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Is Corporate Influence Impacting Your Brand Performance…?

May 17th, 2013

In my last blog entry I provided an overview of all the areas that could potentially impact the value and performance of the company or brand that you are responsible for. Essentially, are you squandering brand value through your own actions, or conversely, are you having to work through parent company influencers that are impacting your results?

At DC in particular, I was hired one month on the heels of a new President, who in his words, “was not brought in because things were going well”. Very true words, and in the beginning, we were given all the corporate support we needed to make the necessary changes. Gradually, as we continued to improve our results, we began to see an increasing restriction in our available resources. Not because our results were deteriorating, but out of support for the other brands who were not performing as well and the need to post a strong consolidated result. The availability of resources started to become scarcer as we consolidated locations and became an embedded brand at a corporate level as opposed to our previous situation of operating as an independent brand…down to a geographic level.

Now to be clear, the issue wasn’t fiscal accountability at a corporate level, but the frustration in the inability to deliver the value that we knew we were capable of. A level of performance that would not have been at “any cost”, but a level of performance that would have easily been achievable while still showing improved financial results, a methodical leveraging of our expense base, and an investment in headcount that would have supported the necessary growth initiatives.

For our brand team, we had complete transparency on our goals, our financial performance, and the mapping of what would get us to that point. So when the brand was denied the resources to perform, the entire team felt the same level of frustration, as well as sharing the common question of why there wasn’t the same level of fiscal accountability across all brands. It was pretty easy to see where there was a prevalence of “legacy” management and staffers across the other brands that held their positions as a result of their tenure with the company, as opposed to the value they actually delivered on a daily basis. It was necessary to accept that the environment we worked in was one of lifestyle, as opposed to the responsibility of driving corporate performance & drive shareholder value.

Conversely, if there was a common drive for performance, knowing that we all designed, developed, and sold a similar product, the allocation of resources should have been a very straightforward process.

  • We should have been looking at the growth rates across all brands, both at a realized level, as well as a forecasted level. We also would have been looking at the historical ability to deliver on previously committed results as opposed to who delivered the most favorable presentation.
  • We should have been looking at the allocation of operating expenses and whether each of the brands was achieving the necessary leverage in their forecasted results.
  • We should have been looking at headcount levels relative to our existing revenues, forecasted revenues, as well as the impact on forecasted OpEx. Would we be looking at an increased revenue per employee metric with the impact of new hires? We’d be looking at that metric across the brands on both a current and proforma basis.
  • We should have been looking at brand level inventory performance and whether we were showing an increased turn versus prior seasons. We should have been measured at a brand level on our performance with reserves, past season inventory, and not merely arbitrary opinions that inventory levels were too high because overall corporate inventory levels had become bloated.

In the end, it’s important to understand the environment that you are working in, or being forced to work in, and whether it fits your own approach and what motivates you. Regardless of whether you’re being forced into a position of compromising the performance of your brand, it’s still important to track what the capabilities are for the brand and to still strive for those levels, even if it is in the face of headwinds that are over and above the normal market, product, and customer challenges.

Thanks for reading…

Jeffrey Ishmael

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