Experience Economy: Primer

Originally posted on the ABA Bank Marketing site on May 15, 2017

Some may not know what the experience economy is about—or how it emerged. This article provides a primer on the concept of the experience economy.

In the early years of our country, agriculture and livestock were the mainstream of commerce. This period was known as the agrarian or commodities economy. People lived off the land, raised livestock, and mined the earth for resources like gold, silver, and coal.

After the agrarian era came industrial manufacturing, driven by the ability to mass-produce goods from those same commodities. Goods that had once been crafted individually could now be assembled and produced in mass quantities—increasing affordability and consistency. Banks adapted to this new goods economy by facilitating the use of currency and coin for the exchange of commodities and the regulation of cost.

As technology advanced and people began living in larger cities, a third economic model emerged—the services economy. And over time, banking shifted its focus again, no longer providing currency in exchange for silver ore or gold dust. Instead, banks became financial service providers, delivering services that members of the public cannot provide for themselves. As such, banks provide funding for homes, cars, and equipment. In addition, they offer a system of secure and regulated financial exchange in the form of checking or debit cards. They also provide safe and secure storage of documents and personal items of value. Through this model of serving consumer needs, banking increased its value to its customers—at least for a time.

And so, the pattern continues. Just as the commodities and goods economies ran their course, the service economy has also been surpassed. Over the past 20 years, there has been a growing trend by consumers to move away from spending on things or paying others to do things for them. The focus has now turned to paying for activities.

The experience economy had taken root—and it offers a greater value than all previous economies combined. A business focusing on experiences can increase the value of its offering by staging activities around the goods and services it provides.

People want to do things and are willing to pay up for that opportunity. Companies like Viking Cruises offer personalized river excursions. Car companies are creating unique driver experience centers where customers can drive high-end and exotic cars—both physically and virtually. Nike offers customers the ability to completely customize and personalize pairs of shoes for a fee. Even toy companies, like Lego, stage huge Lego conventions for the public so they can share their designs and learn about other’s creations—all designed to add value of the goods and services they offer.

What this means for banking.

So how can banks leverage this economic development? First step is to increase their value by staging activities that are not only customized, but personalized to each customer. Digital technology offers the greatest opportunity to achieve this. As described in the first article of this series on the ABA Bank Marketing site, if it’s digital, it can be customized. If something can be customized for the individual, then it has greater value for the customer and in turn, for the bank.

In addition to leveraging the digital world, banks can leverage their physical space by adapting branches to focus more on the purpose of customers’ visits. It’s no longer necessary for branches to revolve around performing basic transactions.

Think about staging activities around what your customers seek and need—and what goods and services you excel at providing. Use that knowledge to change the bank’s physical space to better stage personal experiences and unique engagements that support the brand. This will differentiate you from other banks. Make the shift from doing for the customer to doing with the customer. In the experience economy, it is all about staging engaging interactions that increase value for customers.

Change Through an Idea Prism

There has been a lot of talk online and at various conferences these past years about change with management and culture. Most of these conversations have been around a single change or a single possible outcome. In my idea of change it is never a single event or single target, because change is more fluid and variable than most target.

Over the years of working with teams on change, be it for teams, management, brands or even physical representation, I have observed when groups focus on one single outcome or definition, they overlook so many more possibilities. The range of ideas become broader than their vision.

To help explain, the graphic below shows the idea of planning change in three key phases.

change-ideation-sm

At the start lies the current state. Unchanging and ever decaying for stagnation is decay. So many people have this idea that if they just do what they have always done that time will resolve any issues. The reality is that they are correct, unfortunately, the solution will probable be something they don’t want. When you do choose your course, one will be chosen for you and that choice is rarely in your favor.

Begin by determining ‘Why’ you need to change. What happens if you don’t change and everything around is? Create a clear explanation why staying the course and letting outside forces dictate your change. My guess is you will soon realize the old adage ‘Change or Die’ begins to ring in your ears.

Okay, you finally have a reason to change. Great! Now move that through a process of creative ideation. Look at various ways of how change can happen and determine what are positive and negative advantages to these changes. If you look at the change delta as a prism, the idea is to disperse all the possible variables to create a range of possibilities. It is these possibilities that can help create the possible change you can accept or are capable of performing.

These variations become the ‘What’ states of change. Like light through a prism, each variation of color does not have a distinct separation from its neighboring colors. There is a blurring between each band. This is true of ideas and change. There is no clear defined path or hard outcome. Change creates variations of complexity and it is your ability and capacity to determine how complex of a change your can create.

So, when you hear someone talk of change management or culture change, find out if they are talking variations or single outcomes or changes. If it is a single possibility then use the prism of ideas process, commonly called ideation, to create multiple options and find which solution works best for you or your business.

Avoid the static and the stagnate states of daily life, always plan by seeing your goals and mapping the journey to them.

The Edge of Change

The world we live in is a funny place. Conversations, styles and even perceived needs are cyclical. What is old is new and new, well, that’s so this morning. Every thing changes. Everything. Those things, people, businesses that don’t, well, that’s so in the past. Change is the only constant they say and I find it to be true. Change up, change back, change around, change out, change into, etc… We have so many perceptions of change that the adaptations seem endless.

Change comes in various sizes and increments. Some changes are dramatic while others are subtle. No matter what, change happens to us all each day. The real goal is to try to guide change as best we can, because change never happens as we expect. It always has hidden surprises or consequences.

But what is change? When does something or someone change? I guess that answer lies in the eye of the observer. Only those closely watching can see the change happening, but for most, we see the event after the change. But what if you could plan change in some fashion. This I have asked for some time and here is what I have created.

Based on the idea that yesterday and today are unchangeable, if you avoid any theoretical ideas of time travel, that only leaves the future for change. And, if change only happens in the future, than you can guide the outcome given you can determine all the factors affected by change. And so, here is my model for change.

Change Deltasm

This is my Delta model for change. Even if you stand at the very edge, change will occur. Time always moves forward and you must move with it. But you can decide how you want the change to happen and what you want the change to create once you understand why you want or need the change to happen.

As the model indicates, change should be an improvement and performed of a duration of time through some given process. Also, you must determine any and all pitfalls and obstacles that may hinder you crossing the gap of change.

So the steps:

  1. Why is there a need for change? “Why”
  2. How will this change occur? “How”
  3. Who can help you achieve this change? “Who”
  4. What improvement will change create? “What”
  5. How long will the change take? “When”
  6. And where do you want to be when the change is complete? “Where”

Map the change before you act. Take you intangible idea and make it a tangible plan.

SPARK Your Imagination

There’s a growing trend in America. A trend where the world of art and artists are collaborating with businesses and business leaders to generate a richer offering as well as a new perspective on creating healthier and stronger businesses. There is no better avenue for this thinking in St. Louis than the SPARK Conference hosted by COCAbiz at COCA.

I was honored to be able to perform the graphic recording of the event, for Sharon Price John’s morning presentation and for the evening’s Keynote address by John Maeda. Below is the large-scale graphic recording of the full day event of SPARK at COCA.

COCAbiz SPARK 2015 sm

Please check out the wonderful services and programming that COCAbiz has to offer by contacting Steve Knight at COCAbiz. Just follow the link and get creative with business solutions.

Ask The Right Question(s)

Summertime seems to always be a busy one for recording, Strategy Ideation sessions and conferences to attend. My time is always busy with clients and outside activities that I must be selective with which events to attend. I choose to attend events which bolster more of the creative development on idea generation and or strategy in lieu of general tactical or “How-to-Do” conferences. Many tactical or skills based events eventually are highlighted through social media, so one must pick their best use of time and funds.

It was one of these selective events that reignited some old concepts that we allow to get buried as we continuously update our knowledge base. At the event, like most, there were many speakers, workshops and keynote presenters, but all took a back seat to one individual that sparked my fascination and enforced why I do what I do.

Sitting in the back of one of the concurrent sessions was a small boy coloring with some markers. I don’t know why I was fascinated by what he was doing, maybe it was the fact that during all the information and the banter between presenter and audience I was intrigued that he ignored everyone and just focused on what he was interested in.

As the session wound down, I looked over the boy’s shoulder to see what was so captivating. It was nothing but a coloring book that he had colored with some artistic expression. He then looked up at me and smiled. It was the next few words that he spoke that brought my mind to a laser focus.

With an innocent smile he spoke, “Why are you here?” he asked. His question echoed in my head.

Why was I here I thought. I smiled back and replied, “Because I want to learn more and improve myself.”

“Why?” he replied.

“So I can be better at my job.”

“Why?” he repeated.

Playing along with this popular children’s line of questioning I replied, “To help people.”

Once more he uttered the question, “Why?”

By now most adults would simply smile and move along politely, but this simple line of questioning was making me reflect on my purpose, why I choose to do the things I do and to learn what I choose to learn. His innocent question was not so innocent for me. Did he really want to know? probably not, but it made me want to understand myself better. I finally replied, “because people sometimes need help getting what they want.”

“What do they want?” he asked.

Interested in how he would respond, I fired back a single answer. “Change.”

I expected the response of the repeating question, what I didn’t anticipate was the added response. “Why do they need change? Don’t they have enough?”

I realize he may have misunderstood my term, but somehow his reply was right on the money. “Why do they need change?” This simple question touches at the very core for a company’s growth strategy. In addition, asking about how much change do they need is as important as well.  If a child can ask these types of questions then why don’t more executives ask them of themselves. I realize that it is part of why I am asked to help them, but it should also be part of how they help themselves.

If you wish to understand change and gather new ideas, starting using simple questions like ‘why’ repeatedly as your bait to uncover the core reasons. “Why not!”

Fishing 4 Ideas

 

Bridging The Gap: Purpose + Process

Gap 01

I have written about the gap before and illustrated it in many graphicnotes, sketchnote as well as in client ideation sessions as a Graphic Recorder. It is an image that has a recurring theme with me and with many others in business, education and in life general. The gap is about change and the challenges of change

Why is the image of a gap important? Because it easily represents an approaching challenge of shifting from one state or place to the next. Before I get too deep in this post, let’s step back a bit a look at the source of this recurring image. Why this image and where does it come from?

First lesson; in mathematics the Delta symbol (Δ), represents a change of state between two before and after state schemas; a variation in state. The origins of the delta go as far back as the Ancient Greeks.

Gap 02Today I graphically depict this delta as an inverted triangle. It has become the two sides of a chasm or gap. On one side is the current condition of state and on the other side of the inverted triangle is the targeted changed state. What lies between is the chasm which represents the challenge to overcome.

Another thing I like to add to the image when it is about change is an increase in elevation on the “B” side of the chasm. There is very important element to the message with the visual and the idea I am trying to convey. The first impression of course, is that of the great challenge crossing the gap. The second note with the change in elevation is the idea of improvement over the existing state. I do not shift elevations all the time. In anything that may deal with a partnership I usually keep both sides at the same height since the idea is usually about connections and not intentional change or improvement.

The desire to cross over is not the only task, there is also the purpose behind making the change. For me, anytime such an effort is exerted there must to be intent for improvement, an increase in knowledge or the enhancement of self or business. There needs to be gain of some kind or the action is wasted and becomes nothing but a performance in frustration.

Take the example of a company that make changes, adds new products or alters direction due to pressure from the outside, but they are not really improving the core business. When a company is not improving or enhancing the current state, then it is nothing more than an expensive activity that yields no gain. In many cases, the outcome is unchanged, thus money and time are wasted, and eventually I see them falling off into the chasm.

The inverted delta as the gap and the elevation as the evolution are partly what this image is about. The greater piece is the method of crossing. How we change and the tools we use to make that change are just as important as what we want to change or become after achieving that change. What method is the best to bridge this gap from point A to point B?

Here are some of my favorite depictions of crossing the gap that have appeared in various client thINKing Canvases or in Graphicnotes as well as sketchnotes from meetings.

Many bridges c

These are a few examples of the metaphors of the methods people describe their plan to get from one side to the other. Did you identify one that you feel is your method? If so, what does it mean to you?

Some methods of getting across rely on mechanical bridging techniques while others are very creative or whimsical that could be both affective and an experience worthy of the crossing.

One in particular that always makes me laugh is that of the human cannon. Imagine this method of crossing the gap by being stuffed down a barrel of an oversized cannon. Dressed up all in a colorful fancy suit and wearing a helmet for some slight protection. Then, as you’re waiting in anticipation in the dark for that moment, there comes an explosive noise, your body surges forward into the day light and you find yourself hurdling through the sky like a ballistic. Everything around you is a blur passing by so quickly that you can’t even recognize what your passing by. Then reality hits or soon will, because the other side has no catch net. Guarantee, you will make it across, but at what cost?

The truth is that the crossing of the gap is about processes. Which method you feel you are using or works for you? The conversation leads to which methods is actually better for you? Worse yet, maybe, you turn back and don’t cross as one group discussed. I guess it all depends on the gap you need to cross and the level of the improvement you seek.

For me, it’s about narrower gaps with greater heights and having those already on the other side help me build bridges across so others can follow.

Until next time. use the image below and draw out how you would cross and what that really means.

Gap 03

Customized Gap Maps are available.