Islands' businesses try to identify with 'local' values
By Andrew Gomes
Advertiser Staff Writer
Being perceived as "local" is a sensitive and valuable quality for companies and organizations doing business in Hawai'i.
It's the Good Housekeeping Seal of kama'aina, the lingua franca of Hawai'i business that can be a competitive advantage if one has it or a fatal flaw if not.
The currency of local-ness, long an important trait in the Islands, was reinforced in recent weeks by flaps over two proposed University of Hawai'i logos and a hostile takeover attempt of City Bank.
But what makes a company or organization local can be hard to define. Ownership? Place of origin? Management? Style of doing business? Community involvement?
"People have strong feelings about it," said Dennis Christianson, creative director at Laird Christianson Harris Advertising. "Companies ignore it or falsely claim it at their peril."
Central Pacific Bank chief executive Clint Arnoldus and a University of Hawai'i logo selection committee both learned lessons about the importance and sensitivity of local-ness last month.
Arnoldus, a career bank executive on the Mainland before he was hired early last year to head Central Pacific, criticized rivals First Hawaiian Bank and Bank of Hawaii as less than local. The response, especially from First Hawaiian chief Walter Dods, was quick and harsh.
Dods, a Saint Louis High School graduate who wears his local-ness with pride, fired back that it was sad to see a malihini taking cheap shots. "I was born and raised here," he said. "I didn't just get off the boat from California and learn the shaka sign."
At UH, much of the criticism over selecting a new systemwide university logo focused on why a Maryland firm was given the job and how its two top designs didn't much reflect Hawai'i.
"The concept has nothing to do with Hawai'i and the proud tradition of the host culture ... ," commented Ron Kowalke, a UH art professor.
Jenny Christensen, a UH undergrad, wrote " ... only LOCAL agencies should be able to submit bids to any LOCAL community institution such as the University."
The passion many kama'aina feel about local roots has to do with Hawai'i being a place with a unique host culture and diverse ethnicity that grew up with each other, according to UH marketing professor Dana Alden, who has studied how consumers of different cultures regard behaviors and symbols.
"This is a place where local-ness is very important," he said. "Our local-ness is something you can't come in and ignore."
Unique culture
Some companies have done better than others assimilating Hawai'i's unique local culture where people are considered local if they measure water for making rice using their finger or understand Frank DeLima jokes.
BankAmerica Corp. thought it could lure large numbers of customers away from local banks when it entered the market in 1992 by acquiring Honfed Bank. Five years later, the Mainland bank pulled out.
The state's stagnant economy was an influence, but there also was the wide perception that Bank of America Hawaii was too slow to embrace local customs, which prevented the bank from expanding as it had hoped.
"The fact that they came in with all their marketing prowess and know-how and brought in a pretty standardized Bank of America format — and didn't make it suggests to me that this market, if nothing else, is very loyal to its local banks," Alden said.
Other Mainland companies have met with better success, such as Macy's, which replaced a favorite kama'aina department store chain with 152 years of local roots.
Macy's followed some traditional customs such as blessing its store using kahu Curtis Kekuna and untying a maile lei for its November 2001 grand opening, which also featured keiki hula. Customers who made minimum $25 purchases even got free rubber slippers.
But the retailer also emphasized that its Hawai'i stores would be the only market in the nationwide chain to employ local buyers focusing on merchandise appropriate for the Islands and made in Hawai'i.
Yet what qualifies an organization as local can be widely defined by who owns it, where it was founded, where its managers or products are from, its style of doing business and community involvement.
Gloria Garvey, co-partner of Kailua-based consulting firm Brand Strategy Group, uses the example of McDonald's as such a strong brand that many times local ownership of franchised restaurants is forgotten.
A regular target for anti-American protests in other countries,
McDonald's is frequently regarded as brand-USA. "The McDonald's brand was so overpowering and it's so representative of America that people didn't even stop to think ... that my neighbor owns that McDonald's," she said.
But even McDonald's bows to local taste with its saimin and Portuguese sausage, egg and rice menu items.
Wrong implication
In the case of Central Pacific, Arnoldus implied his bank is more local than First Hawaiian because of ownership.
First Hawaiian is owned by France's BNP Paribas, which acquired First Hawaii's parent BancWest Corp. in 2001. At Central Pacific, employees are the bank's largest shareholder with about 10 percent ownership, though the bank is by far mostly owned by institutional investors outside Hawai'i.
"The whole thing is ridiculous," Garvey said. "It's the red herring that anybody can throw in whenever they want to take the moral high ground in Hawai'i. All you have to do is raise that flag — THEY'RE NOT LOCAL — and you've taken it to another ground of argument. You put whoever you've accused on the defensive."
Arnoldus also sought to discredit Bank of Hawaii by saying it had loaded its senior management with "Mainland imports" who alienated the local market, a comment that led Michael O'Neill, Bank of Hawaii chairman, to compare Arnoldus to a character in "The Mouse That Roared," a satire about a small country declaring war on the United States.
Dharm Bhawuk, a professor of management at UH who teaches cross-cultural training, said there are dynamic imported managers who can inspire employees at local companies. But managers ignorant of cultural behaviors can hurt business and drive out talented employees.
Bhawuk said losses for international companies who hire a bad leader from an outside culture can range from $100,000 to $300,000, including reduced productivity and expenses for hiring, relocation and training.
Other violations of not being local are more subtle, such as a company's style of doing business. Arnoldus also drew criticism here by initiating an offer to buy City Bank from shareholders after City Bank management was reluctant to embrace a Central Pacific merger proposal.
City Bank President Ronald Migita, who has said little publicly about the hostile takeover, responded that it is "not how we do business in Hawai'i."
Many non-Hawai'i-based companies doing business here try to convey a sense of their local-ness through advertising.
Christianson cited Pizza Hut as a classic example, with ads featuring local employees and proclaiming the chain as "your kama'aina Pizza Hut."
The association, according to Christianson, whose firm is not a client of Pizza Hut, has given the pizza chain more of a local association than Domino's or Papa John's.
Companies, however, are often reluctant to tailor national advertising to Hawai'i residents, particularly because the state is a relatively small market.
Importance of positioning
Daphne Chu, creative director and vice president with advertising firm Ostrander-Chu Inc., recalled the example of GTE, which she said didn't understand why they needed to use local ad material after acquiring Hawaiian Tel many years ago.
"Their attitude was, 'Oh, we understand multicultural communities ... we've done stuff in Florida,'" Chu said.
Chu said companies today better recognize the importance of positioning themselves as being part of Hawai'i's unique community, though some now try to do it by producing advertising on the Mainland using models who look hapa or part-Asian wearing a mu'u or aloha shirt.
"Just by the way they act, their body movement, the way they're styled — you know it was shot on the Mainland," she said. "When you make a mistake and pretend to be local it looks really stupid."
All these areas, combined with generous charitable giving, which many large national companies do to generate good will and give back to the communities they do business in, blur the qualities of what it means to be a local company or organization.
Alden said that in reality most Hawai'i consumers desire a mix of local-ness and global-ness. These "integrated consumers" or "glocals" like the quality and standardization of global products and services that also have a local feel or reflect local culture.
"Sometimes they feel global and sometimes they feel very local, and they don't want to ever give up their local ties or local roots," he said. "To say that the local roots, the local culture isn't still a very, very powerful draw is wrong."
On Friday, Arnoldus said he regretted making the comments about local-ness. And two days before that, UH President Evan Dobelle rejected the Mainland-designed school logos, saying "the local thing" was a factor.
"We don't have these conversations in California or Massachusetts or Florida ... we need to get by that," he said. "Do we give a preference to local business? Absolutely. Do I give a preference when I hire somebody? Absolutely. But if a committee has chosen a firm, and I try to overturn that ... you're trying to dominate an institution and that's not what I'm about."
Dobelle added that he knew the selection of a Maryland firm over 11 competing firms (six from the Mainland and seven from Hawai'i) was going to be problematic, "but this is a university and it's different than a corporation where you make top down decisions."
Christianson said he believes that most companies and organizations "try not to just talk the local talk but walk the local walk" with their hiring practices, vendor choices, corporate culture and knowledge of their customers.
"It matters," he said. "It genuinely matters."
Advertiser staff writer Beverly Creamer contributed to this story. Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
