The Purpose Economy
Part 1: The Reciprocity Theory
Back in 2010, I left the movie business to work in digital and social media. I was fascinated by the accelerated growth of Facebook, YouTube and Twitter, and how they were disrupting the content industry. In the movie business, reliable A-list talent weren’t driving people to the box office anymore. But, Charlie Bit My Finger was getting millions of views on YouTube. Seemingly overnight, what was once our audience had become the talent. They’d become the celebrities themselves. And so, as I made a career move into social media marketing, working with bloggers and vloggers and other content producers and startups like BuzzFeed — and working with brands like General Motors and Colgate Palmolive to make sense of it all — I became fascinated by human behavior online. And, I thought deeply about the core motivators that drive participation and action in social media and online.
As I thought about these core motivators, I kept thinking back to Newton’s Third Law of of Physics, reflected here with two ice skaters. So long as the force that each skater is acting upon the other is equal, they maintain a balanced relationship. But, as soon as the force of one exceeds the other, the relationship is thrown off balance. In other words, the relationship is mutually dependent, or, reciprocal. Similarly, reciprocity in social psychology refers to responding to a positive action with another positive action, or a hostile action with another hostile action.
This notion led me to a model I call The Reciprocity Theory. At its core, The Reciprocity Theory believes that social motivation is based on each person’s desire to (1) be recognized as an individual, and (2) belong to a community.
And, this is what makes social media so sticky: you get to define yourself and showcase yourself as an individual, while belonging to a bigger community. And, so long as you are contributing some definition of value to the community, you will earn an equal value in return. Like the ice skaters, the relationship is reciprocal.
Now, when I took a step back and looked at this model, a few things occurred to me. At the intersection of the individual and the community lies the individual’s purpose. It asks the question, what unique value can I, as an individual, contribute to the community — to the world?
It is also the basis for influence.
If you are truly contributing value to the community, you develop some level of influence on them. In marketing, we talk a lot about influencers. Not just how to engage them with your brand, but also how the brand itself can become one.
And, so I asked: where does a brand fit into this? How does a brand reach the individual — or the community of people?
If the brand interjects itself with traditional, antiquated advertising, then it will throw off the balance and the individual and community will retract. The individual and the community will continue their relationship, but the brand won’t be a part of it.
So, how can a brand earn a seat at the table in a new world where the individual wields more power than the brand? By becoming a valued member of the community as well. By being purpose-driven and enrolling customers into their community.
In this post on what I’m calling The Purpose Economy, we’re going to discuss why The Reciprocity Theory and being a purpose-driven brand is so essential. What are the fundamental shifts in our economy that make this community, purpose-driven approach so critical? And, how a brand can do it. How does a brand operationalize this — institutionalize this? We’ll do this in the following sections on Foundational Human Behavior, Technological Revolutions, Socio-Economic Evolutions, and Business Transformation.
Part 2: Foundational Human Behavior (Accelerated and Scaled)
Maslow’s Hierarchy
Most of you are likely familiar with Maslow’s Hierarchy of Needs. The original had 5 levels of needs (1) Physiological, (2) Safety, (3) Social, (4) Esteem, and (5) Self-actualization.
But, maybe less of you are familiar with the expanded hierarchy of needs. This expanded the higher order needs to include Cognitive, Aesthetic, and Transcendence.
The lower order needs are considered basic (or deficiency) needs, and invoke coping behavior because you’re coping with the minimum you need to survive.
The higher order needs are considered growth (or being) needs, and invoke happiness behavior because you’re engaging in behavior that gives you purpose and makes you happy.
Maslow estimated that 85% of Americans were satisfying those basic physiological needs, 75% satisfying safety, 50% social, and 40% esteem. He also estimated that 10% of Americans were satisfying some self-actualization needs, but only 2% were achieving full self-actualization. My intuition tells me that much of the shifts we’re seeing in our economy are based on technology enabling individuals to satisfy their deficiency needs and grow into satisfying their higher order needs to achieve purpose and happiness. I believe this is a foundational basis for the Collaborative Economy. Indeed, human behavior is being accelerated and scaled by new technologies in such a way that enables us to achieve these higher order needs.
The Modern CEO’s Technology Paradox
Which leads me to what I call “The CEO’s Technology Paradox”. IBM tells us that CEOs expect technology to drive the most change in their organizations over the next 3–5 years, more so than the economy. Yet, we know from business guru, Jim Collins, that “technology can accelerate a transformation, but it cannot cause a transformation.” He derived this insight through his research in writing the book “Good to Great” — well worth the read.
There has been a fundamental misunderstanding amongst organizational leaders about the underlying principles behind the changes that technology is ushering in. At the core of the issue are two opposing forces affecting organizations: (1) the external market force of social technologies disrupting industries and the structure of the workforce, and (2) the internal force of organizations reacting with tactical, technology-centered solutions vs. responding with strategic, human-centered solutions.
In order to succeed in today’s market, CEOs must understand the dynamics of technological revolutions, and the effects of the one we’re living through today. Some of the best leaders are catching on to this.
Part 3: Technological Revolutions (We’ve Been Here Before)
In her book, “Technological Revolutions and Financial Capital”, economist, Carlotta Perez, describes 5 successive technological revolutions of the last 250 years. The first was the Industrial Revolution, which launched with the opening of Arkwright’s mill in Cromford in 1771. The second was the Age of Steam and Railways. The third, the Age of Steal. The fourth, the Age of Oil, which launched with the first Model-T coming out of Ford’s plant in 1908. And, the fifth, the Age of Information and Telecommunications, which launched with the Intel microprocessor in 1971.
Each of these revolutions occurred approximately every half century, and followed the same revolutionary sequence: technological revolution, financial bubble, collapse, golden age, political unrest.
Carlotta tells us that, “A technological revolution can be defined as a powerful and highly visible cluster of new and dynamic technologies, products and industries, capable of bringing about an upheaval in the whole fabric of the economy and of propelling long-term upsurge of development. Each time around, what can be considered a ‘new economy’ takes root where the old economy has been faltering. But it is all achieved in a violent, wasteful and painful manner…The new wealth that accumulates at one end is often more than counterbalanced by the poverty that spreads at the other end…It is certainly a broken society, a two-faced world.”
Sound familiar? Does this sound like a story our society has been living the last 7 or 8 years?
If each technological revolution occurs about every half century, then the next revolution is scheduled to arrive sometime around 2021 or shortly after — just 6 years from now.
That means we’re somewhere in between a Golden Age and political unrest. We experienced the financial bubble for the good part of the 1990s and early 2000s, and the collapse in 2008. Now we’re living in an economy that is taking full advantage of innovations in cloud computing, social technologies and mobile devices. These innovations have led to the collaborative economy, the democratization of content publishing and citizen reporters that can create movements for or against brands — or even governments — by identifying a cause, a purpose, that resonates with a community of people, and exploiting it.
Perhaps even more thought provoking is to think about what the next revolution might bring.
But, first let’s take a deeper look at the lifecycle of a technological revolution.
You can see here that after the “big bang” moment, early new products and industries are born, and we see explosive growth and fast innovations. The Intel microprocessor was our current revolution’s big bang moment. And, Intel’s co-founder, Gordon Moore, observed that the number of transistors in a chip doubles about every two years. You engineers reading this know that this observation came to be known as Moore’s Law and has been critical to the acceleration of innovation over the last 40 years.
Later a full constellation of new industries, systems and infrastructure are born, followed by a full expansion of innovation and market potential. We can trace this evolution by looking at a history of social networking.
A History of Social Networking
Venture capitalist, Mark Suster, brilliantly taught us a history of social networking in 2010. It started some 25 years ago with pre-internet social networking services like Prodigy, CompuServe and The Well. These services were online, and people connected for the same reasons we do today. Suster described these reasons as the 6 C’s: (1) Communications, (2) Connectedness, (3) Common Experience, (4) Content, (5) Commerce, and (6) Cool Experiences (entertainment). Ultimately, I think it goes back to Maslow’s Hierarchy, and achieving orders of needs. Or, more simply — the Reciprocity Theory and the interplay between the Individual and Community.
Then, AOL bridged the gap between pre-Internet and Internet with their walled garden. Web 1.0 made it easier to have personal pages on the worldwide web — not just behind a walled garden like AOL. And, web 2.0 accelerated user contribution, making it so much easier to capture and publish content.
New Industries, Systems and Infrastructures
And, as we progressed from our big bang moment, to the pre-Internet era, to web 1.0, to web 2.0, to today, we have, in fact, seen new industries, systems and infrastructures come to play.
And, it looked something like this…
Now clearly this is a bit of a dramatization, but generally, correct.
Meanwhile, over the last 14 years, dialup internet access has fallen by 16% CAGR, and broadband internet access has grown by 25% CAGR. 70% of American adults now have high-speed broadband.
What’s more surprising, perhaps, is that 30% of Americans don’t. But, what really confounds me is that telecom companies consider <20 MBPS download speeds, “high-speed”, and that Americans settle for this. Google Fiber, here we come!
55% of American adults have a smartphone, and 42% have a tablet computer.
Taking a global view, internet users are showing <10% year over year growth and slowing. Fastest growth in users is in developing markets like India, Indonesia and Nigeria. Smartphones +20% strong growth in subscribers, though slowing. The fastest growth is in underpenetrated markets like China, India Brazil and Indonesia. And, mobile data traffic is showing +81% accelerating growth with video being a key, strong driver.
So it’s no wonder that social networking continues to grow; albeit at a slowing pace. 72% of online adults use social networking sites.
Full Expansion of Innovation and Market Potential
And, we’re seeing the full expansion of innovation and market potential that Carlotta Perez predicted, combining social and mobile, with Twitter and Tumblr and Foursquare and Instagram and Pinterest and SnapChat.
Is it any wonder that 2/3 of the digital universe is now content consumed and created by consumers?
Part 4: Socio-Economic Evolution (The Business Implications)
The Trouble with Millennials…
The trouble with Millennials is that their behavior and consumption habits may not be “just a phase”.
Young adults are increasingly likely to have lower incomes. ~2.1M more twenty-somethings, and ~300K more thirty-somethings lived with their parents in 2013 than did in 2007 — Even though many are now employed. Real median household incomes among 25 to 34-year-olds dropped 8% between 2007 to 2012 (-7% for 35 to 44-year-olds).
Meanwhile, student loans have driven up consumer debt burdens. Share of households aged 25 to 34 with student loan debt increased 13% between 2001 to 2010 (from 26% to 39%). 16% of these households have $50K+ student debt (more than tripled from 5% in 2001). Average credit score for Fannie Mae-backed mortgages rose from 694 to 751 between 2007 to 2013, while scores for FHA loans rose from 640 to 693, respectively.
It’s a bit like watching Maslow’s Hierarchy in action. 49% of 18 to 34-year-olds say they have taken a job just to pay the bills. 35% have gone back to school — likely racking up more debt. 24% have taken an unpaid job. 24% have moved back in with parents. 22% have postponed having a baby, and 20% have postponed getting married.
Seems a bit like lower order, coping behaviors to me.
So, how is this generation coping? Let’s go back to the technological revolution lifecycle discussed in Part 3 of this series.
The Collaborative Economy
Until recently, this revolution has been disrupting the technology industry itself — industries with an information technological core, such as devices and media. But, today, it’s about disrupting industries that do not have an information technological core — industries such as transportation, education, hospitality and retail.
We see this today in the Collaborative Economy, which is a peer-based movement that empowers individuals to get what they need from each other. For example, Etsy empowers people to design and sell their own craft products. Kickstarter empowers people to fund an array of projects — including new products and businesses — through crowdfunding. Airbnb empowers people to earn extra income by renting out everything from a spare room to a living room couch. Uber enables drivers to earn a better income, empowers anybody to earn an income driving others, and provides a better transportation experience to customers that need a ride. Indeed all of these companies deliver exceptional experiences, amplified by their underlying cause (or purpose).
This trend is leading to a new definition of freedom for teenagers and young adults. Millennials are buying 2 million less cars per year in the U.S. — down 10% since 1985. And, this is a global trend. Per a study conducted by the University of Michigan Transportation Research Institute, “The percentage of young drivers [is] inversely related to the availability of the Internet.” Why buy a car that’s going to sit unused in a parking lot most of the day when you make less money than previous generations and have so much access to rides via companies like Uber and Car2Go in the moment of need? Plus, cars used to be a way for teenagers to gain some independence from their parents and to see and connect with friends. Now they can escape and connect with their friends on their mobile devices. Freedom and the smartphone are becoming synonymous.
The Great Shift to a Post-Capitalist Society.
Peter Drucker, “the founder of modern management”, anticipated an age where we would generate more value with our minds than with our muscle, and described the rise of “knowledge work”. Three decades later, Drucker became convinced that knowledge is a more crucial economic resource than land, labor or financial assets, and that we were headed into a “post-capitalist society”. Think about this: with robotics and genetics converging, Darwinian human evolution will no longer be about strength, but rather, about intelligence.
Now ask yourself this: how do you measure intelligence when our entrenched education system is disrupted, and knowledge is democratized?
Information is now readily available and at your fingertips. From all the world’s information organized and available in Google, to niche information like restaurant and hotel recommendations in Yelp and TripAdvisor. All this information is available anytime you need it on an ad hoc basis.
For more in-depth knowledge, you can learn things like math and computer programming online via companies like Khan Academy and Team Treehouse. You can even take university-level courses on Coursera.
More companies are going to offer on the job education and training via their own personalized universities, just like Intel and GE do. Go to your company’s university for a couple days to learn strategy or corporate finance or operations. Then, head back to work on Monday morning and implement what you learned.
It’s worth calling out some of GE’s language too: “individual excellence and collective progress.” Sounds a lot like the individual and community inter-play from The Reciprocity Theory.
Evolution to an Experience Economy
In their 1998 HBR article and book, Joseph Pine and James Gilmore introduced the concept of The Experience Economy. They argued that experiences had emerged as the next step in the progression of economic value, and that the next competitive battleground lied in staging experiences. They illustrated this history of economic progress through the evolution of the birthday cake: in the Agrarian Economy, mothers made cakes from scratch, mixing farm commodities (flour, sugar, butter and eggs), each costing mere cents. In the Industrial Economy, moms paid a dollar or two for Betty Crocker premixed ingredients. In the Service Economy, parents ordered cakes from a bakery or grocery store, which at $10 or more, cost 10x as much as the packaged ingredients. In the Experience Economy, parents “outsource” the birthday event to Chuck E. Cheese’s, the Discovery Zone or some other business that stages memorable events for the kids. And, they spend tens, if not hundreds, of dollars to do so.
Pine and Gilmore defined four realms of an experience, based on two key dimensions: Participation and Connection. Participation can be defined as Passive or Active. Passive Participation would be akin to symphony-goers who experience the event as observers or listeners. Active Participation would be where customers play a key role in creating the performance or event that yields the experience. Connection can be defined as Absorption or Immersion. In Absorption, customers absorb the event/experience that is happening in front of them. In Immersion, customers and their senses are immersed in the experience that surrounds them.
The intersection of these dimensions creates the realms — Entertainment, Educational, Escapist and Esthetic. Entertainment experiences involve Passive Participation where the customers are absorbing the experience. HBO is a brand that clearly plays in this space. Educational experiences involve more Active Participation, but customers are still absorbing the experience. SXSW festival and other trade shows and conventions play in this space. Escapist experiences involve Active Participation and Immersion. These are experiences like skiing, running, hiking or even 3-D gaming. GoPro is a great example of a brand that caters to Escapist experiences. Esthetic experiences involve Immersion, but Passive Participation. Think of Virgin America, which immerses you in young, fun, music-oriented experiences from the moment you check in throughout the flight to the moment you step off the plane. But, you as a customer, don’t have actively participate in creating that experience. You’re merely consuming it.
Generally, the richest experiences find a sweet spot encompassing aspects of all four realms. This early notion of the Experience Economy combined with Apple’s famous success as an experience-oriented, design-driven company has proliferated the movement towards the Experience Economy that we now fully live in. I would argue that The Purpose Economy is the next evolution in this trend.
Part 5: Business Transformation(A Roadmap for Leaders)
“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation.”
Peter Drucker, “the founder of modern management” once said, “Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation.” Never before, is this statement so true. And, leaders are catching on.
CEOs now realize that the convergence of technology is creating new business models and disrupting their own. They understand that customers wield an inordinate amount of influence on their organizations. As a result the CMO is becoming more influential in the C-Suite. Strong CMOs are leading their teams to deliver exceptional, integrated customer experience and engagement, focusing on data analytics to gain a deeper understanding of their customers and designing rewarding experiences for those customers. And, they’re leveraging new technologies to help them with both.
Meanwhile, CIOs are coming out of the back office into the forefront. The best are putting their egos aside and recognizing that CMOs are driving technology needs and decisions more than ever. And, thus, those CIOs are partnering with their CMOs to enable the transformation to better customer insights and experience. Where there’s a gap between these two functions, the Chief Digital Officer has emerged, to deliver technological solutions and experiences for internal and external stakeholders.
In this shifting landscape, I offer up a framework for transforming your marketing organization. Since the advent of digital media, the marketing organization has grown larger and more siloed as each new digital channel emerged: .com and e-commerce, e-marketing and CRM, digital ads, blogs and comments, forums and reviews, and social networks. Now, the path forward is to integrate those channels and experiences with critical disciplines in which the modern marketer is fluent: intelligence, storytelling, design and technology. And, these disciplines are directed by the company’s and marketing team’s purpose.
Let’s start with design.
Design.
Recently, The Design Management Institute and Motiv Strategies released the 2014 Design Value Index where they looked at publicly traded companies that meet their criteria for a ‘design-led’ company. Only 17 companies met the criteria. These include obvious companies, such as Apple and Nike, as well as some companies you may not immediately recognize as being design-led, such as Coca-Cola, Disney and Starbucks. During the 10-year period between 2004 to 2014, these design-led firms grew 219% more than S&P 500 companies — a significant difference.
Similarly, in the startup world, design-led firms are being recognized as providing greater value to customers and investors. 27 startups that were co-founded by designers have been acquired since 2010 by companies like Google, Facebook, Adobe, LinkedIn, Dropbox and Yahoo. And, five (20%) of the top cumulative-funded VC-backed ventures that have raised additional capital since 2013 have designer co-founders.*
Design thinking helps these firms elevate the experience with the brand by solving unmet needs for customers, refining the company’s strategy and market focus, integrating a consistent customer experience across every customer touchpoint, and delivering a WOW factor, as Zappos CEO, Tony Hseih would say.
Storytelling
The next discipline that organizations and marketers must become fluent in is storytelling. This is all to often overlooked by companies large and small. Over decades through the advent of radio, TV and digital media brands progressively moved towards one-way push messages through advertising. But, with the rise of social media, customers have regained power over the brands. They expect transparency and exceptional experiences. Advertising and all forms of marketing communications must go back to being more story-driven.
The focus on storytelling is an important distinction. Marketers have been buzzing around hallways and social networks and the speaking circuit touting the importance of content and “brand as publisher”. Yes, content is important. But, there is a lot of shit content out there. The distinction is content that tells great stories. That’s what makes the difference. And, there is actual science to prove that strong storytelling creates a stronger connection with your customers.
Through his research, neuroeconomist, Paul Zak, discovered what he dubs “The Moral Molecule”. Oxytocin is a neurochemical that is key to signaling trust and invoking a sense of empathy. It’s produced when we are trusted or shown a kindness. And, it motivates cooperation with others by enhancing the sense of empathy — our ability to experience others’ emotions. Research found that character-driven stories consistently cause oxytocin synthesis, and the amount of oxytocin released by the brain predicted how much people were willing to help others (e.g. donating money to a charity associated with the narrative). So, is it any wonder why the Ice Bucket Challenge went viral?
Research found that in order to motivate a desire to help others, a story must first sustain attention — an increasingly scarce resource in the brain — by developing tension during the narrative. If that tension resonates strongly enough with the audience, then they will come to share the emotions of the characters in the story, and, after the story ends, the audience is likely to continue mimicking the feelings and behaviors of those characters. This explains your feelings of dominance after you watch an action movie like James Bond or Mission Impossible where the lead character saves the world, or your desire to work out after watching the Spartans fight in the movie 300.
There are business implications to this. Storytelling enables your audience to better recall the key points in a presentation or speech, or in the brand’s content and advertising. “People are substantially more motivated by their organization’s transcendent purpose (how it improves lives) than by its transactional purpose (how it sells goods and services).” The former is effectively communicated through stories.
Zak’s quote below reflects nicely not only the value of storytelling, but also the alignment with the Reciprocity Theory and the movement towards a Purpose Economy.
If business is about service to others, then business itself is a virtue. You’re engaging in a virtuous activity by serving the needs of somebody else. When you do that, you’re serving the needs of your employees, of your customers, you will induce oxytocin release and they will want to reciprocate…In the old model: greed is good, the management technique is lead with fear. In the new model: empower individuals to be the best that they can be in an organization with purpose, you’re going to lead with love.
This value of telling the story of the company’s transcendent purpose is also seen through the research that Simon Sinek produced, illustrated in this TED Talk and in his book, Start with Why. Sinek looked at the language that leaders have used to decipher why some were successful and some weren’t. It came down to what he describes as The Golden Circle.
Most leaders and organizations talk about WHAT they do, and HOW they do it. Rarely do they speak about WHY they do it. The WHY is synonymous with the organization’s PURPOSE. Successful leaders and organizations lead with the WHY. Sinek references the Wright brothers, Apple and Martin Luther King, Jr. as examples of leaders who may have been less known or under-resourced than their competitors or peers, but yet they succeeded above all others in their respective fields. Each of these leaders led with stories about WHY they were doing what they were doing.
In the advertising space, there is also data that indicates the more creative a campaign the more value to the business. In this case creative is defined as award-winning, using data from The Gunn Report. Peter Field and the ThinkBox team ran a statistical analysis of the most creatively-awarded campaigns defined by The Gunn Report and the most effective campaigns, using data from IPA Databank. This analysis found that creatively-awarded campaigns have several key benefits: (1) Creatively awarded campaigns are 12x more efficient, and become more so over time. (2) The greater level of creativity, the greater level of effectiveness. (3) Creative campaigns are more reliable investments. (4) It is in the power of emotional response that brands really make huge progress. (5) Increasing the emotional response to a brand reduces its price sensitivity.
What do these creatively-awarded campaigns have in common? Great storytelling. These stories create an emotional response (produce oxytocin) in audiences that cause an affinity for the storyteller (the brand) and drive them to share the stories with others. More efficient, more effective, more reliable investments that reduce price sensitivity of the brand. Not a bad outcome.
Intelligence
Big data has been all the rage for the last several years. With the democratization of content publishing online (which we discussed in part 3 of this series), we now produce more information (content) every two days than we did from the dawn of civilization up until 2003. Two-thirds of the digital universe is content consumed and created by consumers.**
The advent of social media listening tools thus became an opportunity to gather all types of new insights about customers and other stakeholders. But, most organizations just became overwhelmed by the sea of “big data”. Back in 2008–2012 era, major brands were standing up listening centers and building their own dashboards to try to make sense of the data. I worked on one of these for a Fortune 20 company. They wanted us to automate insights for marketers and other stakeholders across the organization because their stakeholders didn’t know how to derive insights from the data. I vehemently argued against pursuing this automation because (1) it removes accountability from your workforce and enables them to be dumber, and (2) technology can only do so much. The best case is a partnership between technology and humans: technology finds correlations and trends in the data, and humans intuitively translate those into meaningful insights.
This is an important distinction: a ‘finding’ vs. an ‘insight’. And, they often get confused. I often see analysts present findings as insights, and I believe this is because they do not have the experience or context of how that finding can be applied. A lack of experience executing can hinder the development of context needed to translate a finding into a meaningful insight. There is something else at work here too: a way of thinking that society has taken since Aristotle.
In “The Second Road of Thought”, Tony Golsby-Smith describes two thinking systems that Aristotle defined: (1) analytics, and (2) rhetoric. Analytics is driven by logic and lives in the domain ‘where things cannot be other than they are.’ This is a rigid approach to thinking and how most organizations are managed today. It lacks intuition. It lacks a leap of faith. It is how we diagnose what already exists — what happened in the past. But, rhetoric lives in the domain ‘where things can be other than they are’. This is how humans design alternative futures and invent new things.
In the finance world, this is what sets Warren Buffett and Berkshire Hathaway apart from the rest of the industry. Industry focuses mainly on financial statements and statistics to calculate risk and bet on the future. They measure the past as the leading indicator of how a company will perform in the future. On the other hand, Buffett places more weight on qualitative indicators such as the quality of executive team and that team’s willingness to invest cash bonuses back into the company. There is a level of intuition that goes into his investments.
In the marketing world, this is why the best marketers bridge the gap between science and art. Logic and intuition. Analytics and rhetoric. Big data only tells us so much. It provides findings, which give us logical next steps we can take based on what customers have done in the past. But, intuition tells us what those customers want in the future. Steve Jobs and Apple are the obvious example. Zappos did this in retail by focusing their culture and value proposition on customer service. Free shipping is actually considered a marketing expense at Zappos. Similarly, Rackspace shared this intuition and insight early on in the hosting space. IT professionals needed more support in managing their hosting needs than the industry provided, so Rackspace focused on customer service and created their Fanatical Support offering. And, Rackspace became a premiere hosting company with passionate customers. The best marketing campaigns are those that take a transcendent insight — an intuitive leap of faith about what their customers desire or feel or need — and captures that insight in a well-constructed story (as described above).
And, this is where design-thinking, intelligence, storytelling and technology converge and interact. Design-thinking enables us to derive those intuitive insights from big data. Design-thinking converts big data into intelligence. Storytelling helps us convert that intelligence into a meaningful artifact that induces oxytocin in customers, creating a sense of empathy and a lasting affinity for the brand. And, all of this can be supported (but not driven) by technology.
Technology can accelerate a transformation, but it cannot cause a transformation.
Technology
As we discussed in part 3 of this series, we are at the tail end of a technological revolution. We have seen a convergence of technologies enabling other, new technologies, and empowering entrepreneurs to reshape industries or create wholly new ones. As marketers, we must be diligent in deciding what technologies we need to enable our daily activities: what will automate arriving at findings, so we humans can spend less time crunching data and more time deriving insight? What will enable us to tell better stories? What will help us deliver remarkable experiences? This is priority number one for CMOs. But, is this any different than what the CEO should be thinking about in the context of the broader organization and its business model?
As we move toward the post-capitalist society that we discussed in part 4 of this series, where the key economic resource is knowledge (or intelligence), the best future we can design for humanity is a partnership with technology. Let technology automate as much as possible to eliminate wasteful time and effort from low-value, human activities. Then, we humans can spend our time on high value, transformative activities. As Jim Collins taught us, “Technology can accelerate a transformation, but it cannot cause a transformation.”
Every few hundred years throughout Western history, a sharp transformation has occurred…In a matter of decades, society altogether rearranges itself — its worldview, its basic values, its social and political structures, its arts, its key institutions. Fifty years later a new world exists. And the people born into that world cannot even imagine the world in which their grandparents lived and into which their own parents were born. Our age is such a period of transformation.
Peter Drucker anticipated this transformation to a post-capitalist society, described in the above quote, would be completed by the year 2020. If we believe in the timeline of technological revolutions that Carlotta Perez shared with us (described in part 3 of this series), then the big bang moment for the next technological revolution is just around the corner, scheduled around the year 2021. As much change as we’ve seen over the last fifty years, and particularly over the last decade, it’s hard to believe that change will only speed up. But, it will. We’re on the cusp of yet another transformative inflection point in humanity’s story.
As business leaders, we can learn a lot by studying the cycles of technological revolution to time the market with new products, services and business models. But, it’s equally as important to hone our capability to design the future, the universe that we want to live in, using the disciplines of design-thinking, storytelling, intelligence and technology described above.
I, for one, believe we’re moving towards The Purpose Economy, where technology and recent socio-economic shifts are enabling people to pursue more fulfilled lives — to be economically sustained independently or to work for more purpose-driven organizations with which they share a purpose. To focus on intrinsically valuable (knowledge-based) activities, and leave the grunt work to the machines. To transcend and achieve self-actualization.
This, at least, is the future that I’m designing. It’s the universe that I want to live in.
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The Purpose Economy originally appeared as a 5-part series on The ReciprocityTheory blog.
