The Purpose Economy: Business Principles for the Post-Capitalist Society
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The document discusses the lifecycle of technological revolutions based on Maslow's hierarchy of needs and Carlota Perez's work. There have been 5 major technological revolutions over the past 250 years, each following a similar pattern of a big bang moment, period of growth and innovation, maturation and disruption. The current revolution began in 1971 with the microprocessor and is now reaching maturation, suggesting a 6th revolution may be on the horizon, enabled by advances like social networking technologies transforming from pre-Internet platforms to today's user-generated Web 2.0 environments.
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The Purpose Economy: Business Principles for the Post-Capitalist Society
- 1. THE PURPOSE ECONOMY BUSINESS PRINCIPLES FOR THE POST-CAPITALIST SOCIETY david fossas twitter @dfossas email dfossas@gmail.com
- 2. THIS STORY STARTS WITH TECTONIC SHIFTS IN MEDIA 2006 - 2007
- 3. NEWTON’S THIRD LAW OF PHYSICS The skaters’ forces on each other are equal in magnitude, but act in opposite directions.
- 4. THE RECIPROCITY THEORY – A MOTIVATIONAL MODEL individual community
- 5. THE RECIPROCITY THEORY – A MOTIVATIONAL MODEL individual community purpose
- 6. THE RECIPROCITY THEORY – A MOTIVATIONAL MODEL individual community purpose + influence
- 7. TODAY’S JOURNEY foundational human behavior technological revolutions socio-economic evolutions business transformation
- 8. FOUNDATIONAL HUMAN BEHAVIOR Accelerated and Scaled
- 9. MASLOW’S HIERARCHY OF NEEDS realizing personal potential, self- fulfillment, seeking personal growth and peak experiences achievement, mastery, independence, status, dominance, prestige, self-respect, respect from others love and belongingness, friendship, intimacy, affection and love – from work group, family, friends, romantic relationships protection from elements, security, order, law, stability, freedom from fear air, food, drink, shelter, warmth, sex, sleep Physiological Safety Social Esteem Self-Actualization
- 10. helping others to achieve self- actualization realizing personal potential, self- fulfillment, seeking personal growth and peak experiences appreciation and search for beauty, balance, form knowledge, meaning self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility love and belongingness, friendship, intimacy, affection and love – from work group, family, friends, romantic relationships protection from elements, security, order, law, stability, freedom from fear air, food, drink, shelter, warmth, sex, sleep Physiological Safety Social Esteem Cognitive Aesthetic Self-Actualization Transcendence DeficiencyNeeds (coping) MASLOW’S EXPANDED HIERARCHY OF NEEDS GrowthNeeds (happiness)
- 11. helping others to achieve self- actualization realizing personal potential, self- fulfillment, seeking personal growth and peak experiences appreciation and search for beauty, balance, form knowledge, meaning self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility love and belongingness, friendship, intimacy, affection and love – from work group, family, friends, romantic relationships protection from elements, security, order, law, stability, freedom from fear air, food, drink, shelter, warmth, sex, sleep Physiological Safety Social Esteem Cognitive Aesthetic Self-Actualization Transcendence DeficiencyNeeds (coping) MASLOW’S EXPANDED HIERARCHY OF NEEDS GrowthNeeds (happiness) 85%
- 12. helping others to achieve self- actualization realizing personal potential, self- fulfillment, seeking personal growth and peak experiences appreciation and search for beauty, balance, form knowledge, meaning self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility love and belongingness, friendship, intimacy, affection and love – from work group, family, friends, romantic relationships protection from elements, security, order, law, stability, freedom from fear air, food, drink, shelter, warmth, sex, sleep Physiological Safety Social Esteem Cognitive Aesthetic Self-Actualization Transcendence DeficiencyNeeds (coping) MASLOW’S EXPANDED HIERARCHY OF NEEDS GrowthNeeds (happiness) 85% 75%
- 13. helping others to achieve self- actualization realizing personal potential, self- fulfillment, seeking personal growth and peak experiences appreciation and search for beauty, balance, form knowledge, meaning self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility love and belongingness, friendship, intimacy, affection and love – from work group, family, friends, romantic relationships protection from elements, security, order, law, stability, freedom from fear air, food, drink, shelter, warmth, sex, sleep Physiological Safety Social Esteem Cognitive Aesthetic Self-Actualization Transcendence DeficiencyNeeds (coping) MASLOW’S EXPANDED HIERARCHY OF NEEDS GrowthNeeds (happiness) 85% 75% 50%
- 14. helping others to achieve self- actualization realizing personal potential, self- fulfillment, seeking personal growth and peak experiences appreciation and search for beauty, balance, form knowledge, meaning self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility love and belongingness, friendship, intimacy, affection and love – from work group, family, friends, romantic relationships protection from elements, security, order, law, stability, freedom from fear air, food, drink, shelter, warmth, sex, sleep Physiological Safety Social Esteem Cognitive Aesthetic Self-Actualization Transcendence DeficiencyNeeds (coping) MASLOW’S EXPANDED HIERARCHY OF NEEDS GrowthNeeds (happiness) 85% 75% 50% 40%
- 15. helping others to achieve self- actualization realizing personal potential, self- fulfillment, seeking personal growth and peak experiences appreciation and search for beauty, balance, form knowledge, meaning self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility love and belongingness, friendship, intimacy, affection and love – from work group, family, friends, romantic relationships protection from elements, security, order, law, stability, freedom from fear air, food, drink, shelter, warmth, sex, sleep Physiological Safety Social Esteem Cognitive Aesthetic Self-Actualization Transcendence DeficiencyNeeds (coping) MASLOW’S EXPANDED HIERARCHY OF NEEDS GrowthNeeds (happiness) 85% 75% 50% 40% 10% : 2 %
- 16. CEOs expect technology to drive the most change in their organizations over the next 3 – 5 years
- 17. 17 “Technology can accelerate a transformation, but it cannot cause a transformation.” -- Jim Collins
- 18. THE CEO’S TECHNOLOGY PARADOX Social technologies disrupting industries and structure of the workforce Organizations reacting with technology solutions, not human solutions TECHNOLOGY- CENTERED SOLUTIONS TECHNOLOGY- ENABLED BEHAVIOR
- 19. TECHNOLOGICAL REVOLUTIONS We’ve Been Here Before
- 20. 5 SUCCESSIVE TECHNOLOGICAL REVOLUTIONS OF THE LAST 250 YEARS 1ST: The ‘Industrial Revolution’ | Big Bang Moment: Arkwright’s mill opens in Cromford – 1771
- 21. 5 SUCCESSIVE TECHNOLOGICAL REVOLUTIONS OF THE LAST 200 YEARS 1ST: The ‘Industrial Revolution’ | Big Bang Moment: Arkwright’s mill opens in Cromford – 1771 2ND: Age of Steam & Railways | Big Bang Moment: Test of the ‘Rocket’ steam engine for the Liverpool-Manchester railway – 1829
- 22. 5 SUCCESSIVE TECHNOLOGICAL REVOLUTIONS OF THE LAST 200 YEARS 1ST: The ‘Industrial Revolution’ | Big Bang Moment: Arkwright’s mill opens in Cromford – 1771 2ND: Age of Steam & Railways | Big Bang Moment: Test of the ‘Rocket’ steam engine for the Liverpool-Manchester railway – 1829 3RD: Age of Steal, Electricity & Heavy Engineering | Big Bang Moment: The Carnegie Bessemer steel plant opens in Pittsburgh, PA – 1875
- 23. 5 SUCCESSIVE TECHNOLOGICAL REVOLUTIONS OF THE LAST 200 YEARS 1ST: The ‘Industrial Revolution’ | Big Bang Moment: Arkwright’s mill opens in Cromford – 1771 2ND: Age of Steam & Railways | Big Bang Moment: Test of the ‘Rocket’ steam engine for the Liverpool-Manchester railway – 1829 3RD: Age of Steal, Electricity & Heavy Engineering | Big Bang Moment: The Carnegie Bessemer steel plant opens in Pittsburgh, PA – 1875 4TH: Age of Oil, the Automobile & Mass Production | Big Bang Moment: First Model-T comes out of the Ford plant in Detroit, MI – 1908
- 24. 5 SUCCESSIVE TECHNOLOGICAL REVOLUTIONS OF THE LAST 200 YEARS 1ST: The ‘Industrial Revolution’ | Big Bang Moment: Arkwright’s mill opens in Cromford – 1771 2ND: Age of Steam & Railways | Big Bang Moment: Test of the ‘Rocket’ steam engine for the Liverpool-Manchester railway – 1829 3RD: Age of Steal, Electricity & Heavy Engineering | Big Bang Moment: The Carnegie Bessemer steel plant opens in Pittsburgh, PA – 1875 4TH: Age of Oil, the Automobile & Mass Production | Big Bang Moment: First Model-T comes out of the Ford plant in Detroit, MI – 1908 5TH: Age of Information & Telecommunications | Big Bang Moment: The Intel microprocessor is announced in Santa Clara, CA – 1971
- 25. REOCCURRING REVOLUTIONARY SEQUENCE Technological Revolution Financial Bubble CollapseGolden Age Political Unrest
- 26. 26 “A technological revolution can be defined as a powerful and highly visible cluster of new and dynamic technologies, products and industries, capable of bringing about an upheaval in the whole fabric of the economy and of propelling long-term upsurge of development.” -- Carlotta Perez
- 27. 27 “Each time around, what can be considered a ‘new economy’ takes root where the old economy has been faltering. But it is all achieved in a violent, wasteful and painful manner...” -- Carlotta Perez
- 28. 28 “…The new wealth that accumulates at one end is often more than counterbalanced by the poverty that spreads at the other end…It is certainly a broken society, a two-faced world.” -- Carlota Perez
- 29. 5 SUCCESSIVE TECHNOLOGICAL REVOLUTIONS OF THE LAST 200 YEARS 1ST: The ‘Industrial Revolution’ | Big Bang Moment: Arkwright’s mill opens in Cromford – 1771 2ND: Age of Steam & Railways | Big Bang Moment: Test of the ‘Rocket’ steam engine for the Liverpool-Manchester railway – 1829 3RD: Age of Steal, Electricity & Heavy Engineering | Big Bang Moment: The Carnegie Bessemer steel plant opens in Pittsburgh, PA – 1875 4TH: Age of Oil, the Automobile & Mass Production | Big Bang Moment: First Model-T comes out of the Ford plant in Detroit, MI – 1908 5TH: Age of Information & Telecommunications | Big Bang Moment: The Intel microprocessor is announced in Santa Clara, CA – 1971 The reoccurring revolutionary sequence Technological Revolution Financial Bubble CollapseGolden Age Political Unrest
- 30. AND, THE 6TH IS AROUND THE CORNER 1ST: The ‘Industrial Revolution’ | Big Bang Moment: Arkwright’s mill opens in Cromford – 1771 2ND: Age of Steam & Railways | Big Bang Moment: Test of the ‘Rocket’ steam engine for the Liverpool-Manchester railway – 1829 3RD: Age of Steal, Electricity & Heavy Engineering | Big Bang Moment: The Carnegie Bessemer steel plant opens in Pittsburgh, PA – 1875 4TH: Age of Oil, the Automobile & Mass Production | Big Bang Moment: First Model-T comes out of the Ford plant in Detroit, MI – 1908 5TH: Age of Information & Telecommunications | Big Bang Moment: The Intel microprocessor is announced in Santa Clara, CA – 1971 6TH: Age of ? | Big Bang Moment: TBD – 2021 The reoccurring revolutionary sequence Technological Revolution Financial Bubble CollapseGolden Age Political Unrest
- 31. AND, THE 6TH IS AROUND THE CORNER 1ST: The ‘Industrial Revolution’ | Big Bang Moment: Arkwright’s mill opens in Cromford – 1771 2ND: Age of Steam & Railways | Big Bang Moment: Test of the ‘Rocket’ steam engine for the Liverpool-Manchester railway – 1829 3RD: Age of Steal, Electricity & Heavy Engineering | Big Bang Moment: The Carnegie Bessemer steel plant opens in Pittsburgh, PA – 1875 4TH: Age of Oil, the Automobile & Mass Production | Big Bang Moment: First Model-T comes out of the Ford plant in Detroit, MI – 1908 5TH: Age of Information & Telecommunications | Big Bang Moment: The Intel microprocessor is announced in Santa Clara, CA – 1971 6TH: Age of ? | Big Bang Moment: TBD – 2021 The reoccurring revolutionary sequence Technological Revolution Financial Bubble CollapseGolden Age Political Unrest
- 32. THE LIFECYCLE OF A TECHNOLOGICAL REVOLUTION Gestation period Paradigm configuration Introduction of successive new products, industries and technology systems, plus modernization of existing ones Constriction of potential Early new products and industries. Explosive growth and fast innovations Full constellation (new industries, technology systems and infrastructure) Full expansion of innovation and market potential Last new products and industries. Earlier ones approaching maturity and market saturation Degreeoftechnologicalmaturity andmarketsaturation Around half a century today
- 34. THE 6 C’S OF SOCIAL NETWORKING • Communications • Connectedness • Common Experience • Content • Commerce • Cool Experiences (entertainment)
- 35. THE 6 C’S OF SOCIAL NETWORKING • Communications • Connectedness • Common Experience • Content • Commerce • Cool Experiences (entertainment)
- 36. THE 6 C’S OF SOCIAL NETWORKING • Communications • Connectedness • Common Experience • Content • Commerce • Cool Experiences (entertainment) individual community
- 37. AOL BRIDGED GAP BETWEEN PRE-INTERNET AND INTERNET
- 38. WEB 1.0 PERSONAL PAGES ON THE “THE WEB” MADE EASIER
- 39. WEB 2.0 ACCELERATED USER CONTRIBUTION Blogging Photos Videos Networks
- 40. #SELFIE
- 41. THE LIFECYCLE OF A TECHNOLOGICAL REVOLUTION Gestation period Paradigm configuration Introduction of successive new products, industries and technology systems, plus modernization of existing ones Constriction of potential Early new products and industries. Explosive growth and fast innovations Full constellation (new industries, technology systems and infrastructure) Full expansion of innovation and market potential Last new products and industries. Earlier ones approaching maturity and market saturation big bang Degreeoftechnologicalmaturity andmarketsaturation Around half a century
- 42. THE LIFECYCLE OF A TECHNOLOGICAL REVOLUTION Gestation period Paradigm configuration Introduction of successive new products, industries and technology systems, plus modernization of existing ones Constriction of potential Early new products and industries. Explosive growth and fast innovations Full constellation (new industries, technology systems and infrastructure) Full expansion of innovation and market potential Last new products and industries. Earlier ones approaching maturity and market saturation big bang Degreeoftechnologicalmaturity andmarketsaturation Around half a century pre-Internet
- 43. THE LIFECYCLE OF A TECHNOLOGICAL REVOLUTION Gestation period Paradigm configuration Introduction of successive new products, industries and technology systems, plus modernization of existing ones Constriction of potential Early new products and industries. Explosive growth and fast innovations Full constellation (new industries, technology systems and infrastructure) Full expansion of innovation and market potential Last new products and industries. Earlier ones approaching maturity and market saturation big bang Degreeoftechnologicalmaturity andmarketsaturation Around half a century pre-Internet web 1.0
- 44. THE LIFECYCLE OF A TECHNOLOGICAL REVOLUTION Gestation period Paradigm configuration Introduction of successive new products, industries and technology systems, plus modernization of existing ones Constriction of potential Early new products and industries. Explosive growth and fast innovations Full constellation (new industries, technology systems and infrastructure) Full expansion of innovation and market potential Last new products and industries. Earlier ones approaching maturity and market saturation big bang Degreeoftechnologicalmaturity andmarketsaturation Around half a century pre-Internet web 1.0 web 2.0
- 45. THE LIFECYCLE OF A TECHNOLOGICAL REVOLUTION Gestation period Paradigm configuration Introduction of successive new products, industries and technology systems, plus modernization of existing ones Constriction of potential Early new products and industries. Explosive growth and fast innovations Full constellation (new industries, technology systems and infrastructure) Full expansion of innovation and market potential Last new products and industries. Earlier ones approaching maturity and market saturation big bang Degreeoftechnologicalmaturity andmarketsaturation Around half a century today pre-Internet web 1.0 web 2.0
- 46. NEW INDUSTRIES, SYSTEMS AND INFRASTRUCTURE
- 47. NEW INDUSTRIES, SYSTEMS AND INFRASTRUCTURE
- 48. NEW INDUSTRIES, SYSTEMS AND INFRASTRUCTURE
- 49. NEW INDUSTRIES, SYSTEMS AND INFRASTRUCTURE
- 50. NEW INDUSTRIES, SYSTEMS AND INFRASTRUCTURE: A DRAMATIZATION?
- 51. 70% OF AMERICAN ADULTS NOW HAVE HIGH-SPEED BROADBAND -16% CAGR +25% CAGR
- 52. STATIC, DUMB DEVICES STAGNANT, AS SMART, MOBILE ACCELERATES
- 53. GLOBAL VIEW • Internet Users – <10% Y/Y growth and slowing – Fastest growth in developing markets like India, Indonesia and Nigeria • Smartphone Subscribers – +20% strong growth though slowing – Fastest growth in underpenetrated markets like China, India Brazil, Indonesia – *Smartphones – +52% early stage rapid unit growth • Mobile Data Traffic – +81% accelerating growth – Video is a key, strong driver
- 54. SOCIAL NETWORKING CONTINUES TO GROW
- 55. FULL EXPANSION OF INNOVATION AND MARKET POTENTIAL Blogging Photos Videos Networks
- 56. FULL EXPANSION OF INNOVATION AND MARKET POTENTIAL Blogging Photos Videos Networks
- 57. FULL EXPANSION OF INNOVATION AND MARKET POTENTIAL Blogging Photos Videos Networks
- 58. FULL EXPANSION OF INNOVATION AND MARKET POTENTIAL Blogging Photos Videos Networks
- 59. FULL EXPANSION OF INNOVATION AND MARKET POTENTIAL Blogging Photos Videos Networks
- 60. FULL EXPANSION OF INNOVATION AND MARKET POTENTIAL Blogging Photos Videos Networks
- 61. FULL EXPANSION OF INNOVATION AND MARKET POTENTIAL Blogging Photos Videos Networks
- 62. 2/3 DIGITAL UNIVERSE IS CONTENT CONSUMED/CREATED BY CONSUMERS
- 64. CHARLIE …WAS ON TO SOMETHING
- 65. So, now that we’re on slide #65… you may be wondering…
- 66. So, now that we’re on slide #65… you may be wondering… So what?
- 67. SOCIO-ECONOMIC EVOLUTION The Business Implications
- 68. THE TROUBLE WITH MILLENNIALS… …is that their behavior and consumption habits may not be “just a phase”…
- 69. YOUNG ADULTS INCREASINGLY LIKELY TO HAVE LOW INCOMES • ~2.1M more twenty-somethings, and • ~300K more thirty-somethings • Lived with their parents in 2013 than did in 2007 – Even though many now employed • Real median household incomes among 25 – 34 year olds dropped 8% between 2007 to 2012 (-7% for 35-44 year olds) Young Adults Are Increasingly Likely to Have Low Incomes Change in 20-29 Year Old Population, 2003-13 (Millions)
- 70. STUDENT LOANS HAVE DRIVEN UP CONSUMER DEBT BURDENS • Share of households aged 25-34 with student loan debt increased 13% between 2001 to 2010 (from 26% to 39%) – 16% of these have $50K+ student debt (more than tripled from 5%) • Average credit score for Fannie Mae-backed mortgages rose from 694 to 751 between 2007 to 2013 – Scores for FHA loans rose from 640 to 693, respectively Student Loans Have Driven Up Consumer Debt Burdens Non-Housing Debt Balances (Trillions)
- 71. MASLOW’S HIERARCHY IN ACTION
- 72. MILLENNIALS EXHIBITING COPING BEHAVIOR
- 73. So, how is this generation coping?
- 74. THE LIFECYCLE OF A TECHNOLOGICAL REVOLUTION Gestation period Paradigm configuration Introduction of successive new products, industries and technology systems, plus modernization of existing ones Constriction of potential Early new products and industries. Explosive growth and fast innovations Full constellation (new industries, technology systems and infrastructure) Full expansion of innovation and market potential Last new products and industries. Earlier ones approaching maturity and market saturation big bang Degreeoftechnologicalmaturity andmarketsaturation Around half a century pre-Internet web 1.0 web 2.0 today
- 75. THE LIFECYCLE OF A TECHNOLOGICAL REVOLUTION Gestation period Paradigm configuration Introduction of successive new products, industries and technology systems, plus modernization of existing ones Constriction of potential Early new products and industries. Explosive growth and fast innovations Full constellation (new industries, technology systems and infrastructure) Full expansion of innovation and market potential Last new products and industries. Earlier ones approaching maturity and market saturation big bang Degreeoftechnologicalmaturity andmarketsaturation Around half a century pre-Internet web 1.0 web 2.0 today tech disruption
- 76. THE LIFECYCLE OF A TECHNOLOGICAL REVOLUTION Gestation period Paradigm configuration Introduction of successive new products, industries and technology systems, plus modernization of existing ones Constriction of potential Early new products and industries. Explosive growth and fast innovations Full constellation (new industries, technology systems and infrastructure) Full expansion of innovation and market potential Last new products and industries. Earlier ones approaching maturity and market saturation big bang Degreeoftechnologicalmaturity andmarketsaturation Around half a century pre-Internet web 1.0 web 2.0 tech disruption today non-tech disruption
- 78. THERE’S A NEW DEFINITION OF FREEDOM AND STATUS • Millennials are buying 2 million less cars per year – down 10% since 1985 • Global trend: “The percentage of young drivers was inversely related to the availability of the Internet” – U. of Michigan Transportation Research Institute
- 79. THE GREAT SHIFT TO A POST-CAPITALIST SOCIETY • 1959 book Landmarks of Tomorrow described the rise of “knowledge work” • Three decades later, Drucker became convinced that knowledge is a more crucial economic resource than land, labor or financial assets, and that • We were headed into a “post-capitalist society” Knowledge > Value than Land, Labor or Financial Assets
- 80. EDUCATION DISRUPTED, KNOWLEDGE DEMOCRATIZED Ad hoc information
- 81. EDUCATION DISRUPTED, KNOWLEDGE DEMOCRATIZED Online learning
- 82. EDUCATION DISRUPTED, KNOWLEDGE DEMOCRATIZED On the job education
- 83. EDUCATION DISRUPTED, KNOWLEDGE DEMOCRATIZED On the job education “…individual excellence and collective progress”
- 84. WELCOME TO THE EXPERIENCE ECONOMY • Joseph Pine and James Gilmore introduced The Experience Economy in 1998 • History of economic progress through the four stage evolution of the birthday cake 1. Agrarian Economy mothers made cakes from scratch 2. Industrial Economy moms paid for Betty Crocker 3. Service Economy parents order the cake from a bakery 4. Experience Economy parents “outsource” the birthday event
- 85. FOUR REALMS OF AN EXPERIENCE • Two Dimensions – Participation (Passive/Active) – Connection (Absorption/Immersion)
- 86. FOUR REALMS OF AN EXPERIENCE • Two Dimensions – Participation (Passive/Active) – Connection (Absorption/Immersion) • Four Realms – Entertainment
- 87. FOUR REALMS OF AN EXPERIENCE • Two Dimensions – Participation (Passive/Active) – Connection (Absorption/Immersion) • Four Realms – Entertainment – Educational
- 88. FOUR REALMS OF AN EXPERIENCE • Two Dimensions – Participation (Passive/Active) – Connection (Absorption/Immersion) • Four Realms – Entertainment – Educational – Escapist
- 89. FOUR REALMS OF AN EXPERIENCE • Two Dimensions – Participation (Passive/Active) – Connection (Absorption/Immersion) • Four Realms – Entertainment – Educational – Escapist – Esthetic
- 90. FOUR REALMS OF AN EXPERIENCE • Two Dimensions – Participation (Passive/Active) – Connection (Absorption/Immersion) • Four Realms – Entertainment – Educational – Escapist – Esthetic • Generally, the richest experiences find a sweet spot incorporating aspects of all four realms sweet spot
- 91. BUSINESS TRANSFORMATION A Roadmap for Leaders
- 92. 92 “Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation.” -- Peter Drucker
- 93. BRANDS ARE SHARED The brand’s passion and reason for being. The shared contribution to its community The shared values, beliefs and behaviors of the brand and its stakeholders PURPOSE EXPERIENCE CULTURE The touch points, interactions and moments shared between the brand and its stakeholders
- 94. C-SUITE SHIFTING FOCUS Realize mobile devices, social networks and collaborative economy is creating new business models Believe customers wield more influence on enterprise than the board; 2nd only to C-Suite Biggest barrier to integrated digital and physical strategy is struggling to understand social media Now 2nd only to CFO in terms of influence on the CEO Moving from social monitoring + monetization to integrated customer experience + engagement To get there: (1) Building data analytics to gain deep understanding of customers (2) Designing rewarding customer experiences (3) Leveraging new technologies to deliver those experiences Expects to play a critical role in enabling their organizations’ strategic vision Customer insights and intelligence + customer experience management are top priorities When partner with CMOs, enterprise is 76% more likely to outperform in revenue and profitability ceo cmo cio
- 95. CRITICAL DISCIPLINES FOR MARKETING AND INNOVATION Purpose IntelligenceTechnology Storytelling Design Thinking
- 96. CRITICAL DISCIPLINES FOR MARKETING AND INNOVATION Purpose IntelligenceTechnology Storytelling Design Thinking
- 97. THE VALUE OF DESIGN • 15 publicly traded companies • Grew 299% since 2003 vs. 75% S&P The Design Index The Design Management Institute / Motiv Strategies 1. Apple 2. Coca-Cola 3. Ford 4. Herman-Miller 5. IBM 6. Intuit 7. Newell-Rubbermaid 8. Nike 9. Procter & Gamble 10. Starbucks 11. Starwood 12. Steelcase 13. Target 14. Walt Disney 15. Whirlpool
- 98. EIGHT WAYS DESIGN IS HELPING THESE COMPANIES WIN BIG 1. The Wow Factor 2. Brand Expression 3. Solving Unmet User Needs 4. Developing Better Customer Experiences 5. Rethinking Strategy 6. Hardware/Software Interaction 7. Market Expansion Through Persona Development and User Understanding 8. Cost Reduction
- 99. FIVE DESIGN PRINCIPLES OF THE EXPERIENCE ECONOMY 1. Theme the experience 2. Harmonize impressions with positive cues 3. Eliminate negative cues 4. Mix in memorabilia 5. Engage all five senses sweet spot
- 100. CRITICAL DISCIPLINES FOR MARKETING AND INNOVATION Purpose IntelligenceTechnology Storytelling Design Thinking
- 101. STORYTELLING: THE SCIENCE • Neuroeconomist, Paul Zak’s research discovered “The Moral Molecule”, and that • Storytelling enables us to direct human behavior by changing brain chemistry through well-structured narratives Tension synthesizes Cortisol (focuses our attention) + Narrative synthesizes Oxytocin (sense of empathy) Act 3 CLIMAX (turning point) Act 2 COMPLICATION (rising action) Act 1 EXPOSITION (inciting moment) Act 4 REVERSAL (falling action) Act 5 DENOUEMENT (moment of release) FREYTAG’S PYRAMID A simple storytelling structure that has worked for thousands of years
- 102. 102 “If business is about service to others, then business itself is a virtue. You’re engaging in a virtuous activity by serving the needs of somebody else. When you do that, you’re serving the needs of your employees, of your customers, you will induce oxytocin release and they will want to reciprocate…” -- Paul Zak
- 103. 103 “…In the old model: greed is good, the management technique is lead with fear. In the new model: empower individuals to be the best that they can be in an organization with purpose, you’re going to lead with love.” -- Paul Zak
- 105. STORYTELLING: THE VALUE OF CREATIVE CAMPAIGNS The data tell us… 1. Creatively awarded campaigns are 12x more efficient 2. The greater level of creativity, the greater level of effectiveness 3. Creative campaigns are more reliable investments 4. Increasing the emotional response to a brand reduces its price sensitivity
- 106. CRITICAL DISCIPLINES FOR MARKETING AND INNOVATION Purpose IntelligenceTechnology Storytelling Design Thinking
- 107. BIG DATA AND ANALYTICS 2/3 DIGITAL UNIVERSE IS CONTENT CONSUMED/CREATED BY CONSUMERS
- 108. EVOLUTION OF INTEGRATED PLANNING Finds… • Segmentation • Media Consumption • Consumer Preference • Group Opinion weeks — months Finds… • Audiences (Tribes) • Engagement Behavior • Affinities • Sentiment & Reviews days — weeksspeed to insight Planning 1.0 P=40:70 Social Quantitative Qualitative resources Qualitative Quantitative Social resources Planning 2.0
- 109. ARISTOTLE AND THE SECOND ROAD OF THOUGHT ANALYTICS “Where things cannot be other than they are.” Diagnoses the past LOGIC
- 110. ARISTOTLE AND THE SECOND ROAD OF THOUGHT ANALYTICS RHETORIC “Where things cannot be other than they are.” “Where things can be other than they are.” Diagnoses the past Designs the future LOGIC INTUITION
- 111. BIG BANG MOMENTS AND DISCONTINUOUS INNOVATION 1ST: The ‘Industrial Revolution’ | Big Bang Moment: Arkwright’s mill opens in Cromford – 1771 2ND: Age of Steam & Railways | Big Bang Moment: Test of the ‘Rocket’ steam engine for the Liverpool-Manchester railway – 1829 3RD: Age of Steal, Electricity & Heavy Engineering | Big Bang Moment: The Carnegie Bessemer steel plant opens in Pittsburgh, PA – 1875 4TH: Age of Oil, the Automobile & Mass Production | Big Bang Moment: First Model-T comes out of the Ford plant in Detroit, MI – 1908 5TH: Age of Information & Telecommunications | Big Bang Moment: The Intel microprocessor is announced in Santa Clara, CA – 1971
- 112. THE INTUITIVE LEAP OF FAITH Incremental Discontinuous Intuitive Leap P = 40:70
- 113. FRAMEWORKS THAT CAN GUIDE YOU COMPANY What is the customer’s empathetic need? What drives their behavior? What are the competitors in the category doing? What are the gaps that no one is filling? What can the brand deliver that uniquely meets the customer and category needs? The Opportunity “The Big Idea” The Story
- 114. CRITICAL DISCIPLINES FOR MARKETING AND INNOVATION Purpose IntelligenceTechnology Storytelling Design Thinking
- 115. TECHNOLOGY … I think we covered this topic enough… …except to point out that…
- 116. MARKETING DATA AND TECHNOLOGY GROWTH
- 117. HALF of these technologies didn’t exist just one year ago
- 118. SO, I’LL LEAVE YOU WITH THIS THOUGHT
- 119. 119 “Every few hundred years throughout Western history, a sharp transformation has occurred…In a matter of decades, society altogether rearranges itself – its worldview, its basic values, its social and political structures, its arts, its key institutions. Fifty years later a new world exists. And the people born into that world cannot even imagine the world in which their grandparents lived and into which their own parents were born. Our age is such a period of transformation” -- Peter Drucker
- 120. Post-Capitalist Society 2020 -- Peter Drucker
- 121. Next Technological Revolution 2021 Post-Capitalist Society 2020 -- Peter Drucker -- Carlotta Perez
- 122. THANK YOU
Editor's Notes
- Back in 2010, I left the movie business to work in digital and social media. I was fascinated by the accelerated growth of Facebook, YouTube and Twitter, and how they were disrupting the content industry. In the movie business, reliable A-list talent weren’t driving people to the box office anymore. But, Charlie Bit My Finger was getting millions of views on YouTube. Seemingly overnight, what was once our audience had become the talent. They’d become the celebrities themselves. And so, as I made a career move into social media marketing, working with bloggers and vloggers and other content producers and startups like BuzzFeed – and working with brands like General Motors and Colgate Palmolive to make sense of it all – I became fascinated by human behavior online. And, I thought deeply about the core motivators that drive participation and action in social media and online.
- As I thought about these core motivators, I kept thinking back to Newton’s Third Law of of Physics, reflected here with two ice skaters So long as the force that each skater is acting upon the other is equal, they maintain a balanced relationship But, as soon as the force of one exceeds the other, the relationship is thrown off balance In other words, the relationship is mutually dependent, or, reciprocal.1 Similarly, reciprocity in social psychology refers to responding to a positive action with another positive action, or a hostile action with another hostile action.2 Sources “Social Media and the Reciprocity Theory” by David Fossas, published on ReciprocityTheory (http://bit.ly/rMsIE2) “Reciprocity (social psychology)” – Wikipedia (http://bit.ly/sV0cwE)
- This notion led me to a model I call The Reciprocity Theory At its core, The Reciprocity Theory believes that social motivation is based on each person’s desire to Be recognized as an individual, and Belong to a community And, this is what makes social media so sticky: You get to define yourself and showcase yourself as an individual While belonging to a bigger community And, so long as you are contributing some definition of value to the community, you will earn an equal value in return. Like the ice skaters, the relationship is reciprocal Now, when I took a step back and looked at this model, a few things occurred to me: Sources “Social Media and the Reciprocity Theory” by David Fossas, published on ReciprocityTheory (http://bit.ly/rMsIE2)
- At the intersection of the individual and the community lies the individual’s purpose. It asks the question, what unique value can I, as an individual, contribute to the community – to the world Sources “Social Media and the Reciprocity Theory” by David Fossas, published on ReciprocityTheory (http://bit.ly/rMsIE2)
- It is also the basis for influence. If you are truly contributing value to the community, you develop some level of influence on them In marketing, we talk a lot about influencers. Not just how to engage them with your brand, but also how the brand can become one And, so I asked: where does a brand fit into this? How does a brand reach the individual – or the community of people? If the brand interjects itself with traditional, antiquated advertising, then it will throw off the balance and the individual and community will retract. The individual and the community will continue their relationship, but the brand won’t be a part of it. So, how can a brand earn a seat at the table in a new world where the individual wields more power than the brand? By becoming a valued member of the community as well. By being purpose-driven and enrolling customers into their community. Sources “Social Media and the Reciprocity Theory” by David Fossas, published on ReciprocityTheory (http://bit.ly/rMsIE2)
- Today we’re going to discuss Why this is essential. What are the fundamental shifts in our economy that make this community, purpose-driven approach so critical? And, how a brand can do it. How does a brand operationalize this – institutionalize this? And, we’ll do this by covering Foundational human behavior, Technological revolutions, Socio-economic evolutions, and Business transformation
- Most of you are likely familiar with Maslow’s hierarchy of needs. The original had 5 levels of needs Physiological, Safety, Social, Esteem, and Self-actualization Sources “Maslow’s Hierarchy of Needs” by Saul McLeod, published by SimplyPsychology (http://bit.ly/1vXG57x)
- But, maybe less of you are familiar with the expanded hierarchy of needs. This expanded the higher order needs to include Cognitive Aesthetic, and Transcendence The lower order needs are considered basic (or deficiency) needs, and invoke coping behavior because you’re coping with the minimum you need to survive The higher order needs are considered growth (or being) needs, and invoke happiness behavior because you’re engaging in behavior that gives you purpose and makes you happy Sources “Maslow’s Hierarchy of Needs” by Saul McLeod, published by SimplyPsychology (http://bit.ly/1vXG57x)
- Maslow estimated that 85% of Americans were satisfying those basic physiological needs Sources “Maslow’s Hierarchy of Needs” by Saul McLeod, published by SimplyPsychology (http://bit.ly/1vXG57x)
- 75% satisfying safety Sources “Maslow’s Hierarchy of Needs” by Saul McLeod, published by SimplyPsychology (http://bit.ly/1vXG57x)
- 50% social, and Sources “Maslow’s Hierarchy of Needs” by Saul McLeod, published by SimplyPsychology (http://bit.ly/1vXG57x)
- 40% esteem Sources “Maslow’s Hierarchy of Needs” by Saul McLeod, published by SimplyPsychology (http://bit.ly/1vXG57x)
- He also estimated that 10% of Americans were satisfying some self-actualization needs, but only 2% were achieving full self-actualization My intuition tells me that much of the shifts we’re seeing in our economy are based on technology enabling individuals to satisfy their deficiency needs and grow into satisfying their higher order needs to achieve purpose and happiness. I believe this is a foundational basis for the Collaborative Economy Indeed, human behavior is being accelerated and scaled by new technologies in such a way that enables us to achieve these higher order needs Sources “Maslow’s Hierarchy of Needs” by Saul McLeod, published by SimplyPsychology (http://bit.ly/1vXG57x)
- Which leads me to what I call “The CEO’s Technology Paradox”. CEOs expect technology to drive the most change in their organizations over the next 3 – 5 years, more so than the economy… Sources “The Modern CEO’s Social Business Agenda and Technology Paradox” – by David Fossas, published by ReciprocityTheory (http://bit.ly/13Idtml) Stats sourced from IBM’s 2012 CEO C-Suite Study “Leading Through Connections” (http://ibm.co/14Nq7uQ)
- Yet, we know from business guru, Jim Collins, that technology can accelerate a transformation, but it cannot cause a transformation. He derived this insight through his research in writing the book “Good to Great” Sources Collins, Jim (2011-07-19). Good to Great: Why Some Companies Make the Leap...And Others Don't (Kindle Locations 206-207). Harper Collins, Inc.. Kindle Edition.
- There has been a fundamental misunderstanding amongst organizational leaders about the underlying principles behind the changes that technology is ushering in At the core of the issue are two opposing forces affecting organizations: The external market force of social technologies disrupting industries and the structure of the workforce, and The internal force of organizations reacting with tactical, technology-centered solutions vs. responding with strategic, human-centered solutions In order to succeed in today’s market CEOs must understand the dynamics of technological revolutions, and the effects of the one we’re living through today Sources “The Modern CEO’s Social Business Agenda and Technology Paradox” – by David Fossas, published by ReciprocityTheory (http://bit.ly/13Idtml)
- In her book, “Technological Revolutions and Financial Capital”, economist, Carlotta Perez, describes 5 successive technological revolutions of the last 250 years. The first was the Industrial Revolution, which launched with the opening of Arkwright’s mill in Cromford in 1771 Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- The second was the Age of Steam and Railways Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- The third, the Age of Steal Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- The fourth, the Age of Oil, which launched with the first Model-T coming out of Ford’s plant in 1908 Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- And, the fifth, the Age of Information and Telecommunications, which launched with the Intel microprocessor in 1971. Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- Each of these revolutions occurred approximately every half century, and Followed the same revolutionary sequence: Technological revolution Financial bubble Collapse Golden age Political unrest
- Carlotta tells us that a technological revolution can be defined as a powerful and highly visible cluster of new and dynamic technologies, products and industries, capable of bringing about an upheaval in the whole fabric of the economy and of propelling long-term upsurge of development. Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (page 4)
- Each time around, what can be considered a ‘new economy’ takes root where the old economy has been faltering. But it is all achieved in a violent, wasteful and painful manner... Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (page 4)
- …The new wealth that accumulates at one end is often more than counterbalanced by the poverty that spreads at the other end…It is certainly a broken society, a two-faced world. Sound familiar? Does this sound like a story our society has been living the last 6 or 7 years? Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (page 4-5)
- If each technological revolution occurs about every half century… Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- …then the next revolution is scheduled to arrive sometime around 2021 or shortly after – just 6 years from now. Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- That means we’re somewhere in between a Golden Age and political unrest We experienced the financial bubble for the good part of the 1990s and early 2000s, and the collapse in 2008 Now we’re living in an economy that is taking full advantage of innovations in cloud computing, social technologies and mobile devices These innovations have led to the collaborative economy, the democratization of content publishing and citizen reporters that can create movements for or against brands – or even governments – by identifying a cause, a purpose, that resonates with a community of people and exploiting it Perhaps even more thought provoking is to think about what the next revolution might bring Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- But, first let’s take a deeper look at the lifecycle of a technological revolution You can see here that after the “big bang” moment, early new products and industries are born, and we see explosive growth and fast innovations The Intel microprocessor was our current revolution’s big bang moment And, Intel’s founder Gordon Moore observed that the number of transistors in a dense integrated circuit doubles about every two years You engineers in the room know that this observation came to be known as Moore’s Law and has been critical to the acceleration of innovation over the last 40 years. Later a full constellation of new industries, systems and infrastructure are born, Followed by a full expansion of innovation and market potential We can trace this evolution by looking at a history of social networking Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- Venture capitalist, Mark Suster, brilliantly taught us a history of social networking in 2010. It started some 25 years ago with pre-internet social networking services like Prodigy, CompuServe and The Well These services were online, and people connected for the same reasons we do today. Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- Suster described these reasons as the 6 C’s: Communications Connectedness Common Experience Content Commerce Cool Experiences (entertainment) Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- Ultimately, I think it goes back to Maslow’s hierarchy, and achieving orders of needs. Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- Or, more simply – the Reciprocity Theory and the interplay between the Individual and Community Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- Then, AOL bridged the gap between pre-Internet and Internet with their walled garden. Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- Web 1.0 made it easier to have personal pages on the worldwide web – not just behind a walled garden like AOL. Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- And, web 2.0 accelerated user contribution, making it so much easier to capture and publish content… Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- …even if it is as silly as a #selfie
- And, as we progressed from our big bang moment Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- To the pre-Internet era Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- To web 1.0 Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- And, web 2.0 Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- To today Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- We have, in fact, seen new industries, systems and infrastructures come to play And, it looked something like this…
- …
- …
- …now clearly this is a bit of a dramatization, but generally, correct
- Meanwhile, over the last 14 years, Dialup internet access has fallen by 16% CAGR, and Broadband internet access has grown by 25% CAGR 70% of American adults now have high-speed broadband What’s more surprising, perhaps, is that 30% of Americans don’t. But, what confounds me is that telecom companies consider <20 MBPS download speeds, “high-speed”, and that Americans settle for this Sources Pew Research Center Data Media and Technology Home Internet Access (http://pewrsr.ch/1HO0ZZZ)
- 55% of American adults have a smartphone, and 42% have a tablet computer Sources Pew Research Center Data Media and Technology Device Ownership (http://pewrsr.ch/12gcCaZ)
- Taking a global view: Internet Users <10% Y/Y growth and slowing Fastest growth in developing markets like India, Indonesia and Nigeria Smartphone Subscribers +20% strong growth though slowing Fastest growth in underpenetrated markets like China, India Brazil, Indonesia *Smartphones – +52% early stage rapid unit growth Mobile Data Traffic +81% accelerating growth Video is a key, strong driver Sources “Internet Trends 2014 -- Code Conference” – by Mary Meeker (kpcb.com/InternetTrends)
- So it’s no wonder that social networking continues to grow; albeit at a slowing pace 72% of online adults use social networking sites Sources Pew Research Center Data Media and Technology Social Networking Use (http://pewrsr.ch/12gcLLI)
- And, and we’re seeing the full expansion of innovation and market potential that Carlotta Perez predicted, combining social and mobile Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- With Twitter Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- And, Tumblr Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- And, Foursquare Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- And, Instagram Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- And, Pinterest Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- And, Snapchat Sources “Social Networking: The Past, Present, And Future” – by Mark Suster, published by TechCrunch, December 4, 2010 (http://tcrn.ch/e4PtjU)
- Is it any wonder that 2/3 of the digital universe is now content consumed and created by consumers? Sources “Internet Trends 2014 -- Code Conference” – by Mary Meeker (kpcb.com/InternetTrends)
- ~2.1M more twenty-somethings and ~300K more thirty-somethings lived with their parents in 2013 than did in 20072 Even though many are employed Real median household incomes among 25 – 34 year olds dropped 8% between 2007 to 20123 -7% for 35-44 year olds Sources “The State of the Nation’s Housing 2014” – by Joint Center for Housing Studies (http://bit.ly/1y9bmEF)
- Share of households aged 25-34 with student loan debt increased 13% between 2001 to 2010 (from 26% to 39%) 16% of these have $50K+ student debt (more than tripled from 5%) Average credit score for Fannie Mae-backed mortgages rose from 694 in 2007 to 751 in 2013 Scores for FHA loans rose from 640 to 693, respectively Sources “The State of the Nation’s Housing 2014” – by Joint Center for Housing Studies (http://bit.ly/1y9bmEF)
- It’s a bit like watching Maslow’s Hierarchy in action. 49% of 18 to 34 year-olds say they have taken a job just to pay the bills 35% have gone back to school – likely racking up more debt 24% have taken an unpaid job 24% have moved back in with parents 22% have postponed having a baby, and 20% have postponed getting married Sources “Adulthood, Delayed: What Has the Recession Done to Millennials?” – by Derek Thompson, published by The Atlantic (http://theatln.tc/1x5NEq0)
- Seems a bit like lower order, coping behaviors to me Sources “Adulthood, Delayed: What Has the Recession Done to Millennials?” – by Derek Thompson, published by The Atlantic (http://theatln.tc/1x5NEq0)
- Let’s go back to the revolution lifecycle Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- Until recently, this revolution has been disrupting the technology industry itself – industries with a technological core, such as devices and media Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- Today, it’s about disrupting industries that do not have a technological core. Industries such as Transportation Education Hospitality Retail Labor Sources “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” – written by Carlotta Perez, published by Edward Elgar Publishing Limited, 2002 (Chapter 2, page 11)
- We see this today in the Collaborative Economy The Collaborative Economy is a peer-based movement that empowers individuals to get what they need from each other. For example Etsy empowers people to design and sell their own craft products Kickstarter empowers people to fund an array of projects – including new products and businesses – through crowdfunding Airbnb empowers people to earn extra income by renting out everything from a spare room to a living room couch Uber enables drivers to earn a better income, empowers anybody to earn an income driving others, and provides a better transportation experience to customers that need a ride Indeed all of these companies deliver exceptional experiences, amplified by their underlying cause (or purpose) Sources “Collaborative Economy Industry News, Nov 4, 2014” – published by Crowd Companies (http://bit.ly/1CtPLtp)
- Sources Why Are Young People Ditching Cars for Smartphone” – written by Jordan Weissmann, published by The Atlantic, August 7, 2012 (http://theatln.tc/1x5U0pf) “Percentage of Young Persons With a Driver’s License Continues to Drop” – written by Michael Sivak and Brandon Shoettle (University of Michigan Transportation Research Institute), published by Traffic Injury Prevention (http://bit.ly/1x5ZmRq)
- Peter Drucker, “the founder of modern management”, anticipated an age where we would generate more value with our minds than with our muscle, and described the rise of “knowledge work” Three decades later, Drucker became convinced that knowledge is a more crucial economic resource than land, labor or financial assets, and that We were headed into a “post-capitalist society” Think about this: with robotics and genetics converging, Darwinian human evolution will no longer be about strength, but rather, intelligence Sources “What Peter Drucker Knew About 2020” – by Rick Wartzman, published by Harvard Business Review, October 16, 2014 (http://bit.ly/1vAqffP)
- Sources
- Sources
- Sources GE Crotonville “The Future of Leadership” (http://invent.ge/1w7RktL) Intel University Program (http://intel.ly/1w7RFwr)
- Sources GE Crotonville “The Future of Leadership” (http://invent.ge/1w7RktL) Intel University Program (http://intel.ly/1w7RFwr)
- In their HBR article and book, Joseph Pine and James Gilmore introduced the concept of The Experience Economy They argued that experiences have emerged as the next step in the progression of economic value, and That the next competitive battleground lies in staging experiences History of economic progress through the evolution of the birthday cake In the Agrarian Economy, mothers made cakes from scratch, mixing farm commodities (flour, sugar, butter and eggs), each costing mere cents In the Industrial Economy, moms paid a dollar or two for Betty Crocker premixed ingredients In the Service Economy, parents ordered cakes from bakery or grocery store, which at $10 or more, cost 10x as much as the packaged ingredients In the Experience Economy, parents “outsource” the birthday event to Chuck E. Cheese’s, the Discovery Zone or some other business that stages memorable events for the kids. And, they spend tens, if not hundreds, of dollars to do so Sources “Welcome to the Experience Economy” – written by B. Joseph Pine II and James H. Gilmore, published by Harvard Business Review (July 1998 Issue) http://bit.ly/1ysnDCN
- Pine and Gilmore defined four realms of an experience, based on two key dimensions: Participation and Connection Participation can be defined as Passive of Active Passive Participation would be akin to symphony-goers who experience the event as observers or listeners Active Participation would be where customers play a key role in creating the performance or event that yields the experience Connection can be defined as Absorption or Immersion In Absorption, customers absorb the event/experience that is happening in front of them In Immersion, customers and their senses are immersed in the experience that surrounds them The intersection of these dimensions creates the realms – Entertainment, Educational, Escapist and Esthetic Entertainment experiences involve Passive Participation where the customers are absorbing the experience. HBO is a brand that clearly plays in this space Educational experiences involve more Active Participation, but customers are still absorbing the experience. SXSW festival and other trade shows and conventions play in this space Escapist experiences involve Active Participation and Immersion. These are experiences like skiing, running, hiking or even 3-D gaming. GoPro is a great example of a brand that caters to Escapist experiences Esthetic experiences involve Immersion, but Passive Participation. Think of Virgin America, which immerses you in young, fun, music-oriented experiences from the moment you check in throughout the flight to the moment you step off the plane. But, you as a customer, don’t have actively participate in creating that experience. You’re merely consuming it. Generally, the richest experiences find a sweet spot encompassing aspects of all four realms Sources “Welcome to the Experience Economy” – written by B. Joseph Pine II and James H. Gilmore, published by Harvard Business Review (July 1998 Issue) http://bit.ly/1ysnDCN
- Pine and Gilmore defined four realms of an experience, based on two key dimensions: Participation and Connection Participation can be defined as Passive of Active Passive Participation would be akin to symphony-goers who experience the event as observers or listeners Active Participation would be where customers play a key role in creating the performance or event that yields the experience Connection can be defined as Absorption or Immersion In Absorption, customers absorb the event/experience that is happening in front of them In Immersion, customers and their senses are immersed in the experience that surrounds them The intersection of these dimensions creates the realms – Entertainment, Educational, Escapist and Esthetic Entertainment experiences involve Passive Participation where the customers are absorbing the experience. HBO is a brand that clearly plays in this space Educational experiences involve more Active Participation, but customers are still absorbing the experience. SXSW festival and other trade shows and conventions play in this space Escapist experiences involve Active Participation and Immersion. These are experiences like skiing, running, hiking or even 3-D gaming. GoPro is a great example of a brand that caters to Escapist experiences Esthetic experiences involve Immersion, but Passive Participation. Think of Virgin America, which immerses you in young, fun, music-oriented experiences from the moment you check in throughout the flight to the moment you step off the plane. But, you as a customer, don’t have actively participate in creating that experience. You’re merely consuming it. Generally, the richest experiences find a sweet spot encompassing aspects of all four realms Sources “Welcome to the Experience Economy” – written by B. Joseph Pine II and James H. Gilmore, published by Harvard Business Review (July 1998 Issue) http://bit.ly/1ysnDCN
- Pine and Gilmore defined four realms of an experience, based on two key dimensions: Participation and Connection Participation can be defined as Passive of Active Passive Participation would be akin to symphony-goers who experience the event as observers or listeners Active Participation would be where customers play a key role in creating the performance or event that yields the experience Connection can be defined as Absorption or Immersion In Absorption, customers absorb the event/experience that is happening in front of them In Immersion, customers and their senses are immersed in the experience that surrounds them The intersection of these dimensions creates the realms – Entertainment, Educational, Escapist and Esthetic Entertainment experiences involve Passive Participation where the customers are absorbing the experience. HBO is a brand that clearly plays in this space Educational experiences involve more Active Participation, but customers are still absorbing the experience. SXSW festival and other trade shows and conventions play in this space Escapist experiences involve Active Participation and Immersion. These are experiences like skiing, running, hiking or even 3-D gaming. GoPro is a great example of a brand that caters to Escapist experiences Esthetic experiences involve Immersion, but Passive Participation. Think of Virgin America, which immerses you in young, fun, music-oriented experiences from the moment you check in throughout the flight to the moment you step off the plane. But, you as a customer, don’t have actively participate in creating that experience. You’re merely consuming it. Generally, the richest experiences find a sweet spot encompassing aspects of all four realms Sources “Welcome to the Experience Economy” – written by B. Joseph Pine II and James H. Gilmore, published by Harvard Business Review (July 1998 Issue) http://bit.ly/1ysnDCN
- Pine and Gilmore defined four realms of an experience, based on two key dimensions: Participation and Connection Participation can be defined as Passive of Active Passive Participation would be akin to symphony-goers who experience the event as observers or listeners Active Participation would be where customers play a key role in creating the performance or event that yields the experience Connection can be defined as Absorption or Immersion In Absorption, customers absorb the event/experience that is happening in front of them In Immersion, customers and their senses are immersed in the experience that surrounds them The intersection of these dimensions creates the realms – Entertainment, Educational, Escapist and Esthetic Entertainment experiences involve Passive Participation where the customers are absorbing the experience. HBO is a brand that clearly plays in this space Educational experiences involve more Active Participation, but customers are still absorbing the experience. SXSW festival and other trade shows and conventions play in this space Escapist experiences involve Active Participation and Immersion. These are experiences like skiing, running, hiking or even 3-D gaming. GoPro is a great example of a brand that caters to Escapist experiences Esthetic experiences involve Immersion, but Passive Participation. Think of Virgin America, which immerses you in young, fun, music-oriented experiences from the moment you check in throughout the flight to the moment you step off the plane. But, you as a customer, don’t have actively participate in creating that experience. You’re merely consuming it. Generally, the richest experiences find a sweet spot encompassing aspects of all four realms Sources “Welcome to the Experience Economy” – written by B. Joseph Pine II and James H. Gilmore, published by Harvard Business Review (July 1998 Issue) http://bit.ly/1ysnDCN
- Pine and Gilmore defined four realms of an experience, based on two key dimensions: Participation and Connection Participation can be defined as Passive of Active Passive Participation would be akin to symphony-goers who experience the event as observers or listeners Active Participation would be where customers play a key role in creating the performance or event that yields the experience Connection can be defined as Absorption or Immersion In Absorption, customers absorb the event/experience that is happening in front of them In Immersion, customers and their senses are immersed in the experience that surrounds them The intersection of these dimensions creates the realms – Entertainment, Educational, Escapist and Esthetic Entertainment experiences involve Passive Participation where the customers are absorbing the experience. HBO is a brand that clearly plays in this space Educational experiences involve more Active Participation, but customers are still absorbing the experience. SXSW festival and other trade shows and conventions play in this space Escapist experiences involve Active Participation and Immersion. These are experiences like skiing, running, hiking or even 3-D gaming. GoPro is a great example of a brand that caters to Escapist experiences Esthetic experiences involve Immersion, but Passive Participation. Think of Virgin America, which immerses you in young, fun, music-oriented experiences from the moment you check in throughout the flight to the moment you step off the plane. But, you as a customer, don’t have actively participate in creating that experience. You’re merely consuming it. Generally, the richest experiences find a sweet spot encompassing aspects of all four realms Sources “Welcome to the Experience Economy” – written by B. Joseph Pine II and James H. Gilmore, published by Harvard Business Review (July 1998 Issue) http://bit.ly/1ysnDCN
- Pine and Gilmore defined four realms of an experience, based on two key dimensions: Participation and Connection Participation can be defined as Passive of Active Passive Participation would be akin to symphony-goers who experience the event as observers or listeners Active Participation would be where customers play a key role in creating the performance or event that yields the experience Connection can be defined as Absorption or Immersion In Absorption, customers absorb the event/experience that is happening in front of them In Immersion, customers and their senses are immersed in the experience that surrounds them The intersection of these dimensions creates the realms – Entertainment, Educational, Escapist and Esthetic Entertainment experiences involve Passive Participation where the customers are absorbing the experience. HBO is a brand that clearly plays in this space Educational experiences involve more Active Participation, but customers are still absorbing the experience. SXSW festival and other trade shows and conventions play in this space Escapist experiences involve Active Participation and Immersion. These are experiences like skiing, running, hiking or even 3-D gaming. GoPro is a great example of a brand that caters to Escapist experiences Esthetic experiences involve Immersion, but Passive Participation. Think of Virgin America, which immerses you in young, fun, music-oriented experiences from the moment you check in throughout the flight to the moment you step off the plane. But, you as a customer, don’t have actively participate in creating that experience. You’re merely consuming it. Generally, the richest experiences find a sweet spot encompassing aspects of all four realms Sources “Welcome to the Experience Economy” – written by B. Joseph Pine II and James H. Gilmore, published by Harvard Business Review (July 1998 Issue) http://bit.ly/1ysnDCN
- Peter Drucker, “the founder of modern management” once said, “Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation.” Never before, is this statement so true. And, leaders are catching on Sources “Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” – Peter Drucker
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- Sources “What Is the Real Value of Design?” – by Jeneanne Rae, published by MotivStrategies (http://bit.ly/1u0zy9x)
- Sources “What Is the Real Value of Design?” – by Jeneanne Rae, published by MotivStrategies (http://bit.ly/1u0zy9x)
- Pine and Gilmore guided us with 5 design principles to follow in the Experience Economy Theme the experience Harmonize impressions with positive cues Eliminate negative cues Mix in memorabilia Engage all five senses Sources “Welcome to the Experience Economy” – written by B. Joseph Pine II and James H. Gilmore, published by Harvard Business Review (July 1998 Issue) http://bit.ly/1ysnDCN
- Through his research, neuroeconomist, Paul Zak, discovered what he dubs “The Moral Molecule” Oxytocin is a neurochemical that is key to signaling trust and invoking a sense of empathy Produced when we are trusted or shown a kindness Motivates cooperation with others by Enhancing the sense of empathy – our ability to experience others’ emotions Research found that character-driven stories consistently cause oxytocin synthesis, and The amount of oxytocin released by the brain predicted how much people were willing to help others (e.g. donating money to a charity associated with the narrative) So, is it any wonder why the Ice Bucket Challenge went viral? Research found that In order to motivate a desire to help others, a story must first sustain attention – an increasingly scarce resource in the brain – by developing tension during the narrative If that tension resonates strongly enough with the audience, then they will come to share the emotions of the characters in the story, and, after the story ends, likely to continue mimicking the feelings and behaviors of those characters This explains your feelings of dominance after you watch James Bond save the world, or your desire to work out after watching the Spartans fight in the movie 300 Business implications Enables better recall of key points in a presentation or speech People are substantially more motivated by their organization’s transcendent purpose (how it improves lives) than by its transactional purpose (how it sells goods and services) The former is effectively communicated through stories Sources “Why Your Brain Loves Good Storytelling” – written by Paul J. Zak, published by Harvard Business Review (October, 28, 2014) http://bit.ly/1yso8wD
- Sources Big Think Interview with Paul Zak http://bit.ly/1rFK2H3
- “…So, if you lead with love, then you have this oxytocin environment that will motivate people going beyond exceeding expectations leading to delighting the customer, delighting the people around me. And, delight is what we really want from a customer experience.” Sources Big Think Interview with Paul Zak http://bit.ly/1rFK2H3
- The data tell us… Creatively awarded campaigns are 12x more efficient, and become more so over time The greater level of creativity, the greater level of effectiveness Highly creative campaigns generate buzz, which correlates strongly with effectiveness Creative campaigns are more reliable investments It is in the power of emotional response that brands really make huge progress Increasing the emotional response to a brand reduces its price sensitivity Brands should spend more time getting the brand thinking right before rushing into communications Creativity is not merely converting an audience, but actually creating one Energize lots of people to think about the nature of the brand Sources The Link Between Creativity and Effectiveness – Peter Field (IPA Databank, The Gunn Report, ThinkBox, 2010) (www.ipaeffectivenessawards.co.uk)
- Finally, I’ll leave you with another quote from Peter Drucker “Every few hundred years throughout Western history, a sharp transformation has occurred…In a matter of decades, society altogether rearranges itself – its worldview, its basic values, its social and political structures, its arts, its key institutions. Fifty years later a new world exists. And the people born into that world cannot even imagine the world in which their grandparents lived and into which their own parents were born. Our age is such a period of transformation” Drucker wrote that in 1992, and predicted our great transformation would be completed by 2020. That’s just in time for the next technological revolution that Carlotta Perez anticipates in 2021 Sources “What Peter Drucker Knew About 2020” – by Rick Wartzman, published by Harvard Business Review, October 16, 2014 (http://bit.ly/1vAqffP)