Align Management as Basis for Change

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In a March letter to shareholders, Chairman Edward S. Lampert marked the one-year anniversary of the Kmart-Sears merger by using General Electric as an example of the kind of reinvention he's shooting for.

Good luck.

Just about every trick in the book has been tried to revitalize Sears. A major merger. The acquisition of Land's End. Operational changes. Merchandising shifts. Revised messaging, marketing and advertising campaigns.

What hasn't been tried-and certainly hasn't been helped by the revolving door to the executive suite under Chief Executive Alan Lacy-is one of the most challenging yet essential aspects of reviving an aging or endangered brand. It involves creating a brand-centric culture that's open to and encourages change, where management is aligned on everyone's role in fostering that environment, and where the basis for moving forward is a shared vision of and commitment to the best of what the brand stands for.

It's all about a management team that's united in embracing and using brand as the platform for transformative change. It may involve taking risks. And a redefinition of roles and responsibilities. And it demands shared clarity around the brand's roots in the context of its relevance to today's customers and employees.

Getting the CEO to lead the charge is the obvious first step. The GE that Sears' Mr. Lampert holds up has maintained-grown-its relevance in recent years, thanks to two strong champions, Jack Welch and more recently, Jeff Immelt.

Mr. Immelt is known for encouraging creative thinking. The recent Ecomagination initiative, for example, came out of one of his executive brainstorming sessions. He's not afraid to seize ideas and push them through even when there's management resistance to the risks. Ecomagination flew in the face of GE's role in and continuing cleanup of the PCB-contaminated Hudson River, with managers concerned over drawing more attention to the issue. Then, Mr. Immelt gave his team the latitude needed to make ideas a reality. With Ecomagination, marketing was charged with conducting deep analysis into its customers and public policies, identifying market opportunities that would be relevant to both customers' and GE's businesses.

Most important, Mr. Immelt has been true to GE's roots: It's known for never standing still. The reinvention that Mr. Lampert-and others-admire has been a 100-plus year hallmark of its brand.

Increasingly, and especially at more mature companies most at risk of losing their relevance to today's customers, the latitude management needs to push through change is being aided by redefining roles. For example, Wrigley, Humana and Advanced Micro Devices are among those to embrace the concept of the chief innovation officer, a new role most often taken by senior-level marketers who are charged with crossing disciplinary boundaries in the quest for new ideas.

And it's not just new products that fall under the chief information officer's purview; the scope extends to new-business models, different ways to understand and get closer to customers, and, more likely than not, initiatives to help shape the kind of creative corporate culture that defines the brand and keeps it fresh.

At AMD, Billy Edwards was chosen to fill the role not because of his marketing roots (he hasn't any), but because, HR Chief Kevin Lyman told Business Week, he fits the bill in blending the traits of "marketer, technologist, strategist and business person," with an inclination (and permission) for shaking up the status quo. One of his lofty goals: finding ways to help 50% of the world's population get Web-enabled by 2015.

Other C-level executives are also finding themselves challenged to expand their roles, if not their mind-sets, in aligning around brand-driven business transformation.

Achieving the kind of management alignment that ensures a brand-fledgling or mature-sustains and grows its relevance in a changing world is difficult. And whether Sears (and the many others similarly struggling) is able to pull off its own long-awaited reinvention is anyone's guess. But there are plenty of role models that Mr. Lampert can study that suggest the direction must start with him.
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