A battle between two brothers who are partners in a business played out in my office. While one brother failed to see any future in the business and was
seeking to dissolve it, the younger sibling felt that it was
way too early to throw in the towel and that the business
needed “rebranding” and a refocus. The heated argument
that I was forced to arbitrate ended with an in-depth
review of the business and an agreement on the potential
of rebranding a business that had been around for more
than a dozen years. The brothers’ major concern was how
to remake a reputation and an image that they felt was solidly
ingrained in the minds of their customers, and therefore
would be difficult to change.
As it turned out, the business had at one time abandoned
a slow-moving line of goods because of competition, a line of
goods which, upon examination, could be revived today
and potentially give the business a new focus and potential
profit, something that had eluded them for several years.
Turning around a failed business is not a simple matter,
especially, as businessmen like to say, when “it is too far
gone.” But in this case, the debt seemed manageable and
the key competitor that had forced them to change focus in
the first place had merged with another business, moved to
a different location and was no longer a threat.
Sometimes it is pure luck that gives rise to an opportunity.
A good example was when Michelle Obama helped
Millard Drexler turn around the clothier J. Crew after he
rebranded the business in terms of what type of clothing
the store sells. The former first lady told an interviewer
that the clothes she was wearing were from J. Crew. The
turnaround was dramatic.
There is another important lesson to
be learned from the J. Crew story. Just
because a line of clothing was fashionable
ten years ago doesn’t mean it will sell
today. Businesses must take a good, hard
look at whether they are in tune with the
times, regardless of whether they sell
clothing or office supplies.
It is amazing how much an upgrade in
quality can influence rebranding and turn
around a business. Those Harley Davidson
motorcycles you see on the road? In
the 1980s the company was almost $90
million in debt and in danger of going
under. Then they significantly upgraded
their quality and became the Lexus of
motorcycles. Companies often blame the
consumer environment, competition and
lack of customer interest instead of looking
at the quality of their products. There
probably is no better way to rebrand than
to offer products that are of superb quality
at a good price.
Many of the companies I deal with do
not regularly go through the exercise of assessing
their products versus the profits they make. In particular,
they don’t evaluate their products against the
competition. Imagine you are a food producer and
you regularly go to visit stores to see your products
on the shelf and assess how they stack up against
your competitors. You should ask yourself: “Is my
product in a good position? Does my packaging clearly
identify my product? Am I honest about the quality
of my product?”
I always like to revisit Apple’s flirting with disaster
in the late 1990s. It’s hard to imagine that this
iconic company was on the verge of bankruptcy. But
then Apple significantly upgraded its game, producing
quality, elegant products that many of us enjoy
today. Their stock went from $6 to $350 in 15 years.
They understood that the best rebranding strategy is
to become a leader; that is when a company can truly
turn around its fortunes.
Apple is also a good example of putting the customer
into the equation. I wonder how many companies
who are on the downswing ask themselves:
“Are we doing our best to please our customers? Are
we getting regular feedback from them?” The brothers
in my office that day admitted that they do not
devote enough attention to their customers.
A typical response: “Survey our customers?
I believe that UPS learned the value of customer
service the hard way while they were
in an intense battle with FedEx. They suddenly
used the color of their trucks — brown
— to create a personal and friendly image.
They came up with user-friendly slogans and
raised the status of the driver into a man or
woman who improves your life.
Rebranding is also an opportunity to highlight
something you do very well but have
never profiled before, especially if there isn’t
much competition in that category. I recall
speaking to a physical trainer-turned-nutritionist
who, by accident, discovered her
real career. She had been working as a trainer
with a woman for many years, when the
woman begged her to help her with nutrition
as well. After this woman lost a significant
amount of weight, calls started pouring in to
the trainer for nutrition counseling. Today,
almost six years later, she no longer does
physical training and is instead a successful
Sometime during my session with the two
brothers, I cautioned them that rebranding
is not an automatic remedy; that many businesses
still fail trying to turn themselves
around. Obviously, the brother vying for a
decision to terminate the business jumped
at that fact. But then, as the business plan
emerged for how to go forward, he became an
advocate of delaying dissolution and at least
working on the rebranding and turnaround.
In many instances, crushing debt is the
factor that prevents a business from considering
any turnaround. Of course, the big
companies resort to bankruptcy and restructuring.
That is why rebranding should not be
an act of last resort — it could be too little, too
late. The brothers admitted that they had not
held regular sessions to discuss the strengths
and weaknesses of their business, at least not
until recently, when one brother recognized
the difficulty of continuing what was rapidly
becoming, more and more every day, a failing
Of all the business failures I have studied,
the Apple case is the most compelling. It took
a man like Steve Jobs to appreciate the power
of innovation and leadership. He refused to
accept the status quo or the prospect of being
just another tech company. A successful
business needs good leadership and a good
team, which might include your accountant,
business consultant or marketer.