Apple CareKit, ResearchKit and HealthKit

Creating shared infrastructure to enable creative approaches to research and care

Apple’s iOS, the operating system underlying the iPhone and iPad started as a closed system designed primarily for Apple’s purposes. Unlike the platforms of the 90s and early 2000s, which typically optimized for internal stakeholders of a large company, Apple started towards a newer model: a multi-sided platform. We'll take a look at how it creates new opportunities for patient care, health insights and research as a way to understand how platforms bridge organizations large and small to serve end users.

A multi-sided platform (or MSP) like Apple's uses digital technology to create new outward-facing opportunities for all parties involved. In fact, ongoing relationships are one of the main hallmarks of a successful MSP, where the more users participate, the more value they get.

Read more about MSPs:

For the company that develops and hosts an MSP, this may mean building closer relationships with customers and earning access to more data about them, as well as enjoying the shared revenue created by partners. For partners, value comes in the form of being able to create, distribute, and profit from products the develop on the MSP’s marketplace. And users receive value from the engaging with a constantly expanding set of apps on the platform, as well as by allowing data about themselves to be fed back to them in useful ways, such as recommendations.

The Introduction of the Apple Watch

In 2015, Apple released their Apple Watch—a combination fitness sensor and wrist-sized smart device which linked to an iPhone. In the beginning, its features seemed primarily focused on delivering notifications from the smartphone to the user’s wrist, serving as a sort of bluetooth speakerphone, and delivering basic health data back to a user's phone.

Despite a seemingly small feature set, by 2017—only two years after introduction—Apple was the number one watchmaker in the world.

A 2017 video showing the many ways users have benefitted from the watch describes the ‘nudges’ the device gives about health and activity, the medical and fitness implications, and even a user who used the device to dial emergency services after a car accident threw his phone out of reach.

Commercially, the Apple Watch and its competitors Android Wear devices, demonstrate that once a critical mass of users adopts a ‘swiss army knife’ smart device open to third party development, adoption spikes well beyond that of more proprietary devices (like indirect competitors Fitbit and Jawbone UP). And its standardized platform is now even enabling third parties to create regulator-approved medical devices using Apple Watch, like the KardiaBand, which provides high-quality EKG readings without a doctor’s visit.

The opportunity for research: ResearchKit

Health information had another potential use. Jawbone’s activity tracker and associated caffeine- and sleep-tracking apps were suddenly the biggest longitudinal study of caffeine’s interactions with sleep. The precision of smartphone-centric body trackers and the increasing willingness of end users to share raw data about themselves in exchange for meaningful insight meant that medical researchers who had long struggled to fund research of broad groups of people could also now, potentially, take advantage of the economies of scale afforded by Apple’s digital platform and the users and other platforms connected to it.

To aid ethical, efficient and accurate research using iPhones and wearables, Apple introduced ResearchKit in 2015 with the hope of responsibly opening up more diverse populations for research. The platform standardized reporting of both quantitative data (like heart rate) and qualitative data, like patient stories or feedback. Several years later, the platform has been a limited success, validating the possibilities of digital platforms—but also reinforcing that there are few shortcuts to good researcher engagement with users.

This brief video from Apple about ResearchKit and CareKit shows how research can change the global conversation about health and research.

A new way to empower patients and caregivers: CareKit

Roughly a year after release of the ResearchKit API and program, Apple introduced CareKit, a system which allows caregivers and patients to interact around a shared infrastructure. Apple cited users’ feedback that some of the most helpful components of ResearchKit was seeing insights into their health and communicating regularly with a research or clinician. Apple and its research partners noted that adherence to a care plan was one of the most difficult elements of care, especially after complex procedures like a surgery. CareKit and ResearchKit continue to expand as new use cases become apparent.

This excerpt (watch from ~1:50 for a few moments) from Apple’s Worldwide Developers’ conference shows how Apple introduced the use case for CareKit to software developers, sharing some of the problems it can solve and integrating guidance around how best to serve end users. 

CareKit contains four key elements that retrieve and add information from a central store of data:

  Care Card:  Users see a simple, consistent presentation of their care plan across multiple conditions and providers

Care Card: Users see a simple, consistent presentation of their care plan across multiple conditions and providers

  Symptoms & Measurements Tracker:  Users can log objective and subjective data about their conditions and experience

Symptoms & Measurements Tracker: Users can log objective and subjective data about their conditions and experience

  Insights:  Users can immediately see their own progress on care and the resultant symptoms in one place

Insights: Users can immediately see their own progress on care and the resultant symptoms in one place

  Connect:  Users have a simple and secure portal to communicate not just with professionals, but caretakers and loved ones

Connect: Users have a simple and secure portal to communicate not just with professionals, but caretakers and loved ones


The combination of community, marketplace, infrastructure and data into a multi-sided platform like Apple’s means that developers—from small players with unique app ideas to big players wishing to quickly implement new, ‘digital’ offerings—can focus on what they do best and avoid the costly and frustrating process of developing their technology from scratch. Companies can look for software and hardware development kits like HealthKit, ResearchKit and CareKit as ‘indicator species’ of a groundswell of new opportunity to create digital offerings without having to carry all of the risk of such innovations themselves. End users will do the same—when they see investment from major firms like Apple’s, they can be assured there is a decent chance that the device or platform they buy into will continue to get more and more useful.


CaringBridge is a simple community site designed to give people experiencing a health crisis a central place to inform family and friends about what is going on and coordinate community care (think dropping off casseroles and giving rides to the doctor). Importantly, the site also serves the needs of caregivers, especially primary caregivers like spouses or a child’s parents, as they try to coordinate charitable offers of help with the complex realities of serious healthcare. The site was started when the founder, Sona Mehring, used her background in software to help friends share information about their premature baby. CaringBridge focuses primarily on basic community functions and some simple onboarding. But it perhaps has struggled to raise its profile because its business model is not clear and it is not sufficiently distinct from the existing hodgepodge of social media sites, direct messaging and calendaring apps, apart from being ad-free. A huge opportunity exists to connect CaringBridge or functions like it with larger patient bases so that doctors become more familiar with it and integrate it with professional caregiving efforts. Right now, the use case remains focused on a specific portion of a larger care plan—the lay caregiver. While important, it may not be as powerful as it could be with deeper integrations.

Stories of caregivers

CaringBridge provides stories from caregivers to inspire and educate each other

Stories on Well-Being and Healing

Stories on well-being & healing: CaringBridge provides stories on well-being and healing to inspire and inform members




Caringbridge provides a central place for caregivers to keep friends and loved ones apprised of a complex a health journey and to coordinate offers of help with tangible needs, like rides to medical appointments


Patients and caregivers can both share stories and other updates from their health journey

Loved Ones & Friends

Loved ones and friends can read content posted by others on the site, as well as volunteer for specific tasks; they can also subscribe to notifications so they are always up to date

MSP CaringBridge.png


Genomics to tailor medical treatment for each individual—avoiding suffering and overspending


HudsonAlpha Institute for Biotechnology has made significant progress in the realm of genomic sequencing and analysis. While the cost of whole-genome sequencing is about $5,000, a prohibitive cost for most individuals, sequencing just parts of the genome can provide substantial (and far more financially accessible) results. Though genomic testing is generally thought of as useful for screening (eg, cancer risk) or ancestry discovery, there are other uses. When considered from the point of view of the payer, genomic sequencing to determine receptivity to particular medications can be incredibly helpful. Howard Jacob, HudsonAlpha’s Chief Genomic Medicine Officer, related a story of a young patient who had been diagnosed with a difficult hereditary condition which caused seizures and other problems. An expensive medication was prescribed, at a cost of our $10,000 per month, but symptoms continued to worsen. Finally, after over a million dollars in medical costs, the patient’s genome was sequenced—and it was determined that the young man’s worsening symptoms were being exacerbated by the medication, rather than helped by it.

Jacob illustrated how carefully-timed genomic tests can provide great value to both patients and payers. It would have been emotionally jarring to prescribe the medication and then offer a genomic test after symptoms worsened—no one wants to be told that they were just given a medication toxic to their symptoms. However, at a critical juncture in care where a new medication or other treatment is being considered, offering the test in advance of the medication (‘there may be a medication which works well for you, but to avoid contraindications and extra expense for you, we can take a test to make sure it’s the right one’) can be better received and avoid the situation of the young man described.

By working with insurers and group health payers to identify opportunities for opt-in genomic testing with patients, starting with the most obvious examples of patients who are seeing their care providers more regularly and/or using a complex treatment regiment, genomic tests could potentially improve health outcomes and lower costs for everyone involved—without requiring blanket testing of the entire insured population (which has both privacy/ethical and cost implications).

Ethics in Genomics for Individuals

It is incredibly important to attend to the ethical issues at play. For one, individuals are understandably concerned about being classified as uninsurable if pre-existing conditions are being considered (as they were in the United States before the Affordable Care Act, and in qualification for coverages like life insurance, which still assesses current and future risks on an individual-by-individual basis). Security of individual genomic data is incredibly important, as are ways to provide selective access to such datasets without exposing raw data unnecessarily. For genomic testing to be viable in the mainstream, individuals will need to know enough about the security implications to make informed choices. (For more information on Informed Consent and Doing no Harm, please take a look at our piece at, which was constructed as part of a larger joint research effort with Accenture and a number of leading data ethics experts).


It is also important to help individuals understand the emotional implications for themselves and their loved ones if they review their ‘risk profile’ via a genomic profile. Not everyone wants to know—or can handle knowing—about a predisposition to cancer or other serious health conditions. And even learning about existing genetic conditions (like sickle cell anemia) has serious mental health and social implications. As Jacob shared, “the worst are the ‘alpha male’ types—they say ‘just show me everything!’ But the people who have to deal with the emotional fallout of someone learning about a genetic condition or predisposition aren’t just the people who are tested—it’s their families and loved ones, too.” For that reason, counseling prior to testing is required by many standards of care and organizations.

Making Genomic Data Useful: The Importance of Ongoing Interpretation

Additionally, a sequenced genome is only as useful and accurate, from the individual’s perspective, as the research findings used to interpret that genome. HudsonAlpha and other organizations are considering a subscription model for genomic research and review—wherein an annual compilation of research relevant to one’s own genome are compiled, so that if new research comes out about ‘we found the gene for X condition!’ such findings are reviewed on a periodic basis with a qualified professional.

At this point, genomic sequencing is still in its early days. Significant education and outreach work remains to be done (though HudsonAlpha is working on that too), and the ethical frameworks, standards of care, regulations and business models around the highly-personalized realm of genomic medicine are still evolving rapidly. But some of its lessons about targeted diagnostic uses are applicable now.

Related Reading

When Even Genome Sequencing Doesn’t Give a Diagnosis

PillPack & Pharmacy OS

Over 40 million Americans take 5+ prescription meds a day—but only 50% of Americans take them as prescribed. 

According to the founders of PillPack, patients who fall into the category of having multiple prescriptions face the challenge of unsynchronized renewals, inadequate oversight from pharmacists and challenges staying on top of insurance billing and the number of available refills. Additionally, there is the obvious problem of remembering which medications are to be taken at a specific time and tracking if they have actually been taken. And many patients also have caregivers who need to be included in medication management. 


The PillPack

PillPack attempts to solve the challenges of multiple prescriptions by streamlining the front end of the pharmacy experience. The group medications into the simplest schedule possible in easy-open packs for patients (and their caregivers). Because the PillPack makes it easy to know if medications for a schedule have been opened, the challenge of sharing caretaking duties for a patient is also made easier—it’s not as necessary to have pen & paper or online tools for tracking adherence to a prescription schedule.



Additionally, an online portal for the patient and/or their caregivers allows for easy administration without requiring a trip to a pharmacy or lengthy phone calls.


PillPack is made possible by a platform the company calls Pharmacy OS. Pharmacy OS coordinates between four key stakeholders: 

  • Payers, who authorize payments and who need to be checked with to verify authorization
  • Doctors, whose prescriptions need to be captured, and who renew prescriptions
  • Customers (Patients and/or their Caregivers), who need to be supported in understanding their medications’ schedules and interactions, and who update the pharmacy about any changes
  • The Pharmacy (in this case, PillPack), who optimizes the purchasing and dispensing of medication

PillPack is designed to support both patients and their caregivers—allowing them to better manage schedules for medication, link accounts for updates, and reduce the worry related to complex medication schedules.

Pharmacy OS is the system PillPack operates on, coordinating caregivers, patients, payers, pharmacists and doctors.

MSP PillPack and Pharmacy OS.png

Together, PillPack and PharmacyOS have the potential to disrupt the pharmacy industry by optimizing the experience of the large portion of Americans who need to manage multiple prescriptions. It solves several parts of the challenge of adhering to complex schedules from the patient & caretakers’ perspective, reduces the risk of over-spending, renewal surprises or unexpected expenses for patients and insurance payers, and minimizes challenges requiring the last-minute contact of the prescribing physician.


Personalized medicine with both high-touch care and technology enablement

Forward is a startup based in California combining the ‘best technologies’ for health with personalized care. Their approach promises to blend advanced diagnostics, including genomic testing, with more face-time with doctors and care providers. Additionally, patients can co-create health goals with their provider and receive personalized care through telemedicine (in this case, chat-based messaging) to attend to health concerns early while minimizing unnecessary office visits.


A Different Look and Feel


Forward’s offices look and feel different, too. Visitors could easily pass by an important innovation which sits innocuously built into the wall—some airport water bottle refilling machines are fancier. Behind the simple facade lies a clever combination of existing diagnostic technologies in a ‘one stop’ place for basic diagnostics. Once in the doctor’s office itself, patients can expect to be discussing their health situation on very large screens with casually-dressed professionals. Overall, the effect is far more Star Trek sickbay than one-stop family care clinic.  

Getting what you pay for

The VC-backed firm has a difficult path ahead. It will have to convince patients to spend a significant amount of money each month on a subscription model of $149/month, in addition to costs per visit (and for diagnostics). And it will likely have to convince payers to cover somewhat unusual diagnostics (like genomic testing). But if it can, the promise of highly personalized care backed by solid patient data is certainly worth the effort—and could scale as technology costs lower and larger collective purchasers bring their business.

MSP Forward.png


PatientsLikeMe offers a new approach to viewing your own health information, called DigitalMe. DigitalMe combines Biological, Experiential, Medical & Environmental data to create a profile of an individual, which is then aggregated with other ‘little data’ about other individuals into ‘big data’ sets. By contributing data, patients hope to receive meaningful feedback on opportunities to better treat or manage their own condition at the same time as helping others. 

Based on your condition, what we’re seeing across conditions, and what we’re learning from the data – we’ll choose from the most advanced scientific resources available today like machine learning to examine your RNA and DNA, your proteins, antibodies, microbiome and metabolites. We’re stretching the limits of breakthrough technologies to find answers.

PatientsLikeMe provides value in a number of different ways and makes money via their partnership with companies who aim to sell products to patients. Operating in a not-just-for-profit model, with particular emphasis of use of ‘data for good,’ they attract people around a shared purpose of better health care. PatientsLikeMe convenes a couple of key groups:


Share, find and learn: patients can share about their experiences, as well as submit quantified medical data (like health records), biological data (like blood samples) and data about their environment. Currently, PatientsLikeMe says they have over 600,000 members reporting on 2,800+ conditions. Patients have the opportunity to interact with others with the same condition  to directly share experiences and data, and can also seek research/clinical trials.


PatientsLikeMe partners with “companies that are developing or selling products to patients.” According to the company, these products may include drugs, devices, equipment, insurance, and medical services, with the aim to improve health care. One such partnership was with, where they cross-referenced their data  with Walgreens’ drug data.


Clinicians are perhaps less-represented on PatientsLikeMe outside of the context of research. There may be opportunities to further that integration for care programs, much in the same way that Apple’s CareKit clinician-liaison infrastructure emerged from ResearchKit, their research-liaison framework.


Researchers can apply for access to data about their members of PatientsLikeMe, and can partner with PatientsLikeMe to conduct tests, as they did in a trial with The Duke ALS Clinic.

It is not entirely clear from reviewing PatientsLikeMe’s materials is the degree of integration they offer to third parties. For example, is it possible to easily integrate their data with Apple's HealthKit and CareKit, from the patient and medical professional’s perspectives? Can research projects integrate with Flatiron Health’s approach to large-patient-base research projects, or Apple’s ResearchKit framework for opt-in medical studies? The company indicates that it is ‘in trials’ of integrations with wearable technology devices (presumably like Apple Watch, Fitbit or Android Wear devices). They also indicate pilots of electronic medical record integration.

MSP PatientsLikeMe.png

Company Milestones

(from PatientsLikeMe)


  • More than 600,000 people use PatientsLikeMe to find new options for treatments, connect with others, and take action to improve their outcomes.
  • PatientsLikeMe named one of Fast Company's Top 10 Most Innovative Companies in Biotech.

  • PatientsLikeMe partners with Jun Wang's iCarbonX to apply next generation biological measures and machine learning, and accelerate a deeper understanding of the basis of human health and disease.


  • PatientsLikeMe expands the scope of patient-generated information it offers through to help more people better understand how certain prescription medications may affect them.
  • In the first-ever ALS virtual trial, PatientsLikeMe and The Duke ALS Clinic evaluate the potential of Lunasin, a soy peptide, to reverse symptoms in ALS patients.

  • PatientsLikeMe announces a collaboration with M2Gen to give patients and researchers a more complete picture of patients’ experiences with cancer treatments and to shed new light on the factors that may affect outcomes and quality of life.

Research Datasets

Datasets at PatientsLikeMe tend to be focused on complex conditions and include many factors. This can be a boon to researchers looking to attend to environmental and social factors affecting research participants, but can also be challenging to ‘control’ for in a study.


PatientsLikeMe stands to bridge the genomic testing science of groups like HudsonAlpha with the community elements of CaringBridge. It’ll be interesting to see where this goes. The angle PatientsLikeMe takes is more akin to sickness care—their videos and on-site materials focus on people grappling with significant conditions, like post-traumatic stress disorder, multiple sclerosis, fibromyalgia or massive depressive episodes. However, since many people may not find a need for this service until a serious condition enters their life or that of a loved one, it makes sense as a starting point. The promise of the platform is huge, though—and when combined with other platforms, it could provide exponential value to patients, clinicians, researchers and medical organizations.  


Okun S, Goodwin K. Building a learning health community: By the people, for the people. Learn Health Sys. 2017;1:e10028.

AI in the Boardroom: The Next Realm of Corporate Governance

Just as artificial intelligence is helping doctors make better diagnoses and deliver better care, it is also poised to bring valuable insights to corporate leaders—if they’ll let it.

At first blush, the idea of artificial intelligence (AI) in the boardroom may seem far-fetched. After all, board decisions are exactly the opposite of what conventional wisdom says can be automated. Judgment, shrewdness, and acumen acquired over decades of hard-won experience are required for the kinds of complicated matters boards wrestle with. But AI is already filtering into use in some extremely nuanced, complicated, and important decision processes.

Consider health care. Physicians, like executives and board members, spend years developing their expertise. They evaluate existing conditions and deploy treatments in response, while monitoring the well-being of those under their care.

Today’s medical professionals are wisely allowing AI to augment their decision-making. Intelligent systems are enabling doctors to make better diagnoses and deliver more individualized treatments. These systems combine mapping of the human genome and vast amounts of clinical data with machine learning and data science. They assess individual profiles, analyze research, find patterns across patient populations, and prioritize courses of action. The early results of intelligent systems in health care are impressive, and they will grow even more so over time. In a recent study, physicians who incorporated machine-learning algorithms in their diagnoses of metastatic breast cancer reduced their error rates by 85%. Indeed, by understanding how AI is transforming health care, we can also imagine the future of how corporate directors and CEOs will use AI to inform their decisions.

Complex Decisions Demand Intelligent Systems

Part of what’s driving the use of AI in health care is the fact that the cost of bad decisions is high. That’s the same in business, too: Consider that 50% of the Fortune 500 companies are forecasted to fall off the list within a decade, and that failure rates are high for new product launchesmergers and acquisitions, and even attempts at digital transformation. Responsibility for these failures falls on the shoulders of executives and board members, who concede that they’re struggling: A 2015 McKinsey study found that only 16% of board directors said they fully understood how the dynamics of their industries were changing and how technological advancement would alter the trajectories of their company and industry. The truth is that business has become too complex and is moving too rapidly for boards and CEOs to make good decisions without intelligent systems.

We believe that the solution to this complexity will be to incorporate AI in the practice of corporate governance and strategy. This is not about automating leadership and governance, but rather augmenting board intelligence using AI. Artificial intelligence for both strategic decision-making (capital allocation) and operating decision-making will come to be an essential competitive advantage, just like electricity was in the industrial revolution or enterprise resource planning software (ERP) was in the information age.

For example, AI could be used to improve strategic decision-making by tracking capital allocation patterns and highlighting concerns—such as when the company is decreasing spending on research and development while most competitors are increasing investment—and reviewing and processing press releases to identify potential new competitors moving into key product markets and then suggesting investments to protect market share. AI could be used to improve operational decision-making by analyzing internal communication to assess employee morale and predicting churn, and by identifying subtle changes in customer preference or demographics that may have product or strategy implications.

The Medical Model: Advances That Have Enabled AI in Health Care

What will it take for boards to get on board with AI supplements? If we go back to the health care analogy, there have been three technological advances that have been essential for the application of AI in the medical field:

  • The first advance is an enormous body of data. From the mapping of the human genome to the accumulation and organization of databases of clinical research and diagnoses, the medical world is now awash in vast, valuable new sources of information.
  • The second advance is the ability to quantify an individual. Improvements in mobile technology, sensors, and connectivity now generate extraordinarily detailed insights into an individual’s health.
  • The third advance is the technology itself. Today’s AI techniques can assimilate massive amounts of data and discern relevant patterns and insights—allowing the application of the world of health care data to an individual’s particular health care situation. These techniques include advanced analytics, machine learning, and natural language processing.

As a result of the deployment of intelligent systems in health care, doctors can now map a patient’s data, including what they eat, how much they exercise, and what’s in their genetics; cross-reference that material against a large body of research to make a diagnosis; access the latest research on pharmaceuticals and other treatments; consult machine-learning algorithms that assess alternative courses of action; and create treatment recommendations personalized to the patient.

Three Steps Companies Can Take to Bring AI Into the Boardroom

A similar course will be required to achieve the same results in business. Although not a direct parallel to health care, companies have their own components—people, assets, history—which could be called the corporate genome. In order to effectively build an AI system to improve corporate decision-making, organizations will need to develop a usable genome model by taking three steps:

  1. Create a body of data by mapping the corporate genome of many companies and combine this data with their economic outcomes;
  2. Develop a method for quantifying an individual company in order to assess its competitiveness and trajectory through comparison with the larger database; and
  3. Use AI to recommend a course of action to improve the organization’s performance—such as changes to capital allocation.

Just as physicians use patient data to create individualized medical solutions, emerging intelligent systems will help boards and CEOs know more precisely what strategy and investments will provide exponential growth and value in an increasingly competitive marketplace. Boards and executives with the right competencies and mental models will have a real leg up in figuring out how to best utilize this new information. While technology is growing exponentially, leaders and boards are only changing incrementally, leaving many legacy organizations further and further behind.

It’s time for leaders to courageously admit that, despite all their years of experience, AI belongs in the boardroom.

Barry Libert is CEO of OpenMatters, a machine learning company, and a senior fellow at Wharton’s SEI Center. He tweets @barrylibert. Mark Bonchek is CEO of Shift Thinking and a faculty member at Singularity University. He tweets @markbonchek. Megan Beck is CIO at OpenMatters and a research fellow at Wharton’s SEI Center. She tweets @TheMeganBeck.

Originally appeared on MIT Sloan Management Review. Reproduced with permission from the author.

There Are 4 Futures for CMOs (Some Better Than Others)

There are some new faces these days in the boardroom. They have new titles like Chief Customer Officer, Chief Revenue Officer, Chief Digital Officer, and Chief Experience Officer. These executives have responsibilities we might expect to reside within marketing. That leaves Chief Marketing Officers with a decision—do you see the rise of these roles as an opportunity or a threat? Our conversations with marketing leaders suggest that CMOs are indeed at a crossroads with four potential paths:  up, over, down, or out.

The reason for these new roles is that we’re entering a new era of digital transformation. Over the last decade, most companies’ digital agendas have focused largely on technology—moving to cloud-based software, modernizing IT infrastructures, adding digital channels, and digitizing business processes. These efforts have enabled operational efficiencies, cost reductions, and greater agility, preparing companies for the next phase of digital transformation: driving growth. So leaders have turned to what ultimately drives growth: creating value for the customer and using new technologies to transform the customer experience.

Today’s consumers and business buyers have more choices and higher expectations than ever before. They want companies to be more human:  to remember who they are, know what they like, and use that understanding to help them achieve their purpose. For companies, this requires an unprecedented level of integration and coordination across every business unit, from sales and marketing to customer service, and across physical and digital channels. This poses a deep challenge to companies organized by product and function rather than a customer-centric model like experience and value.

Marketing faces a particular challenge since customer engagement has traditionally been considered its domain. However, many of the most vital points of interaction are often not owned by marketing. To meet the organizational need for integrated experiences across business units, many CEOs have created new roles like Chief Digital Officer, Chief Experience Officer, Chief Customer Officer, or Chief Growth Officer. This expansion of responsibility for customer engagement beyond marketing raises questions for the future role of the CMO.

We can see the four pathways for CMOs (up, over, down, or out) already playing out in the marketplace in our observation of recent moves within and between companies.

The first two paths, up and over, occur when CEOs make the shift to a customer-focused growth strategy, and CMOs step up to drive enterprise-wide transformation around the customer experience.

0834 Arrow UP.png

1. UpCMOs are promoted into new roles.

In this path, CMOs take on a new title and position, with responsibility for the end-to-end customer experience and other growth-oriented functions.

At Dick’s Sporting Goods, Lauren Hobart was promoted from CMO to President, while at KFC, CMO Kevin Hochman became President and Chief Concept Officer. At Dick’s Sporting Goods, Chairman and CEO Edward Stack attributed Lauren’s promotion to the importance of driving “omni-channel consumer engagement” across the enterprise. Elisa Steele at Jive Software, Jay Farner at QuickenLoans, and Susan Lintonsmith at Quiznos have even gone from CMO to CEO. This is a break from the traditional paths of finance, sales, and operations to the top spot.

0837 Arrow Right.png

2. Over: CMOs take over new responsibilities.

In this path, CMOs keep the same title, but are given responsibilities over other areas affecting the customer experience such as e-commerce, product, customer service, and digital transformation.

At Airbnb, CMO Jonathan Mildenhall is driving the company’s evolution to an end-to-end travel brand by reinventing “experiential marketing.” Alison Corcoran moved from CMO of Staples to CMO of DentaQuest, gaining responsibility beyond brand and customer engagement. She’s also responsible for digital transformation and the overall direct-to-consumer business. According to CEO Steve Pollock, the expanded scope of Alison’s role was in order to provide “a holistic, integrated experience” to their 24 million customers.

When the CEO and CMO aren’t well aligned, CMOs face less promising paths.

0835 Arrow Down.png

3. Down: CMOs lose influence and authority. 

CMOs can find themselves on a downward path for a variety of reasons. Some research indicates that CEOs hold CMOs responsible for disruptive growth more than any other position in the C-Suite. Yet CMOs don’t feel they are positioned to disrupt the status quo or achieve aspirational growth.

Sometimes the CEO sets the growth agenda but CMOs either aren’t interested or don’t have the skills to go on and reshape the customer experience and drive organizational change. In other scenarios, the CMO is interested, but the CEO doesn’t see their role as being more than running campaigns and generating leads. In this case, the CEO may bring in a new role over marketing.

For example, Coca-Cola—widely regarded as one of the top marketers in the world—recently eliminated the role of CMO and replaced it with a Chief Growth Officer. The previous CMO was known for his focus on campaigns and was thanked for “improving the productivity of marketing” and leading a “resurgence in the quality of advertising.” In contrast, the CEO explained the leadership changes as necessary to “respond to the fast-changing needs” of customers, employees and partners and to “transform our business for the future.”

0212 Exit.png

4. Out: CMOs leave the organization.

CMOs move out of organizations for many different reasons. Sometimes they don’t fit with the direction the company is going, as was the case with Coca-Cola. Sometimes it’s because CEOs want their CMOs to drive growth and transform the experience, but don’t give them the mandate, resources, or span of control to do so. Eventually, the CMO serves as a convenient scapegoat when the company doesn’t deliver on its growth commitments.

In those cases CEOs are ahead of their CMOs. But we more often see CMOs who are ahead of their CEOs and boards. They want to drive growth around the customer experience, but can’t get their CEOs to recognize the need, or—if they do see the need—to commit the political or financial capital to back the CMO leading the transformation.

In the case of Coca-Cola, Jonathan Mildenhall was previously SVP of Marketing at Coca-Cola. He left in 2014 to pursue a transformation at Airbnb. Now Coca-Cola is replacing its CMO to bring what appears to be the kind of thinking that Mildenhall has brought to Airbnb. We are left to wonder if Coca-Cola had moved Jonathan up or over sooner, perhaps he might not have felt the need to move out.

We expect the next few years will continue to see a lot of shuffling around in the C-Suite as companies turn their attention to growth, recognize the insufficiency of incrementalism, and place the customer experience at the center of their transformation.

In order to move up and over, CMOs need to foster new perceptions and expectations across the enterprise. Most marketers recognize that marketing is much more than running campaigns and managing brand identity. But the rest of the organization doesn’t know this yet, including most CEOs. CMOs need to define a broader vision for marketing as the orchestrator of the customer experience and prove that marketing is not a cost center but a revenue generator.

This requires a new set of skills for many CMOs, particularly around leading transformative change. CMOs often find it challenging to get their peers, boards, and sometimes even their own teams to understand the importance of customer experience and then to change how they think about it. It’s even harder to get people to commit resources, change incentives, and make the hard decisions to become truly customer-centric.

It’s worth the effort. The most customer-centric companies are the ones outperforming their competitors and raising the bar on customer expectations, whether digital natives like Amazon and Netflix or established leaders like Sephora and Starbucks. But it takes more than simply saying the words “customer-centric.” The challenge is moving beyond the notion of customer-centricity as getting customers to do what fulfills the company’s purpose, to getting the company to do what fulfills the customer’s purpose.

For those CMOs who aspire to move up and over rather than down or out, the job is increasingly to be a catalyst for change, engine for growth, and orchestrator of experience. It will require strong alignment with key stakeholders, new models of leadership, and a new playbook for success. Given the changes underway, every CMO should be asking themselves, “Which path am I on?”

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 Shift 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.

Is Execution Where Good Strategies Go to Die?

Execution is an odd word. On the one hand, it means “the carrying out of a plan or course of action.” On the other, it means, “the carrying out of a death sentence.” When leaders “execute a strategy,” they usually mean the former—putting an idea into action. But those efforts all too often end up meaning the latter. Execution is often where strategies go to die.

So what determines whether execution brings life or death to your strategy? It’s not what you think. It’s howyou think. The mental models that inform strategy are usually different from those that determine implementation. To close the strategy-execution gap, leaders have to close several other, smaller gaps.

First, the thinking styles of the people who create strategy are often different from those of the people who implement it. In my work analyzing the thinking styles of leaders in organizations, I’ve found that strategy is usually developed by people who have a big-picture orientation, while execution is often done by those with a detail orientation. Furthermore, strategy is usually done by people who are focused on ideas and connections, while implementation is done by those who focus on process and action.

This difference in thinking styles creates a problem when strategy turns into execution. Those who create the strategy are often thinking about the destination, particularly the opportunity and intended outcomes. Meanwhile, those responsible for implementation are thinking about the realities of what it will take to get there. When the strategy is presented, they naturally begin to ask questions about risks and roadblocks—a natural consequence of having a detail-oriented thinking style. But to strategists focused on the big picture, this seems like resistance: “Don’t they see the brilliance of the strategy?” So they get defensive and begin working on overcoming the “resistance.” In turn, this makes the implementers feel suspicious: “I was just trying to understand it better. Why are they being so defensive?”

Right from the start, the relationship is adversarial rather than collaborative, not because of a problem with the strategy but because of a difference in thinking styles. The solution is for strategists to expect different kinds of questions from the implementers than from their fellow strategists. Understand that this can just as easily be a sign of engagement as a sign of opposition. Realize that it takes all kinds of thinking styles to turn a vision into a reality: big-picture and detail, ideas and actions, processes and relationships. If you want to change other people’s behaviors, you have to shift their thinking. You also may have to engage in a bit of unlearning yourself.

The second gap is a result of the connection between participation and ownership. In a phenomenon dubbed “the Ikea effect,” researchers found that people preferred things they helped make to things that were preassembled, even if their creations were of lower quality. What applies to furniture also applies to strategy. Often stakeholders are kept out of the strategy process out of concern that they will slow things down or compromise the quality of the outcome. But this is a shortsighted view. By involving stakeholders earlier, you give them a sense of ownership that speeds things up when it comes time for execution. Furthermore, the evidence suggests that diversity will actually improve the quality of the strategy. And it’s far more likely the strategy will stick to its flight plan, because those responsible for its execution will have a stake in defending it.

The third gap between strategy and execution is in the narrative around the strategy. The strategy itself may be sound, but what matters for execution isn’t what is said but what is heard. Strategy is inherently about creating something new or getting somewhere new. But the way humans are wired, it’s difficult to process something that is completely unrelated to what we already know. A good narrative helps people move from the past to the future. Steve Jobs’s genius in announcing the iPhone was explaining it as three devices: a touchscreen iPod, a new kind of phone, and an internet communicator. He built a conceptual “horseless carriage”—a bridge between the old and the new.

The lack of narrative is particularly a problem in the relationship between sales and marketing. Too often, marketing puts out a new advertising campaign, a new value proposition, or new messaging for the sales team with the expectation that the sales teams will just start using the new language, almost as if they were changing the content on a web page. This behavior is a result of the underlying mental models of sales and marketing. Marketers see the world as campaigns, messages, channels, and audiences. Salespeople see the world as prospects and products, offers and opportunities. To a marketer, sales is a channel for reaching their audience. But salespeople wants to be treated as customers, not channels.

Here the “Ikea Effect” can be particularly helpful. Too often, salespeople aren’t involved in marketing conversations about messaging and sales enablement strategies. When I conduct workshops with marketing and leadership teams on the design of strategic narratives, I’m often asked, “Should we include the sales teams?” The question itself reveals the mental model at work. Inevitably, the sales leaders make vital contributions to the conversation. In addition, the deployment of the narrative into the field goes far more smoothly, both because the sales leaders have a sense of ownership and because the strategy is framed in a way the sales teams will best understand it.

The fourth gap between strategy and execution is in measurement and metrics. This, too, is a reflection of mental models. You only measure what you can see. And your mental models determine what is visible or invisible. I consistently see measurement as an afterthought in strategy development. The assumption is that financial measures like cost and revenue are sufficient metrics to measure progress. But that would be like a coach only tracking points on the scoreboard. You need metrics that tell you how well your game plan is being executed—metrics that all of your players can organize around. If you’re a basketball coach, those metrics might be focused on rebounds, turnovers, or assists. If you’re managing a new product launch, those metrics might be free trial sign-ups, preorders, or product reviews.

The mismatch between metrics and strategy is common in the digital transformation efforts of many companies. Their strategies are designed to create network efforts through platform-based business models or to leverage advanced technologies like AI or the internet of things. These companies expect the organization to execute exponentially, but their mental models—and therefore metrics—are still incremental. In the beginning of a disruptive innovation, the thing to measure is not ROI.

As an example, from the beginning Amazon was primarily concerned with the number of online reviews per product, the number of affiliates selling on the platform, and the number of Prime members joining the program. Meanwhile, other retailers were still focused on year-over-year same-store sales, treating their e-commerce operations as a “digital store.” Their mental model constrained their metrics, which in turn distorted their behavior.

Focus your metrics instead on learning and the creation of network effects. How many experiments are you able to run per week or even per day? How well are you connecting the various forms of capital across your business? How rapidly is your ecosystem growing? How easily can people share data across the enterprise? These are much better indicators of whether you are truly aligning strategy and execution for digital disruption.

Execution doesn’t have to be the place good strategies go to die. As you are developing your strategy, take into account the thinking styles and mental models of the people who will be responsible for its execution. Involve them to generate a sense of ownership and to tap into their collective wisdom. Craft a narrative that connects the past to the future. And design metrics that focus attention and motivate behavior around what will really make the strategy successful.

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

What Creativity in Marketing Looks Like Today

What makes marketing creative? Is it more imagination or innovation? Is a creative marketer more artist or entrepreneur? Historically, the term “marketing creative” has been associated with the words and pictures that go into ad campaigns. But marketing, like other corporate functions, has become more complex and rigorous. Marketers need to master data analytics, customer experience, and product design. Do these changing roles require a new way of thinking about creativity in marketing?

To explore this question, we interviewed senior marketing executives across dozens of top brands. We asked them for examples of creativity in marketing that go beyond ad campaigns and deliver tangible value to the business. Their stories—and the five wider trends they reflect—help illustrate what it means to be a creative marketer today.

1. Create with the customer, not just for the customer

Everyone likes to talk about being “customer-centric.” But too often this means taking better aim with targeted campaigns. Customers today are not just consumers; they are also creators, developing content and ideas—and encountering challenges—right along with you. Creativity in marketing requires working with customers right from the start to weave their experiences with your efforts to expand your company’s reach.

For example, Intuit’s marketing team spends time with self-employed people in their homes and offices to immerse themselves in the customer’s world. Through this research, they identified a pain point of tracking vehicle gas mileage. Based on these marketing insights, Intuit created a new feature within its app that combines location data, Google maps, and the user’s calendar to automatically track mileage and simplify year-end tax planning.

Brocade, a data and network solutions provider, created a “customer first” program by identifying their top 200 customers, who account for 80% of their sales. They worked with these customers to understand their sources of satisfaction and identify areas of strengths and weakness. Brocade then worked with sales teams to create and deliver customized packages outlining what Brocade heard is working or not working, and what they would do about those findings. Later, Brocade followed up with these customers to report on progress against these objectives. The results? Brocade’s Net Promoter Score went from 50 (already a best in class score) to 62 (one of the highest B2B scores on record) within 18 months.

2. Invest in the end-to-end experience

Every marketer believes the customer experience is important. But most marketers only focus on the parts of that experience under their direct control. Creative marketers take a broader view and pay attention to the entire customer experience from end to end. This includes the product, the buying process, the ability to provide support, and customer relationships over time. That takes time and resources – and it also requires bringing creative thinking to unfamiliar problems.

Kaiser Permanente believes that as health care becomes more consumer-oriented, the digital experience becomes a key differentiator. The marketing team instituted a welcome program to help improve the experience for new plan members. Members are guided on how to register for an online member portal, which provides access to email your doctor, refill prescriptions, make appointments, and more. The welcome program required coordination with many areas of the business. As a result of this program, about 60% of new members register within the first six months. These members are 2.6 times more likely to stay with Kaiser Permanente two years later.

Like many retailers, Macy’s has traditionally spent 85% of its marketing budget on driving sales. Each outbound communication is measured individually for immediate ROI. However, recently they began to take a more holistic approach, focusing on lifetime value and their most profitable segment, the “fashionable spender.” This group looks across the business to gather behind-the-scenes information on the runway, newest clothing lines, and aspirational fashion content. The metrics also changed. Macy’s started evaluating engagement per customer across time and platform instead of per marketing message per day. The results? In the last year, customers in the top decile segment increased digital engagement by 15%, cross shopping by 11% and sales by 8%.

3. Turn everyone into an advocate

In a fragmented media and social landscape, marketers can no longer reach their goals for awareness and reputation just through paid media and PR. People are the new channel. The way to amplify impact is by inspiring creativity in others. Treat everyone as an extension of your marketing team: employees, partners, and even customers.

Plum Organics gives each employee business cards with coupons attached. While shopping, all employees are encouraged to observe consumers shopping the baby category. When appropriate, they ask a few questions about shoppers’ baby food preferences and share business cards with coupons for free products as a gesture of appreciation.

For Equinix, surveys revealed that a third of employees were not confident explaining its company story. The company introduced an internal ambassador program for its more than 6,000 employees. This program gives employees across all disciplines and levels tools to educate them on the company, its culture, products and services, and how they solve its customer’s needs. More than 20% of employees took the training online or in workshops in the first few months of the program, and employee submissions to its sales lead and job candidate referral programs were up 43% and 19% respectively.

Old Navy has traditionally dedicated their media budget to TV, particularly around back to school. However, over the past few years, they’ve focused on digital content to engage kids around positive life experiences and giving back. Through this approach, the 2016 #MySquadContest led to 32,000 kids sharing their “squads” of friends for a chance to win an epic day with their favorite influencer, creating 3 million video views, a 60% increase in social conversation about @OldNavy, and a 600% increased likelihood of recommending Old Navy to a friend (versus those that viewed TV ads only). In addition, the program led to record breaking donations for their partner, The Boys & Girls Club.

4. Bring creativity to measurement

The measurability of digital engagement means we can now know exactly what’s working and not working. This gives marketing an opportunity to measure and manage itself in new ways. In the past, marketing measured success by sticking to budgets and winning creative awards. Today, the ability to measure data and adjust strategies in real-time enables marketing to prove its value to the business in entirely new ways.

Cisco has created a real-time, online dashboard where the entire marketing organization can look at performance. The leadership team conducts a weekly evaluation to assess, “Is what we’re doing working?” This analysis can be done across different digital initiatives, geographies, channels, or even individual pieces of content. The result is an ability to quickly adjust and re-allocate resources.

Zscaler, a cloud-based security platform for businesses, created a Value Management Office. The Office helps each client define, quantify, and track their unique business goals associated with Zscaler implementation. Zscaler and their clients hold each other accountable to specific, measurable, time-based results.

OpenTable recently launched a companion app just for restaurants to make better use of the data they’ve been collecting through their reservation system. Restauranteurs can now get a handle on their business right from their smartphone, allowing them to easily answer questions like “How did your last shift perform?” The app can tell them if they are running light on bookings, and soon they’ll be able to activate marketing campaigns to increase same day reservations. More than 50% of restaurant customers on OpenTable’s cloud-based service are already using the app, visiting an average of 9 times a day, 7 days a week.

5. Think like a startup

In the past, marketers needed to be effective managers, setting goals well in advance and then working within budget to achieve those goals. Today, creative marketers need to operate more like entrepreneurs, continuously adjusting to sustain “product/market fit.”

The start-up Checkr represents a trend we are seeing more of in the Bay Area in particular. Marketers are adopting the business practices of entrepreneurs such as lean startup and agile development. For its background check solution, Checkr wasn’t getting the results it wanted from traditional sales and marketing tactics as it expanded into new market segments. They realized they had to think beyond marketing as promoting an existing product. Adopting an agile method of customer testing and rapid iteration, they worked with engineering to rethink the product and bring a “minimum viable product” to market for these new buyers. As a result of this integrated, agile approach, the company easily hit some early 2017 revenue targets with conversion rates that are four times what is traditionally seen in the industry.

The changes happening in consumer behavior, technology, and media are redefining the nature of creativity in marketing. The measure of marketing success isn’t the input, whether that’s the quality of a piece of content or a campaign, but rather the value of the output, whether that’s revenue, loyalty, or advocacy. Marketers of the past thought like artists, managers, and promoters. Today’s marketers need to push themselves to think more like innovators and entrepreneurs—creating enterprise value by engaging the whole organization, looking out for the entire customer experience, using data to make decisions, and measuring effectiveness based on business results.

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 Shift 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.

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:, 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.