What Aunt Jemima Can Teach You About Data and Innovation

The business world loves the idea of using data to make important decisions. The reason is simple: data takes the emotional and subjective irrationality from the decision-making process. Executives think if they can be more rational, they will be more successful. There's some truth to that, but in many cases, using data exclusively can hurt executives more than it helps them.

Data has its part in any decision, but it shouldn’t be the only concern executives have when considering what move to make next. To show you what I mean, let me tell you a story.

What Aunt Jemima Can Teach You About Data

Back in the 50’s, Aunt Jemima was a well-known brand of pancake mix that wanted to grow its market share. To help accelerate their sales, they hired a young advertiser named George Lois.

After working with the company for a time, George Lois asked Aunt Jemima:

"How come you guys don't have syrup? You own the pancake business," Lois recounts in an interview he recently did for NPR. The company replied, "Well, that's not our business."

According to Lois’ vision, Aunt Jemima was a syrup brand in addition to a pancake mix one. This may seem like a trivial addition, but it wasn't; Lois believed Aunt Jemima was attempting to grow their brand in the wrong way - by increasing the sales of its already-popular pancake mix. Instead, they should create a complementary product and grow market share that way.

Lois tried to convince them to manufacture and sell Aunt Jemima syrup, but to no avail. The company wasn't interested in creating a new product offering.

Instead of getting into an argument on why Aunt Jemima should change their offering, Lois decided to create a simple questionnaire about pancakes for their customers to answer. The questionnaire asked which brand of syrup they had purchased recently, and included the option "Aunt Jemima Syrup."

Today, anyone recognizes that product, but back in the 50's, it didn't exist. The only product Aunt Jemima sold were pancake mixes.

The results caught Aunt Jemima off guard:

"Something like 90 percent of the people or so circled that they had bought Aunt Jemima syrup," said Lois. "I took that research to the head guys, and I said, 'I want to talk to you about syrup.' ... Of course, they created the syrup, and they became the leading syrup brand in the world in two days."

The reason Aunt Jemima was able to become the leading syrup brand in the world was simple: George Lois saw an opportunity, consulted the data, and listened to the customer.

The genius behind George Lois' actions doesn't have to do with his ability to come up with a perfect idea, he simply followed a hunch about what people would buy and tested it using data.

Due to this, he was able to convince the company to create an entirely new product that is still successful nearly 70 years later.

It’s important to note that George Lois didn’t just utilize data - he used the right kind of data; one that stemmed from Aunt Jemima's customers.

The Problem with Using Data to Innovate

Big data is a recurring topic in executive meetings, events, and magazines these days.

Executives expect to become "data-driven" by taking large amounts of data and taking decisions based on whatever their data scientists can find. In this end, innovation becomes a matter of crunching numbers.

This idea of using data to innovate seems appealing at first, but in my opinion, is a big mistake.

The problem isn't that using data is bad for your business. On the contrary, when you use it correctly, you can make great decisions. For example, according to Baseline Magazine most  Fortune 1000 companies would receive an additional $65.7 million increase in income for every 10% increase in data accessibility.

The problem arises when business leaders begin to think that innovation is an abstract process that happens inside a dashboard after you have crunched terabytes of data.

If you want, you can get any kind of data you can think of for your business. Just stop to consider for a moment that more data has been created in the past two years than in the entire previous history of the human race.

But these terabytes of data have no real knowledge of your business; they are simply abstractions.

Your data shouldn't guide your business decisions; it should complement them.

In the case of Aunt Jemima, Lois believed the company was positioning its products incorrectly based on what he thought people knew. He may have thought Aunt Jemima was a syrup brand, not just a pancake mix one. He may have heard his neighbors and friends talk about Aunt Jemima's syrup when they were actually talking about its pancake mix.

Whatever the case, he had a hunch that the business was missing out on a major opportunity. He then used data to confirm his hunch; not to come up with it.

What fuels your innovation isn’t just data or just inspiration. Individually, both have failing points and biases. The trick is for organizations to build a robust and sustainable innovation process that incorporates both inspiration and uniqueness, and combine it with real-world tested facts.

Having an Agile Mindset

I believe data is best used when you approach it with an agile mindset. Instead of waiting for data to tell you what to do, you need to test your ideas in the real world, in front of your customers.

Having an agile mindset doesn't reject the idea of using data to make decisions. On the contrary, an executive with an agile mindset uses data extensively in the decision-making process. The key difference is that a successfully innovative executive gathers better data, which in turn helps the business make better decisions.

This is the case in the example of Aunt Jemima: Lois got the right amount of the correct data to justify making a great decision that transformed the business of his client. He didn't get financial reports explaining how creating a new product would impact the sales forecast.

He simply showed his client that people wanted to buy a product that while it didn't exist in the shelves, existed so clearly in people's mind that they already believed they were buying it.

For this reason, I believe big data should always be used in conjunction with small data. This gives you the ability to test assumptions faster and learn more about your audience in the process. This agile mindset will help you drive innovation more quickly and successfully..

According to Eric Ries, author of the Lean Startup: your decisions should be iterative, incremental, and evolutionary. In other words, you should test things, learn from each test, and slowly improve each test so you can end up with the right solution.

Being iterative and agile goes against commonly used business practices, in which a commission of experts decide what to do, spend months and a large budget implementing the idea, and then must wait to determine whether the idea worked or not.

Don’t Forget About Your Vision

If you have read this far, you may be thinking that I'm in favor of launching ideas without considering any data. You may assume I think all that matters is what the market says and nothing else. Don't have a vision, just test and see what happens. Actually, this is far from what I think.

Some of the biggest innovators of the last hundred years (e.g. Edison, Ford, Jobs), knew that if they relied on their customers, we never would have seen things such as the lightbulb, the car, or the iPod.

Henry Ford famously said: “If I had asked people what they wanted, they would have said faster horses.”

You shouldn't focus only on what your customers want and disregard your vision. Your vision matters a lot. It is what makes you unique and sets you apart from the crowd. But your vision has to be in line with what the market wants, needs, and will pay for. It is the balance of vision and data that results in innovations that change the world.

When in doubt, follow George Lois steps: listen to your hunch, gather data to support your ideas, and test them in the real world.