When Tribune Publishing renamed itself “tronc” in 2016, the internet collectively cringed. But the real tragedy wasn’t the name it was what the rebrand concealed: a newspaper empire bleeding $14.8 million quarterly while its CEO had secretly paid $2.5 million to hide a racial slur scandal. The rebrand lasted two years. The fundamental problems outlived it.

This pattern repeats across corporate America with stunning consistency. When faced with operational crises, technological disruption, or market share erosion, executives increasingly reach for the same expensive placebo: brand transformation. It’s what Naomi Klein called “brand equity mania” when Philip Morris bought Kraft for $12.6 billion, they paid four times the company’s market value. They weren’t buying factories or products. They were buying the name, the ultimate executive comfort blanket. Yet the rebrand reflex persists, costing shareholders billions while fundamental problems metastasize.

The psychology behind this phenomenon runs deeper than mere incompetence. New research from Frontiers in Psychology reveals that executives in positions of greater authority become more avoidant when facing high-stakes operational decisions, contradicting assumptions that power breeds decisiveness. When career risk looms, brand strategy offers the perfect corporate camouflage — sophisticated enough to impress boards, vague enough to deflect accountability, and distant enough from quarterly results to buy time. It’s executive avoidance dressed in strategy consulting’s finest clothes.

The hundred-million-dollar distraction

RadioShack’s 2009 transformation into “The Shack” stands as a monument to expensive denial. The company spent over $50 million on marketing campaigns and store rebranding while its actual problem, a complete failure to adapt to e-commerce, went unaddressed. Executives focused on making RadioShack seem cool to millennials while their website didn’t even allow purchases until 2006, years after Amazon had revolutionized retail.

The numbers tell the story marketing campaigns couldn’t hide. RadioShack’s stock price plummeted 95% to 13 cents, its market capitalization evaporated from $3 billion to $28 million, and the company endured 11 consecutive quarterly losses before its 2015 bankruptcy. “I wouldn’t even call this a failure. I’d call it an assisted suicide,” observed NYU marketing professor Scott Galloway. The rebrand bought executives six years of avoiding the real decision: whether RadioShack had any reason to exist in the digital age.

Gap’s 2010 logo disaster compressed this pattern into a six-day farce. With same-store sales down 4% and stock prices 40% below pre-recession levels, executives approved a $100 million rebranding budget. The new logo lasted less than a week before public backlash forced a reversal, but the real failure was what Gap didn’t do: address fundamental retail strategy, modernize its supply chain, or invest in digital capabilities. Fifteen thousand parody logos mocked the company on social media. Zero operational improvements resulted from the exercise.

JCPenney under Ron Johnson provides perhaps the most spectacular case study in brand-as-avoidance. Johnson spent over $1 billion on store redesigns and $200 million on marketing featuring Ellen DeGeneres while ignoring everything his data showed about JCPenney’s coupon-loving customer base. The “always low prices” strategy alienated core customers without attracting new ones. The company lost $985 million in 2012 alone. Johnson’s attempt to transform JCPenney into “JCP” lasted 17 months. The damage lasted years.

These aren’t isolated incidents. Research examining corporate rebranding from 2005-2020 identified over $500 million in documented rebranding costs among failed initiatives, with companies losing tens of billions in market value while avoiding core business decisions. The pattern is clear: when executives face difficult operational choices, brand strategy offers an expensive escape route.

The psychology of strategic avoidance

Mark Zuckerberg stood before the world in October 2021 and declared Facebook’s transformation into Meta, a company building “the next frontier” of human connection. The timing was curious. The Facebook Papers had just revealed systemic content moderation failures. Teen usage was plummeting. Regulators circled with antitrust threats. Rather than address these operational crises, Zuckerberg bet the company’s future on a vague metaverse vision.

The results speak volumes about brand strategy as executive deflection. Meta has incinerated over $63 billion on Reality Labs with minimal return. The stock price crashed 70% in 2022. The metaverse remains largely empty. Yet the rebrand served its purpose: it changed the conversation from Facebook’s real problems to Zuckerberg’s vision of the future. As one internal memo later revealed, even Meta employees didn’t use their own metaverse products.

This behavior follows a predictable psychological pattern. MIT Sloan research on executive decision-making reveals that leaders systematically avoid low-probability, high-impact events, exactly the kind of operational threats that destroy companies. Under pressure, executives demonstrate what researchers call “denying uncertainty,” acting as if the world is more predictable than reality suggests. Brand strategy, with its focus on perception and positioning, offers comfort in this false certainty.

The mechanism runs deeper than simple risk aversion. When researchers studied executives facing high-stakes decisions, they discovered something counterintuitive: increased authority actually leads to more avoidant behavior. Higher-ranking officials took longer to reach decisions and showed greater tendency toward “productive avoidance” activities that appear strategic while deferring real choices. Brand initiatives perfectly fit this pattern: they require extensive planning, involve prestigious consultants, generate impressive presentations, and push real accountability years into the future.

Wells Fargo’s response to its fake accounts scandal exemplifies this dynamic. After employees created 3.5 million fraudulent accounts, CEO Tim Sloan focused on “brand transformation” and becoming “the most customer-focused Wells Fargo ever.” The company launched multiple rebranding campaigns emphasizing trust and transformation. None addressed the sales culture that created the scandal. Sloan eventually resigned. Customer trust only began recovering when new leadership made actual operational changes.

The academic term for this behaviour is “symbolic management” using symbols to transform the meaning of actions without changing underlying reality. Brand strategy has become corporate America’s favourite form of symbolic management, allowing executives to appear responsive while avoiding substantive change. As organizational researchers note, companies “fall back on their identities in times of uncertainty,” and nothing signals identity work quite like a rebranding campaign.

The neurological appeal runs even deeper. Brand strategy targets System 1 thinking, the automatic, pattern-matching part of our brains that ignores familiar stimuli. It’s corporate wallpaper. But real business gravity breaks through to System 2, the analytical, attention-demanding cognition that makes people stop and think: “This doesn’t fit.” While executives craft brand messages for the part of the brain that doesn’t pay attention, successful companies build operations that demand it.

When products speak louder than promises

While failed companies pour millions into brand campaigns, a revealing counternarrative emerges from businesses that reject traditional marketing entirely. Costco spends exactly $0 on advertising, instead reinvesting 2% of annual revenue into operations. The result? The second-largest retailer globally, with 90% member renewal rates and $3.35 billion in membership fees that comprise 75% of profits.

The contrast with traditional retail is stark. While competitors spend 3-5% of revenue on marketing, Costco pays employees an average of $20 per hour, funded by advertising savings. Trader Joe’s follows similar principles, rejecting traditional advertising in favor of product quality and customer experience. Their largest marketing expense? Free samples. Their social media presence? One Google+ follower. Their business results? A cult following that drives consistent growth through word-of-mouth alone.

In-N-Out Burger spent $15 million on marketing in 2018. McDonald’s spent $2 billion. Wendy’s and Burger King each exceeded $330 million. Yet In-N-Out generated $625 million in revenue from just five states, built on fresh ingredients and employee satisfaction rather than brand campaigns. Their “marketing” consists primarily of consistent quality and a secret menu that customers discover and share organically.

Zara built a $13 billion fashion empire while spending just 0.3% of revenue on advertising, compared to the industry standard of 3-5%. Instead of traditional marketing, Zara invests in prime real estate locations, rapid design-to-shelf cycles, and vertical integration that delivers runway trends in weeks rather than months. When customers know new designs arrive twice weekly and quantities are limited, marketing becomes unnecessary. Scarcity and quality create their own urgency.

These anti-brand success stories share common themes. Rather than spending on perception, they invest in:

• Product excellence that generates authentic word-of-mouth
• Operational efficiency that enables superior pricing or wages
• Customer experience that creates natural loyalty
• Employee satisfaction that translates to better service
• Supply chain innovation that delivers unique value

The returns on these investments dwarf traditional marketing ROI. McKinsey research confirms that while strong brands outperform the market, the pathway to brand strength increasingly runs through operational excellence rather than advertising spend. Companies with superior operations generate brand value as a byproduct, not a purpose.

The turnaround truth

When companies abandon brand obsession for operational focus, transformations that seemed impossible suddenly materialize. Continental Airlines entered 1994 as the industry’s worst performer, last in on-time arrivals, first in complaints, bleeding $55 million monthly. New CEO Gordon Bethune ignored suggestions for image campaigns, instead focusing relentlessly on operations. He paid employees $65 bonuses for on-time performance, opened executive offices to all staff, and ruthlessly cut unprofitable routes.

The results embarrassed every brand campaign in airline history. Continental’s stock price soared 2,400% from $2 to over $50. The company posted 12 straight quarters of record profits and became Fortune’s most admired airline. Bethune’s philosophy was simple: “Do you know how much faster I can fix an airplane when I want to fix it than when I don’t want to fix it?” No rebrand could generate that motivation. Operational excellence could.

Domino’s Pizza faced a similar moment of truth in 2009. Customer feedback was brutal: “worst excuse for pizza I’ve ever had.” Sales had declined 15% while competitors grew. Traditional wisdom suggested a brand campaign to shift perception. CEO Patrick Doyle chose radical honesty instead, publicly admitting product failure and rebuilding recipes from scratch. The company reformulated sauce, crust, and cheese while retraining 180,000 employees across 9,000 locations.

Marketing spend went toward documenting this operational transformation, not hiding it. Same-store sales surged 16.5% almost immediately. Domino’s became the world’s largest pizza company by revenue. Stock returns outpaced Google. As CMO Russell Weiner noted, “By saying what we said about the pizza, we blew up the bridge. If it didn’t work out, there was no place to retreat to.” That’s the difference between operational commitment and brand gymnastics, one requires genuine change, the other just messaging.

Microsoft under Satya Nadella demonstrates this principle at massive scale. Inheriting a company that had missed mobile, cloud, and cultural evolution, Nadella avoided brand campaigns in favor of fundamental transformation. He eliminated toxic stack-ranking systems, embraced former competitors, and reorganized divisions that had operated as warring kingdoms. The focus on cultural and operational change over brand messaging drove Microsoft’s market capitalization past $1 trillion within five years.

These turnarounds share a crucial insight: operational improvements deliver results in 12-24 months, while branding requires 3-5 years to shift market perception, if it works at all. More importantly, operational changes create lasting competitive advantages, while brand campaigns require continued investment just to maintain awareness. When executives choose operations over branding, they’re not just saving money, they’re buying sustainable success.

Breaking the brand delusion

The data condemns brand strategy as executive avoidance with mathematical precision. McKinsey research shows brand-obsessed firms lag 2x behind purpose-driven models in growth — companies that focus on operational purpose outperform those chasing brand perception. BCG’s findings reinforce this: successful brand investment follows operational improvement, not the reverse. Companies that cut brand budgets lose market share not because branding matters most, but because they’re usually cutting everything while failing to address core problems.

The psychological research is even more damning. Studies consistently show executives prefer brand solutions precisely because they avoid operational accountability. Brand initiatives satisfy boards with sophisticated presentations, buy time with multi-year horizons, and provide plausible deniability when failures arrive “the market wasn’t ready,” “consumers didn’t understand our vision,” “competition was too intense.” Operational failures offer no such comfort. When products don’t work, customers leave. When costs exceed revenue, companies die. No rebrand changes these mathematics.

Yet the brand delusion persists because it serves executive interests perfectly. Seventy-two percent of corporate transformations fail, with management behaviour as the primary cause. Brand strategy has become management’s favourite form of productive procrastination — activity that feels strategic while avoiding real decisions. As one private equity partner noted, reviewing hundreds of distressed acquisitions: “The first thing we do is cancel the rebrand and fix operations. It’s amazing how often that’s all it takes.”

The solution isn’t subtle. Companies must recognize brand initiatives during distress periods for what they usually are: sophisticated avoidance behaviour. Boards should demand operational metrics before approving brand budgets. Investors should punish executives who choose perception over performance. Most importantly, business culture must stop confusing activity with progress, strategy with execution, and brand with business.

The companies that thrive, from Costco’s anti-marketing empire to Microsoft’s cultural transformation, prove that sustainable success flows from operational excellence, not brand excellence. They understand what struggling executives refuse to admit: customers don’t buy brand promises. They buy products that work, services that deliver, and value that lasts. Everything else is just expensive noise.

The next time an executive promises brand transformation, ask a simple question: what operational problems are you avoiding? The answer might save millions in consultant fees and years of strategic wandering. More importantly, it might force the hard decisions that actually save companies. Because in the end, no amount of rebranding can transform a business that refuses to change its operations. The market always knows the difference, even when executives pretend otherwise.