Published: April 07, 2004 in Knowledge@Wharton Horace Smith and D. B. Wesson did it when they engraved their initials onto a pistol in 1852. Henry Ford did it, as did Mary Kay Ash, Michael Bloomberg, Donald Trump and Michael Dell. Company founders have long believed that placing their name on their company signals their willingness to stake their personal reputation and stand behind their products. That’s fine when things are going well and the company and the CEO whose name it bears are held in high regard. But what if the CEO falls from grace? What happens to a company if the CEO's name is in effect its brand — and then that name is tarnished?

 

Rarely has that question come up more sharply than in the case of Martha Stewart, America's long-reigning diva of decor, who was recently convicted on conspiracy and other charges. Though Stewart had resigned as the CEO of her company, Martha Stewart Living Omnimedia, last summer after her indictment for insider trading in ImClone stock, her name is almost indistinguishable from the company's brand. Does the fallout from this case mean that companies should rethink the notion of personal branding — in which the company leader herself (or himself) is the brand?

 

Marketing experts at Wharton and elsewhere say that making a celebrity out of a business owner can be a good thing, as long as certain safeguards are in place. They caution, though, that problems arise when a company doesn’t prepare for the unexpected. “At one time, brand awareness and positioning was viewed as a process of associating an image with a company — whether people had a positive or negative perception when they thought of a brand,” says Barbara Kahn, a Wharton marketing professor. “But recent brand studies indicate that that’s not enough. For example, successful brands like Coke, one of the most widely globally recognized names, have built an emotional attachment with their customers, a kind of relationship.
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