Thu, 01 Apr 2021 14:15:03 GMT
If you don’t stand for something, you’re likely to fall for anything.
Don’t just take my word for it. More than half of Gen Y and Z consumers, compared to 37% of other consumers, say they have shifted at least some of their spend away from a business when that company disappointed them due to its words or actions on a social issue. On the surface, there’s a clear message here about purpose and how its importance is only growing in correlation to the disposable income of Gen Z.
But I think there’s a deeper current running underneath that conversation. And, if we can tap into it, it can carry a company to where it needs to be to face the future. I’m talking about experience or, more crucially, the business of experience.
We’re living through a time where everything is being reimagined: how we live, work, shop, socialise, and more. In other words, customer priorities are being completely upended. In such an environment, where the way we experience our own lives is changing permanently, every employee at a successful business will be customer-obsessed and putting experience at the heart of everything they do. And I mean everything. We’re not just talking about marketing strategies; the business of experience mindset needs to be implemented across every corner of an organisation’s operations, in order to ensure that every employee and action is customer-obsessed.
Fortunately, CEOs have already woken up to the opportunities ahead. In our research, we found that 80% of CEOs said they will need to fundamentally change how their organisation engages with and creates value for customers. Implementing such large-scale change is no easy task, however. Businesses will need to break out of a legacy brand mindset and adopt an innovator approach that has agility, open-mindedness, and imagination at the core. It’s a way of being one might typically find at a start-up.
Once you’re operating from the starting point that everything can be re-imagined, you’re working from a blank slate. With that in mind, there’s a lot we can learn from the start-up mentality.
Consider the organisational challenges that businesses looking to implement a business of experience mindset are going to face. Driving change across large organisations can often feel like turning around an oil tanker, when you really need the agility of a speedboat. Start-ups, on the other hand, take a nimbler approach to implementing change.
The truth is that you don’t need to be a month-old business to reap the benefits of start-up thinking. Take the UK’s NHS, for example. With the organisation under severe strain at the start of the pandemic, regular essential services such as GP check-ups and social care visits needed rethinking to protect the safety of both staff and patients. In just a single week, however, the NHS was able to build and test Microsoft Teams integration and rolled it out to 1.2 million NHSmail users across 16,000 NHS organisations. As the NHS proves, operating at a large scale is no barrier to quickly pivoting based on the experience you need to deliver.
Another illustrative example of an experience business is Nike’s Run Club. Fitness is a habit, and Nike’s data and research showed that it was all too easy for people to fall out of that habit when they didn’t have the extrinsic motivation of a personal trainer or coach. As lockdowns were enforced across the world, that impetus became all the harder to find.
That’s where Nike Run Club came in. Built-in response to the experiential need for fitness motivation, the app offers GPS tracking, guided running workouts, custom coaching plans, and friendly motivation from friends and other users. Underpinning it all is a sense of gamified fun which keeps engagement high. Another testament to the rewards of putting experience at the heart of your business strategy – and applying that strategy with nimble efficiency. The app’s integrated store has been a boon for the company’s bottom line, with an 11% increase in net income last year driven largely from USD$900 million coming from digital platforms. An increase which, incidentally, saw Nike hit their goal of 30% of revenue coming from digital platforms three years earlier than planned.
The audiences of the future have high expectations when it comes to how socially conscious and purpose-driven businesses should be. Meeting those expectations and catering to those audiences will require agility – like a start-up does. In a world with such an unfamiliar and shifting business landscape, perhaps we’re all start-ups looking to prove a point.
The crucial pivot of the business of experience lies in defining your brand in terms of what experience you aim to reinvent and putting your entire organisation in service of that experience. The rewards are plain to see. Perhaps the most interesting finding from our research was that the companies who reimagine their structure through the lens of experience outperform their industry peers in profitability growth by six times in a period up to seven years.
So, the hard-headed case for implementing a business of experience mindset is undeniable. The question companies should be asking themselves, then, is not if but how. And the answer to that, I believe, is through a start-up-inspired approach which emphasises agility and open-mindedness.
There are four key elements businesses should explore to realise the promise of the business of experience. Leaders (i.e., companies that are independently performing well in terms of financial growth and business cycle endurance) are far more likely to take the following approaches, enabling them to consistently outperform peers who don’t:
In short, there’s no fighting the future. What we ultimately have standing in front of us is an opportunity for businesses to reinvent the way they work, and the way their customers experience them. The companies which will define the future will be taking that opportunity now.