Boards, brand and making the right promises

No board can make the right decision if they aren’t considering how it adds or erodes value in the organisation’s brand.

A lesson trumpeted as the front page news this week, with the Board of OpenAI firing and now reinstating CEO Sam Altman.

I won’t go into chapter and verse of what feels like a poorly-written sequel to the TV show Succession. You can read about the saga here.

However, whether you agree with the Board or not, their actions eroded confidence and undermined one of this century’s most potentially consequential products.

As regular readers of my thinking, you know I define brand as a store of value created by keeping your promises. And as the framers and architects of many promises an organisation makes, the Board has a singular and singularly vital role in how that value accumulates or erodes.

However, it’s likely that the boards you are on, or your organisation’s Board, don’t think or talk much about their role regarding the brand.

Any attention they pay is likely to sign off on the marketing budget to ‘rebrand’. Maybe it’s a line item about awareness in the strategic plan. Something added to the risk matrix. Perhaps brand hit the meeting agenda when an organisational failure spilled over and threatened your reputation.

While those things are all valid aspects of how value gets stored (well, not the ‘rebrand’ one, but that is another article entirely), sidelining brand as something the Board merely notes or reacts to misses how they can most usefully put it to work.

A board who understands the brand is the result of their activity and decisions is more likely to add value. Here are a few example questions members could consider:

• What’s your legal structure, and how does that support or hinder what you’re doing? (This one was part of the recent Open AI tensions.)
• Who is the CEO?
• Do you really understand the business you are in?
• Are you open to changing your products or how you deliver them?
• Will acquiring another organisation (or being acquired) undermine or streamline how you do things?
• Are your demands for information from the executive team necessary for governance or fear-based fishing?
• Do you know what you’re trading at any given time?

In answering every one of these questions, the Board will make promises that directly impact the value stored in the brand. Which will, in turn, affect your ability to make and keep future commitments.

Boards making the wrong promises strip away stored value. For example, acquiring a competitor might seem to make sense. Bigger market share, back-office efficiency. All the usual reasons.

However, if customers of each organisation expect different things, or are confused about the new entity they might not stick around, and efficiency could mean layoffs. Both things depleting stores of value.

Departing customers need replacing. A fuzzy identity means that costs more time and money. Staff leaving walk out the door with know how and relationships that likewise cost effort and money to replace.

Add to that hits to morale and you begin to see how the Boards promise of acquisition ripples into the Brand well beyond the usual tension over names and logos.

The foremost role of any board is to create, protect and make the best use of value. Ignoring the role their decisions have in contributing to the brand makes all those things harder to achieve.

The Board can send value off a cliff. Or create strength and achieve a surplus you can use to do more work.

Which one does yours choose?

See you next time,
Michel

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