Modern Marketing Strategies

CEO as ultimate brand manager

22 September 2015

Human Capital Alliance Managing Director Edwin Sim tells why CEOs may be a company’s best brand manager.

Brand management is as much a science as an art and it’s far too important to be left only to brand people and marketers.

David J Haines, Chairman of sanitary-fittings manufacturer, Grohe recently told McKinsey Insights that it is the CEOs responsibility to nurture a brand.

Acquiring as much data about a brand’s health and discovering what things work well is a critical competitive advantage.

Therefore all companies must understand how their brands are perceived in the mind of their various constituencies.

“… have to focus on the actual products—the quality, the technology, the reputation and how you manage those brands.”

Managing the Grohe brand

Haines who served as Grohe’s CEO for ten years before becoming CEO of Lixil Water Technology in April 2015, said that he closely managed the Grohe brand while also focusing on developing product lines, recruiting diverse talent and reducing the company’s environmental impact.

“We’re a company that is focused on growing a lot faster than our competitors and a lot faster than the market.”

Company’s growth sources

Grohe has identified several key growth sources.

“….from a product perspective, we see lots of room for innovation. We can see products that use less water. We can see products that are more environmentally friendly, with better design.”

The company also recognized it had to focus on its global assets to counteract it low-growth European home environment.

“In Asia, for example, we’re growing double digits in markets like India. The United States is, at the end of the day, the biggest economy in the world, and we’ve seen major growth opportunities there.”

At the same, in certain parts of Europe such as Germany and the UK, the company also identified growth opportunities.

“….we believe that there are growth opportunities basically everywhere, provided we do a good job.”

Two crown jewels

To achieve its growth strategy, Haines said it had to capitalize on its two crown jewels: its globally recognized brand and its highly qualified leaders and technicians.

“The Grohe brand is renowned, in this industry and worldwide, for its quality, its technology, and its design.”

The company tries to ensure that it has the right people for the job, in the right locations.

“Where we have great people, we often have great results.”

Global staff transformation

When he first came to Grohe, Haines said it was very much a white, German, male-dominated organization.

“Today, we’re completely multicultural. At our global headquarters, in Düsseldorf, we have about 25 or 30 nationalities.”

The company also has women leading its businesses in India, China and the UK.

“…. we are totally global and … we also try to bring in the best global talent including from outside our industry.”

CEO as brand manager

Haines has put major efforts into developing the company’s numerous brands. He carefully selects and manages employees and ensures that they are given appropriate tools and funding to provide best services.

Initially, he focused heavily on restructuring and cost management but eventually the emphasis shifted to nurturing and optimizing its brand and people.

Innovation as a brand element

Haines didn’t always think innovation was a very important part of the sanitary-ware industry.

He soon realized the company was dealing with the world’s most scarce and in many ways its important resource: water.

“Anything that we can do to enhance the customer experience and, at the same time, to conserve water is our obligation.”

Innovation also helped the company identify two key areas of product enhancement: renovation and true innovation.

“A lot of our products we renovate. And there we tend to be upgrading, using new materials, using new processes. That accounts for probably 50 to 60 percent of our work.’

True innovation, he said includes digitalization consumer interfaces.

‘”For example, we have a shower now that you can pause while you wash your hair.”

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