Business leaders lean on terminology like “design thinking” to define and quantify the process for innovation. It doesn’t matter what you call the process, what we all desire is more creativity in the process. Creativity is elusive.

Most of us don’t understand creativity, but all of us appreciate it. Marketers spend all their energy seeking creative solutions to the challenge of building enduring and successful brands.  Creating innovative products and brands people can’t get enough of is an elusive reality for many businesses–yet innovation happens everyday all over the world.

Knowing that innovation is happening everywhere, and not wanting to be left behind, most enterprises want to be really good at innovation if they are to create competitive advantage in the marketplace. This is where the organizational discipline of “design thinking” comes in play. It’s a trendy term that implies a higher value method for delivering creativity and innovation.  It’s jargon.

Innovation is radical not incremental.

Radical innovation is what happens when something unexpected shows up, and it just happens to be something people where waiting for– just not asking for– like Facebook, the Swiffer, and an iPad. Every one of these innovations was not based on user needs. Radical innovation is not about function and form, but about meaning– never driven by users.

So what then is the basis for creativity within the innovation process? The answer is simple– a creative mind with the passionate desire to pursue an un-proven and perhaps un-needed idea at just the right time.

Most enterprises aren’t set up for investing and pursuing un-proven and un-needed ideas. They’re organized around risk-averse quantifiable disciplines to make profit and return value to the owners of capital invested. Managing process requires linear thinking creativity does not.

Creativity requires the right dirt.

Like life, creativity within organizations requires the presence of specific elements and in precise quantities. We all want more creativity. For creativity (and innovation) to thrive in organizations, the dirt has to be right.  If it’s not right, then innovations coming out of the enterprise will most likely be incremental – one feature or benefit better than what the other guys are doing at a cheaper price.  Flat-screen TVs come quickly to mind.

In our me-too cluttered marketplace, incremental innovation is not enough to drive much change in behavior or demand.  Nor will it propose new meanings and context that’s highly valued by the marketplace. Building the ecosystems within organizations that spawn greater creativity and innovation is not something every organization will be good at. That’s why so many business leaders and consutancies embraced the idea of design thinking.  It’s a way of making creativity within organizations a linear process.  Business leaders love linear process and efficiency.

Jargon may make designers sound smarter, but it doesn’t enhance their creativity. Nor will it provide market leading innovation.

More creativity within organizations requires the dirt be comprised of:

• an engaged and passionate leadership with a big vision of change
• the vision and purpose is shared amongst all stakeholders
• a healthy shared acceptance of risk playing out on the edges of what’s possible
• talented and highly skilled people who share the vision and pursuit as their own
• money
• time

Take any of these essential elements away, or have them not be in the proper quantities and you can call the innovation process anything you like, but it doesn’t make creativity a force alive within your organization.

All people are creative.

Creativity is the unique expression of our most basic human nature. Everything that ever was, is now, or will ever be, is at first, a formless idea swirling in the goo of creativity inside someone’s head. There is no special club one has to be a member of to express their innate creativity. Both right and left brains are welcome and necessary.

What’s awesome about creativity is it’s such an inclusive thing. Everyone likes creativity because everyone believes they’re creative. And the good news is they’re right!

The behaviors necessary for people to be creative don’t require special knowledge– just empathy and awarenss of human needs and being sensitive to the people and culture you’re immersed in.

From that experience, people will creatively develop the specific knowledge and wisdom to frame up the problem and develop the organic ability to create and enact the right solutions. I suppose you could call that design thinking if it makes you feel better. Call it whatever you want. At the end of the day, the desired element is creativity.

Not all organizations are creative.

There are plenty of creative people designing away inside business organizations that are not driven by creativity or innovative. Every organization can’t be Apple even though they possess all the components that make Apple-type companies possible. This is what makes organizational creativity so elusive. Consequently academia (those that teach but cannot do) tries to provide the doers with fancy terms and quantifiable thinking models to make creativity and problem solving something more predictable and dependable. Seemingly, the more organizations try to mandate creativity as a core competency, the less creative and innovative they are. It’s a bit like dancing with your shoe laces tied together.

Creativity is a phenomenon not a process. Design is process, engineering is a process, and marketing is a process. CEOs who value a culture of strict process usually lead enterprises devoid of the creativity that drives radical innovations that change the world for all us.

Creativity doesn’t require terminology to help people be more creative or organizations more innovative.

The notion that the process of value creation and innovation can somehow be quantified as something predictable, with outcomes easily repeated, is a compelling one indeed. Unfortunately the magic of value creation doesn’t work that way. The source of value creation BEGINS with formless creative thought not data.

Crazy ideas.
Everything that ever was, is now, and ever will be is at first a formless thought seed in the creative mind. Many of the products we can’t live without today started out as crazy ideas– automobiles, airplanes, personal computing, digital music an entertainment, smartphones, the internet and social media – stuff nobody needed or was asking for, but once realized was just the thing they we’re waiting for.  All the stuff that has changed how we live in the world begins as formless crazy ideas.

Crazy ideas are always more richly embedded with game changing opportunity than safe ideas. A safe idea is the one you can “prove will work” before it takes form in the world.

As early humans, we learned and adapted within the context of our surroundings. When humans first learned that fire makes life easier (like cooking meat and keeping warm) the idea of fire was eagerly embraced as necessary for survival. I’ll bet before people figured out the “use value” of fire, it probably was a very frightening thing to experience–and not perceived as very useful.

Crazy ideas are like ancient fire– feared until proven useful.
The music industry fought tooth and nail to avoid the firestorm crazy idea of digitally produced, reproduced and distributed music. Looking back, it’s hard to imagine the days of vinyl records and CDs. If you were a creator of music, you had very little power in how you received economic reward for your creative output. If you were a consumer, someone made the decision for you about what music would be available for you to listen to. It was a closed system unable to accept and utilize a crazy idea.

Consumers were not demanding the crazy idea of digital music be created out of their unmet need for digital music.  Yet once its use value was realized, the crazy idea changed an industry and the world.

The same is true for more commonplace crazy ideas like the Swiffer, which changed how people clean their homes. Dreyer’s Slow Churned Ice Cream, which enabled consumers to enjoy more healthful desserts. And Digiorrno Pizza, which elevated frozen pizza to delivered pizza status.  Nobody was asking for these crazy ideas, yet each one proved massively successful.

Crazy ideas propose new meanings and create competitive advantage.
In a me-too world of abundant choice, it’s far better to create new value (propose new meanings) than compete for the value created by others. If your product is competitively ranked number three or four in a category, you may want to be thinking about a “crazy idea that won’t work” that will create a new meaning around your product that puts it in a league all its own.

That’s what Swatch did. When their bigger competitors Seiko and Casio were closely monitoring consumer needs for technical precision then inventing Quartz technology, Swatch had the crazy idea that people valued self-expression more and created a new category and untouchable competitive advantage in a class by themselves for over a decade.

The key ingredient to competitive advantage is to provide people with more “use value” than they pay in cash value.

Although you could buy a high-quality, precision quartz watch from Casio for under $50, it didn’t provide the perceived use value of self- expression available for $100 from Swatch. This is the power of crazy ideas in creating new value even when it’s not driven by known user needs.

Two choices: the creative plane or the competitive plane.
If your business is to thrive in the new economy driven by crazy ideas, you’ll have to choose between operating from the creative plane or the competitive plane.

When your organization operates on the competitive plane, it can only win when somebody else loses. You will only bring products to market that are based in incremental user needs, and abundantly available from other sources. You’ll be forced to compete at the lowest price. Crazy ideas that are without form and unproven will be discounted in favor of the status quo. Your enterprise will be managed based on control, competition and survival.

On the other hand, if your organization creates value on the creative plane, there will be no shortage of supply or opportunity.  You’ll bring products to market that redefine the category, delighting customers with the unexpected, making competition irrelevant. Your customers will experience more use value than they pay in cash value–making price irrelevant. Your teams will be focused on turning possibilities into realities. You will not count transactions but create experiences people love and build trust money can’t buy.

Indeed, value creation is a crazy idea. Get crazy and more up the value chain.

In a world of ubiquitous choice in every product category, brands no longer compete with each other rather they seem to be melting into each other. It’s time to rethink different in a world predisposed to sameness.

In category after category, the more brands strive for differentiation, the more alike they become. This is the paradox of different. Never in the course of human history has there been more abundant choice and consumption.  There are more upgrades, add-ons, flavors and features between brands in a category that many have become indistinguishable in consumer’s minds.

The rise of the category connoisseur.
In her provocative and quirky book “Different–Escaping the Competitive Herd”, Harvard Business School professor Youngme Moon describes how consumers navigate product categories and discern differences among brands within categories. She uses (to great effect) a low involvement category like breakfast cereal to illustrate the process. According to Moon, it goes something like this:

You’re standing in the middle of the breakfast cereal isle in your local grocery store. Your mission is to select a cereal you’ve never tried before–ideally one you will end up enjoying. How would you go about it?

If you were a breakfast cereal category connoisseur, you would simply walk down the isle instantly eliminating whole batches of cereal types from your consideration– kid’s cereals or anything with lots of sugar. You might begin to narrow your focus down to granolas or high fiber cereals. Maybe you would eliminate raisons or walnuts from the mix. Until you make your selection. The whole exercise would be over in less than a minute.

Consumers have learned to deconstruct a product category into sub categories and mini categories. Consumers, faced with overwhelming choice, have learned to make distinctions between various brands based on the smallest details of difference, and along the way become category connoisseurs. Before consumers can discern brand differences, they must be highly involved in the category.

On the other hand, if you were an alien from another planet, this simple task would prove nearly impossible. For this poor soul, ALL the cereals would appear to be pretty much the same. Why? Because where a connoisseur (category aware consumer) sees differences, the novice (unaware consumer) sees similarity. According to Moon, “connoisseurs can discern subtle differences based on nuanced asymmetries”, while a novice will lack the necessary filters to organize the assortment of choices in a relevant or meaningful way.

You could repeat this same exercise in any number of product categories with the same result. Try explaining to our aforementioned alien friend the difference between a Honda and a Toyota?  AT&T Wireless and Verizon? Wendy’s and Burger King?  Coke and Pepsi, Crest and Colgate?

Yet as consumers, we take for granted how frequently we make purchase decisions among brands in the face of mind boggling, overflowing product choice. For brands competing in a category, this reality has critical implications–especially in mature product categories where the number of alternatives has grown exponentially.

It’s a mistake to assume product proliferation within the category translates into product diversity. As the number of products grows in a category, the differences between them become trivial, almost meaningless.

The emperor has no clothes and everybody knows it.
The whole point of an effective brand strategy is to create relevant competitive advantage in a category. This is accomplished by having a value proposition that is highly valued and not in abundant supply. Yet with so much choice, it’s difficult to name a brand in any category that stands out for its uniqueness.

We now live in a brand landscape of dissimilar clones where imitation has become cloaked in the disguise of differentiation. Marketers still believe in the myth of competitive separation and advantage by function, features and rational benefits. They continue to imitate rather than innovate.

Meaningful differentiation is a breakaway from conventional wisdom.
Over time, consumer’s consumption patterns dictate the conventional wisdom of the category and what defines the functional reach of the products within that category. It’s easy to see why brands that fit neatly into the consumption pattern blend into the category. Thus contributing to the trivial differentiation that eventually becomes imitation.

To break free of the defining norms and innovate new meanings, brands have to breakaway and provide consumers with an expanded view or alternate frame of reference.

Breaking away means letting go of the consumption pattern embedded into the category. Consumers must be complicit in this process for the magic to work.

A great example of a breakaway brand is Cirque du Soleil.  It falls into the “circus” category, but this brand has skillfully crafted a highly valued and differentiated positioning as everything a circus is not. There are no tents, tigers and elephants. No ringmasters. Instead it borrows attributes from other entertainment categories like, dance, music, opera and theater.  It becomes something all together different–far outside the bounds of a conventional circus.

Breakaway brands bring new meanings to the party and make the most of the stretch, holding on to enough of the conventinal wisdom to avoid category defection. Breakaway brands stretch these boundaries and live as outliers. These brands are the opposite of the well-behaved brands in the category and consequently provide a radical differentiation from the status quo.

Breakaway brands challenge the conventional patterns of consumption in the category by proposing new patterns to consumers they would not normally apply in that specific context. In essence, these brands provide the very thing consumers were waiting for, just not asking for.

To break the paradox of different, brands become the exception in their category and not the rule.

Design is an essential thinking skill that must be mastered as a strategic business imperative throughout the entire enterprise. Design is not merely a decorative act.

Everywhere one looks in the marketplace there is revolution and disintegration. Wave after wave of technological change and ubiquitous choice comes upon us more rapidly, engulfing us, confusing us more profoundly. Marketers are struggling to keep pace with disruptive forces that are reshaping the manner in which they innovate new value in this so-called new economy.

Globalization has still to prove itself globally useful amidst a world experiencing the dynamic tension of growing consumption and dwindling supply. The new workplace has seen its own revolution. People no longer rely on the old paradigms of security within the corporation as out-sourced manufacturing, customer service, and even out-sourced innovation mark the end of an era of status quo–especially in the US. Ironically, the nature of this paradigm shift has un-hinged our own intuitive human connections even as we become more and more digitally connected in the social web.

Many marketers have been unprepared to re-think the structures of their enterprises and flow with the changing times, while new, more agile competitors are doing it for them. Brand strategy is no longer about differentiating brands within a category, but rather designing a whole new category your brand can own.

There are two dynamic realities marketers face in this new economy:

1) ideas are more important than process.
2) move up the value chain, or be cast aside.

Nature, in the form of our current economic realities, has had a wonderful way of clearing the dead wood in the system to make room for more innovative players to grow and prosper. Amazingly, as the rules of the game change in real time, improvisation and flexibility is now a useful strategic skill within organizations.

It’s an exciting time rich with opportunity for those who view it as such. Indeed, opportunity is apparent everywhere. If you are a marketing executive, charged with defining and managing the competitive advantage of your products and services, the implications of this disruptive age are of significant importance to your future.

For your brands to stay relevant, your “value proposition” will be less and less derived from attributes of product and service features, and more from the emotional connections and experiences your customers have through their interactions and associations with your enterprise. Creating these “experiences”, and the use value they offer people, is the result of the strategic and creative process of DESIGN.

Design is: a focused fanaticism to create value.

Design is, in all its disciplines (product, process, environment and communication) an essential thinking skill that must be mastered as a strategic business imperative throughout the entire enterprise. Design is not merely a decorative act.

Good design is a value generator. Design has added billions of dollars worth of market capitalization to those enterprises that understand its power and higher purpose. In the new economy, design is the soul of enterprise strategy.

You don’t have to look very far for examples of brands where this principle is applied with phenomenal results: Apple, Nike, Starbucks, BMW, Harley Davidson, Herman Miller, Target, Gillette, Virgin – every one of these enterprises are absolute fanatics about design and its fundamental importance to their business strategy.

Whatever the product or service enterprise, you’ll find design fanatics at the very top of leading organizations. Fanatics who value design as the white hot center of competitive advantage. As a result, design elevates brands above the competitive plane into, dare we say, the more abundant creative plane. Design leaders are not bound by the restrictions of the competitive plane (think cost and commoditization), when they are free to innovate, grow and expand by leveraging the love (think passion and devotion) customers have for their offerings.

In a world of growing complexity and abundant choice, design is the great differentiator.

Consumer Packaged Goods
Kevita Probiotic Drinks
Kevita LLC
Strategic Brand Development

Bringing new vitality to this up and coming functional beverage brand, we helped KeVita refresh its brand to set the stage for its next level of growth.

Kevita is an early stage RTD functional beverage brand offering consumers a delicious and refreshing way to include probiotics into their diet for digestive and immune health. Founded in early 2010, Kevita has experienced some early success with regional distribution, new product introductions and more operational efficiencies.

Challenge
Like most early stage start-ups, not enough attention or resources was invested into brand building. The KeVita brand was struggling to define its value proposition in the functional beverage category and faced entrenched competition from other beverages promising health benefits from their ingredients. The product labeling and shelf presence, although bold and colorful, was generic offering consumers no compelling reason to reach for the brand or retailers to stock it.

In the hyper-competitive beverage category, the KeVita brand needed a compelling and distinctive brand positioning and promise that retailers believed would win consumers at shelf. To grow distribution into national grocery chains required a complete assessment to define where the brand could compete and win going forward.

Old Kevita Packaging and Trademark

Brand Innovation
Working from the brand team’s current market research, and other insights gathered from in-store product demonstrations, we helped the brand team define the target consumer segment that represented the brand’s best opportunity. These consumers were at the nexus of three important trends driving their engagement with the category: greater awareness of the health benefits associated with probiotics in their diet, the market growth of the natural products and functional health beverage category, and the desire these consumers have for creating life experiences with a “sustainable” sense of health and well-being.

Informed by the learning from qualitative consumer insights we crafted a value proposition and brand positioning around what health-conscious consumers cared about most– to experience radiant vitality!

To bring the new brand promise of “delicious vitality” to life at the store shelf, we designed the refreshed brand identity, trademarks, packaging formats and product labeling system to vividly express the essence of refreshing natural flavors, sparkling, living probiotic cultures, and radiant energy expressed with bold and vivid color. The early response from key retailers like Whole Foods has been remarkable. You’ll soon find KeVita in all nine refreshing flavors on the shelf of every Whole Foods Market (and others retailers like them) all across the USA.

Many marketing people are obsessive about the urgent work of competing rather than the more important work of creating.

Brand owners and managers are busy people! They’re busy everyday in back-to-back-meetings. They’re under increasing pressure to create more revenue, and get more stuff done as cost effectively (cheap) as possible. They’re thinking about supply-chain logistics, product development, pricing, channel strategy, promotions, customer service and their competitors.

Managers are hyper-focused on their marketing ROI– the urgent metrics executive management values most and forms the basis of reward and compensation. It’s easy to see why the focus is on the urgent rather than the important. Only a select few of enlightened marketers are afforded the luxury of paying much attention to the more important work– creating!

One of the important principals we hold near and dear in our brand strategy practice needs to be mentioned:

Tis better to create new value than compete for the value created by others.

Why on earth do really smart people invest tens of millions of dollars bringing me-too products to market?  It makes no sense at all, yet it happens all the time in every product category.

The most important things are often neglected.
Think about your own personal life. There are important things that inspire your imagination and are worth pursuing, but somehow they get pushed back while you focus on the expedient matters at hand. It’s no different in organizations.

Increasing revenues with the greatest profit margins is the urgent work of business organizations. The more important work of increasing their value to people is often neglected in the frenzied money-making process. This is where most organizations experience dynamic tension – create new value vs. milk the status quo.

If your company/product/brand no longer existed would any one care?  Does your enterprise represent an ideal (beyond your product/service) that people highly value? Does your organization focus on innovation that provides people just what they’re asking for, or do you focus on providing people what they’re dreaming of and waiting for?

Increasing your value to people requires the insight to be two steps ahead of the customer’s stated needs and connecting with their unspoken aspirations and dreams. This is what people really care about. The products/brands that best represent these higher ideals are usually the ones that reshape categories and lead markets.

If you’re discounting your prices, you’re not leading anything.
Only market leaders command premium pricing. There can only be one leader. Everyone else sells on functions and price. And in an over-crowded marketplace, where there is abundant choice, any price is too high. You can’t grow your business discounting your prices. Nor can you increase your prices without providing the equivalent “new value” people are dreaming of and waiting for.

Innovate around a higher meaning.
Creating new value always involves proposing new or unexpected meanings. What matters most to people is not the function or performance of a given product, but their emotional, psychological and cultural connection to what the products means to them.

New value is in the “meaning” not in the physical thing. People don’t just buy product, they buy into a higher meaning. This unexpected idea, unsolicited by user needs, once discovered, turns out to be the very thing people were waiting for, just not asking for. Nobody was asking for an iPod, Facebook, baked potato chips, the Swiffer, or any other product innovation that has redefined or reinvented a category.

Moving up the value chain implies more than a fair exchange.
It’s no longer enough to meet customer quality expectations. Today, everything is good. Good=the same!  To thrive, enlightened business leaders will focus less on urgent transactions and more on creating scintillating, dramatic, unique, relevant and transformative experiences.  This will always involve innovating new value ideas that provide far more “use value” than customers pay in cash value.  This is the over-looked source code to customer advocacy.

Creating a bigger future in unreasonable times.
In previous recessions, consumer spending was our ticket out of the dip. Not any more. Consumer spending still holds at 72% of GDP.  It’s unlikely to grow further. And in the face of nearly 10% unemployment, productivity has not declined, so it’s unlikely there will be big demand for more workers either. The only way out of this mess is to innovate your way out. Creating bigger futures is the important work to focus on.  This requires lots of inspiration, freedom and creativity.

No other strategic activity is more important (and elemental) to business growth than creating new value for people.  At the end of the day, it’s simply a matter of choice to commit to do this important work.

These have been unreasonable times! In previous recessions, consumer spending was our ticket out of the dip. That’s not happening this time around.

We’ve prepared a report on product and brand innovation for you. It’s our intention to share our insight, selected industry data, and perspective that may be useful next time your team sits down to plan the marketing strategy for introducing new products and creating new brands. We sure hope you find it helpful. If so, please leave your comments for others.

Download PULL report (pdf)

Consumer spending is already 72% of GDP, and is not likely to grow further. Our productivity has not declined even with 10% unemployment, so it is unlikely to increase now. I don’t think you would disagree marketing teams are doing more with less these days. This is especially true when bringing new products to market. The only string left to play on is innovation. If you’re going to create a bigger future, it’s going to require you innovate one. If innovation is the gateway to bigger futures, new products have always been the path.

You can’t lead by following. If you can’t be in the top three of your product category, perhaps some invention is in order. Only innovation can blaze the trial of competitive advantage. Enlightened business leaders and marketers will focus their collective resources on creating, rather than competing for what’s already been created. We believe this is what we as marketers need to be focusing on right about now.

Innovations are happening right now, round the clock, and round the world. Indeed innovation holds the key to our global economic recovery. As a result, there will be a massive increase of new product introductions in every product category as the economy turns around.

How clear is your vision looking out on the horizon of opportunity?