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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.

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.

[Image: Flickr user ansik]

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  • Thanks for the equation, let me remember x is for audience, y for felt need, and z is for design dna, the last one is not clear for me, can you teach me?

  • That's right, Joey. If you have the felt need, and the audience who experiences it, the Design DNA (Y) is the way you're going to address it. It could be product technology, business model, distribution capability - you name it.

  • Interesting.

    Could there be a fourth innovation constant - values (V)? Innocent's 'Chain of Good' & Toms 'One for One' , for example, created within their audience (X) entirely new felt needs (Y) because their constant was their values (V).

    From Smoothies to Noodles (with rumours at one point that Innocent was diversifying into renewable energy) and from shoes to glasses (with all kinds of speculation of where Toms will go next).

    Or maybe their values are their design DNA? Thoughts anyone?

  • Great provocation. I think the Tom's origin, and the values (V) that drove it, were actually around felt needs. Blake Mycoskie WANTED to do good in the world (just as brand managers WANT to grow their businesses).

    Evolutionary psychology confirms what Blake observed: that people demonstrate 'conspicuous generosity' in order to gain social status. That was his constant and his entry point to take his aspiration into reality. From the felt needs (Y) of 'conspicuous generosity,' he was able to address an audience of well-to-do Millennial consumers (X) with the One-for-One business model (Z).

    Without question, WHY companies do things is just as important (if not more so) than WHAT they do. Values (V) is the source of aspiration. The Innovation Equation provides the framework to make aspiration viable reality.

  • Brians Brackets

    Gear 1, Gear 2 and Gear 3. Unmet needs and Value Proposition.

    I think it comes down to finding a need (realized or not) and designing a product to fill that need. I don't mean throwing junk on the market just because you can, but introduce a real product that fills that void in the unmet need.

    I am currently (after one year R&D) preparing to market a new or different product into a filled market. I have designed these pieces so the buyer will have an emotional attachment to the product, because they can make the piece they want to fit their particular needs from a group of parts. What they buy is their design, their innovation and their personal product.

    The evolution of the product came through understanding that it isn't about me; it's about the audience or target. I too have be studying storytelling, from the written perspective and from a cinematic perspective. I have also been and continue to work with an award winning learning designer. Thanks for the article.

    Brian Steeves

  • well written and well said... the crux of the marketing lies in finding out the need for the product..the Y factor, if that is identified, X and Z generally could be trimmed and fit in.... but we generally go by following the examples of successful products and rust as "me toos" in the market and in the process blame sales staff for not putting in their best... Anand M.Sharma.