Brand Change for a Favorable Future

Pisitta Vongswasdi / Wong Mei Wai - October 24, 2024

Tips for practitioners

Family businesses are rooted in tradition, hold fast to their values, and they often go beyond the standard definition of a company. They are a pillar of the local economy and secure financial stability for future generations, both for the family in ownership as well as their long-term employees. But safeguarding all that the family has built requires the business to adapt and carve out new paths for itself from time to time. A new study from WHU – Otto Beisheim School of Management and global consulting firm APAC Global Advisory headquartered in Singapore shows that brand change is a decisive factor in a family business upholding its own legacy.

Brands cannot stay the same in a constantly changing world

The rules of the game have changed—and the time is ripe to explore new products, services, and markets. The family business must react with agility and always reinvent itself to successfully counteract disruptive change. And the challenges ahead are numerous: geopolitical tensions, which can complicate cross-border partnerships; digitalization and implementing it properly; trends now coming and going at lightning speed; the fact that employee demands have changed on a fundamental level. And, of course, venturing into the international market is crucial for today’s companies to survive.

That being said, brand change is not without its risks, particularly for family businesses, and they need to be well prepared. 

Why brand change can fail

Brand change encompasses any and all changes to the overall perception of a company, as well as of its established identity, with regards to its products, services, and the experience of its customers.

For family businesses to be successful in changing their brands, they should not fall into the trap of focusing exclusively on either “inside” or “outside” change factors.

Inside change factors are, for example, the company’s corporate culture, internal values, employee viewpoints, as well as differences between each generation within the family business.

Outside change factors, by comparison, are more visible and/or tangible in nature. These can include, for example, the brand itself, product packaging, the logo, or the company’s marketing strategy.

Companies that fuel their brand change efforts by assuming a squarely internal or external perspective will fail to make substantial progress in increasing the relevance of their offerings. They should instead employ a holistic approach that considers both inside and outside change factors.

Five ways successful brand change can happen

An analysis of multinational family businesses has revealed that there are five key factors that can each lead to a major breakthrough in a company’s brand change efforts:

1. The first is a sudden major occurrence, for example, the company needing to be quickly handed over to the next generation or the unfortunate collapse of an entire industry. Such shocks to the system can serve as catalysts for swift and decisive brand change.
2. Effective brand change can come when efforts are led by strong internal teams that have been given hand-on support from management. Here, success first comes from the commitment of individual actors. Little by little, the company sustains that success and sees it spread throughout the entire organization.
3. A more comprehensive brand change can find success when led by free-acting agents from outside the company. Their participation will ensure an objective view of the company’s transformation, as they can incorporate best practices employed at other firms to accelerate the transformation process.
4. Successful brand change can hinge on the degree to which experienced managers are integrated into the process. These legacy leaders often exhibit a palpable change in their behavior once they are given new responsibilities and access to trainings designed to assist them along the way. And that will lead to a quicker transformation within the company.
5. Teams working in a mentally safe environment are more receptive to new ideas and more ready to support the transformation efforts. As such, companies must overcome any psychological barriers that could hinder progress, e.g., the employees’ potential aversion to change. 

Successful brand change can ensure that a family business is well prepared for the future, and that the family’s legacy lives on. But this is a long and difficult process, and the owners and the family at large cannot do it all alone. Charismatic leaders offer invaluable support in assuring employees and convincing them of new ideas so that they ultimately offer their own support.

Literature reference and methodology

For “Building legacy through brand change: Insights from multigenerational family businesses,” the research team led qualitative interviews with four chosen multinational family businesses. These interviews were conducted with the help of interpretative phenomenological analysis (IPA) with the goal of determining how family businesses tackle brand change to maintain their legacy.

- Wong, M. W./Vongswasdi, P. (2024): Building legacy through brand change: Insights from multigenerational family businesses. Organizational Dynamics, 101078.