UK: STRATEGIC OBJECTIVES ARE THE NAME OF THE GAME. - The do's and don'ts of choosing an effective company name.

Last Updated: 31 Aug 2010

The do's and don'ts of choosing an effective company name.

So farewell, then, Bowater. And a big welcome to Rexam. The company had to change its name for the sake of freedom of action in the Americas, where 'Bowater' is owned by a quite separate US business - a product of the demerger of 11 years ago. But why, after extensive deliberation and consultation, did the board settle on anything as meaningless as Rexam? On the other hand, would another name have been any better? Indeed, does it matter what a company is called?

Yes, it does, believes Wally Olins, chairman of the designers and image-makers Wolff Olins. Businesses often grow big in spite of being called dreadful things, he concedes: like Volkswagen (one of his own clients) whose name still reeks of Hitlerism even after 50 years. 'But I'm not underrating the importance of a name,' says Olins. Changing names is always a serious matter, and not only because it's apt to be expensive. The £2.5 million that Rexam is reportedly spending on its label and livery will soon be water under the bridge. Far more important is the likelihood that the company will have to live with its choice for decades to come. 'If you've got to change', says Olins, 'you might as well get it right.' But how to be sure of 'getting it right'? The first rule, according to John Murphy, chairman of corporate identity specialists Interbrand, is that the name should match the company's strategic aims - both now and in the future. British Oxygen Co would never have been so called had its directors been able to foresee the growing importance of other gases, or the relative decline of the UK business. A name must be available in every market - a considerable limitation, Murphy points out. It should also be pronounceable - and otherwise acceptable - in foreign languages, even if the firm intends to do no more than exhibit abroad. So 'Giftware', for example, is best avoided: in Germany Gift is a poison.

In general, though, it's better to be focused than fuzzy. Anglo United covers a huge range of possibilities, yet it's a fair bet that a lot of people in industry can't relate the name of this troubled public company to coal distribution or the Falkland Islands. Years ago, a combination of embarrassment (at being identified with condoms) and hubris, plus a handful of diversifications, caused London Rubber Company to take the name London International Group instead. Admittedly this is not what brought the company down, but why did the board want a moniker that would have suited a group of conference centres? As one observer remarks, 'you know where you are with London Brick' - or with Hanson Brick.

'International' is beginning to look dated, but 'Euro-' is very much in fashion. This will age too, Olins predicts, just as 'Imperial' and 'Colonial' have done. 'Imperial Chemical Industries is the wrong sort of branding for a global company,' opines Tarquin Henderson, head of communications strategy at PA Consulting Group - happily ICI is invariably known by its initials. These days every thrusting company with some claim to technology calls itself '-otech'; or, if it has a foot in the communications world, '-com' or '-tel' or '-cell'. Such names are a form of corporate camouflage, says Murphy: 'They lack memorability.' A company should emphasise its personality, he argues, not its membership of a club.

Until recently, any British business wanting to break with the past simply reduced itself (legally and officially, unlike ICI) to the initials by which it was known anyway. Hence BAT, BBA, BET, BOC, BTR. The result was equally bland and characterless - Murphy refers disparagingly to 'initial soup'. But the size of these companies ensured that they would never pass unnoticed. (Whether the transformation of GKN really demanded the dumping of its distinguished founders, Guest and Keen, is a different matter.) Less famous businesses might think twice before opting for the anonymity of initials. Under attack by Germany's Gehe, AAH had no army of individual shareholders to help its defences. David Norman, chairman of the PR and recruitment group BNB Resources, is undismayed, however. BNB is a holding - not a trading - company, he points out: 'The institutional shareholders who own us seem to recognise our name.' The favoured course right now is to follow the example of Exxon and invent a word. Unlike genuine coinages (Zeneca, Cordiant), Rexam is open to explanation: the company's US packaging subsidiary is Rexham with an 'h'. But that doesn't give the name much redolence in Britain, let alone France or Belgium. Called in to advise, Interbrand came up with several alternatives, but Murphy admits, perhaps diplomatically, that Rexam - the client's own invention - was 'the best solution for the market'.

Transparently, names do matter. The real question is: How much? And the answer to that depends on the circumstances. A few years ago, having ventured into healthcare, security and the provision of tropical plants, Rentokil Group very sensibly retained creative consultants and cast round for a different tag without the poisonous associations of pest control. 'We came to the conclusion', says chief executive Clive Thompson, 'that it was better to make the most of Rentokil's reputation for service - even if it was not a name we would have chosen had we been starting all over again.'.

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