“Human beings act not on the basis of fact and reality as such, but on the basis of opinions and beliefs about facts”

US economist Frank Knight defined the power of branding as well as anyone with these words, written in 1925. This basic truth applies to all of us and is the reason why tens of millions of whatever currency you care to mention is poured every year into the coffers of those charged with favorable predisposing the world towards companies and their products. Brands are a powerful means of creating competitive advantage.

Consumer branding of products has reached a level of sophistication at which the return on investment can be demonstrated with reasonable conviction. But when it comes to branding companies, even consumer experts seem less certain about what they are trying to achieve and why. One reason for this is that the fundamental differences between corporate image and corporate branding are poorly understood.

You cannot not have an image. You can choose to manage it proactively or leave it to be defined by others, for better or for worse. The former course of action is desirable if not essential in most sectors.

So far, so good. But it’s important to recognize that image values primarily reflect the expectations of others: that companies and institutions should be honest, ethical, environmentally-friendly, financially transparent, accountable, and so on. And that they only differentiate by default when these expectations are not met.

Corporate branding reflects an altogether higher level of ambition. It means thinking beyond image and managing perceptions in ways that create strategic advantage. Brand strategy is driven by your agenda, not the expectations of others and is the result of “inside-out” thinking rather than “outside-in”.

The differentiating qualities that corporate brands seek to project vary enormously. For newcomers in new industries, solidity and establishment often tops the list. Conversely, well-established enterprises may want to be seen as new and different. But successful strategies all have one thing in common: they are grounded in a clear view of the future, and of where and how brand investment can reinforce positive perceptions or change those that could be barriers to progress.

Strategic advantage can take many forms. A well thought-through corporate positioning can be of immeasurable value in strengthening the competitiveness of individual business units, endorsing fast-changing product lines, staking out new value chain territory, supporting acquisition programs and international expansion, attracting new business partners, increasing marketing productivity, changing employee culture and aiding recruitment.

If such challenges loom ahead, the time to think about leveraging your corporate brand is now. Value builds slowly. Tomorrow is usually too late.