On Oct.23rd, InnoKOL had a fascinating conversation with Mr. Edgar Baum, the Founder and CEO of Avasta Inc. talking about his unique work experience and profound insights on valuation and growth strategies.
Jokia: How would you describe yourself in three words? What’s your motto?
Edgar:
Enable everyone's potential. I’m deeply committed to enabling people to succeed.
I very much care about people and organizations being able to be exceptional. I strongly encourage people to learn, unlearn what is no longer useful, and really become the best version of themselves.
Jokia: Can you please share more about your educational and professional background? And we’d love to hear what brought you to brand and business measurement.
Edgar:
My academic background is in mathematics, philosophy (especially logic), and fine art history with a focus on architectural history – I guess you could say they’re all linked together
I’ve also had an extensive background in finance including valuation, commercial banking, financial credit risk software, and brand valuation.
I was always a measurement minded person going back to when I started on Wall Street in the mid 1990s – I was constantly trying to understand the difference between things and why valuation varied so much between companies. I got introduced to the value of brands working at Procter & Gamble in the early 2000s and then to Brand Valuation when I was recruited to relaunch Brand Finance, the British Brand Valuation consultancy in 2011.
In 2014 I was invited to join the global development of the Brand Evaluation Standard – an initiative launched by the Chinese! The following year I developed the graduate course on the Finance of Brand Management at the University of Toronto that I’ve been teaching since then.
I launched Avasta because no one seemed to be measuring business strategy from the customer's point of view. Brand is important but as an idea it is not enough. It needs to be integrated into the business process. Only measurement can do that. Measurement makes the intangible tangible and comparable over time. I love enabling people to be able to understand and explain what is happening between their customers and their business through the brand using our expertise.
Jokia: One of the most exciting pages of your biography is the partnership with founders, the C-suite, and boards to develop math-based measurement approaches and solutions on how to acquire customers. Could you share 2-3 cases impressed you most?
Edgar:
There aren't many current stories I can share due to our agreement to keep the relationship with our clients confidential. However, some I can!
I had the privilege of working for Cirque de Soleil when the Founder, Guy Laliberte was looking to retire and sell his company. He was very frustrated that no one believed him when he said the brand and business were worth over $1bn. Everyone kept telling him that his balance sheet didn’t justify it. I looked at his brand from the perspective of untapped customer demand, and we validated that, with additional money invested, Cirque de Soleil could be worth over $2bn. With that evidence that we were able to collect, he was able to sell the business to a private equity firm for $1.5bn, and that firm was able to pursue those business opportunities that we identified to acquire more customers.
Another example I have is from working with a regional brand, Mr. Gas, owned by BG Fuels which is now owned by Greenergy. It was our first client engagement that we completed at Avasta. We were able to identify that their brand was unique vs the national and international brands that they were competing with and that if they kept promoting that difference and rewarding their regular customers, their brand reputation and opportunity would grow. They grew much faster than the market in the 3.5 years since we helped them with their Brand Evaluation Framework and drove profit faster than any other company in the BG Fuels portfolio as far as we know. They were able to expand to markets that they had never been in before and acquire local customers because their brand reputation could be leveraged. They're now worth a lot more than they were bought for.
Jokia: What is brand equity growth and how to measure it?
Edgar:
Brand equity growth is something that has value in the future. It is the potential strength of the brand with current and future customers that hasn’t been activated by those customers yet due to a lack of opportunity, money, or immediate need to buy. If this starts declining, your company will be in trouble soon enough. (i.e., buyers were intending to buy your product or service in the future or buy it again, and now they won't because your brand strength declined due bad actions, lack of attention, or a competition building a much stronger brand than you while you weren't paying attention)
You need to measure what segment of the marketplace you have positive and growing brand equity with and whether it is changing their behavior. If you don't do this, you're resting on your laurels or hoping for luck.
Jokia: How can companies find better ways to measure and manage the financial value of brand?
Edgar:
They need measure it from the buyer’s and customer’s perspective, especially with the future outlook in mind. A company’s brand is its currency with its customers. Currencies only have value if they’re going to be worth the same or more tomorrow.
Companies need to be systemic about measuring their brands and train their employees to understand that and be willing to let them go to other jobs if they aren’t excited about the current brand being successful.
The financial value of a brand only exists with good measurement and management. If one is missing, the value is impaired. If both are missing, the brand will die quickly.
They can use the global standard from the ISO, 20671, Brand Evaluation as a start, but it can't be done by one person and not enough people are trained in how to do this. Thankfully more organizations are making it available educationally or commercially, not just myself and Avasta.
Jokia: How to measure personal brand of a business CEO?
Edgar:
This has a lot different part to it. I’ll emphasize again on whether the CEO is trusted to make the future better for the company, its shareholders, employees, customers, vendors, community, etc. There will always be a portion of these groups that the CEO is not relevant for.
However, as long as the overall outlook is substantially more positive – essentially their future brand reputation is expected to be better than today’s by enough of the people in the groups that care, then personal brand can be worth millions and billions to their companies – we’ve seen it in the USA where the business CEO at United Airlines resigned a few years ago, He had built a bad reputation with a worse outlook for the future. The day he resigned; the share price went up to the tune of several hundred million dollars because the outlook for the airline was better without him than with him.
Simple ways to measure are if you're outperforming same sized or larger competitors and organizations in having employees that want to work for you, media that wants to engage you for news, vendors that reference you in negotiations, customers too if applicable. Notice that all of this requires measurement and it has to be relative to something else. There is a lot more that could be said here.
Jokia: How brands can transform their measurement framework to drive organizational change?
Edgar:
If they're measuring their business and market with financial values first, they have to stop. That is the road to self-destruction eventually. if they want to be stronger and sustainable as businesses in the future, they need to measure their role in the market from the customers' point of view and keep track of their other intangibles as well.
Implement the ISO 20671 Brand Evaluation Framework as an objective tool and practice including training all functions of the business, not just brand and marketing. Finance, operations, data management, product development, customer experience and especially the executive leaders and board members must participate in measuring the brand.
Also, the minute this measurement is used for personal gain or one-upmanship, the whole exercise loses its value. It has to be an independent measurement.
Jokia: How the metaverse will change brand and business management from your point of view?
Edgar:
I think the jury is out on this one yet. It will probably take 15-20 years before we will know – people will need to grow up with/in that environment. No one has started 'growing up' in that environment right now in terms of being immersed in it with their VR glasses on.
Look at the people that are mobile phone native because that is all they have known. That took 15 years to create an ecosystem (and they can still walk around in the world. The metaverse, unless it is an augmented reality, will be very difficult to spend a lot of time in because it removes you from the physical world – I struggle to see how it can be as ubiquitous as mobile phones.
It's possible that it works out but it would require a fundamental shift in how society works. I think enhancements in augmented reality and have a hybrid between physical reality and the metaverse are more likely.
Jokia: We’ve noticed that you are one of the eminent speakers of global leading events. What’s your benchmark to select the top-tier industrial conferences? How do you think the development trends of events industry in post-coronavirus era?
Edgar:
Thank you. That is a very kind thing to say. I like speaking at two types of events.
One where I can inspire others to take action out of what I have said – start a company, learn something new, make a difference for a colleague, family member, friend or a community.
The other where I can genuinely showcase the expertise of Avasta to potential clients with their attention being given. Our work is incredibly impactful – we have had clients make $6,000 for every $1 they’ve invested with us within 12-15 months. That makes me exciting and satisfied that we can do that. But we can only do that if they’re willing to put their own bias aside and look for the best thing they can do for their customers, future customers, and their business with our expertise. I think post-coronavirus, the nature of in-person international events may change. Going digital allows a much larger share of the world to benefit from the knowledge and sharing of a prominent conference, especially ones who would never have been able to afford to travel to attend (not just financially, but tradeoffs with other work and family). I think the dilemma is how to facilitate the personal relationships that form out of the serendipity of meeting someone who you like, admire, and can mutually benefit from is harder. It takes events like this one today, but also the willingness of people to reach out genuinely.
Facilitating that authentically is going to be a challenge.
ABOUT THE SPEAKER:
Mr. Edgar Baum , the Founder and CEO of Avasta Inc. ,he works with founders, the C-suite, and boards to develop math-based measurement approaches and solutions on how to acquire customers. This enables them to grow sustainably in an increasingly complex world. He leads discovery and integration of data into solving problems and enhancing strategy. Edgar is actively developing the underlying mathematics as an independent field and strive to publish an academic version of it once it reaches a publishable form.
ABOUT THE HOST:
Ms. Jokia Yin is the Founder of Innoverview and InnoKOL, the Vice Chairman of HK International Blockchain Finance Association as well as the Head of Media at United States of America-China Chamber of Commerce. Jokia has over 10 years of marketing and management experience, much of which has been in the Asia Pacific Region within events and PR industry. She has held key leadership roles executing market research and entry, developing sales channels and revenue generation, building marketing, finance and Operations related infrastructure for a more than 20 events related to retail, tourism, energy storage, blockchain, cosmetics domains.
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