Here is a tale of two businesses. There is good news and there is bad news. Let's try to stay positive. The good news first.
Hiscox, the insurance company, announced some impressive results last week — a 30 per cent increase in pre-tax profits in the first half of the year. The company has outperformed most of its rivals at a difficult time. Something is going seriously right.
I trawled through my paperwork and found the notes from a conversation I'd had with Bronek Masojada, Hiscox's chief executive, some time ago. The topic for that conversation had been the rather abstract concept of the "employer brand".
You might not feel that an employer brand would have a great deal to do with your decision to pick company X over company Y to insure the contents of your house. Indeed, you might feel that the term is a typical example of business's unfailing ability to invent grand-sounding but ultimately flaky jargon. Secretly, you might not really know what an employer brand is at all. Mr Masojada had no such doubts. "I like the term," he said. And it was quite simple. "Branding is a result of what you do. The question we ask ourselves is: 'What do we need to do to make this business work really well?'"
Hiscox has been working with People in Business (PiB), the consultancy, for several years. Simon Barrow, PiB's founder, has been a pioneer of the employer brand concept. For him, the employer brand is a rich and potentially valuable asset, which has to be managed as carefully as product brands. The employer brand encapsulates how your workforce behaves, the impression employees create while carrying out their work, but also how well they are managed and led, whether or not they feel engaged, and so on. When it comes to retaining good people or attracting new ones, the employer brand counts.
In 2004, Mr Masojada asked PiB to help his top team define a future strategy that was ambitious, realisable and consistent with the company's values — and with its employer brand. "We were on the verge of an exciting period of growth, but we had to know we were ready for the personal challenge — increased travel, intensive working," he explained (on the phone, as I recall, on his way to the airport). The results announced last week seem to suggest that Hiscox has got its strategy right. The employer brand is strong, and it is delivering.
Now here is the bad news. Also last week, BT, the communications company, announced that it would not be taking part in this year's university "milk round", the annual series of recruitment fairs that visit UK universities in the hopes of attracting the best and brightest graduates.
The company's chairman, Sir Michael Rake, wrote a letter to the Financial Times to defend BT's decision. While acknowledging that young people make "a huge contribution" to the business, and that they bring "new perspectives" with them, Sir Michael maintained that the company could "meet our needs outside this annual recruitment fair". "I am certain," he concluded, "we will be accelerating our graduate recruitment again before long."
Too late, Sir Michael, too late. You have left an empty stand at the recruitment fairs where the BT logo should have been on display. You have shut the door on a cohort of bright young people. You have told them, in effect, not to bother applying.
People remember stuff like that. They will have visited other companies' stands and they will now have formed an unshakeable view of your company. Among these people, and quite possibly many others, your employer brand has been badly damaged.
Until fairly recently, the word "brand" did little to inspire me. Perhaps I am going soft, but I have changed my mind. That big, imprecise, all-encompassing notion of brand matters a lot, whether it is your personal brand, your products' brands or your employer brand. In a world where consumers make emotional connections with companies, brands rule.
If, as an employer, you want to bring in the best new recruits you need to offer them something attractive — and not just in terms of the financial package.
You need to present a coherent and plausible sense of yourself as an organisation. That means having a robust employer brand: knowing who you are, and being able to tell a good story about yourselves. This happy scenario will not come about by chance. It requires leadership and a sustained communications effort. You may need to bring to the surface your organisation's values and attitudes that have remained tacit or undiscussed until now.
In the best presentation on branding I have ever seen, John Williamson, the former director of Wolff Olins, the branding agency, said that successful brands were "big, simple, unique and true". That sounds about right. Think of the companies you admire most. Most likely their employer brands possess all four of these qualities. Does yours?
(on behalf of Adeola Ajayi)
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General Insurer of the Year 2009 British Insurance Awards