The Experience Economy
How will conscious leadership transform organisations?
All around us, we see the same pattern emerging time and time again. Established organisations, especially in the service industry, are unable to keep up with their markets and customers. Working with those organisations, we noticed that their internal structures tend to be rigid, the employees are either uninterested or disengaged. As a result business is impacted. One visible consequence is that customer experience suffers.
Products-Services Vs. Experiences
If we look deeper into organisational structures, the CTO, or sometimes also called CIO, needs to be somebody who is technologically fluent. In a small organisation, this is the tech guy who hacked the alpha version of the product. A common misunderstanding is that the tech person within the startup business needs to have a C-level role. Within startups, they are the ones that love playing with code, being creative and exploring interesting ways of doing things. While they have a great impact on the finished product, their involvement with the strategic direction of the business is not mandatory. They do get recognition as founders yet their involvement is not needed because it is not necessarily their interest or skillset. It is also more beneficial for the business to let them do what they are great at. While it does diminish their direct influence, it frees the organisation to expand and grow. Within established companies, the CTO’s role is dedicated to evaluating and implementing the technologies required for the business to function. In both cases, one of the roles of the CTO is to keep up with technological advances in their field, and understand changes, threats and opportunities to improve the business’ efficiency.
The CMO is responsible for the market strategy. Increasingly, in order to remain relevant, they also need a high- level understanding of digital technology. They work through defining marketing and advertising strategies, typically using social media as an add-on rather as part of a whole system, while not fully integrating technological advances. The CMO tends to have limited engagement with customer care, while this function is usually seen as part of the marketing budget. In both cases, the people holding these functions are focused more on theory and strategy than people and service. Silos emerge when the strategic goals of those two functions are not aligned. This creates additional challenges when trying to deliver engaging experiences.
The Gap Between Producers and Consumers
There is a disconnect between these functions and the way consumers approach the market. Over the last ten years or so, the way people buy product and services has changed dramatically, specifically for millennials. Consumers expect to be able to interact more and more with their favourite brands. This means that the exchange goes beyond a simple transaction, people want experiences.This is particularly true within the service industry. With the advent of social media, a bad review will have much more impact on customer’s negative feeling than an advertisement.This is reflected in a growing disengagement in advertising. Friends’ recommendation, reviews, feedback from others, and everything that makes the experience received before and after the transaction, are the elements that drive the purchase decision.
This disconnect between essential business functions and their team leads to the creation of dysfunctional groups who fail to focus on what is important by trying to protect their roles, cover their backs, or look good for the bosses. As a result are unable to work as a team. They lack real purpose or affection for the business and their apathy generates average to poor results. If we then consider team members are consumers of the business, just as they are in their personal lives, they are looking for experiences in their business and professional life. The role focusing on producers’ experiences will also ensure the alignment of the organisation’s strategy with the individual’s purpose. Currently, businesses spend a lot of resources to create detailed strategies. However there is a gap with the way those strategies align with the company and each employee’s purpose, and with the way they are communicated internally. Purpose is a concept that appears more and more frequently in the business world, and we’re only now starting to understand how individual and company purpose affects performance and productivity. Purposeful organisations achieve better results than their competitors. To add to this, the way the company’s purpose and strategy also has an impact on the overall organisation’s performance. Where most organisations fail is in communicating said strategy. We’ve all heard: “You should know this, you received an email about it”. Why let something as big as your business strategy be communicated with a simple email? What are the chances that this email will be read, even if it was entitled “Important: XXX”? A renewed focus on the individual’s purpose will help align with the organisation’s strategic implementations and support its realisation.
The way people approach products has also changed. More consumers wish to be part of the product innovation life cycle. They want to be heard and have their feedback considered in product development. For most organisations, there is no or limited processes to receive consumer inputs for consideration. There is a growing trend for organisations to create strong communities. This means that people do not buy products and services only, they purchase a whole experience. The most famous businesses for this are actually Apple and Virgin. However, businesses such as Marriott, Hyatt or Samsung are working on their consumers’ experience and focusing on changing the way they interact with their consumers. The design museum new-old exhibit explores the potential for design and designers to enhance the experience of our later lives.
Quite a few established organisations have understood this last point, and there is a growing pool of investment going towards disruptive startups in view of taking over existing markets while using different approaches.
So how can established businesses, who usually operate from a more traditional outlook, do things differently?
These two roles are emerging as the key to navigating evolving markets more efficiently. These roles bridge the business operations and customer-oriented operations rather than keeping them separate. It creates an organisation culture that transcends and enhances both consumers and producers.
The first tole focuses on the consumers. This person is then responsible for the end-to-end experience outside of the organisation. This includes Products, Services, Customer Care, Customer Engagement, Community Management etc.
Working hand in hand with this role is someone who focuses on creating excellent experiences inside the organisation. It approaches employees as a different kind of customer, providing them with personal and professional development. They are thus responsible for culture, recruitment, traditional human resources functions, performance reviews, recognition and lastly, something that is often overlooked yet is essential for employee engagement: The celebration of small and large successes across the organisation. Both need to be working together and be experts in culture design and development.
Loyal Customer Base
Yet it’s not all dark and gloomy for established organisations. They have interesting opportunities that will support them in staying ahead, especially compared to startups that have been disrupting their markets. They already have a very loyal customer base. While customers’ approaches to brands are changing, habits are deeply ingrained and people often remain with the same provider unless the experience is consistently terrible. Most of the time, the experience is average, so they stay. Taking this into consideration, the person responsible for consumer experience should work on engaging and involving those loyal customers with the brand in ways that are usually not done. If we look at SFR Ambassadeurs or giffgaf community where power users provide consumer support and also get access to special offers, beta testing and exclusive support. It opens the door for customers to be part of the product innovation life cycle and a feeling of ownership of the product. The brand becomes theirs.
Established players also have excellent financial stability. It is possible for them to fund experimental projects that will engage their customers and regain market shares. To do such this efficiently, they need to look at the way they approach innovation and create internal innovation labs that will encourage the creation of micro ecosystems within the organisation. Those innovation labs can go all the way and operate in similar ways to Google X by rewarding failure, or they can be an internal space where people can express and develop ideas that will change or improve the service. Those labs then give the organisation access to the vast domain of knowledge across their organisation. Existing employees know the market, the customers, so the organisation needs to actively tap into this collective knowledge. Established businesses should run regular innovation challenges for the creation of new experiences. Everyone, consumers and producers, should be invited to participate. During a selection process, the best innovation can be selected for funding, and successful experiments can be funded further to scale up. The person who submitted the experiment selected will be part of the lab and participate in its development as a reward.
Lastly, established organisations also have wealth of collective wisdom. While a large transformation project can seem daunting, how about using existing resources within the business to foster internal change? Instead of encouraging control over a single function, why not promote collaboration for employees who get involved, who support each other and grow together? This involves rewarding and recognising employees who are happy to train, support and develop others. Those actions then blur the line between producers and consumers, with this coming together growing more apparent as market evolves. People are essential to supporting organisations in navigating ever-changing markets. They are needed to ensure that the organisation’s culture bridges both producers and consumers realms to form a cohesive whole where culture transcends and enhances both consumers’ and employees’ experiences. And while all organisations realise that the human resource component of their business is essential to their growth and continued existence, very few effectively tap in this underutilised resource.
What might it look like?
Integration of the silos into an whole organisation is needed to move them forward. By bringing stakeholders together, it removes the silo approach and enables key actors to play/experiment with one another. For example people can play both the role of a Consumer and Producer of experiences. There is no reason why an invisible wall needs to be built between the two. In fact more co-creation will lead to more Humane Experiences. The spectrum of People on one side and Technology on the other is a persisting divide as these merge together. There is need for more appreciation and awareness of both roles in designing and developing humane experiences. People are both the users and creators of Technology. It is our potential to be able to create tools that will affect our lives positively. Why not, then, make the creation of those tools an entertaining, rewarding, humane experience?
We would love to hear your experiences with this topic.
Acknowledgements — This is a co-written blog which has also been published here. The authors of this blog are Steph who is the founder of Ikigai and Malek who is the co-founder of Unleash Leadership. Special thanks to Amanda and Morya for their editing skills.