Brandovation

This autumn, at Thomas Gad‘s house in Medinge, Sweden, a meeting of the leading brand consultants who are members of the Medinge Group took place. The discussion about innovation and branding was recorded by Sergei Mitrofanov, COO, Brandflight, Moscow.

In the discussion participated the following persons:

• Thomas Gad (Sweden),
• Stanley Moss (USA),
• Patrick Harris (Great Britain),
• Pierre d’Hui (France),
• Nicholas Ind (Norway),
• Ava Hakim (USA/Switzerland),
• Ed Daniel (Great Britain),
• Simon Paterson (Great Britain),
• Anette Rosencreutz (Sweden),
• Ian Ryder (Great Britain).

Sergei Mitrofanov: Branding and innovation are like brothers, one is older, the other one - younger. Sometimes innovation is moving branding ideas, sometimes vice versa. Two or three years ago I thought that innovation was only a technical term, it was about technology, techniques, computers, something like that. Now I have a wider idea about that, and it would be great if you broadened my ideas about innovation, and not only mine but also the readers’ of this magazine.

Thomas Gad: It’s an interesting task to see how you can bring them together to make it one concept. I looked for instance at my 4D branding model, which has, as you know, functional dimension, also social, mental and spiritual, and if I put this branding model on top of innovation, I immediately see that there are four different types of innovation: one is the functional innovation, which is what we are used to, which is actually what everyone thinks about – technical innovation, or methodology and things like these, depending on what kind of business you are in. It’s all about techniques and ways of doing things in a better way, using insights. By the way, I think it’s a very important thing in innovation – insights. It’s not knowledge, not technique only, but it’s actually insights into how to apply different techniques to this or that situation. That’s my definition of innovation. I think in an age when talent is much more important, where you don’t have much cycle time, you don’t have much lead time anymore, innovation is very, very important in terms of how you will sustain yourself. But I don’t know if organizations or therefore brands for instance have kept up with that sort of pace. And so the application in that kind of thought in a brand becomes one of the key layers between branding and innovation as brothers.

Thomas Gad: And also if we look at the social aspect of innovation, it is very much socially driven. For instance, when Toyota company with Lexus focuses not only on innovation of the car itself, how to make a better car, but actually it focuses on how you relate to owners, how to make the ownership more interesting, how we can focus the whole brand in that direction, and that’s also innovation. It’s a new way of looking at the car business and selling the car. And then you have the mental dimension, which is looking at the individuals, individual ways of getting knowledge, or getting interaction with the brand. And some businesses are switching from technology-driven innovation to more personal insights; individuals create knowledge and insights and selfconfidence… And then you have the spiritual dimension, which is very much what we all talked about here, it’s thinking about what are the higher ideas about innovation, how the innovation contributes to a better world, to a more sustainable and interesting world. That’s also been demonstrated by Toyota company, when they put the other focus promoting these ideas of sustainability. And at the other end they have the functional innovation: constant improvements, quality improvements, but they, too, are based on ideology. As for the spiritual dimension, it is expressed in the feeling that innovation is never done, it’s in the process of becoming better adjusted and refined. So that’s my branding methodology: put it on innovation and see what happens, what comes out of it.

Stanley Moss: I liked your summary. Is it then that you’re suggesting that brand if conducted properly could (or branding based on insights) can lead to innovation?

Thomas Gad:  I think so. If you regard yesterday’s innovation, purely technology-driven, as times goes we understand that there’s so much technology that we actually can’t adopt all of it. So the problem today is to find ways of using the technology. We have to meet our own needs. And then we start to think what it is we stand for – that’s my definition of brand: it’s what you stand for, what your idea is with this brand and this concept. And that is a very good guide for what do people really need to manifest with this brand in the product. Or it is the other way round, starting with the brand, manifesting it in the innovation. That’s how I look at this relationship.

Patrick Harris: And the early aspect of the question I asked is that high quality values-based brand can drive innovation. Brand can be poorly built and misinterpreted by a lot of people across the planet. I don’t personally think that brand can drive innovation, even a values-based brand…

Pierre d’Hui: It is good to think about branding and innovation as a positive circle or a virtue circle. So at the beginning there was good innovation, someone made the first coca-cola, then he branded it and sold to clients. So, now we think that a brand is a promise. Your branding goes a little up, and then you have to renovate because the promise is high and the expectations are great.

Little by little, especially with branding, comes an insight, you see and understand that it becomes powerful, that your branding does not belong to you anymore, you have to follow your branding making things. Innovation is the same – we have more and more kinds of innovation. You try things and then you go into a sample or sometimes 10000 samples saying I prefer the last one. To sum it up, I would say the idea is that before it was R&D on one side, advertising company on the other side, then it was inside the enterprise and now it is a kind of community.

Patrick Harris: So you might have an organization that innovates well, but the innovations do not necessarily form a cohesive whole that the organization can use. Brand can make sure that when the innovations do happen, it may not make more innovations happen, it will make those happening be more consistent…

Pierre d’Hui: It will make branded innovation…

Ed Daniel: Excellent!..

Nicholas Ind: One of the key things was about the ability of valid brands to set values to innovation. So, organizations we’ve looked at in terms of automotive, film, creative industries, what they all understood was about using brand values to set values to innovation.

It’s sort of framework in which innovation can occur. When you think about value-adds in most organizations … words like policy, integrity, environmentalism, they are very numinous words, they are up in the clouds, but you have to translate those words into redesigning a new gearbox, how do these words actually apply. That’s a real issue of taking something that sounds up in the clouds and making it practicalities of innovation. The other thing to notice is that even when you have boundaries what you should be doing is challenging the boundaries all the time, should be getting against them… An interesting example of Porsche Cayenne. Porsche is a sport car brand, and they introduce this Cayenne 4-wheel drive brand into the product range, and it really hits against the framework of what the brand is. If you look up online discussions about the Cayenne, people are absolutely mad about Porsche producing this car. “They’ve destroyed my brand”. It was very destructive to make that move.

Stanley Moss: That’s destructive innovation, and that’s the cause of brand to be devalued. This is Stanley Moss speaking… I recall you did a TV program you showed last time where you visited… was it Rover?

Nicholas Ind: …Land Rover…

Stanley Moss: And they had a great success with that brand, which as another automotive brand, it was successful innovation. So how did that manage to do it?

Nicholas Ind: Land Rover is about brand heritage, how they use that as the base point of innovation. So again it’s about brand values. They use the brand values as the catchpoint, and they are very clear about their heritage. I guess also that’s about distinctive product. I can’t imagine Land Rover or Range Rover venturing into sports cars; that would be outside the boundaries…

Thomas Gad: Actually, I was asked by BMW to do the last piece before they sold it off to have an opinion about LR brand, and we came up with an interesting idea that was building on the LR brand. The idea is a lifestyle brand. Our idea was to exploit that lifestyleness of the R brand and create new Rovers. So we created a number of Space Rovers, Sun Rovers, Moon Rovers and so on, and the idea was to endorse the technology in the brand like the Intel Inside thing. BMW is the guarantee for how this car works and the design of it… So it was interesting how you can use these brand values, but go up one level and start looking for new ways of doing it. I think that is what Cayenne is doing, they went off, they extracted the idea of the Porsche, took it up to a higher level, and then all of a sudden you see a new landscape where you can actually afford to do things…

Ian Ryder: I’d like to make a couple of observations about the words “branding” and “innovation”. You [Thomas Gad and Pierre d’Hui] connected them and made “brandovation”. I think that’s different from “branding and innovation”. Brandovation is probably where you get the Cayenne, brand extension, new ways of promoting and existence. The power is where you connect branding and innovation on a business level. We have to successfully find a way to connect branding and business innovation…

Ed Daniel: One of the interrelations is the speed of change in the software industry, in accepting that software development in the empirical process, and so much so is in marketing: you devise the campaign, implement the campaign, you analyze the results and recampaign based on the insights gained from that campaign…

Ava Hakim: I think that step you’re forgetting in marketing is finding who you’re marketing to. It’s the first step. So if you know who it is, then you can innovate for that market. And that’s the other way round: that’s innovation based on brand, not brandovation…

Simon Paterson: Innovation in business processes: how often our brand management is missing out simple process steps that screw up the branding steps. Innovative processes might have been onshore, offshore in customer response sense… Business innovation that can take on board need to be evaluated in terms of how it’s impacting customers and potential customers in service perspective, then innovate business processes, and in the boardroom say, “Hey, I can save you 10 mln dollars in this particular process and increase cash flow into this particular service box”. Then you start to gain real power by tying innovation and branding together…

Patrick Harris: When I worked at Orange, a big technology-based organization, and the pointy heads would have a meeting about something, and they would close each meeting with having developed some concept, they closed it down with saying, “How are we gonna make this Orange”. And the whole organization we are talking about wasn’t “orange”, and that became a negative aspect on some stages because you couldn’t describe what was orange, you could only describe what wasn’t. But nevertheless the conversation is there. And the second example, still Orange forgive me, but it’s a good manifestation of what you particularly talked about, Ian. It is the problem of how marketers use engineers. And what Orange had was the same problem, which was the engineers based in Bristol and the marketers based in Hartford – two wonderful places, nevertheless not connected at all, and they hated each other. And they complained all the time about how they wouldn’t go see each other. So the engineers conceived “a doohickey day”: the pointy-head boss gets given a laptop, and they call it a doohickey, and they tell him to turn it upside down to reboot it, and what they would do was that the pointy heads would invite the fluffy heads into a meeting, started off with about 60 people, and when I was there were about 350 people in it, - and the pointy heads would present to the fluffy heads things about mobile phones, about technology. Interesting things… What made it fun, what made it very-very Orange was that the fluffy heads sat around tables, and each table, round in shape, had a red-nosed button on it, and the button had a sound, each table very different in sound. And if an engineer used a phrase that was considered to be doohickey, it would buzz: “Hahhah!”. And in the day the engineer who had the most number of buzzes had to pay a penance, and the penance was to go and work a day in marketing. The whole thing was a massively Orange concept. It really suited the brand, it really favoured innovation.

Ava Hakim: I just wanted to take your thought about the pointy heads and the fluffy heads one step further in a real situation. We took our pointy-head Nobel Prize winners who were all sitting in lab coats in some secure environment, and we now put them with our customers, which takes that one step further than marketing persons taken out. Now the customer gets to work with this supermind and explain the problems, and then the pointy-head can go up to the labs and innovate for that customer. … It’s the customer talking purely about their needs to someone who can develop a tool to address those needs.

Ed Daniel: So you don’t think that marketing listening to customers is a valued input to business? That’s fascinating…

Anette Rosencreutz: No, she didn’t think so in this situation.

Simon Paterson: But what I’m saying is that we are getting direct customer feedback here. Whatever they say is up to them and the engineers, but how is their marketing feeling they could add value to their business? I’d go and retire!

Patrick Harris: What I liked about what Ava just said was that you could put a customer in touch with a pointy head, and that the pointy head could solve that particular problem, which isn’t anything to do with segments or needs or customer base, and then give that to marketing to have a play with.

Ian Ryder: I don’t think that anyone who deserves the title “marketeer” should own that unless they can sit and listen to conversations like that and then add value to the business subsequently, because frankly, although I agree with you talking about the specific need to a techie – to a pointy head, excuse me – and the pointy head will be cleaning up the language that she used. The marketer will hear a different language. The techie guy is not programmed to hear language of the customer. So I’m fascinated to hear that you don’t think that an experienced marketing head could add value in that conversation…

Ed Daniel: I love the point about putting the customer in charge, like in the Toyota case, because the customer drives. But the customer doesn’t always know what they need. They have the right to be wrong. If marketing has access to that dialogue, maybe marketing is not allowed to talk, but to listen…

Ian Ryder: That’s what I meant. I didn’t say talk I said sit and listen to that conversation and feel the language, feel the passion. I think that can lead to great innovation.

Ava Hakim: Well, it leads to innovations that are purely driven by customer needs because you have the innovator, or the technologist sitting there listening, and they have the power to create the tool. To think of things that the customer may have never thought of, or the marketer may have never thought of. Then what becomes a marketing tool is that we have that capability, and it’s a very confidential environment, so what we innovate for you we might apply to another customer because the other customer doesn’t know, they could be your competitor…

Sergei Mitrofanov: I’d like to drop a third person into this team, and it’s an entrepreneur.

Pierre d’Hui: For an entrepreneur, branding is a pure and absolute concept, so branding and innovation for an entrepreneur is something absolutely evident. To him, innovation is the way you show how your brand is. It’s a big deal for us to go light, because if we mix these things the entrepreneur will say ha, it’s good news because before you used to split these two things… There is a very good thing in marketing that we are working on more and more, and it’s called the hero product. The hero product is exactly the branded innovation. It’s the innovation that in a click you see it belongs to the brand, explains the brand, is extracted from the brand. So, to come back, I would say that for an entrepreneur it’s absolutely logical and the normal way to make it.