QR National versus Aurizon – what were they thinking?

Last week at the QR National annual meeting, shareholders voted to support the change of the corporation’s name to … wait for it.

Aurizon.

There’s a good article about the craziness of this move at LeadingCompany, where editor Kath Walters explores what they might have been thinking – aided and abetted by yours truly and Michelle Gamble. But I wanted to expand on the topic a bit further.

There’s a long and undistinguished history of sensible corporations – who should know better, trying to go all “next generation” with their names and failing miserably. Philip Morris Company’s switch to Altria is a stand out for me but there are many others.

You can almost predict what the press releases will say. In this case, they say the new name is: “…the logical next step in the company’s transformation to becoming a world-class operator”.

Really! Since when is sacrificing customer and employee goodwill, awareness and boat loads of cash on a name change a logical next step for anything or anyone except the agencies who will add millions to their coffers via the process?

A name change might sound like a great way to hit the reset button and shed what ails you and in some (very rare) cases it is necessary and can work. But all too often it is just a giant distraction that takes years to implement, usually at a far greater than anticipated cost.

Here’s just a few of the things that a name change of this magnitude require:

• new logo
• new identity standards (more usually and incorrectly referred to as brand standards)
• new signs, uniforms, stationery, website, collateral, forms for EVERYTHING AND EVERYONE
• new advertising campaign to tell everyone about the name change, usually accompanied by a new “tagline”
• internal “brand” campaign to get employees “on board” usually accompanied by hats, t-shirts and a fancy brochure

But on top of all that, there are other less obvious costs:

• training to get everyone “on board” with and using the new name and how to answer questions about it
• conversations with partners and other stakeholders about the new name instead of about the opportunity at hand
• general customer and market confusion during the transition period
• distraction from operations and restructure process while the new name is implemented

And here is where my personal “what were they thinking” really kicks in.

Just 18 months ago QR National was announcing a restructure to remain competitive and calling for 3,500 people to take redundancies. Just today it announced 500 more job cuts as part of that process.

For a company so concerned about its profitability and competitiveness, the decision to spend tens of million dollars (and it will be) in real costs and untold more millions in flow-on costs to change what was a perfectly good name beggars belief.

Someone, somewhere was sold a bill of goods. These costs won’t be recouped in increased business or awareness. In fact, awareness will be a casualty for some time, especially given the generic, esoteric made-up style of name.

No one will make a decision to become a customer or an employee because QR National is now Aurizon.

As I noted in the LeadingCompany article:

“You don’t make a name to mean something, your name comes to mean something because of what you make.”

There is nothing, absolutely nothing that would have stopped QR National from building meaning and value under the existing name while at the same time continuing to honour the Queensland Rail heritage and legacy of the company.

It would have been nice if just once an adult in the room had stood up and questioned what was going on. Not questioned what the new name would be – by the time new names are being considered it is too late, bright shiny object syndrome kicks in and otherwise rational people start acting like kids on Christmas morning. But questioned the idea of why a new name was even needed.

I want to hear that story.

I want to hear about the company that thought about changing their name but decided it wasn’t worth it and what they had would be fine as long as they kept the promises they made!

See you next week.

Michel is an independent brand advocate dedicated to helping organisations make promises they can keep and keep the promises they make – with a strong, resilient organisation as the result. She also publishes a blog at michelhogan.com. You can follow Michel on Twitter @michelhogan