Thursday, June 21, 2012

The Price of a Name Change

Can a company change its name and thereby escape a tarnished reputation?
There are many reasons a company can, in good faith, change its name, for example: a reorganization, a radical change in product lines, updating an old-fashioned image, a name that no longer has anything to do with what the company does, a significant geographic change or a major change in its customer base.

But for every company that does change its name in the aforementioned circumstances, there are others that do not and focus, instead, on communicating what is new under the same banner, but with newly minted messages and, sometimes, new communications channels.

So what do you make of a company that has changed its name and logo four times in the last five years? As an outsider looking in, I raise an eyebrow. What are they running away from? Are there behavioral issues with which they no longer want to be identified?

In the case I am thinking of, Blackwater, all of the above suspicions are aroused because in a short period of time, as noted above, the company went from Blackwater USA and Blackwater Worldwide to Xe Services and now Academi.

We all remember the serious and ugly incidents in Iraq that cost Blackwater its license to operate there. The company’s reputation was tarnished as the story gained traction on front pages around the nation. That led to Xe Services. But a few years later, new CEO Ted Wright wanted a new, more “boring” image and changed the company’s name once again, this time to Academi.

Joe Louis, the famous boxer, once said, “You can run, but you can’t hide.” Frequent name changes may be as bad as not changing the name at all, even when it’s called for. In the case of Blackwater and its problematic military encounters, one can understand the motivation to change the name and, to some extent, the services. The change to Xe would have sufficed as long as it was given a proper launch and description with sustained positive promotion.

When you get right down to it, all of this is about behavior. If the company sustains best practices and irreproachable behavior going forward, despite the Blackwater heritage, it has the chance to stand out, whatever it calls itself.

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