Branding Is not such a Big Deal

As usual, just one single remark and the spark caused the fire… I simply said: “I don’t think brands play such an important role as in the past” and I didn’t have time to explain my argument before an avalanche of negative comments from my dinner colleagues buried my statement. Thus, be this humble post an explanation of my incendiary point of view.

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[Creativity + Innovation] + Monitored Risks = Business Success

Everyday we read or hear about a different business model, a new turn in the operational processes, a breakthrough in the business marketing strategy… just trying to achieve, increase or extend the business success. However those avalanches of numbers, processes, and strategies sometimes hush up what is really the distinguishing value of a firm: its creativity. Without it a company will never be successful, since creativity is the main business driver.

Creativity must be fed and cared and it usually fades away whenever it is subject to strict rules; flexibility is required: the creative employees do not need a management structure which is always controlling them. They just need space and freedom to create. The corporate culture normally looks for homogeneity, but it may be the worst foe of creativity.

Creativity and innovation must be fostered from the top management; nonetheless, the founding members or managers should not be the last responsible for them, but every single employee should be innovative in their area. A true creative firm is the one which encourages its employees to take important decisions without having to be always asking for authorization.

Is creativity so essential in our business scenario? Taking into account how fast not only companies appear and disappear, but also our society evolves, the key to survive to this changing and challenging maelstrom is creativity and innovation.

Some of the most meaningful business examples of change and adaption to the new needs of our society are the following:

1.- Tiffany & Co. began as a stationer’s.

2.- Nokia was a pulp mill to manufacture paper.

3.- Kutol Products was a soap company from the USA, which manufactured a product to clean wallpaper; however, this business declined and the firm took the decision of transforming the product into a toy which was called Play-Doh –modeling clay-, of which more than 2,000 million of bottles have been sold.

4.- 3M -Minnesota Mining and Manufacturing Company- sold initially the mineral corundum; then it began diversifying its output and it has launched more than 55,000 different products. The firm reinvents itself every decade approximately and around one third of its yearly turnover comes from products which have been in the market for less than five years.

As a conclusion an important item: we have to be aware creativity and innovation are linked to assuming risks and everybody is afraid of risk since human beings are terrified by uncertainty and failure. Assuming risks should not be an option in our times, but a requirement: the best way of guaranteeing the future business success is to take reasonable monitored risks, gauging our strength and resources. It is easier to face the fear to risk when we have done as much as possible to quantify it; whilst being imprecise amplifies that fear, measuring the risk diminishes it. We have to face risk with well-founded data: it is the best way to know how far our firm may go regarding its –hopefully successful- bet.

Towards the Realm of Experience

It could have been the typical conversation at odds between an iPhone fan and a Samsung tifossi but this time there was something which caught my attention. My two friends were defending the advantages of their corresponding smartphones and trying to convince the counterpart about the pre-eminence of one company over the other one:

“Esthetically iPhone -and Apple by extension- will always be much more developed than Samsung”.

“Ok. But, you know what, technically the top Samsung smartphone is much better and powerful than the top iPhone, even regarding the screen resolution”.

“Nonetheless, and you have to admit that, having a iPhone is an unique experience; something Samsung will never be able to improve or even replicate”.

And here lights switched on and some past readings came to my mind… Experience, that’s the question.

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Made in a Developing Country or in a Developed Country? That is the Question

Would have Corona beer sales been better initially if, instead of Mexican, the beer had been produced in USA? Probably yes. Would have KIA car sales increased swifter if, instead of Korean, these automobiles had been manufactured in Germany? The same positive answer as before. This is what the Harvard Marketing professor Rohit Dehspandé calls the provenance paradox.

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Business Model Environment Analysis

Upon either launching a start-up or reviewing the business model of a company, it’s paramount to analyze in detail the environment surrounding the new potential organization or the established one.

The environment mapping and the explanation of the several areas, performed by Alexander Osterwalder and Yves Pigneur in their book Business Model Generation, are simply remarkable from my standpoint. According to these authors four areas can be distinguished around a business model: market forces, industry forces, key trends, and macroeconomic forces.

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