"I don't know how to manage this young generation, they seem to be always distracted and have excuses," said the CEO. "There is a dearth of talent, and sometimes candidates don't turn up even after accepting the offer," said another CEO. "There is no sense of commitment from this younger generation," added one more CEO. As we met many company founders from Small and Medium Companies, we get to hear these most common complaints. All these points are the classic symptoms of the Experience Economy. In this new economy, everyone (Employees, Customers, Partners, and Investors) seeks personalisation, sensation and memorable experiences from your business.
The Blue Ocean Is Becoming Red
Even if your business model is entirely new and futuristic, you are not the only one in the pursuit, at least a few thousand others are also evolving themselves for the same customer. And this is perhaps the harshest truth of running a business in the era of the experience economy. Traditionally, most companies from the early 60s or 70s were a part of the Commodity Economy. As the competition grew, the fight for market share and differentiation gave birth to Service Economy. Now with the influx of digitisation, new generation demand and overtly crowded competition, business differentiation became increasingly tricky proposition to achieve. Thus came the era of Experience Economy. However, the ask is still the same; how do we keep our business relevant and appealing to the customer and how do we differentiate?
The Experience Economy
Welcome to the experience economy. The Harvard Business Review so eloquently put it—"a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event." It's Not a B2B Thing or a B2C Thing—It's a ‘Value Thing’ that is personal and memorable.
Take a look at the chart to understand the different characteristics of the experience economy in comparison with the earlier economies published by the Harvard Business Review (HBR).
Small Businesses Are Under The Threat Of Extinction
Look at any business model, for every traditional business there is a multinational organisation that is disrupting its customer base. The local Kirana shop is getting interrupted by a larger e-Grocery app. The problem doesn't end here, within the smaller business group, there is an overload of competition. Smaller and traditional enterprises are grappling with the digital transformation. It’s easier said than done. While new technologies are emerging to make life more comfortable at the same time, its adoption is an extensive program. Take hotels, for example, what was considered luxury is now a common feature of most hotels.
Struggle To Build A Brand
Most Traditional companies do not realise the significance of a Brand. For many, it is the logo and hence time to time they change their logo, not realising that the brand is the company’s perception in the minds of their customers. For a small business, building a brand is not an easy task, then how do you work on building the perception that is intangible. Most businesses, therefore, rely on posting regularly on social media about their products and services instead of having conversations. The strategies to build a brand for an organisation with deep pockets are different from small and medium businesses. Besides hiring a great marketing team, budget is often a distant dream to most of the traditional small and medium enterprises. But without a brand value, how do small businesses attract talent, customer and business?
The Pressure Is On Sales
Driving your sales team crazy is also not the solution for growth, and yet the smaller organisations are only pressuring the sales team to do more numbers. Usually, the telesales team continuously chase the customers and driving them away. Most organisations feel that their sales team is not focusing on work diligently. They think that the new generation is too distracted with their socio-digital life. Sales teams come and go much faster than ever before. Monday morning meetings are all about sales and delivery. Not realising that it's a quicksand, more desperation means more annoyance to employees and customers.
Culture Management Looks Like A Far-fetched Activity
For any small and medium enterprise, diving into cultural transformation seems like a far-fetched idea. Most companies feel that culture management can wait until critical business issues are taken care off, like sales and deliverables. It is the most common vicious cycle.
"Culture eats strategy for breakfast" - HBR.
No matter how great your plan is, it will fail if your team's culture is not in place. For businesses to strive in the experience economy, culture management is one of the most vital tools, and customer experience is certainly not possible without it (even if your business is manufacturing products for other companies). You need a dream team to grow your business in an experience economy and the access to building the dream team is only through culture management.
"Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients" - Richard Branson
Understanding Culture For The Experience Economy
Culture of an organisation is an unspoken order of the group. You cannot build a culture with rules and regulation of the company. At the same time, it is not possible to deliver every aspect of customer experience by automation, as long as humans are essential to business; the relevance of organisational culture is imminent.
Understanding the three most important factors that are forcing organisations to initiate their transformational cultural journey:
- The Millennials: Yes, they have an entirely new way of looking at life and work. They do not merely work for money - unless it’s above industry par. If you cannot pay, then you must provide them with a greater ‘Sense of Purpose’. The workplace must adapt to fit the new generation and their working style along with older generations. The star model of employee engagement will not fit here as you'll need to create an emotionally safe workplace.
- Transformational Leadership: The era of Dictatorial Leadership is over. Transformational Leadership is a new branch of administration where a leader works with teams to identify needed change, creating a vision to guide the change through inspiration, and executing the change in tandem with committed members of a group. It inspires people to achieve unexpected or remarkable results. It gives workers autonomy over specific jobs, as well as the authority to make decisions once they have been trained.
- Talent Building: The skillsets that are required by the future of businesses are yet to be made into educational programs. Therefore, organisations must gear up to create and deliver training programs for developing leadership, customer experience, problem-solving environment, communication, and technology adoption.
Setting Up The Culture For The Future Ready Business
We have summed up this transformative journey in a much simple 4 step process as explained below.
- Setting the Purpose:
One of the most critical aspects of the future of business is to find its core purpose, most companies are attached to their products or services, but a company's brand outlives products and services. Experiences must be built in alignment to the company's Purpose –that is the guiding force and an unspoken order for making important decisions. It must be formed across all areas of the organisation to conclude the use of the business collectively.
- Internalising Purpose:
Before you talk about the organisation purpose to the outside world, it must first inspire the internal employees. It must ring in the sense of pride and sense of belonging. A valid reason to spend their time effectively at work. It cannot be achieved only through storytelling but through a two-way dialogue between the management and employees. The communication must factor all the five stages of an employee’s lifecycle within the organisation, from On-boarding to Farewell.
- Realigning Policies and Processes:
Humans like to break the rules. The more rules you make, the more they will break. The central idea of policies and processes is not about policing, but about empowerment. They must be aligned with the best interest of the people working within the organisation. Transforming managers and supervisors into advisors and guiding them is the fundamental key to the success of the people. Instead of the star model of employee engagement, which focuses on recognition and provides power to the best performer, companies must focus on commitment based model which the leaders and employees work together towards the common goal. It means instead of hiring the best talent, you hire a culturally fit employee. A great workplace must be safe, not just physically but also emotionally.
- Reinforcing Purpose-driven Relationship:
Often different kinds of people work together, and their way of functioning can create definite gridlocks. Their way of working interferes or empowers the other, and often they delay the decision-making process. In the book Synergist By Les Mckeown, it’s highlighted that in every organisation, there are usually three kinds of people the Visionary, the Operator and the Processor. Visionaries are great with ideas, Operators get things done, and Processors are great in detail. While all of them can work together exceptionally, they can easily take offense of one another, resulting in gridlocks. Transformational leadership, management training, communication etiquette training, and diversity inclusion helps to transform the organisation into a large community.
About Creative Factor
Founded in 2009, Creative Factor (CF+) is a business communication and consulting firm committed to bring change inside organisations and alter their perceptions outside, by allowing them to thrive in the ocean of possibilities. And we do it with the help of our in-house expertise on business consulting and communication services.