Corporate Name Game : Can a Logo Like Unisys Get Respect?
When the chairman of the growing copier company saw the final proposal from the outside consultants, he hated it. They had come up with a new name for his firm, but it was an awful, made-up name--a non-word.
“The chairman was concerned that, as a word, it would be too difficult to pronounce because of its strangeness,” recalled Clive Chajet, chairman of Lippincott & Margulies, the New York consultants that helped develop the name in the early 1960s.
The chairman was won over, however, and the copier company changed its name--to Xerox Corp.
Someday, perhaps, Unisys, USX, Navistar and Trinova--corporate names introduced within the past year--will become, like Xerox, ingrained in the American lexicon.
Someday, perhaps, the original names of Burroughs and Sperry (now Unisys), United States Steel (USX), International Harvester (Navistar) and Libby Owens Ford (Trinova) will be little more than footnotes to business history. People will look back on all the fuss made over the disappearance of such good old names and laugh.
Old Names Retired
But not today. Today, lots of people seem to think those new names are just terrible substitutes for some of the most hallowed, most recognizable names in corporate America.
“The name (Navistar) does not do justice to our good old International Harvester Co., makers of motor trucks all these years,” complained Anthony Trentz, an International Harvester retiree from Waterloo, Iowa, in a letter to Navistar management. “I think we should use a name that would . . . be recognizable by our old customers and owners of IH trucks,” Trentz added.
“Unisys? It sounds like urinalysis, it’s really disgusting,” said Chris Locke, a marketing specialist with a Pittsburgh computer software firm.
“It sounds like the name of a shampoo or a beauty salon,” said Charlotte O’Hanion, a receptionist with Unisys in Atlanta.
Like them or not, however, Unisys, USX, Navistar and Trinova represent the future of corporate naming. In fact, they are just the most visible products of the latest fashion in the business world--the dumping of old, venerable names in favor of new logos and identities that even the developers concede are little more than computer-generated gibberish.
It is a trend that is sweeping away some of America’s best known company names with such speed that a backlash of sorts seems to be emerging among critical stockholders, customers and employees. Even the marketing experts are beginning to worry that the corporate landscape is becoming a little too sterile, too laden with gobbledygook.
“A lot of the new names are very unfortunate,” said Alan Siegel, chairman of Siegel & Gale Inc., the corporate-identity consultant that came up with the much-criticized name USX for U.S. Steel.
“These people should go talk to some English teachers before they come up with these names,” said Martin Friedman, marketing specialist and editor of the New Product News newsletter. “It’s kind of hard to believe they did a lot of research on some of these.”
Some critics even complain that the growing use of computer-generated acronyms and other artificial names reflects the fact that big companies are now run by technocrats with little feeling for the histories of their firms or for the products they make.
No ‘Gut Feeling’
“It is a very sad commentary,” said Eugene Jennings, a widely respected management expert at Michigan State University. “You’ve got a bunch of professional managers running these companies who don’t have a gut feeling for the value of a company’s name and its traditions. It is symptomatic of the fact that we have companies led by executives who have never lived and slept with their products and have no qualms about throwing over the identities that built their companies.”
Others warn that new, artificial names could backfire. They could begin to diminish whatever emotional attachment the public has developed over the years for long-established firms.
“A name change--particularly when a company changes its name to initials like USX--tends to make the company seem a little bit more aloof, a little more estranged,” said Paul Argenti, a professor at the Amos Tuck School of Business at Dartmouth College. He is conducting a study of the impact of name changes on corporations.
In fact, USX’s name has “met with sheer derision” from rank-and-file union workers who are now striking the steelmaker, said Dick Fontana of the United Steelworkers union.
Despite all the criticism, however, corporations are changing their names at a record pace this year, and “identity” experts expect another new record to be set in 1987. At least 950 corporations changed their names in the first nine months of this year, up from about 750 in the equivalent period last year, according to Russell R. Anspach, a principal at Anspach Grossman Portugal Inc., a New York corporate-identity consultant.
What is really significant, however, is that so many large and well known companies are dropping tradition-rich names in favor of artificial ones that give no hint of what they do. At least 32 major corporations listed on the New York Stock Exchange changed their names in the first seven months of this year, compared with 22 in the equivalent period of 1985, according to Argenti of Dartmouth’s Tuck School. Argenti added that he expects a record number of name changes to be made in 1986 among companies traded on the New York exchange.
Many of those big companies are purposefully choosing names unrelated to their businesses. They want to persuade the world that they are shedding ties to troubled manufacturing industries and are becoming streamlined, diversified conglomerates.
U.S. Steel, for instance, now generates more than half of its revenues from oil and gas operations. It changed its name to USX in July because it wanted Wall Street investors to stop thinking of it as a tired old steelmaker.
“This (name change) was a way to tell the financial community that you can’t look at us as just a steel company anymore,” said William Hoffman of USX.
The main driving force behind the name-changing, however, is the merger and acquisition frenzy that has grabbed hold of corporate America. Mergers and acquisitions, and the drastic restructurings that companies frequently undertake to avoid getting swallowed up, are rapidly changing the face of the Fortune 500.
In such transactions, corporations often sell or lose the rights to their old names and logos and sometimes must come up with new ones.
“We sold our name when we sold our farm equipment business, so we had to change,” said John McDonald, marketing manager at Navistar, which announced last January that it was dropping the well known International Harvester name. “But we had a real sense that we were toying with history. International Harvester was a name that had been around for 154 years. We would never have changed if we weren’t forced to.”
Other merged firms just feel they need new identities to go with their transformations.
Firms Dropped Identities
In November, for instance, the newly merged Burroughs and Sperry firms dropped both identities and, with much fanfare, renamed themselves Unisys.
Sweeping change among financial institutions also has led to an abnormally high number of name changes among banks and savings and loan institutions, as they enter new markets and cross state lines for the first time. Deregulation of other industries, such as telecommunications, has spawned dozens of new names. The break-up of the Bell System, for example, was a bonanza to identity consultants, who had to develop new names for seven regional telephone companies.
“The reason there’s so much name-changing going on is that American industry is restructuring at an unprecedented rate,” said New York consultant Chajet. “As companies change their realities, their new realities have to be understood, and sometimes a new name can help.”
Once a company decides to change its name, however, it runs into a sobering obstacle--virtually every real word in the English language has been registered.
“You sit in these meetings like blithering idiots, going over page after page of names, and you realize that the best ones, like General Motors and Boeing, are already taken,” sighs Warren Bimblick, a Libby Owens Ford executive who, in July, helped to change the Toledo, Ohio-based conglomerate’s name to Trinova.
Thus, companies that want new names are forced to make them up, usually with the help of a computer. Computers at the major consulting firms spew out thousands of combinations of roots and stems of real words, and these are reduced to the combinations that form pronounceable “artificial” words that vaguely sound like they might mean something.
A handful of candidates is selected. Then a worldwide search of legal availability and assessments of the words’ graphics potential often reduce the list to two or three finalists. (Burroughs and Sperry conducted an employees’ contest to come up with a new name, but the 31,000 entries were screened by Anspach Grossman Portugal.)
Often, the ultimate choice is determined by the personal preferences of top company executives, outside consultants say. Finally, an advertising campaign announces the new name. The price tag for a corporate name change can go as high as $10 million.
‘Imply Anonymity’
With all the careful research, many of the new names still sound like generic nonsense, critics and industry insiders agree. These new names “imply anonymity and bureaucratization,” complained Stephen A. Greyser, a marketing professor at the Harvard Business School. “How do you begin to tell these companies apart,” Greyser wonders, “when they all have acronyms or initials?”
Some of the top “identity consultants” also are concerned about the generic, “Brand X” nature of so many of the new corporate names.
“We try to resist artificiality, we want real words, but virtually all are taken,” Anspach insisted. “In fact, I generally would prefer to find a way to overcome the problems with a good old name and keep it, if possible, rather than try to develop an all-new identity.”
Chajet adds that, when Chrysler Corp. went through restructuring last year, the auto maker asked Lippincott & Margulies to come up with a name for its newly formed parent company but the consultants insisted that Chrysler keep its old name for its parent.
Chrysler spokeswoman Karen Stewart added that the company considered changing the names of all of its operating units as well as the parent firm but decided against such a move.
Still, an avowed reluctance to kill well known names has not yet led Chajet and other top consultants to download their computers. One of Lippincott & Margulies’ latest products: UNUM. That’s the new name--ballyhooed in advertisements around the country last month--for Union Mutual Life Insurance Co. of Portland, Me.
