Think about the giant pharmaceutical business. And how it seems to have, with few exceptions, lost its sense of direction, of shared meaning.
The industry crisis about executive pay can be treated as a symptom of this problem. "What should we be paying him or her?" is really asking "On what basis should we be establishing our salary levels?"
There is I'd argue, no doubt controversially, no such thing as too much money for a chief executive, unless a) there is no solid foundation of shared meaning that would support a confident and appropriate payment strategy or b) the money in question is clearly beyond that which can be countenanced in the context of that solid foundation, if it exists.
GSK's Garnier, AstraZeneca's Sykes and Bristol Myers-Squibb's Dolan, among others, have been suffering not only from the understandable but familiar shareholder grumpiness about revenues ("What have you done for US lately?"). They are in fact stumped by the unstated question: "Why do we (the company) matter?" When that question is answered, they can then argue with greater conviction why, as leaders, THEY matter, and hence what they are worth.
Pharma's apparently interminable – and I believe often unfair – vulnerability in the cost-of treatment AIDS issue, so prominent and emotionally-loaded, is equally exacerbated by this plain inability to explain itself, to build a compelling argument that would put the issue of CEO rewards into a more realistic context.
This is not restricted to pharma. The global banks, for example, continue to struggle with CSR. Why? Surely the Chief Executives are nice people, wanting to do their bit – and how could they fail to notice the media pressure to do just that?
The problem is that these leaders have no clear platform of meaning in which to address this issue. "If we don't know why WE matter, how can we establish whether - and if so in what way – issue x or y matters?"
This is not a customer value problem
When have you ever heard customers talk about value? There's value for money, but that commonly means simply the best available price, cheaper than anywhere else. Is that what business means by value? I prefer to assume not!
The value problem typically referred to by management, on the other hand, is the challenge of perceived customer value. "How do we convey the value of this new feature on our handset? Why is this drug better than the competitor? Is the new value of this or that service equal to the extra we need to charge in order to deliver it?"
Are these questions about customer value? I'd say no, they're about meaning. These problems rephrased are all essentially: "How do we establish sufficient customer meaning around this product, feature or service to enable an acceptable return for the business?"
And we come to realise, in turn, that there is a bigger question, that's about the risks inherent in innovation investment; not one I plan to explore further here. I happen to doubt, controversially perhaps, that innovation is a branding issue per se (at least in terms of the new definition I propose below), although the link with design may be the cause of previous associations.
