Andersen. What A Broken Brand Looks Like.

What are these ex-partners thinking? (Wait: Are they thinking?)

Darn! We couldn't find ORANGE flavor!

Darn! We couldn’t find ORANGE flavor!

I can still feel the breeze
That rustles through the trees
And misty memories of days gone by.
We could never see tomorrow—
No one said a word about the sorrow … .
O! how can you mend a broken heart?
… How can a loser ever win?
The Bee Gees

In my end is my beginning.
T. S. Eliot, “East Coker”

 

Ah, misty memories that spur poet and bard! The Keats odes, Auden’s famous elegy, Eliot the signature scraping cry of the 20th century!

None would have bothered eulogizing Arthur Andersen. (The Bee Gees? I really can’t take them seriously. Can you?)

Seriously, the only folks likely to have much lamented the demise of Big 6 accounting firm Andersen were partners and employees—and not even all of those.

So who’s the best candidate for writing a panegyric? Anyone?

How about the partners at the newly dubbed Andersen Tax in San Francisco, which negotiated for the rights to use the Andersen name with (you guessed it) the ghostly wraith of Arthur Andersen that still legally exists.

“Whoa!” You say. “Andersen’s back?” Oh, yes, dear one! Yes, indeed. These ex-Andersen partners and colleagues must miss that old firm very much.

So this broken brand wants to live again, sprung like an avenging hero from twelve-year ashes, shards forged anew in fiery flames of commerce. Gleam in bright light, oh daunting blade! Carve a new path! Smite and scatter thine foes, and banish naysayers to utter dark! Be “best in class”!

Life is long, as Salman Rushdie says, in his great early novel of partition and parturitionShame is like everything else; live with it for long enough and it becomes part of the furniture.

But c’mon: Isn’t this broken brand best left where it lay? Is this a good idea?

The Andersen Brand: Are They Kidding?

Let’s not regurgitate the well-known facts. Enron. Worldcom. Baptist Foundation of Arizona. Waste Management. Sunbeam. Burp. Feeling much better, thank you.

Let’s focus instead on what the brand was. For, much as its august reputation allowed the firm a certain spring in its step, Andersen wasn’t too much different from all its competitors—except perhaps in the height of the flames at its downfall.

How do I know this? I worked there, in marketing and branding. In 2001, I was manager of creative communications, and working on the global advertising campaign, when the DOJ punctured Andersen’s little orange ball thingy. Before Andersen, I’d done work for KPMG. Since, my firm has worked with Deloitte (briefly), BearingPoint (before its bankruptcy) and Ernst & Young (a lot).

While I was at Andersen the firm invested in market research with clients and targets. We learned that the then Big 5 accounting firms—Andersen, Deloitte & Touche, Ernst & Young, KPMG and PricewaterhouseCoopers—all were “various shades of grey.” Our services were seen as similar. (They were.) Our service ethic was perceived as the same. (It probably was.) Our levels of competence by discipline were in large part believed to be the same. (Debatable, but who’s worried now? I guess, Andersen Tax!)

Differentiation surely was desirable. But Andersen was at the time of its implosion a professional services firm historically accustomed to operating quietly on its clients’ behalf. Like its competitors and peers, the firm by habit and inclination did not so much seek the limelight for what it did (or didn’t do), as it took pride in a job well done. (Cough.)

It’s accounting, for heaven’s sake. Finding your light and hitting all the high notes isn’t necessarily in the genes. In truth, it wasn’t really a comfortable activity for any of the then Big 6. About as public as public accounting ever gets is the credit that PwC (that’s PricewaterhouseCoopers if you’re not in the know…) receives for its supporting role in counting ballots for the Oscars.

Of course, principles from consumer branding are important in B2B marketing and professional services marketing; the fundamental elements parallel one another. But professional services marketing is less about articulating a public promise to build a positive penumbra around a brand than it is about consistently delivering services at high quality, developing insights, promoting knowledge and sharing best practices, and delivering a believable set of messages about those services.

By the mid-1990s, Andersen was only mid-stream in its second stab at building a global brand image that went beyond direct business-to-business communications with clients and a communications strategy based in knowledge management, information-sharing, and thought leadership. We’d worked with folks at Chicago’s Leo Burnett; later, we turned to Ogilvy & Mather in New York. (“Different shades of…?” You choose.)

Andersen hungered for a global brand in accord with its image of itself, as la crème de la crème, the tip-top, the cheese and the whiz (sorry, Kraft), la champagne!

And something else often gets lost in the noise about Enron, Worldcom, etc.: Andersen was seeking to establish new ground in the marketplace for consulting services, after its highly publicized and hugely acrimonious breakup with Andersen Consulting, shortly to be renamed Accenture, which timed the wave of technology consulting services as well as has any other company in the world, before or since. (For more on that, read this very good summary of the history of Andersen.)

Arthur Andersen had been the wallflower at that big dance. Whether it knew the steps or not, the dance card was far less scribbled on than its former sister’s. The global arbitrator’s decision to uphold Andersen Consulting’s independence arrived in the summer of 2000; it came with only a comparative pittance of the requested $14.5 billion financial remuneration to the Arthur Andersen entity from its eponymous former consulting arm. This surely came to its equity partners as a blow—and frankly it was a surprise to us all. (Yes, we were drinking the Kool-Aid.)

Rebranding came to be seen as critical at Andersen. It would prove the firm and its people strong, dedicated, talented, and competent. It would promote the firm’s image, cement relationships or create avenues to new ones, restore the spirits of the firm’s partners and staff—giving the firm a little market chutzpah, and it would help bolster revenues. Oh, and it would promote the firm’s ability to provide value-added consulting advice, beyond the audit.

Ah! the marvelous, even magical things brands purport to do. When you’re magically thinking, that is.

Andersen’s rebranding wasn’t epochal, mind you, though at the time it was billed as such. The purpose had been to alter perceptions internally and externally, including with a new logo that the firm could vest with brand value over time. That spherical orange ball. (The globe, anyone? A balloon, floating upward on airs of its own aspiration?) Lots of talk about the New Economy. (Remember that?) Moby playing in the background. (Yup, that Moby. Oi!)

But it was fun. It was elegant and thoughtful. The messaging was timely. Seen in retrospect like the Bee Gees, the rebranding evinced themes and gestures then invisible as something that would soon be as dated as a male lead singer in silk pants tossing his bangs. (Gulp.) But life is long. Times change. Barbers assert themselves. Truly, it wasn’t wretched.

It wasn’t realized either. In April 2002, the U.S. Department of Justice lowered the proverbial boom on the dinghy while we were gaily sailing through the effort. Capsized, we went looking for other jobs, taking the Andersen legacy with us, Moby still ringing in our ears.

Few were clutching the life-ring emblazoned with a little orange ball and the words, “U.S.S. Andersen,” though. Few felt they’d lost their identity as the Andersen brand went into free fall. Clearly, some that did are still floating around in San Francisco.

A Broken Brand? How Do We Know?

Companies and brands aren’t identical. Companies are organizations comprised of many individual people who have an implicit contract with one another. Brands are an implicit contract between the organization and its markets and customers; they are a sort of bond, negotiated with audiences (including internal ones). I can burn my initials into the wood of a desk I built by hand, but that’s just a signature, a mark. An orange ball is an orange ball, unless both sides in a contract agree it stands for something else. Companies are founded and grow; brands emerge over time, and need to be cultivated and cared for.

Let’s give a quick thought to how great brands emerge and thrive—and how companies damage or break their own brands. It’s not often a simple distinction to make except in retrospect, and it’s not a topic that deserves short shrift. But in the interests of brevity, let’s suggest there are signals for the brand’s health and power in an organization’s ability to be self-aware, to be self-critical, and to productively manage change.

Successful companies direct their entrepreneurialism toward markets by developing great products. They succeed by adapting as their markets evolve, often because they try things that don’t work and then arrive at what does. Product or service quality is paramount. Listening and learning from customers is important, too. Adjusting to the voice of the customer and to outcomes in the laboratory are equally important.

Of course, how products or services arrive at the market differs widely. Pharmaceutical companies don’t do “beta” tests! But trial and error is a principle of exploration and practice, to find a market niche. Evolution and incremental refinement of products and services is standard practice in industries ranging from software to consumer products as large as automobiles and as small (and vital) as personal electronics, smart phones and more.

Innovative, entrepreneurial companies recognize that success depends on learning from their mistakes and adapting as a consequence. They survive outright mistakes by acknowledging them. They remediate fault, learn from their errors, and institute measures to prevent them in future. Reacting to mistakes, disappointments, misjudgments is not just important; it’s mission-critical. It’s a necessary component of the company’s ethos.

Companies with broken brands might appear on their face to be successful in terms of market size, product or service range, and historical achievement. But cultivating entrepreneurialism is fundamentally different than encouraging opportunism and putting financial results before product quality. Companies that damage their brands are often the ones that veer toward a certain conservatism in how they do things. They refuse to acknowledge fault internally or externally when faced with criticism—including by diverting blame to others. They don’t take steps to remediate systemic errors, either because they don’t believe any mistakes were made or don’t have the will or capacity to encourage or enforce such change on their people.

GM comes to mind. Not just the woeful behemoth GM of the 1990s and early 2000s, which had been losing market share and falling behind in the innovation game for decades, but the GM of the last five years, for which poor Mary Barra was forced to routinely apologize earlier this year. Like insane people, perhaps, GM keeps repeating the same behaviors while expecting (hoping) not to make the same mistakes again. It’s cultural. It’s attributable to the complexity of changing a culture in an organization so large as to have become sclerotic. Blame the other guy, but just that guy.

Andersen comes to mind. The Andersen of Enron and other like circumstances supplanted entrepreneurial endeavor with opportunism. Their desire was not to create and deliver great services; it was based on the desire to enhance revenues. It considered success to be not in the quality of the work, but in profits. Individuals make mistakes and misjudgments; organizations promulgate a certain type of culture. At Andersen, incontrovertibly, auditors at times overlooked questionable accounting practices, a sort of willful neglect of necessary due diligence, while looking to cross-sell other services and boost revenue. It wasn’t just individuals who were at fault.

It’s important to acknowledge that not everyone at Andersen did this. I knew and still know many fine people who worked there, including audit partners and consulting professionals. Most decry what happened; most fully understand its causes.

Andersen did not address systemic issues internally that led to mistakes in judgment and flaws in practice. It refused to institute—at least in its U.S. organization—measures to prevent future mistakes. It sought to argue that mistakes were made by individuals, not by the firm: a classic tactic of large organizations to escape blame. At every turn, it denied there was anything fundamentally wrong at the firm.

Oh, and it sent to Capitol Hill to apologize to lawmakers a woefully ill-prepared or badly coached man in its then CEO, Joseph F. Berardino, who looked at best obfuscating and at worst criminally evasive. His insistence that Andersen did nothing wrong is the signal instance of how not to manage a public failure. Great way to lose hearts and minds, that was.

Rib-tickler? Now Joe Berardino lectures on corporate ethics and governance. I’m not kidding. That’s like Obama winning the Nobel Peace Prize while accelerating the drone program and authorizing extra-judicial murders in corners of the world where we aren’t looking—or don’t care to. (I can’t fix the whole bloody world, can I? Damn.)

No wonder lawmakers pounded the table. No wonder DOJ lowered the boom. But all this is old.

So Why Andersen Tax? And What’s To Do?

The Andersen name is a broken brand. But as I’ve said elsewhere, brands evolve and reputations can be mended. The new question is: How does a firm resurrect such a brand, and why would it bother putting forth the effort—given the costs of developing a new one—from a clean slate? Why write again on this old parchment, seeking to redefine a broken brand that will always hover as a palimpsest? I mean, really?

Does BP’s brand image not get blurred because of the catastrophic spill caused by the Deepwater Horizon—and not a little because of its ongoing efforts to use similar technologies to drill in Russia’s pristine Arctic north? Not to mention its coziness with one of the world’s wackiest dictators in Vladimir “I’m Not the Impaler” Putin?

Has Exxon escaped the stigma of the 1989 grounding of the Exxon Valdez—though more petroleum wastes and distillates are spilled into our oceans every day than leaked from that damaged tanker? Not entirely, but Exxon’s brand no longer only evokes those tarry wastes. (It might evoke other dark and sticky things, but leave that.)

I’m not saying the Andersen name is irredeemably toxic, like, for example, Chernobyl. Or Three Mile Island. Or that Ras(cal)-Putin. But it’s broken, and sticking plasters won’t do the trick.

So The Work Begins.

However you feel about the rightness or wrongness of the DOJ’s action toward Arthur Andersen in 2002, whether a new entity that deliberately adopts the Andersen name can overcome the now defunct firm’s negative history and its tarnished image remains problematic.

It will take work. It will take more time than I think the partners there appreciate. And the new firm could become a laughing-stock. Speaking personally, a change from WTAS to AndersenTax reminds me of the (probably apocryphal) country music song, “From the Gutter To You Ain’t Up.”

Here’s a firm debuting a new brand that’s on its homepage crowing about being “best in class” (it says it so often I found it annoying), and believe it or not, a direct reference to “Think Straight, Talk Straight”—the very mantra that Arthur Andersen grew too fond of to self-critique, believing its own mythos and failing to correct systemic internal problems that promoted profit over integrity.

We all want to cheer when Arnold says “I’ll be back.” But Arthur? I don’t think so. We’ll see if what got terminated in the past can be a hero for the future. Andersen Tax has set the bar high for itself, and its execution of brand marketing we will have to keep an eye on.

 

3 thoughts on “Andersen. What A Broken Brand Looks Like.

  1. Pingback: re: The Auditors » Blog Archive » More On My Reuters Breakingviews Column: The Andersen Tax Name Grab

  2. Pingback: More thoughts on the resurrected Andersen brand. Part 3 | Attestation Update - A&A for CPAs

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