When companies lose sight of their guiding principles or sense of identity, you might be inclined to think it’s just “an internal thing”; something for them to figure out on a team-building day. Unfortunately, the impact is usually far more widespread, and far more financially damaging.

Erik Erikson was a notable psychoanalyst who made numerous contributions to the field of psychology. He is perhaps best known for developing the concept of an ‘Identity Crisis’. Erikson believed that identity was the most important aspect of a person’s life.

However, identity is just as important for the life of an organisation too.

But how can you tell if your company is experiencing an identity problem before it’s too late? Here are five common telltale signs – and some valuable lessons in how to stay true to who you are, so that your business can ultimately stand the test of time.

Sign 1: your communication is all over the place

Do you remember when BlackBerry (formerly Research In Motion) was the giant in the electronics industry? The company’s flagship smartphone had once been the market leader – beloved by company executives around the world. But then the iPhone came along and the market moved: “ordinary consumers” became the dominant buyers of smartphones, and BlackBerry was losing out by targeting its products at businesses.

“Ordinary consumers” didn’t have business-oriented needs: they wanted games and music. They wanted movies. They wanted a range of fun Apps and accessories. BlackBerry smartphones didn’t have these sorts of bells and whistles, because… well, why would a CEO have a need for ‘Angry Birds’ or a playlist of chart hits? But BlackBerry saw the runaway success of its new competitors and wanted a piece of the action.

The most notable evidence of this was the BlackBerry PlayBook – a tablet that went on sale in 2011 to compete with the iOS and Android devices already on the market.

The PlayBook flopped, and blame was placed almost entirely on the mixed marketing messages that accompanied the launch. Who exactly was the device aimed at: consumers or business users? Why would consumers choose the PlayBook over the other options already provided by Apple, Samsung and the like? Why would business users need or want something with the word “Play” in it? It was all very confusing.

The PlayBook wasn’t the only example of mixed marketing messages – and it didn’t take long before company growth stagnated and the press began sounding the death knell. BlackBerry had been tempted by the idea of being “cool”, and in the process had lost sight of its greatest strength: appealing to the less cool (but perfectly profitable) business market, with a range of services and devices well-suited to professionals.

The company learnt its lesson: with the help of a new CEO, it rediscovered its purpose as a serious business brand with a strong emphasis on security, privacy and efficiency. The result? BlackBerry products are being successfully marketed to a re-engaged B2B audience, and the company is slowly beginning to turn revenue around.

Sign 2: you have to cut prices to compete

When you have a strong sense of what your business aims to do, how it’s different from the competition and what it stands for, some people (the people you want to have as customers) will love you for it. They’ll buy your products or service – even if you’re more expensive or less convenient. They’ll talk to their friends about you, and they’ll actually derive part of their self-identity from being your customer or client.

If you don’t have a strong sense of self-identity, you don’t get any of that. You’ll only be bought or used when you’re the cheapest, most convenient option – which means you have to constantly cut your prices in order to win new customers (because people won’t be able to see any value beyond the price). You’ll get no word-of-mouth, and your customers might not even remember you the next time they need the same product or service again.

“Your identity is your most valuable possession. Protect it.” – Elastigirl, The Incredibles

You see it happening with hotel chains all the time – especially now that online hotel aggregators exist. You simply compare prices of hotels that seem to be of similar quality, then pick the cheapest. Then the next time you go away, you’ll do exactly the same thing: you’re unlikely to feel any brand loyalty towards the hotel you stayed in last time, because it gave you nothing to feel loyal about.

Hotels that buck this trend – those that have a strong sense of who they are – create a sense of loyalty among their customers and are able to charge higher rates as a result.

One such hotel chain is CitizenM.

In terms of amenities, it isn’t vastly different from other hotel chains in the “middling” category (somewhere between Travelodge and The Ritz). The rain showers, the ambient lighting, the large beds and the 24-hour food options are all there. Yet the quirky brand messaging on its website, the original little touches (one-minute check-in/out; free minibar; international plug systems), and the emphasis on providing luxuries that people actually want (“Absolutely no trouser presses, bellboys, towel swans, or pillow chocolates”) are a huge appeal to their target market. That target market will be willing to pay more for the privilege of staying in a CitizenM hotel – and they’ll do so again and again.

Whether you’re a hotel, an IT company, an accountancy practice, or an insurance broker, you MUST have a strong sense of who you are and who you’re for, if you want to stand above the competition, appeal to the right people, and charge more money.

Sign 3: you’re spending too much time looking sideways

All companies keep tabs on the competition: it’s inevitable, and it’s healthy. But if you spend inordinate amounts of time worrying about that competition – or, worse still, copying it – it implies something isn’t right.

Perhaps you’ve lost sight of your founding purpose. Perhaps you no longer know (or you’ve given up on) what makes you different from the others in your industry, and you’ve chosen to become a follower rather than strike your own path.

Many companies fall into this trap – especially when they experience any sort of “wobble” that makes them question whether their founding ideals are still relevant.

A fantastic example of this is BOBS shoes by Skechers. If the name sounds familiar, it’s probably because another (more famous) brand of shoe exists called TOMS. But the similarities don’t end there: BOBS shoes are also fabric slip-ons, which come in a variety of colours and cute patterns – just like TOMS. What’s more, when you buy a pair of BOBS, Skechers will donate another pair to a child in need. TOMS does exactly the same.

When Skechers created BOBS after noticing the success TOMS had enjoyed, the company was the subject of ridicule up and down the internet. Most importantly, though, the whole endeavour drew customers’ attention to the crucial distinction between “sense of purpose” and “marketing opportunity”.

As the TOMS website explains, founder Blake Mycoskie decided to set up the business after taking a trip to Argentina and meeting countless barefoot children. The “sell a pair, give a pair” concept was a founding principle of TOMS; it’s a profitable one, to be sure, but it’s also a heartfelt one – driven by a desire to do good. The Skechers approach, on the other hand, seems far more cynical. Not only was it unoriginal, but it also smacked of disingenuous social concern – and people saw right through it.

Sign 4: your focus on growth has left “experience” by the wayside

When Starbucks founder Howard Schultz stepped down as CEO in 2000, the company began growing rapidly. Too rapidly, in fact: within eight years, it had grown from approximately 5,000 stores to 15,000, yet Starbucks’ stock then dropped 42%.

Why? Because everything people knew and loved about the Starbucks experience became the primary casualty of expansion. Coffee quality took a nosedive. The “second home” coffeehouse feel disappeared alongside the friendly and knowledgeable baristas (the new ones were harassed, busy, and hadn’t been trained properly). And a befuddling array of high-margin food items, CDs, books and stuffed animals began taking up more and more store space. Starbucks had lost focus, and customers were going elsewhere.

Schultz returned in 2008. One of his first moves was to close 7,100 US stores for 3.5 hours, in order to retrain its baristas on how to make the perfect espresso. He also decided to only deliver whole-bean coffee to stores, requiring baristas to grind the beans themselves for maximum quality and taste. He removed heated breakfast items from the menu (because the smell overpowered the aroma of the coffee), and scaled back on all the books and CDs that were on sale at the counter. All stores were redesigned to “recapture the coffeehouse feel” – with softer colours, unique lighting and comfortable furniture.

The focus was back on good coffee, great service, and a “second home” feel – and Starbucks stock price (and profits) surged as a result.

It’s an important lesson for all companies about the importance of keeping focus (on staff, on company culture, on what your customers love about you) through expansion.

Sign 5: you’re releasing products that make no sense

Remember when Colgate started selling frozen ready meals? Possibly not – it didn’t last long, because (unsurprisingly) people couldn’t get the thought of mint-flavoured spaghetti or fluoride-filled vegetables out of their minds.

How about when BIC started selling women’s disposable underwear? The unifying concept was “disposability”: both could be thrown away after use. Unfortunately, the products had nothing else in common – and the company soon discovered that their customers’ perception of them wasn’t flexible enough to accommodate underwear.

“Always be a first rate version of yourself and not a second rate version of someone else.” ― Judy Garland

Occasionally, bizarre brand extensions pay off (Michelin restaurant guides, anyone?), but the consumer graveyard is full-to-bursting with expensive failures. Inconsistency often sets in when companies don’t have an anchor – something that gives them a sense of who they are, who they’re for, and what their purpose is in the market.

Are YOU being consistent about who you are?

Have you considered what your message, your pricing, your experience and your product say about your company? They all communicate who you are – and if you don’t know who you are, it’s almost impossible to create any sense of loyalty to your business.

If you recognise any of these symptoms, it’s time to sharpen your identity and get back on track with delighting your dream customers. After all, your competition might be able to copy what you do, but they’ll never be able to steal who you are.