Sometimes a major corporate name change can jumpstart a rebrand in a positive direction. Sometimes it doesn’t help at all, and may even hurt. For instance, Philip Morris did little to staunch the long-term decline in cigarette sales by changing its name to Altria about 14 years ago. Meanwhile, around the same time, Andersen Consulting chose Accenture, a moniker that has turned out well, after a court decision severed its ties with other Andersen entities.
Other winning name-change gambits have been Kentucky Fried Chicken’s conversion to KFC beginning more than two decades ago, largely in an effort to get “fried” out of the name as better-for-you concerns began nibbling away at American fast-food consumers, and Datsun’s change to Nissan more than 30 years ago.
In the case of Google, the new name allows the company to establish a brand for its parent corporation that will include broader interests, ranging from self-driven cars to human genomics. Yet Alphabet will retain the Google name for the division that gave the company its start.
For any CEOs who may be discussing the possibility of a name change with your board and executive team, here are 4 circumstances from business website Tuts+ in which such a move might be to your company’s benefit:
1. Change of ownership. This is the least complex reason, especially when it comes to a merger of equals, or when spinning off a division into its own public company.
2. New direction. When a company switches direction, a new name can get all constituents to accept the new path. Think back more than a half-century, for instance, when Haloid Co., a maker of photographic paper, changed its name to Xerox to reflect the company’s futuristic new orientation toward the photocopying process it had invented.
3. Negative associations. Escaping from a name that has become tarnished is a really good reason to change. See the case of Phillip Morris, for instance, whose executives said the point of the change to Altria was “to reduce the drag on the company’s reputation that association with the world’s most famous cigarette maker has caused.” Some airlines have also done it after a crash.
There was the case of security contractor Blackwater Worldwide, which came under scrutiny in the late 2000s after the private company was involved in a 2007 shootout in Iraq that killed 17 Iraquis. Blackwater rebranded as Xe Services; then after being sold and getting new leadership, renamed the company Academi.
4. Freshen up. Sometimes, “there’s nothing wrong with the old name, but [CEOs] might just feel that it needs freshening up or modernizing. This is the reason why consulting firm Booz & Co. renamed itself Strategy& after being bought by PwC.
Regardless of a company’s name, there’s no substitute for good strategy and execution. Even the best name in the world can’t redeem a company that isn’t cutting it.