Building Human-Centered Brand Relevance Is Key to the Success of B2B Companies: A Case Study of G7 Connect
How can B2B brands create relevance by appealing to both the “head” and the “heart” of consumers?
Since 2016, Prophet has released our annual report brand relevance report, The 2023 Relentlessly Relevant Brands report to understand how brands become indispensable and stand the test of time by being relentlessly relevant. This year, we surveyed 11,500 consumers and found that brand relevance has become more important than ever. For the first time since the pandemic, consumers are prioritizing “heart-hitting” attributes in brands and are more willing to engage with brands that offer meaningful connections. This is a notable shift from prioritizing attributes that appeal more to their “head”, such as functional factors and cost-effectiveness. Both categories remain important and the most relevant brands find ways to win with both.
When helping clients strengthen their brand relevance, we often hear the question, “What role do ‘head’ and ‘heart’ attributes play in building brands across different industries? Are ‘heart’ attributes less important for B2B companies as they are not directly engaged with end consumers?” This is a common pitfall. Indeed when catering to different customers, companies should take tailored approaches to building brand relevance. However, both “head” and “heart” attributes should hold equal significance for all companies, regardless of whether they are B2B or B2C.
In this article, we highlight a recent client story of how we helped to build a B2B brand to create relevance by appealing to both the “head” and the “heart.”
G7 Connect: The Hidden Hero in Road Freight
Today’s consumers are accustomed to the convenience of online shopping and modern logistics, thanks to the advancement of digital technologies. However, express delivery is just a small part of the logistics industry, of which every aspect has yet to be transformed digitally. “Sweat logistics” is a term often used to describe freight, the most conventional business model in the industry that still dominates the bottom of the logistics food chain. It is a sector burdened by overloaded trucks, sleep-deprived drivers and inefficient management and processes. Many freight operators lack a clear understanding of how digital technologies such as the Internet of Things (IoT) and SaaS can benefit the logistics business.
G7 Connect is a leader in IoT SaaS technologies for road freight in China. For 28 years, it has been committed to advancing China’s entire logistics industry through technological innovations based on IoT, big data and AI. As a B2B company, G7 Connect caters to a wide group of audiences with extremely different backgrounds and needs, from regular truckers to small-to-medium-sized freight operators and senior executives of key consignors. For truckers, their needs are quite simple – they hope to drive safely every day and be paid fairly for their work. For shipping companies and freight operators, they need to consider the safety of their people, vehicles and goods; they care about reducing costs and improving efficiency across each aspect and look forward to unleashing higher productivity through new technologies. For business leaders at consignors, they wish to strengthen their control over the logistics process like warehousing and freight.
Rooted in “Head” and Inspired by “Heart” – Building Brand Relevance That Speaks to Diverse Audiences
Our biggest challenge when developing the brand strategy for G7 Connect was balancing the expectations of its different audiences – it was crucial to highlight the value that IoT SaaS technologies can bring in a simplistic and intuitive way. In this regard, appealing to the “heart” is just as critical as the “head”. As G7 Connect’s customers come from different professions and backgrounds, they also have distinctively unique functional needs (“head” attributes). However, each customer is a human first and foremost – a living participant in the logistics industry. Therefore, it is easier for us to identify their shared emotional needs (“heart” attributes).
Through a human-centered approach, the Prophet team conducted extensive interviews with G7 Connect’s different customer groups and its customer-facing employees to better understand their needs and expectations. Based on our findings, we developed a refreshed brand purpose to appeal to its customers’ hearts. We created an impactful brand tagline, “Beautiful change happens now” to encapsulate G7 Connect’s commitment to continuously creating positive changes for all industry participants through digital technology. Moreover, we further clarified the core competitive strengths of G7 Connect’s offerings and capabilities as brand principles, reinforcing its differentiated advantages through “head” attributes.
G7 Connect officially launched its new brand strategy and identity in the spring of 2023. Since then, a range of brand implementation initiatives have been quickly put in place. For example, the company’s annual “advanced freight operator conference” was given a universally resonating theme, “Connecting the Beautiful”. The conference also focused on deepening the understanding of G7 Connect’s core functional strengths by highlighting many of its leading products, from visible processes, refined cost management and secure algorithms to external partnerships. Moreover, by showcasing warm, authentic client stories rich with photography and testimonials throughout its communications, G7 Connect has demonstrated how it is delivering “beautiful changes” to every industry participant through comprehensive digital logistics products and services.
For B2B brands, the power of appealing to the “heart” should not be underestimated. By creating an authentic brand purpose anchored on shared emotional needs, companies can strike chords and create connections with vast audiences in a more intuitive way. When the brand resonates with its customers, they will be more interested in learning what the brand offers and why it is better, thus eventually deepening their trust in the brand’s functional benefits (“head” attributes) as well.
Elevate Your Market Segmentation Approach with Demand-to-Growth Landscape: Three Strategic Examples
Learn how Prophet’s Demand-to-Growth Landscape can help inform strategic decisions across portfolio, brand and product levels.
For consumer brands, China remains one of the most attractive lands of opportunities, despite the disruption from the pandemic. The rise of a huge middle class with enormous spending power makes the market a must-win, but not necessarily an easy one. Different generations of consumers are developing vastly diverse lifestyles, needs and preferences, and competition between local and international, startup and traditional companies is increasingly intense. Regional differences require highly nuanced go-to-market strategies beyond adapting to the local digital ecosystems.
To navigate this environment effectively, companies need to answer two fundamental questions: Where should they play to unlock growth? And how can they win with differentiated and relevant value propositions? These seemingly straightforward questions can be daunting as they require careful and holistic considerations regarding the entire business – how to structurally define consumer opportunities with so many forces and fast-moving trends at play? How to drive organizational alignment around key growth spaces? How to develop a high-level strategy with concrete actions across brand, product and channel execution?
Introducing Demand-to-Growth Landscape
At Prophet, we partner with leading consumer brands to answer these strategic questions through a comprehensive analytic method called the Demand-to-Growth Landscape. In a nutshell, Demand-to-Growth Landscape is a systematic study that examines the key dimensions (e.g., consumer segments, consumption occasions, etc.) influencing consumer demand for a certain category. By drawing a map with these dimensions, we define and synthesize consumer growth spaces, and thus blend value lenses and consumer lenses to decode each opportunity.
There is no one universal formula for how companies should utilize the Demand-to-Growth Landscape. However, those that succeed often follow three best practices.
1. Customize the map.
Although consumer segments and consumption occasions are commonly used, particularly by companies in the consumer packaged goods category as key dimensions to build the Demand-to-Growth Landscape, companies have to think through what works best for their category and the intended usage of the tool. For instance, price tier can be applied as a dimension for the fashion category as it’s often a key factor in consumers’ purchasing decisions.
2. Enrich with human insights.
While the quantitative study is helpful for identifying and profiling growth spaces, companies will benefit from deep listening to gain a thorough understanding of their consumers’ motivations and experiences to inspire actions.
3. Create and sustain competitive superiority.
Once companies have decided which growth spaces to focus on, they have to build a competitive advantage. They can learn from the Superiority Model, initially developed by P&G, to define the most critical levers for their category, and be diligent in applying the framework to guide actions and track results.
Source: Proctor & Gamble
How Your Company Should Utilize the Demand-to-Growth Landscape for Different Strategic Objectives
The Demand-to-Growth Landscape can help inform strategic decisions across portfolio, brand and product levels. Below, we outline three tried-and-true applications of the approach, each with a client story to illustrate how it can positively impact the business.
Develop Brand Portfolio Strategy
Demand-to-Growth Landscape provides foundational insights for developing a brand portfolio strategy. Leaders who oversee large portfolios should ask:
Which are the growth spaces to prioritize?
How many brands are required to win these spaces?
What is the role of each brand?
Is there any opportunity to rationalize the portfolio or tap into white space?
Our work with sportswear and lifestyle group
Our client is a global leader in sports and lifestyle products with a diverse range of apparel, footwear, accessories, and equipment. Its business needed to scale but was facing difficulty, as several of its brands were playing on top of each other.
Source: Unsplash
Prophet was engaged to help the client gain a better understanding of its key global markets, including China and the US, and provide strategic recommendations for go-to-market actions. We started by uncovering eight consumer segments, which were prioritized based on spending power, category engagement and brand perceptions. We then built a Demand-to-Growth Landscape based on these consumer segments and occasions, highlighting growth spaces to expand the business with the current portfolio of brands. To tease apart the individual brands’ growth strategies, Prophet defined clear swim lanes on the landscape, aligning on “centers of gravity” for each brand to prioritize investment and brand building.
Define Brand Target and Positioning
Demand-to-Growth Landscape offers critical consumer insights to help inspire a unique brand positioning. CMOs seeking to elevate their brands should ask:
Who are the consumers in the target growth space?
What do these consumers need the most, and how can my brand connect with them?
What are the functional benefits required to support the emotional value?
Our work with a leading CPG company
Our client, a global food and beverage giant, sought our expertise to help reposition one of its key brands following a successful collaboration on its China brand portfolio strategy. In recent years, the brand has become staler, facing challenges in attracting young consumers.
Source: Unsplash
To reinforce the brand strategy, we thoroughly examined the previously established Demand-to-Growth Landscape data in order to identify the most critical consumers within the brand’s target growth space. We delved into demographics, including age group and city tier, as well as their life motivations and category attitudes and behaviors. Additionally, we conducted deep listening research to capture micro-stories that brought the brand muse to life. Leveraging these insights, we identified a potent brand positioning territory that deeply resonated with the younger generation’s yearning for genuine connections, especially within the home environment following the pandemic.
Identify Product Portfolio Opportunities
By combining Demand-to-Growth Landscape with Superiority assessment, businesses can gain valuable insights to uncover product opportunities. Marketers who own a vast product portfolio should ask:
Where does the brand have potential product gaps on the demand landscape?
Where do the brand’s existing products fall short compared to competitors?
Where does the brand have competitive products but need to improve its messaging or product availability?
Our work with a leading apparel company
Prophet was appointed by a leading apparel and footwear company to accelerate its transformation from a product-driven to a consumer-centric approach to its brand strategy in China. The company had diverse products, each with functional benefits, however, they often overlapped and lacked a distinctive focus in messaging.
Source: Unsplash
Through the Demand-to-Growth Landscape approach, we delineated each growth space based on opportunity size, price tier, consumer profile and goals, and desired product drivers. Subsequently, we collaborated with the client’s product experts to objectively map their product portfolio and those of key competitors onto the landscape, conducting a thorough Superiority assessment. This exercise enabled the client’s senior leadership team to achieve alignment and make commitments to a series of product growth initiatives, bringing confidence to revitalize their growth momentum.
With increasingly fragmented consumer segments and intense competition, companies need to continuously evaluate their priority growth spaces and evolve value propositions to stay relevant. Prophet’s Demand-to-Growth Landscape approach helps leaders navigate these challenges in a systematic yet nuanced way beyond traditional consumer segmentation. Through different use cases, the Demand-to-Growth Landscape can provide indispensable insights into strategic decisions.
Our new global research commissioned from Forrester Consulting has found that human-centric companies are more likely to see results from their business transformation efforts. In fact, human-centric organizations are 10 times more likely to achieve revenue growth rates of 20% or more.
Forrester surveyed over 300 organizational growth and transformation decision-makers across geographies and industries to uncover how firms are using human-centricity to design and assess the effectiveness of their transformation initiatives. Our maturity model provides a comparative analysis that illustrates how human-centric firms are outperforming their peers when it comes to delivering transformative growth.
In comparison to less human-centric organizations, respondents from human-centric organizations are more likely to achieve or expect these benefits:
Barriers to meeting transformation goals for initiatives that are less human-centric:
This study offers resources for decision-makers looking to transform their organizations to be more resilient, improve their culture and satisfy all stakeholders while setting themselves up for future business success.
Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, July 2023.
Our report reveals that successful transformations often require partnerships to help drive organizational change. As leaders navigate the complex landscape of business transformation, relying on the expertise of external partners becomes a vital catalyst for achieving success.
Catalysts: How to Build an Adaptable Organization that Thrives During Uncertainty
Prophet’s 2023 Catalyst research highlights how companies can thrive despite disruption, stay on course for long-term transformation and turn change into a strategic advantage.
The turbulence and upheaval of the last few years have become routine. That’s good since many believe this era of volatility, uncertainty, complexity and ambiguity is here to stay. Business leaders should pay close attention to the post-pandemic twist on Darwin’s law.
It is not the most intellectual of the species that survives; but the species that is best to adapt and adjust to the changing environment which it finds itself.
Charles Darwin
Recent disruptions have proved that while some companies are already impressively agile, many aren’t. Many larger businesses have spent the last few years lurching from one crisis to another, relying on limited moves torn from old playbooks.
This article – the first in a series – is based on interviews with senior leaders and is focused on how enterprises can tap into variety, building organizational flexibility.
Our respondents detailed their successes and setbacks, and ultimately illuminated five critical principles for creating adaptability at multiple speeds during this critical moment in time.
Defining Adaptability in a Post-Pandemic World
At Prophet, we define “adaptability” as the ability to anticipate and respond to opportunities created by a shifting market. And we define “at multiple speeds” across three horizons.
Something that separates humans from other animals is the ability to plan ahead and imagine multiple potential futures. In modern life, we do this quite naturally:
What’s for dinner tonight?
Where might we take the family on vacation this year?
When can I retire, and how much must I save?
Here are just a few ways our respondents are anticipating and responding to uncertainty across these three key horizons.
Optimizing for Today
Our respondents are evolving operating models to deliver the current portfolio of products and services to the same customers. They are organizing resources to increase customer satisfaction and profitability. And they are hunting for efficiencies, like centralizing or outsourcing back-office functions for greater scale or lower costs.
Innovating for Tomorrow
Planning within medium-range windows includes expanding product and service portfolios or reaching out to adjacent target customers. And while many of our respondents may be leveraging brand relevance to expand into new categories and integrate new capabilities, it’s still happening within the boundaries of the existing business model.
Building the Future
To build for the future, our respondents are transforming their business models and fundamentally changing how the business makes money and creates value for customers. It’s a seismic shift, like Netflix’s move from mail-order DVD business to a content studio.
Five Ways to Build Adaptive Organizations
Our research led to five key strategies to enhance adaptability and create future-ready, resilient organizations.
1. Put Purpose to Work
Purpose-driven branding has been part of the corporate playbook for over a decade. Yet the definition and expression of that purpose keep gaining importance. Customers increasingly demand that companies stand for something, and people insist employers care about more than money. They won’t settle for a slogan on a wall or some fluffy catchphrase dreamed up at an executive retreat. It must mean something.
Like human DNA, an organization’s purpose is fixed. “To operate in an environment filled with uncertainty, you have to create stability in other ways,” says Kris Ahrend, chief executive officer of the Mechanical Licensing Collective, a nonprofit focused on streaming royalty distribution. “Our culture is what gives us stability.”
But while purpose may be steadfast, it can still be leveraged differently and more effectively, filtering throughout an organization’s activities. That way, it can provide renewed focus, guiding decisions and strategies.
“Our purpose is always at the root of our decisions for what to do next and why,” says an executive at a large banking company. “We never take our eyes off why we’re here as an organization.”
2. Gain Control by Letting Go
Decentralizing governance can feel counterintuitive in these turbulent times. “We’re all moving forward wishing we had a crystal ball,” one human resources executive says. “Between the war in Europe, pandemic recovery, economic instability, and return to office policy, everything feels more uncertain.”
But respondents feel strongly that this uncertainty is what makes pushing decision rights down even more important. Many wish they’d worked harder for this change in the past.
Decentralization lets those closest to customers and operating problems make better and faster decisions. “It’s not just about tactical changes,” says Danielle Clark, a talent executive at eBay. “We have to address the underlying behaviors that enable leaders to step back and lead differently. It requires trust and a greater appetite for thinking boldly.”
3. Lower the Cost of Experimentation
Adaptability requires innovation. And innovation, by definition, involves failure. Organizations must have realistic conversations and processes about what that means and what those failures might cost, especially in an uncertain economy. It’s easy to invest in experimentation when business is good. But experimentation is too often a prime target for budget cuts when revenue gets tight.
“To be truly resilient, your organization must practice failing,” says one tech executive. “This is supported by a culture that encourages fast and safe failure with risk mitigation measures in place, so resiliency is exercised regularly.”
4. Reinvest to Realign
Aligning new strategies with existing structures is often challenging, especially for big companies that typically overinvest in growth areas during prosperous times and overcorrect in culling these growth areas during times of economic uncertainty.
Over the last year, we’ve seen this pattern emerge within the technology industry, resulting in a hemorrhage of talent, confusing investors and disappointed customers. These massive gaps between their current structure and new strategy inhibit growth.
The companies that overcome this risk and protect their business from boom-and-bust cycles are the ones creating agile operating models and continuously aligning structure with strategy.
It is critical that business leaders get crystal clear about what the organization will not do going forward. “We have a strong understanding of who we are at our core,” says eBay’s Clark. “The work over the past few years has been to innovate boldly to maintain relevance while delivering with impact. This has led to our focused category strategy.”
5. Embrace the Next Wave of Digital Transformation
Digital transformation continues to reshape how industries operate and deliver value to customers. The recent explosion in AI makes automation more accessible than ever before and will usher in the next generation of digital transformation.
Best-in-class organizations embrace new technology to innovate the customer experience and streamline operations. They are using it to redefine systems, making work and life better. Rather than fearing it, they’re upskilling employees to work with these innovations, finding ways to drive a better business outcome.
“We are asking questions about the business and people benefits,” says Jane Jin, a vice president at Takeda, a multinational pharmaceutical company. “What productivity might we gain when using these technologies? How might we develop our people so they continue to bring value to the company if technologies automate some of their tasks? How do we innovate responsibly and remove bias? How do our values translate in this digital age?”
With a leadership team determined to decide when and how to adopt new technologies proactively, companies can guarantee decisions that boost productivity and encourage growth while staying true to their DNA.
If history is any guide, these companies will grow faster and have an outsized advantage in attracting talent. Those that don’t will fall further behind.
As leaders grow increasingly comfortable with uncertainty, they’re hungry for strategies to build resilience and flexibility. In this series, we’ll explore why your company’s purpose needs to play a different role and how the most adaptive companies use their purpose to carve out compelling new business strategies.
The healthcare industry is facing a massive labor and operating model problem – one that involves a predicted workforce shortage of up to 3.2 million people. With more than a quarter of the industry workforce planning to leave in the next two years and $9 billion in annual burnout-related turnover costs the healthcare industry is at a crossroads. So, where do we start?
Prophet suggests that the solution starts with our nurses. In this report, we clarify the magnitude of the crisis, identify tangible issues to tackle and introduce viable solutions that will begin to drive impact against this behemoth of a challenge.
Key Takeaways:
Addressing the workforce shortage starts with a focus on nurses. By starting with the largest population of clinical workers, we can begin to make a more meaningful impact on the collective workforce challenge.
Sustainable solutions to this crisis are not just about workforce retention. They will require us to revisit hiring and talent development practices, redesign care delivery models and the roles required, and rethink the infrastructure needed to support innovation and scale care.
Ultimately, to drive meaningful impact for nurses, we need to hear from nurses. Once nurses have a say in the tools and solutions we develop for them, real change can happen.
Before jumping to the most ground-breaking innovations, we must bring ourselves back to the day-to-day needs of our nurses. Simplifying their routines with technology can help them feel heard and improve employee and patient satisfaction.
Prophet’s Human-Centered Transformation Model can help you understand where your organization can begin to tackle organizational and cultural dynamics that contribute to the labor crisis.
Five Rules for Optimizing Omni-channel Clinical Care Models
Building a human-centric healthcare organization that delivers on patients’ needs.
With the pandemic increasingly in the rearview mirror, many healthcare organizations are coming to terms with the big and small changes that have become permanent parts of the healthcare landscape. Ushered in during the pandemic, omnichannel care delivery is now a fixture and will play an influential role for many years to come; that’s a good thing, as patients prefer having options and are often enthusiastic about new channels, technologies and treatments. More caregivers now see the value of omnichannel care, especially telehealth and in-home care, because they work so well for patients.
In our recent work with clients, we’ve seen how different types of healthcare organizations can capitalize on leading practices for change and transformation as they seek to refine, optimize and expand their omnichannel clinical care models.
The common denominator with healthcare leaders is human centricity. Organizations that successfully drive change design their care models around what patients want and need. Similarly, organizations that adopt a human-centered approach to transformation are more likely to succeed in winning hearts and minds, instilling new behaviors and changing the culture in sustainable ways.
1. When transforming the clinical care model, start small and iterate fast.
There are ample transformation opportunities across healthcare but organizations that take on too much change too fast are bound to struggle. The key is to focus on the achievable while understanding the distinct needs of underserved populations and addressing drivers of high cost.
Organizing around a condition or a use case, rather than a service line, can be useful both for making progress and setting up for broader change over the long term. Breaking down big changes into manageable steps is the only way to go. For example, to redesign diabetes care, leaders will need first to address issues typically treated by primary care, endocrinologists and cardiologists, as well as supporting clinicians in nutrition and other related aspects of care.
Our work with one national player confirmed how many patients with kidney failure “crash” into dialysis in an unplanned fashion when longitudinal care models can address the holistic needs of such patients. When Geisinger launched a home care program, it realized impressive results, including reduced ER visits and lower costs, largely due to its careful patient selection, a focus on chronic conditions and proactive outreach by care teams.
Within value-based care models, better patient communication can increase HCAHPS scores, which directly impacts reimbursement. That’s a relatively small-bore change that can yield potentially big results.
2. Recognize that every healthcare organization is also a software company. And an AI and data science firm, too.
Whether or not they want to be, all types of healthcare companies are in the technology business – and we’re not referring exclusively to electronic medical records (EMRs). Software now underpins every step of the care delivery process and is essential to making the “anytime care from anywhere” vision a workable operational reality. And yet, there’s no denying that tech has contributed to significant burnout among healthcare workers, including physicians.
Healthcare organizations would benefit from several tech innovations, including agile sprints and experience design principles, to continuously enhance features. Had EMRs been designed in this manner, they would more seamlessly fit into the clinical workflow and not contribute to provider burnout as they are today. Healthcare organizations can take a similar approach as they design omnichannel care delivery models and deploy new technology.
Thinking like a service designer will help orchestrate the linkages between backstage systems and data sources and, ultimately, create a seamless experience for all types of users. Accommodating the needs of users with different levels of technology access and literacy – including both patients and caregivers – is the key to developing high-impact solutions. When designing a patient app for patients receiving home dialysis, we went through multiple rounds of design and user testing to ensure that the experience met patient needs in an intuitive way and delivered the right information at the right time. That’s how to empower – rather than overwhelm – users.
Organizations must also change the perception, common after initial rollouts of EMR systems, that technology is the enemy. One way to overcome that persistent bias is to co-create solutions with patients, caregivers and providers. That’s what we did with a national player seeking to shift the site of care from clinics and inpatient settings to the home. Service designers worked directly with nurses and nurse practitioners who could speak empathetically to the day-to-day needs and challenges faced by home healthcare teams and provide feedback on initial design sketches. These foundational insights, as well as those from patient groups, guided the design of new tools.
AI Goes Everywhere
There’s no talking about tech without talking about artificial intelligence (AI). AI seems to be taking over healthcare. Payers are using it to digitize claims, conduct audits and monitor payments. Clinically, AI is helping physicians scan X-rays and get ahead of emerging risks and adverse outcomes. Providers use AI to design care paths, personalize care coordination and model the financial impacts of different treatment plans. AI promises to revolutionize clinical trials in the pharmaceutical sector.
Embedding AI-enabled technology deeply into care delivery processes can make routine tasks simpler, faster and safer. And it’s the most effective way to use technology as a “force multiplier” in delivering care, which is the primary motivation for many healthcare organizations that acquire technology companies. Technology that enables caregivers to do their jobs more effectively and operate at the top of their licenses is invaluable in a time of provider shortages. Equipping end-users (including physicians) with training, skills and knowledge to use the right tech at the right time is how tech can directly support better outcomes.
That sort of human-centered approach is necessary to change minds, create advocates and smooth the transition as the organization evolves from being healthcare-centric to thinking and acting like tech, AI and data science companies.
3. Transformation takes an ecosystem.
Achieving ambitious change objectives will almost certainly require collaboration with others – including payers, specialty care providers, technology companies or other third parties. So finding the right partners is critical, even when focusing on a manageable, well-defined issue or opportunity.
The massive complexity of healthcare – both as a business and in terms of delivering care – makes broad organizational buy-in an absolute imperative for effective transformation. Overlooking a key constituency can make the difference between success and failure.
We define stakeholders as anyone playing a role in care or invested in its outcomes. Thus, the universe of stakeholders includes everyone from institutions (e.g., payers and large employers) to back-stage actors (e.g., hospital management, pharmacies) to front-line care providers (e.g., PCPs, specialists, therapists, care coordinators, social workers) and, of course, patients who must remain at the center. These stakeholders have wildly different incentives, hold different values and operate with different information and authority.
The broadest ecosystems require teams to think like systems designers in working outward from the patient to the entire stakeholder ecosystem, including front-stage actors (e.g., caregivers, PCPs and specialists) and back-stage actors (e.g., care managers, pharmacists, hospitals, payers, regulators).
Ecosystem design requires incorporating the needs and perspectives of many different stakeholders.
All of these players have widely different incentives, hold different values and operate with different information and authority. Misalignment among ecosystem partners can manifest in systemic problems that reach deeper than any single touchpoint. When we design healthcare ecosystems, we apply such principles to understand current systems and envision those that will be necessary tomorrow. Design tools such as ecosystem and value exchange mapping are a critical part of incorporating the entire innovation ecosystem into specific solutions.
Leveraging Internal Ecosystems
The most successful transformation programs also involve many different internal constituencies. One Fortune500 healthcare organization seeking to disrupt renal care with increased use of in-home dialysis built a diverse, cross-functional team, including digital strategists, product teams, client nurses, nephrologists and other specialists, in its ideation process. It gathered ongoing input via iterative design and feedback sessions. The testing process of initial solutions involved 40+ external users, including patients, nurses and other caregivers and social workers.
Organizations enacting large-scale strategic change often convene a leadership council for regular reviews and feedback. Typically, such groups include chief medical officers, clinical business unit leaders, medical specialists and senior operational and administrative leaders.
4. Embrace regulation and payer mandates as inspiration for innovation.
The expanding adoption of value-based care shows how regulatory requirements can prompt necessary change for organizations with creative leadership and high degrees of operational agility. By default, many leaders resist new rules and love to complain about old ones, which can lead to regulatory oversight being used as an excuse not to change.
Federal regulators are certainly looking to foster innovation and prompt greater use of in-home dialysis via reimbursement changes in kidney care and other areas. The acute shortage of clinicians is another area where regulators are likely to be flexible in allowing healthcare organizations to experiment with new care delivery options. Consider how pandemic-era stop-gap measures to allow providers to practice telemedicine across state lines have remained in place. We believe the clinician shortage is an existential threat that must be at the forefront of the design of omnichannel care delivery models. Certainly, it will force provider organizations to automate more low-value tasks as they seek to expand their reach.
Social determinants of health (SDoH) are also being incorporated into regulatory frameworks as their importance to health becomes clearer. Medicaid changes are more likely in the short term, with Medicare following suit in the long term. Organizations that are proactive in developing solutions – ideally in collaboration with regulators and other partners – will be positioned for future success.
Working with a national provider organization to address the needs of diabetes patients, we focused on SDoH in determining how to shift the site of care to the home. Patients with mobility issues, those that lived in food deserts, or lacked reliable WiFi for remote diagnostics each required different design decisions. As innovation strategies more frequently intersect with regulatory requirements, we help clients think through the implications and find opportunities to streamline compliance processes as an outgrowth of experience design and technology development.
5. You can’t change your clinical care model without changing your business model.
This might be the hardest challenge in healthcare, because of the frequent tension between what’s good for patients and what’s good for the bottom line. In theory, clinical care organizations can find the financial backing to move to a more consumer-centric clinical care model in one of two ways:
Improving patient loyalty and outcomes to become a recognized market leader or provider of choice, with the net effect of boosting both patient volumes and financial returns.
Maximizing reimbursement for all kinds of clinical care services including those delivered outside the traditional clinic.
We’ve found the first is a harder recipe for success and following it can lead to internal disbelief at best and barriers at worst. Financial incentives need to align with care incentives. Organizations that invest in transforming their care model should expect to realize financial rewards or at least figure out how to get paid for providing services that benefit patients.
To make it happen, we have helped strong leaders think outside of existing markets to create new categories of care based on patient needs. To model the potential for a new home health business that a diversified healthcare giant was launching, we created a consensus view of existing service lines that could be brought together to meet patient needs in the home, from infusions, to telehealth, to diagnostics and monitoring. Here again, the key was getting stakeholders to collaborate and communicate in new ways.
Is there a more human-centric industry than healthcare? With technology becoming ubiquitous in all forms of care delivery, it may seem an odd time to ask the question. But in our experience, healthcare organizations that master the human touch in both care delivery and designing and implementing their own transformation initiatives realize the best clinical and business outcomes.
From internal initiatives to a client panel focusing on sustainability, Prophet continued to build internal momentum on ESG.
Prophet celebrated Earth Awareness Month with a series of events to raise internal awareness and find measurable ways to reduce our carbon footprint. Throughout the month, Prophet’s global offices held shoe and clothing drives leading to an impressive number of items (600+) being donated to local organizations to help combat the growing number of textiles ending up in U.S. landfills (85% of all discarded clothing). Offices also participated in an informative, earth-month-themed trivia event. Prophet partner, Tosson El Noshokaty hosted an internal learning session on decarbonization and how we can apply this thinking to assist our clients. Finally, the capstone event was a panel discussion on sustainability with representatives from two Prophet clients, Cool Earth and Rainforest Partnership.
Rainforest Partnership is an environmental organization working to conserve rainforests around the world. They work to create sustainable livelihoods in areas affected by deforestation, aim to increase biodiversity, and champion long-term forest protection by working directly with indigenous and local communities as guardians and economic participants. Prophet worked with Rainforest Partnership to redefine and activate new brand positioning and architecture framework.
Client Panel Recap
Hannah Peck, deputy director, Magda Pieta, partnerships manager at Cool Earth and Niyanta Spelman, Founder and CEO of Rainforest Partnership joined Prophet for a moderated conversation that focused on everyday actions that we can do impact rainforest conservationism and sustainability.
Four takeaways from the discussion:
1. Avoiding inaction in the face of the staggering size of the climate crisis is incredibly important.
“[We must] keep banging the drum and continue talking about it to get as many people on board as you can. There is no one magical thing that will fix it all. We need to make sure that we keep staying front and center in people’s attention and focus”
Magda Pieta, Cool Earth
“[We should think through] how we can be an example. Grab a glass instead of grabbing a plastic bottle. Find what is the easiest for you to start doing and incorporate it into your home”
Niyanta Spelman, Rainforest Partnership
2. Even in the face of the current odds and predictions, we can still dream big.
“Stabilizing the climate is this generations biggest challenge”
Hannah Peck, Cool Earth
“Can you imagine what we can do together? A world where 145 countries would actually write something down that they are going to end deforestation by 2030″
Niyanta Spelman, Rainforest Partnership
3. Every small change has a waterfall effect that can create real change, beyond just recycling, e.g., getting involved with World Rainforest Day or contacting local politician(s).
Let’s [drive change] together. The sum of our parts is so much larger. Everyone can be an amplifier, no matter where you are in the world, what role you play, and whomever you know”
Niyanta Spelman, Rainforest Partnership
“One thing I recently realized I could change easily is where I bank, I can choose a more ethical bank… You can also write to your local politician about something you care about in your local environment to make an impact”
Hannah Peck, Cool Earth
4. When choosing what organizations to work with or donate to, it is pivotal to choose ones that are working in partnership with individuals on the ground.
“Funding is almost always the biggest challenge for every rainforest conservation organization. The most impactful organizations are the ones that work closely on the ground. You should choose where you give money carefully and pick those that are the most impactful and work in partnership with communities”
While Earth Month may have ended, our conversations around climate and sustainability continue. We know it will take a coordinated effort between governments, institutions, businesses, and people all over the world to build a more sustainable future. Our Earth Month activities reiterated that the best way to tackle societal, economic, and environmental challenges is by working together.
Prophet has resources for helping business leaders create and implement a sustainability mindset. Learn more about our ESG offerings here.
Relentlessly relevant brands find ways to drive connection – see how social media brands are succeeding and struggling.
Each year Prophet surveys thousands of U.S. consumers about brands that are most relevant in their lives. The 2023 Relentlessly Relevant Brands report shows the brand relevance of more than 250 brands using data from those familiar with them. Analyzing the results from different perspectives yields provocative findings. This year we decided to take a close look at seven of the major social media brands on the “makes me feel inspired” survey question. Many people are impacted by social media brands in some way on a daily basis. We also decided to dissect this angle in part because the pinnacle of a brand connection is to be inspiring. We found an interesting dichotomy. The brands either fell into a clear high or low inspiring grouping.
Social Media Brands That Inspire
The high group included YouTube and TikTok, which were in the top 8%, and Pinterest was in the top 1% in the sample of 257 brands. Facebook, Twitter, Snapchat and WhatsApp, in sharp contrast, were in the lowest 20%.
Each brand has its own story, which is interesting and insightful. It is hard to generalize, but it seems true that the high group has coolness, momentum and a superior ability to gain engagement in competition with those in the low group. Let’s take a closer look.
The inspiration level at Pinterest is amazing and worth exploring. Why? First, it is user personalized—content relevant to a person, for example, can be pinned to their own board. There are also niche communities so that ideas can be shared around common topics. Second, the experience is visual, easy to use and inspiring. The user gets to discover high-quality images and use a search tool to find others. Third, the experience is enriched by having e-commerce opportunities embedded.
The characteristics of the other two high group members are of interest as well. TikTok has short-video content that satisfies people’s attention span and is entertaining, discoverable and sharable with the possibility that any one spot could go viral. It has a user-friendly interface with creative tools and effects to enhance and customize videos that attract top talent. YouTube is convenient, assessable, and has vast user-generated content all of which attracts content creators and audience members. It offers high-quality educational, novel, entertaining and provocative content which means every person will find something that appeals to them. The AI algorithm is advanced; you are served up content that you will like.
Social Media Brands Lacking Inspiration
The lower four brands are not judged in isolation. They can slip by simply being “not as good as” the big three. But individually they each have issues that are not easy to deal with.
Facebook has been battling negative public perception with respect to privacy and misinformation, fake news, and generally harmful or inappropriate content. This has spread into the political realm and has been amplified by polarizing attitudes. For the younger audience, the appeal of alternatives is a factor.
Twitter has a character limit that can be limiting next to alternatives and suggests a lack of content. It is associated with cyberbullying, trolling and frenetic overuse among the young. Twitter has also received critical media coverage for its acquisition by Elon Musk and his controversial views and his decision to sharply downsize the staff.
Snapchat has an interface that is harder to use than competitors. It is aimed at younger users where TikTok has made inroads. While disappearing content has plusses, it can be inconvenient especially if it is the preferred social media vehicle for a person. Their story is interesting because Snapchat was a breakthrough brand at the time of launch (almost like a fad), but other social media brands have replicated their unique features making them easily replaceable and relevant among the core user base who now tend to prefer TikTok.
Because WhatsApp was acquired by Meta, concerns about privacy, data sharing and the potential appearance of targeted advertising have become visible. It is dependent on an internet connection and requires a valid phone number, which some are uncomfortable giving up. Because of their end-to-end encryption, it can be hard to control false information. Finally, it can consume significant storage space on devices. However, even with these limitations, WhatsApp continues to be the most popular messaging app with more than 2 billion global users and may offer Meta an opportunity to reverse some of their negative in-market perceptions.
Having a brand that inspires usually means that an exceptionally strong brand relationship has been established. Inspiration is associated with having momentum in the marketplace, an engaging offering that is unique, self-expressive benefits and an absence of negatives. Want to learn more about the most relevant brands in the U.S. Download the Relentlessly Relevant Brands report today.
Winning Hearts and Minds in Financial Services: The Imperatives to Amplifying Purpose
Purpose isn’t a mere sales tactic; it’s how you forge deep trust with your organization’s stakeholders.
In a world where trust in financial institutions is being shaken up and consumers have more options than ever, organizations must tap into their purpose to assure they can be counted on for more than high-quality products and services.
Research shows that purpose-related drivers rise to the top in motivating consumer choice – especially in financial services. Prophet’s 2023 Relentlessly Relevant Brands report found that consumers are shifting to brands that spark an emotional connection—reaching beyond functional needs. And we’re not the only ones tracking this trend: IBM and the National Retail Federation found that, for the first time, more consumers are driven by purpose than by value.
But simply having a purpose does not move the needle. To effectively build trust and harness the power of purpose, organizations must amplify their purpose. It must be fully integrated into the business, showing up in key moments and being championed authentically by employees—otherwise, it’s just lip service that leaves consumers doubting that the organization truly delivers on its promises.
In our research, we found there are four key imperatives financial services organizations must work toward to effectively amplify and deliver on their purpose:
1. Have a clear and inspiring purpose.
Taking the first step means clearly defining your organization’s purpose. It should be both authentic while also being aspirational, meaningful, and engaging for all relevant stakeholders (e.g., consumers, investors, and employees). Your organization’s purpose should be clear enough that it can be used as a locus for decision-making. Once it’s clearly defined, time and resources must be invested to socialize it internally. Employees should be able to not only understand your organization’s purpose, but easily reference and use it in their daily work.
What this looks like:
Edward Jones recently made a significant investment in defining their purpose, working to create an authentic, clear, and compelling North star for their organization. Beyond just crafting an inspiring purpose statement, they Identified clear purpose impact areas to focus their work.
Edward Jones’ purpose is to “partner for positive impact by improving the lives of their clients and colleagues and bettering their communities and society.” They achieve this by focusing on three key areas: partnering for lasting financial strength, promoting healthier futures, and advancing inclusive growth.
Questions you might ask about your organization’s purpose:
Is it clearly defined?
Is it relevant to key stakeholders?
Is it clear enough to guide decision making?
Do employees know it and understand how their role contributes to delivering against it?
2. Own your purpose.
Don’t outsource purpose through philanthropy. Instead, embed it across the organization and ways of working. Leaders at all levels should be taking actionable steps to integrate your organization’s purpose into everyday operations, making it easy for employees to action against it in their daily lives. Purpose should be inherent to each project and every team, not a siloed effort or initiative.
What this looks like:
FinTech Current’s purpose is to “create better financial outcomes for more people.” They don’t just talk about it—they deliver on it through their product. Believing that legacy banks constrain consumers, Current moves consumers forward by helping them make the most of what they have, specifically by removing all fees (minimum fees, overdraft fees, transfer fees, ATM fees, etc.), expediting direct deposits and simplifying saving through Savings Pods and Round-Ups.
Questions you might ask about your organization’s purpose:
Is it being outsourced (e.g., focused on delivery through philanthropic donations alone)?
How is it being actioned against in day-to-day operations?
Are there metrics in place to measure progress as it relates to delivering on purpose?
3. Build the capabilities to deliver on your purpose.
Purpose must be engrained into your organization’s operating model, guiding each change and transformation. The operating model should be organized to hold leaders and teams accountable for delivering on purpose through incentives and business structures. Additionally, employees should be equipped with the right tools and skillsets to effectively live out the organization’s purpose.
What this looks like:
Mastercard’s purpose is “connecting everyone to priceless possibilities.” To help employees deliver on their purpose, Mastercard created a new compensation model that ties bonus calculations to the organization’s performance on purpose across three key areas: carbon neutrality, financial inclusion, and gender pay parity.
Questions you might ask about your organization’s purpose:
Are employees adequately incentivized to deliver on it?
What tools and skills are needed to equip employees to deliver on it?
Is it a central consideration in business decisions?
4. Ensure that your purpose shows up in key moments.
After establishing purpose as a foundational component to how your organization operates, it’s time for stakeholders to feel its impact. Employees, consumers, and investors should be able to experience your organization’s purpose firsthand—whether through communications, experiences or other touchpoints. When purpose shows up in key moments, internal and external stakeholders are inspired to join in, contribute and learn more.
What this looks like:
USAA’s purpose is to “empower members to achieve financial security through highly competitive products, exceptional service and trusted advice,” and “be the #1 choice for the military community and their families.” One way they bring this to life is through their annual Poppy Wall of Honor and other Memorial Day-related installations. Aligning closely with their purpose, USAA uses their Poppy Wall of Honor to help raise awareness of the true meaning of Memorial Day and provide visitors of the National Mall an opportunity to remember the service members who have died in service to our nation since World War I. Throughout the year, USAA’s Memorial Day microsite allows users to remember heroes, visit the virtual Poppy Wall and honor heroes through action.
Questions you might ask yourself:
How is it being activated with both internal and external stakeholders?
How does it show up in the moments that matter for employees, investors and consumers?
Simply put, financial services organizations must do more than just have a purpose to build trust with consumers. Recent shakeups across the Industry elevate the need for companies to put their purpose into action, amplifying it across all levels of the organization and creating a shared experience for all stakeholders alike.
Contact us to learn more about how to develop and put an authenticate purpose Into action for your organization. organization’s purpose to life and put it into action.
Creating a More Sustainable Employee Value Proposition
Purpose has power. Learn how ESG can help retain and engage your employees.
Earlier this year, Meta, Facebook’s parent company, completed its second round of layoffs in 2023, with a third wave planned for May.
Meta is not alone. Alphabet, Google’s parent company, laid off 12,000 people this year, its largest reduction ever. Amazon has eliminated 27,000 jobs. And Disney plans to reduce its total workforce by 7,000. Some experts anticipate that one out of three companies plans to cut 30% or more of their people in 2023.
Downsizing isn’t just rough on those who are laid off. Researchers found that `survivors‘ in companies with reductions experienced a 41% decline in job satisfaction, a 36% dip in organizational commitment and a 20% drop in job performance.
Yet, the talent war still rages in other areas of the economy. “In 2023, talent will become one of our top priorities,” said a large accounting firm recently.
“Our leadership focus will be on ensuring we have a clear employer value proposition, on providing the right learning culture, offering the necessary flexibility, and on leading with purpose.”
Growth in the renewable energy sector is outstripping the leadership talent pool, forcing companies into more imaginative talent strategies. Healthcare, too, faces a worsening shortage.
Regardless of whether your company is hiring or in retention mode, your Employee Value Proposition (EVP) attracts employees, gives them a reason to stay and is critically important to future growth. And some companies are sitting on a secret weapon: Their environmental, social and governance (ESG) policies.
ESG Plays a Crucial Role in Employee Engagement
While most businesses know how vital an EVP is, with 86% of human resources executives naming it a top priority in a recent study, many are missing the opportunity to include ESG policies.
ESG elements are a significant factor in employees’ decision to join, stay or leave a company:
58% of employees consider a company’s social and environmental commitments when deciding where to work.
Employees are three times more likely to stay and 1.4 times more engaged at what they consider purpose-driven organizations.
93% of employees who believe their company is making a strong positive impact on the world say they plan to stay in their jobs. Of workers who disagree with that statement, only 43% plan to remain with their employer.
And integrating ESG and goals into an organization’s EVP can also help employers gain the upper hand in acquiring and retaining Gen Z and Millennial employees.
For example, 64% of Gen Z workers say the companies they work for must act on environmental issues. For Millennials, 96% cite sustainability as a key issue, and one in four say they’d quit if they found out their company had a poor environmental record. Women, people with higher incomes and those with higher levels of education are also significantly more likely to choose ethical employers.
1. Put your ESG goals and achievements center stage
Companies can do more to communicate sustainability achievements via social media and websites, increasing visibility to current and future employees.
Starbucks anchors its EVP on the commitment to “inspire positive change in the world while you grow in your career and in your community.” One way it demonstrates that is by offering the Starbucks Greener Apron program, a partnership with Arizona State University. This program helps employees learn about global sustainability practices and create personal pledges to support them.
2. Make ESG part of the candidate’s experience
Companies can show how they bring ESG initiatives to life by connecting prospective talent with employees deeply engaged in sustainability and social programs. They can also infuse interview guides with questions that test affinity to ESG goals or dedicate time in the “pitch” materials to highlight ESG opportunities for perspectives.
Slack, for instance, focuses on how it has reworked and implemented diversity, equity and inclusion policies into the candidate experience. It started by sharing the company’s current ethnic and gender makeup and strategies for improvement.
Slack implemented some of these experiences to rework and promote more equitable hiring practices, including revising job descriptions with more inclusive phrases like “care deeply” and “build relationships,” eliminating whiteboard interviews and replacing them with blind code reviews and using co-worker role-plays for anyone conducting interviews.
3. Make your employees part of your ESG program
Organizations can mobilize initiatives to engage existing employees in contributing to ESG goals and celebrate those “from the front lines” stories, especially via social media.
Chipotle delivers its “Cultivate a Better World” EVP to employees all the time, including using more local produce in restaurants. Employee-led organizations provide millions of fresh food to local food banks. It funds fledgling Agri-Tech businesses, encourages micro-producers and helps provide meals for food-insecure members of the LGBTQIA community. It further fosters accountability by linking executives’ annual bonuses to ESG strides. This compensation plan is another way it hopes to champion responsible leadership and sustainable solutions.
ESG can become a company’s secret weapon in modernizing its EVP and revitalizing its culture, regardless of the economic climate. People want to work for companies making the world a better place, which is why infusing your EVP with your ESG strategy can help strengthen your recruitment and retention efforts.
One critical foundation of growth that IMOs typically mismanage during M&A activity is the MarTech & SalesTech infrastructure. IMOs often focus on identifying and eliminating duplication of systems and subsequent cost reduction but don’t proactively explore improvements such as tighter cross-system integrations, cleaner data or more thoughtful process automation. While these sound like minor operational factors, they can become the underpinnings of more effective customer engagement strategies, compelling user experiences and powerful upsell/cross-sell/retention initiatives.
If organizations aren’t careful, MarTech and SalesTech can fall victim to cost-focused consolidation efforts and might come out of an M&A deal tied to systems that will suffocate growth. Here’s how to spot these dangers and avoid them.
Do Not Assume Your Options are Binary
We have yet to see a sales or marketing team 100% satisfied with their existing tech stacks and workflows. After a deal, you will have to invest time and money into consolidating and migrating systems. You will also have a large pool of vendors -many of which you have great interpersonal relationships with- feeling the pressure to hold onto their accounts.
Fight the urge to pick from a subset of existing vendors. You may find yourself with a system that is only designed for half of the company, or unable to scale into the new larger enterprise. Take the time to step back and make a holistic and strategic set of choices before diving into a large migration effort. It’s better to be at the bottom of the right ladder than halfway up the wrong one. As Amber Sundell, head of demand generation at Merative, a data and technology healthcare company, puts it, “We might have fewer marketing and sales systems these days, but everyone in this space continues to feel those budget and data standardization cuts/missteps.”
Clarify Your Desired Future State and Look Backwards
Your CEO and the deal team likely won’t stop talking about this future utopia of the new combined organization. That utopia two, five, or ten years from now probably doesn’t have tech stacks designed when the two companies were operating with different intentions.
For example, lead handling systems typically put potential customers into different categories or types. What if those categories are different between the two merging companies? And what if those categories are hard-coded into all sales flows and reporting systems — how will you operate?
Or what if your organization uses Platform X for email campaign management, and the acquired firm uses Platform Y, but they both use different sets of templates and other source data to trigger the message? Is it possible to send a demand generation campaign or order confirmation message without a manual workaround?
These sorts of “differences” are assumed and understood when framing an M&A event, but rarely is there budgeting for the hard work of standardizing data taxonomies, refactoring (reducing) templates, or re-integrating systems outside of core billing. What starts as potential synergy quickly becomes invisible technical debt. Often, that debt becomes a long-term liability for the resulting Marketing or Sales Operations Teams, and it persists for years beyond the merger event.
You are Building Pipes and Plumbing, not a Funnel
If you’re not already operating in a multi-business unit enterprise, the latest acquisition might spur it, or will in the near future. There is already an invisible wall between marketing and sales on a variety of dimensions, incentives, cultures, skills, styles, etc. And as you move towards –or deeper into – a multi-BU enterprise, you’ll likely have fragmented sales teams and centralized and decentralized marketing teams. From a demand gen perspective, you need to stop thinking of lead flows as a funnel, and more like pipes and plumbing. And don’t underestimate the people risks associated with M&A activities. Sundell states, “The employees who are redistributed or leave the organization after an integration, take legacy knowledge with them. You also find yourself missing reasons why things were or were not done in a certain way.”
How do you move forward with this approach? Examine each joint and pipe and look for leaks. Measure the pressure and flow rate at each valve and faucet.
And check the temperature frequently.
Translation: Standardize data formats and integration points to make sure systems are talking and information flows correctly from one step to the next. Use reporting to capture meaningful operational metrics and KPIs for each overall process and important sub-step. And use ROI analyses with clear and simple dashboards to know when the process is working and the effort was successful.
It is said that most mergers and acquisitions fail. Many believe that it is because deals are normally predicated on growth, but the integration process is dominated by cost-related decisions. The answer is both, and most importantly, your Salestech and Martech are your biggest demand gen investments. There will be opportunities to combine stacks to lower ongoing operating expenses. But don’t lose the opportunity to step back and fully re-evaluate your platforms to maximize your demand gen efforts to support the growth of the newly combined enterprise.
Four Ways to Futureproof and Build Resilience Through Innovation in Southeast Asia
Building innovation for resilience is no longer a good to have, but a must-have for companies in Southeast Asia.
In today’s world of volatility, uncertainty, complexity and ambiguity (VUCA), businesses continue to be challenged and their resilience tested. Innovation is increasingly crucial for enhancing resilience, yet most organizations still see tension between the two instead of the potential for a more positive business outcome. In our latest global research and report, Building Business Resilience Through Innovation, we found that the most successful organizations are using innovation to drive business resilience.
Southeast Asia (SEA), one of the world’s fastest-growing regions, faces unique challenges such as limited resources, inadequate infrastructure, and complex cultural and socio-economic contexts. Yet these constraints are also the reasons why the region is one of the most creative in problem-solving due to its frugal yet bold innovation culture. In fact, according to the Global Innovation Index 2022, SEA is one of the only regions globally closing the gap on North America and Europe in terms of innovation and has become a hotbed for tech startups and a home to a number of highly successful companies with soaring valuations.
Leading the pack is Singapore which positions itself as a hub for innovation in the SEA region. With plans to invest SG$24 billion ($18.1 billion USD) over the next three years to help local businesses build “deep, future-ready” capabilities for innovation and transformation. The country has already attracted Google, Dyson, Visa and Hyundai which have chosen to set up their APAC headquarters and innovation labs in Singapore.
Our research further unveils that several companies in SEA innovate better than many global players by leveraging diverse innovation techniques across an organization. Here are four successful innovation techniques we uncovered:
1. Embrace a Lean Startup Mentality to Drive Organization-wide Innovation
Large enterprises today possess years of built-up legacy practices and a bureaucracy that is often hard to change. A lean startup mentality allows large enterprises to operate more nimbly and flexibly, adapting to business needs or customer feedback in real time. This is achieved by organizing traditionally large innovation teams into pod-like working squads, each with the goal of building new products, testing features, and validating ideas in an agile manner. Firms in Singapore are using this tactic well and are in fact, twice as likely to use pod-like team structures / decentralized teams than in the US and UK (27% vs 13%).
For example, MB Bank, a leading bank in Vietnam, spun off a business unit when it embarked on its digital banking journey. To accelerate digital transformation, the digital bank operated much like a lean and agile startup to ramp up its digital product development process. The new digital banking model was then reverse-engineered across the legacy bank as part of the enterprise-wide transformation. Today, MB is highly regarded as one of the most innovative banks in Vietnam and has close to a thousand employees in its digital, IT and tech divisions working in pod-like structures to continuously deliver products ahead of its competition. It is therefore no surprise that MB digital banking has acquired close to 20 million retail customers today in a short period of just 3 years since its launch and is the only banking app in Apple’s Top 10 Apps two years in a row. Learn more about Prophet’s work with MB Bank.
In Singapore, DBS, one of Asia’s most digitally advanced and innovative banks, set up DBS Asia X (DAX), a collaborative innovation facility where it runs all open innovation-related initiatives, supported by partners, startups, and its other innovation teams such as DBS Ventures and DBS Xchange. Separate from its headquarters in the central business district, employees and external resources in this facility work in pod-like teams with startup mentalities to design and deliver digital products that help DBS remain one of the top digital banks in the world.
Takeaway: Large traditional organizations must break down the walls of bureaucracy, and function like startups to stay agile and ahead of the innovation curve.
2. Leverage Open Innovation to Expand Innovation Horizons
Open innovation is an approach that involves working with external partners to generate and implement new ideas. Instead of relying solely on internal resources, companies engage with a variety of external stakeholders, such as customers, suppliers, universities, startups, and other companies, to develop new products, services and processes. Our research shows that organizations in Singapore are more likely to have formal innovation incubation programs than in the West (35% vs 15%).
Singapore’s government remains one of the most innovative countries in its “Smart Nation” endeavor and continues to lead by example when it comes to open innovation. The Infocomm Media Development Authority (IMDA), a part of Singapore’s Ministry of Communications and Information, promotes open innovation through its Open Innovation Platform which offers co-funding support for prototyping and deployment of ideas from the public.
Across Singapore and Hong Kong, DBS has also been running several pre-accelerator programs, which allows them to stay connected with new, emerging fintech; resulting in new mobile features such as conversational banking, which is a combination of AI technologies from fintech startups such as Moneythor, V-Key and Kasisto.
The Malaysia-based airline, AirAsia, established Redbeat Ventures to expand its offerings beyond flights to include other travel-related products, such as hotels and travel insurance. The company also organized hackathons to generate ideas and solutions for specific challenges, inviting employees, customers and external partners to participate and providing resources and support to help teams prototype and test their ideas.
Takeaway: Organizations should adopt open innovation and increased collaboration as a strategic approach to tap into the expertise of external partners and stakeholders, and drive innovation, growth, and competitive advantage.
3. Adopt Design Thinking to build and meet dynamic consumer needs
Many innovation initiatives fail due to a lack of structure and process when developing new services and products. This is where design thinking comes in. It is a powerful tool for fostering innovation by understanding user needs, questioning existing assumptions, reframing problems, and generating pioneering solutions that can be prototyped and tested. Design thinking methods are well implemented by firms, especially in Singapore, and twice as likely to use this tactic for innovation as compared to the West (39% vs 23%).
CP Group, a Thai conglomerate with operations in agribusiness, retail, and telecommunications, embraced design thinking boldly when they set up True Digital Academy in partnership with the US-based design thinking institute, General Assembly. The Academy doubles down on the adoption of design thinking for innovating new products and services to meet shifting consumer needs. In fact, CP group’s newly launched line of high-protein instant noodles targeted at health-conscious consumers, and a plant-based brand, MEAT-ZERO is the result of the new design thinking approach. The Group’s ambition is to make MEAT-ZERO one of the top three alternative meat brands in the world by 2026.
Unilever is another example of a company that leverages design thinking to drive innovation in its target markets and has succeeded in being the first in market for many of its hair care products. In recent years, the proportion of Indonesian women wearing the hijab has grown significantly (~ 20% since 2018). In response, Unilever began increasing efforts to innovate hair care via design thinking frameworks to better serve this target segment, by taking into consideration the human truths such as pain points and needs of the hair care routine across various hijaber personas. By leveraging design thinking, Unilever can better serve the ever-changing needs of its target markets and customers.
Takeaway: The use of design thinking to innovate and adapt to shifting consumer needs and market trends, coupled with a long-term commitment to innovation, is a key driver of business resilience and growth.
4. Leverage Scenario Planning to Stay Future Proof
In the wake of increased economic unpredictability and global instability, scenario planning has become more important than ever. Scenario planning allows organizations to prepare for potential future events or unforeseen market changes. For example, DBS Bank used scenario planning to anticipate the impact of digital disruption on the banking industry and developed a digital transformation roadmap to stay ahead of the curve. It also developed a “Future of Work” scenario to anticipate how work and workplaces may change in the future and are using the scenario to inform their HR policies and strategies.
Elsewhere in Singapore, Keppel Corporation assessed multiple challenges such as overcapacity, low oil prices, prolonged downturn and increased competition from China. With scenario planning, Keppel developed the “2030 Energy Scenario” assessment which involved solutions such as diversifying their business into areas such as renewables and data centers to reduce their dependence on the oil and gas industry.
Takeaway: To future-proof their business, organizations must incorporate scenario planning into their strategy development process to identify potential risks and opportunities to develop contingency plans to mitigate risks.
Forward thinking companies in SEA are leveraging multiple techniques in tandem to stay ahead, de-risk their business, and win against competitors. Innovation, however, doesn’t start and end within the company – tapping into both internal and external resources and expertise can be crucial, especially during this period of VUCA. Building innovation for resilience is no longer a nice to have, but a must-have for all organizations. Embracing an innovation culture and integrating an innovative way of life takes time and patience. Most importantly, organizations need to foster the right innovation approach and tools in a structured manner to achieve the desired goals and results.
