Creativity Is Capital

The cover art for Volume 2 of Huge Moves magazine is magnetic — a riot of color, form and abstraction. Some readers might focus on a small detail, while others might take in the whole picture. No matter how we experience the composition, we can recognize it as the creative output of many inputs. Refik Anadol’s studio created proprietary algorithms, then the artist tirelessly manipulated and refined the imagery until the piece achieved the desired effect. The magic of creation is there, but so are the definable inputs that helped produce the artwork. If this were a statistics course, we might say that the creativity quotient of the art is high.

But among the numbers worrying the C-suite, you won’t find a metric for creativity. In business, the value of creativity is never in question; where would Nike be without “Just Do It” and the Air Jordan, or Apple without the iPhone? Yet for as long as the modern corporation has existed, a narrow, even lazy view of creativity has prevailed. At best, creativity has been treated as the output of a specific department. And even then, it’s been seen as a slippery, unpredictable, unreliable thing: a hothouse flower that drops its petals at the slightest breeze. Nothing resists measurement like creativity, and we live in a world where organizations, to say nothing of their shareholders, crave the comfort of statistically expressible information.

If we take a more expansive view, however, and see creativity for what it is — an expression of disparate inputs from across the business — an opportunity for measurement opens up.

Suddenly a business’ capacity for creativity can be quantified and understood as a form of capital, similar to financial or intellectual capital. If the applications of creativity were treated as a source of capital, they would become tools for increasing productivity and gaining strategic advantage. A business that consistently and effectively harnessed, focused and deployed its creative capital would have the jump on competitors — perhaps an insurmountable one.

This may sound like alchemy, an exercise in magical thinking. There are just too many variables, living across too many touch points, to build a valuable, viable snapshot of an enterprise’s creative capital. And even if the capacity were there, by the time the snapshot reached you, any number of conditions might have changed, rendering the whole exercise pointless.

Fortunately, we’re alive in an age where generative AI and machine learning are putting the lie to that thinking. Every day brings a new revelation in real-time data capture and analysis, to the point where yesterday’s breakthrough can become yesterday’s news.

The dominant narrative around generative AI is one of disruption: how it will blow the old modes to smithereens. When really, it’s a paradigm shift in how we interact with the world. And a sizable part of that shift touches on how consumers interact with brands. History shows us that real advantage doesn’t come from incrementalism, but from bold, creative applications of new technology.

In other words, smart companies don’t squander good breakthroughs. They recognize them for what they are: chances for big swings and new approaches. And because we’ve reached a moment where technology is finally a match for the world’s thorniest business challenges, brands can analyze data, glean insights and apply creativity like never before. The world’s boldest, most innovative brands now wield the very thing that has eluded them: a statistical model that reflects the creative growth potential within their business — in real time. They wield the Creative Capital Index.

A New Model to Measure — and Accelerate — Growth

Creativity is an organization’s most powerful asset. According to Ocean Tomo’s Intangible Asset Market Value Study (2020), creative companies hold higher market valuations through intangible assets like brand, reputation and intellectual property, which account for 90% of the S&P 500’s total valuation. And Forrester’s Creativity Catalyzes a Growth Mindset (2023) reports that firms that exhibit creativity grow 2.6 times faster, no matter their vertical or product focus. Unlocking the creative potential of a business is the key to driving durable, sustainable, predictable growth.

Over the past two years, Huge has evolved its understanding of creativity. Whereas for our first 20 years we might’ve viewed creativity as the output of a strategy, we now understand it as an expression of the sum total of a series of inputs — including strategy, but also an organization’s people, products, operations and values. Through this broadened aperture, every consequential piece of a business becomes an input for measuring and generating creative capital. We designed the Creative Capital Index (CCI) precisely to understand these factors, so we could better guide clients toward the decisions and actions that can reduce underperformance and increase growth.

We’ve also come to understand that uncommon, exponential growth happens when you’re applying data-fueled insights to the work you do. 

At its core, CCI helps businesses measure, track and increase their creativity in ways that accelerate growth. To calculate a Creative Capital Index score, we analyze a company through three lenses: Brand, Offerings and Experiences. For the purposes of CCI, we get at the meat of these broad concepts by addressing the following questions in our analysis:

Next we defined “growth” to include calculations based on share price and share of search for each industry. Focusing on external data to provide an outside-in view, we analyzed billions of diverse data points from more than two years to understand their relationship to and impact on growth. Through that analysis, we developed our proprietary CCI algorithm.

Each industry in each market has a unique algorithm to reflect industry dynamics. Our historical data analysis shows that high CCI scores often lead to an outsize change in growth. Furthermore, CCI tracks how an organization’s creative capital rises and falls over time compared to benchmarks within the industry.

A CCI score is a powerful key that unlocks opportunities to design and run tailored, potentially transformative programs that increase a brand’s creative capital and business performance. Having this level of insight across an enterprise is like going from a black-and-white Kansas to a Technicolor Land of Oz. Let’s step through and have a look around.

Diverging Drives

Automotive is the most competitive, dynamic sector tracked and captured by CCI, and for good reason. The steady drumbeat of model debuts, promotions, media attention and geopolitical intrigues, not to mention supply chain snags, all conspire to influence a brand’s CCI score.

That dynamism is on clear display across aggregate CCI scores of three randomly selected automakers: Tesla, Ford and Toyota. All three brands are performing well above the industry average, a testament to their relative health across the public data that CCI queries and weights. Interestingly, Tesla’s score went from the lowest of the bunch to the top in the 12-month period analyzed, an indication of the EV startup’s ability to harness and apply its creative capital effectively over that span (fig. 1).

Looking across the applications, Tesla is not only outpacing but increasing the relative distance between its Offerings score and those of its competitors, with Ford and Toyota hewing to the industry average (fig. 2). Here CCI is examining whether the products and services offered by the brand are relevant, of high quality and aligned to what customers value. These factors are analyzed at scale, drawing on billions of sentiment indicators using semiotics and discourse analysis. Whether it’s media coverage of a new model launch or the emotional intent of an emoji in a tweet, CCI is harnessing AI to crunch a staggering volume of inputs, with an extraordinary “eye” for nuance, to determine the relative value of these brands’ products and services. And with a fully electric lineup that inspires borderline-messianic customer loyalty, Tesla is simply running away with the ball.

The Experiences application, however, inverts that narrative. Whereas Tesla’s score tracks toward the industry average, Ford and Toyota outperform it (fig. 3). Remember, Experiences in this context refers to the quality of the total experience, inclusive of all touch points and expressions. Here we’re looking closely at indicators of customer satisfaction, purchase intent and consideration, among many others.

Myriad factors may influence Tesla’s relatively low Experiences score, from customer sentiment around service visits and the purchase process to wait times for product delivery. Closer interrogation of the data, ideally with Tesla in the room, could yield deeper insights into the brand’s underperformance.

Broadly, CCI can help Huge objectively assess where an automaker is strong, and where to apply targeted interventions. Knowing where the gaps lie is one thing; filling them is another, and that’s where programs built on bold, intelligent creativity make their mark.

A Tale of Mismatched Shoes

Designer Shoe Warehouse, more commonly known at its 500-plus stores across 44 U.S. states as DSW, presents a fascinating study in creative capital contrasts. DSW’s total CCI score does not deviate significantly in comparison to its biggest rivals, Shoe Carnival and Famous Footwear (fig. 4). But whereas Tesla excels on Offerings and waffles on Experiences, DSW struggles with a different challenge: fantastic Experiences factors but low Brand scores.

In the footwear subsector of retail, the Experiences metric plays a remarkably important role in consumers’ perceptions, preferences and behaviors. Factors that inform an Experiences score may be the returns and exchanges process, the physical layout of stores, the e-commerce side of the business and many others. Such inputs may help drive DSW’s strong Experiences score — and dampen those of its competitors (fig. 5).

Conversely, Shoe Carnival and Famous Footwear are walking all over DSW where Brand application is concerned (fig. 6). Again, numerous forces may be weighing on DSW’s Brand score, from a lack of brand awareness to reputational factors, all of which would come into sharper relief through collaboration with the brand.