A Rose by Any Other Name

iStock_000016367908MediumBy Richard Berman, VerbFactory CEO

When the Washington Bullets became the Washington Wizards in 1997, I wasn’t happy with the switch – but I understood the rationale behind it. After all, the DC had the highest murder rate of any city in the country, and it made perfect sense that the local NBA franchise should not be seen as an enabler. But in business, even when it makes sense on the surface, a name-change isn’t always a no-brainer.

When should a company change its name? There are many factors to consider, but the first is the rationale for switching over. The desire to spice things up because you’re bored with your existing name won’t justify the myriad costs and risks associated with a name change, such as redesigning every piece of signage and collateral, online properties, and business cards; planning focus groups; launching ad campaigns; filing all necessary legal paperwork; and alienating customers who had strong affinities with your old brand.

Costs and risks notwithstanding, however, there are circumstances where it does make sense to give some serious thought to such an investment.

  1. You’ve merged. Oftentimes, mergers can result in culture clashes among workforces and in the boardroom.  They must be managed carefully so that stakeholders in one of the principal companies won’t feel like the lesser partner, and a new name can be an important part of the process. In this case, a partnership of equals can project necessary strength.  When Bell Atlantic and GTE merged, Verizon was born. Slightly more than a decade later, Verizon remains the strongest brand in the carrier market—and it’s not really close.
  2. You screwed up. Bad things can happen to companies with good people. Sometimes these calamities are self-inflicted, and the only way forward is to purge the past. For a stretch in the early 2000’s, after a team of its auditors cooked Enron’s books, Arthur Andersen became the corporate equivalent of the Ebola virus. Today, Accenture (the name the company adopted after separating its consulting and accounting services) is one of the 50 most admired companies in the world. At the same time, a public relations disaster does not necessarily require a name change. In the cases of BP and Toyota, simply doing the right thing, producing quality and value  – and communicating effectively – can yield big payoffs for the brand.
  3. Things have changed. Perhaps, like RIM, your flagship product has more brand equity than the company. Blackberry still has a good reputation for business use, but Wall Street saw the parent company as one that couldn’t get out of its own way and had hopelessly fallen behind Apple and Samsung. To pave the way for the launch of a new device positioned as a secure email platform and a functional SmartPhone, RIM went all in on the Blackberry brand.  The jury is still out on the product, but the early returns on the name change indicate a possible win.

Ultimately, product matters most. No matter how much a company invests in its name, it still has to deliver on its promise. Blackberry will either bring a kick-ass phone to market or it won’t. As for the team formerly known as the Bullets, things haven’t gotten much better. Other than ditching their egregious teal and gold uniforms and returning to their traditional red, white and blue, it’s the same train wreck of a team that I grew up with. The Wizards continue to stink on the court – and the gun culture remains very much a part of the team’s DNA.  Ironically, there was almost a real-live duel in the team’s locker room not too long ago.  But now that I live in the Bay area, I’ve got 99 problems and the Wizards ain’t one.  Go Warriors!

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