, marketing people have changed, or re-branded itself to meet the needs of their frequently left brain CEOs and Finance Director paymasters.
As a result of this change, the process and outputs of branding are now designed to appeal to those who see business in terms of cash flows and returns on investment, which of course includes all finance directors and most CEOs. Brands now have more measurable values, and it is frequently stressed by left brain and newly financially savvy branders that this value makes up a significant proportion of intangible assets on the balance sheet.
Meanwhile marketing academics and practitioners have created complex left brain measures of marketing efficiency and brand ROIs.
Now often wearing charcoal suits, and certainly without funny glasses, newly re-branded brand builders use financial terminology for all the world as if they were accountants. Niall FitzGerald, the recent CEO of global brand builders Unilever, and himself an ex-accountant, has called brands “a reservoir of future cash flows”, classic left brain language.
So, in summary, the brand building world has set out to change itself in recent years. From being an activity whose benefits were once only obvious to right brained creative types, branding now seems able to present its benefits with greater clarity, so that they are apparent even to the most left brained finance director. Has this change allowed branding to make an impact in the left brain world of asset management?
My conclusion is that branding will indeed be accepted in European asset management, and already is in many firms, including both those that I call the ‘brand enthusiasts’ and the ‘brand realists’.
The old notion that left brain investment professionals and leaders would reject right brain marketing techniques has now long been shown to be a stereotype.
It now exists only among the ‘brand averse’, whom I characterise as being wedded to an old left brain notion of what brand is, and what they perceive it can (or can’t) offer them. The competitive advantage offered by brand strength will pass these firms by unless they can clear their heads of these outdated myths.
Magnus Spence 2007
Taken from "Brand Ahoy! The Development of Branding in European Asset Management" which is available for download at http://www.spence-mi.com/Downloads.html