“Brand” and “Innovation,” in many companies, are often distinct functions, disciplines that come together only occasionally to collaborate. This is in large part why I believe companies sometimes question investment in those disciplines—because their efforts have not been integrated in a way that creates commercial value. And, in the worst cases, their efforts may actually be in conflict with each other.
When Brand and Innovation agendas are not aligned or at odds with each other, companies will likely not realize the financial results that they expect. But the reality is that Brand and Innovation are inextricably linked, particularly in healthcare, where the landscape is undergoing significant change.
First, let’s take a look at the Brand discipline. Particularly in pharma, “Brand” often refers to product Brands. In this scenario, Brand’s role is to set the strategic imperatives of the product based on the where it is in its lifecycle; determine the marketing needed to create behavior changes; and deliver a respectable ROI. “Brand” could also refer to a corporate or master Brand, which is more prominent among smaller companies, health insurers, health systems and other non-pharma, non-OTC companies. In this scenario, Brand’s role is to determine the corporate Brand strategy and position the Brand successfully for what the company aspires to be in the next few years.
Now, let’s look at the discipline of Innovation. This is, of course, a loaded term that means different things in different organizations, including clinical Innovation, technology Innovation or commercial Innovation. The focus of this article is commercial Innovation, which doesn’t always exist as a structured function in some organizations. A simplistic way of breaking down commercial Innovation is by categorizing it as either downstream or upstream. Downstream innovation refers to a broad range of initiatives meant to improve a Brand’s marketing, including exploring new channels and digital platforms to reach customers. Upstream innovation refers to the “white space” ideas that evolve the Brand’s offerings through new experiences, new products/services, and potentially new business models.
The downstream aspect of Innovation is usually somewhat aligned with the Product Brand teams, resulting in both marketing efficiencies and greater relevance to customers. Yet, the upstream side of Innovation is where there are significant upside opportunities for value creation across all sub-sectors of health. In pharma, upstream Innovation is necessary to fully realize “value beyond the pill.” In Consumer Health, upstream Innovation is necessary for the transformational mindset required to reimagine the category. It is the upstream side of Innovation that needs to be closely integrated with Brand—both product-level Brands and the corporate/master Brand.
Why? And what will each discipline get from this close collaboration?
Reason #1: To uncover customer insights that are the basis for designing human-centered experiences, products, and services. A deep understanding of customer unmet needs, both the known and the latent, is essential to creating things that don’t yet exist in a format that is valuable to consumers/patients and HCPs.
What Brand Gets: Brand, whether product-level Brands or corporate Brands, doesn’t always have visibility or input into the Innovation agenda. In the case of product-level Brands, understanding the broader Innovation objectives of the organization enables them to leverage those ideas to benefit their products. And when it comes to corporate Brand, ensuring that new offerings are developed based on the same customer insights that drive the corporate brand positioning allows for more certainty in the success of the Brand.
What Innovation Gets: Upstream Innovation teams typically do not have the resources to spearhead research that would generate such insights. The budget, and sometimes the capabilities of extracting rich insights, typically would reside with Brand (and its supporting functions). Collaboration with Brand allows for access to existing organizational knowledge and customer insights. In addition, it helps add to Innovation’s research agenda to cultivate deeper insights about areas of opportunities.
Reason #2: To ensure the aspirations of the corporate Brand positioning are legitimized and brought to life through new offerings. Brand positionings are intended to be aspirational. In healthcare, there is room for the corporate Brand positioning to push the boundaries on aspiration as companies evolve their category and portfolio mix. In the best-case situations, upstream Innovation offerings are developed in conjunction with the corporate business strategy. However, the upstream Innovation offerings must also align with the corporate Brand strategy for the Brand to be believable to customers and other stakeholders. And the Brand must put some of its equity into the Innovation offerings to generate interest in those products/services.
What Brand Gets: For example, if a fitness brand wants to position itself as more of a holistic wellness brand, marketing initiatives alone will most likely not achieve this. People will expect to see new offerings and solutions that help them achieve their wellness goals, beyond just exercise. Collaboration with Innovation enables new offerings to align to the Brand’s aspiration.
What Innovation Gets: By the same token, if a fitness brand starts to launch new products and services in areas beyond exercise without committing some of its brand equity toward them, customers may see that as a push to sell them “more stuff” without seeing it as part of the Brand’s value proposition. Collaboration with Brand allows the new offerings to get more attention and be taken more seriously. And if these new offerings fail commercially and are discontinued, customers are more apt to forgive the failures and eventually purchase future new offerings, because they believe in the Brand.
Reason #3: To maintain internal credibility and engagement with employees. One of the biggest problems in repositioning a brand or developing new offerings is that employees are not bought in or don’t believe the organization is truly committed to the transformation. This is particularly important when the employees are responsible for delivering on the Brand value proposition to customers or advocating for the new offerings.
What Brand Gets: A collaboration with upstream Innovation shows employees that the Brand value proposition is not just words on a page or marketing messages without substance. It shows that the organization is serious about its aspirations.
What Innovation Gets: A collaboration with Brand shows employees that the organization has some rigor when introducing new offerings. It’s not just about selling whatever people may buy only to increase revenues; rather, it’s about expanding what the Brand stands for and creating solutions that fit into that aspiration.
The more aspirational an organization wants to be with their Brand(s), the more integration is required between the Brand and upstream Innovation disciplines. The collaboration creates credibility and facilitates pull-through of the company’s business goals.