Satyam Computer Services Ltd is mulling a change of name. The exercise to find a new name has been kicked off in the company as the present name has a serious brand problem,key officials feel.
Some key clients of Satyam,especially with international operations,are learnt to have strongly advised the company to change its name as well its logo. The coming of a new CEO and CFO will hasten the process of selecting a new identity for the IT company,say these sources. A makeover of the company will also need additional funding. The other issues will be the changes that would need to be made in the listing of the company in the stock exchanges in India and abroad.
Advertisement industry experts said the change would be useful. The company should immediately look for an image makeover, said a leading Mumbai-based brand consultant. According to Madison World chairman Sam Balsara,the need of the hour is communication with customers,investors,employees and media. The corner stone of this communication must be complete disclosure and transparency. There should be a combination of print advertising and use of competent PR strategy, he explained.
Most of the brand damage for the company has come from the jokes doing the rounds about Satyam meaning truth. Clients are now worried that just mentioning the name Satyam in their official documents could hit their credibility as well. If not that,we will have to answer some more questions than are usually asked, says a business development executive with a leading global database service provider.
This makes it an interesting development as some of Satyams clients are trying to hand-hold the troubled company at this juncture by continuing with ongoing projects. However,the status of fresh projects coming from new and existing clientele is not yet known.
The brand name issue has haunted the company ,till recently the fourth by turnover in the IT pecking order in India. Its erstwhile founder chairman Ramalinga Raju was keen on the brand name Satyam and the logo to make it unique since 1985. But it reversed the name to use for his realty ventureMaytas.
A survey carried out at the World Economic Forum at Davos in 2004 found that corporate brand reputation outranks financial performance as most important measure of success. The Voice of the Leaders Survey,released by the World Economic Forum and Fleishman-Hillard International Communications,quoted John Graham,Fleishman-Hillards chairman and CEO,as saying,The reputation of a company and its products used to be regarded as an intangible asset that was very hard to quantify Now it is clear that reputation is a vital component of a companys value and it is becoming a key measure of a companys performance. Three-fifths (59%) of the survey respondents estimated that corporate brand or reputation represents more than 40% of a companys market capitalisation. And more than 77% believed that reputation had become more important over the last two years. Clearly,the recent wave of corporate scandals has made CEOs reappraise the importance they attach to their corporate brand, the survey quoted Graham. One of the results of this reappraisal is that business leaders no longer regard traditional financial measures as the ultimate indicator of a companys success.
As much as 92% of corporate survey respondents (103 leaders) perceived reputation as important to their corporate strategy and 24% rated corporate reputation as the most important measure of success. That answer was followed by profitability (17%),return on investment (13%),sustainability (6%),and stock market performance (5%). Survey respondents named only the quality of products or services (27%) more often than corporate reputation as the leading success measure.
There are precedents. Andersen Consulting,which split from Arthur Andersen in 1989 to become the largest consulting firm in the world changed its name after an arbitration stricture in 2001. After the Enron debacle that lasted from 2001 end to 2002,in which Arthur Andersen was implicated,Andersen Consulting was safe in its new avatar as Accenture and did not see its business being ruined. The company says it spent about $175 million in marketing the new name.