The B-Factor: Why a new logo for Microsoft is not enough.

A new logo doesn't make a new brand. Let alone a new business.

Today (Aug 24, 2012) Microsoft announced a new version of it's logo. (see below).

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Microsoft's Brand Strategy Manager Jeff Hansen said "We're excited about the new logo, but more importantly about this new era in which we're re-imagining how our products can help people and businesses throughout the world realise their full potential." (Source: News.com.au)

It's painfully clear to investors that Microsoft do need to re-imagine their products and services. But will this be enough? Are new products and services enough to get you across the line to win?

We don't believe so.

The B-Factor

We've been experimenting with a new way of measuring the impact of creative, critical and constructive thinking in an organisation.

Let's call it the B-Factor for the moment, Blirt's Creative ROI (beta). It is a measure of the economic return on the investment of the creative thinking efforts in an organisation.

Why did we establish it?

We needed a better economic indicator than Brand Equity for the value of creativity and innovation. We needed to understand if, and then how, better thinking today would directly lead to increases in dollars tomorrow.

It was a measure that couldn't just be about brand.  It had to weave together investments in people, marketing and research.  

Brand equity values are useful for understanding overall goodwill. But, they are an indirect measure on future growth prospects. There's too many variables between brand equity and tomorrow's revenue. That's why some of the world's biggest and most valuable brands have terrible returns on investment and declining revenues. Yes, that brand is an asset but the way a company treats it and the way a company treats those who steward that brand might be the reason for it's destruction in value.

So what is the B-Factor?

It is Blirt's way of communicating an economic return on creative thinking and innovation in an organisation.

It is simply net sales revenue divided by the sum cost of people, communications and research & development represented as a percentage or ratio. It ignores extraordinary revenue. For example, interest from investments or the sale of a business or other asset that props up a revenue number. And, it sums the investment you place in the primary areas of critical, constructive and creative thinking - people, marketing & communications and research & development.

It is helpful to see this in the context of a competitive market. 

Here is the analysis of Microsoft vs Apple taken from their respective annual reports: ($s are in thousands of millions)

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One dollar in the hand of someone at Apple was creating almost $11 in 2011 whilst for the same period at Microsoft, one dollar was creating only $1.60.

Represented as a percentage, it clearly shows that Apple are doing more with less every year whilst Microsoft are flat lining. 

Blirt's B Factor or Creative ROI on Microsoft and Apple

Where would you prefer to put your dollar today in order to make more than one dollar tomorrow?

Clearly, new products and services are just not enough.

The way you create these products and services is so critical to the bottom line. You can't buy creativity, innovation or critical thinking. But you can inspire it and you can structure your business for it.

Until there is a new culture, inspirations and new ways of doing things I'm not sure the returns will come for Microsoft. Who cares what the logo looks like! Brand Identity is always secondary to Brand Purpose.

It is possible for Microsoft to regain the lost market to Apple and Google.  But, it will require so much more than just a suite of new products. 

That's the B-Factor. The magical mix of brand, culture and business smarts that create a stand out strategy.

What's your B-Factor? What return on innovation and creativity are you getting?

Do you want to know what your B-Factor would be?  Contact us.