Insight: Preventing the next flag attack
The riots and outrage provoked by the Muhammed cartoons affair may have cooled off, but for Denmark, at the centre of the attacks, the crisis has proved to one of the biggest brand disasters suffered by any country in recent years.
The cartoon wars have dramatically changed the ways many foreigners, especially those in Muslim countries, now perceive Denmark. A recent global survey of country brands, Anholt Brand Index, indicated that not only will exports and tourism suffer, but the damage to the country’s reputation will make it far more difficult for Danish firms to attract top talent.
Arla, the Danish diary giant, has already been forced to lay off hundreds of workers as a direct consequence of lost market share in the Middle East, and Arab airline Emirates has cancelled a proposed route to Copenhagen. Additionally, raising capital from Muslim investors is likely to become increasingly difficult for Danish firms in years to come. Also the crisis has potentially worsened a political conflict between the Muslim world and the West.
So how can other countries avoid a similar fate? They must learn the lessons from the world of corporate branding. In the late 1990’s, global names such as Shell, Nike and Coca Cola saw their brands come under heavy attack from anti-globalisation protesters. Burning Nike shoes and tearing down gas stations may have been replaced by flags and embassies engulfed in flames, but the mechanisms that drive these protests are the same and so are the tools to avoid it.
The paradox of global branding is that the more successful a brand is, the more vulnerable it becomes. Many shoe firms manufacture footwear under far worse conditions than Nike, but the lack of a well known brand, or corporate symbol, means that outrage and media attention cannot be mobilized against them.
Many countries are far more insensitive to religious sensitivity than Denmark, but few could have provided the kind of headlines that followed when this ‘fairytale country’ came under attack.
Using the global media to attack brands has proven to be one of the most efficient ways for groups who feel marginalized to exercise non-parliamentary pressure on large corporations and now also countries – consequently, it looks like flag burnings are here to stay.
So rather than providing a way for the public to hold corporations and countries accountable for their promises, strong brands are made into scapegoats for issues they have no direct responsibility for. This may seem unfair to a brand owner, but corporate brands has learned to manage it as any other business risk. Brand consideration has become an integrated part of corporate strategy with management forced to employ permanent brand crisis teams with the sole purpose of protecting and improving their brand.
In comparison, Western governments are hopelessly unprofessional in their brand management. The Danish government has been criticised for doing too little too late to avoid the crisis, but the real problem had more to do with lack of ability than unwillingness. No one inside the government apparently knew who had the responsibility for the ‘Denmark brand’ or how to protect it. The attempts by the government to stop the crisis through closed diplomatic channels failed completely. The failures demonstrated that traditional foreign policy tools will never win a brand war. Countries need a new institutional framework to effectively defend their brand.
All countries that to a great extent rely on their brand for exports, labour, capital and tourism – and spend hundreds of millions of Euros promoting it – should set up a national brand agency, with a senior executive reporting directly to either the prime minister or the Minister of Foreign Affairs. This brand manager would be better equipped to assess the potential dangers to the brand and deal with it through public, as well as closed off, communication channels. Major policies need to be evaluated not only on the basis of economic, foreign and domestic policy criteria, but also on their brand impact. Like major corporate brands, countries cannot avert a brand crisis but they can certainly minimize the risk of it happening and manage it if it does.
Sadly, these insights come a little late for Denmark. Restoring the country’s reputation and image will be a long-term effort, involving a series ‘bridge-building’ efforts At the same time, Denmark now has to search for an alternative brand image in the global mind than the one as a tolerant, open country – an image that now appears untrustworthy.
Other states should learn from this, since the cartoons war has made it highly likely that another country brand will soon come under attack.
About the writer
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Rasmus Bech Hansen is chief strategist at Kontrapunkt, the brand consultancy and business columnist at Berlingske Tidende,
the Danish broadsheet.