Lessons From Rebranding a Berkshire Hathaway Consumer BusinessSue Yannaccone and James Burn
Companies spend an enormous amount of time and money creating a new brand, but when it comes time to launch, they often miss deadlines, communicate poorly with everyone involved, and fail to coordinate the multitude of moving parts. Opportunities are lost to delay, and worse, the company’s image is tarnished. In a world where brand is synonymous with reputation, shareholder value can take a big hit.
The danger can be even more acute for companies that rely on a dealer or franchise network—a common business model in industries from insurance to car dealerships. Top salespeople, viewing poor implementation as a harbinger of worse things to come, may flee. Competitors, sensing weakness, see an opportunity to lure away disaffected affiliates. Others may stay on but go rogue—doing their own thing instead of adhering to the strategy.
That was the challenge creating Berkshire Hathaway HomeServices, a new real estate franchise formed when Berkshire Hathaway’s real estate affiliate acquired a majority interest in the Prudential Real Estate network. The Prudential affiliates were free to join the new organization or go elsewhere when their existing contracts expired. In addition, we were acutely aware that poor execution might tarnish the Berkshire Hathaway name, which the company has rarely conferred on consumer businesses.
The change was also an opportunity to demonstrate the effectiveness of the organization by adhering to these principles:
Plan early. Rolling out a new brand requires forethought about supporting technology, communication with stakeholders, and the thousands of details that can trip you up.
Balance speed with deliberation. Proceed too slowly and you risk delays that could undermine goals. Too fast and you risk making mistakes. In our case, we felt that a big-bang approach would leave little time to get the details right.
Quantify the risks and track progress. By monitoring affiliate satisfaction throughout the transition, we were able to anticipate the impact that future moves would have on revenue.
Manage resources. Organizations have finite resources, including the time of their people. Operating within those constraints ensures a more cost-effective rollout. It also avoids the risk of losing momentum due to dwindling resources, which can result in the persistence of legacy logos and other manifestations of the old brand that dilute the new.
Manage vendors for quality. Don’t assume that your existing vendors can handle the increase in demand for things such as signage and printed matter that launching a new brand brings. Needing as many as a million yard signs that could stand up to extremes of weather, we interviewed vendors, reviewed their financial statements, and tested their signs for durability.
The first of those signs went into the ground last September. By late March, the network had more than 27,000 agents and almost 700 offices in 33 states, exceeding our retention and revenue goals. While results like those are important, the ultimate value lies in the long-term, fruitful relationships with affiliates that a well-executed brand rollout brings.