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By Steve McKee

Why did Google whip Yahoo! so decisively? How did Apple become the world’s most valuable company? Why have we all heard of Intel? The answer is simple. Or, to be more precise, simplicity.

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The ability to distill highly complex business concepts into simple consumer propositions is one reason why Google, Apple, and Intel are three of the most valuable brands in the world. Google’s breakthrough insight was to make everything about its brand and user experience clean and simple, unlike Yahoo and other search engine companies that thought a busier page somehow communicated more value. Apple rejected complexity in everything from its operating system to product design to advertising. And Intel created a five-note musical signature and two-word catchphrase to make us all believe that a computer was better if it had “Intel Inside.”

It’s a lesson that McDonald’s —another of the world’s most valuable brands—is (re)learning the hard way. The world’s largest fast-food chain has been getting a little bit smaller of late, with second-quarter same store sales in its biggest market, the U.S., declining by 1.5 percent. The reason? A drift from fundamentals, according to Chief Executive Officer Don Thompson, who has singled out  the company’s too-complicated menu, in particular. McDonald’s is taking a fresh look at operations, staffing, advertising, and even its core value proposition in an effort to simplify as it struggles to compete with such new, exciting (and simpler) concepts as that of fast-growing Chipotle.

McDonald’s is far from alone in facing this issue. American automakers have been dealing with it for years. Some car companies have understood the power of branding simplicity for decades. Think of BMW (performance), Mercedes (German engineering), and Porsche (exhilaration). But what, exactly, is a Chrysler? Or a Buick? It’s kind of hard to put your finger on a core concept that these brands represent (other than U.S. government bailouts, but that’s probably not very compelling to consumers).

In my home state, the local insurance exchange that was set up as part of the Affordable Care Act was launched a year ago with a $7 million budget, a huge number relative to the size of the population (and dwarfing the budgets of other local advertisers). Yet, over the course of a year, less than 30 percent of the target audience of uninsured adults became familiar with the exchange and only 11 percent tried it, in part because its message is so complex. That’s often true of any kind of political initiative, which in this election season candidates would be wise to consider: Simple ideas such as “Morning in America” or “It’s the Economy, Stupid” can resonate, but most political campaigns throw a bunch of stuff at the wall to see what, if anything, sticks.

Unfortunately, that’s the approach many consumer brands take as well. Consumers today are bombarded with marketing messages and overwhelmed by choices, and they have neither the time nor inclination to wade through a forest of information to find an acorn of appeal. Bernardo Huberman, director of the Social Computing Research Group at HP Labs, put it this way: “The value of most information has collapsed to zero. The only scarce resource is attention.” There are too many screens and not enough time in our lives to process complex information unless or until we make a commitment to doing so, which tends to happen only in the more high-risk purchase occasions.

French writer Antoine de Saint-Exupery expressed the simplicity principle elegantly when he said, “Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.” That’s how to approach effective branding. Just as a chef might reduce a soup or sauce to intensify its flavor, you can intensify the appeal of your brand by reducing it to a simple, compelling idea. It should be shorter than an elevator speech and perhaps even briefer than a soundbite—a single word or simple concept that captures the essence of your brand.

Even the most complicated brands can be simplified. Take GE, a $140 billion dollar conglomerate that is one of the world’s most complex organizations. It serves a broad range of customers in a wide variety of countries and cultures, yet the company has built its brand identity around a simple concept: Imagination. The simplicity allows GE to communicate a captivating message about the company’s essence in as few as 60 seconds.

Your brand’s challenge is probably not as complicated as GE’s, but then, you don’t have GE’s marketing budget. The need to simplify is especially important for brands with limited resources, and it is growing more so as media options (online, offline, mobile, social, experiential) grow ever-more complex.

If you think you’re in the game of selling “service, selection, and low prices” (or the like), you’re not in the game at all. That’s not only a cliché, it’s complicated. But if you’ve managed to stay in business over the seven years since the financial crisis, you must be doing something right. Look inside, talk to your customers, examine what it is that has made things work. Then set your brand on the stove, simmer it down to its essence, and use it to flavor everything you do.

Originally published on Bloomberg Businessweek


Steve McKee

This smart looking guy is our agency’s co-founder. When he’s not sitting in his not-so-oval office looking official, he’s busy writing books and winning awards for them.

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