Latest thinking on brand-led innovation

Innovation is how ideas come to market. It’s the process by which that idea becomes a product or service. Additionally to that is not only in terms of products, it could be also in terms of services. We said the two ideas are running together. It’s not like a process as it was perceived 50 years ago, that the companies will create a product and then several linear processes will deliver the final innovation to the market. It’s much more complex in the beginning of the 21st century. And, of course, because innovation is about novelty, it’s about new things, it’s about experimentation, it’s about the unknown, we can’t know the outcome of those processes in advance.

Which means that organising them is very, very difficult and complex. We have to continuously plan for the unexpected. So innovation has become a very complex process of trying to coordinate a lot of actors all at the same time. Yeah. Many of these actors are within the company– the firm. All of them working together. That’s right. Once upon a time they would have each had a clearly defined task. Well those things would have taken place in a linear kind of way. Sequential. That’s right. But I think over the last 50 years the real push in innovation management has been to get products to market quicker.

So that’s why you start to see all of those processes taking place at the same time. And the real challenge in innovation management has been to coordinate all of those activities. Now understanding that you’re trying to achieve innovation with lots of parallel activities means coordinating is a real challenge. And that, I think, is really where brand comes into the innovation process. Because a brand helps you to have the big idea, the core concept, around which lots of independent activities can take place. They still remain coordinated even though they’re undertaken in a kind of quasi independent way. And a brand is a very important way of pulling that activity together.

Will it be the case that the brand is actually leading all of the motivation of every single area towards a final outcome? That’s right, Alfonso. I think that there’s an important motivational element to brand. So a brand can permit and give workers within the firm a feeling that they are enabled or empowered to innovate. The role of branding innovation today is very much about guiding and coordinating. It means that workers don’t need to be told precisely what to do. So it’s a very important part of speeding up the innovation process. I could also observe that the brand could be the soul of the company.

But also gives you independence in every single functional area of the company to work independently as well as in parallel in order to bring the final product or idea to the market. People say the brand might be the DNA of the company. The same sort of idea. That it’s the essence of the company that you find in every single part. And the real value of that is that it enables this coordination of many different functional activities around a common vision or a common understanding of the general direction of travel of the company. So that different parts can act independently but still come together to deliver a product or service or process improvement. For established companies innovation is a threat.

And how they manage to deal with that is a really important issue. And brand, I think, is important because it can constrain companies. And that idea of disruptive innovation need to take a look– very strong look– at how the company can serve different market segments. Otherwise it can be trapped– as an example of Xerox just serving one specific, very thin market segment and forgetting the potential for other innovations they may have. That’s a really good point, Alfonso. And I think another good example there would be Kodak. So Kodak had market leadership– very strong brand in terms of photography, very, very powerful position. And they had many of the technologies associated with digital technology.

But the brand identity meant that they were never able to make that jump to the new market. Whereas other camera and film companies– Nikon, Canon and so on– made the transition to digital much better. So it is clearly possible to do that. And brand, I think, is important because it can lock them into what are currently very profitable, high value, high return segments. But the lower value– lower return segments– can actually be much, much bigger markets.