Build Your Brand as a Relationship

The way we think about brands need to change. In the past, they were objects or concepts. You had a relationship with a brand. But in this social age, brands are the relationships. By defining a brand’s particular kind of relationship, companies can create greater engagement, differentiation, and loyalty.

To understand this new mental model for brands, it is helpful to see how the concept has evolved. A brand started out as an identifying mark. Cattle owners would “brand” their cattle to indicate ownership. We can still see the “brand as object” model in the American Marketing Association’s definition: “Name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.” In this view, a brand is something applied to what you make.

In the next wave, a brand shifted from a feature to a perception, from an object to an idea. Al Ries and Jack Trout capture the essence of this model in their classic book Positioning: The Battle for Your Mind. They define a brand as “a singular idea or concept that you own inside the mind of a prospect.” In this view, a brand is not something you make, it’s something you manage.

The most recent wave focuses on brand as experience. Sergio Zyman, in The End of Marketing as We Know It, says: “A brand is essentially a container for a customer’s complete experience with the product or company.” A brand is not something you manage over time. It’s something you deliver in the moment.

Our experience working with innovative companies indicates they are redefining not only how their brands are observed, perceived, and experienced. They are also redefining the very nature of the relationship they have with their customer.

If the first three waves were brand as objectidea, and experience, the next wave will be brand as relationship.

The way to put “brand as relationship” into action is by defining the respective roles and responsibilities of the company and customer. The default brand relationship is provider/consumer. It’s a simple relationship that is one-directional and asymmetrical. The company provides the product or service, and the customer consumes it.

Brand innovators tend to create different kinds of relationships. Instead of transactional and one-directional relationships, the roles are more collaborative and reciprocal.

For example, in the hospitality industry most brands operate with the roles of host/guest.It’s one-directional, asymmetrical, and transactional. Airbnb has disrupted that model. With a mission of “belonging,” Airbnb has cultivated a neighbor-to-neighbor and citizen-to-citizen relationship on a global scale. It is reciprocal, symmetrical, and collaborative.

In the taxi and livery industry, cabs and limo services have operated with the roles of driver/passenger. Again, it’s one-directional, asymmetrical and transactional. Uber and Lyft established differentiation by introducing new roles along two dimensions. The first is a shift from driver/passenger to friend/friend. For example, Lyft passengers are encouraged to “sit up front” as if they were getting a ride from a friend. According to Kira Wampler, CMO of Lyft, “Our original tagline was ‘Your Friend with a Car’ which served not only to describe the human, peer-to-peer experience we delivered with Lyft but also to differentiate us from other private driver approaches.”

Another new brand role is entrepreneur/supporter. Uber encourages potential drivers to “build their business” on Uber. In both these cases, the brand relationship is more reciprocal and personal. As Amy Friedlander, Head of Experiential Marketing at Uber describes it, “Working with Uber is about our drivers’ needs, whether those needs are to have a fully flexible schedule or earn extra money. Uber is a platform that fits their lifestyle, not the other way around.”

In the airline industry, innovators have also redefined the brand roles. The established players like United and Delta have operated with a brand relationship of flyer/passenger. But Southwest broke the mold with singing flight attendants and a relationship that might be described as “fun friends.”  JetBlue, with its free snacks and mission of “Inspiring Humanity,” has a “human-to-human” relationship.

Virgin America went in a different direction, creating a brand relationship that is a cross between the hip friend and host of the party. The relationship is perhaps one reason Virgin customers are so upset by the sale of the airline. As one Virgin fan said, “I think of Alaska [Airlines] as more of a friendly aunt.” The sale is like someone busting up the party and telling everyone to go home.

The concept of brand-as-relationship also helps explain the rise of well-established market leaders. American Express redefined the relational roles of its industry from card issuer/card holder to club/member. Disney redefined the relational roles of amusement parks from operator/rider to cast member/guest. And Starbucks redefined not only the role of the server from waiter to barista, but the role of the coffee shop from restaurant to community hub.

Those familiar with brand archetypes may see some similarities to this approach. The difference is that in brand archetypes, the focus is on the attributes of the brand. But in the model proposed here, the focus is on the relationship that people have with Nike. As an archetype, Nike is a “Hero” brand because of its focus on victory. But Nike’s brand roles are best described as coach/athlete.

Marketers have an opportunity to redefine brand roles in every industry. Media has been defined by broadcaster/viewer for decades. Health care has been defined by doctor/patient. Education has been defined by teacher/student. In each of these industries, there is an opportunity to create a new relationship based on co-creation and collaboration.

To get started, think about the relationship people have with your brand today. Frame your answer as social roles. For example, if you are a health care provider, you probably have a brand relationship based on doctor/patient. Now think about other kinds of relationships outside your industry. For example, in health care there are aspects of teacher/student (to educate), coach/athlete (to motivate), or guide/traveler (to navigate). Be sure to consider roles that are symmetrical, like friend/friend, neighbor/neighbor or co-creator/co-creator.

Another strategy is to work backwards from the kind of relationship you want to have. Think about the value and benefits of your product. Then imagine the human relationships that would provide the same type of benefits. Nest thermostats, for example, automatically adjust the temperature to your liking, and their smoke detectors calmly direct you to safety in the case of a fire. Instead of the usual role for a device maker of manufacturer/buyer, Nest has created a brand role of being part of the family, looking out for you in an attentive and protective way. “Instead of thinking about George Jetson’s ‘smart home’ we imagine a home that is humanized and takes care of the people inside it and the world around it,” says Doug Sweeny, CMO of Nest.

Finally, look for ways to shift your brand roles from one-directional, asymmetrical, and transactional to reciprocal, symmetrical, and personal. These roles will bring to life your strategic narrative around a shared purpose. If today’s brand innovators are a guide, the result will be greater engagement, differentiation, and loyalty.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Cara France is CEO of The Sage Group, a firm providing marketing and consulting talent to San Francisco Bay area companies, and founder of Marketers that Matter. Follow her on Twitter @SageCEO.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How to Build a Strategic Narrative

It’s a common refrain in executive suites these days: “We need a new narrative.”

It’s not enough any more to say “we make widgets.” With changes happening so quickly from so many directions – competition, regulation, technology, talent, customer behavior – it’s easy for one’s story to become generic or outdated.

You want a story that inspires employees, excites partners, attracts customers, and engages influencers. A story that is concise but comprehensive. Specific but with room to grow. One that defines the company’s vision, communicates the strategy, and embodies the culture.

The natural step is to give the assignment to an agency. Most branding firms will come back with a tagline and positioning statement. Most advertising agencies with creative treatments and marketing campaigns. Most PR firms with messaging and communication plans. These are useful tactics but aren’t the kind of strategic narrative you are looking for.

A strategic narrative is a special kind of story. It says who you are as a company. Where you’ve been, where you are, and where you are going. How you believe value is created and what you value in relationships. It explains why you exist and what makes you unique.

This doesn’t come out of the usual competitive landscape, customer interviews, and whiteboard sessions. It takes a different approach and a shift in thinking led by the leadership team.

Human context

The first step is to understand the context of the narrative. Research shows that our brains think of companies not as objects but as people. Every time someone engages with your brand, they are asking you: “So tell me about your yourself.”

Consider the scenario of a job interview. You have the candidate’s resume, but what really matters can’t be put on paper. You want to know what inspires them, what they are like to work with, and whether they can be counted on. You want to get a sense for them as a person.

It may sound a bit strange at first, but the same is true for your company. The context of the narrative must be a human, not an institutional, relationship. People want to get a sense for your company as if it were a person. Human relationships require reciprocity and authenticity. The narrative should say who you are, not just what you do.

Shared purpose

The cornerstone of a strategic narrative is a shared purpose. This shared purpose is the outcome that you and your customer are working toward together. It’s more than a value proposition of what you deliver to them. Or a mission of what you do for the world. It’s the journey that you are on with them. By having a shared purpose, the relationship shifts from consumer to co-creator.

One function of the strategic narrative is to explain how the purpose will be fulfilled. As an example, between 2008 and 2015, IBM organized its marketing under the shared purpose of “Building a Smarter Planet.” In a series of papers and talks, then CEO Sam Palmisano laid out a detailed explanation of how things were becoming more “instrumented, interconnected, and intelligent.” By infusing intelligence into systems and processes, the world would become smarter.

The second function of the narrative is to explain the roles necessary to fulfill the shared purpose. By analogy, consider a potluck meal in which everyone is responsible for bringing a different dish. I bring the entrée, you bring the salad, and someone else the dessert. Similarly, the shared purpose is the potluck and the narrative explains who brings what to the party.

As an example, Nike has a mission “to bring inspiration and innovation to every athlete in the world.” What makes this a shared purpose is that Nike actively encourages people to inspire each other. Nike’s “Just Do It” slogan is a key part of its narrative. In addition to being part of the inspiration in the mission, it also helps define the respective roles. In effect, Nike is saying “We’ll bring the shoes, the equipment and the clothing; you bring your drive, your discipline and your competitive spirit.” It’s a narrative that goes far beyond the products Nike sells.

Brand DNA

People don’t fundamentally change, and neither do companies. When they are founded, a kind of DNA is created that persists for the life of the company. A strategic narrative must align with this brand DNA or it will be perceived as inauthentic.

It’s not a coincidence that the mantra of IBM’s founder, Tom Watson, was THINK; IBM’s last marketing strategy was based on the idea of a Smarter Planet; and its current strategy is based on the idea of Cognitive Business. Thinking is the DNA of IBM’s brand.

To find your brand DNA, go back to the original vision and ethos of your founder(s). Walmart’s value proposition is everyday low prices. It’s by no means unique among retailers. But Walmart’s shared purpose is not about lowering prices, but raising the quality of life. When he founded the company, Sam Walton said, “If we work together, we’ll lower the cost of living for everyone.” Other retailers can match Walmart’s strategy, but not its narrative.

Losing the narrative

Most companies don’t have a powerful narrative. They are missing the human connection, lack a shared purpose, or are out of alignment with their brand DNA. But the opposite can also be true. Some companies have a powerful narrative and then lose it. Starbucks is one such cautionary tale.

At the core of Starbucks narrative is the idea of a “third place.” Before becoming the CEO, Howard Schultz traveled through Europe and realized that in every country there was a third place between home and work where people gathered for conversation and community over a beverage. He envisioned Starbucks as a third place for America. The concept of third place powered years of exponential growth for Starbucks until Schultz stepped away from direct management of the business in 2000. Financial performance suffered until his return in 2008.

In his book Onward, Schultz reveals that Starbucks lost its narrative while he was away. Schultz writes: “Starbucks’ coffee is exceptional, yes, but emotional connection is our true value proposition. Starbucks is not a coffee company that serves people. It is a people company that serves coffee.”

It is no coincidence that market leading companies like IBM, Nike, Walmart, and Starbucks have powerful narratives. By creating a context of human connection, collaborating around a shared purpose, and connecting with the company’s DNA, you too can create a narrative that energizes your executives, inspires employees, excites partners, and attracts customers.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How to Discover Your Company’s DNA

The term “company DNA” is sometimes used as a shorthand for an organization’s culture and strategy — a metaphor for what makes it unique.  But there may be more to the metaphor. Understanding your company’s DNA can help you know what you can and can’t do, and how to achieve agility and authenticity in a changing world.

We know from biology that DNA contains the instructions an organism needs to develop, function, and reproduce. It is formed at conception and does not change. However, the same DNA can express itself in different ways based on one’s environment. It’s the reason identical twins have different fingerprints. In this process, called “expression,” the instructions in the DNA are turned into proteins and other cellular products.

Does biology inform business? It’s happened before. The language of ecosystems redefined our understanding of competition by viewing markets has habitats. Our understanding of organisms might lead to similar insights about organizations.

  • For example, DNA is formed at conception. Is that the case for companies too? Is a company’s uniqueness set by the founders’ vision and values?
  • Second, DNA does not change over the life of an organism. Is that true for a company? If so, does it limit the degree to which it can adapt and evolve?
  • Third, DNA expresses itself differently based on its environment. Might a company have the same DNA for its lifetime, but be able to innovate by expressing that DNA into new business models, organizational designs, and offerings?

These questions will clearly take a lot more research than this article. But the following stories suggest further exploration is warranted.

Consider Pokemon Go, the viral sensation of Summer 2016 and the most popular smartphone game in history. You probably know about the millions of people who gathered in public spaces trying to “catch” Pokemon characters with their phones. What you may not know is the origin of Pokemon.

The founder of Pokemon, Satoshi Tajiri, grew up outside Tokyo. His childhood hobby was collecting insects. The other children even called him “Dr. Bug.” As urban expansion paved over fields and forests, Satoshi’s insects disappeared. When Satoshi later developed an interest in video games, he saw a way to recreate his childhood experience of catching and collecting elusive creatures. For many years, this vision was played out on desktop computers. With Pokemon Go, Satoshi’s original vision remarkably came to life in the outdoor environments where it was first conceived. One might say that the company DNA of Pokemon is “collecting creatures.”

Interestingly, Pokemon Go was produced by a company called Niantic, whose founder, John Hanke, created the company that became Google Earth. The DNA of Niantic might be described as “mapping places.” Put “collecting creatures” and “mapping places” together, and you have Pokemon Go. Conversely, it would be hard to imagine Mojang (creators of Minecraft) or LEGO, both of whom have a DNA of “building worlds,” having created Pokemon Go.

If we continue with the idea that DNA is set at the conception of the company, does it actually create a limit on the ability to adapt and evolve?  The examples below seem to suggest that a company must stay true to its DNA, but has a lot of room to express that DNA in new ways whether in external strategy or internal management.

To illustrate this, consider the paths of two competitors: IBM and HP. Both struggled in the 1990s, but one re-embraced its founder’s vision and values while the other rejected them.

The leader who defined IBM as we know it was Thomas J. Watson. It was his vision to move beyond “office appliances” and create the International Business Machines Corporation. His mantra was THINK. It was more than a slogan. It was a way of doing business and a credo for the company. Watson’s vision was to use thinking to create machines, and to use machines to enable thinking.

IBM had a near death experience in the early 1990s due a series of bad business decisions. But in the wake of that crisis, IBM returned to its DNA of “think.” IBM’s game-changing laptop was the ThinkPad. One of its most successful marketing campaigns was “Let’s Build a Smarter Planet.” And its current focus is on Cognitive Business, led by the machine learning technology called Watson.

IBM’s competitor, HP, was founded in 1939 by Bill Hewlett and Dave Packard in a one-car garage in Palo Alto. The “HP Garage” is recognized by many as the birthplace of Silicon Valley. (The garage is such a symbol of the entrepreneurial spirit that other tech companies have invented stories about how they too were started in a garage.)

As they outgrew the garage, Hewlett and Packard sought to maintain that entrepreneurial spirit on a larger scale. This became the “HP Way,” one of the first examples of empowering employees, decentralizing the organization, and tying pay to performance. Jim Collins has written of Hewlett and Packard that “their greatest product was the Hewlett-Packard Company and their greatest idea was The HP Way.”

Starting in the late 1990s, a series of CEOs saw the HP Way as a liability rather than an asset. They abandoned the HP Way and replaced decentralized entrepreneurship with centralized control. The mindset of the garage was not only abandoned, it was destroyed. When HP merged with Compaq in 2002, Bill Hewlett’s son Walter protested that “the fundamental mistake … was the perceived need to do something with scale instead of succeeding the way HP has in the past.” Only recently with CEO Meg Whitman, has HP begun to re-embrace the HP way.  In 2012 she announced to all the employees a re-expression as “The HP Way Now.”

This story suggests that there may be a limit on corporate malleability. Strategy must be aligned to the company’s own DNA as well as the marketplace.  Transplanted organs are rejected if there isn’t a genetic compatibility between donor and recipient. Similarly, one can’t simply transplant a best practice from another company. It needs to be consistent with the DNA of the company.

At first glance, this seems to pose a problem. In today’s markets, it’s more important than ever to adapt and evolve.  If companies are limited by their DNA, is it possible to change in a way that keeps them competitive?

In biology, there is a difference between genotype and phenotype.  The genotype is the underlying DNA or instruction set for a physical trait, also called a phenotype.  Sometimes the genotype determines the phenotype regardless of the environment, as in the case of hair color. But sometimes there is a range of how the DNA can be expressed, what’s called “phenotypic plasticity.” For example, when baby newts sense the presence of predators as they are growing, they develop bigger heads and tails, which increase their chance of survival.

In business, some companies display this same type of plasticity, finding ways of responding to new environments by expressing their DNA in new ways. Pokemon Go is an example of expressing the underlying DNA of “collecting” in a new environment on the smartphone. Similarly, IBM has gone through multiple iterations of taking the underlying DNA of “thinking machines” and expressing it across mainframes, PCs, cloud, and now artificial intelligence.

Today, GE is looking to make a similar transformation, re-expressing Edison’s DNA of “invention” into the new market for the Industrial Internet, less focused on manufacturing and finance and more on software and analytics.

How do you discover your own company’s DNA? Start digging around in the company archives, talking to early employees and reading the corporate history. Look to the original vision and values of the founders. How did they see the world? What problem were they out to solve? What was their core insight about human behavior and the creation of value?

Once you’ve found the DNA, map it to the company’s past and current business.  Where is there stronger or weaker alignment? Finally, as you consider future strategies, how can you increase your “competitive plasticity” — the ability to express your DNA in new ways that create unique value and sustainable advantage.

It’s not a coincidence that the origin of the word company is “companion”, corporation is “body”, and organization is “organ.” Just as we talk about human development as a combination of nature and nature, perhaps the growth of organizations follows a similar path.  As leaders we spend most of our time thinking about how to nurture and shape our companies.  It’s time we also paid attention to their intrinsic nature and how we can cultivate their full expression.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How to Thrive in Social Media’s Gift Economy

So you’ve got your brand on social media. You have a Facebook page and Twitter account. Maybe a Pinterest board. But now what? There has to be more to social media than posting coupons and running sweepstakes. How do you drive real customer engagement?

The answer may come not from Silicon Valley or Madison Avenue, but from places like the Trobriand Islands and the Pacific Northwest.

Indigenous cultures developed what anthropologists call gift economies. As observed by Marcel MaussLewis Hyde, and others, gift economies are quite different from the market economies to which we are accustomed.

The concept of gift economies has been used to explain open source software and the Burning Man festival. But it also provides insight into what works — and doesn’t work — with social media, and what brands can do to be more successful in the online arena.

To understand a gift economy, consider the example of moving into a new apartment. When friends help you move, you express your appreciation by providing pizza and beer — really good pizza and beer. When you hire professional movers, you pay with money. Offer your friends money instead of pizza and beer, and they are likely to be offended. Offer to pay the movers in pizza and beer, and they won’t unload the truck. Your friends are operating in a gift economy; the movers in a market economy.
While both market and gift economies are systems of exchange, they differ in three fundamental ways.

1) Context: Transaction or Relationship
In a market economy, the focus is on transactions. In a gift economy, the focus is on relationships. Trobriand Islanders passed along necklaces and armbands as part of a ritual called the Kula Ring. An item’s value was not determined by supply and demand, or measured by a market price. Instead, its value came from the relationship between the giver and receiver and its meaning in the community.

2) Currency: Financial or Social
In a market economy, people use money as a medium of exchange — a financial currency. In a gift economy, people use social currencies. The purpose of a social currency is not to execute a transaction, but to express a relationship. Social currencies don’t have a price set in the market. In the moving example, pizza and beer are a social currency.

Note that social currencies are not the same as virtual currencies. Facebook “Likes” are social currencies, while Facebook Credits are virtual currencies. There is no price on a Facebook Like, while Facebook Credits have a clear market value.

But just because something has a monetary value doesn’t mean it can’t be a social currency. In the moving example, imagine if one of your friends drove a long way to help you out. It would be entirely appropriate to give your friend some gas money to cover the extra cost. The key point here is that the context is relational, not transactional.

3) Status: Earned or Bought
A tell-tale sign of a gift economy is that status is earned, rather than bought. In the Pacific Northwest, native tribes developed the ritual of the potlatch. Status was given not to those who accumulated the most wealth, but instead to those who gave the most to the community.

On a Google search page, you can see these two worlds of earned and purchased status side-by-side. In the middle of the page, so-called “organic” search results are earned based on a site’s popularity. In contrast, the ads in the top rows and right-hand column are based on how much advertisers have paid for the spot.

Social media are fundamentally gift economies. People are there to cultivate relationships, not conduct transactions. They exchange social currencies, not financial currencies. And status is earned not bought.

This illuminates why many brands are struggling with social media. They have confused market and gift economies. They focus entirely on transactions, buying status, and pushing products and promotions.

Brands that succeed in social media follow the principles of a gift economy. They build relationships, earn status, and create social currencies.

How is your brand doing? Rate yourself with the following simple guide:

1) Build relationships. 
• Push out information to drive transactions: Base
• Create relationships with individuals: Better
• Help people create relationships with each other: Best

A brand that that I give a Best rating to in this category is Vail Resorts’ EpicMix, which turns a ski slope into a social game. The experience keeps people connected anywhere on the mountain.

2) Earn status. 
• Celebrate your own accomplishments: Base
• Celebrate the accomplishments of others: Better
• Enable people to celebrate each other’s accomplishments: Best

A brand that I give a Best rating to in this category is Nike’s running community, Nike+. If you post to a friend’s Facebook wall during their run, they hear virtual applause through their music player.

3) Create social currencies. 
• Focus on discounts and promotions: Base
• Think of your product as a social currency: Better
• Create new social currencies related to your brand: Best

A brand that that I give a Best rating to in this category is Kraft Foods for recognizing recipes as a social currency and engaging customers on the Web, Facebook, Pinterest, and Twitter.

To put these principles into practice, put yourself in the position of your customer and ask yourself the following questions:
• What rituals, traditions, or social conventions involve your product?
• What do people talk about, share or exchange in these activities?
• How might the experience be enhanced with something better or different?

Keep looking until you get an “aha” moment — a social insight you can build on. For Kraft, it was helping people exchange recipes. For Vail Resorts, it was bringing the social experience of the lodge onto the slopes. For Nike, it was enabling runners to bring their friends with them.

Put these insights into practice, and soon your social strategy will start taking off. Begin by contributing to the community and earning trust. Over time, you can mint your own social currencies and cultivate a gift economy. As your customers start connecting with each other, you will generate social gravity that pulls customers into orbit around your brand. The result will be a deep connection with your customers that goes beyond our transactional notions of loyalty.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How Top Brands Pull Customers into Orbit

The most successful companies in business today have something in common. This trait doesn’t just make them better than the competition; it makes them fundamentally different.

Where traditional companies push out messages and products, these companies pull customers in. Instead of treating customers as passive targets, they treat them as active participants. Like the sun in a solar system, they create a gravitational field that pulls customers into their orbit. They go beyond customer loyalty to building customer gravity.

Consider three top companies with orbit strategies: Apple, Google, and Nike. Each has a different approach, but the result is the same: customer-initiated touchpoints between transactions, and the creation of value beyond just product. At the core of each orbit strategy is a platform or service, what might be called a Customer Gravity Generator. Apple has iTunes and the App Store. Google has its search engine and Gmail. Nike has Nike+ and NikeID.

These orbit brands are actively building new Customer Gravity Generators. Apple has launched its iCloud. Google created Google+. Nike just launched NikeFuel.

Orbit brands are organized differently than traditional companies. Traditional brands are like artillery. Their mantra is aim and fire. They spend their time sighting targets (through customer segmentation), calibrating trajectories (by optimizing marketing mix), loading ammunition (with messages and offers), firing their weapons (with marketing campaigns), and celebrating successful strikes (from sales).

Orbit brands are more like scientists building a supercollider. Their mantra is test and learn. They focus on understanding the physics of their market space (through customer behavior), create and improve their technology (on products and platforms), run experiments (for new benefits and services) and analyze the results (for customer engagement).

To get started with an orbit strategy, start by measuring the strength of your gravitational field. Customer satisfaction isn’t enough. You aren’t measuring how well you target and transact. You want to measure the attractiveness of your brand — how well you pull customers in, and how well they pull other customers in with them.

A good test of where you are on the push/pull continuum is your social media strategy. Are you using social media as a channel for delivering messages to an audience? If so, you may be stuck in the push mindset. Or are you using social media as a way to listen and learn, to create an authentic relationship, and to deliver value beyond the products you sell? If so, you are well on your way to being an orbiter.

Next, imagine how you might build your own Customer Gravity Generators. First, revisit the core mission or purpose of your company. Think about what would help fulfill that mission and complement the products and services you sell. There are any number of sources of value: data, content, stories, relationships, experiences, identity.

If you think that only technology companies can create orbit strategies, think again. Nike has created a series of gravity generators, including Nike+, NikeID, and NikeFuel. With each generator, Nike creates a different orbit. One for runners, one for shoe aficionados, and one for athletes. Nike+ is particularly good at building social gravity, as existing users pull in new users like moons around their planets.

You don’t need to be a product company. Vail Resorts, a ski resort operator, created an orbit strategy with its Epic Mix. Starbucks’ “third place” strategy turned its own stores into gravity generators for local neighborhoods. Retailer Sears Holdings — where I work — is creating concentric orbits: ShopYourWay.com, a social network for social shopping; FitStudio, a community for fitness enthusiasts, and Craftsman Experience, a media channel for do-it-yourselfers.

You can also start small. Have you seen the Samsung power towers at busy airports? Road warriors are always huddled around them, tethered via their power cords. Samsung used electricity to generate customer gravity, and this one literally pulls in potential customers.

There are lots of options for creating customer orbits. So next time you hear someone talk about targeting customers, ask yourself, “What could we do instead to create some gravity and pull them in?”


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Marketing Can No Longer Rely on the Funnel

One of the central concepts of marketing and sales is the funnel — through which companies are supposed to systematically move prospects from awareness through consideration to purchase.

But consumers are now more informed, connected, and empowered than ever. Does the funnel still work in a digital, social, mobile age?

We asked some of the leading marketers in the world — from companies like Google, Intuit, Sephora, SAP, Twitter, and Visa — to assess the relevance of the marketing funnel.  What we found says as much about the future of business as it does about the future of marketing.

According to these marketers, the primary problem with the funnel is that the buying process is no longer linear. Prospects don’t just enter at the top of the funnel; instead, they come in at any stage. Furthermore, they often jump stages, stay in a stage indefinitely, or move back and forth between them.

For example, consider items that come recommended on an e-commerce site. With a click you can add them to your cart, moving straight from awareness through consideration to purchase in only a few seconds. The same holds true on items discovered in a Tweet, Facebook post, or Pinterest board.

In both B2B and B2C businesses, customers are doing their own research both online and with their colleagues and friends. Prospects are walking themselves through the funnel, then walking in the door ready to buy.

As an example, Julie Bornstein, CMO at Sephora, has seen social media change how people buy beauty products. Recommendations from friends have always been important, but now these recommendations spread “quicker, faster, and further” at every stage in the funnel. The decision on what to buy increasingly comes from advocates who share their experience in a way that pulls in new customers and informs their purchase decision. Sephora’s response has been to bring all the stages of the funnel together into a single place, creating its own online community where people can ask questions of experts and each other about brands, products, and techniques.

One popular alternative to the funnel is the Customer Decision Journey popularized by McKinsey. A key advantage of this model is that it’s circular, rather than linear. Prospects don’t come in the top and out the bottom, but move through an ongoing set of touchpoints before, during, and after a purchase.

The Customer Decision Journey is an improvement over the traditional funnel, but some marketers see it as incomplete. The problem is in the name itself. Brands may put the decision at the center of the journey, but customers don’t. Jonathan Becher, CMO at SAP, believes that for customers, “the pivot is the experience, not the purchase.” The Customer Decision Journey might be circular, but if the focus is still on the transaction, it is just a funnel eating its own tail.

One of the most critical weaknesses of the Customer Decision Journey is the connection between purchase and advocacy. Almost every marketer we spoke to described how social media has disconnected advocacy from purchase. “You no longer have to be a customer to be an advocate. The new social currency is sharing what’s cool in the moment,” says Joel Lunenfeld, VP of Global Brand Marketing at Twitter.

In today’s marketing landscape, people can experience a brand in many ways other than purchase and usage of a product. These include live events, content marketing, social media, and word-of-mouth. Consider all the members of the Nike+ running community who don’t own Nike products or the half million fans of Tesla’s Facebook page who don’t own a Tesla. Or consider companies where employees use their own devices or download their own software until IT purchases the enterprise version for the entire company. In today’s digital age, advocates aren’t necessarily customers. Marketers who think that advocacy comes after purchase are missing the new world of social influence.

Antonio Lucio, Chief Brand Officer at Visa, believes the solution is to shift the focus from the transaction to the relationship.  After exploring the Customer Decision Journey, his team developed what they call a Customer Engagement Journey.  In this model, transactions occur in the context of the relationship rather relationships in the context of the transaction.

As an example, consider a real world journey of a family’s trip from the U.S. to Mexico. Visa has mapped out the entire experience, from where the family gets ideas on where to go (TripAdvisor), to how they gather input from friends (Facebook), to how they pay for their cab (cash from an ATM) or hotel (credit card), to how they share photos of their trip with friends back home (Instagram). Only a few of these situations are opportunities for transactions, but they are all opportunities for relationship. “When you change from decision to engagement,” Antonio says, “you change the entire model.”

Market trends suggest the mismatch will only widen between customers’ actual experiences and the models of the funnel or Customer Decision Journey.  One key trend is the integration of marketing into the product itself.  The funnel presumes that marketing is separate from the product.  But for digital products like games, entertainment, and software-as-a-service, the marketing is built right into the product.  Examples include the iTunes store and Salesforce’s App Exchange.

Caroline Donahue, CMO at Intuit, oversees numerous web-based products for which “the product and the marketing become one thing.”  The funnel changes because “with cross-sell and up-sell, you move from awareness to action instantaneously.” Instead of a Customer Decision Journey, her approach might best be described as a User Experience Journey into which opportunities for transactions are thoughtfully embedded.

Google shares a similar view, taking the fusion of product and marketing one step further. Arjan Dijk, the company’s Vice President for Global Small Business Marketing, believes products should be designed to market themselves. For Google, the question is not “how can we market this product?” but “which products deserve marketing?” Marketing isn’t about “pushing people’s thoughts and actions. It’s about amplification, helping what’s already happening grow faster.”

So where do we go from here?  The funnel and Customer Decision Journey aren’t going away.  They are useful models, and will continue to be helpful in certain contexts.  But marketing today requires a new mental map to navigate a changing landscape. We need a model that informs marketers how to enable and empower, not just persuade and promote.  There are a variety of alternatives including journey, orbit, relationship, and experience.

Whatever model you choose, what’s most important is that it addresses: first, the multi-dimensional nature of social influence; second, non-linear paths to purchase; third, the role of advocates who aren’t customers; and fourth, the shift to ongoing relationships beyond individual transactions.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Cara France is CEO of The Sage Group, a firm providing marketing and consulting talent to San Francisco Bay area companies, and founder of Marketers that Matter. Follow her on Twitter @SageCEO.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Three Elements of a Successful Platform Strategy

We typically think of companies competing over products — the proverbial “build a better mousetrap.” But in today’s networked age, competition is increasingly over platforms. Build a better platform, and you will have a decided advantage over the competition.

In construction, a platform is something that lifts you up and on which others can stand. The same is true in business. By building a digital platform, other businesses can easily connect their business with yours, build products and services on top of it, and co-create value. This ability to “plug-and-play” is a defining characteristic of Platform Thinking.

Consider the market for smartphones. Nokia and Blackberry today are a shadow of their former glory. Their technology and products lag Apple and the Android ecosystem. But the triumph of Apple and Android is not from features and functions. It is from the app store on which external developers create value. Microsoft has gotten excellent reviews for the technology in its new phones, but it is the ability to create a successful platform that will determine its ultimate success.

The use of platform thinking extends beyond the tech sector. Retailers are shifting from distribution channels selling products, to engagement platforms co-creating value. Online retailers like eBay, Etsy, and Amazon led the way, and now traditional retailers are following.

JC Penney has made platform thinking a pillar of its reinvention strategy. Its stores are featuring more and more “boutiques” managed by others. It is no coincidence that JC Penney’s CEO, Ron Johnson, was previously at Apple. Johnson has said, “All those boutiques are the apps. What J.C. Penney is creating is a new interface.” While JC Penney’s pricing strategy has been controversial, analysts have been very positive about the in-store platform.

Nike is also shifting from products to platforms. Building on the success of its Digital Sport products, Nike recently launched its Nike+ Accelerator to help companies build on the Nike+ platform. Nike’s announcement reflects platform thinking. “We are looking for people who want to create companies that build upon the success of [Nike+] to make the world more active.”

The rise of platforms is being driven by three transformative technologies: cloud, social, and mobile. The cloud enables a global infrastructure for production, allowing anyone to create content and applications for a global audience. Social networks connect people globally and maintain their identity online. Mobile allows connection to this global infrastructure anytime, anywhere. The result is a globally accessible network of entrepreneurs, workers, and consumers who are available to create businesses, contribute content, and purchase goods and services.

Readers will recognize a number of intellectual foundations to platform thinking. These range from Geoffrey Moore’s ecosystems to John Hagel and John Seely Brown’s focus on “pull.” Where traditional ecosystems push, these new platforms pull. Platforms also rely on the power of network effects — as they attract more users, they become more valuable to those users. And there’s a growing academic literature that explores the unique quality of value creation on what are called “multi-sided platforms.”

In our view, the success of a platform strategy is determined by three factors:

  1. Connection: how easily others can plug into the platform to share and transact
  2. Gravity: how well the platform attracts participants, both producers and consumers
  3. Flow: how well the platform fosters the exchange and co-creation of value

Successful platforms achieve these goals with three building blocks:

  1. The Toolbox creates connection by making it easy for others to plug into the platform. This infrastructure enables interactions between participants. For example, Apple provides developers with the OS and underlying code libraries; YouTube provides hosting infrastructure to creators; Wikipedia provides writers with the tools to collaborate on an article; and JC Penney provides stores to its boutique partners.
  2. The Magnet creates pull that attracts participants to the platform with a kind of social gravity. For transaction platforms, both producers and consumers must be present to achieve critical mass. Apple needed to attract both developers and users. Similarly, eBay needed both buyers and sellers. Platform builders must pay attention to the design of incentives, reputation systems, and pricing models. They must also leverage social media to harness the network effect for rapid growth.
  3. The Matchmaker fosters the flow of value by making connections between producers and consumers. Data is at the heart of successful matchmaking, and distinguishes platforms from other business models. The Matchmaker captures rich data about the participants and leverages that data to facilitate connections between producers and consumers. For example, Google matches the supply and demand of online content, while marketplaces like eBay match buyers to relevant products.

Not all platforms place the same emphasis on all three building blocks. Amazon Web Services has focused on building the Toolbox. Meanwhile, eBay and AirBnB have focused more on the Magnet and Matchmaker role. Facebook has focused on the Toolbox and Magnet, and is actively building its Matchmaker ability.

In the future, we will see more and more companies shifting from products to platforms. Even those in the extermination business may worry less about building better mousetraps, and more on building mousecatching platforms. For example, imagine a smart mousetrap with sensors that wirelessly communicate to a cloud-based MouseCatcher service. Homeowners and exterminators could monitor the status of the trap on their smartphones, receiving a text message when it is out of bait or needs checking. Smart traps already exist. But the shift from products to platforms would focus on building the service (the Trapp Store?) that enables anyone with a smart trap to connect and communicate.

Every business today is faced with the fundamental question that underlies Platform Thinking: How do I enable others to create value? Building a better mousetrap still might not have the world beat a path to your door. But the right platform might just do the trick


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Sangeet Paul Choudary is a Singapore-based entrepreneur and author of the blog Platform Thinking.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

People Are the New Channel

In the past, channels delivered messages to audiences. You either owned the pipe or paid to use someone else’s. You controlled the message all the way through that pipe.

In a digital and social age, pipes are less important. People are the channel. You don’t own or rent them. You can’t control them. You can only serve and support them.

This new world is disorienting because pipes and people work very differently as channels. Pipes flow out; people flow in. Content is pushed out through pipes, but pulled in through people.

This reversal is shifting the balance of power. Individuals have access to information, tools, and resources once reserved for institutions. Externally, this means a shift in the relationship between customers and brands. Internally, this means breaking down the silos that once divided functions and departments. What used to be a hierarchy with the company at the top is now a network with the customer at the center.

For marketers, this of course changes everything. As part of an awards program that one of us (Cara) created and the other (Mark) helped judge, we had the opportunity to see how hundreds of top marketers in Silicon Valley are engaging customers and growing revenue in this new era. The two most important principles that emerged are that customers make the best brand advocates, and entire organizations make for the best marketing teams.

• Externally, empower your customers to be brand advocates. Laura Messerschmidt, Vice President of Marketing at Outright (a GoDaddy company), discovered through extensive customer research a new tax law that would significantly affect millions of customers and prospects. Instead of creating a campaign, Laura created a movement. She developed compelling content to educate customers, prospects, advocates, and influencers on the new law. She organized a roadshow meeting with local small business groups in ten cities. She reached out to 5,000 top customer advocates and invited them to share the content on social networks. The results? Monthly sign up rates went up over 225% in just two months and the cost to acquire customers decreased by over 40%.

• Internally, treat your entire organization as your marketing team. Chris Borr, former Vice President of Marketing at McKesson, was responsible for launching a major new campaign for one of McKesson’s divisions. On the belief that everyone in the division would need to support the campaign to make it successful, he spent as much energy cultivating internal ownership as external engagement. Focusing on the division’s 7,500 employees, from the night shift workers to the executives, he looked at every customer touchpoint and ensured everyone understood their new role as it pertained to the brand. The results? $600 million in new business the first year the program launched.

Some key skills and strategies accelerate the shift from pipes to people:

1) Don’t talk, listen. Brent Remai, CMO at FireEye, was hired into a small, venture- funded company with several years of moderate results. His first task was to spend significant time with dozens of customers to understand their problems and the language they use to talk about the issues. He used this information to formulate a marketing strategy that spoke to the customers in a language they understood. He then tested his strategy repeatedly with customers until it truly resonated. The result? In 2012, they were ranked as the 4th fastest-growing tech company by Technology Fast 500.

2) Don’t push products, solve problems. Laura Fay, Vice President Integrated Campaigns and Strategy at Cisco, has helped the global marketing organization rethink the way it approaches marketing. For years, the company had been focused on product launches to create splash, buzz, and engagement. Instead, she implemented an integrated planning process that started with the top customer issue and then created an integrated solution that crossed business divisions. The results? The integrated campaign resulted in Cisco’s share of voice for Cloud computing going from No. 5 to No. 1.

3) Don’t stop at 1-to-1, think many-to-many. Antonio Lucio, Chief Brand Officer at Visa, created a customer engagement strategy for the 2012 Olympics. Instead of pushing out messages, the company used social media to connect fans with each other and with the athletes they were cheering for. In exchange, fans got exclusive behind-the-scenes stories. The results? The most successful campaign in the company’s 26 year history of Olympic sponsorship, resulting in significant brand equity lifts, 13% claimed product usage and 470 million earned impressions in 26 markets.

Ironically, the shift from pipes to people is made possible by intensive use of technology and data — not only to automate but to analyze, personalize, and socialize. Technology brings speed and scale to what previously was impractical or unaffordable. Many of the most innovative marketers cited how social media monitoring enables them to listen and respond on a global scale. In addition, customer and employee communities enable them to identify real problems in real-time. Finally, relationship and content management tools enable them to make connections and capture user-generated content achieving both reach and relevance.

Counterbalancing this use of technology and data is a shared mindset that emphasizes reciprocity in the relationship between a brand and its customers. Top marketers know that they can’t put one over on the customer, nor can they control the message or their customer’s behavior. It takes humility, appreciation, and an orientation towards openness and inclusion.

So what’s the recipe for results in marketing today? Choose people over pipes, and mix one part technology with an equal part humanity.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Cara France is CEO of The Sage Group, a firm providing marketing and consulting talent to San Francisco Bay area companies, and founder of Marketers that Matter. Follow her on Twitter @SageCEO.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Purpose is Good. Shared Purpose is Better

Companies are turning to “purpose” and “authenticity” as a way to engage consumers and employees. But it’s hard enough to find a purpose in life if you’re an individual, let alone an entire company. And being authentic is a bit like being cool — sometimes the harder you try, the less you are.

So what’s a leader to do?

The first step is to recognize that there are different kinds of purpose. Sometimes purpose is about values — who you are and what you stand for. Other times it is about value — what you do and how it benefits others.

The ultimate goal would seem to be having your values and value aligned: have what you do reflect who you are, have what you stand for guide what you make, and have your value to the community enhance your value to customers and shareholders.

This goal is of aligning values and value is espoused by many eminent leaders, from Jim Stengel to Bill George. It’s a core tenet in the field of corporate social responsibility.

But in a social age, this kind of purpose isn’t enough. The problem comes down to a simple preposition. Most leaders think of purpose as a purpose for. But what is needed is a purpose with.

Customers are no longer just consumers; they’re co-creators. They aren’t just passive members of an audience; they are active members of a community. They want to be a part of something; to belong; to influence; to engage. It’s not enough that they feel good about your purpose. They want it to be their purpose too. They don’t want to be at the other end of your for. They want to be right there with you. Purpose needs to be shared.

To understand the power of shared purpose, it’s useful to look at the mission statements of leading companies. To be clear, I’m not equating mission statements with company purpose. But they illustrate the point, and in fact are remarkably representative of the differences between the companies. So with that caveat, let’s look at our first mission statements from Adidas and Nike:

Adidas: The adidas Group strives to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle.

Nike: To bring inspiration and innovation to every athlete* in the world.

*”If you have a body, you are an athlete.”

Notice how you respond to each statement. Which one do you feel more a part of, regardless of whether you are a customer or shareholder? Adidas puts the emphasis on value and values. But Nike goes further, addressing not only people’s interests but their sense of who they are. Adidas is for, while Nike is with.

Let’s look at another example, this time between Starbucks and Dunkin Donuts.

Dunkin Donuts: Make and serve the freshest, most delicious coffee and donuts quickly and courteously in modern, well-merchandised stores.

Starbucks: Our mission: to inspire and nurture the human spirit — one person, one cup and one neighborhood at a time.

Dunkin Donuts’ purpose is clearly for customers, and it delivers on this purpose exceedingly well. But there is something different about Starbucks’ purpose. It is a purpose that is achieved with its customers.

Again, mission statements don’t always reflect a company’s true purpose. But in these cases, I think you would agree that they are fairly accurate representations of the company’s approach to the market, its engagement with customers, and its perception as an “authentic” brand.

The relationship of shared purpose to corporate social responsibility is worth exploring a bit further, this time by comparing Pepsi and Coca-Cola. Under the label “Performance with Purpose,” Pepsi has declared both a mission and a vision.

Mission: Our mission is to be the world’s premier consumer products company focused on convenient foods and beverages.

Vision: PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate — environment, social, economic — creating a better tomorrow than today.

This is a perfect example of a “Values and Value” approach to purpose. The vision covers values, and the mission covers value. But something is missing. There is no shared purpose here. Nothing for people to participate in, belong to, engage with, co-create, or share with others that aligns the commercial side of the business with social responsibility.

By contrast, Coca-Cola has declared as its mission:

To refresh the world…
To inspire moments of optimism and happiness…
To create value and make a difference.

While the third line is a bit generic, the first two lay a stronger foundation for a shared purpose. It is perhaps no coincidence that Nike, Starbucks, and Coca-Cola all feature the word inspiration in their mission statements. You can’t inspire someone without their participation and engagement.

How can you create your own shared purpose? It’s simple, but not easy. The essential question is:

What is the shared purpose that …

a) We and our customers can work on together?
b) Is a natural expression of who we are and what we stand for?
c) Connects how we make money with how we contribute to the world?

When you apply this lens to the brand we have covered here, you can see how Nike, Starbucks, and Coca-Cola pass the test. Nike to inspire the athlete in all of us. Starbucks to nurture the human spirit. And Coca-Cola to refresh the world with moments of optimism and happiness
.
As you formulate your shared purpose, don’t go for what you think it should be. Look for who you already are. How you already connect with your customers. What your fans already say about you.

Remember, this is not something you are going to do to them, or for them, but withthem. It’s a journey you will be on together, hopefully for a very long time.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

What If You Could Learn Design from Apple?

Over 4,000 companies have corporate universities. Some of the most famous are run by GE, Disney, and McDonalds. Their purpose is to instill the company’s vision and values and cultivate critical skills and competencies.  The best ones are permeable membranes that transfer knowledge from the outside in: Steve Jobs recruited the Dean of Yale’s Business School to run Apple University, while  Jeff Weiner recruited business coach and thought leader Fred Kofman to lead leadership development for LinkedIn. Some of the best programs are said to rival traditional business schools.

The assumption in leadership development is that corporate universities are for internal audiences. But what if corporate universities were for customers as well as employees?  There are competencies inside of companies that would be of value to those on the outside. What would happen if we turned the corporate university inside out?

Companies everywhere are looking for new ways of engaging customers.  Content marketing is a start, but articles and posts on social media don’t go deep enough. It’s time to flip the corporate university inside out, blending marketing with learning to create relationships beyond the transaction.

There’s some precedent for “flipping the corporate university.” The Disney Institute is a professional development organization that works with companies to showcase “the business behind the magic” and instill the competencies of leadership, employee engagement, and service that have made Disney so successful.  The company uses events, courses, and consulting to share principles of what the Institute calls “#DThink” like “Setting the Stage” with a growing community of individuals and organizations. The Disney Institute is separate from and complements Disney University, which trains Disney cast members who work in their parks.

Ritz Carlton and Zappos follow a similar model. Through courses and consulting engagements, the Ritz Carlton Leadership Center enables companies to acquire the competencies of “service excellence” for which Ritz Carlton is so renowned. The Leadership Center is well respected in the industry and has been inducted into the Training Magazine’s Hall of Fame.  Zappos Insights was created to “share the Zappos Culture with the world” and help companies strengthen their own culture and core values.  The Insights team offers tours of Zappos Headquarters, Q&A sessions with Zappos leaders, content subscriptions, and a “full culture immersion” through live events.

Disney, Ritz Carlton, and Zappos are all service-intensive businesses. But the model can be applied in other areas too. For a number of years, IBM organized the Center for CIO Leadership as a “global community to advance the profession.” At the time of its founding in 2007 most leadership programs were focused on helping CIOs be better IT managers. In contrast, IBM’s program helped CIOs be better business leaders.  The program helped CIOs gain a “seat at the table” within their companies, and strengthened relationships with IBM’s key buyers.  (Note: I advised IBM on the design of this program.)

P&G Professional serves the “away from home” market for commercial cleaning. The industry suffers from high turnover and most commercial cleaners are relatively small companies without resources for extensive training.  So P&G Professional recently launched its University as a “virtual campus” with training materials on cleaning techniques and best practices.

The notion of using learning to strengthen customer relationships is not a new one. In 1920-21 farmers were hard hit by deflation.  Farmers were vital to Sears-Roebuck, which at the time was still purely a catalog company.  Radio was still a new technology but had been rapidly adopted by farmers.  Sears had advertised on radio stations, but wanted to create a deeper relationship with its customers.  In 1924 Sears launched the Sears-Roebuck Agricultural Foundation and WLS Radio (for World’s Largest Store).  The purpose was to help farmers “Farm Better. Sell Better. Live Better.” By helping farmers be more productive, Sears enabled them to generate more disposable income. By focusing on a shared purpose, Sears created reciprocal relationships that went beyond loyalty to gratitude.

The potential for turning corporate competencies into customer relationships is vast. Imagine learning product design from Apple. Salesmanship from Salesforce. Digital marketing from Adobe. Sustainability from Patagonia. Organizing from the Container Store. Industrial internet from GE. Logistics from FedEx. Branding from Nike. Networking from LinkedIn.

Why don’t more companies do this? The reason isn’t demand. Whenever I speak to a company’s best customers, they always say they want to know more about what the company knows.  The problem is that companies don’t see the opportunity.

The first reason is mindset.  No one thinks of learning as being a strategy for building deeper relationships with customers and partners.  The second is perspective.  Customer interactions that aren’t directly tied to sales are seen as unproductive.  The third is skillset.  Companies don’t think of themselves as being “in the learning business” or they don’t feel they have the competency to produce high-quality learning.  The fourth is silos. Marketing and learning rarely talk to each other.

The final reason is confidence.  Companies often don’t think they have anything to say.  A few years ago I was working with a global company that was trying to engage Chief Financial Officers.  They had developed all kinds of thought leadership and white papers about how CFOs could do their job better.  But when we talked to CFOs, what they really wanted to know was how the company managed its own finances across so many geographies.  When told of this request, the company’s response was “Really?  That seems too easy.”

As you consider flipping the corporate university, look for where your distinctive knowledge or competencies can solve a learning or business problem for your customer.  The business case has two components.  First, by solving that problem you create a deeper relationship and gratitude beyond the transaction.  Second, a properly designed program generates more business for the sponsor.  By helping farmers be more productive, Sears generated more disposable income for Sears products. By helping commercial cleaners be more profitable, P&G generates more demand for its products.  This combination of economic benefit and social reward is a powerful engagement strategy.

Keep in mind that you don’t need to create a formal “university” to put this strategy into action.  Sephora has put education and learning at the heart of its marketing, sales and customer service strategy.  Its “Beauty Workshop” gives customers expert advice and how-to makeovers online and in the store.  Similarly, Home Depot offers free DIY (Do-It-Yourself) workshops in their stores and a robust collection of how-to videos online.  For Sephora and Home Depot, the learning deepens the brand relationship while generating more demand for the products. The more creative and confident you feel about your makeup or building skills, the more likely you are to buy their products.

In this digital age, it is imperative for companies to build their brand orbits with ongoing relationships beyond individual transactions.  This relationship must be built on more than a value proposition and a net promoter score.  We all remember the teachers that had the greatest impact on our lives.  And we are loyal fans of the schools that shaped us into who we are today.  It’s time to bring marketing and learning together to create more enduring and authentic relationships.

There is a saying that if you sell someone a fish, they eat for a day, but if teach them to fish, they eat for a lifetime.  The flipped university is a simple variation.  If you have a bait, tackle, or charter business, teaching someone to fish can make them a customer for life.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Why Customer Gratitude Trumps Loyalty

Brands want loyal customers. They buy more, pay more, and refer more.  But research shows that loyalty is in decline. Consumers are considering more brands and switching providers more frequently than ever before.

So what can marketers do with their loyalty programs to earn greater trust, commitment and advocacy?  The answer isn’t more sweepstakes, coupons, points, promotions or emails.   It takes a rethinking of what loyalty really means in a digital age.

1. Loyalty needs to be reciprocal. Consumers today expect this allegiance to go in both directions. According to a study by Kitewheel, three-quarters of consumers believe loyalty programs are for brands to show their loyalty to consumers. But two-thirds of marketers think the reverse: that loyalty programs are a way for consumers to show their loyalty to brands.

You can see this disconnect in how brands talk about loyalty.  The phrases “brand loyalty” and “customer loyalty” often mean the same thing. What would the world look like if brands were loyal to their customers? Credit card companies would waive late fees for customers who were on vacation when the payment was due. Retailers would reward shoppers who don’t spend a lot, but are active on social media as brand advocates. Airlines and hotels would renew status levels for customers who took a hiatus from traveling when they had a baby or were between jobs.

2. Loyalty is about emotion first, behavior second. For most brands, the measure of brand loyalty is repeat purchase behavior. This metric puts the cart before the horse. Loyalty is powered by emotion; repeat purchases are the result.

The increasing popularity of promotions shows this flawed thinking in action. Low prices may be a way to drive more transactions, but it doesn’t necessarily earn loyalty, at least not in an emotional sense.  Ivan Wicksteed, CMO at Old Navy and architect of the brand’s recent transformation, has said, “It’s the emotional connections that a brand makes… that last the longest and go the deepest.”

Things get worse when carrots turn to sticks and brands start penalizing disloyal behavior.  Consider Amazon’s recent announcement that it would stop selling products that aren’t compatible with its video streaming service. Like other Amazon customers, I question how this serves its mission to be “Earth’s most customer-centric company.” Or consider phone companies like Verizon and AT&T that are always looking for ways to lock customers into another two-year contract.

3. Go for gratitude and loyalty will follow. How does one create a sense of loyalty that is reciprocal, authentic, and emotional?  The answer is to focus on fostering the emotional response that is most likely to drive loyal behavior—gratitude.

By definition, gratitude is “a readiness to show appreciation for and to return kindness.”  Note that gratitude is inherently reciprocal. It also combines both emotion and behavior. There is a feeling of appreciation and an expression of that appreciation through some kind of action.   Gratitude therefore can serve as the basis of a relationship beyond the transaction.

It’s tempting to think that gratitude can be generated by doing nice things for your customers. It’s a good start, as Starbucks has demonstrated with the success of its own loyalty program. Giving gifts, granting rewards, and doing other nice things can work in the short term, but customers can become conditioned or easily wooed by someone else with nicer gifts.

The strategy for generating sustained gratitude is to discover and foster a shared purpose with your customers, and to help them share that purpose with others.  Shared purpose is not something you do for your customer, but rather with your customer. Satisfied customers at T-shirt company Custom Ink, for example, receive a personalized communication when they complete a survey after their purchase:  “Your t-shirt design is an extension of yourself, a statement of your creativity! I’m so glad that we were able to help bring your idea to life. We love seeing our t-shirts out in the world, so check us out on Facebook. You can share your story, post a picture of your creation, and share it with your friends.”

All of the elements of a gratitude program are in these sentences.  CustomInk is going beyond the transaction to create a shared purpose around expressing creativity.  They are expressing their own gratitude, not for the transaction (“thanks for your purchase”), but for the opportunity to contribute to that purpose (“glad to help you bring your idea to life”).  They have created a personalized interaction to show loyalty to the customer.  And they have identified a social currency in the t-shirt itself (they call it “a creation”) with opportunities to share it with others.

GE is another company pursuing a gratitude strategy with its “Surprise and Delight” program.  It launched a “Healthymagination” program with a shared purpose of “creating better health for more people.” To deliver on that shared purpose, in 2012 the company created an outreach program designed to “create an emotional connection” around health.

GE monitored social media outlets and engaged people talking about health. They didn’t try to sell, but instead to express appreciation and support. In some cases they went even further, sending personalized gifts (like a yoga mat or water bottle) as a tangible expression of appreciation aligned to the shared purpose.

The spirit of gratitude is apparent in the interactions. For example, one of GE’s tweets said “@[name] Your blog post made us smile. We’re glad you share your healthy habits with your friends :-)”  This was followed by a personalized gift. The recipient responded with:  “@generalelectric Your lovely gift made me smile. So it’s smiles all around :-)  And yes, sharing fitness with friends is the best!”

The key to success for GE and CustomInk was the authenticity of the appreciation they showed to their customers. The interactions weren’t transparent attempts to drive another transaction. They were inspired by a well-articulated shared purpose, motivated by a heartful desire to “show appreciation for and to return kindness,” and organized with a well-planned program combining social media, personalization, and customer support. And there wasn’t a coupon or loyalty program point anywhere in sight.

If you are wondering how to generate more brand loyalty, consider implementing a gratitude program. Identify the shared purpose that you can work on together with your customer. See where you can express appreciation for their accomplishments toward that shared purpose. Cultivate gratitude and loyalty will naturally follow.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Focus on Keeping Up with Your Customers, Not Your Competitors

Every company these days seems to be either contemplating or pursuing digital transformation. Most cite the need to keep up with disruptive and well-established competitors. But perhaps this focus is too narrow. We believe the greatest challenge to companies today is not keeping up with their competitors, but with their own customers.

One reason is that individuals are transforming to digital faster than organizations. Think for a moment about people as tiny enterprises. They’ve redesigned their core processes in the area of procurement (online shopping), talent acquisition (marketplaces), collaboration (social networking), market research (peer reviews), finance (mobile payments) and travel (room and ride sharing). Have you reinvented your core processes to the same degree?

Customers’ expectations are also more liquid and no longer based on industry boundaries. Customers – whether consumers or business buyers – don’t compare your customer service to that of your competitors, but to the best customer service they receive from anywhere. The same is true for their expectations of your web site, mobile app, loyalty program, branding, and even social responsibility.

So how can you keep up with your customers? You have to start thinking like them.

Customers don’t think in or; they think in and. You have to transcend trade-offs.

The adage used to be that you could pick any two combinations of “cheap, good, or fast.” But today’s customer doesn’t want to make tradeoffs. They want it cheap, good, and fast. As leaders, we are accustomed to thinking of business being about making tough decisions between competing objectives. But we need to think more like our customers. Instead of focusing on how to make tradeoffs, we need to focus on how to transcendthem.

Some of the tradeoffs that are most suited to digital transcendence are:

  • Big and small: Combine the speed, agility and creativity of being small with the scope, scale and influence associated with being big.
  • Complex and simple: Manage the systems and processes to run a global business while creating simple and elegant experiences for customers.
  • Global and personal: Achieve universal consistency and reach around the world while delivering relevant, tailored interactions to every customer.

Customers want to be empowered, not controlled. You have to act with empathy.

Business used to be about getting customers to do what you wanted them to do. But customers don’t accept this any more. They don’t like to be told what to do. They want relationships based on reciprocity, transparency and authenticity. If you want to keep up with your customer, you can’t be focused on getting them to do what you want, but instead on helping them do what they want.

This evolution from control to empowerment means a change in the basic building blocks of customer engagement.

  • Funnels used to be linear processes that moved customers from one stage to the next. There was no going back until a sale was either won or lost. Now these funnels have become Escherian journeys, fluid, customer-led and multi-dimensional. It’s not about capturing and converting towards a transaction, but connecting and collaborating around a shared purpose.
  • Channels used to be pipes connecting you with your customer, carrying carefully crafted messages to passive audiences. Now they are experiences connecting customers to their own desires, and communities connecting customers to each other. It’s not about promoting the features and benefits of your product, but building empathy and understanding of each customer’s intent – and helping them achieve it – as part of an ongoing relationship.

Customers don’t think in straight lines. You need to be non-linear.

To keep up with your customer, you have to let go of linear thinking. Customers today expect you to be where they are, deliver what they want, when they want it, and how they want it. If they’re browsing your website on their laptop, they will expect that when they next come to your site from their mobile device or tablet, or talk to a sales person in your store, branch or call center, you will pick up right where they left off. Business has become like that old game of Twister. You have to be flexible if you are going to win.

This requires rethinking and redesigning core disciplines:

  • Strategy has to go beyond analyzing markets, making plans, and forecasting the future. Strategy also has to build capabilities, transform culture and architect for constant change.
  • Campaigns have to be more than one-way communications for one-time responses. They need to initiate and expedite personalized journeys as part of ongoing conversations.
  • Personalization needs to go deeper than looking simply at what someone buys. It needs to be based on the subconscious motivations of why someone buys, revealed through real-time analysis of a wide variety of data sources.
  • Social can’t be treated merely as a channel for distributing messages. Done right, it’s a context for building genuine relationships that demonstrate how much they really matter.
  • Loyalty needs to be more than accumulating points for rewards. To be genuine and enduring, loyalty needs to be reciprocal. If you want their loyalty, you have to be loyal in return.
  • Operations need to go beyond the efficiency of the company to the efficiency of the customer. How can you optimize to help customers get more for their time and effort, not just their money?

It’s a significant shift in mindset and practice to reorient from keeping up with competitors to keeping up with customers.

We suggest getting started by assessing where you are.

  • How does your transformation compare to your customers? In what areas are they moving faster or slower than you are?
  • Who is setting your customers’ expectations? It’s probably coming from outside your industry.
  • What kind of relationship do you want to have with your customer? Are you trying to get them to do what you want? Or figuring out how to help them do what they want?

Next, look at where to focus your attention.

  • Which tradeoffs do you need to transcend? We mentioned a few above. Others include speed and scale, consistent and nimble, high-tech and high-touch.
  • Where is linear thinking getting in the way? Review the disciplines outlined above and see which ones will have the most impact on your customer experience.

Creating sustainable advantage is more elusive than ever. The new game is designing customer-driven journeys across touch points to help them achieve their intent, and to create more multidimensional relationships. To win this game, stop thinking about just keeping up with your competitors, and start thinking about keeping up with your customers.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Gene Cornfield is Managing Director at Accenture Interactive, where he helps global organizations transform their customer experiences, organizations, and business outcomes.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

The Age of Social Products

We are moving from a world in which physical products are separate to one in which they are connected.  Computers were just the beginning.  Appliances and engines now send alerts when they need to be serviced.  Cameras upload their photos automatically.  Vending machines trigger their own restocking.  Crops feed and water themselves.

This shift has many monikers:  “The Internet of Things” and “The Internet of Everything” are two of the most popular. But the history of the Internet suggests that this is just the beginning.  The real change will happen when products aren’t just connected, but social.  Instead of the Internet of Things, we should be thinking about the Social Network of Things. To take advantage of this shift, you need to start thinking about the social life of your products.

What makes the Internet of Things possible is the confluence of multiple technologies:  inexpensive sensors, wireless networks, and cloud computing.   The ability to access data and computing resources from anywhere means that products don’t need to have computers and memory built into them.  They can just use the cloud.  Put sensors, a simple processor, and a wireless connection together and you have the makings of an intelligent and connected product.

The Internet of Things is already expected to transform customer servicebusiness models, and advertising.  But we should remember the evolution of the Internet.  The early days (Web 1.0) was about computers talking to computers.  A few years later (Web 2.0), people started talking to people.  The Internet was disruptive as a connected infrastructure, but it became explosive when it got social.

Today, most of the discussion about the Internet of Things is about products being connected.  But just because your product is connected doesn’t make it social.  For products, the real revolution will come when objects aren’t just passing information back and forth, but collaborating around a shared purpose.

This insight is behind Google’s recent acquisition of Waze for $1.1 billion.  Google already has the best map and traffic program, so why would they want another one?  Was it just to keep it out of the hands of Apple or Facebook?  We think not.

Among other things, Waze cracked the code on social products.  Google Maps is a data network, while Waze is a social network, in this case of cars, phones and people.  Waze creates a constantly updating repository of traffic information, much like Wikipedia creates a dynamic repository of encyclopedic information.  However, in this case, it is cars, phones and people who are collaborating to create the body of knowledge.  Waze provides a glimpse of how the car can become a social device by using the little data created by each individual car and driver.  According to the head of Google Maps, the goal is “to harness the power of Google technology and the passion of the Waze community to make it easier to navigate your daily life.”

Waze shows us how the cars of the future will not only connect to each other but also leverage the collective intelligence of that community of connected cars. We can see this in other areas as well.  Connected e-readers already help every individual reader benefit from the actions of the community. Nike is betting on a future with connected shoes, where each individual shoe learns from the data aggregated from a network of connected shoes. Social products leverage the power of the community to learn from other products.

So how do you create a social product?

First, you need a product that is smart and connected.  You can build your own (like the thermostats and home alarms from Nest) or use someone else’s device.  It might be a smartphone (think Waze), a consumer device with open APIs (like Nike’s FuelBand), or a commercial device with a strategic alliance (likeOpower and electric utilities).

Second, you need to make the product social.  This requires a platform where people and products are connected in a collaborative network.  Each individual product and each user benefits from being part of a community of fellow products and users. For example, Nest’s thermostat and smoke detector work together.  When the alarm detects carbon monoxide, it tells the thermostat to turn off the furnace.

In the case of Waze, each car and driver benefits from the information gleaned and aggregated from the community of cars and drivers.   That’s not all.   A Department of Transportation study demonstrates how cars of the future will talk to each other.  Cars within 1,000 feet of one another will send out their speed and location to the others, which will then notify the driver as needed.  Google’s driverless cars will be able to make adjustments automatically.  In this future state, is it the cars that are driving, or the social networks?

If you are considering building a strategy around social products, you have a few choices.   You need a connected product, a social network of people, a social network of products, and a collaborative platform for interaction, data exchange, and analytics.  The good news is that you don’t have to do all of this yourself.

  • Instagram leveraged an existing connected product (smartphone camera) and an existing collaborative platform (Facebook) to create a social network of connected camera-phones.
  • Qualcomm Life is creating a new collaborative platform to transform existing connected devices (for mobile health and fitness) into social products.  Recognizing they also needed a social network of people, they recently purchased HealthyCircles to help physicians, patients, and families coordinate care and support.
  • Nike is creating an entire ecosystem of connected products (Hyperdunk+ shoes), social network of products (FuelBand), social network of people (Nike+), and collaborative platform (Digital Sports).

The Age of Social Products will change the basis of competitive advantage.  Companies have traditionally focused on product supremacy, outdoing their competitors with better features and attributes.  In an age of social products, competitive advantage comes not from product features but from network effects.  Companies succeed by having products that better leverage the intelligence of the network of other connected products. This is a shift in mindset from standalone-product thinking to connected-platform thinking.

The Age of Social Products is dawning.  Companies that create products that are smart, connected, and, most importantly, social, will not only survive, but thrive.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Sangeet Paul Choudary is a C-level advisor to executives globally on platform business models, an entrepreneur-in-residence at INSEAD and the co-chair of the MIT Platform Strategy Summit. He has been ranked among the top 30 emerging business thinkers globally by Thinkers50. He is also a co-author of Platform Revolution (W.W. Norton & Company, 2016) and the April 2016 HBR article Pipelines, Platforms, and the New Rules of Strategy.” Follow him on Twitter at @sanguit.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

The Coming Branded-Currency Revolution

Coupons. Gift cards. Loyalty points. These tried-and-true tools of the retail trade might not be as sexy as other forms of marketing. But together they account for more than $165 billion in purchasing power ($110 billion in gift cards purchased, $48 billion in loyalty points earned, and more than $5 billion in product coupons redeemed). That’s almost as much as total e-commerce sales.

These instruments share a common objective: to influence purchase decisions by equipping consumers with incremental spending power for specific brands and retailers. But consumers use them independently and individually (combining their value, when possible, takes a lot of manual effort), and store them in different places — often in drawers or folders where they lay forgotten and unused.

This is changing as coupons, gift cards, and loyalty points all become digital — and, more important, mobile. Mobile enables all of this purchasing power to converge in one place, and potentially be used interchangeably and collectively, always within easy reach for consumers.

What does this mean for retailers and brands? The mistake would be to think that they can keep doing what they have always done, but just add a little digital to it. Instead, retailers need to think about coupons, gift cards, and loyalty points not only as three separate tools, but as different forms of Branded Currency.

Economists define currency as a store of value and a medium of exchange. All of these instruments are stores of value, and by going digital and mobile, they become far more effective mediums of exchange.

The first wave of this convergence has made it easier for consumers to use their coupons or points for payment. Card-linked offers enable consumers to load coupons to their credit cards or loyalty accounts in advance of purchase. Valid offers are automatically applied as a credit when consumers’ cards are scanned at the point of sale. Consumers like it because they don’t need to remember or present individual coupons. Another approach is Shop-with-Points. As an example, Amazon enables consumers to use their credit card loyalty points as a way to pay for purchases on the site. Shoppers can see their balance and apply their points as easily as using a gift card or credit card.

Where the first wave made possible convertibility, the second wave introduces much greater convenience. Mobile wallets, like Apple’s Passbook, bring coupons, gift cards, and loyalty cards together in one place without the constraints of a physical wallet. This innovation is good, but it’s a bit of a horseless carriage, still tied to the mental model of a wallet. Consumers still need to manually figure out which instruments can be combined and which cannot, prioritize them based on expirations, calculate the math on their own, and then present them at point-of-sale one at a time.

The third wave will be the mobile portfolio manager, the automobile to the mobile wallet’s horseless carriage, which marries the convertibility of the first wave with the convenience of the second. When you treat coupons, cards, and points as convertible instruments, fully leverage the power of digital and mobile technology, and add intelligence into the system, you get an entirely new possibility: calculating and comparing purchasing power, converting currencies, prioritizing usage, and dynamically creating scannable barcodes or other methods for combined payment. Soon consumers will be managing their Branded Currency the way they use Mint to manage their bank, credit, investment, and other financial accounts.

There is a lot of talk these days about brands as publishers. But the successive waves of Branded Currency suggest that retailers will also need to think like bankers who mint their own currencies. Market leaders will be those who best help consumers manage and spend Branded Currency from their portfolios, offer the best exchange rates, create the most liquidity, and make the most efficient markets. Retailers who adopt and execute smart Branded Currency strategies will gain relative share of wallet and have deeper, more enduring relationships with consumers.

Starbucks is perhaps the most advanced retailer in the area of Branded Currency. Most retailers treat their gift card program as an afterthought. Starbucks, on the other hand, has turned it into a hub for competitive advantage. In fact, CEO Howard Schultz considered the combination of mobile payments and social networking as central to the company’s “blueprint for growth.”

In 2011, Starbucks launched Android and iPhone apps that enabled customers to mobilize and easily reload their plastic cards or purchase new digital gift cards. Most Starbucks customers use the gift card not as a present for others, but as an easy way to pay for purchases, redeem offers, and earn rewards. In effect, they transformed their gift card into a mobile payment/loyalty card and their mobile app into a wallet for their Branded Currency. Over 7 million people now use Starbucks’ mobile app to make 4.5 million payments a week, accounting for at least 10% of Starbucks total U.S. revenue. Over 10 million Starbucks eGifts, the digital version of a gift card, have been sent just since 2012.

The strength of Starbucks strategy is not in any single program or promotion. It is the way that the entire Branded Currency system works together to provide an integrated and seamless experience for the customer. They knit together a variety of technologies and platforms from Apple, American Express, CashStar, Facebook, Square, and daily deal providers to promote and execute their deals, offers, and payments across digital, mobile, and social channels. But most importantly, by having its own Branded Currency system, Starbucks maintains control over the customer experience, relationships, and data.

Many technology companies including Apple, Google, eBay and Square are hoping brands will rely on their platforms to integrate and manage coupons, offers, gift cards, payments, and rewards.

Apple has been quietly creating a platform for managing branded currency in the form of its Passbook app and a newly filed patent. If brands aren’t careful, they will be as beholden to Apple for digital and mobile coupons, payments, and loyalty as record companies are for digital music, book publishers are to Amazon for digital books, and social game publishers are to Facebook.

As the market for Branded Currency converges and grows, brands will fall into three categories.

(1) Losers: Some brands will continue to operate their coupons, deals, offers, gift cards and loyalty programs the way they always have, as separate standalone programs, and will adopt mobile technology reluctantly. These brands will steadily lose their competitive edge and share of consumer spending.

(2) Laggards: Some brands will play catch up, adopting best practices after they are widely accepted, and rely on the platforms developed by technology and financial services companies. They will stay in the game, but will be in the middle of the pack, either unable to control the customer experience, lacking full access to their data, and losing margin to the platform provider.

(3) Leaders: A few brands will set the pace by creating an integrated approach to using Branded Currency as a vehicle for customer engagement. They will aggregate deals, offers, payments, and loyalty; unify online and offline; and put mobile at the center. They will work with other third-party platforms and wallets, but not be beholden to them. As a result, they will use their data to create value for their customers and bring a unique brand experience to every touchpoint. They will enjoy increased frequency and spend, forge stickier relationships, and greater and more sustainable profitability.

Will you be a loser, laggard, or leader? History, current trends, and the billions of dollars at stake would suggest it’s time to start building your Branded Currency strategy and system now.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Gene Cornfield is Vice President of Marketing at CashStar, a provider of digital gifting and mobile payments solutions. Follow him on Twitter @genecornfield.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

What if a Company Maximized Jobs Over Profits?

All over Silicon Valley, venture capitalists are asking entrepreneurs “How scalable is your business model?” What they really mean is, “Can you grow without having to hire people?”

In our digital economy, value creation and job creation don’t always go together.  Consider that Whatsapp just sold for $19 billion with only 55 employees.  It used to be that business growth led to job growth.  But as machines get smarter, labor becomes a reluctant necessity.  Companies only hire as a last resort.

But what if the purpose of a company was to employ people?  Instead of hiring enough people to make the greatest profit, it would make enough profit to hire the greatest number of people.

Put simply, these “job entrepreneurs” maximize jobs instead of profits.  There is a precedent in this. “Social entrepreneurs” seek to maximize purpose over profits.  They take a social problem, like health, poverty, or the environment, then work on finding a business model that can remedy the problem. They seek to make enough profit to make the greatest social impact.

Job entrepreneurs take a similar approach. They start with a group of people they seek to employ, then work on finding a sustainable business model that leverages their talent and experience. This isn’t about job placement. There are many organizations that help people find jobs in other companies. Job entrepreneurs bring people directly onto their own payroll.

One pioneer in the “job entrepreneur” movement is Dave Friedman. Two years ago, Friedman left his position as a Fortune 100 executive to start a new venture.  His goal was to employ people on the autism spectrum – individuals who have traditionally been unemployable.

Friedman considered creating a traditional startup, but he realized that his goal was different. He didn’t want to maximize profits but rather employment.  Many advised him to setup a non-profit. But Friedman didn’t want to rely on grants and donations. He believed the business needed to generate a sustainable profit to foster discipline and efficiency. He also wanted his employees to know that their jobs weren’t just charity, bringing a source of authentic empowerment.

Some advised Friedman to create a social enterprise, but the models didn’t really apply.  Friedman wasn’t changing how the product was made (e.g. organic or sustainable) or where it was sold (e.g. low-income buyers).  He was focused on changing who gets hired.  Like social entrepreneurs, WHY mattered more than HOW MUCH.  But in this case WHO mattered more than HOW or WHERE.

Without an existing model to guide him, Friedman set out to make his own.  He had a powerful belief that people on the autism spectrum represent an exceptional yet hidden workforce.  But he needed a business model that would turn what others saw as a deficit into a source of competitive advantage.

Friedman found his answer in what he calls “Process Execution” jobs.  These are labor-intensive activities such as website maintenance, data entry, and software testing. Many companies struggle to fill these positions. But the repetitiveness and attention to detail are well-suited to the talents and abilities of people with autism.

As much as possible, Friedman downplays the fact that his employees have autism.  He is not looking for charity.  He wants to compete on the same playing field as other companies providing similar services.  But on the inside, AutonomyWorks is unlike any of its competitors.  Friedman has redesigned the way work is structured, organized, and managed to suit his employees.

With these changes, Friedman has found that not only can AutonomyWorks match traditional competitors, but it can produce better quality at a lower price.  By generating profits, he is able to hire more people and fulfill his mission.  In the process, he has empowered an overlooked workforce and relieved families of the costs of supporting autistic relatives.

Another company following a similar model is Shinola, a Detroit-based manufacturer originally known for its shoe polish.  Shinola has recently reinvented itself to create jobs for unemployed auto workers.  Like AutonomyWorks, Shinola started with jobs and worked backward to the business model.  In this case, auto workers have unique skills in light manufacturing and upholstery.  So Shinola produces watches, leather goods, and handcrafted bicycles.  A traditional entrepreneur wouldn’t set out to make this combination of products.  But for a job entrepreneur in Detroit, it makes all the sense in the world.

So what does it take to be a job maximizer?

  1. Choose Your Talent. Who do you want to employ? AutonomyWorks focuses on people with autism. Shinola focuses on former auto workers. There are many other segments of the labor force who are underemployed or underutilized.
  2. Find Your Market. What products or services can these workers best make or provide?  This is where the entrepreneurial magic comes into play.  You need to find something that suits your people and also generates a sustainable profit.  Friedman recommends looking for markets where work has been off-shored or automated, and that have low capital requirements.
  3. Design Your System. What innovations do you need to meet the unique needs and bring out the best in your workers?  This might involve rethinking hiring, process design, management, or organizational culture.  The key is turning people’s disadvantage in society into your company’s competitive advantage in the marketplace.

Over the last twenty years, we have successfully created an entirely new economic sector in which social entrepreneurs maximize purpose over profit.  It’s time to turn this entrepreneurial spirit on a new goal:  job creation.  We need more people like Dave Friedman and more companies like Shinola — job maximizers and employment entrepreneurs.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Can Bigger Be Faster?

In nature, there’s a tradeoff between size and speed. Whales are slow. Birds are fast. But organizations today need to be big and fast. Is it possible? Can organizations be both agile and scalable?

There’s some good news. Science is revealing that biology doesn’t have to rule the marketplace. And new models of leadership are emerging from some unlikely places.

First, the science. Professor Geoffrey West from the Sante Fe Institute has shown that in biology, bigger does have its advantages. Whales are more efficient and live longer than birds. But they are also slower and less adaptive. Economies of scale give efficiency, but not speed or resilience.

Cities, by contrast, get better and faster as they get bigger. Large cities have higher income, lower crime rates, and more rapid innovation. People even walk faster in bigger cities.

The reason is networks. Bio-mechanical systems get more efficient as they get bigger, but they also slow down and become less adaptive. Networks, on the other hand, become more versatile and creative. The brain has this characteristic. So do social systems like cities and communities. And virtual communities like Facebook or Twitter.

But what about organizations? Are they more like cities or whales? Communities or machines? In his research, West found that companies today behave more like whales and machines. The pursuit of economies of scale has led to efficiencies, but also a loss of speed and agility.

The good news is that there’s no reason companies can’t be more like communities. After all, companies are social networks too. It’s just that we haven’t been running them that way.

To get bigger and faster, organizations need to be reconceived as networks. But how? The appeal of the status quo is overwhelming for many. The hierarchical models of the 20th Century are safe, dependable, and comfortable for leaders and investors alike. Networks sound unpredictable — good for creating social groups, but bad for large organizations that need to make disciplined decisions.

Outside of startups and tech firms in Silicon Valley, are there any role models to emulate?

One answer comes from an unlikely place: the U.S military. Perhaps the most whale-like organization in the world. There is no greater hierarchy in the world than within the five sides of the Pentagon. Yet inside this massive structure is a surprising amount of innovation in the area of organizational design and decision-making.

As we have written previously, the events of 9/11 led the U.S. military to realize that “it takes a network to defeat a network.” The new enemy was a light, agile, and rapidly evolving network. The hierarchical models of post-cold war design were no longer sufficient. Our military was big, and now it had to be fast.

The thought-leaders of this change within the military reconceived the organizational relationships as network-based, versus the traditional hierarchies of the past. They developed a new model that enabled the military to use its size — and its extended network of relationships — as an advantage rather than an impediment.

Four strategies were at the core of this transformation: build relationships, establish shared purpose, create shared consciousness, and foster diversity.

(1) Build relationships
In network terms, relationships are connections between nodes. When viewed as a network, hierarchies have a relatively sparse number of connections. Each individual only has relationships with his or her boss, peers, and direct reports. So the first step is to build more relationships and connections. This change first developed inside the special operations community whose leaders faced the reality of being out-paced by a new type of networked challenger in Al Qaeda, and therefore focused on building the density and diversity of their own friendly network. They orchestrated an unprecedented level of interagency collaboration across organizations that previously had never worked together — a model often referred to as the “team of teams.”

(2) Establish shared purpose
To build relationships, it’s not enough to hold offsites and call bigger meetings. People need a reason to work together — a reason that simultaneously addresses the interests of all stakeholders: customers, community, investors, and employees. In Iraq, the shared purpose was rebuilding a nation on principles of freedom and self-determination. As General Stan McChrystal, one of the leaders of the military’s move to networks, said in a recent TED Talk: “Instead of giving orders, you’re now building consensus and you’re building a sense of shared purpose.”

(3) Create shared consciousness
To get where you are going, you first have to know where you are. Shared consciousness ensures that everyone across the network has a sense of where they are and is acting on the best available information. The formation of “intelligence fusion teams” created unprecedented levels of collaboration between a broad array of military units and many civilian organizations, accelerating the flow of information across the network. These globally dispersed teams were constantly connected and became the epicenter for creating shared consciousness. They gathered data from across the network, then pushed out the information to whomever was best positioned to take swift and effective action.

(4) Encourage dissent
In a hierarchy, obedience is a virtue. In a network, it is a vice. Conformity creates groupthink, stifling innovation and organizational resilience. The antidote is cultural diversity in all its forms: experience, gender, age, ethnicity, geography, profession, etc. The new military-interagency collaboration created an environment in which dissent was not only tolerated, but encouraged. Instead of being chastised for expressing a contrary or unpopular view, team members were reprimanded for withholding it. Individuals were incentivized to present counterpoints, and leaders worked diligently to ensure the environment was safe for the free exchange of ideas.

This new approach turned traditional war-fighting upside down and inside out. Instead of centralizing command and control at the top, information and autonomy was aggressively pushed to decision-makers in the field. Decentralize to the edge of discomfort became the mantra of many of these organizations — setting the conditions for rapid and focused action.

Motivated by a shared purpose and aligned by shared consciousness, the network became denser, more diverse, and more intelligent. The result was unprecedented speed, resilience, and effectiveness — even while surrounded by the chaos of war. Bigger no longer meant slower, and network no longer meant unpredictable.

If the Pentagon could turn itself from a whale into a city, so too can a large corporation. Most companies embody leadership and organizational models created at the turn of the 20th century. Back then, the goal was size not speed, and the challenge was coordination not complexity. We live in a different time and we need new models to enable us to get bigger and faster. We need our leaders to be more like mayors than generals, building relationships instead of issuing orders. If our generals can make the change, so too can our business leaders.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Chris Fussell is a director at McChrystal Group. Follow him on Twitter at @mcchrystalgroup.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How Leaders Can Let Go Without Losing Control

Massive flocks of starlings, known as murmurations, exhibit a rare combination of speed and scale. The birds coordinate themselves with remarkable agility to find food and avoid attacks. Schools of fish do the same.

What’s noteworthy in these murmurations is the lack of a leader. Instead, each bird follows three simple rules: (1) move to the center, (2) follow your neighbor, and (3) don’t collide. The rules enable each bird to act independently while ensuring the group acts cohesively.

Every organization today wants to achieve both alignment and autonomy. Can what works for birds and fish also work for people? The answer comes from a surprising place: the battlefield.

Over centuries, the military has developed an approach to managing “the fog of war.” Generals need to ensure alignment to the strategy, while soldiers need autonomy to respond to changing conditions. The military’s solution has two parts:

  • Commander’s Intent declares the purpose of an operation and the conditions for success.
  • Doctrine determines how soldiers make decisions towards the fulfillment of that purpose.

The formal definition of doctrine is important: “Fundamental principles by which the military forces guide their actions in support of objectives. It is authoritative but requires judgment in application.”

For a flock of birds, the intent is to reach their breeding grounds. This means finding food, staying on course, and staying alive. The three simple rules are the doctrine for the flock. They don’t tell the bird which way to go, but rather guide them on what action to take (move to the center, follow one’s neighbor). In terms of doctrine they are the “principles [that] guide actions in support of objectives.”

We can find doctrine in other places besides the battlefield, namely constitutional democracies. For example, in the U.S., the Declaration of Independence describes an intent of “life, liberty, and the pursuit of happiness.” There are also numerous laws, rules, and regulations that specify what citizens can and can’t do. In between, the Constitution serves as doctrine. It is “authoritative but requires judgment in application.” In fact, an entire branch of government is tasked with its interpretation and application.

Turning to business, we find doctrine to be noticeably missing. Every organization has its mission, goals, and strategies to tell people where to go. They also have rules, policies, and procedures that tell people what to do. But few organizations have comprehensive, communicated, and contextualized doctrine to empower decision-making across the organization.

Without doctrine, it’s impossible for managers to let go without losing control. Instead, leaders must rely on active oversight and supervision. The opportunity is to replace processes that control behavior with principles that empower decision-making.

Although rare, there are companies that have made the shift from process to principles-based management. Wikipedia has its five pillars. Red Hat has embraced open source principles. Visa was designed to achieve both chaos and order. Google has its nine principles of innovation. And Amazon has its own leadership principles.

Amazon says of its leadership principles: “Our Leadership Principles aren’t just a pretty inspirational wall hanging. These Principles work hard, just like we do. Amazonians use them, every day, whether they’re discussing ideas for new projects, deciding on the best solution for a customer’s problem, or interviewing candidates.” Good decision principles help people make everyday decisions in diverse settings.

It’s important to know the difference between values, goals, and decision principles: Values are what’s important to you. Goals are what you want to see in the world. Principles are what help you make decisions. So “Frugality” is a value. “Saving money” is a goal. “Spend others’ money like your own” is a principle.

One difference between values and principles is their specificity. Principles can “nest” inside other principles, like Russian dolls. Amazon has a fundamental principle of “Customer Obsession” and working backwards from the customer. This means different things for product development, marketing, and customer service. Wikipedia has specific principles for authors that nest inside the more general five pillars. The Agile Software movement has general principles that apply universally, and specific principles for practices like Kanban and scrum.

Be aware that the shift to doctrine and principles-based management is more than a tactic. It’s a new way of thinking about management. Instead of making decisions forothers, or delegating those decisions to others, it’s creating principles with others that enable them to make decisions for themselves. It’s a distributed governance model for networked organizations.

Current, a digital power service from GE, is on this journey. Like many other companies, Current saw the need to evolve its company culture. They defined their values, put them in behavioral terms, and built them into systems & structures. But as Bethany Napoli, global head of HR for Current says, “the action rested on the shoulders of leadership to implement. We were left with a system that measured what leadership defined as the ‘right’ way to behave.”

Current wanted a culture that could move faster and support exponential growth. So they shifted their focus from values and behaviors to cultural tenets and decision principles. According to Bethany, “The very act of creating the tenets and associated decision principles is what creates the promise of real and organic culture change. We are on a path to change from the typical pattern of creating culture by defining attributes and managing them through systems and structures to organically building it through dialog, empowerment, and engagement.”

To get started on the journey, take these steps:

  1. Purpose: Re-examine your mission. Is it truly a shared purpose? Do you have a narrative that explains how that purpose will be fulfilled?
  2. Principles: Start with your existing values. Transform them into decision principles. Then find real-world decisions and reverse engineer the most effective principles.
  3. Catalysts: Find internal catalysts who can help evolve the principles and help people apply them to daily decisions. Connect the catalysts to learn together.

Keep in mind that this is an iterative process. When decisions are made that don’t align with the mission or strategy, take a look at the situation. It might be that the person is responsible. But chances are you are simply missing the right principles and need to create some new doctrine. The goal is to manage principles more than people.

By creating the missing layer of decision principles, leaders have an opportunity to let go without losing control, and to add structure without losing speed. It’s a way to transcend the tradeoff between alignment and autonomy and to create a culture based on principles over process. It works for birds, fish, and soldiers. Maybe it’s time to give it a try for companies too.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Use Doctrine to Pierce the Fog of Business

The “fog of war” describes the uncertainty faced by soldiers in the field of battle. In today’s markets, business leaders face a similar challenge: how to pierce through the “the fog of business.”

The traditional tools of management — strategy and planning — are no longer sufficient. Strategy and planning are like high beams on a car; they just bounce off the fog. Strategy doesn’t give employees enough guidance to know how to take action, and plans are too rigid to adapt to changing circumstances. In rapidly changing environments, you need fog lights to get closer to the ground.

Business leaders recognize the importance of pushing decision-making down the organization and out to the front line. But delegation can lead to invisibility, inconsistency and even chaos. When driving, fog lights work best when there are lines on the road to follow. Similarly, leaders must create mechanisms that keep everyone aligned to the mission and coordinated in the field.

Doctrine is the military’s mechanism for managing the fog of war, pushing decision-making closer to the ground while providing the lines to guide decision-making and action. Doctrine creates the common framework of understanding inside of which individuals can make rapid decisions that are right for their circumstances. We believe doctrine offers a powerful model for executives looking to pierce the fog of business and find new ways of exerting influence without centralized control.

NATO defines doctrine as “Fundamental principles by which the military forces guide their actions in support of objectives. It is authoritative but requires judgment in application.” If strategy defines objectives, and plans prescribe behavior, then doctrine guides decisions.

Consider one example from U.S. Special Operations teams trying to get the most use out of their helicopters, assets with high demand and limited supply. One approach would be to centralize all of these decisions, but that would be too slow. Another would be to have a computer automate the process, but there would be no way to feed enough data into the system in real time. So Special Operations went with a third option … let the human network figure it out and create solutions.

This network became the fog lights, pushing decision-making closer to the ground. But how to ensure the human network made the right decisions? What were the lines to paint on the road?

Military leadership created a common doctrine to frame the organization’s understanding of how helicopters would and wouldn’t be employed, their range, their maximum load capacity, their refueling requirements, etc. With these principles and shared understanding, the network could quickly coordinate across silos and create collaborative solutions.

One of the most powerful qualities of doctrine is its scalability. Like a Russian matryoshka doll, doctrine can be nested inside other doctrine. For example, the doctrine related to helicopters is nested inside doctrine related to the military’s network-centric approach to warfighting. This higher-level doctrine has four core tenets:

 A robustly networked force improves information sharing;
 Information sharing enhances the quality of information and shared situational awareness;
 Shared situational awareness enables collaboration and self-synchronization, and enhances sustainability and speed of command; and
 These, in turn, dramatically increase mission effectiveness.

One can see how the distributed approach to managing helicopters flowed from this higher level doctrine, especially in how to achieve self-synchronization. Doctrine provided the many units spread around the battlefield with a shared framework in which they could operate. Units were free to move and take action within that framework. In turn, results were fed back to leaders, who evolved the doctrine to improve performance, enabling a true learning organization.

The media company TED would seem to have little in common with Special Forces units in Iraq. But in fact, TED’s approach to scalable growth echoes the same doctrine-based approach.

Founded in 1984 by Richard Saul Wurman, TED became famous for its exclusive conferences and compelling talks. The world discovered TED when Chris Anderson posted videos of the talks online. But how to give more people the experience of TED events, not just the content? The solution was TEDx, which launched in 2008 to extend the TED mission of “ideas worth spreading.” In only a few years, TEDx has grown to 1,300 events in 134 countries with only a handful of employees.

What most people don’t know is that TED has no direct control over TEDx events. Instead, TED authorizes and empowers local organizers to create TED-like events in their own communities. How does TED ensure consistency instead of chaos? With what amounts to doctrine.

On its web site, TED publishes clear guidelines for organizers on how to run a TEDx event:

1. RULES, e.g. “Your event must maintain the spirit of TED itself: multidisciplinary, focused on the power of ideas to change attitudes, lives and ultimately, the world.”
2. RESPONSIBILITIES, e.g. “Early on, you’ll need to decide who your event is for: Work colleagues? Friends? Kids? This decision will help guide all the decisions that follow.”
3. RESOURCES: Best practices from the community on designing, promoting, and sponsoring TEDx events

These guidelines are consistent with the definition of doctrine: “Fundamental principles by which [TEDx organizers] guide their actions in support of objectives.” These principles are “authoritative but require judgment in application.” As another sign of the doctrine-based approach, TED recently had a problem with some of the TEDx events. Rather than step in to micromanage, they clarified and reinforced the doctrine.

How can you apply doctrine to your company?

1. See where you might already have some elements of doctrine. Do you have principles that guide decision-making throughout the organization? Sometimes these are informal precepts that are passed along as part of the culture. Other times they get codified, as Reed Hastings did for Netflix.

2. Identify areas conducive to doctrine-based approaches. It might be where the front line is calling for more authority, but where you are afraid to give up control. Or where centralized operations can’t keep up with the amount of information or the variety of local conditions (as in the case of the helicopters.)

3. Involve your broader team in creating the doctrine. When the military rewrote its doctrine on counter-insurgency, it brought together a cross-functional team of soldiers, civilians, experts and leaders while gathering feedback from hundreds of front-line personnel. When IBM rewrote its values, it engaged 50,000 employees around the world.

4. When developing doctrine, focus on principles not policies. Don’t be too specific in telling people what to do, but also not so broad that it doesn’t help them make the right decision. What information do you need from them, and what information do they need from you, in order to create rapid, independent, and effective action?

One way to put these steps into practice is to convene a “Constitutional Convention.”

After all, a constitution is essentially doctrine for democracy, providing the enduring principles by which to govern a nation. The Agile software movement started with such a gathering.

Ultimately, good doctrine becomes embedded in the culture. Touring a command post in Baghdad, a general came across this sign: “In the absence of guidance or orders, determine what they should have been and execute aggressively.” Good doctrine provides the empowerment, autonomy, and direction to make this not only possible, but effective. For business leaders operating in fast-moving and uncertain environments, doctrine dispels the fog of business.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Chris Fussell is a director at McChrystal Group. Follow him on Twitter at @mcchrystalgroup.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How to Stop Worrying About Becoming Obsolete at Work

In case you missed it, FOMO is now an official word in the English language. The “Fear of Missing Out” is now in the Oxford Dictionary, which has described it as the “anxiety that an exciting or interesting event may be happening elsewhere, often aroused by posts seen on a social media website.”

Perhaps FOMO has become a contemporary problem because things are moving so much faster. But I believe there is a deeper fear — a fear of becoming obsolete. We’re afraid of being left out because we’re afraid of being left behind.

As individuals, we’re afraid of being left behind in our careers. A recent survey by Oxford Economics found employees’ top concern is that their position might change or become obsolete. Half believe their current skills won’t be needed in three years. And the fear has spread to the C-suite: a study by Adobe found that 40% of marketing executives feel the need to reinvent themselves but only 14% feel they know how.

As organizations, we’re afraid that our industries will be disrupted or that our companies are no longer competitive. Business leaders surveyed by IMD believe 40% of the incumbents in each industry will be displaced by digital disruption in the next five years.

Perhaps we should use a variation on FOMO when it comes to our companies and careers: FOBO, the Fear of Becoming Obsolete. The dictionary definition might be “anxiety that the world is changing so rapidly that your career and company will be left behind.”

There are good reasons to be concerned. The lifespan of a company on the S&P 500 has decreased from 61 years in 1958 to 18 years today. Gartner predicts that one-third of jobs will be replaced by software, robots, and smart machines by 2025. Productivity is rising but jobs and income haven’t kept up.

We’ve been through transformative change before, but the rate of change was much more gradual. A century ago, it took generations for the economy to transform from agriculture to industry. These days, a career or business strategy can become obsolete in a matter of years.

So what should you do to prevent obsolescence? It’s a trick question. You don’t fix FOBO by updating what you do. You first have to update how you think. If you change what you do without changing how you think, you will get more of the same. But change how you think, and you will naturally change what you do. So the real question is how should you think to prevent obsolescence?

In times of transformative change, it is not just our skills, tools, and practices that become obsolete. More fundamentally, our mental models become outdated, rendering them ineffective, misleading, or outright dangerous.

Mental models are the (largely unconscious) ways we make sense of the world around us. They determine what we see or don’t see and connect cause with effect. For example, the typical mental model for how to solve a problem has us looking for what to do instead of how to think.

Our mental models are like maps in a GPS that tell us how to reach our desired destination. When things are stable, we just punch in new coordinates to get where we need to go. But when the landscape changes, our mental maps become outdated. We find ourselves making wrong turns and getting lost or confused.

Unfortunately, we can’t update the maps in our heads as easily as the maps on our phones. These models are like mental habits. And habits don’t change overnight. Change requires both learning and unlearning. The process is less like a teenager learning to drive, and more like a tourist in London trying to drive on the opposite side of the road.

Research on habit design tells us that the key to learning any new behavior is setting the right triggers and taking small steps. The same principles apply to mental habits. Here are a few to get you started.

  1. When someone raises a problem, notice the tendency to immediately ask “What should we do?” Instead of that question, try asking “How should we think?” Are you trying to solve the problem with the same thinking that created it? Is someone describing a car and you’re thinking, “Oh, sounds like a horseless carriage”?
  2. When you’re organizing an activity, check that everyone is aligned in their thinking before getting everyone aligned in their action. Just because they are using the same words doesn’t mean they are using the same mental models. When someone says “brand,” do they mean your logo, reputation, or experience?
  3. When you read about a successful company, catch yourself merely seeking to imitate what they’re doing. Instead, look deeper into how they are thinking. The key to becoming the “Uber” of something is not creating another app-enabled delivery service but instead applying platform thinking.
  4. When you’re making decisions, beware relying on “best practices.” By definition, a best practice is a tool or approach derived from an old mental model. Instead, look for “next practices.” Deconstruct the thinking behind their success and apply the principles to your situation.

The Fear of Becoming Obsolete is both real and warranted. Fortunately, we are not destined to be digital dodos. It is not we who have become obsolete; it is our mental models. The dodo couldn’t learn to fly, but we can learn to shift our thinking and create new mental habits. With an update in our mental models, we can be more resilient, more relaxed, and more relevant. All of which gives more time for checking social media and ensuring we’re not missing out on anything.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Don’t Sell a Product, Sell a Whole New Way of Thinking

We all know the story.  A team creates a groundbreaking new innovation only to see it mired in internal debates. When it is eventually launched in the market, there is an initial flurry of sales to early adopters, but then sales cycles become sluggish. Pilot customers are enthusiastic, but broader adoption is slow even with customer support and training. All the pieces are in place to create “disruptive innovation” and to “cross the chasm,” but the results are disappointing. What’s missing?

The problem is that data, information, and value propositions are not enough to sell innovative products. We all know the saying, “I’ll believe it when I see it.” But when it comes to innovation, the truth is often “I’ll see it when I believe it.” To sell your idea to executives, buyers, and users, you have to change not only what they think, but how they think. Without the right mental model, they won’t see the problem, understand the benefits, or make the change.

Mental models are how the brain makes sense of the vast amount of information to be processed every moment of every day. They are the lens through which we see the world. The filter that separates the signal from noise. The framework for attributing cause and effect. The “sorting hat” to decide what makes it into our conscious awareness.

To understand the power of mental models, consider Dr. Ignaz Semmelweis, a physician working in Vienna in the 1840s. He observed that the death rate for puerperal fever fell tenfold when doctors washed their hands before treating patients. He shared his findings with his colleagues to introduce handwashing as a standard practice. Despite the data, his fellow doctors dismissed his findings. In fact, his colleagues and even his own wife thought he was losing his mind. They had him committed to a mental institution where he died shortly thereafter.

Why couldn’t Semmelweis persuade people of his innovation? In the 1840s, the mental model of disease was an imbalance of four “humours” in the body such as phlegm, bile, and blood. Every disease was entirely internal and unique. With this mental model, Semmelweis’ colleagues couldn’t see how handwashing could affect a person’s health. It didn’t matter what the data said.

A few decades later, Louis Pasteur proved that germs, not humours, were the primary cause of disease. With this new mental model, doctors could understand how handwashing would affect health. Personal hygiene became a new standard of care. Unfortunately, this was too late for Dr. Semmelweis. He had failed to shift his colleagues’ thinking, and thus failed to shift their behavior.

Innovators change the lens through which we see the world. Companies that successfully market and sell innovation are able to shift how people think not only about their product, but about themselves, the market, and the world. Steve Jobs was one of the great mindshifters of our time. He championed the mantra “think different” and shifted the way people think about technology to be more personal and human.

Shifts in mental models go deeper than traditional thought leadership. Most thought leadership tries to establish a company as an expert within the existing mental model. Shifts in thinking challenge the prevailing model.

Over the last ten years, Salesforce.com has grown from an upstart to a market leader in enterprise software. From the beginning, Salesforce.com has focused on shifting the paradigm of computing as much as shifting customers over to its product.

For years, the company’s marketing strategy has focused on the idea of “No Software,” reflecting the shift from packaged, installed software to cloud computing and software-as-a-service. Salesforce.com recognized that only after buyers understood the mental model of cloud computing could they understand the benefits of Salesforce.com as a product.

To put the power of mental models to work in your business, start with three steps:

A. Identify the shift

The first step is identifying the underlying shift in thinking. This is different than your value proposition. It’s an assumption (usually unconscious) about how the world works.

To find the shift, ask yourself a few questions. What was the original insight that led to the innovation? Where do you feel people “don’t get it” about your solution? What is the “aha” moment when someone turns from disinterested to enthusiastic?

Try to frame it as a From and a To. This is not about bad to good, just better for the current context. As an example, consider companies selling software and services related to “big data.” The shift is not about “simple to intelligent” or “smaller to bigger.” In the area of data, the “aha” might relate to a shift in thinking about decision-making (from intuition to analytics), in data models (from spreadsheets to algorithms), or how the data is used (from target to empower)

B. Find the sticking point

Next, determine how mental models are getting in the way of your success. The sticking points are usually in one of three areas. You can tell which one by the associated symptom.

  • PRESENT: The model of how things work today. Do people fail to see a problem that seems obvious to you? If so, they are operating with a different model of the current state. This is often because they don’t see how things are related. As an example, the movie An Inconvenient Truth was successful in shifting many people’s mental model of the relationship between greenhouse gases and global warming. If you are trying to get people to see a problem or opportunity, focus on disrupting their existing mental model.
  • FUTURE: The model of how things could be in the future. Do people recognize the problem, but fail to see how your solution could solve their problem? This was the situation faced by Dr. Semmelweis in his Vienna hospital. People agreed that mortality was a problem, but they couldn’t see how handwashing could make a difference. If you are trying to get people to understand the benefits of your solution, focus on shifting their thinking in a way that reveals why your solution would be effective.
  • TRANSITION: The model for how to bring a new future into being. Do people recognize the problem, and the value of your solution, but fail to make the change? Sometimes people recognize the need to jump from the trapeze bar they are on, and can see the merits of the new bar you are offering them, but feel they can’t make the jump. In this case, focus on a mental model related to the transition. Define a roadmap that explains to them how to get from where they are to where they want to go.

C. Build the program

Shifts in thinking don’t happen overnight, any more than going to a weekend yoga workshop makes you flexible. Think of it like learning a second language or building a new habit – in this case a mental habit. People need to see how the new way of thinking plays out in different contexts and situations.

“The really good innovations – the ones that change the world – need to be explained before they’re accepted,” Beth Comstock, the Chief Marketing Officer of GE, recently wrote. One of GE’s mantras is therefore “mindshare before market share.” GE’s strategy focuses on being a “content factory” to disseminate powerful stories. Interestingly, GE is also the home of Crotonville, one of the world’s top corporate universities. Perhaps in the future we will see corporate universities expand beyond employees to serve customers and clients as well.

Albert Einstein once said, “We cannot solve our problems with the same thinking we used when we created them.” Companies that help customers shift their thinking will be more effective at solving problems and ultimately selling products.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.