Our analysis showed that nations led by females outperform, on average, their male-led counterparts across all of the 11 metrics covered by the Global Soft Power Index, with the most significant lead for Governance, COVID-19 handling, Business and Trade, and International Relations.

Looking at a more granular level, of the 34 statements that the General public audiences were asked about, female-led nations excel in all but three metrics. Female-led nations have the most significant lead on measures that relate to safety, security, and stability. Attributes that male-led nations score better than female-led nations are influential in arts and entertainment, food the world loves, and perceptions of being fun - all arguably factors that are driven by the nation’s longstanding culture rather than governance and leadership.

During a year of disruption, chaos, and uncertainty, notably, a select few female leaders have been commended for their stable leadership and empathic approach with Angela Merkel and Jacinda Ardern also navigating their nations to be the best perceived at their handling of COVID-19 among the specialists and general public audiences, respectively.

The attributes that female-led nations most significantly outperform male-led nations on are widely regarded as attributes that lead to long-term success. If we take a closer look, we can see that most of these variables are related to attributes in which women are considered to excel by political leaders.

According to Dee Dee Myers (2009), former White House Press Secretary, political leaders, and voters consider that women leaders excel at “caretaking skills”, “team-building”, and “motivating others”, and they “tend to be more pragmatic and results-oriented (…) less consumed by the constant who´s-up-and-who´s-down scorekeeping aspect of the political game.”¹ Women focus less on the swings of short-term popularity, and more on the endgame.

This long-term orientation, together with their ability to compromise, listen, and work across party lines, are key to lead effectively in the current situation in which polarization, partisanship, and divisive narratives are stalling progress.

These gender traits seem to be particularly effective in leadership during a crisis. Zenger and Folkman (2020) explain that women leaders face a “glass cliff” when they are advancing towards the highest levels of an organisation: “when a company is in trouble, a female leader is put in charge to save it.”² According to these researchers, during a crisis, we look at leaders that show honesty, integrity, adaptability, security, collaboration, and empathy. These are the traits that are more often being displayed by women. As Kofi Annan put it, “for generations, women have served as peace educators, both in their families and in their societies. They have proved instrumental in building bridges rather than walls.”

This unifying drive, together with the transformational leadership style that is associated with women leaders, provides both the strength and flexibility that are required to thrive in extremely volatile and uncertain contexts and is evidenced in this year’s Global Soft Power Index survey as the general public and specialists in different fields are recognising this.

Brand Finance Global Soft Power Index 2021

Download the full report to learn more about top soft power nations in 2021. 

Even when sharing the same objective, corporate brands have responded and supported the Black Lives Matter movement in very different ways. Some, more focused on statements and spots; others, on internal recruitment and training initiatives related to unconscious bias; and, a third group, on social action addressed at education or through support of black-owned businesses.

But do these initiatives and investments have a significant impact on brand value? Which specific measures related to inclusion and diversity seem to resonate the most with key stakeholders? Which specific initiatives, training related, community-related or communication-related seem to drive the most significant uplift in terms of brand value?

What Is The Impact?

In order to answer these questions, Brand Finance conducted an analysis of our database of more of 5,000 brands, correlating perceived “Inclusion and Diversity” with the brand equity metrics in our brand strength assessment model - the Brand Strength Index (BSI).

Brand equity metrics in the BSI include amongst others: Consideration, Familiarity, Preference, Recommendation, Employee Score, Analyst Recommendation, Credit Rating, CSR Scores, and Reputation. Scores for each of these inputs are then weighted and benchmarked within a competitive set for a score out of 100.

Read our article Rigour and Structure in Brand Evaluation, if you are interested in learning more about how we evaluate the strength of brands.

The employee score has three subcategories: 'Compensation & Benefits', 'Diversity & Labour Rights', 'Training, Health and Safety'. We analysed which one of them has a stronger correlation with higher Brand Strength Index scores. We found that perceived diversity and inclusion by the general public shows a correlation of 0.17 with overall Brand Strength Index (BSI) scores globally.

If we look at this correlation by geography, the importance of “Diversity” as a driver of brand strength is higher in the US (0.15), compared to Europe (0.11). In fact, in the US during 2019 diversity was a more relevant driver of brand strength than compensation or training . This might be explained by the fact that the treatment of minorities has been at the forefront of public and policital discourse.

In 2012, The Conference Board ¹ conducted a multi-year study that compared brand strength and value, as measured by Brand Finance, and sustainability performance, as measured by CSRHub². The analysis revealed a strong connection between sustainability performance and brand value, but also, that the main aspects of sustainability that explained the overall correlation were, in this order:

1. “Training, Health & Safety” with a correlation of 0.18
2. “Compensation & Benefits” with a correlation of 0.17
3. “Diversity and Labour Rights”, with a correlation of 0.15

Diversity and Inclusion have become increasingly important for different stakeholders globally. The recent social conflicts sparked by the police brutality in the US, have renewed the relevance of this issue. This context, linked to the increasing demand for transparency and reporting, imposes a new mandate for global brands: design clear inclusion and diversity policies, implement them consistently, track their adoption, communicate them internally and externally in compelling, culturally sensitive and engaging ways, and report the impact of all these initiatives.

For this, it is key to monitor sentiment. We have a global market research database that tracks perceived inclusion and diversity, among other sustainability aspects, paired with brand investment. We use it to help corporations and brands make informed decisions about the impact their inclusion and diversity initiatives have on their own brand strength, the competitive landscape, and key stakeholders.

4 Ways Brands Are Building Their Perceptions Around Inclusion and Diversity

Brands have responded in a myriad of ways to the Black Lives Matter movement, with actions that are meant to “address the problem from within” or actions that are meant to “influence others”. Within the first group, we find brand management and talent management initiatives. Within the second group, we find communications and broader society driven initiatives which are meant to address the issue in society through influence or action. Let’s look at specific examples:

1. Communication-driven initiatives: 

Many companies have published statements to express solidarity with the black community, including: Twitter, Netflix, Disney, Nike, Adidas, Amazon, Spotify, Microsoft and Accenture. P&G has launched a spot, “The Choice” which implores white Americans to do more against racism. The main criticism to all these “statements” or communication initiatives is that they do little to change the realities of those who are suffering from systemic racism.

2. Society-oriented initiatives: 

Airbnb, Adidas, Apple, Amazon, Coca-Cola, Facebook, Nike, Uber, Warby Parker and YouTube announced during this month they will be donating significant amounts to organisations and initiatives fighting inequality and systemic racism, or have committed to award grants to black-owned businesses. These initiatives have been criticized by some experts as “corporate PR, because it transfers the responsibility of solving the problem to outside organisations” ³.

Therefore, many brands have also focused on the internal organisation. Ben & Jerry’s is mixing, as usual, brand-driven initiatives with social impact. The company names their products and their narratives around specific social or political causes. In 2019, in partnership with Advancement Project, they launched a new flavour called “Justice ReMix’d” that hoped to support grassroots organisations fighting for justice all over the country and ensuring that “everyone enjoys the sweet taste of justice.”

Some brands are focusing on a key issue too, education. Adidas announced that it would cover 50 annual university scholarships for outstanding black students over the next five years. Nike seemed to suggest that part of the $40 million it will invest over the next four years to support social justice, will also be funnelled to education initiatives.

Tomás Bulat, an Argentinian economist, on said “when you are born poor, studying is the greatest act of rebellion against the system. Knowledge breaks the chains of slavery.” ⁴ Spot on. Investing in the education of marginalised sectors of society, through scholarships, funding and grants, is one of the main initiatives a global corporation can undertake to achieve social justice in the long run.

3. Brand management-driven initiatives: 

Within these, we find two specific clusters, some companies are conducting reviews of their brand identities or brand portfolios to evolve or remove some “brands with racist origins”, as well as some brands that have reviewed their association with social media platforms.

In the first cluster, we find brands like PepsiCo, which is now removing the Aunt Jemima brand, originated on a racial stereotype. Mars has decided to evolve its Uncle Ben´s brand for similar reasons. This type of review has reached Latin American countries too, with retailer Alicorp changing the name and image of its iconic brand, “Negrita” (little black in Spanish). The objective, in all these cases, is that the brand identity and portfolio reflect the corporate values and changing consumer expectations around equality, equity and social justice.

Some brands are looking for “partners that share corporate views and values on this subject. Patagonia has recently announced they will pull ads from Facebook and Instagram as part of the Stop Hate for Profit campaign, which asks all businesses to “stand in solidarity with [America´s] most deeply held values of freedom, equality and justice and not advertise on Facebook´s services in July.” ⁵ The Stop Hate for Profit Campaign is a recently formed coalition that alleges that Facebook is “complicit in spreading disinformation and fomenting fear and hatred.”

4. Talent management-driven initiatives: 

Nike CEO, John Donahoe, explained in an internal memo to employees that “while we strive to help shape a better society, our most important priority is to get our own house in order.” The value of your corporate brand is at risk if your internal brand is weak and lacks credibility. It’s like a pyramid brand: big at the top but sustained by a “lie”.

Therefore, as Donahoe mentioned, it is of utmost importance to work on your internal brand as hard as you work on your corporate and product brand. This was also understood by Adidas, that announced a series of talent-related measures, promising to hire black and Latino professionals for 30% of all new positions in the US.

How are stakeholders reacting to these initiatives?

Morning Consult, a global data intelligence consultancy, conducted a survey between May 31^st and June 1^st 2020, among 1,990 U.S. adults, to explore reactions towards companies actions in the context of the current protest and demonstrations in US cities. Based on their research output, we can conclude:

• The single action that has most impact on favourability is to “set up a fund to support small businesses or retailers impacted by the looting” (with 56% of respondents seeing companies doing this more favourably, 7% less favourably and 36% being indifferent).
• All communications-related actions have far less impact on the percentage of people that see the company more favourably (official statements supporting protesters, police or both).
• The percentage of people that state that companies
  around the subject had no impact either way range from 46% to 63%

Actions speak louder than words. Action to support the community shows more impact than official statements. Mostly, people are neutral to BLM statements. Why? Probably, because words without action feel meaningless to many.

Reactions to Brands Who Champion Diversity Inclusion

We wanted to use our database and research capabilities to explore the specific reactions of specialist audiences to diversity and inclusion initiatives taken by some of the “champions” in the field.

We selected three brands, one in the B2B space and two in the B2C space, and asked a specialist audience of 50 respondents, what they thought about Nike, Ben & Jerry’s, and Accenture`s inclusion and diversity initiatives. Selecting these three brands was no accident. All three have a strong reputation for investing in diversity and inclusion, and use this as a cornerstone of their marketing strategies.

We asked our respondents to mention the top 3 brands that came to their minds when they thought about inclusion and diversity before we exposed them to any names. The results are not surprising: more than half of the sample mentioned Nike (probably due to their famous Kaepernick campaign last year), followed by Dove (probably due to their long-running Real Beauty campaign), Google (despite the criticism the technology giant has faced in this regard) and H&M (which following the controversy after releasing an ad with a black child wearing a T-shirt with the inscription “coolest monkey in the jungle”.

Here you can see a word cloud with the results:

Out of these three champions, the most admired overall was Nike, followed by Ben & Jerry`s, then Accenture. The admiration for Nike and Ben & Jerry’s was higher in the female segment. Surprisingly, those respondents that categorise themselves as conservative or progressive, showed higher and similar levels of admiration for these brands than those that “sit on the fence”, showing that there might be an audience that is rather neutral to these issues (mostly young women). Ben & Jerry’s does better in terms of admiration among Gen Z (25 or younger) and Gen X (45 and older) versus Millennials, but they trail Nike with all audiences.

Before exposing the sample to selected initiatives by these three brands, we asked them how familiar they were with communications actions launched recently around diversity and inclusion. Levels of familiarity were highest for Nike, followed by Ben & Jerry’s. This could be explained by two factors: Nike’s massive investment in advertising and marketing, and the nature of their communications, mostly based on above the line initiatives vs. Ben & Jerry’s more niche, “grassroots” type of initiatives.

Nike fared best in terms of perceived authenticity and consistency, especially among those defining themselves as progressive. For everyone who knows the history and values of Ben & Jerry’s - the “honest brand” of Generation X - this came as a surprise. One hypothesis is that the tone and narrative of Nike have been, in the last month, more positive and more focused on what unites us rather than on actions and events contributing to the growing divide.

The narrative of Ben & Jerry’s has been riskier, choosing “politically charged” words like “dismantling” and “white supremacy”. This may hint that the “activist role” for brands implies taking a stand, but not using the same tone and tactics often employed in political circles: uniting rather than dividing and fuelling the conflict (even if inadvertently), showing direction by showing action rather than words or symbolic micro-actions, and putting people above their own interest and agenda.

When it comes to judgement on how much all of these initiatives would promote actual change, again, Nike fares best. All of these findings, indicate a strong correlation between consistent, well supported and executed campaigns around the subject, the creation of familiarity and a halo effect on the rest of the indicators.

But, how does all this translate into actual purchase behaviour? How important are inclusion and diversity when it comes to considering a purchase in these categories? When we compare inclusion and diversity considerations with price and quality, the latter appears a more of an important factor for most consumers. This is consistent with findings of other reputation studies, which show that product & services are the main drivers of reputation. Still, diversity and inclusion, as well as sustainability, have become part of the agenda, and their importance for different stakeholders is increasing.

Final Thoughts

Arguably, the most important outcome of this social movement is that multinationals have finally begun to take this subject seriously, incorporating inclusion and diversity into their management philosophy.

This situation and the varying reactions of stakeholders towards brand responses, are showing us that, at this juncture and when it comes to inclusion and diversity: facts are more important than words, the way you take a stand is as important as taking a stand – exemplifying unity and not agitation, and that you really care about people investing in what is important to them (black businesses, black education) rather in what is a purely cosmetic action. Brands whose actions are authentic and unifying will see disproportionate improvement in Brand Strength.

Winston Churchill once said, “the farther back you can look, the farther forward you are likely to see.” There are quite a few lessons buried in multiple crises throughout the history we should be aware of to avoid repeating the same mistakes that brands made in the past. 

Brand Investment And Brand Strength In Times of Crises

During times of crisis, many companies resort to systematic marketing spend cuts, without considering long-term consequences of this action. 

Current pandemic is no exception. According to a recent IAB survey¹, “nearly a quarter (24%) of respondents have paused all advertising spend for the rest of Q1 & Q2.” 

However, what we are really interested in exploring is why companies systematically cut their investment in communications in times of crisis. There may be a few theories, but I think there are five key reasons that stand out: 

• Because it´s easier to cut marketing budgets than firing people, for example
• Because brands are not considered as long-term assets that require continuous investment to protect their value
• Because it is wrongly believed that, after “going dark”, marketing investment can be increased again without any long-term harm. In reality, the problem is that the long-term effect that these cuts can have is not understood
• Because, generally, the key communication performance metrics (if any used at all) are not linked to value creation. If the metrics of the marketing measurement system do not explain investment profitability, it is very difficult to justify why it should be maintained in times of crisis at all. 

Academic and empirical evidence shows that crises represent ideal time to take advantage of opportunities in a market in which most competitors are cutting back.  

Peter Field (2008)² analyzed 880 companies from the IPA database and showed that brands that increase their Share Of Voice (during recessions and boom periods) are more likely to increase their market share. The short-term benefits of reducing budgets in a recession were offset by the drop in long-term profitability (which was most acute after a third year of reduction). 

But while some companies cut down on their marketing spend, others have historically gone in for the kill and took the opportunity to “steal market share” during financial crises. A.G. Lafley, the ex CEO of Procter & Gamble, used to say that at P&G they had "a philosophy and a strategy: when times are tough, we build market share."  

The Drum has recently reported that P&G has committed to continue investing in communications to retain the “mental availability” of its brands ³. Increased media consumption creates an opportunity to “double down” on brand visibility.  

So, the first lesson learned from past crises: maintaining or increasing advertising investment during a recession, increases market share during the recession and the profitability in the long run. 

Brand Strength and Business Performance

We conducted an analysis of the brands that had been most affected during the 2008 crisis in terms of negative impact and brand value (see Figure 1).  

Within these sectors, not all brands performed equally. Our analysis reveals that during past crises, stronger brands are consistent winners during a recession (see Figure 2).  

In addition to measuring overall brand value and understanding brand resilience through crises, we also evaluated the relative strength of brands, based on factors such as marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value. We monitored brand value fluctuations during the three major economic downturns experienced in 2009, 2012, and 2016.  

The key takeaway of this long-term analysis is that strong brands perform better during crises, across all sectors.  

Conclusion 

In short, investing in communication (understood in a broad sense, not only as an advertising investment) is profitable. Although it may negatively impact profitability in the short term, it increases brand strength, which will bring more profits in the long run.  

As The Economist recommended back in the 2008 crisis, "it is time to go in for the kill." 

Managing Your Brand in a Crisis 101
How Has COVID-19 Impacted Brand Value and What Can You Do About It?
5 Ways to Manage Your Brand In Times Of Crisis
Managing Your Brand in Times of Crisis: Lessons From the Past
How Brands Can Overcome Unprecedented Crises

There is always a risk of crisis. Although we are writing this piece during an unprecedented and unforeseen pandemic (November 2020), which has affected all geographies and sectors, brand crises occur very frequently. It is almost an inherent part of a brand's destiny that it will, at some point, go through a unique crisis of its own. So the questions are: what should, and shouldn't you do in times of crisis?

In this piece, we are going to cover the five most common strategies taken by brands to mitigate the risk of brand value and strength loss in times of crisis with the pandemic as a backdrop. However, it should go without saying, that fluency in these strategies will be a useful tool for unforeseen crises lurking on the horizon.

Has the pandemic asked hard questions of your brand? See our consulting services to find out more about what we do to help brands overcome crises.

1. Avoid

Many brands have gone dark during this period out of fear to appear opportunistic. This tactic rarely works. Avoiding investing in marketing is not the solution. What companies should do instead is consider how to invest in the future strategically.

The answer is: invest in the brand in ways that will improve the life of your clients or the situation for society in general. This feeds nicely into the next brand risk management strategy, “improving.”

2. Improve

Brands are faced with the choice between doing or saying during times of crisis.

Some brands have used advertising to amplify specific actions undertaken to benefit clients in these tough times. Ford adapted their "Built Tough" tagline for the pandemic with their “Built for right now” campaign by Wieden + Kennedy.

Some companies have understood brand investment in a much broader sense, focusing on social action more than words. There are many examples of these brands, some that have stood out to us include: Armani, Inditex, Dyson, LVMH, Seat.

These companies sought to improve their brand perception by converting their plants to produce PPE or ventilators, and in some cases offering their logistic assets to help the government transport medical supplies when most needed. social action at this juncture as paid off in terms of value creation.

So, one of the main risk management strategies for brands now is answering the question: How to generate positive impact? And the answer is: placing action over words.

In our article, How Brands Can Overcome Unprecedented Crises, our CEO, David Haigh explores how economic downturns are fertile ground for brand growth.

3. Adjust

A lot of brand directors and leaders equate brand investment with advertising investment, and this reduces their options to make a significant impact on brand value, and society in general.

There are good examples of brands that are innovating and implementing short-term changes to reduce the impact of the crisis and increase the earnings post-events, by actioning other elements of the marketing mix: either adjusting their offer, prices, or distribution in creative and innovative ways.

4. Retain

Brands can also absorb the loss now, with the view of compensating for it later. The expectation from stakeholders is that brands do everything they can to protect the well-being and financial security of their employees and their suppliers, even if it means suffering big financial losses until the pandemic ends.

This is exactly what many of the most valuable brands have done: they have looked to protect their employees, long before governments confined them to their homes, putting their health above any economic consideration.

Twitter, EY or bank Santander were among the first to react and implemented home office or "smart working" in an effort to protect the health of their employees. Patagonia closed all its stores voluntarily and promised to continue paying the wages to its employees despite the losses in which it will incur.

All of these brands chose to put their employees above profits. Their decision will definitely affect short-term profitability but will strengthen their brands and reputation, presenting them with a recipe for success.

5. Share

Redistribute the burden of the crisis. Why is this relevant? Because being a leader is a complex role, which entails the sort of protection that extends beyond employees to encompass the broader society.

In the last few months, we have witnessed how public-private collaboration is key to mitigating the effects of the health, social, and economic crisis we are living in.

The French luxury group, LVMH, has dedicated its production plants for perfume and cosmetic brands in France to manufacture large quantities of hand sanitizers, which will be donated to hospitals. Armani decided to reconvert part of its production capacity to put together the PPE required to support medical staff during the crisis.

In an industry that has been among the hardest hit by the crisis, many other Italian fashion brands have joined forces to produce millions of masks. In Spain, Santander Bank and BBVA have made financial donations to acquire medical equipment. The fashion giant, Inditex, announced it would deploy part of its productive assets and logistic network to making and facilitating the acquisition of medical supplies.

Many of these corporate and public actions and initiatives are already contributing to generating a reputation for those brands that have acted in a quick, honest, and compelling fashion.

Leadership and Brand Value

These brands understood that leadership in the 21st century means more than simply possessing economic power and revolves around the ability to have a positive impact on the world. 

Leadership today relies on collaboration, rather than unilateral decisions based on short-termism and a thin concept of "value creation", which fails to account for the impact on the wider society.

This is the opportunity that this pandemic represents for brands in general: to generate value through proactive collaboration and cooperation with other relevant players and stakeholders. The collective effort in these unprecedented times will reward participating brands with improved reputation and long-term profitability.

Managing Your Brand in a Crisis 101
How Has COVID-19 Impacted Brand Value and What Can You Do About It?
5 Ways to Manage Your Brand In Times Of Crisis
Managing Your Brand in Times of Crisis: Lessons From the Past
How Brands Can Overcome Unprecedented Crises

As the pandemic has triggered market crashes across the globe, we have estimated the brand value at risk for the world’s most valuable brands.

We assessed the impact of COVID-19 based on the effect of the outbreak on enterprise value, compared to what it was on 1^st January 2020. In Q1, the estimated brand value at risk was US$1 trillion given the strict lockdowns that have affected economic activity across the board. But since then, many sectors have bounced back, painting a more complex picture.  

The risks are not uniform for all sectors and all brands. Usually, there are two types of risks that affect brands during a crisis: 

• Sectorial: the range of impact depends on the type of product, service, or category where the brand operates 
• Own: the impact also depends on the company’s own culture, appetite for risk, orientation to innovation, and flexibility.

Sectorial Risk 

Brand Finance estimates the likely impact on brand value for each sector based on the impact of the pandemic on enterprise value observed in the period between January 2020 and September 2020. The sectors can be classified into five categories: 

• High positive impact
• Moderate positive impact
• Limited impact
• Moderate negative impact
• High negative impact

Own Risk 

Within categories and sectors, not all brands are impacted in the same way. This depends on their 'Own Risk'. The real differentiator is in how brands have responded to this crisis.  

We have noted three distinct ways that impacted brands have responded:

Thriving 

Some companies are now thriving and are well placed to cater to our changing lifestyles, but how they act now can shape future trajectory. Zoom, Vodafone, and Amazon are good examples of brands that fit into this category.

But all of them are facing their own challenges. Zoom due to privacy concerns, Vodafone for raising prices in the UK in the middle of lockdown, and Amazon are faced with trade union problems in the US, Spain, and Italy.

These reputational issues must be tackled for Amazon to emerge out of the crisis as a stronger brand and fully optimise its long-term profitability. The surge will not last forever, and these examples illustrate that managing brand reputation through scrutiny is key to maximize long-term profitability.

Striving 

A second group of brands is striving, adapting and reacting rapidly, either by adapting business plans, products, and services to maximize changing opportunities and stay current, or adapting the production to cater for urgent social needs.

For example, Cabify has launched a courier service on top of its traditional people transportation services. Similarly, LVMH decided in mid-March, that it would dedicate three of its perfume manufacturing premises to produce hand sanitizer. ¹

Surviving 

A third group of companies is merely surviving, as they are unable to transition online or have come to a standstill. Hotel and airline brands could lose up to 20% of their brand values and are good examples of companies in this third cluster

How To Mitigate The Impact Of The Pandemic

There is no universal recipe, but some ingredients must always be present in our "crisis mix": 

1. Keep investing in communications but avoid meaningless messages. Find the right content and tone. It is not about how much you invest, but how you invest.  
2. Consider how your brand actions will improve the lives of stakeholders. Build brand reputation, not campaigns.  
3. Adjust all the elements of your “marketing mix” and not just your promotion. Ask yourself what you can do to improve the lives of your customers.  
4. Consider whether taking short-term losses can generate long-term profitability. In particular, when it comes to protecting employees.  
5. Consider how you can collaborate with other stakeholders and share your resources to alleviate the impact of the pandemic in your community. Today, brands are expected to provide collaboration, protection, and security.

To manage the aforementioned risks, metrics linked to the creation of brand value must be measured and monitored. But measuring requires a clear vision. So, the question every smart, committed brand leader should be asking now is: where do we want to be in 2021? 

Managing Your Brand in a Crisis 101
How Has COVID-19 Impacted Brand Value and What Can You Do About It?
5 Ways to Manage Your Brand In Times Of Crisis
Managing Your Brand in Times of Crisis: Lessons From the Past
How Brands Can Overcome Unprecedented Crises

A lot has been written about how female leaders have managed the pandemic better than their male counterparts.

Most analyses have focused on proving this link, without trying to identify the causes of the difference in outcomes and their implication for the future of political leadership. Given our extensive Global Soft Power Index database, we set out to answer what we consider the most important question: why do female leaders seem to be more successful in facing the pandemic?  

To conduct this analysis, we identified all the female-led countries in our database. Only eight countries are led by women: Germany, Switzerland, Belgium, Denmark, Norway, New Zealand, Bangladesh, and Myanmar. We then identified the pillars and attributes in which these countries scored higher than average, as well as their impact on the country´s overall influence.

We then conducted an extensive review of the literature on the traits and impact of female leadership, to further investigate these results.

This article relates to the findings of Brand Finance's Global Soft Power Index. See the full index here.

“The Future is Female”

One of the most popular slogans used by feminist leaders is “the future is female”. While this phrase originated in New York in the 70s, it has since been revived by activists, influencers, and political leaders alike. Musician and activist, Madame Gandhi, recently released a song titled after the slogan, and Hillary Clinton famously declared that “the future is female” in her 2017 Makers Conference.

Despite the volume of conversation around the subject, there are only 24 female CEOs within Fortune 500 companies, which is down from 32 the previous year.

Out of these women, only four feature in our ranking of the top 100 brand guardians (CEOs of the world's most valuable brands).

See the full Brand Guardian ranking here: 2020 Brand Guardianship Index.

That being said, the world’s best brand guardian was Marillyn Hewson, CEO of Lockheed Martin. Also generally, the quality of female leadership is also very high. On average the 4 female CEOs in the ranking perform much better on ‘Net Positive Coverage’ and ‘Average Dividends per Share’, with a lead of 3.5 points out of 10 ahead of their male counterparts.  

The numbers don't lie. Women are still drastically underrepresented in leadership positions. The sad truth is a phrase coined in the 70s - about the future - still applies fifty years later.

So when we are analysing female leadership, we can not forget that we are still operating within a small sample. Though we live in the 'future', we are still many years away from leadership roles adequately reflecting the diversity of western democratic society.

Reviewing the Literature on Female Leadership

From our own analysis, it is clear that women leaders, although far outnumbered by their male counterparts are linked with higher performance. However, this is only one study of many.

Our review of existing literature on female leadership found that there are three types of research that are typically conducted which seek to prove: 

1. The link between female leadership and successful financial outcomes.
2. That traits of female leadership lead to better results.
3. That female leadership style (often coined as “compassionate leadership” or “cautious leadership”) and traits are preferred by the general population

The link between female leadership and successful financial outcomes

In 2018, Nordea conducted a study to discover if diversity paid off for shareholders. While it could not prove the link between a larger share of female leaders and higher returns, it showed a correlation with lower volatility in returns ¹.  

In 2016, MSCI found that, in the period 2011-2014, companies with three or more women on the board had higher earnings per share and return on equity, compared with companies with zero female directors in the same period. 

Goldman Sachs has recently analysed 496 large-cap US equity funds and found that female-managed funds outperformed their male counterparts amid the coronavirus-related market swings².

Traits of female leadership lead to better results

In 2015, Corinne Post conducted a study that showed that female-led teams scored higher on cohesion, cooperative learning, participative communication, and that the female leadership advantage widened when the coordination requirements were higher ³.  

Female leadership styles and traits are preferred by the general population

Within this third group, we found a myriad of studies, so we will just focus on the results of a few. A recent study by Deloitte in 2018 states that “modern leaders should look to balance hard and soft power traits.” Being communicative, flexible, and patient – soft power traits which are usually considered feminine – were among the five most important factors for strong leadership. ⁴  

Another study conducted by Harris Poll in 2018 showed that half of Americans would prefer to work for a company run by a female leader⁵.

All the studies discussed above show evidence for the link between female leadership or feminine leadership traits, financial impact, and social preference.

Considering this, the questions are: which traits define a feminine leadership style? How do women tend to lead? What can we classify as attributes typically feminine or masculine? To answer these questions, we conducted further research.

Feminine vs. Masculine Traits and Leadership

John Gerzema and Michael D´Antonio researched the subject by surveying 64,000 people in 13 countries ⁶. Their objective was to discover “if – due to the economy, technology, generational influences, globalization, and other factors - people, in general, might be placing more value on the feminine side of human nature.” Some of their key findings support that hypothesis: 

• 66% of those surveyed thought that “the world would be a better place if men thought more like women.”  
• 57% of those surveyed were “dissatisfied with the conduct of men in their country.” 

As part of the same work, they asked half of their sample to classify 125 different human traits as either masculine, feminine, or neutral. Attributes like “rugged,” “dominant,” “aggressive,” “selfish,” and “hard-working” were classified as masculine, while “selfess,” “patient,” “sensitive,” “sincere,” “nurturing,” and “trustworthy,” as feminine.

Then, they presented the same list of attributes to the other half of their sample and asked them to rate the importance of those traits to leadership and success. Comparing the results from both samples, they determined which feminine attributes would make up an ideal modern leader (see Figure 1).  

What the data proves is that the definition of leadership is changing and masculine traits like aggression and control are becoming less effective than feminine attributes like collaboration and flexibility. The authors conclude that in “a world that´s increasingly social, interdependent and transparent, (...) feminine values are ascendant.” 

Now, our question is: are these results from the corporate world equally valid in the world of public diplomacy and geopolitics? To answer this question, we will explore the results of the Brand Finance Global Soft Power Index.

Evidence from the Global Soft Power Index

The concept of soft power has become increasingly relevant in the 21^st century. Professor Joseph Nye (2004) ⁷ defined soft power as “the ability to influence the preferences and behaviours of various actors through attraction rather than coercion.”

We released the Global Soft Power Index in February 2020 in an effort to measure the soft power of nations, its levers, and impact on prosperity. The study covered a sample of over 55,000 respondents in 100 countries, including specialists and the general public. The study incorporates a broad range of measures, which in combination provide a balanced and holistic assessment of nations’ presence, reputation, and impact on the world stage. These include: 

• Awareness and Familiarity: nation brands which people know, and have mental availability of, have greater soft power 
• Overall Influence: the degree to which a nation is seen to have influence in the respondent’s country as well as on the world’s stage 
• Overall Reputation: is this nation deemed to have a strong and positive reputation globally? 
• Performance on the 7 Soft Power Pillars (Business & Trade, Governance, International Relations, Culture & Heritage, Media & Communication, Education & Science, People & Values). Figure 2 depicts each pillar and the variables measured in each one of them.  

Although the nations governed by male leaders, on average, have more overall influence, they are perceived as having a significantly higher negative influence, on average, than the female-led nations. The female-led nations, on average, have a better reputation and a higher net positive influence (see Figure 3). Female-led nations outperform in Governance, International Relations, and Business & Trade (Figure 4).  

Out of the attributes we measure in our Global Soft Power Index, on average, the nations led by female leaders outperform the nations led by men in 26 of them, and only underperform in 9 (see Figure 4). 

They are perceived significantly better in the following attributes: 

• A strong and stable economy 
• Acts to protect the environment 
• Good relations with other countries 
• Safe and secure 
• An appealing lifestyle 
• Politically stable and well-governed 
• Trustworthy 
• Strong educational system 
• High ethical standards and low corruption 

Most of these attributes relate to three key themes: stability, safety and security, and trust and ethics, and many to the values classified as “feminine” in the work of Gerzema and D´Antonio. 

In his book, “Leaders Eat Last” ⁹, Simon Sinek described how strong leaders make people feel secure. This is probably one of the key common traits that has been identified in female leaders during the pandemic: clear communication and decisive action which makes citizens feel secure.

Most countries led by women performed well in the following traits even before the pandemic: protection, stability, security, and trustworthiness. If anything, the need for increased cooperation and multilateralism brought by the pandemic has further highlighted the importance of a leadership style based on these values.

Within this context, it is not surprising that Germans call Chancellor Merkel the nation’s “Mutti” (Mummy). This just exemplifies how, in an increasingly volatile world, leadership is about cooperation, protection, and safety – values in which female-led nations outperform male-led ones. 

Hard Power and Economic Power

In addition, when comparing how nations perform on Hard Power and Economic Power, an interesting pattern emerges (See Figure 5).  

While both female-led and male-led nations perform similarly on Economic Power, the divergence is evident when comparing Hard and Soft Power scores.

“One of the criticisms I’ve faced over the years is that I’m not aggressive enough or assertive enough or maybe somehow because I’m empathetic, it means I’m weak. I totally rebel against that. I refuse to believe that you cannot be both compassionate and strong”.

Jacinda Ardern, Prime Minister, New Zealand

Male-led nations outperform on Hard Power while female-led nations lead on Soft Power. As Soft Power is seen as an increasingly important tool for success, nations that can successfully leverage this are set to thrive across a variety of areas.

Female leadership styles appear to be well-placed to tackle changes in the future. The greatest challenges of our time, including the coronavirus pandemic, climate change, and social conflict and polarisation require co-operation, stability, and safety and security – attributes where female-led nations outperform those run by men.  

Brand initiatives to close the gender gap

Can we prove that these results are completely dependent on female influence? The short answer is no.

A key outlying question is whether there is a correlation between the duration in office of female leaders and these results, or whether they have been forged before their mandate and female leaders have accelerated them.

A lot of the outcomes we discussed are forged in the long run. We also know that, historically, there have been female leaders with extraordinary negative influence on their nations, kingdoms, or cities.

“No company that wants to grow can give up talent, and women represent 50%.”

Rami Aboukhair, CEO Santander Spain

Our analysis points to leadership styles based on attributes that have been historically recognised as more associated with females. It is possible that most women-led nations are diverse and inclusive societies. These cultures tend to be more respectful of differences and provide opportunities and support for a diverse pool of talent. This can explain the representation of women in positions of power, but also, the maturity of that nation in many other pillars of soft power.

This might be the main explanatory variable behind the disparity in results for female-led nations: inclusion. As Rami Aboukhair, CEO of Santander Spain, puts it: “No company that wants to grow can give up talent, and women represent 50%.”

We have conducted a vast analysis of the impact of diversity and inclusion on brand strength, finding a significant positive link.

If female talent is so important to grow, corporations need to take action to ensure female representation at the top. These actions can be categorised in three clusters:

1. Education and Training
2. Policies and Standards
3. Evaluation and Reporting

Education and Training

How can the organization support female leaders’ development? Through sponsorship, mentoring, coaching, specific leadership skills training and networks. IBM is a great example of a company that provides all these platforms for female leaders. In their EMEA division they have created a “Women in Tech” mentorship program as well as an open network called “Inspired by Women” that raises awareness about unconscious biases or specific obstacles in female development and how to tackle these challenges. These initiatives not only support individual development but also enable connections necessary to propel careers forward.

Policies and Standards

Flexibility in terms of work schedules extended leave, and working from home policies are all key for many working mothers and instrumental in avoiding losing talented female leaders.

Evaluation and Reporting:

All the above sounds good, but it is also imperative to prove the impact it has in terms of employee satisfaction, a positive climate, and retention. Not only that, but ideally, it should be linked to business and brand value creation. Measuring the impact of D&I initiatives oriented to leverage female talent is essential to secure continued investment.

Conclusions

Our database analysis shows that nations led by females outperform, on average, their male-led counterparts in net positive influence, reputation, and most attributes under the seven pillars of soft power, but particularly those related to safety and security, a stable economy, trustworthiness, and cooperation (good relations with other countries).  

Although this is based on a relatively small sample, and that these results can be also explained by many other factors, analysing the literature around traits and impact of female leadership allows us to infer that feminine values definitely make a positive impact also on a geopolitical level.

This is not to say female leaders are free of mistakes. As Joseph Nye explained in an interview with David Haigh in September 2020: “Women are human too and they make mistakes”. But the female leadership style is more strongly correlated to soft power attributes, rather than hard power ones.

On a corporate and geopolitical level, these attributes will be key to build positive influence and reputation going forward. To ensure we have more of this type of leadership going forward, public and private organizations need to focus on diversity training, standards, and measurement.

Jacinda Ardern, Prime Minister of New Zealand, and one of the leaders praised for her management of the pandemic, recently said: “One of the criticisms I’ve faced over the years is that I’m not aggressive enough or assertive enough or maybe somehow because I’m empathetic, it means I’m weak. I totally rebel against that. I refuse to believe that you cannot be both compassionate and strong”.

This underlines the importance of compassionate leadership in an environment that becomes increasingly volatile. We are convinced that a leadership style based on traditionally feminine traits will have a positive impact in a world that is plagued by polarisation and conflict, that requires now more than ever: multilateralism, collaboration, and compassion.

This article relates to the findings of Brand Finance's Global Soft Power Index.

Once the crisis is over, these actions and initiatives will contribute to the overall reputation for nations and brands alike who reacted to the crisis in a timely, honest, and compelling fashion. For those nations and brands whose decisions protected their citizens and employees as well as other actors in their environment, we expect to see an increase in influence - both domestically and abroad. domestic and global influence. This goes far beyond military or economic power, and is what we define as “Soft Power”, which is key in the construction of the nation brand.

Brand Finance Global Soft Power Index

The Global Soft Power Index, published in February 2020, is our first global study on perceptions of Soft Power. Our objective was to measure a “nation’s ability to influence the preferences and behaviours of various actors in the international arena (states, corporations, communities, publics etc.) through attraction or persuasion rather than coercion.”

Our methodology is based on 55,000 surveys of specialists and the general public, which were carried out in 100 countries, and incorporates a range of measures to provide a balanced and holistic assessment of nations’ presence, reputation, and impact on the world stage. These include:

• Awareness and Familiarity: nation brands which people know tend to have greater soft power
• Overall Influence: the degree to which a nation is seen to have influence in the respondent’s country as well as on the world stage
• Overall Reputation: is this nation deemed to have a strong and positive global reputation?
• Performance on the 7 pillars of Soft Power (Business & Trade, Governance, International Relations, Culture & Heritage, Media & Communication, Education & Science, People & Values)

Although there are no quick fixes, by better understanding what drives soft power and the prosperity of a nation in general, resources can be allocated more effectively to improve performance in the seven pillars.

Just as perceptions do not change abruptly, optimal soft power cannot be reached, (or likewise lost), overnight. However, identifying and understanding these levels of influence is essential in delineating long-term strategies consistent with the national goals of public and economic diplomacy.

Among the public diplomacy tools and techniques that can positively impact soft power and strengthen the country’s brand, “gastrodiplomacy” and “sports diplomacy” can play a fundamental role in building soft power by impacting one of its fundamental pillars: Culture & Heritage.

At the moment, we are witnessing an old type of diplomacy acquiring a renewed relevance: health diplomacy. With the United States hit hard by the pandemic, China is leveraging its experience and production capacity of medical equipment as a “soft power” tool. In mid-March, it announced that it would help 82 countries, and since then, has sent medical staff and equipment to Italy, and donated equipment to Pakistan, Japan, Argentina, and other Latin American countries.

Leadership Amid the Pandemic

According to the Global Soft Power Index 2020, the United States, Germany, United Kingdom, Japan, and China are the top five countries in terms of soft power, illustrating that soft power goes far beyond public policy.

The United States scores first in culture and entertainment, sports and brands, and products. This is a testament to the symbiotic relationship between the strength of a country’s commercial brands and its global influence. That is, commercial brands act as ambassadors of the progress, dynamism, and business environment of a nation. Forging an optimal environment for innovation, including a fiscal, legal, and educational system that promotes it, is key when designing nation brand strategies. But what happens during a crisis of the magnitude that we are experiencing?

This is even more important. Over the last few months, we have witnessed how public-private collaboration is key to mitigating the effects of the health, social, and economic crisis. The French luxury group, LVMH, will dedicate its production plants in France to manufacture large quantities of hand sanitizers, which will be donated to hospitals. Armani has decided to convert part of its production capacity to put together PPE to support medical staff during the crisis. In an industry that has been among the hardest hit by the crisis, many other Italian fashion brands have also coordinated to produce millions of masks.

In Spain, Santander Bank and BBVA have donated financial resources to acquire medical equipment. The fashion giant, Inditex, will dedicate part of its productive assets and logistic network to making and facilitating the acquisition of medical supplies.

Many leading brands aimed to protect their employees long before governments confined them to their homes, putting their health above any economic consideration. Twitter, EY Spain, and Santander were among the first to react and implement working from home or “smartworking” policies. In the United States, CVS eliminated the shipping costs of medicines. Patagonia voluntarily closed all its stores, promising to continue paying employees’ wages despite the losses it would incur.

These are all examples of brave brands, who understand that leadership in the 21^st century exceeds economic power and revolves around the ability to have a positive impact on the world. In his work, “The Diary of the Year of the Plague”, Daniel Defoe wrote: “Another year of the plague […] would end with animosities and would make us see with other eyes the same things that we have seen before.” The brands we mentioned have understood that leadership and influence in today’s world are all about cooperation.

Leadership and Soft Power

Similarly, and during the crisis, some countries have embraced this new concept of leadership and influence. They have understood that leadership today depends more on collaboration than on unilateral decisions based on short-termism and a thin concept of “value creation” which does not consider the impact of their decisions on the larger ecosystem of nations.

This is precisely the great opportunity that the pandemic represents for nations and brands in general: to generate soft power through proactive collaboration and cooperation with other nations, which will probably have a positive effect on their familiarity and reputation, as well as on international relations and perceptions associated with the “People and Values” pillar.

Although our research data does not cover responses to coronavirus, next year’s data will reflect the impact of decisions and actions taken during the pandemic. And we know what to expect.

When we observe initiatives such as those of the Chinese government, who is supporting Europe, donating PPE, and sending medical experts to help to overcome the pandemic, the words spoken by Ban Ki-moon, the eighth Secretary General of the United Nations, during the Global Soft Power Summit hosted by Brand Finance hosted in London this February, take on a new meaning: “Soft power is key to creating a more sustainable world through cooperation, collaboration and mutual understanding.” This is the true meaning of leadership and power in the 21^st century.

Soft power and the pandemic:

Female Leadership and Soft Power: Do Women Outperform Men?
COVID-19: Brand Value and Leadership in Times of Crisis