I’m currently reading Dan Ariely’s The (Honest) Truth About Dishonesty. Read it – it’s a fascinating insight into how the human mind works, and it has much wider application than honest/dishonest behaviour.

I’m increasingly interested in how behavioural economics is playing a role in challenging some of the tenets of brand building. And I’m also noting that a number of our clients are paying similar attention.

Ariely runs an experiment repeatedly throughout his book that tests our tendency to cheat. The overall conclusion is that humans are all predisposed to cheating a little bit if we think we can get away with it. He then introduces variants along the way to tease out a few related issues to dishonesty.

A number of thoughts have struck me about the results and how they relate to our work at Interbrand. Here are two:

The first was around honour codes and how fragile they are. Ariely runs the experiment with first year students of a well-known US university who have all recently signed an ethics code where they pledge not to cheat. And he then asks these students, after completing the test, to declare that their answers are honest (despite giving them the chance to cheat in a way that they know thy can get away with). The results? The students still cheated.

But he then re-ran the experiment and asked the students to sign the declaration of honesty before completing the survey. The tendency to cheat was greatly reduced. The conclusion seemed to be that you need the reminder right up front and in the moment for the honour code to be effective.

As Areily points out, any industry – for example insurance or tax collection - that relies to some extent on the honesty of its "customers" should look to put the “I hereby declare…” at the start of the form.

I think it has application for us at Interbrand too, in particular where we do a lot of internal engagement with businesses that are looking to embed brand thinking into their organisation as part of a culture change programme. Too often this is treated as a communication campaign that assumes that if you tell employees in a bright and compelling way, the behaviour change will happen. My conclusion is that we’re all inclined to laziness, and need constant little reminders to "do the right thing" rather than a big moment in time.

Honour codes work, but they need constant reinforcement against the human inclination to inertia.

The second theme that struck me was about the social aspect of behaviour change. In Ariely’s experiments he demonstrates that people will cheat if they can, but will cheat more if they see their peers doing it and getting away with it. It’s what Ariely calls "socially contagious" behaviour. Again I’ve got to think there’s a parallel here to the bahvioural change that many culture-led programmes look to engender. The conclusion for me is that we need to work hardest at getting the right behaviours adopted by a few influential employees, and then noticed by their peers, rather than just looking at better company wide communication.

There’s more to come from Behavioural Economics in the brand world.

Fred Burt is Managing Director, Global Accounts, for Interbrand.

Global CEO Jez Frampton spoke at the World Business Forum 2012 about Interbrand's 13th annual Best Global Brands report. Frampton explained that Interbrand studies the economic success of brands, the role brand plays in consumer purchase decisions and how far into the future will the brand impact customer loyalty and future sales. He notes of the brand ranking within the report, "The number itself is great, but more importantly it reminds companies of the importance of brands."

The importance of internal brand engagement was stressed. "It's as much to do with what's going on in your company as outside," Frampton said. The key too, he explained, is in listening to customers and staying relevant. The Best Global Brands 2012 report is itself a reflection of what's going on in the world.

Coca Cola, number one on the ranking, "always seems to be on the edge" of what's trending globally Frampton added. The historic rise of Apple on the list, questions about the company's future and the strong showing of technology bands as a whole reflect how much technology has become part of our lives. While the numbers for the report and valuations were completed months ago, Frampton noted that recent headlines declaring Google overtook Microsoft for the first time demonstrate that the Best Global Brands report is a solid future predictor.

Ann Lewnes, SVP of Global Marketing for Adobe, and Andy Palmer, EVP at Nissan, joined Frampton on stage to discuss branding. Both Lewnes and Palmer agreed that the focus on internal brand engagement has become critical with an understanding that "the brand matters." Lewnes noted Adobe's ranking on the report motivates the team from the engineers to the marketers to ensure that products are developed with the brand story in mind. Palmer said that "where we are" on Best Global Brands functions at Nissan as a "sanity check."

Listening is critical for brands today. Adobe, for example, showed technology that could de-blur photographs at a conference, and it was so well-received conversations about the new innovation went viral. While Adobe as a software company has the ability to create a product from idea to launch within months or a year, for an automotive company like Nissan, the process can take far longer. So how can the brand ensure it's incorporating listening to consumers, staying relevant and keeping the brand in its long-term product development goals?

Palmer explained that marketers, PR and engineers are working together at Nissan to ensure that the story of the products and the products themselves connect long before launch, helping to ensure the process stays true to the brand. He noted Nissan's teams work together to analyze data, listen to trends and the marketplace, study the global picture and "demystify this thing called brand."

Lewnes and Palmer each shared views of their brands into the future. Lewnes observed, "I actually think the world is getting smaller." With more and more people around the world seeking similar products and having shared consumer experiences, Lewnes noted they are finding that where once different locals needed different marketing campaigns, testing indicates the same campaign can now be used in the US and Japan, for example. Palmer added that Nissan is stepping up its focus on consistent tone in its messaging globally.

Lewnes and Palmer also shared that going forward commitment to brand transparency and corporate social responsibility will play growing roles. "People want to know more about the companies they buy from," Lewnes commented. Palmer noted that within emerging markets such as India, where compared to the US's car ownership rate being about 800 in 1000 people, it's at about 50 in 1000. He noted we will "have to democratize the motor car again," yet the "planet simply can't" handle that level of increased Co2. So we will have to see the emergence of significant use of electric vehicles, fuel cells and other sustainable technologies.

Ultimately, in as Frampton described it, "our highly social, networked world," it will be "responsiveness" that will drive brands' stories into the future.

In a recent Harvard Business Review blog post, professor Bill George brings to light the foibles and unethical doings of several high-level leaders of the last year. Among them:

• Dominque Strauss-Kahn – a leading French politician and former head of the International Monetary Fund, charged with sexual assault.
• David Sokol, rumored to be Warren Buffett successor, was forced to resign after violating Berkshire Hathaway’s insider-trading rules and purchasing roughly US $10 million in Lubrizol stock prior to recommending that Berkshire Hathaway purchase the company. 
• Mark Hurd, former Hewlett-Packard CEO resigned post sexual harassment – expenses scandal.

As George points out, what these three leaders have in common is that at the pinnacle of their careers, they jeopardized their position and prestige by abusing their status for seemingly ephemeral gains – money, sex, and power. And at the heart each controversy lies an unexamined self – not bad people, but individuals that have lost their footing and succumbed to the seductions in their path.
 
He suggests that when leaders rely on external gratification for fulfillment versus internal fulfillment and the satisfaction that comes with building a team and doing something greater than oneself, a vicious impetus is produced: a deep desire for more, whether it is more rewards, press, perks, bonuses, stock appreciation, or the like. In turn, this leads them farther from reality. This disconnect means they are likely to act irresponsibly if a problem comes to the surface and put their organization at risk. (For example, Lehman CEO Richard Fuld’s denial that Lehman Brothers was undercapitalized, and his persistent rejection of advice to seek added capital.)

So, how does this relate to Buddhism and branding? At the heart of Buddhist thought is that chaos and suffering emanate from our desires. But if our desires are rooted in compassion, with the ability to see and speak the truth, we’ll be planting seeds of improvement, not chaos.

 
Similarly, as we tell leaders time and again, they play a pivotal role in shaping and defining the values that drive their brand, and more importantly, a brand is nothing without its employees. Any brand leader who loses sight of this is putting their organization and bottom line at risk.

And as George advises, “This requires reframing their leadership from being heroes to being servants of the people they lead. This process requires thought and introspection because many people get into leadership roles in response their ego needs.”

So the next time, a CEO or CMO is tempted to turn left on scandal lane, they should remember what they and their brand stands for, and that an “eye for an eye makes the whole world blind."

No brand wants to confront the news that the U.S. Supreme Court may hear a potential class action lawsuit involving alleged widespread discrimination against female employees. But for Walmart, it’s especially bad news. It’s not simply the fact that the lawsuit could potentially include one million current and former female Walmart employees (that’s one percent of all American females), it’s also that the news has been a springboard for the media to revisit previous stories involving Walmart’s low pay, poor benefits, and cheap and sometimes flimsy products.

Just as consumers evaluate brands based on how they treat the environment (BP, we’re looking at you), consumers also evaluate brands based on how they treat their employees. When a brand declares that it wants to help people “Live Better” by saving them money, it’s only natural that consumers may ask if that brand is helping its employees to “Live Better” as well. Shoppers love a bargain, but as brands associated with child labor have learned, they don’t want to feel guilty about saving money.
 
Walmart would do well to remember that the lawsuit on hand is far more than just a public relations issue: It’s an employee engagement issue. Walmart’s employees stand front and center in its stores wearing vests emblazoned with the words “How Can I Help You?” They are the face and representation of the brand— something that Walmart needs to remind itself.

Now is the time for Walmart to make the link between its many laudable corporate citizenship efforts and its brand. The question Walmart needs to begin asking itself is this: How is Walmart helping its employees “Live Better” today? There is a story to be told. Let’s hope Walmart begins telling it.

This year's marcus evans Corporate Reputation Risk & Management conference featured a strong social media component. SAP, Grainger, Southwest Airlines, and MWV shared how their communications have evolved from pushing controlled messages to engaging employees and external stakeholders in a dialogue to shape their company reputation. Twitter, YouTube, blog, and Facebook have provided outlets for employees to have even more influence in shaping their company reputation. But the big question on virtually everyone's mind was how should the risks of an open dialogue be best managed to truly help build your corporate reputation?

Several speakers suggested introducing new types of control measures such as social media guidelines and new positions to monitor and manage rogue messages. Interestingly, companies such as noted rule-breaker Southwest Airlines and B2B icon SAP are moving in the opposite direction with a less is more approach. Rather than try to rein in communications, they have given their employees more freedom to express themselves and quickly experienced small wins that have helped build stronger reputations for their companies. For example, rumors were self-corrected by employees, stronger connections with customers were created, and employees felt more engaged in shaping their company.

This less is more approach is only effective when you have a strong culture focused on a deep and all-encompassing employee understanding of the company's vision. For this strategy to work effectively, employees need to be aligned with the messages you want to share and need to be invested in the success of the company.

In that sense, brands considering where to focus their efforts and limited resources would do better to put less emphasis on putting more controls in place, and more effort toward helping employees better understand the CEO’s vision and what makes a company a special place to work. In the end, giving your employees the tools and freedom to spread that message and build your reputation makes more sense than reigning them in and holding them back.