Lucent, Consignia and the psychology of naming

What is a good name?

Most people would agree that the 1996 Lucent spin-off from AT&T was a brilliant success. The name ‘Lucent’ is cited as a triumph, as shiningly transformative as the literal meaning of the word on which it is based (lucent:from Latin lūcēns, present participle of lūcēre to shine).

Remember this TV ad? $100 million says you do.

And yet, according to one authoritative account, the whole naming process was a debilitating, angst-ridden affair.  Lucent was unloved and unwanted. Right to the end AT&T executives were ready to ditch it. Consider this passage from Optical Illusions: Lucent And The Crash Of Telecom:

“No one loved the name Lucent…The choice of both name and symbol were controversial until the last, and Landor continued to developed the AGB name [Alexander Graham Bell’s initials] and an alternative, Telascent or Telescent.

As the process dragged on, Rich McGinn and Henry Schacht [President and CEO elect respectively] chatted in front of an elevator one evening. They had reconciled themselves to the fact that the Bell name [American Bell] would not be available, that no new name would emerge to sweep them off their feet, and as their elevator car descended to the ground the two agreed that Lucent was the best option available.

Yet neither was overly enthusiastic about the name, and as they ascended the stage to announce it to their employees, McGinn turned to Schacht and said, “Come on, Henry. One last chance, we can still change it if we want to”.”

Their worst fears were realized on launch day when newspapers ran their usual ‘What’s in a name’ story with quotes such as this:

“It’s a horrible name,” said Danny Briere, president of TeleChoice, a telecommunications consulting firm. “The good news is that it doesn’t sound like anything else; the bad is there’s a reason for it.”

For engineers steeped in a century of the Bell culture and telecom jargon Lucent was outside of their frame of reference. It was a gift thrust upon a recalcitrant management by force of circumstance: a spin-off needs a unique, ownable name in order to be spun-off, and all other options that were within their comfort zone were not available.

Kathy Fitzgerald, Lucent’s VP of Corporate Communications, was revealingly philosophical on this point:

“It turns out you don’t need to love the name or the logo to be able to turn it into one of the best known names in communications in less than two years. Because, trust me, I was at best lukewarm about the name – with its key virtue being that it wasn’t a made-up name and was actually a word in the meaning ‘marked with clarity and glowing with light’.”

The definition was repeated like a mantra to ward off evil spirits. How many people knew Lucent was a real word? Why does it matter? And how is ‘marked with clarity and glowing with light’ relevant?

Underlying this comment is an atavistic fear of what many executives think of as ‘made-up’ corporate names and a bias towards the tried-and-true of the familiar.

In spite of its eventual business decline and merger with Alcatel of France, Lucent’s initial success gave rise to a tranche of sound-alike imitators, circa 2000 – Agilent, Navigant, Thrivent, Mirant – all of them made-up names for companies hoping to borrow some of Lucent’s magic. Such is the corporate world psychology of naming.

So what transformed Lucent from the unpopular choice it was into a celebrated case of rebranding brilliance?

In a word: success.

The Lucent Technologies IPO was a huge success, thanks in no small measure to a $100 million ad campaign designed to underwrite the stock issue. Ipso facto, the name is a success.

At the other end of this spectrum there is the example of Consignia, which one newspaper was moved to call  “one of the most disastrous corporate rebrandings ever undertaken”.

Consignia was launched in 2001 as the new name for the UK’s Post Office Group, a cumbersome collection of inefficient delivery services which included that most royal and ancient of institutions, the Royal Mail.

The rigorous restructuring plan was years in development. It was designed to bring the government-owned enterprise into the 21st century as a modern, competitively viable and internationally focused business. However, they didn’t reckon with public sentiment and the media’s penchant for indulging it.

If you can include the three words ‘royal’, ‘institution’ and ‘branding’ in the same sentence you have a potent complexity of popular interest that is red meat to the rabid British press.

After a remorseless torrent of negative news stories, union strike threats over job cuts and mounting financial losses the restructuring strategy was abandoned. In a final act of high symbolism, the whole sorry mess was renamed yet again, this time as the Royal Mail Group. Political expediency won the day. Consignia was sacrificed as proof of the plan’s demise.

Ringo, Aviva ad
Ringo, it was the Beatles who made you famous.

Was Consignia a bad name? No. There are other names out there of similar ilk doing serviceable duty – Altria, Aviva, Centrica, etc. Consignia was pilloried in part because it did not do a very good job of explaining itself. In the end the strategy failed and, therefore, the name is associated to this day with a failure.

It was a lesson learned well by Aviva a few years later.  When the British insurer Norwich Union decided to unify its global operations under a single name, Aviva, they took no chances. Ringo Starr, Bruce Willis and Alice Cooper were featured in a series of high-profile TV ads to make the point that changing your name is really OK; we did it – and just look at how successful we are.

It was rebranding 101 to the letter. The name and the campaign may have been pretty banal stuff but it worked. Aviva got its version of the story out first and stuck to it.

Is Aviva a better name than Consignia? Is Consignia worse than Lucent? It doesn’t matter.

In business, as in war, the victors get to write history. Ultimately, all rebranding is about PR and the battle for control of the story.

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Allegis, the name that died of shame

In the annals of corporate branding the Allegis affair must go down as the granddaddy of all rebranding debacles.

The story is told and retold as the classic disaster, a cautionary tale of what happens when a corporate naming exercise goes badly wrong.

Why — what did go wrong? Is Allegis really that bad a name?

In truth, the fuss had little to do with the wretched name itself.  There are more egregious examples of the genre that have served their corporate purpose successfully and much less controversially – Accenture, Agilent, Novartis and Verizon to mention a few.  And Allegis lives on quite happily these days as a name in various corporate guises, here, here and here, for example.

The disaster, as is often the case where corporate name changes are concerned, was a compound of corporate politics, investor impatience and union unrest. Like Gettysburg, Allegis was transformed through a complexity of circumstances from an innocuous name to a proxy for a battlefield.

The Allegis story starts in 1979 when Richard J. Ferris became chief executive of UAL Inc., the parent company of United Airlines.

A vigorous proponent of airline deregulation, Ferris saw an opportunity to shake up the stodgy industry and create a new kind of company. By putting together the airline with rental cars and hotel services under one umbrella, Ferris argued that large savings could be realized and more customers could be attracted through “synergy”, a word that had new and sexy currency in the corporate world at the time.

He spoke with messianic zeal of his visionary concept of a one-stop fly-drive-sleep behemoth that would take care of the major needs of travelers. With extraordinary prescience for the time he foresaw a future in which travel agent around the world perch in front of computer screens making reservations for his airline, his hotels, and his rental cars completely seamlessly.

In a two year span Ferris spent $2.3 billion in pursuit of his vision, acquiring Hertz Car Rental, Westin and Hilton International hotel chains. In February 1987 he changed the name of UAL Inc. to Allegis Corp. to reflect the broadened scope of his travel enterprise.

“We are a travel company, not just a transportation company”, he said. “The name change clearly identifies us as the only corporation that can offer travelers door-to-door service.”

Lippincott and Margulies, the firm that came up with the name, said Allegis “conveys the central corporate mission of service and guardianship … through its relation to the word allegiant, meaning loyal or faithful, and aegis, meaning protection and sponsorship.”

Ferris’s grand vision now had a name, and his many opponents on Wall Street had the weapon they needed. Investors were growing restless. The huge cost of putting the strategy in place became a drag on Allegis’s earnings and the stock price sank below the break-up value of the company. A disgruntled pilots union put together a bid to buy the company. Allegis was in play.

Investor discontent came into keen focus around the name change. Security analysts and institutional investors stared even harder at Ferris and his operation, which they thought was grossly undervalued. Shareholder Donald Trump, even then never lost for a pithy remark, said Allegis sounded like ”the next world-class disease.” It was merciless and unrelenting. The outfit ought to be called Egregious Corp., burbled the Wall Street wits.

It was all over by the following June, less than four months after the name change. Unnerved by the ridicule, Allegis directors finally bowed to pressure from dissident shareholders who threatened a proxy fight to replace the board. They forced Ferris to resign, symbolically changed the name back to UAL, and began to dismember the company.

Ferris’s arrogance had won him few friends on Wall Street along the way. But even his harshest critics conceded that his big-picture strategy might have been workable some day. They just were not willing to give Allegis the time it needed.

The power of a name to make abstract concepts real and focus emotion and Allegis’s ready accommodation to ridicule made it a lightening rod for dissident shareholders and unions. The naming of Allegis was the beginning of the end for Ferris.

Donald Trump acknowledged as much when told the New York Times how the name had affected him:

“The name change made me more militant as an investor and more willing to speak out against management, because I thought it was so wrong,” he said. ”And I think it had an important psychological role. It brought out even more anger at management and made a lot of people say they had finally had it.”

”A name change can be an incredibly powerful thing,” said naming expert S. B. Master. ”What you’ve been saying in annual reports and speeches suddenly becomes real when you change the name. Ferris’s idea finally got through.”

Joel Portugal, a principal at Anspach Grossman Portugal, perceptively put his finger on the real long-term damage: ”For the rest of my life, I expect to hear clients joke about Allegis,” he said at the time. ”They’ll say, ‘don’t give me an Allegis,’ or ‘don’t make an Allegis out of me.’ And beneath the joking there will be real fear.”

Fear there is. Allegis became a radioactive name and the fallout seeped into corporate boardrooms of America. It is there still. CEOs have a real fear of what they think of as ‘phony, made-up names’. Like Allegis.

Karl Marx said history repeats itself, first as tragedy, second as farce. If Allegis was the tragedy, then Consignia was the farce to prove his point.

Next: The savaging of Consignia and how it could have been avoided.


What is it about Accenture that engenders so much negativity?

Time recently included Accenture in what it referred to as the ‘Top 10 Worst Corporate Name Changes‘, putting it in the company of Comcast’s new Xfinity brand, SyFy and Blackwater’s name change to Xe.

According to Time, the rebranding of Andersen Consulting to Accenture was “regarded as one of the worst rebrandings in corporate history”. The criteria seems to be that if any name change becomes remotely controversial (and most of them are to reporters) it qualifies as a disaster.

Then last week Business Insider, in conjunction with Method and Rob Frankel, a branding expert, came out with its own list – “The worst rebranding disasters in the past few years”. Accenture is in there again, along with a mixed bag including the Tropicana pack redesign, the London 2012 Olympic logo, and “The Shack’ advertising campaign.

Once again the criteria for inclusion is hazy although the writer, one Bianca Male, says earnestly that “successful rebranding involves overhauling a company’s goals, message, and culture — not just changing a name or a logo”.

Quite so. But that’s a lot to expect from an orange juice carton redesign. As far as Accenture is concerned I would (and do) argue that the rebrand succeeds at every level on this basis.

What do you think Tiger?

The worst they can throw at Accenture is that the name is ‘meaningless’ and the rebrand cost $100 million, suggesting the company has been extravagantly profligate with its shareholders’ money.

First the name: as unlovely as it may be, it is far from being the disaster that Time and Bianca Male insists.

As anyone who has been involved in global branding programs knows only too well, finding a name that is universally available and has a positive interpretation in many different languages practically mandates a manufactured name in the Verizon, Novartis, Agilent genre. As a global company, the Accenture name had to be cleared in 47 countries and acceptable in 200 different languages.

As for the cost, a $100 million is about par for the course with corporate rebrands these days, most of that going on advertising and media. If cost is qualification for a disastrous rebranding, where is the mention of Verizon, AT&T and Lucent? Those rebranding campaigns cost about the same.

The main fact that is so oddly overlooked in the criticism of Accenture is the name change was forced upon Andersen Consulting. Unlike the Bell Atlantic/Verizon name change, for example, Andersen Consulting had to change its name as a requirement of its acrimonious legal split from its parent, Andersen Worldwide. Neither did it have the luxury of time. Andersen Consulting had to totally reinvent itself globally within 147 days of the August 2000 arbitration ruling. The risk of getting it wrong was huge.

Whatever one might think of the name itself, Accenture today is very successful $21 billion global enterprise. Its brand has been beautifully and comprehensively executed and positively embraced by clients and 180,000 employees worldwide.

Where is the disaster? Where is the failure?

Try looking at Accenture’s competitors. KPMG’s consulting arm, for example, changed its name to BearingPoint in 2002. Ironically, a bearing point is a nautical term for setting directions to a specific destination.

BearingPoint ran aground: it went into bankruptcy in 2009 and was broken up. There is a disaster if ever there was one.

Name changes are easy copy for reporters – the cost, the unusual name, the reaction. Gasp! They need little research, just rewrite the last article on the subject, and ‘experts’ who will freshen the controversy with ready quotes about how rank the name is are easily found.

For me, it is somewhat depressing to see reputable branding companies and “branding gurus” complicit in this kind of shabby, ill-informed exercise at the expense of branding industry’s already damaged credibility.

For those interested in the facts, here is an excellent white paper on Andersen Consulting’s marketing strategy and its transition to Accenture.