Why Take Risks with Your Brand? 

I have been working as a Place Brand strategist since 2002, a similar length of time to the age of Bloom Consulting. In that time, I have observed that within the fields of commercial product and service branding, all brands face risks and face them constantly. My interest in this experience goes back to my master’s thesis on “Future Forecasting,” which was informed by the work and thinking of the Rand Corporation in the USA.

Commercial brand strategists typically subject their draft strategies to rigorous risk assessment to increase their resilience in the face of competition, as well as predicted and probable change in an increasingly mercurial world[1]. They recognise that their brands are at risk unless they constantly assess and reassess the risks that they are confronted with. This is often termed as “future-proofing” their brand. Typical risks include increased competition from competitors (game-changing products – e.g., personal computers, electric vehicles), changing market and customer tastes and desires (e.g., sustainable, and responsible fashion), increased price of product materials (e.g., oil, Lithium), and wage inflation.

This article is essentially an introduction for Place Brand practitioners to understand the range of actions that can be undertaken NOW to future-proof Place Brand strategies and why they need to do so in a period of unpredictability that is unlikely to relent within the foreseeable future.

The following covers relevant lessons for Place Brand risk assessment from commercial brand development, public sector economic development initiatives to increase place resilience and stability; common risks currently faced by Place Branding practice; why Place Brands need to be risk-assessed constantly; future risks already apparent for Place Brands and practical actions to identify, assess and mitigate the impact of those known and probable risks; and, in closing, key questions for places and their brand strategists to consider before and during Place Brand development. Plus, the need to prepare for “Black Swans” – unpredictable events – by learning from previous such occurrences.

Future-proofing is as much about the place that the brand represents as it is about the brand itself.

Common Risks for Place Brands

Below are some of the more common risks that places have faced in developing and implementing their Place Brand strategies that I have observed over the last twenty years. A number are beliefs, a number are behaviours, and others are actions, or, more commonly, a lack of them.

  • The insularity of thinking – being so focused on their own place that they fail to see the risks they face from similar places, locally or internationally.
  • Lack of Observation – of the world around them, in their own place but especially of competitor place offers and global trends affecting their own consumers and the behaviours and operations of their businesses.
  • Failure to Respond to Predictions – suffering from “Scotomas” – blind spots – causing them to fail to recognise things relevant to their place including effects of pandemics, climate change, impacts of mass migration, the impact of new technology, and AI.
  • Lack of Realism – about how their place is perceived – by locals and by others elsewhere – visitors, businesses, investors, and the media.
  • Unwillingness to Change – policies and programs in the face of findings that they find unpalatable, e.g., research on their place.
  • Failure to Learn – from their past experiences and previous changes to understand expected and highly probable change and its impacts and alter their strategies to respond effectively.
  • Insufficient Consultation – with their local population, businesses, and stakeholders, being honest on the key issues and risks facing the place, how to face them, and predictions of further change.
  • Limited Engagement – of key stakeholders in assessing the extent and type of change being predicted for their place that will impact existing or developing brand strategies.
  • Failure to Establish and Specify Ownership of the Process of Change – engaging their stakeholders and communities in action to mitigate the potential impacts of such change.
  • Failure to Understand the Nature and Scale of Change – that the implementation of place brand strategies requires constant awareness and observation of change to properly understand and identify the most likely impacts on their place.
  • Failure to Change Behaviours – in the face of evidence that old or current place brand approaches, initiatives, and policies have a limited lifespan or require immediate change.

In a range of combinations, these failures of behaviour, belief, and practice can put Place Brand strategies at significant risk of underperformance or failure. And they demonstrate that the greatest future risk for existing and new Place Brand strategies is the failure to identify and address RISK – existing risks and probable and potential risks becoming apparent.

Why do Place Brands Need to be Risk Assessed?

Given the areas of risk identified above it’s clear to me that they all need to be addressed where they are identified, and urgently. The rationale for doing so is that brands need to:

  • Be more aware of the number, nature, scale of likelihood, and probable and predicted changes affecting their place.
  • Be more adaptable to those changing circumstances over time.
  • Factor in the potential impacts of probable and predicted changes – often referred to as “White Swans” – ones we can see and respond to – e.g., such as the impacts of climate change, the economic impacts of a medical pandemic, on the implementation and management of their brands.
  • Factor in the potential impact of “change collisions” – two or more White Swans taking place together or in close proximity – e.g., a combination of climate change and mass migration.
  • Reduce their fragility – their susceptibility to damage from change.
  • Increase their adaptability – to cope with change and ensure their relevance and usefulness, most importantly by taking action to mitigate known and predicted risks.
  • Understand that a failure to assess risks to the place and its brand, and a failure to mitigate them, will seriously damage their reputation and identity.

Potential Future Risks for Place Branding

Looking ahead there are numerous risks for Place Brands chief of which are:

  • Climate Change – failing to take it seriously with consequent impacts on the environment and economies of countries, cities, and towns; and failure to mitigate those impacts, with consequent damage to the reputation and brands of countries, regions, and cities.
  • Conflict – the impact of an ongoing or new conflict on a Nation’s Brands– its potential negative impacts on perceptions of aggressor countries, and its positive impacts on countries who act to mitigate its consequences on people and businesses.
  • Recurring Cost of Living Crises – which, if not adequately resolved, can negatively affect confidence in and the reputation of governments risking damage to their Nation Brands.
  • Artificial Intelligence -failing to understand the potential impact of Artificial Intelligence on place economies, nationally and locally, both positively and negatively, potentially enhancing or damaging their reputations and brand attractiveness; and failing to effectively harness and use it positively for Place Branding and marketing.
  • Urban Restructuring – resulting from long-term impacts of behavioural change from the Covid pandemic, e.g., the semi-permanent shift to home working impacting on place economies potentially affecting the attractiveness of their brands as places to live, work, study, or visit.

Practical Actions to Identify and Assess Risk

There are several actions and behaviours that places can take NOW and consistently adopt in the future to increase the resilience of their brand strategies and their implementation, which I summarise as “Having Foresight”; these are:

  • Be Aware – ofyour beliefs and behaviours that limit your ability to recognise and deal with risks to your brand.
  • Be Open-Minded – about the range of risks your place faces, that its core offers face, and take action (like those below) to mitigate them.
  • Be Observant – by creating and staffing an Observatory for your place to continuously assess the global social, medical, health, economic, and scientific trends relevant to their place.
  • Be Curious – about these observations by investigating and assessing them for potential impacts.
  • Be Warned – of the potential impacts of identified risks by setting-up “early-warning” systems to ensure timely action and response.
  • Be Healthy – monitoring the health of the brand, e.g., regularly checking that the brand is still being expressed in a relevant way by stakeholders to the target market audiences and checking their perceptions of the brand and its offers.
  • Be Antifragile Places – through “Placemaking” which identifies how they may be at risk from damaging environmental, economic, and social trends and events and learning from the mitigation of previous impacts to improve the ability of a place to survive better in the future.
  • Be Rigorous – in assessing all proposals and policies for inclusion in your brand strategy and its implementation for the risks that they will individually face.
  • Be Challenging – of all accepted perceptions and opinions about your place however uncomfortable.
  • Be Strategic – by assessing the potential risks to emerging brand strategies during their formulation and conduct annual (or more frequent) brand risk assessments in order to avoid unpleasant surprises.

And Finally – Black Swans

Black Swansare “unknown unknowns”. They are completely unpredictable events that occur without warning and whose impacts can severely damage a place and its brand and leave it scrambling to understand what to do about it. Some believe that the Covid Pandemic was a Black Swan but doing so ignores a lot of evidence to the contrary, evidence which had not been sufficiently observed and identified by policymakers.

However, in my opinion, if a place undertakes the range of actions advised above then it will increase its ability to address the impacts of emergent Black Swans.

Note:

This topic will be explored in more detail in a Chapter on “Future Proofing Brand Strategy” in the forthcoming “Encyclopaedia of Place Branding, to be published by Elgar in 2024.

[1] For a comprehensive assessment of how commercial brands assess brand risk see “Brand Resilience – Managing Risk and Recovery in a High-Speed World”, Jonathan R. Coplusky, Macmillan USA, 2011.