Google’s creation of its Alphabet parent is a future-looking, ambitious strategy that few others would have the boldness to do. But it’s bold for a reason: creating new challenges for Alphabet to make it a real success.
What Google is doing breaks the normal rules of corporate branding.
The trend today is towards “master brands”: the unification of disparate companies and products under a single strong name-brand, such as Apple or Samsung, GE or IBM. Master brands are clear and efficient. Companies are often prepared to sacrifice substantial brand equity in companies they acquire in order to achieve this powerful clarity and ubiquity.
But Google is gratuitously going the other way. Why?
Google’s success has prompted its leadership to think about how to manage such a massive company and keep it nimble and innovative. This bold brand architecture strategy shouts loudly, about how much innovation is still to come.
If one of the world’s most powerful brands can’t encompass the strategy of the company, the ambition must be huge indeed.
The new organisation strategy did not require a new brand strategy. Google is creating a parent, to manage a family of businesses, to simplify and clarify their role, and give greater transparency to where Google is investing. It could have called that parent Google. It could have brought its different businesses under that master-brand (like, for example, GE, IBM or Nokia do) or kept the asymmetry of having some businesses take the parent name and others not (like, for example, BMW Group, Coca-Cola or TimeWarner). Such a restructuring could potentially be done with or without changing names. Many companies have highly diverse and autonomous divisions under a common brand.
By changing names, Google has put a very big emphasis on how important the strategy is, particularly to Wall Street, but also to potential employees. It’s a move with some clear benefits. It frees up multiple brands to win on their own innovation agendas. It creates visibility for some very large businesses potentially that may be obscured today by the associations people have with Google.
It helps tell the corporate growth story.
But any structural move away from a master brand also creates complexity and potential walls to be managed. Will Alphabet, not Google, now talk to Washington and Brussels? How will they ensure it benefits from the same goodwill that Google earns through the way we use it? Will employees feel they work for Alphabet, Google or its sister brands? How will they ensure these brands provide the same aura that Google has as an employer?
And the more successfully these attributes accrue to Alphabet, will the Google brand be just "one of the parts" of an ambitious innovation machine? Resolving these tensions is what will make the bold move pay off.