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“Founderitis”, Cognitive Friction And Branding

Every market is made up of constituencies. A constituency is any group whose perception of the brand is important to its future. So, of course, customers or clients are the most important constituency of all. Or are they? Virgin’s Richard Branson would say employees are the most important constituency in any market. Didn’t he once say, “Take care of your employees and they’ll take care of your customers.”? There are other constituencies that need to have a positive perception of the brand as well: vendors, suppliers, financiers, competitors, the press, regulatory agencies, etc. And of course there is that all-important constituency of one: the boss. And if that boss happens to be the founder of the business, you have someone with encyclopedic knowledge of, and unparalleled influence over, the brand. Unfortunately, that can sometimes be a bad thing. Because even though the founder’s perception of the brand is extremely important to its future, its also the most isolated point of view. Literally no one else sees the brand the way the founder does. No one else can possibly experience it the way they do. So when founders or bosses insist on relying on their own judgement, without the input of customers and employees, the brand can suffer.

I was recently in talks with a 30-year-old, billion-dollar, family owned business in the financial services sector. Quite a success story, by any measure. Except one. Back when the founder first opened his doors, he had a friend design the company logo. His friend did a terrible job. Now we all know that the logo is not the brand. But it is the reflection of the brand. It is meant to signify what the brand is all about. And, in this case, the logo was signifying shoddy amateurism.

This causes cognitive friction. Have you ever walked into a room and knew, instantly, that something was wrong? Without even knowing why, you can tell someone just got some bad news or somebody is angry with someone else. Or something. What happens when you’re in that situation? You slow down. You don’t want to make a wrong move. You don’t say or do anything until you figure out what’s the matter. It would even be a natural response to turn around and walk out.

That’s cognitive friction. It originates in the limbic system, our lizard brain. It dates back to our caveman days when we had to make instant, life-or-death decisions about who to band together with and who to fear. And it happens today when somebody sees something that just seems off … like a bad logo.

Even someone who doesn’t care about logos, doesn’t think about logos or doesn’t even look at them really, has a reaction when they see a bad one. Just like the person who walks into a room and senses trouble, they can’t really articulate what’s bothering them. That’s because they don’t know what’s bothering them. But they’re looking at the contract or whatever it is they’re expected to buy and they sense something is wrong. They slow down. They stop. They have to think about it. They get very cautious. Sometimes they walk away from the deal. It’s a natural response to feeling uneasy about the purchase. Bad design impedes business.

I knew going in that it would be pointless to ask the boss to change his logo. I thought of all the people over the decades who must have urged him to do so. And he refused them all. There had to be a reason. I found out, in the end, that it was loyalty to his friend that made him insist on keeping the bad logo. I get that. I even admire it. It gives me faith in humanity. But I wonder if the boss realized that loyalty to his friend came at the cost of keeping his market at arm’s length. How loyal would he be if he knew it was making customers feel unsettled and putting an unnecessary barrier in the path of his sales force?

It really is lonely at the top. Owners of closely held companies, especially founders, have to realize how isolated their viewpoint is. They have to understand that it’s bad business to base every decision solely on their own experience. Had the boss explained things to his friend 25 years ago, I’m sure he would have understood. Had he then invested in a professional rebranding effort, this billion dollar company might have been a two billion dollar company by now, or even a ten billion dollar company. This founder got fixated on the logo but it could have been any other thing. A boss with founderitis can infect the business in all sorts of ways.


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