There's an infamous principle at Google to 'do no evil'. Now, you can argue whether or not they live up to this, but there's no doubt they have done a better job at it than Volkswagen. Years of blood, sweat and tears and millions of dollars in marketing spend convincing us that this was a brand that understood us and was on our side undone in an act of deliberate corporate malfeasance or an accident in the lab. Either way, asking people to wait as they 'remedy this issue' (as they asked on their US Twitter account) suggests a remarkable misunderstanding of the issue.
Brands, excuse the pun, are the engines of business today. As Andrew Winston pointed out in a recent Harvard Business Review article, "decades ago, a company's market value was nearly equivalent to its tangible assets – buildings, machinery, materials, financial capital, and so on. In 1975, intangible assets were just 17% of the market value of the S&P 500. But today, those proportions are flipped: intangible assets now make up 84% of the market value of the S&P 500". That intangible value is primarily the brand and is what has been dramatically downgraded by the market since the story broke (some estimate a loss of $10 billion in brand value at the time of writing).
If nothing else, this is a potent example of the primacy of the brand at the heart of business today. No longer can the brand be seen as a function of the business: today, it is the heart that must be kept beating. As Telefónica's Ronan Dunne puts it: "We're not a company that runs a brand, we're a brand that runs a company."This means that brand management has to break from its tendency to obsess over message management and what we want to tell people and instead focus much more broadly on our overall behaviour and what we do as a company for people.
Now this may all sound like nothing new, but architecting the overall customer experience has never been so important. As a result, it is good to see the (albeit slow) introduction of chief experience (or customer) officers inside organisations from John Lewis to BBH. But this move feels perhaps too little too late. Perhaps something more radical needs to be done if brands are to regain trust with people. Trust is in increasingly scarce supply: countless surveys across countless countries have shown rapidly declining trust not just in brands but in the institutions that have formed the bedrocks of our cultures.
This is the tension that lies at the heart of most marketing today: marketing (as we know and tend to practise it) is built on layering more opacity around companies and what they do. Yet we live in a world that is demanding more transparency than ever. As a result, we are seeing the rise of brands such as Everlane, a clothing 'basics' brand on the West Coast of America that is taking on the likes of Gap through being absolutely transparent. Every product page shows where and how it was made and the breakdown of price from materials, labour and transport to the markup added by the brand. As they say about their philosophy of radical transparency, 'Know your factories. Know your costs. Always ask why.' To Everlane, radical transparency is their competitive advantage and it's building a company with breakaway momentum.
Now, you might argue that it's easy for a brand to put spin on its supply chain story but new technology is emerging that will dissipate this concern. Blockchain, the secure, shared and open database that underpins Bitcoin, is increasingly being used to shed light on complex global supply chains. Its decentralised nature means no one party (supplier, brand or an 'independent' – and open to bribery – third party) can control the data. This technology has the potential to totally change how we certify, track and trace the origin of goods. Most importantly, it can be easily accessed by end users and regulators through a smartphone-readable QR code or radio frequency identification (RFID) tag embedded in the label of a T-shirt, engraved into the underside of a piece of jewellery, printed on a bag of coffee beans or, indeed, the vehicle identification number of a car. Perhaps transparency will redefine authenticity, and the notion of made in, with and by will take on new, more powerful meaning.