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Part two of a two-part interview, Damian Borchok continues our conversation by discussing the need for designers to have some understanding of business, how design studios might consider tackling growth, and why all businesses need to be purpose-driven. This interview was featured in Open Manifesto #7 which focused on the theme ‘Enlightened self-interest’.

Note: At the time of this interview, Damian Borchok was CEO of Interbrand Australia. He is now Managing Director, APAC, of Koto, Sydney.

Kevin Finn: With such a volatile and unpredictable economic climate and with perhaps diminishing client budgets as a result, how financially viable are large studios or large networks—as opposed to a group of smaller, independent studios that might be a collaborative force?

Damian Borchok: I think we’ll always have both. In my experience it comes and it goes in waves. I remember when there was a big move towards big global brand businesses; they had a certain expertise. Then, a number of clients began thinking: “Actually, they’re expensive, they’re a bit slow. In reality we have a relationship with a subset of that group—who are our team. At the end of the day, they kind of look like a small business.” Eventually, some of those little teams often start their own businesses. The big client follows them, and more clients pick that up.

I think we certainly see some of that—this agility thing, and the speed of being in the small agency. If you have some really top talent, if you focus that talent around a couple of top clients, you can do really well. It switches back, because a lot of those businesses then recognise that when they start up, they might have a fresh new client, there’s energy, but then they get caught up in a lot of the management. How do you deal with growth? “Do I have the infrastructure to deal with finance and IT and all the other things if I bring a big client across?” It starts to break down. A couple of people might leave. You bring in some other people. All of a sudden the quality of the firm declines. The client says, “FYI, it’s not really working. I’m going back to ‘B’ agency.”

You get these waves of changes. To me, I don’t see scale as really being the driving force around quality and results. I think there are a lot of really great small businesses and there are really, really cool big ones, too. There are really crappy small ones and really crappy big ones. There’s no correlation between size and quality of the work that you get. It’s very much around how is the business is being led? Who’s the talent in the business? How progressively minded are they in the way that they are improving their products and the way that they can serve their clients? It’s those kind of questions that you think about to find whether an organisation is going to do great creative work for you or not.

I guess there’s a perception that growth means you have to get more staff, get bigger clients, and that produces a need to ‘feed the machine.’ Then it’s difficult to be selective in deciding on client work to accept. This begins to cannibalize your position because you’re just trying to pay the bills. Now, that’s one perception of growth. You’ve personally experienced growth at Interbrand, from just a few people to quite a large organization. How have you navigated that growth so that it doesn’t begin to impact the product?

In the back of your mind you always have to ask: how sustainable is big? That’s often a challenge. There’s a real fear, particularly if you’re in a business that has to achieve monthly targets in order to get there. Does that dysfunctional behavior force compromise, or chasing the dollar? That is always a balancing act. From our experience, I would say that, in Sydney, it’s a much bigger market than anywhere else in Australia. You can sustain a decent size studio, probably 30 or 40, maybe on a good day 50, people with what I would call a standard consulting service.

One approach is identifying the great business you did and just doing more of the same. But some organisations ask themselves how they can extend those relationships with other things and get deeper in the relationship. The other option is you add new products. That’s the important thing for us. The product firm is really the key. Motion graphic business is certainly a few years old but doing well. Verbal identity is growing. Employee engagement programs and team is vital too. They started to expand after about 18 months of hard work in finding the right sort of relationships to do that kind of work. That allows us to have a fairly stable and traditional strategy and design group, but the other parts of the business that we add on are new. New types of work that we’re doing is adding new value to the business and allowing us to grow.

The other thing with the brand globally isn’t simply about the size of the office, or the geographic spread of the service. Sydney has grown to a particular size. Melbourne has a lot more opportunity to advance the business. To me it’s still very early days for that part of the business, in terms of its opportunity. Growth can significantly expand that office in the coming year. There are different ways that you manage growth. There are some ways you can chase the dollar. To me that’s not sustainable, because sure enough somewhere along the track, you’re going to lose a client, or there’s going to be another GFC [Global Financial Crisis]. You have a big, lumbering business that’s got a long way to fall.

I guess the two sides of that coin are: Diversify and, if you refer back to something that you mentioned earlier, to be good at one thing as opposed to being a generalist. Is there a danger when you start adding new products and expanding your business? It achieves diversification, but do you then have to walk that fine line by being very clear about what you do?

Yes. That can be a challenge. We usually expect about a three year lead-time before it actually gets real traction, because you have all those classic innovation curve events. There may be a few clients who are early adopters. They might take it on. Some of them might question the experience you’ve got in a new area for the business. They might question how good your team is. They might think: “I have never heard Interbrand doing this sort of stuff locally before. Is this real?” Those are probably a more mass market kind of client, and so they will wait for a couple of years. You have to be quite mindful of that. If you build a product, go to market and think that it didn’t take off this year, you are leveling the opportunities on the table.

The other point is that we don’t play that generalist game. We are essentially a large office of specialists. We are very much focused on hiring people who have specific skills. Like, for example, with our environments people they are interior designers and architects. Hiring a person whose career has been built in that area, and has that expertise, that’s a very different conversation to your marketing department, for example. Those kind of perspectives enrich the business, as well as actually provide us with the credibility that we need.

A softer way to introduce those new products would be to offer those new services to your existing clients so you can say, “This is something else—within the remit of our project with you. But we can also do this new service.” That way you’re not going to the market with a whole new pitch to new clients…

Yeah. You can sometimes have those wins, and that’s good if you have the trust of your client, but then you have other clients that you’ve worked with for a long time who have a very fixed view of what they have hired you for, and they just will not accept that you do anything else. We do. We have those challenges quite a bit. They hire us for our strategic thinking, and they have a very blind view of all the other things that we can do. Sometimes they are the ones that take the longest to come around. It is horses for courses. You do get a mix on that front.

Interbrand is part of the Omnicom Group so with the Publicis Omnicom mega merger, does this development impact the business structure at all? Does it put extra pressure or add KPIs, or change the business focus? Or, is it more of a positive addition to the service that you can provide? [Editor’s Note: This interview took place before the Publicis Omnicom merger collapsed.]

It’s really hard to say at the moment. It’s a merger that has been stated, but there’s a whole bunch of things that have to happen before it becomes official. At this stage, there’s no change as far as I can tell. We’re ‘business as usual’ for the minute. I’ll probably wait and see what becomes of it. I haven’t been through one of these large scale mergers before so I’m not really sure what to expect. Because these acquisitions tend to be lots of businesses that are part of a portfolio coming together they tend to go about their business— unless there’s some crossover.

Obviously, there are scale opportunities and things like that, and there are probably some competitive advantages. It’s still certainly very early days to fully understand the implications.

Some could argue that, with this kind of super power mega merger, it might create a less creative landscape. Would you agree with this assessment?

It was Martin Sorrell who made that point. But no, I don’t necessarily think there’s a correlation between scale and creativity. It’s often an argument that you could become less creative, but I don’t buy that argument. There are plenty of really rubbish small firms, as well. There are plenty of good, big firms. It comes back to the conditions that you create to deliver creativity. No, I don’t agree that’s going to be an issue.

We see the rise of the smaller, independent studio. It’s an increasing trend at the moment, but do you think it might galvanise the smaller independents or at least increase the number of them?

It may, certainly. It’s always interesting when you have a major shift in the market. The smaller studios work to fill that in, because the emergence of more small, creative agencies is probably a cool thing to have happen. The more new things that are happening in a marketplace the more it provides a better dynamic, a better sense of competitiveness. The interesting thing around the emergence of the smaller agencies is a response to a particular shift that’s happening—the need for organizations to be more agile, more creative, more adaptive.

Smaller agencies are certainly meeting that challenge. We often talk about the war for talent. In our industries, it can often take a bunch of talented mavericks to come together, and they’ve got a very new, exciting product. The thing that I find interesting about this is the challenge this sets and how you renew yourself. How do you refresh yourself? And how do these other players set benchmarks? You then have to think about: “If we’re a leader, we need to think about that context.” And also ask: “What does leadership mean for our kind of business?”

These are the kinds of things that I find interesting. I actually like a marketplace with that kind of dynamic. Apart from keeping me on my toes, I think it keeps everybody fresh—if they actually want to be successful.

You mentioned earlier that one of the products, which Interbrand has developed—and a term Interbrand may have coined—is the term verbal identity. Can you expand on that?

Verbal identity responds to what branding identity does, in relation to the graphic side of things. But there is a whole bunch of other things you can think about. Language is one. I know sound is becoming more popular. The nature of touch, and particularly when it comes to user experience and interface is now becoming something to consider as a more important dimension of emotionalising, and creating a sensory experience around a brand.

To come back to the idea of ‘verbal identity,’ A number of years ago there was a guy called John Simmons, who worked at Interbrand. He ran a language practice within the London office, and he wrote a number of books. The one that I read was called The Invisible Grail, which certainly stuck in my mind as being one of the more interesting business books, which I often find really boring and formulaic for the most part.

But this one is really exciting, because he opened my mind to the idea of language, and he was probably one of the real pioneers of this field. Whilst we’ve had copywriters for years and years as a key part of brand communication, nobody actually thought of establishing ‘verbal identity’ as a product when building visual brands. This has been something Interbrand has been doing for many years. It makes a lot of sense, when you start to think about how brand guidelines usually consist of many hundreds of pages of visual expression. When you get to the verbal identity part, you usually have about two or three pages. But if you consider the amount of interactions that you have with a brand, whether it’s spoken, or with a specific language, that’s a very disproportional representation in your guidelines document.

For us, it’s a fundamentally important piece of what we offer and how people communicate your service. For example, it’s important for when somebody in a call centre talks on the phone. But it also involves looking at how you write. Given the extent of social media, and how it is such a language-based medium, this is really key. Anybody who reads literature will be aware that certain writers have their own kind of voice. Why wouldn’t a brand have its own tone of voice? When we refer to tone it isn’t just about a list of things like: “Keep it simple, use straightforward language, be friendly and engaging.” It’s about finding a style that’s all your own.

One great example I use is a gym in Utah called Gym Jones. They have such a strong tone of voice, and you can see that it’s come from the leader—and the passion of that leader. It’s an extreme gym, and only the most elite athletes go there. They talk about this on their home page and their tagline is The Art of Suffering. They state they are exclusive—in that they exclude. They say you can expect to have mental and physical breakdowns there. There are no mirrors in the gym. There is no air conditioning. You have concrete floors, and it’s hard work. There is an intensity and brutality to their attitude and their language represents the experience you have. This is a very honest, true representation of the tone of that business, all delivered through its language. It’s a hugely successful business. Anyhow, you’re left with no confusion about what you are going to get. I think more brands need that kind of clarity. Perhaps not in that style, but certainly understanding the world that you want to build, and how people want to see that world.

This is not simply dumbed down by the legal department, and a boring 2000 word lexicon of business speak, which is what most organizations present. Just go to most corporate websites and you can see that the same repetitive, jargonistic language is there.

It’s interchangeable…

It’s created to cause anonymity and to ensure that, essentially, it flattens out the experience you have with the organisation so there are no bumps along the way. The result is that you are left with a characterless organisation—and an absence of branding their language.

I guess, in many ways, it refers back to the point we discussed earlier about the pitch process where, oftentimes, the pitch process becomes self-selecting. Verbal identity helps that self-selection, in terms of who you might attract. For example, the gym you gave as a case study, they will attract a particular kind of person who is looking for that experience. It is self-selecting.

Absolutely! They know exactly who they want. They don’t want some 20 something that just wants it to be cool and hip. They want somebody who is an elite athlete and they’re obviously clearly positioned that way. It may not work as a mainstream proposition— it probably wouldn’t—but for them that’s absolutely spot on.

It’s a niche market. They know exactly what to do, what they want to do, and I’m sure they have included within their language that it’s not just about the brutality of the experience, but also the benefit, the outcome.

Absolutely. Yeah. You get the full leadership piece that they have on their site about the kind of development and how they grow their people. Everything is pretty extraordinary. You can see the whole package, in terms of this intensity and brutality on one side, but you also see yourself coming out the other end as the best person you expect to be.

You’ve mentioned ‘innovation’ a few times, and in a recent conversation we briefly discussed the issue of innovation and its potential overuse in the context of business expectations. My view is that true innovation is a game changer, and usually only happens over a longer period of time. You argue that the idea of innovation can actually be a language tool, which can be used regularly to specifically leverage or persuade in a client situation. Can you expand on this?

It very much comes down to whether you want to narrowly or broadly define the nature of innovation. It’s not so important to me. I probably use the term as a short-hand because there are lots of different types of innovation. There is business model innovation. There is service innovation, client innovation. There’s all sorts of ways to actually cut that conversation up. For us, the idea that innovation needs to be something big isn’t the case, because innovation can be evolutionary by its nature.

You don’t necessarily come to an end, but we see the exploits and end results of innovation, and usually those innovations are a consequence of months, years, decades of evolution, and work, and thinking. That’s why I probably have a wider view of it. I know when you look back on the history of branding it has evolved, but it has been done through certain individuals and organisations who question the way branding works and find a better way of looking at it, which actually moves things along.

That is part of the innovation process; even though it may look quite glacial over time. There are categories that should be considered as innovation, other than just the new product they want to launch, or the new service that they are going to do. Instead, they need to look at the way they think about their category, the way they think about how their business is run, the way that they interact with each other as potential sources innovating the nature of their firm and their behaviour to actually deliver new results.

I have a wider definition, because I find it helpful to consider how you bring about change, and the ongoing effects as this can be quite substantial. Even though, initially, they might come from quite small things.

Is that something you actively put into context for people? Because there is the sense that innovation, or a start-up mentality, is the new buzz, or the most recent buzz phrase within business, and people expect to be innovating every other week. In terms of when you use the term ‘innovation,’ is it within the context of what you just described?

What I’ve just talked about it is within that context, but I think there is a dangerous trap companies who hire ‘innovation experts’ can fall into by sticking them in a corner with certain expectations put upon them. Not surprisingly nothing happens, because they weren’t connected with all the things that work in the business and which were required to actually deliver the innovation.

They hire companies that are really great at consulting on how innovation can be done. The meetings are really fun and feel like great entertainment and are emotionally inspiring. But at the end of the day when they return back to the business they recognise they couldn’t make any of this stuff, because the firms were great about inspiration, but they really avoided the fact that you have to operationalise innovation.

That’s where the hardest part comes in. I hate the idea of trying to create the big, explosive results in a disconnected way with a business. I’ve often had clients say to me: “Now, we need to think out of the box.” That’s when I say: “Here we go again!” Out of the box is disconnective thinking, so I say to clients: “You’ve got to stop thinking out of the box. You need to think inside the box. The problem with you people is that your box is too bloody small, and what you need to do is create the conditions in the business to be better at creating those new things. If you don’t do that, you’re going to be stuffed.”

A few years ago I read a really interesting thing about Pedigree. Before they did anything they spent a lot of time in the organisation looking into the things they needed to change. A lot of that was very much around: “You know what? Why aren’t there any pets in this office?” It was as simple as that. How do you have empathy for your end customer if you don’t actually allow them in the office? Its understanding how you create those conditions for creativity and innovation first, and whether you can actually create sustainable behaviour in the business around that. It isn’t a one-off event, and you might have one little bit of success. It needs to by systemic to be real.

So it’s absolutely cultural. It also relates to a phrase Ji Lee uses: “Ideas are nothing, doing is everything.” That’s the follow through you’re talking about, right?

Yeah. For too many organisations, it’s very easy to analyze and strategize when you’re sitting in meetings. But the real talent in your business is those people who actually get down to doing the stuff, those that know how to do things. That’s what more organisations need. I think this will happen, because we are starting to see the emergence of more and more metrics around employee behaviour. I think as technology develops, and big data becomes more widely used in the way business works, we will see a lot more evaluation on who is doing what, when, where, how—and how they are going to get outcomes.

That will shine a very stark light on these kinds of dysfunctional behaviours around not actually doing stuff in business. That’s a pretty exciting thing to see happen, because oftentimes companies don’t react to the culture of not doing by saying: “We need to be more entrepreneurial, and we need to be the leader,” and all that sort of stuff. Which is correct, but often there is a misunderstanding in the nature of this, because entrepreneurship is often seen as cowboy, and radical, and fly-by-night. We need to pick out the right characteristics from that behaviour because here is an operational skill these people have that is really important to our business, and that’s what we need to introduce, creating conditions for that to work effectively.

Earlier in our conversation you mentioned how branding—or the brand landscape—has changed over time; market driven, technology driven, etc. A recent development within the branding field is dynamic identities, and I know Interbrand has developed a number of dynamic identities, which are identity systems with numerous variations of a logo or a visual theme. In an interview on Design Boom Michael Bierut [Pentagram, New York] proposed that the popularity of dynamic identities will decline. He states: “Looking at 10,000 logo variations is entropic and exhausting.” He goes on to say: “on the other hand there is something so calm and comforting about a fixed, enduring symbol upon which people can impose their own private interpretations there. The dynamism happens in the real world in a more natural way.” Do you agree with this prediction, and also his assessment?

I probably agree with a lot of what he says. But I don’t think it’ll be as absolute. I think he is completely right that it is faddish. Will it return to stability? For some organizations, yes. I think they’ll make that choice. They will probably feel having 300 different versions of their logos is too hard to manage. The thing is, though, when you look at the degree of change in technology it’s not slowing down. And it’s just going to get faster and faster. Things are more dynamic. They change with a high degree of regularity. We have more touch points. We have more points of interaction. We’ve reached more people. There is a need for dynamism that I don’t think will go away.

Now, with dynamism you also need to have stability. Otherwise, people end up being disoriented in all that they see. His point of view about having that kind of stability does make sense. One of the various essentials to understand is that language is a dynamic thing. Is your language the element that changes? You don’t have to have your visual side change as much, but certainly it’s a mix of a range of things that will occur. The fact that we are moving more towards a video database world, which is only bigger and more expansive, means we will see identities evolve again—not necessarily return to where they were, but certainly evolve.

We are starting to see that Microsoft and BBC have done work around this intersection between brand interaction design, experience, and user interface. That’s a really interesting development where it’s no longer the design of your identity, and then separating the design of an interface. It’s the two of those coming together to create one, and for me it’s a wider idea of the concept of design working holistically in the business to create an experience. That is often why it’s actually going to be a more dynamic experience. It will breed new waves for considering these intersection points, and the way brands work will have more interesting functionality in how they represent brand to people.

Will that relate to logos? I’m not so sure, but I think certainly the other design elements that you create will become just as important, because they are part of the operating system of your business. That’s a really cool development. I am more interested in that than worrying about whether it’s going back to static logos, or whether we going to have more dynamic identities, because it’s neither here nor there, really.

There are other sides to brand communications that can be dynamic. In a conversation I had with Peter Saville we discussed developments in branding. His view was that a key thing for a brand is that it must be a regular, frequent news generator. If it’s not generating news, it gets clipped out of our awareness, and the news that it generates must be ‘on message.’ That could be a space for dynamism. Would you agree with that? If so, does the fact of being a news generator depend on the size and the nature of the brand in question?

I can certainly agree with that point. I think brand identity is often created for purposes of anonymity, and at best they are often created just to be a signpost for an organisation. That’s all that they do. They don’t play an active role in shaping and influencing people’s behaviour, and often organisations make the compromising assumption that it’s about creating perception, and I don’t buy that. You don’t get a result on perception. You get a result on behaviour.

Therefore, if you believe that brand has a role in shaping people’s behaviour, you need to first understand what behaviour you want to shape and influence. You need to know what the brand needs to do. Your concept of newsworthiness is fundamental. It means your brand has to be on the front foot. And you have to have a point of view. It has to have something to say where people actually want to sit up and take notice. I think all of those things are hallmarks of really great brands. That would be a fundamental part of brand performance. It’s a sign of confidence about knowing who you are and what you want to do, and being able to engage and shape the way people think about the world, and how they think about you as an organisation. All of those things are good things.

Of course being a news generator—or being within the wider consciousness—does help with perception. Even though you dismissed perception earlier, it is a valid concern for a lot of people where perception may be nothing near reality. When perception is more visible than reality then perception plays a huge role as a news generator.

Yes. My view around perception is that it’s part of the journey, but it’s not the end result. Also, many organizations are still happy to look at evaluating perception but not actually getting to the hard questions regarding to what degree they are influencing behavior. Behavior is certainly influenced by perception. That’s what I mean. It’s part of the way on the journey. At the end of the day, this is where so much cynicism comes around design projects and marketing activities because most CEOs, CFOs, and COOs are saying: “You know what? My sales team have told me I’ve sold about 10 percent more than I did last year. What’s our marketing telling me? We’ve increased perception by X percentage points, and that some of our attributes are performing better than they were last year, right? But tell me how this is actually changing people’s behavior to get a result.”

That’s where the results-based view of branding needs to become a far more behavioural-based view where branding speaks for more than simply ‘perceptions’ management, because with perceptions management you are only doing part of your job. It’s about operationalising the brand. Understand, for example, how brand can play a role in improving the way your front line staff actually engage customers because that prompts comments like: “You know what? These front line staff are actually influencing buyer behaviour.”

It’s through our ability to shape the way they improve their service and get access to their behaviour, where I can actually show my brand activity is doing something. It’s those kinds of things that are particularly interesting, and if you want to do the hard job of providing real facts around what brand can do, that’s the stuff that you need to be thinking about rather than simply how can my communications move perception.

I’ll finish on this question, which comes off the back of what we’ve just discussed, and it’s in relation to perception. There is a lot of public pressure for organisations to engage in corporate, social, and environmental responsibility, and in a conversation that I had with Wally Olins around this topic he stated: “If a commercial organisation believes that it will be in its interest to become charitable, I don’t want to sound cynical here, but the appropriate phrase is lacking self-interest. If they see it as being in their interest to be socially responsible, then that is what they will do, and that is a very powerful mechanism for change.”

Generally speaking, do you feel that we are at a point where most organizations do see the benefit of this—beyond their own self-interest—or are we still in that marketing spin stage?

I think some organisations are in different stages of evolution. It’s part of the innovation curve. There are some that very quickly adopt it and fully embrace it, and fundamentally understand it. There are others that say: “You know what? A few people have done that sort of thing, and it seems to be the right thing to do so we’ll adopt it.” And there are others that will be unrepentant in saying: “Absolutely no. This is nonsense. I don’t see any upside. We are in this to make more sales, and we are going to stay focused. We are going to stay lean and mean around that.” You are always going to have these various states of organisational evolution.

I guess the wider consideration—and it’s the thing that’s most compelling for me around this whole conversation—is that it’s leading us to a place which is far more interesting and far more important in the nature of the role of organisation in society. Historically, organisations are always seeing themselves as something apart from society. They are almost like this old garden in which commerce is conducted, very much about creating shareholder value, and where they set their own operating rules and rhythm, feeling they should be allowed to just get on with that.

I think economics is a fundamental engine of any society. The participation of business in, not only the economics of that society but also the welfare and the way that we live, is fundamentally important, because they influence degrees of employment. Organisations create a mechanism for commerce to happen. They create wealth that influences the degree to which you can have a healthy corporate sector or not-for-profit sector. It’s a consequence of all these interactions that the businesses can’t see themselves as being separate, and are largely compliant to the rules of the country, but where they are essentially setting their own rules on a day-to-day basis. They are a fundamental part of the fabric of society, and therefore their role is to operate an organisation that is part of a full society. To me, that’s the interesting piece.

This will ultimately evolve into a general requirement for organizations to demonstrate they are playing a role in society as opposed to seeing themselves as separate from it. And I think that will shape the way decisions are made around how organizations behave at a day-to-day cultural level—and how that can be more pervasive. Organizations will be free to choose the degree to which they proactively provide more connections.

It’s also generational, because we tend to forget that organizations are filled with people. The generation that is coming up now, and those following behind them—have much more social, cultural, and environmental awareness, and those people who go into those organizations won’t just be expected to have this type of view. This is the view they already have, and I think, perhaps, what you are predicting will happen purely because of the people who are in those organizations.

You’re probably right about that. I think it will take perhaps maybe another generation or two for them to be more pervasive. It certainly will evolve that way. I think we still have the equivalent of—what might be referred to as—the DNA of the Industrial Age, which is evident in some businesses, though that is certainly disappearing. We are seeing, at almost every level of decision influence, how workplaces are shaped, or the nature of the way you conduct business, and the degree of collaboration, and we are about to see more organisations driven by purposes rather than processes. All these kinds of things are markers toward that evolution.

I think it will be a matter of time because all the particularly big organisations are slow to change, due to the scale of those demands. You do need a generational change to actually bring about those kinds of significant cultural shifts.

Are you optimistic?

Oh, yeah! I am always optimistic. You can’t not be, because part of the job is walking into businesses facing a lot of challenges, and you have to be thinking: “How can make them the best that they can be?” By the very nature of what we do we have to be optimistic about it—because we like fixing stuff.