Forget the fuzzy jargon, corporate identity today is a science that expresses a company's personality and its ambitions.
How much should you pay for a corporate identity? British Airways is reported to have spent £60 million on the new look it unveiled last summer. Guinness and Grand Metropolitan paid £250,000 for their much ridiculed new name: Diageo. At the other end of the scale English, Welsh & Scottish Railway (EW&SR) offered the price of a train ticket as the prize to the reader of a trainspotters' magazine who designed its logo.
Few business services can be subject to such disparity. Cost is just the most obvious confusion. With so many sectors affected by globalisation, privatisation, deregulation and other major upheavals, companies are changing faster than their identities can keep pace, which raises the question: is it worth investing in a corporate identity anyway? The answer must be yes because, if done properly, a corporate design reflects the values of the company - in other words the logo becomes the physical manifestation of the company.
British companies are spending more than ever before on corporate identity.
Direct figures are hard to come by, but the fee earnings of the top consultancies in the area are at record levels, with 1996 figures 20% ahead of 1995's.
Clare Fuller, head of consultancy at identity management advisers, Bamber Forsyth, found that 55% of the UK's top 100 companies have invested in a major identity development in the past 10 years. Of these, half have chosen an entirely new look, often triggered by a merger or privatisation.
Even companies whose identities seem frozen in time, like IBM, Marks & Spencer or British Steel are often engaged in a process of constant evaluation and tweaking.
For most companies, it is not necessary to spend millions. The design fee will be typically only about 10% of the total cost of an identity programme, according to David Jebb, a design sector management consultant, who reckons that 'at the lower end of the scale you can get a lot done for £15,000'. The bulk of the cost is implementing the new look. Included in BA's £60 million figure is the cost of repainting 300 aeroplanes, as well as cars, uniforms, and printed material. The airline claims to have saved £2 million by preparing some of its planes for the new livery during routine repainting.
Where there is no need for a dramatic unveiling, the cost of implementation can be reduced further by only introducing the new identity as stationery, vehicles and the rest are replaced. British Steel, for example, is paying around £80,000 for a subtle modification to its logo. However, this sum includes four months of research by the consultants, Design House, including a 'visual audit' of how the company appears.
These procedures are important if the designers are to create a visual identity that accurately expresses the reality and aspirations of the company. British Steel's group businesses felt it advantageous to be seen to belong more clearly to the parent company which is becoming a more global player. The designers' response was to modernise British Steel's well-known S logo. Out went the dated and technical-looking, lightweight lettering and black-and-light-blue colouring of the old design. In comes a grey-and-dark-blue colour scheme and a heavier typeface conveying authority and confidence. The names of member businesses appear in a consistent location at an increased distance from the words 'British Steel' and the famous S symbol. The new identity will be phased in over a period of years.
Company literature will come first, with more expensive, longer-term changes later.
British Steel's strategic objective - to have its group businesses more closely identified with the parent - allows the designers to take advantage of the latest technology to create stationery that can be printed centrally and then overprinted with the names of individual businesses.
Identity consultants are unanimous when they say that their work on a company's image only has value when it reflects the underlying reality.
The value companies gain is thus down not only to the quality of the research and design they commission, but also to their frankness in stating their position.
In the weeks after its unveiling, BA's new identity became associated with a bitter industrial dispute with flight and ground crews - especially ironic since one purpose of the cosmopolitan identity was to build an association in customers' minds between the communities BA serves and the community of its own staff.
Both the strike and the new look drew criticism at a stormy shareholders' meeting last July. Virgin Atlantic Airways, meanwhile, took the initiative by announcing that it would adopt the Union flag dropped by BA. With only 20 planes, the Virgin stunt cost just £60,000. It shows that not all companies regard identity exclusively as a strategic issue. 'We felt that British Airways had made a tactical mistake,' says Paul Moore, a Virgin Atlantic spokesman.
It is a short step from modifying a corporate identity in response to consumer demand, as Virgin claims to have done, to handing the whole job over to the public, as EW&SR did. The pre-privatisation rail sector was characterised by highly professional corporate identities which expressed a public service ethos and enjoyed wide public recognition. EW&SR combines four former British Rail freight and parcels businesses acquired by US operator Wisconsin Central. The businesses had been split geographically to introduce an element of competition after privatisation. Wisconsin's strategy was to reunite them, and other businesses such as Railfreight Distribution and National Power's rail division which it is in the process of acquiring, to fight competition on the roads.
As for a new corporate identity: 'We felt we could do it ourselves,' says communications manager Andy Lickfold. 'We're a rail haulier, it's not glitzy up-market stuff. We opened it out to staff and the general public through Rail magazine for someone to design us a logo. At a design house you pay a lot of money for concepts and ideas but there's no ownership.
If a staff member had come up with it there would have been real ownership.' In the event, the winner was a member of the public whose design was given a semblance of professionalism with a colour scheme and application guidelines imported from Wisconsin. Mike Denny of Roundel Design, who created Railfreight's identity, is predictably rather critical of the company's action. 'EW&SR may run a better business than Railfreight because the whole culture has changed,' he admits. 'But the identity doesn't express this change.' Its clearest failing, he adds, is that it does not say what the company does - carry freight - or acknowledge its competitive position versus road hauliers.
But does it matter? There is some evidence to indicate that, particularly in merger situations, it does. 'A strong corporate brand is very important at the time of the merger and in the period immediately afterwards because until you can sort out the internal organisation, the change in corporate identity is the outwardly visible sign that things are happening within,' explains Bruce Haithwaite, corporate identity manager at Royal & Sun Alliance, formed from the merger of Royal Insurance and Sun Alliance in 1996. 'But this quickly needs to be backed up by other visible manifestations of change, new products, a re-statement of your level of service - how soon varies with who you're addressing.'
Other factors too are driving the issue of branding up the corporate agenda. In the pharmaceuticals sector, a trend towards closer patient involvement in prescription decision-making has forced companies such as SmithKline Beecham and Glaxo Wellcome, whose corporate identities have historically been weak, to start using their identities more prominently to endorse their products. In the fast-moving consumer goods sectors, companies such as Nestle Rowntree and Unilever have started giving the corporate identity more prominence in a reaction to consumers' diminishing loyalty to old product brands, while a key aim of Rover's recent identity redesign was to provide an umbrella brand for the group's marques: Rover, MG, Land Rover and Mini. Strong corporate branding also makes it easier for companies to experiment by extending their brands or exploring new areas, as the Virgin Group, now into everything from financial services to cinemas, shows.
Flexibility is the key whether companies are introducing a new identity or merely updating an old one. One way of trying to build in the ability to update and refresh an identity is to create an identity from a kit of parts. BBC2 does this with a family of '2's. Here, the cut of the numeral and some of the colour are constant elements; everything else can vary.
BA is the most spectacular example. The ethnic art on its aeroplane tails is highly diverse, yet each new work must be carefully chosen in order to belong to the set. Both identities have the flexibility to adapt to change over a prolonged period.
But for most companies the traditional approach, with all its shortcomings, remains the safest. At Royal & Sun Alliance, it may take five years for the new identity to permeate throughout the merger organisation. It is possible, perhaps likely, that further merger and acquisition activity will interrupt this process. 'By luck, you can get it right,' says Haithwaite, 'but it would be very difficult to design in the flexibility to accept a further merger.'.