Innovation -- everyone's talking about it. Almost all corporate mission pages cite innovation as a strategic priority. But are businesses talking about the wrong kind of innovation? For much of history, innovation has usually focused on the product. Improving product performance, adding new product features, or creating new products altogether have usually been the cornerstones of most innovation strategies. And we often talk about approaching innovation through the power of experience. Yet there's one lever at a company's disposal that is often overlooked as a compass for innovation -- brand.
Innovations inspired by brand have for many years taken the guise of brand extensions. Applying a brand name to related products and services has often led to supplementary revenue streams for companies. But far from putting a logo on a product, true brand-led innovation gives companies the ability to play in new industries altogether and establish relevance in other parts of customers' lives. How can brands position themselves to grow this way? And what's the relevant criteria?
In answering these questions, it's worth splitting the world of brands into two groups. One set consists of brands defined solely by the products they sell. They're experts in what they do and nobody else does it better -- think Bose for sound systems, Dyson for vacuum cleaners, and Intel for microprocessors. A brand like this may push the boundaries in its respective industry, but with strong functional attributes, it is unlikely to gain credibility in other parts of customers' lives. When Intel ventured into the consumer electronics business -- making digital cameras, audio players, and even toys -- it couldn't quite capture the hearts or minds of its audience. The company discarded the unit a few years after its launch.
Then there's a another group of brands that while still associated with a certain product or service, are known for the way they go about doing things -- think Mercedes for elegance, John Lewis for service, and Apple for simplicity. What we have here are brands that are guided by an inspiring and meaningful purpose that gives them the ability to play in multiple product categories. It's brands like these that can break ground in new spaces, shake the status quo, and drive innovation in new and unexpected ways.
Having an emotive and inspiring purpose is not enough. The key to making big shifts across industries lies in identifying a common link and one that is relevant to the industry being considered. Even successful brands can get this bit wrong. The Virgin group famous for shaking up all kinds of industries has seen most of its extensions work because the notion of challenging convention was relevant in each venture. Some extensions didn't work, perhaps for reasons that aren't brand related but Virgin's move into the Cola business was hard for consumers to understand -- why do I need a brand that challenges convention for my beverage needs?
For a brand to move categories, its attributes have to resonate with the needs of the customers in that area. It's the reason why Bulgari, with its impeccable design ethos, was accepted in the hotel space, why Disney could translate its sense of magic into consumer products and video games, and why Caterpillar could take its ruggedness into footwear and apparel. These brands stand for something customers want and are making it available in other parts of their lives.
Of course, an innovation strategy guided by brand presents its risk. Why would companies risk hurting an already strong reputation in new areas where resources and capabilities may be inferior? This is where truly understanding how your brand is perceived bears fruit. Brands that trigger emotional and attitudinal responses from customers become associated with a sense of feeling. It's these emotional triggers that customers find hard to resist when thinking about new products or services to buy.
So what's the key lesson for building your brand? To improve your ability to innovate, ask yourself whether your brand is guided by a true and meaningful purpose. Does that purpose widen the playing field beyond your immediate circle of products and services? Does it link to a bigger idea that resonates emotionally with customers? If your brand answers those questions, then it is well placed to becoming an empowering force for innovation.