We live in a world of exponential growth in connectivity. Regardless of time zone, whether you’re in New York or Calcutta, we all share the same 1440 minutes from midnight to midnight.

In this world, the way we build brands has fundamentally changed.

Brand building today requires more of us than curating and managing. It has expanded its remit and is now the main driver of value through new digital business models. You need to think about it in a more comprehensive way, and consider how you leverage that connectivity. Your focus has to be on more than just creating a better experience. You need to build a better business.

So, how do you evolve your brand messaging, programs, and your brand management in our hyperconnected world?

Beyond a World of Walls

The old branding model was a world of walls. You thought of your brand within a particular category. You were an automotive company, an electricity company, an insurance company, a banking company.

In the world of walls, brand was basically one function along a chain of value creation, from designing, making, selling, and then ultimately proposing it to the consumer. It was driven by competing against others to win. How do I create a perception that we are better, more relevant, or more distinctive than anybody else? How do I create more shareholder value than the competition?

When you think about branding in the world of walls, you think about the relevant differentiation of essentially identical or very similar products. Brands competed to shape consumers’ perception on the basis of attributes.

Take Mercedes, BMW, and Audi for example. These companies are all OEMs – original equipment manufacturers – combining very similar parts, such as tyres or electronics. Branding created differentiation. Audi has technology that makes you feel smart. Mercedes expresses a sense of luxury, class, and exclusivity that makes you feel successful. BMW positions itself as the ultimate driving experience.

In a linear model, every function – R&D, design, manufacturing, quality, manufacturing, marketing, sales – added a little piece of value. And, because BMW did this so well, we were willing to pay a premium for a car because of its perceived value.

It used to be understood that the more advertising you bought, and the more product you distributed, the more you sold. In this model, the objective of a car company was to sell product to a dealer. Once the car was on the dealer’s lot, the car company’s role was over. In turn, the dealer was primarily interested in shifting inventory by whatever means necessary. This, in effect, undermined the brand story.

To a World of Webs

Today, those walls have disappeared. Instead, we live in a world of webs.

Relevant differentiation is only important if you can attain it. When consumer behaviour shifts and you’re no longer able to easily define your category, this becomes more difficult.

This doesn’t mean that the old way of brand building is completely irrelevant. We still need to manage brands. We still need to provide guidelines. We still need communications and advertising. However, we also need a change of emphasis.

Let’s return to our example of the car industry. Do consumers still buy cars? Or are they seeking to solve a problem of mobility? If we agree it is the latter, they can shop a number of categories to find mobility solutions. Zipcar, Uber, and Lyft all offer alternatives to car ownership that might be more affordable and more convenient.

In this world, what brands need to do is work to solve real problems.

Today, using a new brand building model, Tesla has created a company that is more valuable than Mercedes, Audi, and BMW combined. Tesla isn’t just another relevant differentiated product or car company. And the brand wasn’t built solely on advertising, a better experience, or better digital marketing. They have built the brand in a fundamentally new way.

In Tesla’s world, while attributes are still important to the brand, they play a minor role when compared to the power of interactions. They have leveraged connectivity and collaboration to solve wider industry and societal problems, and change consumer expectations. Every mile Tesla drivers cover contributes to their cloud based autopilot system and the safety of every vehicle in the network. Every charging point increases the viability of electric, and every domestic solar installation increases renewable capacity.

As a result, they are able to challenge BMW’s claims to the ultimate driving experience, Audi’s technological superiority, and the luxury of a Mercedes. Instead of being a brand that talks about sustainability as a piece of communications, it looks at solving the problems of sustainability as a business model. It isn’t that other car companies no longer produce great machines to drive, but that the perceived value has fundamentally changed.

It is this shift, exemplified by Tesla, that means better communications, experiences, or advertising alone will not cut it anymore. It’s why we need to talk about a better business model, one that leverages the connectivity and interactivity that exists globally in order to build brands.

Connectivity Demands Connection

In today’s connected world, you have to build your brand in direct relationship with the customer. The power of these new business models is in the direct, one on one relationships they create with the consumer.

Value is no longer created linearly. Instead, every additional thing you do, every additional connection in the network, multiplies and creates value exponentially. If you look at the ten most valuable companies today, eight of them have embraced digital business models.

There are three distinct ways to create value and each poses a very different brand challenge.

Digital Interfaces

In this model, a single company delivers on a single need and a single value proposition, through a direct relationship. Using data, technology, and analytics, they are able to optimise that relationship.

With a direct interface with a consumer, you’re no longer defining the brand and pushing it out. The brand becomes the interaction, and the consumer learns about the brand through their interaction with it.

One company doing an outstanding job of this is Domino’s. The original value proposition was a quick, convenient solution to your hunger. Your pizza was delivered in 30 minutes and if it wasn’t, you got it for free.

Domino’s has optimised that value proposition using a digital business model to build the brand, rather than through communications or more promotions. At Domino’s headquarters in Chicago, half of the 800 people employed work on nothing but the data, analytics, and technology that drives the business model.

From simplified ordering via the consumer’s voice assistant, to pre-payment and pre-tipping to ensure contactless delivery, they have optimised the delivery process and made ordering effortless. Domino’s consumers learn about new offers and functionality through their phone app, rather than through advertising.

This business model is paying off in driving value for the company and shareholders, with stock appreciating more than Google, Facebook, Apple, and Amazon.

It’s a similar story at Starbucks, a $25 billion dollar company where 70% of revenues come from automated mobile ordering. Interactions, such remote ordering enabled by geo-fenced notifications, prompt commuters to grab their morning cup of coffee on the way to the office from the subway station. Automatic charging creates a frictionless experience and the busy worker’s coffee is ready for collection as they arrive. In return, Starbucks knows not only their customer’s preferences, but also their daily behaviours and movements. That’s the power of learning that comes from a digital interaction model.

Platform Ecosystems

In a platform ecosystem, a single company builds the brand around a network connecting several companies.

Take, for example, Airbnb, a company that matches travellers with people who have accommodation. In order to deliver that value proposition, they connect users with ancillary services, such as insurance and cleaning services, through an ecosystem of suppliers. Airbnb captures data from each of those interactions to optimise their services. They are now a $100bn company, without having to own a chain of hotels like Marriott does.

Another example is Nike. Nike has taken a commodity product and created a belief system around athleticism and performance. Even though Nike has great flagship stores, their experience is about enabling people to solve their problems everyday. With an ecosystem of technologies that enable the everyday athlete, the brand is now bigger than just the shoes or apparel. It’s about how you can measure and manage your fitness on a daily basis, and representation for all athletes.

The company is worth around $45 billion, with growth of 19% in a downturn.The direct to consumer business is now worth around $15 billion, a growth of 32%. Those are the numbers you can realise, when you shift your thinking to how you can create a business model that connects with consumers directly.

Interaction Fields

An interaction field is a network that creates value around a core functionality. That value creation is exponential and oftentimes isn’t asset heavy or requiring significant investment. It’s about people in connection. The more people participate, the more value is created.

In an interaction field, our traditional understanding of brand architecture falls apart. Branding becomes a complex thing, with a family or ecosystem of sub-brands around a nucleus.

This is where Tesla sits. Part of Tesla’s value is created in the factory, but that’s not the value that makes Tesla such a runaway success. That value is created through interactions – the more drivers and charging points that are in the network, the more valuable it becomes.

Another example of an interaction field is the Chinese company, Ant Group. At its core Ant Group is the AliPay payment model. Based on their knowledge from this source interaction, or nucleus, AliPay have been able to develop algorithms, analytics, and technology that drives new product development. They have bolted on other networks and systems, including a loan capability, a wealth management capability, and insurance capability. It is a complex system, almost a platform of platforms, but all powered by the AliPay interaction.

Building the Brand

So, how has the model of branding changed in this world?

In the traditional model, you defined what the brand stands for. You created a purpose and a brand essence, and defined a set of core elements. You brought all of this together to create your positioning and a value proposition that appealed to your target audiences. Then you created communications that you believed would prompt consumers to act.

As we’ve seen, to build strong brands for our new digital ecosystem, you have to start from an understanding of the problems you are really solving for. From there you design and build the brand interactions you need to get consumers to engage with the brand and, ultimately, become so invested that they help to create shared value.

We can examine these four steps for building powerful brands by looking at one of the world’s best known, and loved, brands – LEGO. LEGO has a traditional brand strategy. In this brand system, all of the elements of the brand ladder up to deliver on their brand purpose – the Joy of Building and Pride of Creation.

However, new thinking is what has driven the brand forward and made it one of the most profitable companies in the world. Those little bricks create nearly $4 billion dollars in revenues a year, of which one third is net profit.

LEGO has tapped into their pride of creation promise and have created the opportunity for its users to share their creations from existing building sets online. The community upvotes the creations they would most like to see LEGO offer as a new set. If a user’s idea gets 10,000 votes, LEGO creates it and gives the originator 1% of the revenues in compensation. This encourages creators to promote their idea and, by extension, the brand. This authentic and organic social influence is what makes Lego the number engagement brand in the world.

1. Framing

Brands need to know the true consumer problem they are solving.

If you think about Lego from a traditional linear business model perspective, it is a toy company that fits into the market relative to Mattel, Hasbro, and other toy companies. While that framing might be still helpful, Lego has thought about their business from a very different perspective.

When they dug into the problem they were solving for, what they found is that the development of a child’s creativity and problem solving abilities isn’t just about play. It is about a particular type of play – free and fluid play that represents shared quality time with an adult

2. Designing

If network effects are the powerful driving force behind brand building, and the more people who participate the more valuable the brand becomes, brands need to design the interactions, architecture, and governance that enables those effects to emerge.

Continuing with the Lego example, as more people are motivated to create and share their ideas it increases both the number of desirable Lego sets available to buy and the number of people engaged with the brand.

Innovation also benefits as it is no longer confined to Lego HQ. It can happen anywhere in the world as the brand empowers consumers to innovate on behalf of the company. By designing the interaction architecture and governance, you give consumers a stake in the brand.

3. Building

These are the activities that prompt consumers to interact with the brand.

Going back to Lego, they’re not trying to create another toy to hand to a child. The problem they are attempting to solve is one of how that child spends their time, and how they interact with the adults around them.

These are the motivations behind the activities the brand builds and promotes. What goals, activities, and interactions can they create that will engage both children and adults in the Joy of Building and the Pride of Creation?

4. Sharing

In this model, the creation of brand meaning is now shared with the consumer. This creates both shared value and brand gravity.

It is interactions, like the Lego Ideas platform, that have the power to transform the brand. It creates an experience that draws in other consumers and communities through word of mouth. The brand no longer needs to be communicated to consumers when they are active participants in it.

Final Thoughts

The world has changed so much since the first iteration of the internet built a network of information in the early ‘90s. Just as the emergence of the social web in 2009 changed how we build brands, so will the Metaverse as technology continues to converge and mature.

As the internet evolves, brands need to shift with it. We need new skills, new concepts, new frameworks, and new business models to succeed. However, it is the connectivity that challenges everything we used to know that also allows brands to be engaged in a process of continuous education. Interaction fields enable us to learn, unlearn, and relearn – about the market, consumers, competitors, and opportunities for collaboration – and help us solve for the problems we face as individuals and society.

For this to work to succeed, brand needs to be given a strong influence in building the business model. CMOs need to take their seat at the board table and, as a platform thinking company, we would love to be part of your conversation.

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I understand platform thinking to be a revolutionary new way of thinking about how markets work – how consumers, companies or brands, competitors, and others, interact and create shared value. The traditional way of thinking of markets is in terms of producers and consumers. Value is produced upstream by producers and consumed downstream by consumers. Producers create value by optimizing a range of activities along the pipeline or value chain from procurement, design, manufacturing, branding, and marketing to sales and service. The activities create actual differences between products or differences in perceptions, which is where branding comes in. BMW is an example of a strong brand that optimizing the value chain activities, engineering, technology, and design. It’s well known to be the ultimate driving machine or driving experience compared to competitors such as Mercedes and Audi. The producer (in this case, BMW) delivers value for which the consumer is willing to pay a price.

The new way of thinking about markets is in terms of many participants who interact to create and consume value. Consumers are not just recipients of value, but active participants of creating value, and so are one or more producers. Value is created through collaboration, engagement, and connection between participants. Airbnb is a platform that brings together guests or travelers, hosts, property managers, providers of cleaning services and many other producers; for example, manufacturers of toiletry products or providers of financial services for hosts. Everyone can be a producer and consumer of value. Travelers consume value but also create value by providing travel preferences, by rating hosts and posting reviews which helps Airbnb to better match demand and supply. Airbnb orchestrates value creation. Value is created through interactions between all participants which builds the brand.

How to define a brand?

Platform thinking requires a reassessment of how to define a brand and how to build a brand. A brand is what you stand for in consumers’ or customers’ mind. That’s how my co-author David A. Aaker and I defined a brand in the Brand Leadership book in 2000.[i] A brand then is defined by the associations that consumers hold in their minds linked to a name or logo or any other tangible element. The stronger the linkages, the stronger the associations that can be anything – including attributes, feelings, emotions, thoughts, experiences, even a gesture – the more a brand influences preference, liking and purchase.

In the platform world, though, defining a brand in this way is no longer sufficient. It is also necessary to define how a brand connects with every participant in a network. I call this network an “interaction field” in my new book because the value of connections, and hence the power to build brands, is determined by interactions in a larger field that a brand needs to define for itself.[ii] The more frequent the interactions, the more they influence perceptions. Twenty-two percent of consumers shop on Amazon once a week, and 79 percent shop at least once a month.[iii] That’s a lot of frequency. The quality of interactions matters too. It is about how the interactions reinforce the meaning of the brand. Amazon stands for convenience. As a Prime member, I get most deliveries within a day if not within the hour. Every purchase strengthens or reinforces the meaning of the brand in my mind. It is also of value to me and I get more value from Amazon because Amazon marches on to set the perceptions and expectations for speed of delivery for everyone else. Value increases as my engagement and interaction with the brand increases. The interactions are reciprocal. The brand, then, is also the sum of all the interactions that have meaning, create value, and are reciprocal.

As a brand strategist, it is necessary then to think of a brand in terms of its identity, as I wrote many years ago. Identity is not limited to what you stand for in terms of attributes or qualities, values, and beliefs, but also how you behave, collaborate, and/or interact with participants in an interaction field. A brand is not just a noun; it is also a verb. Neil Parker said so well, “A brand lives in the moments of action and interaction between your business and the world around it, and great ones generously invite people in to contribute.”[iv]

How do brands become strong?

Clearly, brands become strong because consumers learn to understand what a brand stands for over time. This happens through the usual mechanism of communications, behavior, and experiences. The more differentiated a brand is on relevant attributes, feelings, emotions, and other brand associations, the stronger a brand becomes over time. See, for example, Kevin L. Keller’s brand resonance model.[v]

But there are three additional effects that are typically not discussed in branding. These three effects have a powerful impact on building strong brands in the platform world. They are network effects, virality and learning effects. Let’s look at each of these effects one by one:

Network effects kick in when a product or service becomes more valuable as more participants or people contribute to it. Think Airbnb. The more Londoners offer their spare rooms, stately homes, or canal barges to travelers through Airbnb, the more valuable the service becomes—greater selection, increased availability, more variety and choices. It also affects the brand.

Airbnb wants to create a world where you belong anywhere and where people can live in a place, instead of just traveling to. That’s why its slogan is: belong anywhere. Ask yourself – who builds the Airbnb brand? The travelers and hosts do – those Londoners who offer their spare rooms. Those hosts also reinforce key attributes such as selection, availability and variety. There are over 650,000 hosts who build the brand by offering over 6 million ways to stay or “to belong.” Add to this the millions of Airbnb travelers who interact with hosts and Airbnb, and you have a very powerful brand-building machine through network effects.

Second is virality – as people find value in the offering, they voluntarily become advocates for it and encourage others to join. Clearly, there is a lot of virality on Airbnb – how did you hear about Airbnb the first time? But let’s look at another example: GoPro is the action camera that has a commanding market share among extreme sports enthusiasts, surfers and snowboarders. That Hero 8 camera is so good, it doesn’t need much advertising. GoPro benefits from the viral effect because it makes the owners of GoPro cameras actively participate in brand-building. You can witness this when taking into consideration GoPro’s campaigns encouraging surfers to share their pictures or videos on the GoPro channel. What’s growing like wildflowers in springtime in the social media world lately? You name it – TikTok – the short-format video site. GoPro can use this new channel to show off its best content which creates GoPro impressions and views with viewers and builds the brand. Some of those share the videos and some even want to shoot content like you can only do with GoPro – effectively building the brand and translating into more sales of cameras.

Third, as the brand applies human knowledge and artificial intelligence to the great amounts of data being collected as part of its business, the learning effects emerge – that is, the more information the brand or product gathers and synthesizes, the more valuable it becomes. Airbnb also benefits from the learning effect as it learns about hosts and travelers. Here is another example. Tesla cars collect more data through sensors and cameras than other manufacturers which enable machine learning in its Autopilot software which increases driver safety. Tesla gets smarter as you drive and becomes even smarter the more Tesla drivers there are. In short, Tesla drivers are the active participants in building the Tesla brand. It makes Tesla safer, which is an important attribute, often called a point of parity association in building an automotive brand.

We believe that the combined power of network effects, viral effects and learning effects on brand building is sadly ignored in most discussion of building strong brands today. These effects will become more important for brands, as I write about in The Interaction Field book.

If you really want to build strong brands today in a world where everything connects, where technologies from machine learning to social media and artificial intelligence to cloud computing have converged and reached relative maturity that enables the platform world, also called a platform economy, then you must enhance your ways of thinking about brands, and build your expertise in platform thinking.

[i] David A. Aaker and Erich Joachimsthaler (2000), Brand Leadership: The Next Way of How to Build Strong Brands,” The Free Press, New York. Republished in 2009, Pocketbook, London.

[ii] Erich Joachimsthaler (2020), The Interaction Field: The Revolutionary New Way to Create Shared Value for Companies, Customers and Society,” Hachette Book Group, PublicAffairs, New York, forthcoming, September 15.

[iii] https://www.statista.com/forecasts/1011650/shopping-frequency-at-amazon-in-the-us

[iv] Neil Parker, “Your Brand is Not an Asset. Think of it as an Action Instead,” Inc Magazine, August 9, 2019.

[v] Kevin L. Keller brand pyramid, summarized here: https://medium.com/@keatonhawker/kellers-brand-equity-model-what-it-is-how-to-use-it-84e42d562299

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Most businesses today focus on competition and disruption instead of collaboration, participation, and engagement. They focus on transactions instead of interactions. They seek to optimize or extract value rather than share it. They build assets and thrive on enormous scale, huge distribution networks, and brand recognition. But then along comes a rival that doesn’t care much about your brand and your other assets, and it either rushes past you or mows you down.

In The Interaction Field, Vivaldi CEO and professor Erich Joachimsthaler explains that the only way to thrive in this environment is through the Interaction Field model. Companies who embrace this model generate, facilitate, and benefit from data exchanges among multiple people and groups–from customers and stakeholders, but also from those you wouldn’t expect to be in the mix, like suppliers, software developers, regulators, and even competitors. And everyone in the field works together 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 immediate challenges of people today and also the major social and economic challenges of the future are the ones that will survive and grow.

The Interaction Field is now available to order wherever books are sold.  

Amazon | Barnes & Noble | Bookshop.org  

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It is easy to calculate the network effect.[ii] One of the first attempts to quantify the network effort was Metcalfe’s Law, which says that the value of a network is proportional to the square of the number of users (n^2). So, if you have 10 users, the value the network provides is 10^2=100. That is, you can facilitate 100 distinct inter-user connections.

Another one is Reed’s law, which suggests a more encompassing way to evaluate the network effect. Reed contends that the value of your network is how many unique “group connections” your members can form, representing by the power of two (2^n). So, if you have 10 users, that same group of people has the power to 1,024 unique subgroup connections (2^10=1,024).

While it is easy to calculate some form of network effect, it is a lot harder to actually create it. For that, you need gravitational pull – that is, you need to get consumers or users to actually connect, to engage, and to interact.

This is such an important subject, I had to separate my research and thinking into two chapters of the Interaction Field book, Chapters 4 and 7. My attempt in writing these chapters was to provide guidance for how to create interactions in an interaction field that drives the network effect, but also learning and viral effects.

I reviewed the existing scientific evidence of how participants join a network, or an interaction field in the fields of sociology, behavioral economics, and psychology. In Chapter 4, I speak about the role of framing and branding. Clearly, this is an important subject that I have worked on for more than 25 years now. For me, framing is all about branding; it is setting what we like to call, the “frame of reference”.

A frame of reference can be industry-, category-, competitor- (see Avis, “We Try Harder”), or consumer-specific. Typically, I prefer consumer-specific framing to answer the question, “What do you solve for in the lives of consumers?”

In a way, framing is all about defining the contours of the interaction field, which means what you are solving for in the cultural context, in the lives of consumers, or where and how you fit in. The methodology for that has been covered already in my previous book, Hidden in Plain Sight, where I discussed how to capture more of the 1,440 minutes that we all live from midnight to midnight, and how to intersect with more of those minutes in the lives of consumers.[iii]

Let’s go over this with an example from The Interaction Field book. In Chapter 4, I talk about the role of free play, fluid play, and social play that kids and parents like to engage but have little time for. LEGO calls it the “play gap” and LEGO wants the world to close that gap, preferably through LEGO play experiences. In other words, it wants to capture the minutes or hours in a day where kids or adults engage in a certain kind of play, free play, together. That’s the frame of the interaction field.

LEGO also defined a brand which can be captured by the sentences: “joy of building,” “pride of creation,” and in terms of how LEGO connects with consumer. LEGO Ideas is one illustrative effect.

LEGO Ideas invites parents and kids to submit their creations that were built using an existing LEGO set. If a creation wins 10,000 votes, LEGO will consider producing it, and if it is successful in the marketplace, it pays out money for every set sold to the creator.

The next step is to design the interaction field in such a way that there is gravitational pull toward the nucleus. There are seven factors that need to be taken into consideration in designing an interaction field. These factors not only guide how to design the interaction field, but also what to design, who to design it for, and why. Let’s go through the seven factors one at a time.[iv]

1)   Motivation

In designing an interaction field, it is important to know who the design target is. What the strategist needs to look for are consumers who have a relatively large degree of cognitive surplus.[v] These are people who not only have time and motivation to play with LEGO and create new LEGO sets, for example, but also those who have the available time to engage in thinking beyond the tasks of everyday life. These are the people who use technology like social media and repurpose their available time to engage with others through these means.

The common mistakes that designers make is to focus on personas because design thinking routines have told them to do so. Personas serve the purpose of creating UX, UI, or CX – not to create gravitational pull. Alternatively, they may focus on influencers or micro-influencers because they think that they will influence others. I don’t think these standard recommendations are always the best solution.

2)   Ties

The second consideration is related to the ties between and among the participants in an interaction field. LEGO, for example, needs to look not only at the kid-parent dyadic which is considered a strong tie, but also between the kid and classmates or other kids in the same grade, usually referred to as “weak ties.” This follows from work by sociologist Mark Granovetter which has shown that in order for an idea to go viral, it isn’t the strong ties that are best, but the weak ties that help the spreading of an idea, ultimately influencing the network effect. This finding is also supported by the concept of “Three Degrees of Influence” by Christas and Fowler, which suggests that influence only lasts three degrees – the impact on friends (one degree), our friends’ friends (two degrees), and the friends’ friends’ friends (three degrees).

3)   Collective Intelligence

The third factor has to do with the shared intelligence between individuals. According to this research, a person is excitable (by others!) depending on the proximity and density of one’s neighborhood. LEGO successfully launched the Women of NASA set that featured minifigures of four prominent women of NASA: astronomer and educator Nancy Grace Roman; computer scientist and entrepreneur, Margaret Hamilton; astronaut, physicist and entrepreneur Sally Ride; and astronaut, physicist and engineer Mae Jemison. The success of this LEGO set is due in part to the fact that there are a huge number of weak ties between large group experiences, scientists, physicists and astronomers with shared collective intelligence.

4)   Law of the Few

This law has been discussed many times. It has been popularized by Malcom Gladwell who studies people who are influential. He identifies “carriers” of an idea that cause 80 percent of the “infections.”[vi] There are three types: those who have a massive social network with many acquaintances (connections); those who boast about ideas they love and who are highly contagious (salesmen); and those who gather information, serve as a resource for others and share knowledge (mavens). The strategists who seek to build gravitational pull need to make sure that the interactions, architecture, and governance is designed such that it attracts these “carriers”.

5)   Stickiness

This factor is about the message itself. It matters what is being shared; what is the message? Four women of NASA certainly is a message that remains in people’s mind, especially other scientists or aspiring scientists. It is also a message worthy of being passed on. Would another launch of a rocket in space be as powerful of a message? I doubt it. The key is to evaluate carefully what interactions create frequency and what interactions create the quality of interactions, thus creating meaning for the participants.

6)   Context

Another factor is the context or environment in which an interaction takes place. One of the well-researched areas are the Dunbar numbers or Dunbar’s law. It suggests that interactions that create virality and power the network effect often distribute in relatively small groups. Professor Dunbar suggests that we each have 5 people who are like family, 15 intimates, 50 acquaintances, and 150 totally familiar that we can interact with on a regular basis. Beyond these approximate limits, people don’t do well.

Context matters. A strategist who seeks to create gravitational pull needs to design the interaction field in such a way that some interactions tap into the inner sanctum of five people; others tap into the 15 intimates and so on. This requires careful analysis and understanding of the design target of an interaction field because of what is typically known of users or consumers.

7)   Social Currency

The final factor and perhaps most important factor is social currency. This factor explains one of the most important aspects of gravitational pull. It is not just about the motivation to connect and interact in an interaction field. Nor is it just the ability to interact in particular way, as a “carrier” for example, but it is also about whether a consumer or user or why a participant takes advantage of the opportunity to interact, to share, connect or collaborate in an interaction field. In over 50,000 interviews since 2009, I have analyzed this phenomenon at Vivaldi Group, the business transformation firm I am working at. My conclusion is that there are a set of individual benefits that incentivizes a participant to take the opportunity to interact. One benefit is personal identity development because it can enhance a person’s self-image. A second benefit is creating a sense of belonging or kinship with others (social identity). Another is expression. Think of the GoPro surfer who makes a social statement about surfing. Fourth is conversation, that striking an emotional beat. Fifth is the affiliation, the motivation to seek social connections or relationships. Sixth is utility. People like to interact to be helpful, to teach each other, and to solve problems for each other. Finally, it is about information. This is a motivation to take an opportunity of sharing because people like to discover new things.

Conclusions

In researching and creating these principles of gravitational pull, I was hoping to encourage the interaction field strategist to design interactions, an architecture and governance that provide effective guidance in building effective interaction fields, by creating a gravitational pull toward the nucleus. This will lead to value creation because of the network effect, virality and learning effect. In my next blog, I will write about the four steps to create the gravitational pull. If you want to read about them, please consult The Interaction Field book, pages 129.[vii]

[i] Erich Joachimsthaler, The Interaction Field: The Revolutionary New Way to Create Shared Value for Companies, Customers and Society, PublicAffairs, New York, 2020, pp. 80 ff

[ii] https://a16z.com/2018/12/13/16-metrics-network-effects/

https://www.nfx.com/post/network-effects-bible/

[iii] Erich Joachimsthaler, Hidden in Plain Sight: How to Create Your Next Big Growth Strategy, Harvard Business Press, Boston, 2007.

[iv] Erich Joachimsthaler, The Interaction Field: The Revolutionary New Way to Create Shared Value for Companies, Customers and Society, PublicAffairs, New York, 2020, pp. 80 ff

[v] Clay Shirky, Cognitive Surplus: How Technology Makes Consumers Into Collaborators, Penguin Random House, 2010.

[vi] Ibid, Joachimsthaler, pp. 127

[vii] Ibid, Joachimsthaler, pp. 129 ff]

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The COVID-19 pandemic and its global consequences for social and economic life keep the world in suspense for over two months now. While the overall dimensions of the crisis change on a daily basis, there is immense pressure on politicians to stabilize the situation. Yet, consumers also expect companies to contribute to a solution. Since many industries face massive restrictions of their usual working conditions, it requires pragmatic but precise measures to navigate a company’s brands through the crisis as unscathed as possible.

We at VIVALDI are convinced that both thoughtful communication and authenticity take top priority during such a time of crisis to avoid irreversible damage of a company’s image. But what are the right actions to take? And how can all relevant stakeholders be addressed comprehensively – from customers to employees, investors and business partners?

To start, not reacting at all to the crisis, ignoring instructions or possibly neglecting a stakeholder group can cause lasting damage to a company. Secondly, when conceiving and developing corporate actions of crisis management it is crucial to remain true to a company’s values and purpose.

What exactly is a brand purpose?

The brand purpose describes a company’s motivation, the “why” of what they are doing or their reason to exist apart from doing profitable business. An approachable purpose has to be focused on the core competencies and actual capabilities of the brand. Concurrently the needs and wishes of the customers as well as socially relevant topics and areas of responsibility must be addressed and combined to a comprehensive ambition. It’s a statement of belief and pursuit, the concrete formulation can range from an abstract to a concrete strategic goal of a brand, depending on the industry, customer structures and the company’s culture. In a comprehensive and actionable guiding principle, the purpose can be complemented by a vision, a mission and corporate values.

Figure 1

So, how does that help to prevent your business from the consequences of a global pandemic? 

1. Brand purpose as a guiding principle in crisis management

A strong, continuously cultivated purpose shapes a strong brand statement, that provides a useful basis for credible crisis management and the opportunity to position oneself as a doer in this extraordinary situation. Therefore, actions taken to cope with the virus that reflect a brands purpose will be perceived especially authentic and therefore more effective. Our CEO Erich Joachimsthaler emphasizes that “Brand values are no longer just communicated; they are delivered and experienced.” So, following this principle and really bringing to life a company’s values during these times should be the overall focus when approaching your stakeholder groups. Inversely, addressing these values throughout the process of crisis management will perspectival strengthen the purpose. That again offers companies to pursue a sustainable growth strategy even within their limited possibilities during a crisis state. For some concrete inspiration and best practices read our recent post on outstanding positive examples of reactions to the COVID-19-crisis.

2. A Brand purpose strengthens customer relationships

Studies prove that a strong purpose enables brands to build deeper bonds with their consumers. Looking towards the worldwide challenging situation and it’s not even fully predictable impact on economy, it gets obvious that now is the time to strengthen those bonds wherever possible. Many brands underestimate that aspect and thus risk to lose the relationship to their customers. Putting your customer in focus therefore opens up the opportunity to come out of the crisis ahead of competitors instead of just surviving it. That is why we highly recommend shifting remaining resources and marketing spend into long-term marketing and brand-building activities, which leads to our third aspect:

3. A Brand Purpose keeps strategic goals in sight

Following a dedicated brand purpose demonstrates that a company does not only understand and address the world we are living in right now, but also aims for goals and customer needs that must be faced in the future. That’s why, no matter how extraordinary the situation might be, now is also the time to reconsider strategic goals and use them to guide companies and brands though an unstable environment.

If you are interested to discuss how you can elaborate your brand’s purpose or to implement it in a comprehensive concept contact us via email or give us a call at +49 1522 9230 752 for Germany/ Europe and +1 212 965 0900 for the US.

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As millions of learners had to adapt to new ways and technologies crossed the chasm to mass usage, it quickly became apparent that there is no going back to the world as it used to be. Covid-19 is changing education in profound ways, just as in its time the Black Plague changed the world.

A thread became popular on Facebook, amid all the worries that the kids will fall behind. “What if, instead of falling behind, our children ended up ahead?” The thread generated quite a bit of controversy, as tired parents wrote about the impact of loneliness and unprocessed trauma, and yet it kept being shared. Just as those affected by the Black Plague would be startled to learn about the new, flourishing culture that the Renaissance was to bring about, today’s educational companies, institutional leaders, educators and parents may have in front of them, in the lingo of Erich Joachimsthaler, opportunities hidden in plain sight. In many ways, Covid-19 simply accelerated changes already under way, in a world of platforms and multifaceted learning. What the crisis did is dramatically alter the technology development curve, moving technology usage to mass and creating new opportunities poised for exponential growth. What are some key vectors of change likely to shape the world of education after the crisis?

1. A New Wave of Learners

As expectations of a 2021 baby boom have become commonplace, a new generation of learners may be about to enter the scene, dwarfing both baby boomers and millennials. This will create new demand for education, in a world where transition to middle class in many emerging economies was already creating considerable demand and strain on the system. It may be next to impossible to meet this growing demand for education through the old model, highly labor and capital intensive. Economies that were already under strain to devote resources to education may be unable to continue doing so as resources continue to be diverted to healthcare and other priorities. This may concern state-run education in many countries of the word, but also private institutions that rely on individual giving through donations and tuition, where past rises increasingly seem unsustainable. New learning models and business models will need to be found.

2. A Learner-Centric Education

This new wave of learners will have the power to pull the blanket to its side in a dramatic way, shifting away from learning organized around educators and institutions to a learner-centric model. The shift to learner centricity was well underway even before the crisis, with players who missed it increasingly losing ground, and it is by no means unique in the big scheme of things – it is no different from the shift to patient-centric healthcare, that Michael Porter analyzed already many years ago, or shift to customer centricity across so many different industries and players. In education, this shift is likely to be accelerated now that millions of learners are called upon finding a way to learn that works for them, with little support and (perhaps with freedom from?) oversight by teachers and educational institutions.

3. The Empowered Learner

As learners increasingly yield more weight in assessing how education is structured and delivered, they will be able to shape things in unexpected ways. Specifically, social media is split between reports about kids bored and disengaged, and those taking ownership of their learning process – by doing creative projects after school-mandated work, finding and cultivating new interests and pursuing their curiosities as they have the time to go deeper. It becomes apparent that learning does not have one flavor or a one size fits all model – but rather can, and needs, to be bent and adapted to everyone’s individual needs and interests. Just as the Renaissance brought about a newly well-rounded individual, we may now be at a time when basic encyclopedic knowledge yields little practical value. Instead, an undying curiosity and an ability to dig deeper, willingness to engage with complex problems that have no easy answers, may be more conducive to success in life, rather than knowledge of facts that have no practical application.

4. New Educational Outcomes – the End of Testing?

Indeed, the very notion of the outcome of a successful education may be changing. Forbes already called the Covid-19 time the official end of the testing era. Indeed, there are many practical problems around testing that create immediate headaches for institutions, educators and parents – will the students complete requirements for their current year? Will they be tested? How will gaps be addressed? Will they simply be moved to the following year, negating the purpose of testing? Will they have to complete this year in the next  academic year? With so many unclarities, we might expect that students come back vastly different levels – in higher ed, they may have had the time to explore a favorite research subject, neglecting required coursework. In K-12, some may have spent endless hours reading, while others chose to dive into coding and robotics, leading to dramatically improved STEM skills. It may prove challenging, as a society, to bring everyone back down to the same line in the sand across subjects, as required by testing. This will mean an increased opportunity for adaptive learning systems that allow learners to move at their own pace – going faster in some areas and slowing down in others until mastery is attained.

5. The Power of Data

However, the need to measure outcomes will not go away – indeed, technology can serve the need for deeper measurement than afforded by high-stakes testing at a discrete moment in time. Today’s technologies create an opportunity for measuring student engagement and progress throughout the learning process rather than at the end of it – studying correlations between various factors (from time to login to time spent on each section etc.) that ultimately allow for an understanding of patterns leading to success. As the use of technology becomes more prevalent, there may be no need to submit students to periodic testing that they resent – but rather measure their progress along the learning journey, allowing to raise flags and address problems as they arise. Ability to interpret and make usable Big Data that is generated by educational technologies will continue creating untapped opportunities – especially as a standard way to store, interpret and present the data provides a much better chance for cross-market comparison and insights extraction, favoring the emergence of platforms in EduTech.

6. Technology Adoption Curve

The opportunity for a platform to emerge that puts together all different market participants to leverage data that improves performance across the board is now becoming a more viable proposition as technology adoption has made a huge leap. Indeed, received wisdom that learning can only be done through face-to-face teaching is quickly turning on its head – the current experiment became a de facto forced technology training for reluctant millions. Yes, in-person interactions will continue to be missed, but necessity is the mother of invention – it becomes increasingly apparent that technology can enhance and transform learning in profound ways.

7. Learner Engagement

No, technology cannot replace personal interaction – it will always remain priceless. Nor should it. Institutions that were able to build successful online learning programs have long known that the worst way to create an online learning system is to try to transpose and replicate in-person learning. Instead, it is much more powerful to leverage technology’s intrinsic power to enhance the learning process – not only through continued loops of evaluation and performance improvement, but also through opportunities for deeper engagement of an increasingly fickle and demanding learner audience, who expect a smooth and glitch-free experience that they find in video games and social media. The holy grail will be to keep this audience engaged in the learning process the way social media keeps them glued to the screen – the race, from the likes of BrainChase to Night Zookeeper, is already on.

8. Learning accessibility

Technology is not simply making learning accessible to different types of learners, beyond the traditional conceptual academic learner – from hands-on learners who love learning by doing, to visual learners or those who thrive on gamified competitions – it is simply making learning available to many. Even before the crisis, as employers such as Google started offering their own educational courses, news stories emerged about young people from all corners of the world completing these courses to land a coveted job at the technology giant. Now that technology usage becomes more enduring and commonplace, this will lead to a massive breaking down of barriers, as it will not be necessary any more to show up on a campus to receive an education (or indeed apply for a job). This will be good news for learners with disabilities – technology offers help in a way that physical environment may not – but also for non-traditional learners, from veterans to mothers, who were already changing the demographic composition of campuses prior to the Covid crisis. As geographic barriers further break down, this will also mean an ability to take any course from anywhere in the world on a topic of interest, as already evidenced by the opening of most of the world’s cultural institutions and museums to learners from around the world. Without the need of physical presence, learners today can already explore collections at the Louvre, listen to the Vienna Philharmonic, or interact with experts at NASA. This will lead to the emergence of global excellence centers; learner and researcher communities around the globe will in turn offer more opportunities to sharpen skills by interactions with the best. As barriers break down, opportunity – both educational and economic – will become available to many, creating more open markets and global competition.

So, what will this mean for education? In the short term, a need to adapt to the new reality of creating a digital educational ecosystem, truly leveraging the power of technology to enhance the learning process. In the medium term, the opportunity for platforms or networks to emerge that will leverage the power of data to enhance interaction and improve performance. In the long term, an opportunity for exponential growth, fueled by breaking a breaking down of barriers in an increasingly open field. And for learners – opportunity for an education on their terms, to truly harness their unique talents.

Just as peasants moved into Renaissance cities to create a new class of merchants and seize opportunities previously unavailable to them, who knows what new barriers will today’s learners, hunkered in their houses, break down? Who will be the partners – companies, technologies and institutions – who will help them shape their new world?

How do you see the world of learning changing?      

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 “While earlier the brand architecture was confined to a world of walls characterized by production, marketing, design, and research, now it is more about the world of web characterized by producers and consumers.” 

          Read the full article here.

“We live in the world I call, the world of webs, the world of networks, the world of connectivity. It’s changing the way you think about brand.” 

           Read the full article here.

“Branding is two pieces of work – Firstly, brand strategy – what you want to be known for and aspire to be. And then, brand architecture – all the things that come under strategy – the products, strategy among other things. ‘How is branding really evolving and how has it been changing?'”

          Read the full article here.

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Sweetgreen – Arming Hospital & Medical Workers with Locally Sourced Sustenance 

With in-person services and socialization put to a halt until further notice, the restaurant industry is among the hardest hit by this pandemic. However, despite the threat of daunting revenue projections and an unforeseeable future dictated by COVID-19, Sweetgreen – the locally sourced, healthy, fast-casual salad chain – is putting the medical community fighting this pandemic first. Acting on their company’s mission “to inspire healthier communities by connecting people to real food,” Sweetgreen has repurposed and dedicated its outpost operations to delivering free salads and bowls to the hospital workers and medical personnel sacrificing their lives to combat this crisis.

Vita Coco – Using their Gains to Benefit Communities In Need

As consumers attempt to prepare as best they can for the unknown and continued disruption to their lives, people are stocking up in droves on the household and pantry items that they deem essential. So, while many other industries are suffering from staggering sales declines, other F&B and household product brands are experiencing the opposite. Among the F&B products consumers have chosen to amass, Vita Coco – a nutrient-rich, shelf-stable, coconut water brand – has seen a dramatic uptick in sales, increasing upwards of 100% across large, key retailers. As Co-Founder and CEO, Michael Kirban reflected on the company’s recent spike, he took to LinkedIn to ask, “But when things get bad, shouldn’t we be doing good?” Vita Coco has since committed to donate $1MM of their incremental profit gained as a result of this pandemic to organizations directly helping those that need it most. Kirban is also urging other businesses that are in similar positions of privilege to “make [Vita Coco’s] donation seem small!”

ClassPass, CorePower Yoga, and Peloton – Bringing Fitness to Everyone

Once flocked to by consumers looking to improve or maintain their health and well-being, workout studios have shut their doors to protect people from the potential spread of dangerous germs that group exercise and shared equipment could enable. As the COVID-19 situation unfolded, ClassPass, the online fitness class booking platform, continuously updated its response with the health and safety of their customers in mind, while also recognizing that the urge to workout and stay fit was not going to go away for their customers. ClassPass’ first move was waiving the cancellation fees and rolling over any unused credits to encourage anyone who felt unsafe and/or uncomfortable attending classes to take precautions. Less than 2 days later, as the gravity of the COVID-19 situation became more apparent, ClassPass revisited their plan and put the onus on the company to act responsibly. ClassPass removed the ability for its customers to book any upcoming classes and suspended billing on all memberships until further notice. Despite no money coming in from its members, the company is still continuing 

to provide members access to their audio and video workouts online for free as part of their dedication to “helping people feel their best.” Similarly, CorePower Yoga, a cardio-yoga fitness studio chain, has made their special collection of online classes free while their studios remain closed, and Peloton has extended their free trial of its app by 3x to 90 days.

AB InBev, Diageo, and Pernod Ricard – Taking their Inputs to Produce New Outputs

With healthcare workers and consumers alike fearful of the spread of COVID-19, a dire shortage of medical and other disinfectant supplies continues. While some individuals are taking to Amazon to make a killing by upcharging these products by an exorbitant amount, many large spirit manufacturers are temporarily repurposing their operations in an effort to produce and donate hand sanitizers to those who need it most. Pernod Ricard was among the first major distillers to disclose their plan to produce and donate 70,000 liters of alcohol for hydroalcoholic gel. Shortly thereafter, Anheuser-Busch InBev and Diageo, the world’s largest beer company and largest distiller, respectively, both committed to donating millions of liters of alcohol to make disinfectant products and distribute them to healthcare systems and workers.

The post A Running List of Brands we Admire for their COVID-19 Action appeared first on Vivaldi.

1. Brand building is not just advertising. Brand building requires investment internally into a company culture and the creation of a lasting and permanent identity that creates value and meaning for consumers, extending beyond any one marketing campaign.
2. Brand building involves innovation.Taking risks and expanding offerings are critical to the growth of a brand. No brand was ever invigorated by keeping things See examples of innovation in some of our recent posts on the power of platformizationin innovating your company’s connections to its customers.
3. Excellence in execution creates huge payoffs. Having dynamic and direct execution of your brand purpose, language, and vision in all that you do makes your brand more than an idea and gives it the equity that brand strategists strive for.
4. Products are key to the brand. Aligning product purpose with brand essence, value, and related value propositions is salient to retaining authenticity in presentation of the brand.
5. The brand is more than products.While launching a new product line can be a great step toward achieving new growth and building a new identity, new products are not synonymous with a new brand. Many times, altering value-based offerings instead of product offerings can be even more effective in generating growth.
6. Know the brand identity.Every actor within your organization should be aware of and emotionally in tune to your brand, living out the identity in their day-to-day activities at work and communicating this identity in all collateral.
7. The brand team should run the brand.Having a team with a clear, articulated purpose in maintaining the brand identity and ensuring its execution is a necessary staffing addition that will have impressive long-term payoff.
8. Connect with customers on an emotional level.Value creation comes at its strongest execution when it is accompanied by a personal, human connection between brand and consumer.
9. Use subbrands to tell a story and manage perceptions.The power of brand architecture in strengthening and bolstering overall brand equity and power is one that should not be underestimated.

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