Red Thread

Sponsorship as organisational change-driver

For Redmandarin, a full 90% of client briefs relate to deepening brand engagement. This might be expressed as re-positioning  shift of audience focus, reappraisal, building NPS or advocacy, but, ultimately, it comes down to people feeling warmer about the brand.

But there’s another objective which surfaces much more rarely – organisational change.

And sponsorship’s potential is enormous.

We came across some great examples in our research for Working the Olympics.

Visa and Samsung are the textbook studies for Olympic brand transformation, but a less well known example, is AMP, in Sydney 2000. AMP is an Australia-based financial services company, formerly the Australian Mutual Provident Society, which was a non-profit life insurance company. In 1998, it was demutualised and listed on both the Australian and New Zealand stock exchanges.

American CEO George Trumbull had been employed to manage the listing and drive it hard. In his words: ‘I took Olympic partnership to be a deliberate, all-encompassing transformation tool that would reduce the time I would need … from 10 years down to 5.’ And he used the Sydney Games very successfully to drive the internal cultural transformation from an older style, older world business to a very contemporary, sharp, highly-focused, customer-centric model.

VW China, similarly, used Beijing 2008 to drive dramatic internal culture change. VW China began as a joint venture with the Chinese government, which saw its market share drop from 50% to 15% as it emerged from the aegis of government protection into a new commercial landscape – with the liberalisation of the Chinese market.

So VW China used the Olympics as a tool to rally the organisation, 40,000 people, to a new level of competitiveness – in what they actually called the Olympic restructure programme, embedding Olympic terms, thinking and targets across the entire business to increase responsiveness, flexibility, customer-centricity and raise performance levels. Again, with great success.

Redmandarin’s main experiences of sponsorship as a lever for OD were with UBS, and Philips Electronics. UBS explicitly used their sponsorship of Ernesto Bertarelli’s entry into the 2003 America’s Cup, Team Alinghi, to cement their global brand. Their sponsorship, which ended in the victory of Team Alinghi, was notably successful in leveraging relationship-building opportunities across the various divisions – and grouping employees around a single, global objective.

We helped Philips use the FIFA World Cup to accelerate their ‘one Philips’ philosophy as an operational reality across their  (then) five business divisions, even bartering rights with Toshiba to ensure every Philips division had skin in the game (semiconductors, actually).

Tail and dog? It feels almost hubristic to suggest sponsorship could be considered as organisational change-driver… why can’t it just stay in its box?

David Aaker, when we interviewed him in 2009 for our first publication, Defining Sponsorship, correctly identified one benefit of sponsorship as ‘spanning organisational silos’ and this particular dimension of sponsorship certainly supports organisational change – but David’s point (which was not specifically addressing questions of OD) overlooks some powerful intrinsics of sponsorship.

What enables sponsorship to reach target audiences so well is its ability to sidestep emotional resistance – conscious and unconscious . It’s a psychological truth that people, we I should say, don’t like to feel unseen, unheard, or unvalued, which, I remember one of my teachers once telling me, is the single greatest cause of anger on the planet. When we’re objectified (be it as consumers, voters, readers, shoppers, subjects or employees), we resist: in fact, we’re endlessly creative in our resistance. We look for ways to subvert systems and ‘policies’. We switch off and zone out. We kick. Or play dead.

But sponsorship has the ability to sidle up to people gently, engage them in conversation, and creative an affective relationship – without provoking resistance. From that perspective, it’s the ultimate route to reach the hard-to-reach – and that can include employees.

Much of current attention on resistance to organisational change focusses on affective, that is, emotional processes, recognising that we as human beings have the tendency to populate areas of unknowing with the products of our own imagination: ignorance is fear, in other words. And what sponsorship can do is engage with and validate employees’ emotions through a clear demonstration of corporate empathy: we understand you. Instead of asking employees to adopt corporate values, it makes the clear statement: we share yours.

What Alinghi, interestingly, had in common with the Olympics was a clear sense of shared and public purpose – and adventure: for Alinghi, the sense of purpose was almost crusading – to bring the America’s Cup to Switzerland. For those who have lived it, this feels very reminiscent of start-up energy, a time of ambition, when everything is possible, regardless of the odds, with a unifying, motivational sense of organisational purpose that can be buried beneath layers of operational procedure.

David Aaker was entirely right of course to highlight  sponsorship’s ability to span silos, cross-functions and create fresh conversations.  And when these conversations are around, for example, the sort of innovation required to grapple with an out-of-corporate-body experience – such as the Olympics, it’s easy to see how this can be used to support change.

Relationships, both internal and external, become fixed, just like neural pathways – with the danger that one’s universe becomes very limited. Organisationally, businesses naturally like to operationalise – to harness extensive workforces. But the danger is that your relationships, your business model and your thinking become fixed – and your systems become as much of a limitation as a support.

Intelligently crafted, sponsorship offers an opportunity to reconfigure your system.

Red Thread

‘Make GE Olympic-centric’

The text below is an extract from an interview with Professor James Santomier of the John F. Welch College of Business, at Sacred Heart University, Connecticut. James and his colleague Tim Crader were discussing Tim’s professional experience at GE one day and he off-handedly mentioned ‘pull-through’ marketing, and implied that GE had benefited significantly from its IOC relationship, which stimulated further discussion and research.

Beth Comstock, who is the CMO, co-authored an article for the Harvard Business Review, published in late 2010, which focused on the fact that up until 10 years ago, to all intents and purposes, GE didn’t have a marketing programme – it had simply been so confident in its technologies. But one very evocative paragraph near the beginning paints a picture of growing realisation: ‘GE was learning that it could not win simply by launching increasingly sophisticated technologies… Some of its best thought-out new offerings were fast becoming commodities.’

So in 2003, GE began to evolve its marketing function, doubling the size of the function, and marketing became ‘the torchbearer’ for what was internally called ‘Commercial Innovation’ – which included ‘Imagination Breakthroughs’ across many categories. And essentially, Dan Henson and Beth Comstock were the driving forces behind the softening of GE, the femininising of GE if you will, and making it a much more user-friendly organisation. And the sponsorship played into that.

Around the same time, NBC, the media business unit of GE, was bidding for the media rights to the Games in 2010 and 2012, and GE’s top management made a strategic decision to seek a TOP position with the IOC. NBC’s winning bid represented a 33% premium on their payments for 2006 and 2008 and then, in addition, GE paid approximately US$180 million to join the TOP programme.

The drivers of the IOC relationship were most likely Dan Henson and Jeffrey Immelt. Beth was more focused on communication, and wasn’t CMO at the time. And I think, if Peter Foss hadn’t been a friend of Immelt’s, and hadn’t had experience in sponsorship, they may not have done the deal. Beth Comstock told me: ‘at the time we took the Olympics we really were trying to push from a commercial – a sales and marketing perspective – cross-selling … The Olympics allowed us to focus on this … in a very powerful way, that made it real.’

When Jeffrey Immelt convinced Peter Foss to take on the job, Peter pushed to flatten the organisation and to make GE Olympic-centric. And it’s my guess that because GE was so fresh to marketing, there was little by way of restrictions in terms of how they could integrate the sponsorship – whereas for other major companies, their marketing processes would be too institutionalised and rigid.

The GE WorkOut is a proprietary OD tool developed back in 1988, after CEO Jack Welch emerged from a meeting with mid-level managers in which many expressed concern that, amongst other things, process was slowing down important decisions. The WorkOut brings together a cross-functional group of people together to develop actionable recommendations to a business challenge that has been identified as a priority. These are tied to action plans which, if approved by leadership, are implemented within 90 days.

So when Peter Foss was hired, he developed a WorkOut related to the Olympics. His vision was a new, very flat, and non-bureaucratic organisation with a single point of contact for each of GE’s business units. That individual would be responsible for driving the revenue for his or her respective business and have a matrixed relationship with other profit /loss and internal GE cost centres. And now that’s exactly the way they’re selling all their infrastructure, and clean energy, and new grid technology.

Dan Henson, the former CMO, went on record to say that GE has ‘always been good at selling in the context of the P&L, but the Olympics forced us to be adept at responding to opportunities that span three, four or five business units … to present one GE face to the customer’.

The most interesting aspect was how the organisation embraced the sponsorship and how they were willing to adapt the organisation in response. For most organisations, sponsorship is an appendage. Beth told us in our meeting that the sponsorship became a learning experience for them.