Public Affairs

Will the Co-operative Bank brand survive?

Will the Co-operative Bank brand survive?

This morning’s news about the continuing difficulties of the Co-operative Bank raised one obvious question in interviews and reports: will the brand survive?

The survival of the bank, in one form or another, is highly probable. It’s difficulties relate to the future ‘financial resilience’ requirements of the Bank of England rather than immediate operational issues. These requirements broadly require banks to hold a higher proportion of capital assets than has been the case in recent history so that come another financial shock they will be better placed to withstand it than they were in 2008. Getting to that threshold has proved a problem for the Co-operative Bank. A buyer with sufficiently deep pockets would get them out of this hole. The question is, however, would the Co-operative brand – associated with mutuality and ethical practice – survive or be subsumed.

Beggars, as the saying goes, can’t be choosers. Thus the survival of the Co-operative brand within the banking sector will depend on whether or not the Co-op’s buyers believe that there is commercial benefit in retaining the Co-operative message. The brand, essentially, ‘belongs’ to the Co-op Group – the one that does the supermarkets and the funeral homes as well as a few other less well known notions. To say understanding exactly how the Co-op operates is tricky is something of an understatement. Behind the retail brand is a web of locally own mutual with democratic structures that buy in to the stores in some obscure way to which most of its modern-day customers seem oblivious. Nonetheless it has a reasonably clear ‘niche’ of ‘fair-trade’ and ‘ethical sourcing’. The bank was the choice for many for similar reasons. You knew where ‘your’ money was invested. You didn’t really, because that’s not actually how banks work of make money, but they need customers and that was one way they found them.

Despite having squandered its position as the UK’s largest retail group in the 50s and 60s, the Co-op remains the seventh largest food retailer, only recently having been overtaken by discounting insurgent, Aldi. The bank clings to the brand based on 20% ownership from the Co-op group and its continuing its ethical financial policies. The uncomfortable fact, however, is that the Co-operative is a massively damaged brand.

Confidence in banking is everything. Without it banks fail to prosper and, ultimately in times of shock, just fail because banking confidence is a matter of smoke and mirrors. The difficulties of the Co-operative bank are too well documented to be easy to escape – the brand symbolises those difficulties. The Co-op Group well knows this because the difficulties of the bank, its ‘colourful’ former Chairman, Paul Flowers – the Crystal Methodist and the less than ethical activities of other bank directors damaged the brand of the entire group. The Co-op may spin its reversion to the ‘Co-op’ brand and logo of the 1960s however it likes but nobody will ever convince me that repairing the damage done by the scandals at the Co-operative Bank was not THE key driver.

So back to the original question – can the brand survive in the banking sector? My guess is not. First and foremost the damage outweighs any particular benefit the retention of the Co-op association might provide, secondly the interests of the Co-op Group would seem best served both financially and by brand association by just getting the hell out of banking and completing as far as possible the ‘cleansing’ of the Co-op brand. And finally, there are better non-mainstream brands around. Nationwide has long made a virtue of retaining its mutual status, and TSB, while not driven by ‘ethical investment’ policy plays on being the local retail banks – smaller, more trustworthy than the big players who made such a mess of it (including its former parent, Lloyds, of course. I can’t for the life of me see how the residual loyalty of a diminishing social niche could be sufficient for any suitor to outweigh the downside of retaining the Co-operative Bank as a brand. Nor can I see why it would be in the interests of the Co-op Group any longer to allow their brand to be subject to factors and owners way beyond their control. My guess is that in time and following its eventual return to the private sector, the NatWest and RBS banking brands too may have to be, erm, shredded.

The moral of this tale is that there is a point beyond which the damage done to a brand, no matter how well known, cannot easily be repaired. Brand assets, which are the stuff of real balance sheet value for many a conglomerate, need to be maintained, protected and valued. They are key elements in merger and acquisition and, for growing SMEs, need to be understood, valued and protected. Growing that asset requires strategy and day to day attention. To anybody who still thinks a brand is just a logo the carry on at the Co-operative Bank should convince them otherwise.


Public Impact advises and mentors businesses seeking to maximise brand assets, create and re-fresh their brands and develop robust brand strategies. Get in touch for a chat.


Photo: Wikipedia Creative Commons.

Posted by John Howarth in Brand, Business, Communications, Public Affairs
When Strategy Fails: What business can learn from 2016’s political shocks

When Strategy Fails: What business can learn from 2016’s political shocks

Neither of this year’s big political shocks needed to happen. Both were failures of strategy in which there are clear lessons for business communication.

I’ve done a bit of number crunching in my time and I must admit I didn’t see the election of Donald Trump coming. It seemed a more secure prospect that Hilary Clinton would make it into the White House than the UK voting to Remain but, as one of the best of the number crunching sites, Nate Silver’s 538, pointed out to those who cared to listen, though the election of Trump was improbable it was never impossible. In 2012 Silver, despite polls at times closer than this years, placed the probability of Mitt Romney ousting President Obama at less than 10% throughout the campaign. Trump went into election day at 23% – a long shot, but far from out of the question.

Ominously, Silver, who’s other great passion is sports statistics, wrote after the third game of the baseball World Series that the Chicago Cubs (then 1-3 down in a best of seven) had less chance of winning than Trump had of making it to the White House. The Cubs won the next three games and took the title 4-3.

However, it wasn’t probabilities or polls that cost Hilary Clinton and Remain, these votes, the full significance will remain unclear for some time, were lost because of fundamental failures in the strategy adopted by the campaigns.

To stay with Trump and Clinton first, it was clear for many months that the election was Hilary Clinton’s to lose. The Clintons had rescued the Democratic Party from situation where its only electoral victory since Lyndon Johnson’s Civil Rights legislation turned the southern states to the Republicans was Jimmy Carter’s in the aftermath of Watergate. Bill Clinton’s campaign explicitly rejected the notions of ‘rainbow coalition’ in favour of a return to the mainstream Democrat approach of looking to working Americans, the aspiring middle class and campaigning across rather than within the lines of social division. Barak Obama, though harnessing the African American and minority votes effectively, again did so with his focus firmly on majority issues of economic wellbeing.

Despite this clear evidence of success Hilary Clinton’s campaign returned to the notion of the rainbow coalition – either by choice or by default. They did this because they perceived Trump as deeply unpopular among these groups – the problem is people don’t necessarily see themselves as part of a ‘group’. By taking the approach it did the Democrat campaign neglected the ‘economic mainstream’ issues that played heavily in the key states Trump won in the northern mid-west. Democrat messages were confused and fragmented, Trump’s were unconventional yet clear and his ‘inexperience’ in office was a positive for enough people to take a punt on a ‘businessman’ rather than a ‘politician’.

Remain had similar problems. Faced by a Leave campaign with a series of simple assertive messages presented by eccentric but largely untested messengers, the Remain campaign sought to project expert opinion and, indeed, succeeded in demolishing the Leave case. Three weeks out from the vote (as with Trump) the Leave ship was sunk – their economic narrative had fallen apart and their vision of what might follow a Leave decision was shown to be non-existent, however there were still three weeks to go and Remain took the campaign onto migration. The Remain campaign, who’s messengers had no credibility on the issue, failed to engage and lost.

The strategic failures were many, but firing all of your guns and running out of ammunition before the battle is over is never a good move and, while fighting on the ground of your choosing is an important thing to attempt in any strategy, having no battle plan for fighting on opponents ground is simply unrealistic. Remain knew two years before the referendum that migration would inevitably be part of the campaign but utterly failed to come up with a sustainable line of counter-attack.

So what are the lessons for businesses in these two historic engagements?

First and foremost, have a strategy, test that strategy and challenge that strategy. This involves three principle actions:

  • Ask ‘what if?’ – explore the possibilities and think about the unexpected.
  • Play to your strengths but address weaknesses and prepare defence – because they WILL attack you.
  • Understand the audience before you think about the messages

One way or other the two campaign that lost from winning positions failed on all three.

Challenging assumptions is essential in forming strategy. It is also difficult, particularly for owner managers. The owner manager has, usually, come up with the idea, put in the money, worked long hours and put huge quantities of themselves into their businesses. Essentially, winning owner managers do positive thinking and they do it well. It is hard for employees to challenge effectively – particularly where there is a sole owner. This is where it gets dangerous because lack of challenge leads to lack of thinking leads to taking the field ill prepared.

One of the most valuable aspects of Public Impact’s work on strategy is challenging internal assumptions as a critical friend. We tell you what you need to hear rather than what you want to hear.


To find out more about Public Impact’s strategy development services click here to get in touch.

Posted by John Howarth in Brand, Business, Communications, Public Affairs
In defence of the numbers

In defence of the numbers

Above: It was You Guv! – the archive figures showing the election neck and neck.

Public Impact Director, John Howarth, has been crunching numbers most of his life. Here he explains why the 2015 General Election did not ‘discredit’ opinion polling and why businesses can and should continue to rely on the numbers.

Say I’m ‘on the spectrum’ if you like, but I’m very fond of numbers. In an uncertain world with shifting motives and inconsistent people numbers are reliable, constant and, ultimately, the only logical truth. Numbers are the friends you can rely on.

At the UK General Election in May the opinion polls were wrong. Of course it wasn’t the numbers as such that were wrong – more a reflection of the people manipulating and using the numbers. Now, apparently, we know why the numbers were wrong – it was all about the sample selection not reflecting the real turnout pattern.

But, of course, there are a few things that could get a little lost in this debate, so because I like to be loyal to my friends I feel the need, before breakfast, to make some points in defence of numbers.

The polls have always been ‘wrong’.

During my lifetime the polls have failed to predict the result of the election on three occasions: 1970 – when the data took much longer to compile and Ted Heath’s ‘late surge’ was missed; 1992 – when they failed to pick up on the electorate’s aversion to the concept of Prime Minister Kinnock; and in May 2015. In each case the election was thought to be relatively close, in each case Labour lost and in each case a ‘late surge’ benefited the Conservatives. However in other elections polls were also ‘wrong’ – but, because the margins were clearer and the winner was in line with predictions, polling ‘error’ was not regarded as such a serious business. For example, in 1997 and 2001 Labour’s lead was over-stated in many polls, in 1983 and 87 the Conservative lead was understated. Nobody made a fuss (1).

The polls are not Labour’s friends – are they?

It is a favorite saying of mine that your true friends in politics are the people who tell you what you need to hear rather than what you want to hear. In that respect the polls have not been Labour’s true friends. Activists of whichever party want to believe that their party, or their faction within their party, is doing well and is going to win. Voter contact by political parties has an in-built confirmation bias – everyone spends more time working on their own supporters, so it often seems like you are doing fine and, in any case, if you didn’t delude yourself you would just go to the pub instead(2). It is a reasonable conclusion, however, to suggest that polls during the 2010 Parliament were consistently ‘wrong’ and so affected the thinking of Labour’s high command. In the light of different information different decisions may have been made – maybe. So their argument seems to be that they really were deluded – just rationally so! Park that thought for a moment.

Never answer a hypothetical question

It’s an iron rule of political media technique that one should not answer a hypothetical question. It is a simple fact that every poll more than a couple of months away from an election campaign is asking a hypothetical question about ‘an election tomorrow’ that is not going to happen tomorrow. People answer that question honestly – they are not being asked how the WILL vote come the real election. Mid-term opinion polls as well as mid-term local elections and by-elections tend to punish the Government of the day. That’s also part of the psychology at play when answering that hypothetical question. They are not making a serious decision about an alternative Government – the electorate is sending a message, either through the ballot box or via the pollsters. The polls provide a snapshot of opinion, yes, a true reflection of what will happen, no.

Crystal balls are mainly just balls

Following from the hypothetical question, polls are not predictions, they are not meant to be. The polling companies always say so. The politicians don’t listen unless it suits them to do so – and in any case no politician can ever say ‘we are going to lose’ – even when it is screamingly obvious that they are. Perhaps we should be less surprised when something that isn’t a prediction fails to predict.

Do the polls ever tell us anything?

Despite all of this the polls tell us quite a lot. They show us movements, trends, patterns. Their relative position against real results can produce reliable estimates around which decisions can be made about campaigns and resources. They can show regional differences. They are often ‘right’ in relative terms even when they are ‘wrong’ in absolute numbers. This is what number crunchers do – we learn to read the numbers. There was much in 2015 that the polls had to tell – the Labour Party just didn’t want to hear it. This is why it is self-serving nonsense to suggest that Labour’s high command may have made different decisions in the light of different polls. I don’t think so – the justification for inertia would simply have been different. Labour claim’s that they were ‘duped’ by the numbers doesn’t stand up to analysis. This delusion was far from rational – they only saw the numbers they wished to see while the reliable indicators told a different story – as did others (3).

There is no great polling conspiracy – so be very afraid

Some peddle the crazy notion that opinion polls that present uncomfortable evidence are part of some great conspiracy. Sadly this is part of a world view that is equally help at the extremes of left and right and is, I’m afraid, entirely barmy. The numbers are what they are. The polling companies do not want to be wrong because being seen to be wrong is bad for business, not least because they are generally correct. The real horror for Labour, given that polling ‘bias’ has now been proven to ‘favour’ Labour, is not what the polls said about the outcome of the last election it’s what they are saying right now.

It remains a fact that people lie, numbers don’t.


(1) the evidence of this is ample – see the various Butler et al publications detailing polls and results, the work of Thresher and Rawlings and the likes of John Curtis.

(2) when the appeal of a party is narrow but deep this effect can be even more pronounced – which is why in both 1983 and 2015 Labour activists reported ‘great ethusiasm’ on the doorstep. Their delusions weren’t entirely baseless – but it didn’t mean they weren’t getting thrashed.

(3) see Andrew Rawnsley’s mea culpa piece in The Observer, 17 Jan 2016.


Posted by John Howarth in Business, Communications, Public Affairs, 0 comments