Why are there so many sound-alike names? The short answer is this: Most of the good names are taken. Between a rising tide of startups on one hand, and a flood of URLs on the other, companies are continually forced to dive deeper for workable names. The latest trend is to push the boundaries of dignity with names like Yahoo!, Google, FatSplash and Jamcracker. Where will it end?

It won’t. The need for good brand names originates with customers and customers will always want convenient ways of identifying, remembering, discussing, and comparing brands. The right name can be a brand’s most valuable asset, driving differentiation and speeding acceptance. The wrong name can cost millions, even billions, in workarounds and lost income over the lifetime of the brand. George Bernard Shaw’s advice applies to brands as well as people: “Take care to get born well.”

Of course, some names haven’t been created so much as inherited. A good example of a heritage name is Smuckers, which marketing people have often cited as a bad name with a clever spin. “With a name like Smuckers, it has to be good,” goes the well-known slogan. But Smuckers was a good name from day one – distinctive, short, spellable, pronounceable, likable, portable, and protectable. And while the company presents it as slightly silly, the name benefits strongly from onomatopoeia. “Smuckers” sounds like smacking lips, the pre-verbal testament to a yummy jam.

Another heritage name is Carl Zeiss, the maker of optical lenses. Does Zeiss make great lenses? Who knows? But the name makes the lenses “sound” great. The word “Zeiss” has hints of “glass” and “precise,” and evokes thoughts of German technological superiority. The name works so well that it can stretch to include high-end sunglasses and other precision products without the risk of breakage.

Generally speaking, high-imagery names are more memorable than low-imagery names. Names constructed from Greek and Latin root words tend to be low-imagery. Accenture and Innoveda come to mind. Names that use Anglo-Saxon words, or the names of people, tend to be high-imagery names, producing vivid mental pictures that aid recall. Think of Apple Computer and Betty Crocker. Some of the most powerful names are those that combine well with a visual treatment to create a memorable brand icon.

Transformation is in the air. Business leaders across industries are recognizing that “old school” management isn’t up to the task of nonstop innovation. As a result, companies that were once run from the top down are steadily shifting to a more networked style of management in which employees and customers play a greater role in driving innovation. Networked cultures tend to be more creative, more agile, and better able to anticipate the needs of customers.

How do you create a culture of innovation? By recognizing one simple fact: If you want to innovate, you’ve
got to design. Design and design thinking are the tools that create new products, new services, new business
models, new markets, and new industries. The best way to leverage innovation—as outlined in my latest book—is to build a “designful company”.

To find out where you are on the culture curve, take this simple test: Share a total of 10 points across each of the
10 pairs below. For example, if your company is more siloed than collaborative, you might score it 6 and 4.
When you’ve finished, add up the two columns to measure your progress. If your totals come out to 60 and 40, for example, you could say that you’re 40% along the path to an innovative culture.

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For most companies, the problem with radical differentiation is the “radical” part. If nobody’s doing it, you’d be crazy to do it yourself, right?

What stops most companies from zagging is the cloud of uncertainty that follows innovation. In an effort to remove the cloud, marketers often conduct focus groups, which, while helpful in some situations, are notably unhelpful for encouraging innovation. This is because radical differentiation doesn’t test well in focus groups. When you ask people what they want, they’ll invariably say they want more of the same, only with better features, a lower price, or both. This is not a recipe for radical differentiation. This is a recipe for me-too products with pint-sized profit potential.

A better way to judge a new offering is to map customer feedback against a success pattern. When you draw a chart with two axes, one for “good” and one for “different,” you can see how your business concept stacks up against other successful zags. You also begin to see why most companies are fooled by focus groups.

On the chart, the “good” axis can include any attributes that customers typically value: quality workmanship, good aesthetics, low price, high functionality, ease of use, speed, power, style, and so on. These are the qualities on which most offerings compete. The “different” axis is for any attributes that make an offering, well – different. These can include attributes that customers may characterize as surprising, weird, ugly, fresh, crazy, offbeat, novel, and so on.

As with other charts of this type, the best place to be is in the upper-right corner – in this case, where good and different combine to create a successful zag. Classic examples are the Aeron chair, Citibank, Toyota Prius, Charles Schwab, and Cirque du Soleil. However, successful zags usually test poorly with consumers before they’re launched. They fare pretty well on the “good” axis, but then attract so many negative comments on the “different” axis that their companies get nervous and reject them.

Not surprisingly, where companies find the most encouragement is in the upper-left corner. Offerings here test extremely well, and the “good” comments are rarely undermined by negative comments such as “weird,” “ugly,” “offbeat,” or “crazy.” But the reason customers don’t make negative comments about offerings in this corner is that there’s nothing new or different to dislike. So while offerings in the upper-left may test extremely well, there’s little chance that they’ll lead to radical differentiation.

Offerings in the lower left corner, where “not good” meets “not different,” test fairly well with customers, since there’s not much to dislike or misunderstand about them. While this can encourage companies to proceed, in the end these offerings fail because there’s either too little demand or too much competition.

Offerings in the lower right corner usually don’t get off the ground at all. They’re perceived from the start to be dogs – and guess what? – they are.

What makes the good-different chart tricky, though, is that some of the potential winners in the upper right corner look a lot like the dogs in the bottom right corner. The line is often blurry, and the consequences for making a bad call can be extreme. It takes an experienced innovator to know the difference – someone who can match customer comments to a previous pattern of success.

When BMW decided to launch the Mini Cooper, piles of research showed that Americans had no interest in the ultrasmall car and only wanted more SUVs. Despite this “fact,” the zagmeisters at BMW stepped on the gas instead of the brakes and motored straight into profitable new market space.

The intrepid folks at BMW had a lot in common with physicist Niels Bohr. Many years ago one of his colleagues was invited to deliver a controversial paper to a group of scientists, including Bohr. Immediately afterward his colleague asked Bohr how the paper was received by the other scientists. He replied, “We all agree that your idea is crazy. What divides us is whether it is crazy enough.” The Mini people were crazy, too. Like a Fox.