Problem is we are still struggling with brand semantics and value recognition and - it's elusive for all but the best. However, there has never been a time more important for energy sector companies to redefine their missions and be understood by their stakeholders.

Brand, Brand strategy, Branding – are awful words, poorly understood, endlessly dissected by purists, argued-over among practitioners. True brands have really little to do with cute sayings, bi-lines, word marks, swishes or logos, and everything to do with the fundamental way you are understood and valued by all those with vested interest in your business. It’s a business challenge not PR, Advertising or graphics. The decision to pursue strategic Branding is a sensible ROI decision. Who has a vested interest? Who are the stakeholders? What do they value? What is common to all these constituencies such that your brand can speak to each with relevance? And what language and style should be used to be effective and respectful? Sounds simple enough…wait.

Like a classic novel, the turning point in the energy story happened earlier than even experts recognized.

…And it ain’t pretty. The person in the street is still pretty much in the dark. Few markets are evolving as rapidly and have received as much public attention as the energy sector: Roller coaster pricing, political unrest in the reference feedstock geographies, surges in global demand. Financial and regulatory pressures, accelerated technology improvements, and recent mergers and acquisitions - contribute to volatility.

Volatility is not good for shareholder comfort and value, not good for brand stability, not good for trust.This volatility leads energy companies to emphasize improved productivity and operational efficiency across geographical boundaries – mostly short term initiatives.

Energy companies also face a retiring baby-boomer workforce crisis, “the second energy shortage” in this decade and will lose about 60 percent of employees. Should energy companies do a better job of branding the industry as innovative, high-tech and valuable? increase the HR role to ensure workforce planning? And shift the industry’s biz model from “global” to “multi-domestic” to drive operational priorities? Is the industry doing these things? Perhaps they are. That’s the point. We don’t know and will assume that the Brand doesn’t stand for these things.

It’s not easy to brand yourself as a solution-provider if you’re unwilling to disclose what the problem is

There is going to be a reckoning when the publics more fully understand the extent of the problem of diminished economic oil and gas reserves, aging infrastructure assets, and other fundamental deteriorations - and their consequences. People, customers and investors are going to ask questions that are difficult to answer. Governance will take on yet another new meaning. Enron is nursery school when compared to these issues. Upstream and integrated oil and gas companies, newly re-organized utilities, and other giants - who are spending money changing the style and color palette of their logos, shifting signs, word-smithing a jingle – instead of speaking clearly about key issues in the language of regular people – are losing I.Q. points in an increasingly intelligent marketplace.

Ironically, energy sector people are some of the plainest talkin’, straight talkin’ and truthful people inside their companies. But externally, advised by third-party agencies, the external communication strategy in use sometimes kills the brands’ capacity to weather the future storm.

The perceived “safe” approach to brand management is in fact dangerous. Whilst not wanting to sound alarmist, these companies are not talking clearly enough about the issues and about what must be done and about what kind of energy world we are going to become and about what their role will be in that world – in a word, their mission as a solutions provider. Hard to be valued as a solutions provider if you are unwilling to talk about the problem. Catch-22.

The industry is the “strong silent” type

It’s no wonder that the non-expert world outside – is pretty much clueless about the business. The Brand suffers as the industry is playing the “strong, silent type”.

I sense that most consumers of energy feel more vulnerable to their providers (and their associates) than feel a sense of partnership with them. It’s an issue of corporate personality and its expression and it’s a great opportunity to be seized.

The petroleum and energy industries must change its orientation from the management of hydrocarbons and electrons to the caring for carbon-based life forms - if they are to be supported by their stakeholders in an uncertain future.

Believe it or not, Branding is one of the most effective growth strategies

Brand is an effective growth strategy because brand is the only stand-out strategy aimed at the people who matter most – those who work for you and those who buy from you and continue to choose you among alternatives. Branding is how every great organization defines its purpose, is known and is remembered. It delivers top of mind and emotional connection. In fact, great branding does something that defies logic. It gives the company its personality.

Fact is, great brands push your stakeholders to commit to you long-term because they understand and can relate to you, perhaps (believe it or not) even like you. Why? Because you deliver to them what they're actually looking for and have been asking for. And if you can’t or won’t, you’ve been straight about that too.

No other growth strategy does this; forges this level of relationship, recognition, and understanding but embedding brand within an organization needs coordinated actions, not window dressing. One must continually manage and minimize the gap between reality and your stakeholders’ needs and desires. Your Brand therefore must be central to the organization to enable the organization to leverage the power of its relationships.

Only Branding done poorly – is too expensive

The cost of developing and marketing a great brand is less than the proverbial quarter-turn of a bit in a dry hole. But it can deliver reserves that sustain you in rough times. Harley Davidson, U.S. Marine Corps - are brands that fire up the imagination, evoke emotion and romance their owners. Fact is companies do not own their brands. Their stakeholders do by virtue of the way they understand the meaning implicit in the brands and act on that understanding. Branded companies in oil and gas and utilities are making some wrong choices. Branding starts from the heart. It’s the heart (and the gut) that will determine whether your brand can weather the storm.

Branding may be widely misunderstood but it is not rocket science. First you must agree on a vision of the future and your role and objectives (or mission) within that future.

Those are the answers to the “why” and the “what” questions.

Next, you must secure a commitment to a set of values and beliefs that define “who” you are and how you seek to behave. These are the stuff that brands are made of – and they are fairly stable; values and beliefs do not tend to change. I know of some companies that carve them into stone and cement them at the entrance of their offices. Strategy however does and must change to adapt to changes in your company’s external and internal environments.

Strategy answers the “how” question; how are you going to achieve your mission, and satisfy your objectives (and how are you going to know when you got there, ergo all objectives must be measurable). It’s only then, with that clarity achieved and commonly shared, can your operational strategy be articulated and the details of your Brand worked out. The operating strategy that drives the “detail Brand” begins with an understanding of four key things: your primary and secondary target customers; your competitors; your product/service mix and their primary channels; and your advantage.

Brand, it’s a terrible word.

Brand is about having customers see you as the only solution to their problem amid today's clutter and price wars. The way to get new business today is by turning your current customers into evangelists. If you don't give them something to evangelize—like your brand message—they'll have no way to communicate it to the next person, U.S. based thinker, Frankel says. "Your brand strategy should be in your business plan" and he’s right.

Some Marketers use the term "brand" to mean ‘‘whatever’’ the consumer thinks about when he or she hears the company name or sees their image. This ‘‘whatever’’ includes labor practices, the company’s environmental record, or well publicized customer complaints. In his 10 rules, another thought leader, D’Alessandro addresses some of the problems that occur as markets try to maintain their brand profile. He talks about the difficulty of establishing a great brand, the need to fight for advertising with a positive impact, how to get beyond a scandal and how ultimately the brand is the responsibility of the CEO and everybody else in the company.

I’m not saying that’s easy. It’s not. Growth is hard. Growth demands affirmative actions. It requires companies to recognize what they’re good at, where they need to go and what they will need to be good at in the future. It’s a long-term strategy for a short-term world. It isn’t something you can outsource. But it is something you can brand.

The required reality: Brands as resources and working assets

Forbes recently commented on PepsiCo’s tangible book value of $6.5 billion, yet a market value of $86.8 billion. Even if one includes in PepsiCo's book value, the intangible assets, like goodwill, quantified on its balance sheet, Wall Street says you are still $75 billion short of the company's worth. What intangibles are not quantified? Brand values of innovation, corporate integrity and corporate citizenship.

Defining how brands work starts by recognizing that marketing and brands are not objectives but strategies. The governing objective of business is to create value for shareholders. As a recent Business Week survey concluded:

• The fundamental task of today’s CEO is simplicity itself: Get the stock price up.
• Top managers nowadays do not hold their jobs long if they cannot increase the financial value of the firm. Strong brands, customer awareness, market share and satisfied customers are not goals in their own right, but means to create shareholder value.

Though advertising and marketing spending may have tightened up over the past year, those brands that have put the customer experience first and developed their businesses around that have been rewarded with increases in brand value.

Accounting for Brand value involves comparisons of competitors and companies of similar revenues to determine the financial impact that a brand’s favorability have on its market capitalization and determines the percentage that brand equity contributes to overall market capitalization. The highest percentage is that of Coca-Cola, whose brand contributes 19.4% to its market cap.

Among Business-to-Business companies, FedEx owns an estimated $3 billion in brand equity (highest %) comprising 18.4% of its market cap. Runner-up is Microsoft, with brand equity of 18.3% of the company market cap.

Summary

Brand strategy, Branding execution is critical to all businesses and business growth and business protection. It’s a blend of Business sense, Management Science, Marketing Innovation. It’s pragmatic. It’s been predictable and superficial in the energy industry. No one really stands out as stellar, yet the opportunity is there for the taking. True leadership can be had for the honest, brave, smart companies – and they will be positively rewarded in measurable ways.