Digital Brand Discussions is a series of articles that discuss, debate and elaborate on topics related to Brand - theory, practice, management and Digital - in the broadest sense of the word. And mixture of those two. Starting with articles from April 2016 I covered both basic topics such as "What is a Digital Brand" and "Why should your Brand be a Digital Brand" but also more strategic such as "Digital (as) Brand Equity Building Tool" and organizationally-oriented topics such as "The conflict of Brand and Digital in matrix HQs". "Digital (as) Brand Equity Building Tool?" discusses how to use Digital to build Brand Equity while I also tried to touch upon challenges digital brands and marketing professionals working in HQs of Global Brands face every day in articles such as "The Rise of Digital Brand Touchpoints"and Global Brand's Digital Consistency Challenge.
Since it's been a while since I had time to sit down and write, I want to address now a question of Brand's Innovation, Value Innovation and Digital and most importantly - the Culture of Digital Brand Innovation.
Why Do Brands Want to Be Perceived as Innovative?
It turns out that most innovative brands or those who are perceived as innovative are also the ones that have biggest market cap. Innovative brands sell most and have huge revenue streams. Take a look at Apple, L'Oreal and you'll get a clue. Why is this so? Well, let's consider what innovation actually means for the company? It means that consumers will be coming back, and if you're lucky, like Apple was (not sure if it still is), customers will be lining up to your next product versions. If people are waiting for your next version, they're definitely not looking to anybody else (competitors).
Also, if your Brand is perceived as innovative, consumers will like that and they will be willing to pay a premium, even if they might not use or understand the innovation in place. One of many research papers that discusses innovation perceived by consumers and its importance in driving purchasing decisions can be read here - Why brand innovation is a vital consumer selling point
Product Innovation vs. Value Innovation
Now, there is a big difference between Product Innovation and (customer) Value Innovation. At the core level the difference is that Product Innovation doesn't necessarily have customers in mind and often it actually has company and its sales in mind. I could argue that Apple iPhone sequels, all after its first version, were actually examples of Product Innovations not (Customer) Value Innovation. Product Innovations are Technology-driven innovations that may or may not offer customers additional value. On the other side Value Innovation starts with Customers in mind.
Blue Ocean Strategy Value Innovation Model
Value Innovation starts with Customer perspective and looks at the Buyer Utility (Map) and how to increase elements of it.
Blue Ocean Strategy Customer Utility Map.
If one takes into account these criteria, it would be hard to argue that Apple iPhone 6 vs Apple iPhone7 provided any customer value innovation. I could use that same argument to go back to Apple iPhone 1. It surely didn't reduce costs, nor did it simplify maintenance, disposal, delivery, nor touch on environmental friendliness.
Brand's Digital Value Innovation Potential
Google's, Apple's and recently, Samsung's Self Driving cars being tested on streets are examples of Innovation Through ReCombination that is enabled by digital.
I believe digital can be used by brands to unlock the innovation cycle. Google's, Apple's and recently, Samsung's Self Driving cars being tested on streets are examples of Innovation Through ReCombination that is enabled by digital. Cars were there before, satellite was there before, internet was there before, and maps were there before. But different combination of these, enabled by digital (connections, data processing and IoT) have made self-driving cars possible. If your Brand is looking to innovate, I would look at the Value Innovation Concept, Buyer Utility Map and ask myself what can digital do to move these elements around? How can digital make disposal (of products) easier for our customers? How can digital make maintenance realtime or more convenient? How can our Brand use digital to reduce the cost of acquisition and cost of ownership for the customers ?
If your Brand is looking to innovate, I would look at the Value Innovation Concept, Buyer Utility and ask myself what can digital do to move these elements around? How can digital make disposal (of products) easier for our customers? How can digital make maintenance realtime or more convenient? How can our Brand use digital to reduce the cost of acquisition and cost of ownership for customers ?
Culture of Digital Brand Innovation - Who Has it?
But how does one company start innovating and start innovating sustainably? I believe the key component to a Brand's ability to use Digital to Unlock Innovation is the company's Culture. What characterizes a culture of digital brand innovation? And how can your brand develop it? I'll refer to the example of Red Bull and the presentation of their ex CTO and now Chief Innovation Officer Andreas Gall done during the Mobile World Congress, IAB session. The presentation was one of best ones I've seen in conferences - and I attend most, if not all, conferences around the world when it comes to digital, marketing, brand, creativity, and startups. Andreas showcased examples how they used digital tools (data + IoT) to measure and later visualise emotions in their creative brand expressions.
While this is a great example of innovation in creativity and brand expression creation, one thing I kept asking myself was how is Red Bull and their culture different from other Brands and was it this that enabled them to innovate in digital brand expression creativity? I believe it is and one thing that drew my attention is the number of times (at least three) that Andreas mentioned that in order to achieve this Red Bull partnered with three different startups.
I believe this is the example of what makes a Culture of Digital Brand Innovation possible - cultural openness - or openness to new ideas, new people and new companies.
That sounds quite straightforward but in practice many Global Brands, or better said, successful companies, aren't open to innovation. Success breeds arrogance is one of the key takeaways of my Stanford Growing Companies Executive Education Program. The Culture of Arrogance as a result of Previous Market Successes was the key to failure of the biggest companies and the biggest brands.
Culture of Arrogance as a result of Previous Market Successes was the key to failure of the biggest companies and the biggest brands.
So, if you're a Global Brand, wanting to Innovate and Innovate with and through Digital, I would keep my focus on whether you're open enough to innovate. Are you open to new people, new companies and new connections? Keep that in mind next time you get a Linkedin request or a Startup pitching you their idea / concept that they might be holding a key to your success. Or your failure.
So, if you're a Global Brand, wanting to Innovate and Innovate with and through Digital, I would keep my focus on whether you're open enough to innovate. Are you open to new people, new companies and new connections?
How to Innovate Systematically?
TO READ THE FULL ARTICLESIGN IN