In my opinion #2 is a direct outgrowth of #1 and all things are subordinate to it. The main way to build #1 is through internal communication from leadership to employees and vice versa.
Beginning of time – roughly 1950s: You did what you were told and #2 was primary. There was no such thing as #1. You bought image and image only and did not know what went on inside the ivory tower.
Roughly 1960s-1970s: The seeds for #1 were sown with the civil rights movement, antiwar movement, feminist movement, Watergate. Hypocrisy was the biggest sin you could commit. But still there was no Internet so not much empowerment of the individual with regard to forcing transparency.
1980s: All things branding became the craze because it was a wealthy, high-rolling time. There was very little interest in #1 and a lot of interest in turning yourself into #2, though nobody really thought of it that way.
Roughly 1990s – 2010: We tried to recover from the 1980s but didn’t get anywhere till nearly the turn of the century. At that point and progressively more and more, we figured out #2 and paid superficial attention to #1. Mostly because we started to realize that not only could you write a blog but others could too and you couldn’t control what they wrote! OMG!
Roughly 2010 – Present: #1 takes center stage as all attempts to control your image prove meaningless in the face of social media as a tool and the axiomatic belief that every person has the right to their say. In this environment the leader is the brand but the workforce is restless and every misstep, mistake, or lack of coherence generates all-out rebellion, too often played out in social media. #2 often is a direct outcome of #1. (There is tremendous emphasis on metrics but in the end personality dictates #2.)
Going forward: The concept of the genius leader will be obsolete and the focus will be entirely on employee-generated internal communication. Meaning, that employees collaborate to get work done and in the process help each other find the information they need. We will see companies relaxing the rules on what employees can and cannot say as they increasingly try to engage them for the sake of the mission. People will increasingly be thoughtful brand ambassadors at the frontline level, or begone. In this kind of organization #1 and #2 merge as customers interface with employees and real-time user demand generates the products to be branded and sold.