Identity processes define a firm to its customers, investors, and itself. Not all firms have such processes and those that
 don't, lacking any distinctive, differentiating process capability tend to pursue "me too" strategies. FedEx's guaranteed on-time delivery processes, McDonald's fast-food processes, McKinsey's recruitment processes, Toyota's lean production processes, Motorola's "six sigma" quality processes, Nordstrom's customer service processes, and 3M's research and product innovation processes are all identity processes; in each instance, the processes stand for the company.A part of the Business Process Investment framework, the concept of identity processes is closely allied to the notions of strategic intent, core competencies, and dynamic capabilities. Strategic intent is the overriding, single-minded commitment of a company's leaders to a specific direction or goal, the fulfillment of which relies on the firm's possession of the requisite core competencies or capabilities. McDonald's and Motorola's strategies are more than strategic direction; they involve personnel recruitment, training, motivation, and retention as well as coordination and management of key processes. These cannot be copied but must be built. Identity processes represent the fusion of strategic intent and core competencies that yield a firm-specific asset.
Which two to five processes do you, your customers, and your investors think of when your company is named? These define the identity of your business and its potential competitive differentiation. Companies that lack identity asset processes equivalent to those that support FedEx's guaranteed on-time delivery can only pursue a "me-too "strategy. Identity processes that have become liabilities, IBM's marketing and cultural processes are examples, signal an urgent need for transformation.
Identity processes are not always assets; they can depreciate, as they did for IBM, into liabilities. IBM lost its decades-long preeminence largely as a consequence of relying too long on eroding identity processes. The company's marketing and cultural processes-widely admired, envied by rivals, and worth a premium to customers-served it well throughout the 1970s. As late as 1986, The IBM Way, a book of tips about the company's marketing processes written by a recently retired executive, was a best-selling business title. Think of IBM in the l990s and its marketing and cultural processes still come to mind, but as the source of the company's identity problem, not an identity asset. Liabilities that drain value from the firm, they are today disdained by rivals. IBM's identity is imperiled and its leadership has yet to identify new identity processes, never mind turn them into firm-specific assets.
There are some obvious general principles for investing in identity
processes:
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Protect identity assets through continuous improvement.
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Recognize that today's asset identity processes might become tomorrow's liability identity processes as change renders old assumptions and strategies obsolete.
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Move quickly and aggressively to rethink identity processes that have become liabilities.
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