View from the ‘Loo: Global brand builder Scott Bedbury on why EQ trumps IQ Anthony Reinhart May 15, 2014 Communitech, Enterprise, View from the ‘Loo Photo: Scott Bedbury, the branding whiz who helped propel massive growth at Nike and Starbucks, appears at Communitech’s Tech Leadership Conference May 29. For all their success, Starbucks didn’t invent coffee and Nike didn’t invent the running shoe. Obvious as these facts might be, they’re worth remembering for anyone trying to turn a product into a brand. Starbucks and Nike became global sensations by marketing common products in a way that made people feel something. Scott Bedbury was pivotal to this process at both companies. As Nike’s Worldwide Advertising Director from 1987-95, he helped take the company from $800 million to nearly $5 billion in annual sales through its Just Do It campaign. At Starbucks, he recast a niche American coffee chain as a near-ubiquitous international phenomenon. Two weeks from today, Bedbury, who now leads a global brand development agency called Brandstream, will take the stage at Communitech’s Tech Leadership Conference, and he’ll no doubt touch on what makes the difference between a great product and an iconic brand. For tech companies in particular, it has a lot to do with emotional intelligence – in other words, your EQ, not just your IQ. I caught up with Bedbury, whose current clients include Airbnb, by phone from Seattle this week for a sneak preview. Q – Which tech companies are doing the best job of branding today? A – I might be slightly biased because Airbnb is a client, but I think they’ve done a tremendous job. It’s hard to call them a tech company; I think you could ask [co-founder and CEO] Brian Chesky and he’d say it was a hospitality company, but they just recently got valued at $10 billion and raised $450 million, I think, last month. I think Uber is hit or miss. I love what they’re trying to do to take some pain and friction out of an incredibly bad human experience with cabs, but I would not give them super-high marks on brand. During Hurricane Sandy, it was an Airbnb host who suggested she’d reduce her rate to free for a couple of weeks to take in people who were displaced. Airbnb spent all night with us, probably 12 engineers [to enable hosts to provide free accommodations]. You don’t [mess] with a pay page very often, but they had to, because everything had to be reset. So, while they were doing that – a couple of hundred hosts ended up giving up their places for free, some of them for more than a month – Uber went to a higher rate, which they do in bad weather and peak periods. Nobody was at the brand switch, which is why I would give them shit. That’s kind of how you manage a brand – you’ve got to make exceptions. That being said, I’m kind of an Uber aficionado and I’m bummed if I can’t find them where I’m at. They’re doing a pretty good job. I haven’t been a huge fan of Facebook, to be honest with you, and up until some of their recent acquisitions I was kind of worried about them. I went to South Africa maybe 18 months ago, and they were doing an awful job of defining themselves, specifically with that ‘Facebook is like a chair’ bit with Wieden, my old agency from Nike, which was pretty laughable. I joked that they would become Sgt. Zucker’s Lonely Hearts Club Brand. And at Starbucks, I worried about that, because we didn’t have a lot of advertising. Everything we did attracted a certain kind of customer, and had we ever gone out to attract men first, Starbucks would have never succeeded. We attracted women who had some sense of taste; had some sense of need for a nice, socially acceptable, warm environment. A lot of brands in the technology space forget all about that. They completely forget the human experience, and what kind of franchise or what kind of brand they’re building. But I’ve been lucky. I was in Silicon Valley in ’98 after I left Starbucks, and I helped four companies. Three of them actually survived and all were pure technology plays. One of them was called mySimon, the world’s first really true shopping bot. It could find any item; a camera or whatever, and find all the retailers, find you the lowest price. But we quickly realized that for the consumer, it isn’t always about the lowest price. Am I going to buy from Guido’s Cameras in Brooklyn, or am I going to buy it for 18 bucks more from someone in Seattle where I live, and if I have a problem, I can walk down and say, ‘What’s up?’ I gave a speech about a year or two ago in San Francisco, and it was the on the art and science of branding. In tech, as you know, there’s a lot of science, there’s a lot of logic, a lot of linear pathways, a lot of black and white. In building a brand, it’s that, plus how you treat your employees, how you treat your community; it’s how you walk, how you talk, what you smell like; it’s all that other stuff. In the end, tech comes and goes; technology itself. You really need to be good at everything, and that’s kind of what I try to do, if it’s an engineering crowd in particular. As I say that, I also know full well that some of the smartest minds in that world have a very low EQ. They’ve got a high IQ but a low EQ sometimes, because they don’t get that whole idea of why you worry about how something feels to someone. I tread carefully. The only reason I took on Airbnb a couple of years ago was that I researched them after Brian called me, and found that two of the three founders were grads of the Rhode Island School of Design. If it was three engineers, I don’t think I could do it; I’m not sure. Q – What has changed and what hasn’t about how to succeed in branding since your Nike and Starbucks days? A – It’s been an evolution. I’ve probably helped 30 Fortune 500 companies, probably half of them in tech, and I’m working on three startups right now, one that could be huge. Everyone’s coming around to the fact that there’s never going to be a silver bullet. There’s always a first-mover advantage; [Amazon founder and CEO Jeff] Bezos wears that on his forehead every day, but I think, in the end, the brand actually has to stand for something more than just revenues, more than profits, more than whatever. With young folks, if you listen to them, most of them want to work for a company they respect at some point. So I think that’s actually got a little more intense. In the book, when I turned in the manuscript around 2001 or whenever that was, I had to prognosticate a bit on the Internet, and I said it would be God’s truth serum for business. You could run, but you couldn’t hide. That’s actually taken longer to come to fruition than I would have thought. I would have thought by ’03, ’04, ’05, that companies with slightly evil CEOs would have been just completely taken out and laundered. But it’s taken a while; they’re very clever. The first ones to go were the evil dictators – Gaddafi and Mubarak [went], and Assad’s got to go in Syria. When the public has dissatisfaction with something, it used to be one phone call to your customer service group. Obviously that’s changed. So the whiplash effect is pretty significant, and it happens all the time; big companies and small, tech and non-tech, it doesn’t matter. People make mistakes and brands are ultimately human, or run by human beings. And then what happens is I usually get these calls late at night from CEOs in trouble; they look around and they have no equity; they have no reservoir of goodwill. People look at them and say, ‘Well, you’re profitable, but what do you do again? And who do you stand with, and what do you stand for?’ That’s actually become a bit more acute than it was even 10 years ago. The core idea of a brand – and building not just a business, not just an organization, not just a P&L, not just a stock price, not just a valuation – is actually more prescient than it’s ever been, and smart companies have figured that out. There’s a whole load of them that look like deer in the headlights of oncoming cars, who are just not paying attention to the ultimate transparency that’s just around the corner. Q – Brands, and the number of channels through which they are conveyed, have never been more abundant. How much more difficult does that make it for any one brand to stand out and connect with customers? A – You know, not that hard, actually. It goes to storytelling, and that’s the one thing that hasn’t changed. It used to be 10, 15 years ago that if you really wanted to tell a story, you bought a Super Bowl spot. And having been a guy who’s produced a few of those, I know what that feels like, and it’s terrifying. Today, you can create a roar in a matter of minutes if you hit the right place at the right time with the right message. I’m working on a business concept that works with big charitable organizations, and one in particular that we’re working with right now is sort of reinventing marketing. It’s working with social networks that are non-profit based, and it had 56 million unique visits to its website in one day by having nine influential donors – you and I would read that to be celebrities – tweet or post something in one day. It was second only to the day after Katrina and the Phuket tsunami. So, the ability to get your story out has honestly never been easier, but the problem is there are very few good storytellers, and it goes back to the art and science of it. I would never trust an engineer to tell a story for me, ever. Nor would I ask a creative director to write code for me, ever. We’re still at the same yin and yang that I described 10 or 12 years ago. It doesn’t go away; it’s just human nature. Steve Jobs failed at that the first time around, then came back and found equilibrium between those two. Now, you’ve got to have a great product, a great service and what ever you’re doing has to be good. If it sucks, you’re not going to last very long. But the gain goes to that organization that not only tells its story in the best way externally – in engaging people, having people contribute to the story and share it and pass it on and forward it – but also internally. Very few companies do a good job internally. They’re awful. It’s about employee engagement. If you get your employees engaged, creativity goes up, productivity goes up, (attendance) goes up, and you start punching above your weight class. That, in large part, is never an accident. It’s because the leadership of the organization at all levels understands how important it is to continue to connect with employees to tell them why (the company) exists, and share the problems, share the opportunities, the success, the failures, but also just help them to understand how they are not just building revenues, but building the brand through what they do and what they don’t do; what they say and what they don’t say. That whole internal communication thing is another massive piece of low-hanging fruit that very few organizations – tech, non-tech, it doesn’t matter – do well. At Starbucks we did that incredibly well. I show a video that we did that was part of the core training for the next 50,000 or 60,000 baristas who came. You’ve got to remember that Starbucks was tiny when I stepped in; I think we opened our third store in New York the first week I was there, and there was nothing international for a year. I realized that if we screwed up the baristas, and screwed up the customer experience, it wouldn’t matter how much marketing money we had; we’d just be into the dump. Q – What’s the most important attribute a corporate leader needs to have when trying to build a world-beating brand? A – Absolute honesty and integrity. You can hire people with great ideas; you can hire people who create great technologies. But if you fail at integrity and you fail at honesty, you’re done. A close third to those is to be a good communicator. Someone’s got to be the voice; someone’s got to stand up and not just get everybody lined up, but get everybody inspired. I was lucky with both Howard (Schultz) and Phil Knight. Even though Phil absolutely hated public speaking, he was one of the best public speakers ever. I think he’s only done four television interviews in his life, and the last one was on one of Oprah’s last shows. I’d probably put that one up there, because again, in a world that’s so transparent that everything about a company is readily researchable or findable, along with stuff the employees talk about, you need someone who can be in real time and not work through a bunch of PR flacks to tell the story. Q – Anything you’d like to add? A – I think we’re coming into an amazing era in the next five to 10 years, where technology is going to not only just make things better – on the environmental side, there will be less of an impact and we’ll create more sustainable methods for doing things – but I think we’re finally becoming sensitized to the human element. That, in the end, trumps everything. You may have the best app on the planet in the minds of five or six folks sitting around a table, cranking away. But in the end, for the consumer, if it doesn’t really meet their need, or if it meets their need but kind of comes out of left field and doesn’t really respect their sensibilities or their values or their beliefs, it doesn’t work. There’s so much technology now that tech that actually feels human to us – that feels like something we ourselves would have come up with, rather than something outside-in – is going to prevail. I think we’re coming into a period where we’re going to see the left and the right brain fuse, and amazing innovations are going to happen, and it’s going to change lives for the better. So, it’s a good time to be in the industry. Anthony Reinhart is Communitech’s Director of Editorial Strategy and senior staff writer. View from the ‘Loo is a weekly look at the issues, people and events that shape Waterloo Region’s technology sector.