Creating an Innovation Nation
Creating an Innovation Nation
How to supercharge innovation in the UK
The UK is home to some of the strongest and most enduring brands in the world. The Top Five brands in this year’s ranking have almost 500 years of heritage between them.
But while so many UK brands are seen as flag bearers for quality and reliability, they lag much of the rest of the world when it comes to innovation. In the minds of consumers, brands from fast-growing economies, particularly in Asia, tend to have the edge when it comes to innovation, as do the giants of the US tech industry – the likes of Google, Apple, Facebook and Amazon.
These leading international brands, along with a good many smaller ones, are growing their value much faster than UK brands, and are perceived as being far more innovative.
But the innovation gap in the UK isn’t just a matter of geography or even age. After all, Apple is 42 years old this year, and Google is turning 20.
Is it complacency, modesty, a lack of imagination or something else entirely that’s holding back big UK brands?
We brought together innovation specialists from WPP companies across the UK – who addressed some of the myths about innovation, how to break down barriers to innovation, and the hidden importance of making a mess-free cheese toastie.
They concluded that there are many factors behind the UK’s innovation gap; but the good news is: it’s a gap that can be filled.
Don’t be an ostrich
Brands first need to appreciate that there’s no product or service category that isn’t ripe for disruption by an innovative alternative – whether that comes from a current player in the sector or, as is often the case, from outside the industry.
The fresh set of eyes that an outsider can bring often reinvents a category, as has been the case in sectors as varied as banking and mattresses.
“The basis on which many of these brands have been built are old-fashioned, arcane and meaningless to a lot of people,” said Conrad Persons, CEO of the agency Mash. “To say ‘we’re a bank that holds your money’ to people who say money doesn’t really exist, it’s just a number on your phone … why is that relevant to me?”
The innovation could be about the product itself – as is the case with the new breed of mattress suppliers that send your item rolled up in a box with satisfaction guaranteed – or about the ease with which a service can be accessed. Think here of money-management apps that take away the pain of traditional “customer services” from banks with branches and websites. Complacency invites disruption, and pretending it won’t, provides no protection when consumers are redefining what’s acceptable to them.
“It’s ostrich syndrome,” said Warren Minde, European Practice Leader, Innovation, at Kantar Consulting. “When something’s big and scary, they put their head in the sand and pretend it’s not happening.”
Defining the challenge
Often the barrier to innovation is a misunderstanding of what innovation actually is. Too frequently, innovation is seen as new product development, when actually innovation in the minds of consumers is far broader than that.
The make-up brand Glossier, for instance, has not reinvented the category or even particular products, but it communicates in a novel way that engages its fans and builds a relationship with them. It has reinvented not lipstick but interaction.
Part of what makes innovation scary and difficult to achieve is quite possibly the word “innovation”. The ‘I’ word can make people in a business imagine that it takes innovation specialists to innovate – possibly with added ping-pong table and office ball pit. The word “idea” is where innovation starts, and no department or individual has a monopoly on ideas.
“Ideas can come from anywhere,” said Minde. For many organisations, however, it takes a change of mindset to see that great ideas – not just about product but also service and experience – can come from an. An idea can be as simple as realising there’s a problem to solve.
“There’s this myth about creative genius and only innovative people have ideas, but that’s not the case,” said Andi Davids, Senior Strategist at Superunion. “As humans that’s one of the things that sets us apart – our ability to analyse and draw conclusions about the world and have ideas.
“We need to start by getting companies to foster ideas, then apply those ideas to challenges that we have, and then finally look at how do they take that to market. You could have the best innovation in the world but if you can’t sell it, it’s not innovation, it’s just an idea.”
Ready, set, innovate?
The scramble for innovation is often counter-productive, as businesses desperate to be forward-thinking pursue misguided solutions to problems that don’t really exist, or fail to get the simple things right.
“Innovation for its own sake is very dangerous,” said Jenny Kirby, GroupM’s Managing Partner, Digital Services. “Think of the explosion of apps that happened seven years ago. Everyone had an app and it was basically their web site in an app format. If an innovation lacks utility or resonance with people, it’s just a white elephant. To say, ‘I’ll do an innovation, tick!’ is meaningless.”
“There’s often a rush to create solutions for a problem you don’t understand, or to monetise an opportunity you haven’t properly thought out,” said Persons. “Think ‘what’s the problem you’re trying to solve, what’s the opportunity, and what are my expectations of it?’. ‘Are we going to make money tomorrow, is it creating a new category?’ These are questions people tend to get bored with quite quickly, which is unfortunate, because you end up with shortcuts rather than real vision.”
Innovation can be about small developments that taken individually seem tiny. McDonald’s, for instance, develops new products all the time, but always in a way that’s true to the McDonald’s brand and experience.
“It’s not always a big ‘ta-dah’ moment; it’s evolutionary innovation,” said Conrad Persons.
Our innovation experts shared some of their personal favourite innovations, which ranged from the Borrow My Doggy service to Warburton’s Toastie Pockets, which allow consumers to make tasty toasties without making a cheesy mess.
Minde said true innovation catered to shifting consumer expectations, on convenience or sustainability, or personalisation.
“People see companies as innovative when they’ve experience the surprise and delight of doing something they’ve never been able to do before,” he said. “Like with Just Eat, my food just appears there. Or I can just switch on Netflix and don’t need a DVD. You have to be ahead of that, and that’s hard.
Brands don’t have to innovate alone. Volvo has been working with Amazon, for instance, to encourage potential buyers to book test drives online, and has partnered with FedEx so that parcel deliveries can be made directly the boot of users’ cars.
“You don’t have to sit in a room and build everything yourself,” said Neil Bruce, MindShare’s Head of Mobile, UK Strategy.
Often, a business brings in innovation – and a spirit of innovation – by acquiring an innovative brand. This works, provided the parent gives the smaller brand scope to retain its way of working and a distinct identity. Innocent drinks is a good example; it is still one of the most innovative UK brands, according to BrandZ data, although it has been owned by Coca-Cola for several years.
“It works, as long as the right company buys the right company,” said Persons.
Let’s make some noise
The important thing about innovation is that brands must not only do it, they need to make sure consumers know they’re doing it, to shift perceptions.
Brands such as Apple are great innovators, but also great communicators. The iPhone has evolved only gradually hardly changed in the past five years, but communications around the brand ensure it is still seen as cutting edge. Similarly, consumers are excited by Amazon testing drone deliveries, because this, rather than the web services that make up the bulk of their business, gets talked about.
“If anything happens at Tesla, you know about it because it’s on social media,” Persons said. Similarly, Red Bull is perceived to be innovative even though the product is unchanged, as a result of the experience that’s been built around the brand and the way it communicates.
Phil Sutcliffe, UK board director at Kantar TNS, suggested this was a cultural issue, with British businesses tending to see innovation as something they should hide away to generate. “That’s innovation as a destination rather than looking at innovation as a journey,” he said.
The way forward
While the WPP experts reported seeing increasing numbers of clients with innovation budgets, what’s less common is the idea of ongoing innovation permeating an entire business.
Anjali Puri, Global Director, Qualitative Offer and Expertise, at Kantar TNS, said innovation had to be driven by a purpose that was genuinely well-intentioned, such as solving a problem that consumers were grappling with. Others cautioned against allowing data – and institutional investors – to hinder rather than help progress.
“For me the future of innovation is about addressing big human needs,” said Minde. “Whether it’s through tech or not, it’s about addressing a desire for convenience or sustainability, or big human needs for safety and security. It might be tech that’s addressing it, but tech itself is not the innovation. You don’t need to have millions and millions for R&D when people actually want simple things … and it feels like this generation is ripe for business-model innovation.”
UK brands – old or young – should see the declining barriers to innovation as a chance to make a big difference to people’s lives. Brands like BP and Shell, for instance, are seeing the shift towards electric cars and cleaner fuels as a chance to promote their category leadership.
“A lot of the big UK brands have a huge opportunity to be more innovative,” said Phil Sutcliffe, UK board director at Kantar TNS. “It’s a massive opportunity.”
Manifesto for innovation
- Consider scrapping the ‘I’ word – The word “innovation” can be intimidating, and make the process feel off limits to all but a few individuals or department. “Ideas” is more inclusive, as everyone can come up with ideas.
- Think beyond new product launches – Sometimes the greatest innovators make only incremental changes to their products; others change not just the product but their service or the experience around it.
- Let consumer needs and desires be the driving force – Focus on purposeful innovation that serves real human desires, needs and feelings. This is how many startups are disrupting established brands.
- Don’t pin your hopes on new tech – Technology can be a great way to deliver innovation or make it possible, but it’s rarely the tech itself that makes a difference to someone’s life. Every brand touch point plays a role in perceptions of innovation so pay attention to them all, not just the newest and shiniest.
- Be bold – The first step is to innovate, and the second is to shout about it. The brands perceived as being the most innovative are often those that communicate clearly and frequently about what they’re doing.