What happens when brand and customer focus move to the top of the CEO’s agenda?

The following is an excerpt from Level5 Strategy Founder and Chair David Kincaid's book 'The Brand-Driven CEO'.

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For my money, the archetypal brand-driven CEO is humble Ed Clark, former president and CEO of TD Bank. Even now, after his retirement, few CEOs anywhere can match Ed Clark’s understanding of what brand-as-business-system can do for a company, let alone a bank.

When Clark arrived at TD Bank after a merger with the much smaller Canada Trust, TD was a firmly entrenched part of a notoriously conservative group – Canada’s five chartered banks. Bankers’ hours drove customer service, and most branches looked like the faceless outposts of an impersonal corporate conglomerate.

Clark brought two key concepts to TD: “brand and customer focus.” By the time he was promoted to CEO in 2002, he had not only helped to seamlessly merge two almost diametrically opposite cultures, he had also firmly jettisoned the traditional 10:00 a.m. to 3:00 p.m. bankers’ hours and had begun planning many more changes, including an invasion of the U.S. retail banking market.

Years earlier, Clark had come to understand the business value gained when a financial institution makes itself available when the customer wants it open, not when the bank wants it open. Canada Trust’s move to “8 to 8” hours, six days a week, was truly unique in the banking world at the time, and the company’s culture defined Clark’s approach to business. “You must understand Brand,” he said in a speech, “what it is and how to build it.”

Did he ever. Thanks to its customer-first brand promise, Canada Trust rapidly gained market share. The number of branches grew from 340 to 440. Brand loyalty was outstanding. Surveys repeatedly showed that most Canada Trust customers had chosen to make it their core bank. When Canada Trust was sold to TD, its earnings were about $360 million. But the price tag of $8 billion – even for a wildly successful financial institution like Canada Trust – was extraordinarily high. In fact, it was approximately four times Canada Trust’s tangible book value, a huge premium over standard market rates. (Price to book ratios in the banking sector average a little over one time’s book.) “It looked pretty good to me as a seller,” Clark said dryly. So, what was TD Bank paying such a premium for? The Canada Trust brand – and its brand promise.

When Clark became CEO of the merged entity in 2002, his next challenge was to define and grow the new TD Canada Trust brand and “build a unified retail franchise that had the capability to sustainably outgrow our very competent and entrenched competitors.”

That meant agreeing on a vision. And the vision had to be more than words. “It had to transcend the making of money,” Clark said. “It had to be something that attracts employees to an enterprise that adds value, creates a better world for its clients and customers and is truly focused on the long run.”

Analysts and journalists made fun of this new, “better world” culture at the bank, and financial journalists exchanged quips that everyone at TD had drunk the same Kool-Aid. But that’s what it took to make the vision a reality, says Clark.

What was the vision? The same one he had helped create at Canada Trust: Start with what customers want – not what banks want to do. “It’s amazing,” he said, “how many organizations have such profound tendencies to start at the center, do what they like doing and forget the customer.”

TD realigned its core processes and procedures to deliver on the brand promise of being totally customer-centric, and it trained its people to consistently deliver on that promise – making banking easier and more comfortable.

Clark made mistakes along the way, but unlike many leaders, he was willing to offer public apologies, because, as he put it, “delay only causes more pain. When you look for great leaders – look for people who’ve actually had to fix their own mistakes.”

In the early days of his leadership, Clark would have been the first to admit that TD Bank’s in-branch experience and supporting processes didn’t measure up to the bank’s legendary symbol of the green leather chair. But he eventually fixed that issue. And his approach clearly worked. Under Clark’s twelve-year brand stewardship, TD’s total annual shareholder return was a remarkable 14.5 percent.

What made this even more remarkable was that Clark didn’t employ marketing hype or wild and woolly innovations. Instead, as one financial journalist put it, “he turned the business on its head in this country not by way of revolutionary products or new-fangled investment gimmicks designed to make a fast buck. Rather, the former federal bureaucrat reverted back to the fundamentals – retail deposits and good old-fashioned customer service.”

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The following was an excerpt from 'The Brand-Driven CEO', if you would like to check out the book, click the link below. https://utorontopress.com/9781442649859/the-brand-driven-ceo/.?