When I want to make a point about strategy, I often refer to a famous brand in order to do it.  So does everyone of course, and because there are so few brands out there who are strategically interesting, the same names always get repeated.

To be honest I always feel a bit embarrassed to mention the usual suspects in pieces like this, because even if you’re making an original point, a well-worn case study can immediately make it feel cliched.  However there’s no denying that they’re useful: clear, vibrant, and more importantly, familiar.

There is however one iconic brand who I basically never reference, and that is Nike.

Despite being arguably the ultimate case study cliche (behind perhaps Apple), Nike never struck me as being especially strategically interesting.  Or perhaps more accurately, I simply didn’t have good grasp of what their key strategic play was.

Well, thanks to a book sent to me by a reader (thanks Greg), I now know their back story – and it’s interesting enough to pass comment on.

The book is Cultural Strategy by Douglas Holt and Douglas Cameron, wherein the authors discuss a concept they call “cultural innovation”.  Cultural innovation is essentially the idea that a brand can open up clear market space not only through functional innovation (i.e. providing improved or novel performance), but by representing a new ideology within its market.  Brands who pursue this second approach don’t necessarily need to have any meaningful functional differences with their competitors at all – they simply need to stand for an arresting and motivating cultural position which is deeply at odds with the status quo.

I’ve never really bothered to draw this distinction between functional innovation and cultural innovation before, instead preferring to talk about the new value a business brings to the market.  For me it’s clear that this value can be either functional, cultural, or ideally both – however on reflection I do think it’s useful to pay some special attention to the cultural side of the equation because it’s rather more subtle than the functional.

It can be hard to talk about pure cultural innovation, because most of the great brands do both.  Apple we might say represented an extremely powerful combination of both cultural and functional innovation – whereby they made computers non-nerdy, accessible, and tools for creative expression (cultural), which they then backed up with radical design, UX, and product innovations (functional).  Perfect.  Nike, on the other hand, give us the ultimate example of a purely cultural and ideological strategic play.

In short, when Nike came to prominence in the 70s, they and all other athletic apparel companies were embracing the same category norm: a focus on performance and winning.  Typical of this expression would be an attempt to build associations with top athletes and their moments of victory (thus implying that the shoe or whatever played a big part in it).

What was somewhat different about Nike was their background, specifically in running.  Running, unlike other sports, was individualist and somewhat masochistic.  Phil Knight, Nike’s founder, was himself an accomplished track athlete – and he understood this culture better than anyone.  Running often doesn’t have a glorious moment of victory (for example when you’re jogging); it is simply a solitary process which requires discipline and fortitude.

This individualistic mindset, and focus on the struggle associated with sport, rather than the moment of glory, laid the foundations for Nike’s cultural revolution.  Whilst other brands would typically advertise a sneaker with an athlete triumphantly crossing the finish line, Nike would instead choose to focus on the athlete’s 5am morning routine: getting up in the dead of winter, and putting in the miles no matter what.  By and by “Just Do It” emerged as the call to arms of this philosophy; go through the struggle, no matter how tough.

Needless to say this focus on overcoming obstacles rather than simply “being great” was seen as being applicable to all sorts of wider issues beyond competitive sport.

Their first iconic ad featured a real octogenarian San Francisco resident who ran across the Golden Gate Bridge every day before swimming in the bay.  Many of their subsequent ads emphasised the most unglamorous elements of training; pain, poor weather, and the like.  Latterly they leant heavily on the struggle of urban kids trying to use sports to leave the projects, and on female athletes struggling for recognition, and even on overweight people (not the typical ambassadors for a sports brand) taking that first step to better health.

In short, Nike became the brand for anyone who wanted to be associated with taking matters into your own hands, and overcoming obstacles.  This stood in stark contrast to the more upbeat but fundamentally shallow and demotivational positions of their competitors, who stood by their “this shoe will make you play better” ideologies.

As you can gather, cultural innovation is an extremely brand oriented type of strategy.  It is, largely, superficial.  Unless you go for the blended approach of cultural + functional, you will not be building any concrete walls between yourself and your competitors.  However, as Nike have proved, that doesn’t necessarily negate the power of the approach if done with sufficient skill.

Would I recommend it?

For most brands I probably wouldn’t, frankly.  The problem with it is that, due to its superficiality, it looks far easier than it actually is.  I’m pretty sure that all branding agencies believe they are engaging in cultural innovation (even if they don’t call it that) when they work on a project – but clearly vanishingly few actually are.  That’s because cultural innovation requires actual innovation.  That means it must put forward an ideology which is in opposition to the orthodoxy.  And naturally very few brands have the guts for that.

What I see most brands doing is in fact the opposite.  They set up “straw man” orthodoxies to push against, and then act like they are doing something brave and counter-cultural, when in fact they are leaning deeply into establishment tropes.  They think they are acting like Nike, or Ben & Jerry’s, or Apple, or any of the other successful cultural innovators because they are copying them – without realising that those brands were only innovators because they went against the orthodoxy of their times, and did so so successfully that they made their own positions orthodox.  In fact we can put the continued success of these brands today precisely down to them representing the establishment – which of course is a great place to be if you can get it.

In truth a modern Nike would in many ways have to be the anti-Nike.  It would need to put forward an ideology like:

Any of these would be far more counter cultural than anything in the pious territory of overcoming obstacles.  I have noticed that occasionally Adidas have flirted with some positions approaching these; which suggests to me there are some smart cookies behind the scenes there – and sure enough they have performed extremely well in recent years.

Anyway, overall I think it’s a worthwhile exercise to consider your current balance of functional vs. cultural innovation, and whether it needs readdressing.

If you’re a functional innovator, can you follow the thread of your innovations to reveal a consequent cultural innovation?  And if you’re a cultural innovator (you probably aren’t, but you never know!), can you follow that thread to a functional one?

One thing’s for sure: due to the process of concentration I wrote about recently, cultural innovators are becoming rarer and rarer.  So potentially there are some spoils to be had.