The Almighty Dollar

Can Obama save the dollar?

The Almighty Dollar

Dean Crutchfield Article, February 16th 2009, Brand/Media/Adweek

Brand America, Champion Obama and the Mighty USD

For many of us, America’s new brand champion is Obama, who is without doubt, our great faith for improving our reputation at home and abroad, as well as dealing with the current crisis that ranges from energy, immigration, national security to tax cuts, Iraq, Iran, Afghanistan through to education, healthcare, Guantanamo and the economy.

Not to be lugubrious, but it’s a tall order and rebuilding confidence won’t be easy. The approach to these monumental challenges is not black and white either: it’s green, because the outcomes will bear down upon the symbol of our great economic doubt: the mighty greenback.

Brand America needs more work abroad than at home. So whilst it’s essential to spread the wealth around in the US and prevent a deepening recession with (temporary) increased government spending, some of the campaign promises must be put on the waiting list while full attention is paid to the critical condition of the economy, Brand America and the USD.

The mighty greenback is an American icon whose value comes in part from the fact it’s one of the most recognized brands in the world. Since WW2, the USD has fueled growth, allowed countries to do business and enabled globalization on an unprecedented scale whilst simultaneously playing an unwitting ambassador for Brand America around the world. People have not just loved the dollar; they have loved what it has enabled them to do. In many regards, it is so much more than many of today’s respected brands.

For a brand to be strong (like its leader), it relies not just on emotional levers, clever messaging and iconography, but it also must have a unique functionality. Apply that to the majority of the world’s currencies (and leaders) and they are by in large prosaic. They lack (worldly) presence, style, intrigue, desire and charisma. In contrast the dollar has a profound global function, elegance and unique beauty combined with myth, legend, adventure and mystique.

What we know has now changed and the quality behind the brand has been stymied. The US dollar accounts for 68% of global currency reserves and the world’s central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. So for example, if there’s pressure to devalue a particular currency, the more dollars the central bank must hold, thus the dominance of the USD.

Over the last year, around the world, there are demands that US dollar hegemony has got to go. Just take a fleeting glance across an array of media and you’ll groove to a hip hop music video with Jay Z clutching a handful of euros, learn about supermodel, Gisele, last year publicly refusing payment in dollars and hear about Iran’s Ahmadinejad mocking the dollar as a worthless piece of paper.

Just last month, Putin was demanding a wider use of national currencies saying “we all know this well, the whole world based on the dollar is experiencing serious problems” and simultaneously, China accusing the US of plundering global wealth by exploiting the dollars dominance.

No wonder the trust and respect in the dollar has plummeted. It was hanging by a thread when this financial tsunami roared across the globe. Even though the dollar has staged a rally as this crisis has been unfolding – there are platitudes of reasons for the perceived role of the dollar declining, but we must acknowledge that the dollar, as a brand, has afforded the world unique opportunities as the international (reserve) currency and Brand America, the most prosperous country on earth.

It’s a catch-22 situation for Obama (our brand champion) and the USD. As Churchill once said, “it’s only when you risk losing what you can least afford to lose that you learn to play the game.”

It’s not just the country’s future that’s on the line…the US sets the tone for much of the world and Brand America is inextricably tied to the USD brand. Therefore, it is not just an economic problem, but a brand problem: we have a battered reputation, no trust in our leadership, erosion of our market share, pummeled profits, crippled projected revenues, dwindling customer loyalty and a severed stock price.

The solution is not solely an economic one, it’s a need for marketing and brand building that only our new brand champion, Obama, can do. As the 19th Century French politician, Tocqueville Fraud, once said, “when America is good she is great and when she is not good she is not great.”

With Obama at the helm we show to the world our unrivalled ability to renew ourselves and be great – brand revitalization if you like – but can it be the same for the dollar? Clearly trust is an essential ingredient of all brands and their reputations, including currency. And the notion of trust (in the commercial world) has been mainly centered on the transaction itself, but not any more. The notion of trust around the world has dramatically moved on from trust in the product to trust in the people behind the product: the dollar.

So will Obama seek to obviate the dollar’s fall from grace and its global role as the world’s reserve currency or does he acquiesce (too much) to domestic pressure and persist in bailing out everything from too big to fail businesses, banks hoarding their lucre, relief to credit crunched Americans and investors desires for increased corporate profits?

We are at a crossroads with far reaching consequences and denying our basic economic woes will erode credibility and exacerbate the pain. As brand champion elect, Obama needs to ameliorate the fears of the nation and capitalize on the tension between the great faith (we have in him as our brand champion) and our great doubt.

The thundering heard might be grazing, but

the word from national media is all about how the agency world is handling Damocles’ sword and turf wars. Hopefully the many have long term embedded relationships with their clients. But the clients are getting mounting pressure to slim down on current programs. This raises the central issue and the biggest hurdle for professional services: to prove they’re an investment not a cost.

Typically, if the client is half way in and/or obliged to complete the brand overhaul, reputation push or campaign, the funds will remain, often because the switch out costs is too high. However, if you’re heavily project based, you’ll quite likely experience cut backs and cancellations.

For example, latest rumours from KPMG’s advisory business is that they’re urging their clients to cut back severely on their use of consultants as a way to substantially reduce expenditure. Clearly over the coming months each category speciality will also be making similar remarks to protect their client relationship and their professional turf and fees. So its dog eat dog, or is that bull eats bull?

Building Trust

Can it be done when it’s been broken? What are the steps that make it work?

What is Your Share of Trust?

To regain trust we must first learn from the carnage of message management we have been through these last 12 months. From the very beginning we created a cacophony of conflicting messages from discombobulated departments: investor relations, marketing, public affairs, media relations and HR. Then it dawned upon all of us that audiences overlap and the need for unity and consistency is critical. Making matters worse is that we all knew this already.

What is Your Share of Trust?

Dean Crutchfield article, December 2008, Advertising Age

During the latter part of the last century we finally accepted that the age-old notion of “economic man” – a rational, single-minded, self-interested entity – no longer existed. It was abundantly clear that every economic, business and purchasing decision was made by “ethical man” – an emotionally charged, moral entity that was consumed by the affects on people, their community, their well being and their environment. Suddenly, the marketing of “values” and the selling of reputations, products and services had become big business and forever inextricably intertwined.

It was a new era and a quantum leap: a crying out for words like ethics and trust indulged by the rapid adoption across corporate governance, stakeholder groups, CSR, business ethics and the role of vision, mission, values and culture within companies.

Studies audaciously revealed that people had more trust in brands than the Church, Government and Institutions! In the wake of the Enron and WorldCom debacle, this took a thorough beating for sure, but we’re an optimistic lot and past failures are not an indication of future performance. Or so we thought.

Even the 2008 Edelman Trust Barometer survey of 3,100 opinion leaders across 18 countries revealed some fascinating findings:

“At least 70% of respondents in North America (71%) and Asia (72%) state that global business plays a role that no other institution can in addressing major social and environmental challenges. Fifty-seven percent in the European Union and 63% in Latin America also believe this to be true.”

This merger of the economic and ethical has transformed the meaning and context of trust. Hitherto, trust has been an essential ingredient of all brands and their reputations. Consumer expectations are a combination both emotional and rational: that the brand can and will deliver on promise and that it won’t rip them off.

Here’s the catch: stocks do not have a memory recall button, but consumers do. And now we’re deep into another debacle where global markets have been ripped to shreds and working folk are losing their livelihoods and homes, all the while staring down the barrel at sky high gas prices, avoiding salmonella infected jalapeno peppers, tainted baby milk, toys coated in lead paint, lethal pet foods, plastic bottles leaching off poisonous chemicals, the list goes on (too long).

As the shock, horror and probes in the media have shown about the current pandemonium, the notion of trust (in the commercial world) is still naively centered on the transaction itself and minimizing the “risk” involved in the transaction – which is what brands are supposedly all about. But even at this level of transactional trust, the relationship between business and the consumer is a contract of trust that has clearly been broken. With money easy to come by, confidence at arrogant levels, hedge funds heralded as kings and basic risk management theory thrown out of the window we are steeped once again in very murky waters.

The outcome of these times will reveal that our notion of trust has dramatically moved on from just the transaction itself or trust in the company’s product, but to trust in the people behind the product! Right now, it’s less about “can I trust them to deliver?” but “are they the sort of people who would…?”. Are they the sort of people who would sell me a stock that wasn’t worth the paper it was written on; who would sell me a mortgage I can’t repay; who would tell me a product safe when it’s not; who would use questionable chemicals to manufacture goods more cheaply; who would test on animals; pollute the environment, all in the search of a profit?

Today, most organizations commonly refer to the meaning of share in terms of market share, profit share, revenue share and share of wallet, etc. What they often foolishly overlook, however, is that they are also competing with other organizations for share of trust.

So in today’s world, full of litigation, accusation, scandal and bankruptcy, evidence and counter evidence, when it’s down to the wire, whom do you trust? Which of the organizations you are doing business with are and have the sort of people who would tell the honest truth in this matter?

To regain trust we must first learn from the carnage of message management we have been through these last 12 months. From the very beginning we created a cacophony of conflicting messages from discombobulated departments: investor relations, marketing, public affairs, media relations and HR. Then it dawned upon all of us that audiences overlap and the need for unity and consistency is critical. Making matters worse is that we all knew this already.

Secondly, the smug belief that perception is reality has been found wanting. The truth should not be whatever you get others to believe, it should be about the delivery between word and deed: finance might be the brain of the economy, but brands are its heart.

People and business live their lives in the future not the present. If you take away the future the present becomes meaningless. So as we reap the bitter harvest of imprudent lending, there will be revealed a huge new market for trust that the few and the honorable can mount. In this overwhelming need for revitalization of trust, corporations, governments and regulators will all be ferociously fighting to recapture their share.

So even if I’m praying for light at the end of the tunnel, thanking Paulson for the bail out and calling the police to tell them my tax dollars have been stolen, it all comes down to who do you trust? And in this market for “trust” – worth trillions – the battle will be won and lost on the words and deeds of brands.

Dean Crutchfield