“We’re grappling with who we are because we can’t be who we used to be anymore… It’s not clear what the hell to do.”

When change overwhelms a technology company, the impact can be sudden, shocking and irreversible.

The quote above is by former RIM co-CEO Jim Balsillie* when sales of the Blackberry were in meltdown.

Much the sentiment was echoed by Stephen Elop, the last CEO of Nokia before it was acquired by Microsoft, when he said with a touch of self-pity and more than a tinge of denial, “We didn’t do anything wrong, but somehow we lost.”

Both comments should together serve as a cautionary tale of our time for every product-based technology company. One minute you’re king of the world, the next you are struggling to understand what happened.

The pace of change in the technology industry can be breathtaking. The demise of Yahoo has been glacial in comparison, but even its inevitability did not mitigate the shock of its sale this year to Verizon and its end as an independent company.

How what was once a $125 billion behemoth squandered its pre-eminent brand position as the king of the Internet and was sold for chump change is a story that remains to be told. Watch out for the book in 2017.

There was another news headline of 2016 that caught the eye, one not quite as dramatic as that of Yahoo, but more richly instructive as a tale of a storied technology brand in decline.

*     *    *

acs-2News came in January that Xerox is splitting itself into two to “realize shareholder value” six years after a major acquisition that was intended to finally propel the company into a brave new future beyond copiers. Shareholders lost patience. The plan had failed.

What happened?

Difficult market conditions and aggressive competition certainly play their part, but great companies take such exigencies in their stride.  At the heart of Xerox’s predicament is the tale of a celebrated global brand trapped in its own shadow.

The Kodak parallel

In many ways, the fate of Xerox is bound up with that of close relative Kodak. Both were founded in the same city and in the same industry at roughly the same time, both met with spectacular business success, both brands became virtually synonymous with the product that bore their name and both struggled to renew themselves beyond their legacy business.

By the early 20th century, Rochester, NY had become the center of the U.S. optics and photographic industries.

Bausch & Lomb, the lens manufacturer, was founded there in 1853.  Kodak started life as the Eastman Dry Plate Company in 1881. Xerox was incorporated across town as the Haloid Photographic Company, a manufacturer photographic paper and equipment, in 1906.

Kodak dominated the city. The Kodak Tower, a 19 story skyscraper completed in 1914 was Rochester’s tallest building for more than 50 years until it was overshadowed by another edifice in the late 1960s. That building was the Xerox Square Tower.

George Eastman’s influence spread far beyond Rochester. Kodak camera and film business model put photography into the hands of ordinary American’s at a time of rising prosperity and unsurpassed personal mobility. Between 1908 and 1927, Henry Ford had put some 15 million Model T cars on the road and people took road trips and took photographs with their Kodaks to memorialize the journey.

For all his invention, Eastman’s real genius lay in branding and marketing.

He metaphorically burned his device into popular consciousness with a non-technical, unique, easy-to-remember name. Legend has it that he and his mother devised the name Kodak with an anagram set. He later said that there were three principal concepts he used in creating the name: it should be short, one cannot mispronounce it, and it could not resemble anything or be associated with anything but Kodak.

The creation of Xerox

Eastman’s branding lesson could not have been lost on Rochester neighbor Joseph Wilson. When he took over Haloid (named after a chemical salt) from his father in 1936 the photographic paper market was dwindling and he urgently needed to reinvent the business.  Physicist Chester Carlson provided the answer with a process for printing images using an electrically charged drum and dry powder “toner”.

Wilson signed an agreement with Carlson to commercialize the process and decided it needed a brand name. Following Eastman’s naming precepts for Kodak, Wilson and Carlson came up with Xerox, a name that closely mirrors Kodak in structure and concept*.

The success of the first dry plain paper photocopier (Xerox 914) was so huge that the company changes its name to Haloid Xerox in 1958 and then Xerox Corporation in 1961.

914_trade_show

Both Xerox and Kodak prospered mightily in mid-century and both brands became household names, synonyms for the products that bore their name – Kodak for film, Xerox for copiers. And in that immutable truth is the seed of what was to be a profound problem for both companies.

As late as 1976, Kodak commanded 90% of film sales and 85% of camera sales in the U.S. But the digital revolution was just around the corner and in spite of its innovation and invention of digital photography, Kodak remained captive to a legacy business that threw off enormous amounts of money and the brand that symbolized it.

In a declining market the company slowly and inexorably slid towards oblivion as it proved incapable of change. Kodak filed for Chapter 11 bankruptcy protection in January, 2012 and has re-emerged as a much smaller technology company focused on imaging.

The business lesson

Xerox met with its own struggles. Asian rivals ate into the copier market in the 1990s and in the early 2000s Xerox had a brush with bankruptcy.

By 2009, the company had been nursed back to financial health and new CEO Ursula Burns took a brave gamble to avoid the same ruinous fate as Kodak. The Xerox story was going to be different.

The company unveiled a “transformational deal” the biggest acquisition in its 103-year history and joined the wave of hardware makers expanding into services with a $5.6 billion deal to acquire Affiliated Computer Services (ACS).

“By combining Xerox’s strengths in document technology with ACS’s expertise in managing and automating work processes, we’re creating a new class of solution provider,” said Ursula Burns. “A game-changer for Xerox, acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth.”

Unfortunately, things did not work out that way.

The stock remained roughly flat while the market capitalization of the company was down and in January this year, nearly six years after the acquisition, Xerox bowed to investor pressure and announced it was reversing course and splitting in two, effectively dismantling the acquisition of ACS.

The brand lesson

conduent

A new company named Conduent (see Name Origins) will be responsible for business process outsourcing on its launch in early 2017. The remaining document, copier and printer business will retain the Xerox name.

Xerox is back to square one, same brand, basically the same business but with a different CEO. Ursula Burns will be replaced by Jeff Jacobson, who is currently president of Xerox Technology. Ms. Burns will become Chairman.

Could the outcome have been any different? Possibly, with a different brand strategy.

Hindsight is 20/20 but a certain amount of informed foresight is essential when it comes to brand positioning, brand strategy and business transformation.

Xerox took a brave gamble to avoid the devastation that befell Kodak but there was a brand lesson embedded in the debacle – that of the paradoxical weakness at the heart of powerful brands and widespread suspension of disbelief that often surrounds them.

Xerox was looking for radical change. The ACS acquisition was positioned as “transformational” deal. At any time of business transformation the question has to be asked: Is the brand capable of making the transformational journey along with the business, or will it be an anchor that holds us back?

For Xerox, a brand born in the early part of the last century, a brand so attached to a product that it has become a generic verb for the action of copying, it is was a massively critical question – is Xerox the brand to go forward with; does it have the elasticity and attribute power to credibly represent a 21st century solutions company; do we have the data to make a decision?

Whether or not Xerox asked the questions and had the answers, the company placed its transformational bet on the Xerox brand and commissioned advertising agency Y&R to develop and superbly execute a multi-million dollar campaign designed to “disrupt legacy perceptions” of the brand with the rubric Ready For Real Business.

The problem here is that disruption of legacy perceptions is a long game to play.

IBM has achieved it, but very carefully and over decades. It takes time, investment, patience and strategic clarity. When time is short and transformation is the objective, the best way to disrupt brand perceptions, if they need disrupting, is to change the name.

While the idea may have been sacrilege for a brand like Xerox it had the wormhole of an opportunity to come out of the gate wholly reinvented with a new brand – call it Conduent for argument’s sake – a brand with a powerful, future focused vision for exploiting that $500 billion market to handle the back-office operations for businesses and governments, and with no legacy perceptions to change.

Xerox could have been folded into Conduent as an operating division and, as CEO, Ms. Burns would have had time to consider what to do with the Xerox brand from a more objective and considered vantage point, perhaps spinning it off eventually as a pure-play hardware company to appease shareholders, if necessary, or selling the brand to the Chinese. And she would still be in the CEO’s chair.

In fact, it’s not so radical a strategy.

google

Several energy utilities (Exelon, NextEra Energy, Sempra Energy) have restructured themselves in this way to surround a legacy business and grow beyond it. And, if a sexier example is needed, it’s exactly what Google did last year when it created Alphabet. Even though Google is still immensely profitable, what the company will be in 10 years, and what the search engine’s role will be in it, is anyone’s guess, but Alphabet has future-proofed its options.

Where does Xerox go from here?

At the time of the ACS acquisition an unnamed top ACS executive told the Dallas News, perhaps self-servingly, that “Xerox was dead in the water. It had no future. With ACS, it has a future, but it has to make something of it.”

Xerox no longer has ACS. Is it dead in the water?

Not yet. The last chapter of Xerox has yet to be written, and maybe the story will end in triumph, but the slow unraveling of a once great technology company is surely nearing its denouement.

Whatever its fate, Xerox has to be all about the Xerox brand and what it can be, not what it should be. The task is to build relevance and deepen the Xerox brand with key market segments with a clear roadmap based on data.

Its survival depends on it, and hopefully the CEO won’t have to say anything like, “We didn’t do anything wrong, but somehow we lost.”

Sources.

*From LOSING THE SIGNAL: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of BlackBerry. Copyright © 2015 by Jacquie McNish and Sean Silcoff.

**The Xerox name is based on xerography – meaning ‘dry writing’ from Greek (xeros) – “dry” and (graphia) – “writing”].

Waiting for Mr. Cooper

Fans of Frank Capra’s film It’s a Wonderful Life will recall with distaste the conniving banker Mr. Potter, the richest and meanest man in Bedford Falls.

George Bailey, played by James Stewart, falls afoul of Potter and is driven to the edge of suicide on Christmas Eve, saved only by the intervention of Clarence, his guardian angel.

Potter, or Henry F. Potter to give him his full fictitious name, occupies slot #6 on the American Film Institute‘s list of the 50 Greatest Villains in American film history. People just don’t like him.

This scene, where George Bailey confronts Potter, could be a post-2008 parable of our time.

Screen Shot 2016-09-05 at 1.52.56 PM

So it was with some ambivalence I read that Nationstar, one of the biggest nonbank mortgage servicers in the US and whose name is associated with mortgage crisis, distressed loans and foreclosures, is creating a new brand with the name “Mr. Cooper”.

Mr. Potter? Mr. Cooper? Mortgages? Haven’t I seen this movie before?

According to the Dallas Morning News, executives at Nationstar have spent more than a year and roughly $5 million on the branding overhaul. The hope is that consumers will see the new name as an extension of a new company ethos, “personable, customer-focused and easily navigable online.”

The rebranding comes as the company, which grew into a niche borne of the massive rise in distressed mortgages, adapts to a shifting industry. As the housing market recovers Nationstar needs new ways to grow, especially after a difficult year that saw the departure of several senior executives and a 60 percent fall in the stock price.

President and CEO Jay Bray said making existing customers happy is a top priority. So building a recognizable digital-savvy brand that will attract customers for life is a logical step forward.

“Mr. Cooper is meant to be that advocate that person that’s going to connect with the customers to deliver best — better experience and to be an advocate for them day in and day out,” Jay Bray said on an earnings call.

Nationstar will be well shut of a tired, generic corporate name that is lost in the Landstar, Ameristar, Coinstar morass of sameness and, it’s true, personal names have worked well in the financial services industry in which service should be the operative word.

Chuck

The names of Messrs. Wells and Fargo have served the bank well since 1852, and J.P. Morgan, Edward Jones and Charles Schwab built financial empires on their personal credibility. Charles Schwab’s “Talk to Chuck” campaign in 2005 was a great way of capitalizing on the personal integrity and acumen of an individual, also signaling there was a real person on the end of the phone to talk to for advice, if not Chuck himself.

But, like Mr. Potter of Bedford Falls, Mr. Cooper is a fiction.

We are invited to relate to a man who doesn’t exist. Who is he? What does he stand for? What does he look like? Maybe the company will invent a Colonel Sanders-type spokesperson to give the brand flesh and blood substance. Even the Colonel was real, though. Given the artificial, digital nature of the brand, Max Headroom might be a better avatar (remember him?).

The world is changing around Nationstar and its ilk and it presents a seminal opportunity for them to reinvent what it means to be a mortgage company in the age of digital brands and heightened customer expectation. It had to do something.

Atom

The financial services industry is alive with the sound of molds cracking and breaking. Atom Bank of the UK, for example, is building a “customer obsessed” bank brand that customers can personalize. “We were building a bank for ‘you’ (the customer) and not ‘us’ (the bank).”

Mr. Cooper feels lamely traditional and superficial in comparison. It has the hallmarks of a campaign developed by a new age ad agency. And all ad campaigns are, by their nature, transient.

The intention for the brand is not entirely clear. News has leaked out in dribs and drabs. It could part of an Allstate/Esurance strategy allowing Nationstar to hedge its bets for a while.

Whatever the intention, Mr. Cooper needs more than a “digital-savvy brand”. He needs to be given life.

Leonardo, Tesla and the genius syndrome of corporate naming

IN THE SUMMER OF 1974 a pregnant young woman was gazing at a painting by Leonardo da Vinci in the Uffizi Gallery. At that moment she felt the baby kick and, so the story goes, Imelin DiCaprio decided, then and there, to call her first-born child Leonardo.

A nice story if you believe it. Her son, Leonardo DiCaprio, has certainly been blessed with a talent that has earned him fame and fortune. To what extent Leonardo da Vinci’s namesake can ascribe his success to his name has to remain the stuff of romantic speculation.

Mauro Moretti, the CEO of the Italian aerospace company Finmeccanica, has no doubts at all about the power of Leonardo’s name. He has decided to rename the entire company Leonardo in honor of the renaissance genius.

Mr. Moretti had a tough job ahead of him on his appointment in 2014. 

Finmeccanica was then a sprawling industrial company partly owned by the Italian government. He launched a dramatic restructuring plan to transform performance and upgrade the reputation of a company dogged by corruption.

By all accounts he has done a good job streamlining the company and unifying its multiple brands into a coherent organizational whole around a ‘one company’ brand strategy that fits the business vision of a more cohesive, homogeneous and efficient group focused on aerospace.

Mr. Moretti has talked openly over the last year about his intention to abandon the Finmeccanica name, which roughly translates as “Financial Mechanics”, for something more inspiring, something with “the sense of deep roots and a great future.” Obviously heavily pregnant with ideas about names, he received a metaphorical kick in the stomach while contemplating Leonardo da Vinci’s genius for invention and the future of Finmeccanica.

So, on January 1, 2017, Finmeccanica will become Leonardo SpA.

Screen Shot 2016-05-08 at 4.20.12 AM

“We looked for something that would reflect the history of our evolution in space and security,” Moretti said at a press conference in Milan’s Science and Technology Museum Leonardo da Vinci, which hosts a collection of the Italian master’s models and drawings. “Luckily we have this genius Leonardo. We think that this will be the basis of our future motto: genius at your service.” *

Mr. Moretti is said to be moving on to greater things and is now in the running for the post of Italy’s industry minister.

What will become of Leonardo? It remains to be seen what the company will do with its presumptuous new name and whether it can build a brand for the future beyond the backward-looking museum piece references of the Vitruvian Man and Leonardo’s sketches of machines.

Moretti had a much better name available to him in Alenia Aerospace, a division of the Finmeccanica group. Far too mundane, though, for a renaissance man on the move who wants to leave his personal stamp on the company.

Genius for sale.

It’s not the first time a company will have draped itself in the borrowed robes of a dead genius in hopes of reviving its fortunes. The names of Thomas Edison, Nikola Tesla, George Westinghouse and Albert Einstein have all been invoked in the cause of capitalism.

If the notion appeals to your conceit it is possible to license the Einstein name at einstein.biz for your business, albeit with stringent conditions.

And with some legitimacy there are many US utilities that use the Edison name; Southern California Edison, Consolidated Edison, Detroit Edison, Boston Edison and Ohio Edison, to mention a few, all operated happily together and independently under an original agreement in which Thomas Edison allowed electric utilities to use his patents if they used his name.

George Westinghouse, Edison’s great rival, has not been so lucky with his brand trustees. Westinghouse Electric once bestrode the industrial landscape of the world producing amazing technical inventions in defense electronics, power generation, refrigerated transport, nuclear engineering and so on. By the mid-1990s the company was a shadow of its former self, having diversified almost to the point of oblivion. In 1995 Westinghouse purchased CBS, the broadcasting company, and in a kind of ‘reverse brand merger’ morphed itself into the CBS Corporation in 1997.

Screen Shot 2016-05-07 at 3.45.26 PM
The Einstein licensing website

The company sold its remaining manufacturing asset, the nuclear energy business, to British Nuclear Fuels (BNFL), along with rights to the Westinghouse name. BNFL, in turn, sold it to Toshiba in 2006 and it still operates to this day as Westinghouse Electric Company.

CBS also created a new subsidiary to manage the Westinghouse brand. What “managing” means in this case is licensing. The famous W logo, designed by Paul Rand in 1960, along with the Westinghouse name and the slogan “You can be sure…if it’s Westinghouse” is yours to use for a price. It has been licensed to a ragbag of upstart crows now called Westinghouse each hoping to be raised from obscurity by association with a genius (Westinghouse, the undead brand).

westinghouse-logo
For sale: one previous owner.

At the center of the power struggle between Edison and Westinghouse was the commercialization of electricity and the two different technologies used to transmit it from plant to user. Edison was a proponent of DC power (Direct Current) although he recognized its limitations; it was very difficult to transmit over distances without a significant loss of energy. He turned to a young Serbian mathematician and engineer whom he’d recently hired at Edison Machine Works for help. His name was Nikola Tesla.

Tesla accepted the challenge and set out to redesign Edison’s DC generators. The future of electric distribution, Tesla told Edison, was in Alternating Current (AC) —where high-voltage energy could be transmitted over long distances using lower current—miles beyond generating plants, allowing a much more efficient delivery system.

“Splendid” but “utterly impractical” was Edison’s verdict. Tesla was crushed and left Edison in 1885 to raise capital for his own company, Tesla Electric Light & Manufacturing. George Westinghouse was a believer in AC power and bought some of Tesla’s patents and set about commercializing the system to make electric light available to all.

Tesla went on to become celebrated as a ‘mad scientist’ showman, renown for his achievements and displays with electricity. Using his Tesla coil to conjure thunderbolts on stage he would enthrall audiences and speak like a sorcerer. Despite the fame he achieved in his lifetime, the name Tesla would be largely forgotten today were it not for another industrial genius of the 21st Century.

Tesla
Tesla: Electrifying

Elon Musk is the CEO and public face of Tesla Motors, the first new American auto company to turn profit in decades (the company was founded by Martin Eberhard and Marc Tarpenning, Elon Musk joined soon after it was incorporated).

Tesla Motors acknowledges its debt to Nikola Tesla and has drawn on the inspiration of his name and work to shape the Tesla brand into something beautiful and original with its own vision and brilliance. For Tesla Motors, the name was a starting point, not an end point.

And here’s the challenge with “Leonardo Strategy” of naming in general: such borrowed brands have a seductive appeal, they are chocolate clichés with creamy fillings, tasty but gone in a bite.

For Finmeccanica the Leonardo name can either delude the company into believing it’s branding work is done, that the brand comes as a complete ‘off-the-shelf’ package with the name, or, like Tesla Motors, the company can use the name as a starting point for its own renaissance in true tribute to a genius without equal.

Footnote: Leonardo DiCaprio’s first agent believed Leonardo Wilhelm DiCaprio was “too ethnic” to work and, at first, refused to sign him unless he changed his name to Lenny Williams.

Lenny SpA Mr. Moretti?

* Financial Times: Finmeccanica turns to Leonardo for rennaisance.

Brilliant. Just brilliant.

Once, when something was brilliant, it really was brilliant. It was splendid, magnificent.

A George Best goal was brilliant. Peter Sellers was brilliant. An Aston Martin DB6 was brilliant.

Lives were brilliant. In his book “Brilliant Creatures” author Howard Jacobson traces the footsteps of Australians Germaine Greer, Barry Humphries, Clive James and Robert Hughes and their influence on the cultural revolution in 1960s Britain. It was a time when “every life became a brilliant breaking of the bank” according to Philip Larkin in Annus Mirabilis.

The brilliance of brilliant has since dimmed. Over use has reduced the word to mean any mildly pleasing or underwhelming news — “are you ready with your order? Brilliant!” Laced with sarcasm it conveys disbelief. Basil says in exasperation to Sybil in Fawlty Towers: ‘Oh, brilliant!! Brilliant!! Is that what made Britain great? ‘

So it makes one wonder why ‘brilliant’ is currently enjoying such voguish popularity in the world of branding and advertising.

It started a few years ago when HTC, the Taiwanese mobile phone maker, launched a new brand campaign to noisily tell the world how “Quietly Brilliant” it is.

Marriott Hotels followed up with a rebranding campaign created by Grey urging us to “Travel Brilliantly”.

Harman, the audio technology company, is now warning us to “Expect Brilliance”.

And Hyundai has joined the parade with “Live Brilliant”.

With all this sudden brilliance it feels like I’m living in a Harry Potter movie.

BrilliantLess than.

Vwls R so ystrdy.

Vowel free, apparently, connotes cool and modern.

The race to capture that Zeitgeist spawned Motorola’s SLVR in an attempt to emulate the success of its RAZR phone.  There’s Flickr, the image hosting and video hosting website, and MBLM, the self-styled brand intimacy company, and numerous others.

The latest is MVMT, a watch company that combines “classic design, quality construction, and styled minimalism”. The name is Movement, as in Swiss watch, the brand is MVMT. I saw MVMT and read ‘Movement’, so I suppose it works.

It’s a naming trend referenced by Fritinancy in her blog post Vowel Obstruction‘. and stems, in my view, from the growing acceptance of shorthand in text-messaging and instant messaging, communication that encourages users to get as much said in as little time and space possible.

Glick

“We’re in a hurry, so who needs the vowels?” says James Gleick (or, as the book jacket has him, ‘Jms Glck’) in his book “Faster: The Acceleration of Just About Everything”.

The popularity of the vowel evisceration approach to names may be that it eases somewhat the practical problem of URL availability, but unfortunately for MVMT, MVMT.com belongs to a media production house, and movement.com is a mortgage company. MVMT the watch company has to make do with http://www.mvmtwatches.com, which is less than optimal. 

This phenomenon was previewed a few years ago in this Internet post that did the rounds:

Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it dseno’t mtaetr in waht oerdr theltteres in a wrod are, the olny iproamtnt tihng is taht the frsit and lsat ltteer be in the rghit pclae. The rset can be a taotl mses and you can sitll raed it whotuit a pboerlm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. Azanmig huh? yaeh and I awlyas tghuhot slpeling was ipmorantt!

Intrstng.

MVMT

Tck tck.

Who was Oscar?

The Oscars are upon us again. Will Leonardo DiCaprio finally take home the coveted statuette for his role in the dreary “The Revenant” or will “Brooklyn” steal the limelight, as I suspect it will?

Regardless, the burning question for Namedropper is the identity of Oscar. Who was Oscar?

Officially, the statuette is called the Academy Award of Merit, but everyone in Hollywood has known it as Oscar since at least 1934. The Academy itself adopted the nickname in 1939. The most likely story is that when the Academy’s librarian, Margaret Herrick, first saw the statuette, she said it looked like her Uncle Oscar. There were other claims to the name at the time – including the rumor that Bette Davis had named it after her first husband, Harmon Oscar Nelson – but whatever its uncertain provenance, it was to stick as firmly as superglue.

The BBC goes into the history of the awards and the story of Oscar  here.

The R S Owen Oscar Statuette factory in Chicago, America - 1994
Mandatory Credit: Photo by Araldo di Crollalanza/REX/Shutterstock (642981d) Polished but unplated statues await the next part of the process The R S Owen Oscar Statuette factory in Chicago, America – 1994