You Name It

You Name It

You Name It

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July 13 1997 3:30 AM

You Name It

When corporate big shots should leave well enough alone.

Nike used to be known as Blue Ribbon Sports. What's now Sara Lee used to be Consolidated Foods. And Exxon was once Standard Oil Company of New Jersey. These were name changes that worked. But for all the ones that do, there are 10 or 20 that don't. Each year, hundreds of U.S. corporations change their names. In a corporate culture driven by the mystique of brands, and in a country obsessed by the possibility of self-invention, that comes as no surprise. What does surprise is just how irrational are the hopes and how feeble the performance of corporations that decide a new name is all that stands between them and fiscal nirvana.


Most corporate name changes are the result of mergers and acquisitions. But these tend to be unimaginative. Corporations have tended either to smoosh names together--thus Lockheed and Martin Marietta became Lockheed Martin, McDonnell and Douglas Aircraft became McDonnell Douglas, Northrop and Grumman became ... well, you get the idea. The result is straightforward, if not always felicitous, monikers. Or the smaller company simply adopts the bigger company's name. For instance, all indications are that the Boeing-McDonnell Douglas merger will produce a new company called Boeing.

One notable exception was the 1986 merger of Sperry and Burroughs, which created a new company called Unisys. At the time, the name was much mocked, violating as it did the precept that you don't choose words ending in the sound "iss" because people associate it with disease. But although the company has gone to the dogs, its name now looks stylish in a retro way. At least that's what I imagine Unisys' executives saying to themselves when they seek comfort in the face of the company's falling profit margins.

The real debacles in the field of corporate name changes have been utterly self-imposed, not forced by a merger or other change of circumstance. They are the corporate equivalents of middle-aged men buying Corvettes. Almost without exception, when corporations have tried to reinvent themselves as more sophisticated and complex entities, they have chosen names distinguished only by their obliqueness and lack of intuitive appeal. The desire for reinvention seems to arise most often when companies hear the siren call of synergy and start to expand beyond their core businesses. And they seem to be guided by one fundamental rule: What you call yourself should have nothing to do with any product you make.


T he most unforgettable example of this rule was United Airlines' baffling adoption of the name Allegis in 1987, just after CEO Richard Ferris had spent $2.3 billion acquiring Hertz and Hilton. Ferris wanted Allegis to become a world travel powerhouse, but within a year he was gone--cushioned, to be sure, by a $3 million golden parachute--and United became United again. It's tempting to say that only in retrospect does Allegis seem like such a stupid name, but the truth is that it seemed like a stupid choice even then. Hell, to begin with, it violated the "iss" rule. When a Chicago Tribune reporter randomly surveyed shoppers at a mall soon after the name was chosen, one said, "Isn't that a new disease?" while another insisted, "I'm sure I've seen that name on my medicine." More strikingly, a 1988 study of consumers showed that Allegis ranked in the bottom 5 percent of corporate "identities" both in terms of name recognition and in terms of the esteem accorded to the name by people who recognized it. United Airlines, on the other hand--the old name the company threw in the trash--was in the top 15 percent in awareness and the top 10 percent in esteem. It isn't easy to be that wrong, but Ferris managed it.

And he did it with fanfare. What's most amusing about corporate name changes is the dubious reasoning and overwrought rhetoric that inevitably accompany them. The United--excuse me, Allegis--spokesman explained at the time, "We are a travel company, not just a transportation company. The name change clearly identifies us as the only corporation that can offer travelers door-to-door service." Of course. Allegis = door-to-door travel service. How could we have been so blind? Even better was the explanation offered by Lippincott and Margulies, the "identity-management firm" that came up with the name. It said that Allegis "conveys the central corporate mission of service and guardianship ... through its relation to the word allegiant, meaning loyal or faithful, and aegis, meaning protection and sponsorship." That might be more convincing had the word "allegiant" ever, in the history of the English language, been used in a sentence.

Maybe even funnier is when executives celebrate the empty-signifier status of their companies' new names. Sounding like a student of Ferdinand Saussure, the French semiotician, retired chairman David Lennox said of Navistar, the name chosen for the former International Harvester, "One of the pluses of Navistar is you can make it mean whatever your imagination wants it to mean." When Waste Management Inc. changed its name to WMX Technologies, CEO Dean Buntrock insisted that adopting the non-descriptive name meant the company was "growing up [and] raising our profile." One can only speculate how executives of a company called Combined Insurance explained to themselves their decision to adopt the name Aon.

Coming up with a name like Navistar is certainly creative, and trashing a valuable label like International Harvester is certainly destructive, but the process hardly adds up to Joseph Schumpeter's famous definition of capitalism as a process of "creative destruction." And it's not cheap. United spent more than $8 million in the move to Allegis and back. When Swift and Co. became Esmark in 1974--the company finally decided to get out from under the cloud of bad publicity created by Upton Sinclair's exposé The Jungle, published in 1906--it cost more than $2 million. Changing Esso (Jersey Standard) to Exxon cost an incredible $100 million. Nissan spent $30 million on its three-year campaign to ditch Datsun.

The fact that bad names do seem to hurt companies is, to be sure, evidence of a sort that names matter. A rose by the name of Allegis would almost certainly not smell as sweet. But it's clear that corporations are as faddish in their choice of names as parents are. Just as waves of Ashleys and Brittanys are succeeded by hordes of Maxes and Sadies, so the postmodern bricolage names of the '70s and '80s have been replaced by the retro labels of the '90s. WMX Technologies is Waste Management Inc. again. IC Industries, which makes Whitman's Chocolates, is now called Whitman's. United Brands now bears the name of its best product, Chiquita. And Microsoft, I hear, is changing its name to Slate Inc.