Ever post a question on Linked-In that generated a great discussion? Leon came up with a doozy a couple weeks ago which I posted to several of my groups.  The responses were so thought-provoking we decided to post them all together here for further discussion.  All answers follow.  Enjoy, and feel free to add your comments.

Q: “Would you justify offering a product or service that is incongruent with your established brand in order to increase cash flow?”

Candise Miller - Digital Marketing Evangelist – TopLinked Member

I think casting a wider net on your original target audience is necessary, especially in a down economy when we must take advantage of every opportunity we can find. I guess it depends on what you mean by incongruent. My company’s mission is to build successful brands, but we have also expanded to include direct response marketing on a performance basis because it is a much more viable market right now. Would you consider that incongruent?

Jeff Pilisuk – Principal, iEnso Consulting

Don’t do it. Your brand will become confusing, weaker, and less meaningful to your customers if you do not consistently deliver and reinforce your brand message and experience. It takes a lot of work to create a strong brand that consumers connect with, but it’s so easy to dilute the brand with bad management decisions. 

Companies needing to increase their cash flow should examine other options, such as: 

1) Expand your brand: Perhaps the scope of your brand is too narrowly defined.  Consider ways to expand how you define your brand that will allow you to offer new products and services, without alienating your existing customers. 

2) Create a new brand: If you have a really great idea for a product or service that doesn’t fit with your existing brand(s), launch these under a new brand. You can still leverage organizational resources, but you don’t risk diluting the equity of your current brands. 

3) Spin it off: If a new product or service begins to gain traction, but is clearly not consistent with your existing business, spin it off into a separate company.

Sheevaun O’Connor Moran – Chief Energy Officer, Energetic Solutions, Inc.

Offering a product or service that is incongruent with your values or brand will cause conflict on many levels. The more you are in alignment with what you love or have passion for you will have more business than ever before. 

Even my book that sounds off center in its title is congruent with my values and practices of flow energy and alignment. You will learn how to get more clients and be in higher alignment using the techniques. To get your special discount click the below link. 

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Rod Eames - Human Resources/Organizational Development Consultant

Hi Julia 

Interesting question. I think the answer is yes-if my established brand is no longer competitive in the market either because the product is out-dated or no longer adequately differentiated in an increasingly crowded market place. 
But it’s a big leap and requires the courage to move away from what has sustained us in the past. 
Be interested in your thoughts.

Julia Fischer Baumgartner – Visionary strategist and creativity expert

I don’t know if it’s ever good to undercut your own brand. You know the old Tiffany’s story about the $75 dollar bracelet they introduced; it sold like wildfire and before it hit its peak it was discontinued, because it’s very success threatened the prestige of the brand. I DO think that a company’s identity is the most important component — what is the strategic mission, competitive advantage, and what’s its unique culture and what biz is it really in. If this identity foundation is strong, then product offerings (brands) can be diverse, but not incongruent, with the larger org. identity. 
Thanks so much for your thoughts — 
Julia

Charles Phillips - IS/IT Support Services at RAG Electric

No, I would not.

Adam Bowden - WizEgy Consulting and Training – Business Innovation Specialists

Yes – if it was by re-naming / re-branding i.e Lexas/Toyota, Accura/Honda – thus breaking into different market segments (see Ansoff Matrix).

I coach companies on how to do this profitably and also help companies to dramatically free up cash flow (Google … Adam Bowden Cash Flow … for some examples).

Adam

David Burckhardt - Etat de Genève

I think Hewlett-Packard is one of the strongest examples, specially during the 50s-80s decades, until the Agilent spin-off. And they mostly did it using the same brand. It has a lot to do with the famous “Boston Square”: use cash cows to finance your future.

Robert Cooper - Managing Director, Change Management Consultancy

Thought-provoking question Julia.

Interestingly, I have a real-life example of that question right now that has had mixed responses.

Recruitment businesses are suffering greatly in the current economic environment. I’ve done some work with a number of them with a view to assessing their ‘current situation’ and creating strategies to improve their current ‘cash-flow’ issues and to position them better into the future.

One specific area I questioned them on was what market are they in – ‘recruitment’ (only) or what I call ‘employee flow’ – ie. movement in, through and out of an organization. Now, if they adopt the latter stance, they can look at their offerings not just from the ‘in’ (recruitment only) perspective but also from the ‘out’ perspective.

And, to give just one potential solution, this allows them to offer ‘outplacement’ services – something that is in great demand given the amount of redundancies about.

What is interesting is the responses I have had. Some had no difficulty ‘moving’ into that space – economic sense, open-mindedness and a sense of agility, amongst other drivers, allowed them embrace the transition wholeheartedly.

Others however saw the association with redundancies as a dilution or negation of their brand and brand values to the point of being horrified that it could even be suggested! They believed such services were hugely incongruent with their brand and delivery of same would have a detrimental long-term effect on their brand.

It would be invidious of me to say that one approach is right and the other is wrong – I firmly believe people and businesses must remain true to their values. However, if cash is king, if there is little or no current market for your product or service and if you fail to see that additional services, incongruent as they may appear to your brand, are actually that – services that people welcome and are willing to pay for – they should be at least considered. Otherwise, you may have no brand to worry about!

M. J. Doc Dougherty - Principal at CRUCIBLE Group

Astounding to me that more change professionals haven’t weighted in with a resounding yes! 

This is a core competency every vibrant and healthy enterprise exhibits as part of its DNA. A generation ago this was referred to as Creative Destruction.  Identifying and leveraging renewable engines of economic growth brands, certainly but human, fixed, or working assets are all on the table

Anne Marie McIlwraith - MD at McIlwraith & Associates

Hi Julia, the only constant in business is “change”, in order to maintain position and value it is important to embrace innovation; that includes new markets, brands, products, approaches, Cash flow is the life blood of the company, if this is compromised then issues arise with suppliers who are not being paid on time who might withold product compromising sales & customer satisfaction, if payroll costs are not met then human talent is lost and the spiral continues until the company ceases to exist. There is nothing incongruent with being proactive and everything to lose by trying to stand still! 
Regards 
Anne Marie

David Burckhardt - Etat de Genève

To be even more provocative: I sometimes wonder if “focusing on one’s core business” isn’t the beginning of the end. Of course it is quite often necessary, even a survival phase. But look where some computer or automotive “monocultures” are driving.

Philip POZZO di BORGO – OLIVER - High Performance Coach & Trainer (BSc., ACC)

Julia, I find Robert Cooper’s response a particularly well-reasoned one. So, I offer these additional thoughts… 

From my experience, I think it depends on which level you consider the question. That is – 

(a) On the level of ‘brand’, your proposed new service or product may appear incongruent if it is not yet associated with the other things you offer – this may be a challenge that a brand consultant could help with, but in all likelihood it is just a question of time before the market gets used to this new offering and makes the connection. (Example: Virgin Records vs. Virgin Trains). 

(b) More significantly, on the level of ‘skills’, ‘distinctive competencies’, or more simply ‘strengths’, an incongruous new offering may spell trouble in the long term. You may be able to make some money by turning your hand (or business) to something that seems more in demand, but consider what will happen over time if you (or the business) is playing in a business space that you/it is not best suited to. Example: Ms. X *could* go into commercial graphic art, but her tried and tested skill and expertise is in teaching art in higher education. 

So “stick to you knitting”, “play to your strengths”, “do what you’re best at doing’… In the long term, that’s how you find your niche and differentiate; in the short term, you may need to use those strengths (business competencies) in a different way / different market. 

In conclusion, I believe that ‘incongruous to brand’ is an acceptable and temporary risk; ‘incongruous to competencies’ is fatal in the long run.

David Burckhardt - Etat de Genève

“In conclusion, I believe that ‘incongruous to brand’ is an acceptable and temporary risk; ‘incongruous to competencies’ is fatal in the long run.” 
This seems very meaningful. 
I think there is also a dimension of market and competition. To come back to my HP example: in the printer area HP remains among the leaders. In the digital camera area, no doubt HP has the technology and competencies. But whereas among the printers, HP belongs to the top 3, in the camera segment, they were a new entrant against 10-20 well-established brands. They didn’t make it. Maybe someone more proficient can formulate this in a smart way?

Lee Brent - Independent Operations Professional

Incongruent, to me, simply means not sticking to the knitting. GE Lighting added GE Finance,and network television. Increasing cash flow is the name of the game…
If the product viloated the ethics or mission of the organization then NO.. Like if the Catholic Church bought Ortho. (Those seemed to be pretty much polar opposites).

Thanks, good one.

Julia Fischer Baumgartner - Visionary strategist and creativity expert

What a great discussion — thank you all so much for your input. This is over-simplifying, but I’ll say it: I hear a differentiation between IDENTITY and BRAND emerging in the posts. If an org. has well-articulated identity based on it’s competencies, competitive advantage and strategic mission, it can afford to experiment with brand diversity, as long as the new products/services don’t fall outside the realm of the organizational identity. Thoughts?