Humungous Widgets? I'll Buy That!
By Robert Barker
Here's a prediction: Over the next year or two, we'll begin to notice a countertrend in corporate identities
What do I mean? I expect that companies will start giving themselves names that inspire confidence instead of confusion. This would be a reversal of the trend that has been gathering force at least since 1972, when what had been Standard Oil of New Jersey rechristened itself as Exxon.
Exxon, odd as that name appeared, at least held some relation to one of the company's brands, Esso. But this "rebranding" movement took a decided turn toward the bizarre on Apr. 30, 1987. That's when UAL Inc., the parent of United Air Lines, decided to rename itself Allegis. The shock of that switch proved so severe that the name Allegis was dropped little more than a year later in favor of UAL Corp. -- and a new chief executive.
Curiously, however, plenty of companies failed to learn the lesson of Allegis. Today, the Standard & Poor's 500 includes Agilent, Altera, Ameren, Aon, Applera, and Avaya. And that's just at the top of the alphabet. Toward the bottom, we've got Visteon and Xilinx. In between, there's Exelon, Mirant, and Synovus. Now, I ask you, can you tell by the name what any of these companies do?
A NEW LOW.
Last year, what had been the consulting arm of Arthur Andersen decided to call itself Accenture. Soon, the consulting arm of PricewaterhouseCoopers will be following suit, splitting off and taking some new, as yet undisclosed name. The rebranding's marketing campaign has already been budgeted to cost $110 million in the first year alone. Philip Morris, maker of Marlboros, Velveeta, and other healthful products, is weighing whether to change its name to -- get this -- Altria. Almost makes you think that the folks at Philip Morris come to work each day to advance purely altruistic projects.
Just the same, I suspect Altria may prove the absolute low point for unintelligible corporate names. For in the current climate of dashed expectations and crushed trust, Corporate America has no small amount of fence-mending and confidence building to do. That's why I see a return to names that both aim to generate trust and explain what the company.
Doubtless there's a sharp corporate-identity consultant who already is drumming up business by pointing to thriving companies that do just what their names suggest. The nation's largest mutual-fund company, despite its share of miscues, has proved a fabulous success for its owners and has seen no need to change its name: Fidelity Investments. Twentieth Century Investments a few years back had to escape looming obsolescence, so it switched its name. But it made a logical choice -- American Century Investments. For insurance companies, Safeco and Prudential seem to work just fine. Nor have American Greetings, Family Dollar Stores, and Illinois Tool Works wasted time on rebranding themselves.
So when Enron comes out of bankruptcy, look for it to be renamed something like Natural Gas Trust Co. If Arthur Andersen survives the current threats on its life, it may want to adopt a new identity as Assured Accounting, L.P. Maybe Tyco Intl. can escape its foul odor by becoming something straight-forward like Amalgamated Mammoth Industries Inc.
With apologies to Shakespeare, there's plenty in a name. As we've seen with Enron, a name that means nothing to no-one can turn out to be worth just that much.
Barker covers personal finance in his Barker Portfolio column for BusinessWeek. His barker.online column appears every Friday, only on BusinessWeek Online
Edited by Patricia O'Connell