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Leadership Now

If You Can Solve This Equation, You're Ready To Build Your Brand

Driving brand innovation is not easy, but it is simple—solve the Innovation Equation and your brand will grow.

[Image: Flickr user ansik]

Imagine it’s 8th-grade homeroom: the bell rings, and you take your seat. Written on the board is the following:

X + Y + Z = $

The teacher walks in and announces that solving this equation is your assignment. Teen angst—even more than usual—ensues. That’s because this equation can’t be solved. Why? Because there’s no constant.

The above equation is one that marketers encounter each day. But instead of cardigan clad teachers, these professionals answer to hardened CMOs and investors who aren’t in a position to gently walk them through it. Brands need to grow, and this equation must be solved—now!

Enter The Innovation Equation

There are three factors—X, Y, and Z—to account for in order to drive brand innovation. They aren’t easy to obtain, but they certainly are simple. And it all starts with assigning a constant.

To form a true strategic platform, one must have X—an audience or target, Y—a felt need or desired benefit, and Z—design DNA or capability.

Often, larger organizations are bereft of all three of these, so much so that it can cause paralysis of choice. Startups, on the other hand, often only have one constant to which they cling.

Whether it’s an engineer applying physics to make a new heart valve (Z), a coder writing an algorithm for a new diet app (Y), or a mom-preneur looking to social media as a way for moms to meet other moms (X), their constant is the key to solving for the other two variables.

Big brands should identify the constant they know the most about, then work to develop the other two variables in order to create meaty platforms. It’s one of the true keys to making efficient progress, and to quickly pressure-testing for failure points before getting too far down the road. Here’s a look at how to break down the process to find your constant:

X—Is the AUDIENCE your constant?

Do you know your audience? Can you describe them like you would a friend? Can you explain their tastes, fears, likes, dislikes, and characteristics?

Or, do you at least know about them? Can you explain how old they are, where they shop, in which type of community they reside?

For example, if you know them, you may be working from a fresh segmentation study that really puts a face on a given consumer group. If you know about them, you may be interested in growing your brand’s market share with Millennials. Either is a suitable constant from which to work.

Y—Is the FELT NEED your constant?

This territory becomes a bit more nuanced, but the simple summary of it falls within the following two questions:

  1. What does the marketplace need?
  2. What is scarce?

If you’ve identified a felt need and have a pretty good answer to those questions, you’ve probably found your constant here.

For example, it’s easy to observe that people need energy. It’s also easy to observe that energy drinks are not scarce. So, you may observe that people need energy in a way that won’t leave them feeling jittery. Alright, now you probably have a constant from which to work. You can now set about identifying who most needs this, and how you’ll uniquely deliver it.

Z—Is Design DNA your constant?

A great example of this is when the R&D team shows up with a new, patent-pending technology. Now you have the Design DNA—the capability—as your constant, and your job becomes determining who needs it, and which felt needs it solves.

Any of these three are viable constants and a surefire way to lead your teams beyond the churn that often comes with big brand innovation. Simply identifying your constant will not only ensure you create substantive innovation platforms, but that you lead your team towards growth with the best, most competitive foot forward.

The principle in real life

The Innovation Equation comes to life in a new brand example like Chobani and its founder Hamdi Ulukaya.

As Ulukaya tells it, he was running a struggling cheese brand when he literally pulled a direct mail piece advertising a tired old yogurt factory from his trash can and decided to take a look on a whim. Ulukaya’s constant fell in his lap (or, more accurately, his trash can).

He had the Design DNA (Z) that would ultimately enable his breakthrough: the dormant yogurt plant. He spent two more years after that fateful factory tour figuring out whom he would serve (X), and why his new product had a right to exist (Y). The Innovation Equation that drove Greek yogurt from less than 1% of the category to nearly 60%, and continues to drive double-digit year-over-year growth, was born.

These principles are drawn from Hunter Thurman’s new book, Brand Be Nimble: How Big Brands Can Thrive by Innovating Like Startups. As founder of the innovation lab Thriveplan, the book is a result of Thurman’s global experience across every consumer packaged goods category, complemented by his work as an innovation mentor to Cincinnati’s startup accelerator, The Brandery.

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