Guts!: Companies that Blow the Doors Off Business-as-Usual
by Kevin Freiberg

Freiberg, the well-known business author who penned the best-seller Nuts! about Southwest Airlines, advocates the notion that great leaders “gotta have guts.”

In Guts!, Freiberg advocates replacing fear-based management with heart, soul, discipline, loyalty, and humor. Among the topics covered in the book’s seven chapters are ways to brand the culture, make business heroic, and inspire fun. Whole Foods and Omnicom Group are among the examples he uses to illustrate his themes.

If you find Guts! insightful, check out the sequel in Boom! 7 Choices for Blowing the Doors Off Business-as-Usual.

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ESPN used to be known as a great sports brand. In the last few years, it has transcended the sports label to become one of the best brands anywhere.

The company’s lineup now includes its flagship cable station, numerous specialty cable stations, a top-rated website, a successful magazine, and destination restaurants. The company recently launched its own mobile service for sports junkies.

CEO George Bodenheimer has received much of the credit for ESPN’s brand growth. In a recent Business Week profile of the company, Bodenheimer explained his own philosophy toward brand building:

1. Define your mission – “We serve the fans.”
2. Know what your brand is – “We view ourselves as the world’s biggest sports fan.”
3. Cultivate relationships with your customers – “Talk to fans, not at them.”
4. Develop an inclusive culture – “I came up from the mailroom, so I had managers who were listening to me.”
5. Continually enhance your product – “We have launched three new channels in the past two years, a broadband service, and a cell-phone service.”

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Something bad has happened, but the news media doesn’t know about it yet. If the word gets out, your company’s reputation could take a big hit. Should your company be proactive about releasing the news or wait to see if someone calls?

This is a difficult question. The answer is entirely up to you, your culture, and your confidence in working with the news media. The following decision tree will help you make a better assessment:

The first consideration is how likely the bad news will get out. If you consider all the possible ways the news could get out and decide that all are very unlikely, then your chances of negative media coverage are slim and you may opt not to communicate the news proactively.

The scenario changes when it is very likely the news will get out. Since you have a high suspicion the news will get out, you have to consider whether to use a proactive response or a reactive response. Proactive means that you release the news in a controlled way. Reactive means that you wait until the news breaks and then respond.

This decision is ultimately driven by many factors, particularly the likely tone (neutral, somewhat negative, or highly negative) of the news coverage. The proactive response has a greater likelihood of generating a neutral or somewhat negative article. By contrast, the reactive response has less likelihood of generating a neutral article or somewhat negative article since you are responding to the other side of a story that is already out.

There is neither a single nor a simple answer for these situations. Knowing how to assess them properly can improve your overall response.

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CEOs worthy of their title know the value of brand equity: satisfied customers who advocate the product or company to others. That level of loyalty is an elusive marketing formula.

In a recent study, The Conference Board identified four organizational support factors that are key to brand building:

• CEO leadership and support
• A distinctive corporate culture serving as a platform for the brand promise
• The ability to obtain support from all levels of employees
• The alignment of brand messages across functions

All four have a common theme in that they start in the executive suite. Let’s break them down and look at three good examples from Southwest Airlines and one poor example from United.

CEO leadership: The Southwest organization mimics CEO Herb Kelleher. It’s maverick, playful, personal, and, yet, serious. At the same time, this is not to say Southwest is a company of Kelleher wannabes and mini-mes. The company values each individual and gives employees opportunities to be themselves.

Distinctive culture: CEOs must define and then guardedly protect a culture that supports the brand. Southwest has a unique culture – low fares, entertaining flight attendants, no assigned seats, easy fare system, etc. – that personifies its brand as a people’s airlines. We once heard a branding executive say, “I feel like Southwest is my airline.”

Employee engagement: Southwest makes sure its employees personify the brand. At a branding conference in Santa Barbara, Calif., the Los Angeles area marketing manager summed up the company’s philosophy when she said, “Enthusiastic employees spread enthusiasm to customers. If your employees don’t ‘get it,’ neither will your customers.”

Align Messages: Now for a poor example. United Airlines designed its 1997 “Rising” campaign to communicate a new commitment to customer service. The campaign backfired immediately because executives failed to read the tea leaves. Just as United was announcing its new customer satisfaction philosophy, its flight attendants were threatening a labor action called CHAOS™, or “Creating Havoc Around Our System™”. CHAOS’ tagline: “No raises. No rising.”

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