Vivaldi strongly believes in WIN’s mission to close the gender gap in innovation. Vivaldians are on the global leadership and chapter leadership teams and have even been ambassadors of WIN.

Vivaldi spoke with Shakeir about advocating for women’s careers, the expectations of Gen Z, and how we define innovation.

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How would you explain the mission of Women in Innovation?

Women in Innovation was founded to close the gender gap of the representation of women in the innovation space. If you look at innovation firms, only 25% of top firms are actually led by women. If you look at innovation best-sellers (books and written content), only 16% are written by women. In Fortune 100 companies, only 25% Chief Innovation Officers are women. Obviously, there’s a gender disparity that we need to not only monitor closely in terms of data and how we’re moving the needle, but also to think of outside-the-box ways by which to close these gaps.

What key focus areas do you think are vital for creating equity in the innovation space?

Looking back at my own career and the interviews I’ve done for my own research around this area, there’s a lack of executive leadership sponsorship. Only about 56% of junior level women report having a senior leader who actually advocates for them. Mentorship is one thing, but someone who is willing to put their neck out there when it comes to decision-making and say, “I want this person to lead,” that’s a different story. Around 49% believe it’s more challenging for them to reach senior management positions than it is for men. If you don’t have somebody who is advocating for you, with intentionality, it’s very difficult.

If people think there’s only one spot, there may be more of a perception around competition, rather than an idea that we can build larger networks to help each other in a different way.

Absolutely. One of the main challenges women feel impede their advancement is a lack of opportunity to broaden their skill sets. Creating those spaces where you’re tapped into networks or thought leadership that’s constantly giving you previews of trends.

Another piece is peer to peer support networks. This is often where women are more hesitant than men to ask a connection for a favor or advice out of a fear of being perceived as opportunistic or weak. I think there’s room for us to really strengthen each other by creating those spaces for networking, which is one of the mandates of WIN. The last piece is a lack of female dominated inner circles. Around 75% of high-ranking women have really strong ties to female circles, which led to job placement level, and it’s 2.5 times greater than women with small networks or male dominated inner circles.

To talk specifically about the innovation piece — do you have a preferred working definition for “innovation”?

Innovation has been one of those terms that could be anything and everything. I favor the definition that innovation is a process of making changes, large and small, radical and incremental, to products, processes, and services that result in the introduction of something new for the organization that adds value to customers and contributes to the knowledge store of the organization and is profitable.

Dr. Reima Shakeir, CEO, Women in Innovation

There are so many ways that people can work in innovation-related spaces. With your background as a professor, what are students looking for when it comes to career opportunities around innovation, business reinvention, and technology?

I get to talk about my favorite topic: Gen Z. Let’s start by saying that the one certainty today is uncertainty. Over these past few years, with the global pandemic, rocketing inflation, climate disasters, Russia’s war on Ukraine — Gen Z is really growing up and navigating a very complex and uncertain world, along with the rest of us. They are re-thinking foundational elements of day to day life, be it building decentralized networks of emotional support to advocating for greater responsibility from companies and brands, and questioning the world they want to live in. Gen Z is truly beyond the binary in every single sense of the word. And like many of their peers, perhaps similar to millennials, they want to put their efforts into and work in companies that they can feel good about. The three pillars that have historically been relevant to my students have been sustainability, equity and integrity. These are what they look for in companies when they are joining.

One of the other things we’ve heard about people entering the career world is that they are looking for companies that have practices that reflect their values with regard to DEI. Is that something you’re seeing people evaluate more?

Gen Z is one of the most diverse generations of its time. Gen Z is a generation of inclusivity and belonging. So, the question becomes, how are you actually creating a culture of belonging in your organizations? Only 76% of companies admit that they do not have diversity and inclusion roles to begin with, so to lead into the future, leadership is going to be tasked with understanding and taking action to reflect the cultural landscape of this workforce and building an organization that reflects those values from the ground up. It’s not a choice anymore, it’s an expectation. That’s why Gen Z-ers have no problem job-hopping if they don’t find that the company is hitting those targets. Their world view is organically one of inclusivity and fairness, and they really have the expectation of organizations that they work for to reflect those values.

Are there any organizations or companies that are doing a good job of fostering belonging and inclusion in a better way?

When we see someone like Larry Fink, from Black Rock, writing an open letter that says we’re not going to do business with folks who don’t care about ESG, who don’t care about diversity, that’s a huge statement. It gets people thinking. I would say the trend is now moving more toward how we can be more intentional in our diversity efforts; let’s stop making a business case out of diversity, and try to be a bit more authentic in how we are engaging because it’s the right thing to do. Wharton just launched an MBA focused on DEI. If you’ve got a leading business school in the world dedicating a whole MBA to it because more and more leadership from corporate spaces are asking for it, I think that’s very telling.

You’ve worked in the nonprofit and philanthropy worlds – what is the approach there to innovation?

This is extremely complicated. When you think of innovation, inherently there’s risk involved. In the nonprofit and philanthropy space, there’s an accountability to donors, and so they tend to be risk averse. I think innovation has many nuances and interpretations in the business community and the same is true of philanthropy. What’s important is that foundations understand what they mean by the word and apply creativity in looking at how we’re solving for problems.

What’s happening next for WIN?

We have an exciting year unfolding for our community. Keep an eye on some of the initiatives we have coming up, the programming that we have, and how we’re aligning on our mission and sharing out our progress to our communities. Stay tuned and check us out at womenininnovation.co.

Dr. Reima Shakeir is an international scholar, author, and CEO of Women in Innovation. She previously served as COO at the Edmond de Rothschild foundations, and teaches at the MBA level at the NYU Stern School of Business and The Wharton School of Business.

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However, given the terrible war in Europe and its implications on the international energy market, energy is now a high involvement topic. Consumers are willing to rethink their energy supply and their individual setup. The pressing questions are complex and costly: Is my next new car an electric vehicle? Where do I get a charging point and what does it cost? Should I get solar panels on my roof and a battery in the garage? Is gas still a reliable source of energy for my company? What is the most efficient heating system? These are all complex buying decisions that are far from being low involvement. 

These buying decisions also sit under an even more complex layer of socio-economic questions: How dependent are we from energy imports? Should we aim for more energy autarky? How can people make their businesses more sustainable? Even decisions made long ago are up for discussion again. For instance, as recent research shows, 70% of Germans now support extending the operating lives of nuclear power plants. 

Neither energy consumers nor energy suppliers can answer these pressing questions on their own, but energy suppliers must play an active role. According to Vivaldi’s research**, even weeks before the war in Ukraine consumers expected energy companies to play a proactive role in the transition towards new energy solutions. 

To meet these consumer expectations, energy suppliers must get active in two areas: First, they must proactively start a dialogue about the most pressing questions with their customers. This can include regular consumer panels across regions and market segments, social listening approaches, or a consumer advisory board that discusses with management. And second, they must develop new and innovative solutions and services. For example, the leasing of solar panels, heating as a service, or bundles around smart energy management. Both areas must be addressed simultaneously. But the good news: these topics are closely interrelated and can support each other. Gaining new insights from customers through focused research can serve as input into the innovation process, and newly developed services will in turn stimulate new conversations. 

There are massive challenges for the energy industry, but currently, the window of opportunity has never been open wider. Major players of the industry have clearly understood the challenge. E.ON’s latest campaign states: “The time for action is now,” and presents a cross-disciplinary initiative of scientists, consumers, analysts, and operations managers, thus stimulating new conversations. 

The field for innovations is broad. Companies should consider opening investments in renewable energy and related ventures as does the Swiss investment firm smartenergy. German company BayWa r.e. encourages its partners to rethink energy for good: “How it is produced, stored, and can be best used … is essential to the future of our planet.” They come with impressive references for how they support businesses, regions, and even whole countries to cut CO2 emissions and to get energy transformation going. Innovative players from other industries are also pushing into the energy market: Tesla offers solar roofs to produce clean energy, electric cars, and an app to control everything in one place. Smart home technology is being developed by IKEA, with its IKEA Home smart App. 

Energy companies must step up and connect more deeply with customers. Developing reliable and flexible products and services, including hardware, software, and tariffs, will be a step in the right direction. Creativity and innovation will be the tools to keep customers happy, to manage energy transformation, and to develop future-proof business models. 

* Source: Accenture New Energy Consumer research, 2017 

** Vivaldi conducted a representative study among the general population in several European countries with over 3,000 participants, conducted Q1 2022. 

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Many businesses have had no choice but to update their strategies — and, as a result, are discovering their capacity for rapid experimentation and adaptation. COVID-19 sped up the adoption and segmentation of digital services, demonstrating parity or superiority to non-digital options. Think of the home delivery demand during this endemic period and how it’s permanently escalated. Or the growth of direct-to-consumer  models. Or even shifting hotel models and workspace rentals.

Just look at Peloton. The business capitalized on the new role of the home as a multifunctional workspace, family place, and place of wellbeing. Post lockdown, the gloss has started to peel away to reveal the fundamental truth of the inflated expectations of many businesses like it, whose models depend on us staying at home. The real potential for brands lies somewhere in the foggy middle of two extreme interpretations of the future role of the home. Yes, it will be more important to exercise at home during the new variants, and especially with Omicron, but it won’t be the only option.

COVID-19 may have led to these mindset shifts, but it’s really something the business community should have been grappling with all along. And that is the capacity of business leaders — to sense and adapt to cultural and technological changes, or achieve “commercial clairvoyance.”

So, how can business leaders reach that level of clarity?

It doesn’t matter if a brands’ strategy is focusing on an entire business model or a specific product or service innovation. The same two questions are paramount, and are key acid tests of a company’s foundational strategic assumptions:

1. How are consumers’ expectations changing?
2. How will the consumer relate to your business, brand, product in five years’ time if strategy doesn’t adapt to a specific trend or series of trends?

Immersing your brand in your target audiences’ lifestyle and observing behaviors gives brands a deeper layer of contextual understanding of needs and desires.

Want to hear something brutal? Brand competitors are likely all looking at the same data, and all struggling with how to effectively analyze it to extract meaningful insights. Even more brutal? That means competitive market research is likely not giving your brand a competitive advantage, as it’s not unique and ownable.

Tomorrow is a difficult thing to forecast, but tomorrow is where your competitors are probably not adept at focusing, either.

Every organization I have worked with is awash with trends. But organizations don’t know how to assess what’s real and long-lived, or effectively unpack the consequences of each trend.

And consumer research dominates the front end of the innovation process at the cost of focusing on what’s changing.

Brands need to implement the practice of cultural planning platforms, which develop understanding of the consequences of key shifts in culture and consumer expectations and attitudes. These are “big bet” changes to the foundational logic of a category or how value will be delivered to the consumer in the future. By boldly attacking the foundational logic of your brands’ category now, you can stretch thinking to who the consumer will be in the future.

It’s here that business leaders ignite revolutions in new business models, brand, and innovation thinking; because we are designing for tomorrow’s consumer, today.

_
This article was originally published on MediaPost on January 7, 2022.

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Erich Joachimsthaler and Julie Roehm discussed business transformations.

Here are some of the key principles that Julie shared about her recent journey with Party City: 

1. While making it easy is not the only driver to keep customers coming back, it certainly does play a huge role in customer retention. Navigating through the pandemic is already complicated by itself, so companies are now concentrating more on making the highly digitalized transactions and customer interactions more seamless while fulfilling safety measures.

“I’m much more interested in learning: ‘Was it easy for those things to happen?’ When you peel that onion, that’s where you see the opportunities.” – Julie Roehm, Party City CMO

Party City’s main focus is currently on Customer Effort Scores because it informs the company how easy it was for customers to transition into highly digitalized transactions and finding relevant information. Party City believes in investing in seamless experiences because it increases customer engagement.

2. “Curbside pick-up is not an innovative experience but rather an expected norm.” Julie indicated that pick up without leaving the car’s safety has been part of Party City’s roadmap; however, the roll-out was expedited once the pandemic took place. In order to adapt quickly, it’s best to err on the side of action. 

“We chose to have an imperfect experience and just got the experience going to be able to service the customer.” – Julie Roehm, Party City CMO

Innovative outlets can come in the most unexpected and sometimes low-cost ways. To help parents adjust to their new work from home schedule, Party City provided free event itineraries that users can download with items from their inventory that go along with it. With this free asset, Party City discovered that providing free experiences has a direct impact and value on sales. 

“How do we celebrate Halloween while social distancing?“ 

3. We will probably not celebrate Halloween the same way we always have this year, but that does not mean that it can’t be fun anymore. Julie shared Party City’s “thrive rather than survive” approach by planning to continue making memorable experiences during this upcoming holiday with recent customer research outcomes. 

“People want to celebrate. They want to create joy regardless of the situation and the creativity that is there. They will figure out a way to do it. We just want to lean in.” – Julie Roehm, Party City CMO

Party City’s research shows an increasing demand for Halloween décor because it is a way to celebrate while social distancing. Through influencers in their team, they were also able to develop ways of doing Trick-or-Treating without contact by promoting “Trunk-or-Treating” where treats could be accessed from the back of vehicles. Finding creative ways to keep experiences as normal as possible is a fun process by itself and should be approached as an exciting challenge.

Retailers also need to consider creating a scalable experience and selling opportunity past the pandemic including:

• Identifying Creative Social Distancing Trends: By shifting from pandemic distress to an opportunity mindset, companies will find new customer segments with real-time quantitative customer journey data and influencer trends. The pandemic certainly has a daunting effect on both companies and customers, but using customer research findings as the guiding light during these dark times may bring exciting new opportunities and services to the company.
• Safety Impacts Customer Loyalty:  If companies continue to build trust between their customers by actively and consistently demonstrating safety measurements during the pandemic, then the company will be able to usher the customers towards their eventual reopening as they maintain their customer following.
• Retailers as “Experience Consultants”: Because the majority is unfamiliar with the changes in how we consume during the pandemic, retailers can suggest new ways for their customers to experience their products and services. Party City redefined celebrating moments by designing virtual experiences while waiting online, building party planning teams, and opening a new digital marketplace for additional services to complete the new party experience. Forming strategic partnerships that enhance these new experiences also creates new opportunities to innovate.

“If you create a brand purpose and you throw it out or revise it six months later, you probably haven’t arrived in a good brand purpose.” – Erich Joachimsthaler, Vivaldi_ CEO

A massive transformation is happening in almost every business because of the pandemic. Some elements should change, but the one piece that should not change is the brand’s foundation. By positioning your brand with a resilient future-proof purpose, it becomes easier to navigate through the transformation process and to plan the next steps to take.

Watch the full event here:

• 6:40 – Party City transforms from being a goods provider to an experience provider
• 8:35 – Party City aims to provide equal parts of party supplies and equal parts experience
• 12:55 – Listening to the customers and leaning into their demands
• 13:08 – Julie’s “thrive rather than survive” approach to challenges
• 19:30 – On making the customer experience easier
• 23:00 – Julie recommends retailers to provide consulting for their products and services
• 23:23 – Julie shares Party City’s findings of consumer demand shifts and how to work with the information
• 23:58 – A glimpse into what Halloween with social distancing could look like this year according to Party City
• 27:50 – How Julie’s previous experience car experience prepared her for her role in Party City
• 31:25 – The importance of bringing in a customer experience expert to leverage the customer journey
• 36:56 – On accelerating Party City’s roadmap because of the pandemic
• 37:36 – To err on the side of action
• 44: 08 – The role of partnerships in transformations

This segment was part of The Interaction Field Series of our LinkedIn Live Events. Please connect with us on our LinkedIn page to stay updated with our upcoming conversations.

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The 3 Eras of Connectivity  

The first era featured information, with the birth of the internet, Google search, and e-commerce. The second era entailed connections between people through digitized relationships, facilitated by social media and mobile phones. Now, we are in the era of everything being connected – the Internet of Things, blockchain, 5G, Artificial Intelligence and machine learning are all coming to maturity. And never before have all of these major technologies matured at the same time at a rate like this. 

From a World of Walls to a World of Webs 

We’ve been living in a World of Walls for the past 100 years. In this world, competition is based around the business of better, faster, cheaper production. It’s a constant cycle of design, make, sell, use and reuse. Customers are on the receiving end of the traditional supply chain. But in the World of Webs,  uber-disruption creates exponential growth for businesses. In thinking collectively of all opportunities and leveraging value created by interactions, a business or brand can greatly benefit from this re-framing. Consumers become active value creators and, in this world, you gain competitive advantage in the digital space. This shift is ultimately from a world of transactions to a world of interactions.   

Guidelines on How to Compete in the Era of Disruption 

There are four main principles to follow when competing in the modern world – the world of disruption characterized by the connectivity of everything.  

1 – Compete head-on 

Just like you can’t outrun a bear, you can’t outrun disruption. Target well-exemplifies this principle as it invested to build out it’s advantage against Amazon – it’s storefront presence and proximity to consumers. It also added value through exclusive brands and is on its way to beat the disruptor at its own game – in this case, Amazon and its extreme convenience. Target is building online/offline interactions by encouraging online browsing but store buying. 

2 – Identify new ways of creating value 

Another case study – Best Buy embodies this principle as it is competing with Amazon and Target, though it has had an outdated business model for quite some time. So it is leveraging its advantage by not only offering in-store pickup of online orders but also investing in adjacent in other opportunities, such as in healthcare. Also, it is solving for important consumer pain points that disruptors can’t through its Geek Squad, which helps customers with troubleshooting technology.  

3 – Create interactivity that builds the brand 

The many different ways to practice this principle are seen in the evolution of Burberry’s brand. First, Burberry returned to its brand by communicating what it is not – it is not a company that makes trench coats, instead it is about all things British, from art and entertainment to British royalty. It also adopted a millennial mindset – though the ideal target market may seem to be the posh lady with the purse who “does lunch,” it is instead the millennial. Third, Burberry democratized luxury. This is best shown through a quote from the former CEO of Burberry, Angela Ahrendts: “I grew up in the physical world and I speak English, the next generation is growing up in the digital world and they speak social.” Ultimately, as seen with Burberry, taking social media seriously drives commerce and sales. 

4 – Personalize and integrate into people’s lives 

Though Apple is often considered to be the world’s largest retailer, it is second to Chinese supermarket giant, Hema. The key to Hema’s size capture is its fully personalized and convenient shopping experience, with an entire retail value chain completely digitized. The secret? Behind every single interaction, there’s data collection. From the moment you open Hema’s app, it collects massive amounts of data to leverage in personalizing and making more convenient every experience with Hema.   

So while there is a World of Walls that we compete in with other brands in particular categories and segments, there is also a World of Webs – and with it, a whole new world of opportunities. With the combination of technologies that enable interactivity and connections with consumers that are both emotional and functional, the future of business is changing the way we live our lives. 

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In 2013, our CEO Erich Joachimsthaler was featured in a MarketWatch article announcing the rollout of video on Instagram and the importance of this update from a strategic standpoint. Read the full article here.

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In 2013, Vivaldi_ CEO Erich Joachimsthaler met with FiveMileRiver Marketing to discuss the importance of staying on top of the ever-changing nature of consumerism and got to the nitty-gritty of what innovation truly means. Read the full article here.

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The Interaction Field describes an emerging phenomenon that can be glimpsed in a handful of wildly successful companies such as Alibaba, Vitality, GoPro, and LEGO. It can also be found in some traditional industries, from farming to steel to fashion. The one thing that these companies have in common is that they understand and leverage their interaction field. The Interaction Field is a new way of structuring a company that thrives on the participation in value creation by many different groups. A key feature of an Interaction Field company is that it builds velocity to improve an entire industry or solve a larger societal problem and can create a self-perpetuating virtuous cycle. 

Value chain business models are a thing of the past and platform businesses aren’t enough. 

It is clear to us that a new model is needed to create value for all participants within the field and society at large. In his new book, The Interaction Field, our CEO and Founder Erich Joachimsthaler, explains that the only way to thrive as a company is through the Interaction Field model. An Interaction Field company generates, facilitates, and benefits from data exchanges and interactions among multiple people and groups – not only customers and stakeholders, but also suppliers, software developers, regulators, and even competitors. The company creates shared value for everyone in the interaction field, well above and beyond the benefits it brings to its direct users, and everyone collaborates to solve big, industry-wide or complex and unpredictable societal problems. The future is going to be about creating value for everyone. Businesses that solve the immediate challenges of people today and the major social and economic challenges of the future are the ones that will survive and grow.  

The three levels to an Interaction Field:  

Nucleus: The nucleus of participants is typically the company and the customers—anyone who contributes to the core interactions on a regular basis. 

Ecosystem: The ecosystem of contributors is composed of partners in the company’s business activity. Data is shared between the nucleus participants and the ecosystem participants. They are built on relationships that have been established over years. 

Market Makers: These are entities that exert influence and enable the velocity in the interaction field. There are many types of entities that can be market makers, and the types differ from one interaction field to another.   

Reviews:

 “The Interaction Field is a thrilling new way of looking at a successful business model for the future. This fascinating book contains great business stories as well as important thinking today’s CEOs should become familiar with.” 

Vijay Govindarajan, Coxe Distinguished Professor at Tuck at Dartmouth and NYT and WSJ Best Selling Author, Three Box Solution: A Strategy For Leading Innovation 

“Undeniably compelling…a timely source for leaders who want to be relevant in the next decade.” 

Beverly Anderson, President, Global Consumer Solutions, Equifax 

“In this powerful and groundbreaking book, Joachimsthaler clearly demonstrates how platform thinking can be utilized to create shared value and drive new growth for companies and brands.” 

David Collis, Adjunct Professor at Harvard Business School and Author, Corporate Strategy: Resources and the Scope of the Firm 

“A fascinating, practical and insightful book that brilliantly examines the value that platform thinking can bring to companies and brands in today’s hyper-connected world.” 

Sangeet Paul Choudary, CEO of Platformation Labs and International best-selling co-author, Platform Revolution and author of Platform Scale 

“An engaging, insightful and immensely practical book on building strong brands and businesses delivering not just shareholder value but also shared value for companies, customers and society.” 

Vince Hudson, Senior Vice President, Enterprise Marketing Strategy, American Express 

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We all live in an interaction field. When waking up in the morning, most of us check the mobile phone first (about 80 percent of us).[1] Whether you only look up the weather or you go over to LinkedIn or flip through Flipboard to read the morning news, or if you move over to Google and search or check the Dow Futures for the day’s expected swings in the stock market, you generate data about your every move. Your weather app connects to the Nest network that regulates the temperature of every room in your house and sends an alert to the electrical company and other providers who advise you to improve utilization or conserve energy.

As you go through the day, you leave a trail – a digital trail – that consists of data. If you drive a Tesla, 8 video cameras, 12 ultrasonic sensors, and a front radar will track your driving. The toll booth records your time, and when you stop by the grocery store, a geofence captures your arrival. The Starbucks nearby readies your favorite latte as you approach within a few hundred feet based on your mobile phone location – no need to wait in a queue or even pay, just drive up and get your daily fix.

I call this digital trail “interactions.” I see an entire field of interactions, a world of hyper-connectivity where everything connects anywhere and anytime. I don’t mean that we are being tracked and we all should be worried about our privacy now. No, I mean we quickly approach a world where everything connects – companies, brands, consumers, and things. As Douglas Rushkoff says, “We don’t ‘go online’ by turning on a computer and dialing up through a modem; we live online 24/7.” [2]

And it is already happening because of technology. An example is the Internet of Things (IoT). IoT is the technology that connects everything from thermostats, cars, your toaster or refrigerator, lights in your home, the alarm clock, or your Bose stereo system. Social media technologies connect people, and APIs connect different computer systems from different companies.

In the future, the physical world will seamlessly merge with a fully flushed-out digital world. It is called the “Mirrorworld” by Kevin Kelly.[3] Kelly describes a future where converging technologies create a mirror world that sits on top of the physical world, the mirror world being a complete digital replica of the real world. I think this world already has arrived in parts.

In China, 1.1 billion people live and work on the WeChat app. Oh, it would be ridiculous to call this an app. It is more like an operating system. Users rarely, if ever, leave it throughout the course of the day. You can do everything on WeChat including messaging your friends, buying groceries, hailing a ride and even booking a doctor’s appointment or getting married, if you wish. Its stated purpose is “to embed itself in every moment of the user’s daily life, from morning till night, anytime, anywhere.” Already today, WeChat is so interwoven in people’s daily life – you practically can’t do anything without WeChat.

If you are a company or a brand, and you want to grow your business, drive new innovation or build a brand, you need to understand the interaction field of consumers and you need to define the field that is relevant for you. It does not matter whether you are in the grocery business, the fishing business, if you sell laptop computers or accounting software, or if you provide tax services in Deadwood, South Dakota. Yes, there are people living in Deadwood. Here are a few things that I would consider:

Framing the Interaction Field

The first question to ask yourself is, “what am I solving for? What challenges am I solving, and what frictions am I removing in the lives of consumers? What jobs are to be done? What pain points really matter today and over time to consumers and society at large?”

It isn’t helpful here to start thinking about your products, services, or assets and capabilities. You won’t see the opportunities if you think from the inside-out.[4] Luckily, a lot of good sources exist that can help you define the right problem to solve for.[5] There is more than enough written on framing and writing a purpose. A good recent source can be found here: [6]

Define the Participants who Create Value

The next step is to define the full set of companies, brands, institutions and people who create value and solve the challenges, pain points, jobs to be done – or, shall I say, the needs and wants of consumers. I look at interactions in three ways, those in the nucleus. In a platform business model, this would be the two sides of a marketplace like riders and drivers in the case of Uber. In a traditional pipeline business, it would be the company or brand and existing customers. The next level are the ecosystem participants, and finally there are market-makers.

I also define the core interactions that create value between ALL the participants. This helps to define the relevant interaction field. If you are a company like John Deere, your nucleus consists of farmers riding John Deere tractors. They are the core participants. In the ecosystem are participants like crop manufacturers or fertilizer companies that all contribute to the job to be done – to increase the profit per acre of farmland or to reduce water usage. But there are also market-makers who influence value creation in the field – both the actual land and the interaction field. The Department of Agriculture strongly influences it, as do other participants in the food chain including consumers like you and I with our nuanced food preferences, the retail trade and food companies.

Make it easy to participate and share

In this step, I look at technologies and other ways that enable interactions and in particular the frequency and quality of interactions. It is very important to understand how interactions create value, which participants create value and how value is not just captured but shared out to the larger interaction field. GoPro is a camera company that helps amateur surfers make videos of their exploits on the water much like pro surfers do (hence the name GoPro). It invested significantly in technologies that makes it incredibly easy to capture, edit and share videos on the GoPro channel and all major social media networks. Today, the GoPro channel has one of the highest levels of engagement, participation, and interaction among social networks. The higher the frequency and quality of interactions, which I call velocity, the more the participants in the interaction field benefit – everyone shares, and everyone benefits.

Define the value that can be created and how it can be shared

To maximize the interaction field, it is necessary to determine how the interactions in the field create value and how everyone benefits. This requires understanding the role of network effects, viral effects, and learning effects. It is a difficult challenge. This also requires defining proper governance mechanisms between the participants. MoviePass is an example that failed because its service benefited moviegoers but not movie theaters. At $10 a month for a relatively large number of movies, it was a deal too good to be true for frequent visitors, and for participants who ran concessionary stands, but theater owners had lower admission revenues. This is called “negative externalities” and is a good example of a flawed governance mechanism.

Ultimately, the entire system – the interaction field that you choose to build, manage or orchestrate, needs to benefit everyone including companies or businesses, customers and society. It’s about shared value, not just shareholder value.

Conclusion

If we understand the relevant interaction field where a company or brand seeks to create value, we have a much better foundation to solve some of the challenges, problems, and jobs to be done that matter today. There can be goodness in digital, in data, analytics and technology. Interaction fields don’t pigeonhole consumers into segments. They don’t create artificial boundaries or barriers between categories or industries to build monopolies and protect or preserve them. Interaction fields transcend these groupings or clusters of same products or services and set the sights on the interactions that create shared value for everyone.

If you are interested in more information about this approach, please feel free to contact us.

The post We All Live in an Interaction Field appeared first on Vivaldi.

Brand purpose is on everyone’s mind and it has been like that for over a decade now. And there are only two sides you can take. You either think and believe it is a lot of baloney or you believe in the purpose of brand purpose. Evidence abounds that make both sides’ positions and argumentation valid and many times laughable. I love to read about the latest news or quibbles on brand purpose because it always is, in some ways or another, rather thoughtful or rather amusing, or both.

Reading about brand purpose sometimes makes me think of reading a few paragraphs from Marcel Proust’s monumental tome In Search of Lost Time, and his description of the childhood experience of tasting an ordinary madeleine. And so it is with brand purpose. Purpose is so obviously important for any business, just like the daily ritual of dipping a madeleine in tea in France. Yet, the writing on purpose takes on different proportions and qualities, weak efforts of being a bit Proustian, with authors waxing on forever, touting its importance and relevance for our times.

Brand purpose is in a crisis of gargantuan proportions.

There is no need for me to dive into my own opinions on brand purpose or which side I come out; it depends on the time of the day. There is so much wonderful writing on it. The latest article that I read by Tom Roach was so beautifully written – I can only urge you to read it – “The Biggest Lie the Ad Industry Ever Told”:

https://thetomroach.com/2020/06/23/truth-lies-and-brand-purpose-the-biggest-lie-the-ad-industry-ever-told/amp/

The large Association of National Advertisers (ANA) has even launched a Center of Brand Purpose. The center has an objective and it published already a comprehensive essay on, you guessed it, the power of brand purpose for advertisers, agencies and society.[i]

The ANA research and the Tom Roach article might help solve the dilemma for you, in favor of or against brand purpose. If that does not help, you can just choose a third way to think through brand purpose. You can decide not to take sides, but to just say, “SWWC (So What Who Cares), do we really need a purpose at all?” For that discussion, you can follow Tom Goodwin, who struck that conversation on LinkedIn. See the following link, and don’t forget to review the 130 comments made by others following his post:

https://www.linkedin.com/feed/update/urn:li:activity:6683092418981572608/?commentUrn=urn%3Ali%3Acomment%3A(activity%3A6681709910360678400%2C6683092410395852801)

In my opinion, all that vivid, elegant writing and opining on the value of brand purpose is highly shaped by our own perspective – the little box we all live and work in. We write either from the brand strategy perspective or the advertising perspective; we write as consultants or as agency staffers, or as staffers anywhere in the hierarchy inside companies. One side will say that agencies should never touch brand purpose because they merely create a pithy slogan, based on a creative brief, and look at brand purpose from a communications perspective and they really don’t understand the strategy of the business – purpose is so much more.

Consultants get called out because they purport to create purposeful brand strategies, and in support of brand purpose, they cite questionable studies or surveys, or cherry-pick cases studies and anecdotes. They fill PowerPoint presentations by trotting out the traditional examples of TOMS Shoes, Unilever, or Patagonia, or a set of case studies that nobody knows about but that sound really, really good.

What I find astounding is that not a single article or opinion in the last 20 years on brand purpose has approached brand purpose from a broader systemic perspective – the perspective of shared value for everyone including consumers, companies, and society at large. No, I don’t mean a business model to sell more shoes like in TOMS one-for-one model: for each pair of shoes sold, the company gives one pair to kids in developing countries. I am also not talking about the profit with a principle business of the Godfather of purpose, Patagonia, or the company’s crusade over the years or how a large multinational company like Unilever became the Champion of the Earth and was able to differentiate based on sustainability. Shareholders rejoice.

In all of these examples, the company decides to “be purposeful,” and they do something about it, for the most part. That’s a good thing, but it makes purpose an afterthought of the business and mostly a communications exercise. The company is healthy, makes profits, delivers value to shareholders, and, well, of course, there is an opportunity of doing more, so let’s fund something that matters to society. Amazon donates 10 million dollars to support social justice and equity.[ii] Yes, we live in days and times of protests and daily demonstrations, and Amazon donates $10 million. How good of a gesture this is. Real action – not just statements of goodness from the CEO. Right? Well, remember the CEO is worth north of $100 billion. That’s what is called the “net worth” of Jeff Bezos that makes him the richest man in the world, even after his recent divorce. The company is worth over $1 trillion, one of the most valuable companies in the world. I love Amazon, but spending merely $10 million on an important cause such as social justice? Is that living a purpose? The rabid media is quick to report on the latest commitment made by the company and the announcement goes viral. The announcement has helped the Amazon brand.

The problem with this way of thinking about brand purpose is that purpose is an afterthought. Business has been good, consumers have been generous, and shareholders are happy, so let’s pour some money back into society. It is good for business and good for society.

Build an Interaction Field Company NOT a Purposeful Company

There is another way to think about brand purpose. That is to build the purpose of the brand or company in the company’s vision, operating model and operating processes – to build a purposeful business, not a business with a purpose. Here is how.

It starts with platform thinking. Platform thinking is a revolutionary new way of thinking about how markets work – how consumers, companies or brands, competitors and others, interact and create value.[iii]

The traditional way of thinking of markets is in terms of producers and consumers. Producers create value by optimizing a range of activities from procurement, design, manufacturing, branding, marketing to sales and service. The differences in the activities of competitors create their competitive advantage. A BMW becomes the ultimate driving machine or ultimate driving experience relative to Mercedes, Audi and others. The producer creates value for which the consumer is willing to pay a price. This is also called a “pipeline model” or “pipeline thinking” because a company competes by controlling and adding value along with the activities or along the pipeline or value chain. Brand purpose in this model is about adding or enhancing the company’s vision, mission, and values through a purpose. It makes brand purpose an afterthought.

The new way of thinking about markets is in terms of participants who interact to create and consume value. Consumers are not just recipients of value but active producers or participants of creating value, as are one or more producers. Value is created through collaboration, engagement, and interaction between participants.

This new way of thinking about markets gives rise to three types of business models. If there is one group of producers and consumers, the business model is typically called a “platform.” Uber is an example. The participants are riders and drivers who create value which, in turn, is orchestrated by Uber through a set of rules of governance. With Airbnb, there are travelers and hosts. A platform, in this case, is an open architecture with rules of governance designed to facilitate interactions.[iv] With more than one producer and consumers, we typically talk about a digital ecosystem.

A digital ecosystem may be defined as interacting organizations that are digitally connected and enabled by modularity, and are not managed by hierarchical authority.[v] It is a way of providing adjacent products or services by collaborating with other companies or business units. One mechanism to create value is to share data generated on the platform. Uber entered food delivery with Uber Eats, which adds restaurants as an additional participant in the Uber ecosystem, and then built out the ecosystem to include Uber Health, Uber Freight, and Jump bike and scooter sharing, for example. The data and analytics applied to the sheer number of transactions help optimize the platform and ecosystem and create value.

Digital ecosystems change the nature of competition from being firm-focused to being ecosystem-focused.[vi] Strategically, the decision is either to create an ecosystem and orchestrate it or to join an existing ecosystem. The Android ecosystem competes against the Apple ecosystem, a typical example of ecosystem competition.

A third business model is the interaction field.[vii] Unlike platforms and digital ecosystems, an interaction field is not transactional but interactional. It feeds on continuous engagement, participation and collaboration between multiple groups, not just discrete transactions such as another ride with an Uber, or another booking on Airbnb. It delivers shared value to everyone, not just the platform owners or ecosystem partners. It creates new value that solves entirely new problems; it does not just solve existing problems better or more efficiently or merely takes out frictions or pain points in commerce or shopping experiences.

These business models are three examples of platform thinking as compared to traditional pipeline thinking. What is common among these three models is that they are built through three mechanisms: interactions, architecture, and governance. If you would like to read more about these three mechanisms of designing a business, I suggest this source:[viii]

These business models build brand purpose into the governance of how the business creates value. The mechanism defines how interactions create value, how the business captures value, and how it shares out value. Sharing out value to the participants of the ecosystem or interaction field is not a single act of goodness, such as spending $10 million on social justice and equity, but it is part of the daily business operations, part of the operating mindset, and part of the operating model and process.

Brand purpose isn’t about doing something good for society; the traditional way of thinking about maximizing shareholder value and recognizing that society is also important in the end, but it is about building an interaction field company that creates value and shares out value for everyone. Everyone, including consumers, are participants of value creation and also beneficiaries of that value creation.

If we start thinking of brand purpose in terms of designing the business and its interactions in a larger interaction field properly in the first place, we can make sure that purpose isn’t only a communications exercise. I have tried to address this issue in my new book.[viiii]

[i] https://www.ana.net/miccontent/show/id/ii-ana-discovering-brand-purpose

[ii] https://blog.aboutamazon.com/policy/amazon-donates-10-million-to-organizations-supporting-justice-and-equity

[ii] The first use of the term can be found in: Sangeet Paul Choudary (2014), “A Platform-Thinking Approach to Innovation,” Wired.com, https://www.wired.com/insights/2014/01/platform-thinking-approach-innovation/

[iii] Marshall Van Alstyne, Geoffrey Parker and Sangeet Paul Choudary (2016), “Pipelines, Platforms, and the New Rule of Strategy,” Harvard Business Review, vol. 94, no. 4, pp. 54 – 62. Geoffrey Parker, Marshall Van Alstyne, and Sangeet Paul Choudary (2016), Platform Revolution: How Networked Markets Are Transforming the Economy – and How to Make Them Work for You, W. W. Norton & Company.

[iv] Michael G. Jacobides, Arun Sundararajan, and Marshall Van Alstyne (2019), “Platforms and Ecosystems: Enabling the Digital Economy,” World Economic Forum Briefing Paper, February, p. 14.

[v] Michael G. Jacobides (2019), “In the Ecosystem Economy, What’s Your Strategy?” Harvard Business Review, September-October.

[vi] Erich Joachimsthaler (2020), The Interaction Field: The Revolutionary New Way to Create Shared Value for Companies, Customers and Society, Public Affairs, New York.

[vii] http://www3.weforum.org/docs/WEF_Digital_Platforms_and_Ecosystems_2019.pdf

[viii] https://www.amazon.com/-/es/Erich-Joachimsthaler/dp/1541730518?language=en_US

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