IBM’s Basic Branding Conflict

by Marc Rudov, Branding Advisor to CEOs
October 17, 2014

I read with extreme interest Fortune’s recent expose on IBM, especially its CEO, Virginia (Ginni) Rometty. As the company’s ninth chief executive, Ms. Rometty’s mission is to shake up, modernize, and streamline a behemoth.

If the Ebola pandemic has taught us anything, it’s that large organizations are impossible to manage. Newsflash: they’re even harder to brand. Frankly, IBM is too large, and it shows.

At the beginning of the Fortune article, author Michal Lev-Ram makes a revealing statement:

IBM’s revenue has shrunk for nine quarters in a row. Its historic businesses are fading, its century-old culture a relic of the past. CEO Ginni Rometty has a plan to turn things around—but can anyone make this elephant dance again?

Out of nowhere in Lev-Ram’s story appear Ginni’s Rules:

Don’t protect the past
Never be defined by your product
Always transform yourself.

Ginni’s Rule #2 (never be defined by your product) caught my eye. As I make abundantly clear in Be Unique or Be Ignored: The CEO’s Guide to Branding, it’s inviolable. Why did it pique me? Because Rometty doesn’t mean it. Instead, she has focused the 103-year-old IBM on three core areas:

Big data
Cloud
Engagement (mobile and social technologies).

Brand Is Unrelated to Product

What are these three core areas? Products and technologies! Duh! Ginni is violating Ginni’s Rule #2 — and Branding 101. She’s defining IBM by its product(s). By creating a basic branding conflict, IBM is on a collision course with suboptimal destiny. This strategy, ultimately, will fail.

Make a choice: It is impossible to be customer-centric and product-centric simultaneously. And, you cannot have a strong brand (value proposition) if your company is product-centric. Brand is unrelated to product. Hence the conflict.

First, big data is meaningless. Cloud is equally meaningless. These terms couldn’t be more generic, nebulous, and detached from customer needs. See “IBM’s Hazy Hammer.”

Second, what happens when customers decide that trendy technologies, like mobile and social, have become irrelevant or invasive or unsafe? Rometty will have to reorganize again; I predict she’ll do so around other technologies.

Parting Advice to CEOs

Organize your company around customer needs it can address with unique solutions.
Adopt new technologies, only if they buttress your brand, without changing your organization and your brand.
Observe Ginny’s Rule #2, even if she doesn’t: Never be defined by your product.
IBM is, unfortunately, defined by its product(s). Don’t likewise saddle your company (and its bottom line) with this basic branding conflict.