In the new global economic reality defined by constant change, companies and, consequently, brands cannot simply survive in the shelter of their comfort zone. Change is indeed hard and sometimes even risky, but taking risks and a certain ambiguity are part of the scenario of those companies that succeed. Comfort zones, built under pre-crisis resources and processes, must be expanded to generate new spaces that make room for innovation.

Forty percent of the businesses that have entered the S&P 500 over the past 20 years have done so from a business model focused on innovation: a new operating structure that delivers value from both the company’s and the customer’s perspective.

Advantages and objectives of innovation

Innovation is not born in a laboratory

A business innovation represents an improvement in a company’s business model. It involves making important organizational, productive, or technological changes in the proposal that a business makes to the market to be more efficient and achieve a better position in the market or even create a new market.

Four key elements are shared by companies that incorporate innovation into their DNA:

  • They adapt easily to changes in the market.
  • They are very agile internally in the development of new solutions.
  • They are characterized by a long-term vision.
  • They know how to create overwhelming competitive advantages.

It is also important to note that there are two main purposes for any business innovation. The first is to increase the competitive effectiveness of the company, an aspect that is achieved by making substantial changes in internal processes, making the organization much more competitive. The second goal focuses on increasing the value perceived by customers with the products and services offered by a business, an objective that is achieved through a reconversion of the business model, where research and development are fundamental to finding opportunities.

Innovation is a change that involves a novelty. This word comes from the Latin innovatĭo, -ōnis, which in turn is derived from the term innovo, -are (‘to make new’, ‘to renew’), which is formed with in– (“inwards”) and novus (“new”). ).

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Branding and innovation

Brand and innovation are closely linked. Strong brands are not only strong because of innovation, but they are themselves an important source of innovation. The brand allows ownership of the innovation, adds credibility and legitimacy, improves visibility and supports communication. Innovation needs the brand as a guide to connect the good things the organization has with the desires and needs of consumers.

Some common drivers for innovation are advances in technology, changes in competition, new trends, internal transformations, social changes, etc. Variations in any of these dimensions force the Company to react. But innovation cannot be the effect of reacting to a problem, but must be integrated from a proactive perspective: looking for opportunities, rather than reacting to inevitable changes.

“The brand needs innovation to complete its promise, and innovation needs branding to provide meaning to the brand by understanding the relationship between the organization and citizens. Design, and more particularly Design Thinking, is the glue that creates synergies between branding and innovation” – Brand Driven Innovation – Erik Roscam Abbing

If branding lies in finding the balance between who you are as a Company and what the customer really values, this is an ideal basis for successfully fostering innovation. The problem is that many of the decisions that companies make in branding remain in the marketing or R&D area, when any decision of this type must be made at the same level as the business strategy and this implies from the own management of the Company.

Under this reflection, for a company to grow based on innovation, three factors need to come together: a brand culture that facilitates it, a brand strategy that includes it, and good tools that support it. Any imbalance between them will cause innovation to cease to be truly innovation.

In short, the brand is an essential lever in any process of innovation and growth for Companies.

If you want to continue delving deeper into branding and innovation, read and/or download the special publication BrandAbout #6

What is BrandAbout?

 

Carlos Puig Falcó

President of Branward®

Photos: Shutterstock