The five question framework for naming a new business unit

You’re about to name a business unit wrong. It’s not because you lack creativity or market insight, but because you’re starting in the wrong place. Naming isn’t just a branding exercise; it’s a strategic decision with implications for culture, market positioning, and resource allocation. And naming a business unit is very different from naming a company or product given the variables and considerations at play. Before you choose your name, work through these five questions to make a smart, thoughtful, and profitable decision.

1. Is it customer-facing or internal?

Internal business units rarely warrant distinct names. In many cases, giving them unique names will only serve to reinforce silos and breed territorial conflicts. The exception is when you want to signal organizational transformation, like elevating an R&D team to push innovation or launching a venture arm to explore new markets.

Your naming strategy must align with your broader business objectives. If you’re trying to cultivate a more unified culture, then creating separate business names undermines that goal. But for units that face customers directly, the calculus changes but the audience remains just one variable in a more complex equation.

2. How aligned is this business unit with your core?

Here’s where many organizations falter. They rush into creating new names without considering how they will fit within your larger brand architecture.

If the business unit extends your core offering to audiences that already know and understand who you are, keep the names closely aligned. Descriptive names that tie naturally back to the parent brand typically work best. But if you’re moving into unfamiliar territory with a new customer base and a different value proposition, you may need something more unique.

Amazon faced this when they launched AWS. While Amazon signaled retail to consumers, AWS targeted enterprise IT buyers who didn’t associate the brand with cloud infrastructure services. Creating a separate identity helped them build credibility with enterprise IT buyers who wouldn’t have associated Amazon with servers and data centers. Without that distinction, AWS would have had a tough time overcoming assumptions about what Amazon could deliver.

Distinctive names can signal capability where people least expect it, but that same distinctiveness can weaken your core brand if applied to business extensions that should stay closer to home.

3. What strategic role does this business play?

If the business unit exists to shift perceptions of the parent brand, like a healthcare device manufacturer pivoting to software, or an industrial company entering consumer markets, then the connection to the parent should remain strong. Using a structure like ‘parent name + business name’ transfers equity in both directions.

Salesforce does this well with Salesforce Marketing Cloud, Salesforce Service Cloud, Salesforce Commerce Cloud. Each name connects to the parent while clearly delineating its own function. The parent brand benefits from each unit’s success, and customers understand the relationship immediately.

Conversely, if the business unit is meant to drive growth independent from perceptions of the parent or if parent brand associations could get in the way of the unit’s success, a separate identity with a distinct name may be the best option.

Google did this when they spun off Verily to be a stand-alone brand under the Alphabet portfolio. This allowed the business to be viewed as a scientific discovery and health company, distancing itself from associations with advertising and web search.

Be honest about what your parent brand really stands for. Use it when it helps and create space when it doesn’t.

4. Is there budget to support a unique name?

A new name requires investment in launch, maintenance, and market development. If you don’t have the resources to establish awareness and clarity, then it’s usually better to use descriptive naming tied directly to your existing brand architecture.

A strong strategic case doesn’t matter if you don’t have the budget to support the execution. Too many organizations concept compelling names but fail to fund them properly, leading to confusion, fragmentation, and wasted effort.

5. What does the future hold?

Some business units start small but intend to grow far beyond where the parent brand currently plays. If future expansion or a potential spin-off is part of the plan, then investing in a distinctive name from the beginning may save you from costly transitions later.

As Google branched into autonomous vehicles, life sciences, and urban innovation, their leadership realized these ventures needed room to grow without being tied too tightly to a search engine brand. Alphabet, with entities like Waymo, Verily (mentioned earlier), and Sidewalk Labs, created that space while still benefiting from Google’s resources and credibility. The architecture anticipated future growth rather than constraining it.

Without thinking ahead, companies often trap themselves with names that made sense at launch but become more limiting as the strategy evolves.

Beyond nomenclature: The complete identity system

Naming is only one tool in an expansive toolkit; name, visual identity, and verbal expression need to work in concert to shape perception.

A suggestive name paired with a customized design can signal change. Or, it can maintain visual alignment while letting the names create separation. In other cases, both the name and design must diverge to create proper separation.

When Mastercard evolved from a payments network into a broader technology company, the name stayed the same but their visual and verbal identity transformed completely. Their sonic branding, simplified mark, and new messaging did the heavy lifting.

Conversely, when Facebook became Meta, both their name and identity changed to signal their new ambitions in the metaverse.

Each situation requires intentional, strategic decision-making at every point in the process, alongside org-wide buy-in. Even the best naming strategy falls apart without organizational support or proper activation.

Playing the name game

A successful business unit name doesn’t stand alone. It should support broader objectives and never be treated as an isolated creative exercise. Approach naming as part of a comprehensive brand architecture strategy that clarifies relationships, builds equity, and creates space for future growth.

Ask tough questions about the reasons you’re choosing a new name in the first place. Allocate resources realistically. And remember that even the best name falls flat without a full identity system behind it.

Your business unit deserves strategic rigor, not guesswork. Know what role it plays in your ambitions, then name it accordingly.