Team behind Red Hat seeks to upfit the marketing world

RALEIGH -- David Burney admits that since starting his agency New Kind more than two years ago, he's probably spent more time telling people what the company is not as opposed to what it is.

Advertising agency? Design firm? Management consultant?

New Kind dabbles in all those areas for its clients but, as its name brashly declares, the small Raleigh firm prides itself on doing things in very nontraditional ways.

"This may sound arrogant, but I really think we're on to something different," said Burney, 54.

That something different is an approach to corporate branding and strategy that is heavy on transparency, community and collaboration, and generally contemptuous of the conventional thinking found in business schools and many Fortune 500 marketing departments.

What gives New Kind clout with prospective clients is the fact that Burney and his partners used this same approach to build one of the strongest corporate brands: Red Hat.

Burney was vice president of brand and design at the Raleigh-based software company until August 2008. He started New Kind - along with fellow Red Hat alums Chris Grams, Matthew Munoz, Jonathan Opp and Tom Rabon - with the idea of doing for other firms what they did for Red Hat.

"Without their leadership there would have been no Red Hat brand," said Matthew Szulik, former chairman and CEO of Red Hat. "Red Hat was a trademark before these guys really put their work to use."

The Triangle, of course, has no shortage of firms that help companies with various aspects of their branding, marketing, advertising and public relations. Capstrat, McKinney, MMI Public Relations and French/West/Vaughan all compete with New Kind on some level.

And the industry is notoriously fickle, with firms' fortunes fluctuating as they win and lose clients.

Gathering the clients

Although the services New Kind offers can seem like dark matter to the layperson, the agency's work is becoming more visible in the Triangle.

New Kind is now working with an eclectic mix of local nonprofit organizations, governments and companies that include the Morrisville-based insurance company Redwoods Group, the risk management company IEM and the recently opened Contemporary Art Museum in Raleigh.

"They're very intentional about wanting to transform the organizations they're working with," said Kevin Trapani, Redwoods CEO.

New Kind leases a 4,700-square-foot building across from N.C. State that was designed by the modernist architect G. Milton Small Jr. Burney jumped at the chance to occupy the space, a box of elevated glass and metal that speaks to the firm's belief in the role good design plays in creating transformative work environments.

Burney acts as New Kind's CEO. Munoz, 30, is chief design officer. Opp, 36, the wordsmith, has the lofty title director of poetics.

Grams, 39, is the branding guru while Rabon, 57, who was Red Hat's executive vice president for corporate affairs, is the agency's chairman and manages a number of client relationships. New Kind's only other full-time employee is Director of Operations Elizabeth Hipps, 40.

Learning to listen

What the five New Kind partners took away from their Red Hat experience was that building a strong community around a brand spurs innovation and gives a company a competitive edge. Although traditional marketing and advertising plays a role, there's more to it than that.

"If you listen to (your customers), they will love you so much they won't want to leave you," Burney said.

During their stint at Red Hat, the Linux software company was under attack from corporate behemoths like Microsoft and Oracle, as well as from intellectual property lawsuits such as the one SCO Group filed against IBM over its Linux code.

Szulik, who was not a fan of traditional advertising, included the New Kind partners in the highest levels of strategic planning occurring within the company.

"They really understood that it wasn't just product placement and product communication," he said.

To strengthen Red Hat's culture, they created a "memo list" where employees could freely, and anonymously, discuss and criticize product launches and other nonpersonnel issues within the company.

For Szulik's keynote speech at LinuxWorld in 2003, they created a 2-1/2-minute video, "Truth Happens," that linked the open-source movement to other historical innovations that were at one time or another wrongly dismissed as inconsequential.

After rival Oracle vowed to crush Red Hat, the team responded by showing up in 2006 at Oracle's largest user conference and passing out T-shirts with the slogan "Unfakeable Linux."

Oracle had branded its own product Unbreakable Linux.

Szulik said the importance of all these moves became apparent when rivals came after Red Hat - its employees, customers and the entire open-source community rallied to the company's defense.

"I think what these men really embraced at Red Hat is that authenticity matters if you're going to produce a durable culture," he said.

Talking to everyone

New Kind begins each engagement by holding conversations with a client's employees, customers and business partners. This requires an organization's employees, and particularly its leaders, to be comfortable with self-assessment and criticism.

Munoz, for example, met with the Contemporary Art Museum's identity committee every Friday for months in the lead-up to its opening this year.

Those meetings ultimately produced a 17-page story book outlining CAM's mission and a branding campaign that included posting hundreds of CAM decals on sidewalks throughout downtown.

"Matt was there hanging up 'we're opening soon' billboards on the windows. He was laying down decals, he and his staff," said Denise Gonzales Crisp, who co-chaired the museum's identity committee. "It wasn't just like they created something and pawned it off on us."

Putting it into action

Redwoods Group, which insures YMCAs and Jewish Community Centers, practices what it calls responsible capitalism, emphasizing charitable giving and community service even when its eats into the company's profits.

New Kind ultimately came up with a three-word "brand-equity" statement that was intended to sum up Redwoods when it was operating at its best: Love. Serve. Transform.

Trapani, the company's CEO, admits there was some concern about how it might be received.

"Not every customer loves us or even knows us, frankly," he said. "So we've had some people say, 'where do you come off talking about love. You guys are an insurance agency.' And they're right. If you're going to start talking about yourself that way, you have to prove it."

Proving it now means working with New Kind to improve the customer experience and build connections among its employees and customers. Within the next month Redwoods will launch a new website featuring a number of interactive tools designed to make life easier for its customers.

Madhu Beriwal, CEO of IEM, first met the New Kind partners when they were still employed at Red Hat. Beriwal was considering moving her company to the Triangle from Louisiana and as part of her due-diligence was visiting several major employers in the area.

IEM has since relocated to Research Triangle Park. With the company about to celebrate its 25th anniversary, Beriwal decided to hire New Kind to help IEM figure how to make its work accessible to a larger market.

"Advertising is letting people know who you are," Beriwal said. "What they provide is a way for you to self-assess who you are and improve yourself and I think there's tremendous value in that. It's the difference between sizzle and steak."

Spreading the word

The concepts that New Kind pushes incessantly - collaboration, community, authenticity - have become increasingly in vogue in recent years in publications like Fast Company and the Harvard Business Review, which means Burney gets fewer baffled looks when he tries to explain what New Kind does.

Part of this has to do with the rise of social networking, which has made companies much more aware about how they interact with their customers. It's also a reflection of the commoditization of many products, which has forced companies to distinguish themselves through their brands.

Still, New Kind's approach is not for every organization, and there are real risks involved if a company fails to live up to the ethics it professes to its employees and customers.

"I think if you're interested in a pedestrian relationship with a marketing firm, these are not the guys you want," Trapani said.

That's fine with Burney. He envisions New Kind as becoming the Southeast's answer to firms such as IDEO and Stone Yamashita Partners, two California-based agencies that have made names for themselves offering similar services.

"Our goal is to never get so big that the core group of New Kind can't fit in this building," he said. "Our business model is different."