The AMP saga and the failure of brand strategy
June 5, 2018
Do you have money invested with AMP?
If so, you must have trusted them implicitly. How do you feel about them now?
Like all Australians, I have taken a personal interest in the scandal surrounding AMP. Some of my family and I’m sure many of my friends have money invested with them.
But I have also taken a professional interest in the scandal, as one of my clients is a superannuation fund.
When I first heard about the Royal Commission’s investigation I thought:
“Is my client at risk of the same pitfalls AMP has experienced and, if so, is there anything Taylor & Grace can do as brand strategists to avoid a similar catastrophe?”
AMP (Australian Mutual Provident Society ) was founded in 1849 as a nonprofit and didn’t become a public company until 1998. The word ‘mutual’, as in mutual life insurance or mutual funds, has an institutional meaning relating to common benefits for members. If the organisation prospers, members prosper. Profits are normally reinvested in the company for the mutual benefit of all.
This business model served the Australian Mutual Provident Society for 149 years. Their decision to go public may have been a wise or even necessary decision in 1998, but it should have been taken in conjunction with a brand review. That either did not happen or was ineffective, because at some point the culture shifted, the integrity of the old brand was forgotten and the leadership cheated its members to please its shareholders.
AMP has admitted to charging members for advice that was not given, and then misleading the regulator. As a result, the CEO and chairman have both resigned and AMP has lost billions in market value.
At first glance, this seems like a governance issue, not a branding one. You don’t break the law, you don’t lie to regulators. And obviously those responsible for governance failed the company and its stakeholders. After all, the change from a nonprofit to a public company created a potential conflict between members and shareholders that should have alerted risk managers.
But brand managers could have prevented this shift in culture in the first place, because the leadership wasn’t interested in good governance, and that reflected a failure in brand.
If I had been doing their brand strategy back in 1998 I’d like to think I would have urged the leadership to prioritise the M in AMP. It’s easy when you refer to your company by initials to forget what those letters stand for.
I would have told them to use the word ‘mutual’ liberally in their key messaging to reinforce to their customers and to their employees that, while they now had shareholders to look after as well, they weren’t about to turn their back on 149 years of faithful service.
In fact, the superannuation client I do represent is a nonprofit and doesn’t charge fees for advice. Not only did this policy of theirs help them avoid the temptations that led AMP astray, but it was a point of differentiation we hammered home in their brand messaging.
In other words, the fact that they didn’t charge fees wasn’t just a business decision for them, it reflected their core value of having their interests aligned with their clients.
And that’s why brand needs to be considered at all major business touchpoints.
Imagine, for instance, our client decided to start charging fees. They might consult us only long after the decision had been made, and after Marketing had begun to create a campaign.
But brand strategists who understand their clients on a deeper level and have access to leadership, could warn them that such a path could lead to the diminution of their brand, a step that could start a cataclysmic chain of events ending in resignations and Royal Commissions.
Brand strategy is more than considering what colours, logo or font you are going to use on the front of your building. It’s the very essence of who you are as a company, what values you live and aligning those values with the interests of your clients.