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Best and Worst Brands of 2022 

From YouTube, Patagonia and Taylor to Twitter, FTX/Crypto and Adidas

This has been a year for brands to shine in big ways–and fall in even bigger ones. It has also been a year of impressive brand heroics, with record-setting generosity, expanded inclusivity and high-octane comebacks. We’ve seen more companies spin pandemic-era lessons into smart marketing moves, using brand purpose and customer engagement to achieve impressive levels of relevance.  

Many brands unleashed their inner value propositions, from EVs coming out of Detroit to the inspiration named Volodymyr Zelenskyy to the hard-charging prowess of HBO Max and Hulu. And many took the world by surprise, like the brilliance of BeReal and the reimagination of “ugly” shoe brands such as Crocs and New Balance. It’s also been a blast to see Harry and Taylor rise (again) and watch the coming-out party for AB InBev. All in, 2022 found plenty of unexpected ways to win hearts, minds and wallets, especially in an unstable economy.  

With as many brand winners, we saw an equal number that either missed the mark or raised more questions than answers. Elon Musk imploded, tainting Twitter and Tesla. Then there was FIFA’s continued corruption and Ticketmaster’s monopolistic nightmares coming true. Singer Jax revealed the truth about Victoria’s Secret, Shopify lost some magic and Beyond Meat failed to meet the moment. Big Oil garnered record profits while most of the world struggled at the gas pump, and questions about Meta(verse) abound. Many brands are ending the year trying to climb out of big holes. 

That said, I went to my amazing Prophet colleagues from around the world to get their take. For the tenth straight year, they delivered, producing close to 100 nominees. A dozen stand out, all with lessons for marketers as we head into 2023. 

The 2022 Brand Winners  

Airbnb 

This hospitality company continues to expand its frame of reference with a super-inclusive approach and stream of updated offers. This includes a new listing service in the U.S. that allows renters to offer their apartments for short-term sublets, just as homeowners can. And its categories feature is a genius way of browsing. Why not stay in homes that are 10,000 feet above sea level, built into caves or with amazing pools? Even as rival VRBO comes on strong with consistently powerful marketing of its own, Airbnb continues to redefine what it means to be a creative traveler. 

Patagonia 

In a world full of Mars-bound billionaires, Founder and Chief Executive Yvon Chouinard donated the entire organization to Planet Earth. By giving his $3 billion company to a foundation that will devote all profits to the environment, he invented a Triple Crown for branding: Epic generosity, the most significant investment in brand purpose ever and a competitive difference none can match. Bravo Patagonia! 

Taylor Swift 

Few performers–and fewer women–have built a brand as strong, enduring and appealing as Taylor Swift. Her tightly controlled record releases with a host of product tie-ins (the record clock) show that no one else is calling the shots. And in an acid test for all brands, she’s expertly steering through her part in the epic Ticketmaster fiasco, reaching out to fans to heal the damage.  

YouTube 

YouTube, the Google-owned social media platform that’s also the world’s second-largest search engine, outdid itself this year, proving its relevance as never before. It surpassed Netflix in global streaming watch time. And it sharpened its support for creators, launching monetization for shorts and providing a much better deal on revenue sharing than TikTok. It’s barreling into live shopping. And it surpassed 80 million music and premium subscribers, up 30 million in one year.  

BeReal 

This social platform appeared out of thin air and captured an audience of 74 million with its two-minute window of authenticity. Radically different from competitors, it finally gives young fans the ability to shake off that phony Instagram vibe. And like Wordle, which won big love last year by asking for so little, BeReal is fast becoming a daily ritual for increasingly anti-social young people. Is it sustainable? That may be a meaningful question for marketers. Gen Z could care less.  

AB InBev 

OK, Budweiser and the AB InBev stable of beers have been languishing stateside for years. But a moment on the giant stage of the FIFA World Cup gave Budweiser a chance to shine, making it the beverage of choice for pro-Western democracies. When Qatar banned beer sales just days before the tournament, Budweiser’s quick-witted response made sure its $75 million sponsorship didn’t go to waste, with its promise to donate all that beer to the winning country with a smart new campaign, “Bring Home the Bud”.  

The 2022 Brand Losers  

Twitter 

Unsurprisingly, Elon Musk and Twitter are No. 1 on the most bad-brand lists. But the real loser may turn out to be Tesla. Musk’s reign of terror at Twitter transformed his personal brand from disruptor to dirtbag, a reputational body blow that may follow him forever. With massive layoffs, his gutting of the unprofitable social media company has resulted in plunging ad revenues. Hate speech on the platform is soaring as customers flee: In the first week of Musk’s control, Twitter lost 1 million users. 

Tesla 

Elon may have also believed Tesla, long a darling of the tech world, was immune. But there may be little overlap between the free-speech absolutists who love him on social media and Tesla’s affluent planet-conscious customer base. Tesla sales are declining, pressured by cheaper competition and anti-Elon-ism. And its stock price keeps dropping, falling 50%–well below the overall market. 

Adidas 

Adidas first formed a partnership with Kanye West, now known as Ye, in 2013, earning plenty of sales and enviable cultural relevance. The relationship deteriorated, and Adidas reportedly has been looking for an exit for four years. But by waiting until Ye spiraled into overtly antisemitic tirades, Adidas calls its commitment to purpose into question. In some ways, it is understandable: Yeezy products brought in $2 billion in sales or 8% of its revenue. But the delay is inexcusable–perhaps more so because of the founders’ apparent ties to the Nazi party. Will Adidas bounce back? Of course. It’s one of the world’s biggest sporting brands. Will consumers ever believe its purpose blather, all about integrity and diversity? That remains to be seen. 

FIFA 

This global organization has been engulfed in corruption scandals for so long that it’s hard to imagine the brand faring worse. Yet this year’s FIFA World Cup Qatar 2022 vaulted it to new levels of disgrace. The selection of tiny Qatar, triggering human rights, a bigoted stance on the LGBTQ+ community and more corruption accusations proved that the ugliest organization represents the beautiful game. 

Victoria’s Secret 

The world’s largest underwear brand is halfway through an ambitious five-year makeover aimed at erasing decades of sexism and misogyny. Some might say it’s working: Sales are rising, and it’s launched new and more inclusive marketing–there are even reports it may reintroduce its fashion shows. But the popularity of Jax’s “Victoria’s Secret” exposes how many younger consumers still take issue with the unrealistic body image standards that the brand is so well known for promoting. And the $400 million acquisition of AdoreMe, the direct-to-consumer dynamo, seems like an admission that it doesn’t know how to talk to Gen Z. 

FTX/Crypto 

While FTX’s $32 billion meltdown is deservedly getting much attention, the entire crypto market has taken a terrible hit. And certainly, the 30-year-old Sam Bankman-Fried is a Madoff-level conman. But we’d like to call out the mainstream press, including the New York Times and the Wall Street Journal, that lauded him as an altruist. While some brands will weather the crypto collapse, the entire regulatory apparatus that allowed FTX to happen deserves condemnation. And it likely set retail investing back a generation. 

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We would love to hear your thoughts. What brands made your 2022 winner/loser lists? 

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The New Science of Demand: Digital Transformation and Consumer Engagement

Critical steps to accurately forecast consumer demand during turbulent times.

Earlier this year, Target Corporation lost nearly 25% of its $100B market capitalization following a disappointing earnings report. A few weeks later, the stock fell again as the company announced that it would be reducing prices due to rapidly increasing inventories. Walmart, a retailer four times larger than Target, lost 20% of its value over the same period claiming changing consumer behaviors and continued supply chain challenges were responsible. Shockwaves spread across the retail landscape as markets scrambled to process the impact of underlying trends. This may have you wondering: “In a world spinning with constant news of inflation, spiking energy costs and supply-side woes, why would deflationary trends like ramping inventories be hitting some of the world’s largest businesses?”  

If your business is consumer products, many challenges of the pandemic era have become abundantly clear: hiccups at the top of the supply chain due to lockdowns, shortages in shipping containers and port infrastructure, a massive transition from consumption of services to goods and housing and breaking news every week are impacting all these factors as they shift and churn. While understanding how all these dynamic inputs impact your bottom line might seem like an impossible machine, they all boil down to one core concept: forecasting consumer demand.  

Whatever the incarnation, be it sales operations, inventory, or revenue management, it is someone’s job to predict future demand as input to a variety of investment and staffing decisions. It can be done terribly, as a trendline of historic quarterly sales with a seasonal adjustment applied—an approach completely unable to respond to a shifting macro environment. It can also be done incredibly well, with dynamic tools in the hands of multiple stakeholders sitting on real-time data that responds to the slightest change in consumer preference, sentiment or spending power.  

Below, we outline three key elements to building successful demand forecasts that will keep the pulse of consumer engagement no matter how unpredictable the world can be.  

1. Look to First Party Digital Data for an Accurate View of Individual Customer Behaviors Over Time 

The first thing to note: Organizations need to use web and/or app engagement data as the foundation, ideally first-party data blended with media exposure and eCRM for a more holistic view across the customer lifecycle. These data types are most critical and valuable due to their real-time nature and reflection of active shopping behavior. After all, if a consumer is no longer interested in buying a product from you, they won’t be visiting your website to read about it. This is the signal you want. It is also important to have data tracked via a robust web analytics platform (such as Google Analytics or Adobe Analytics) collected via a logged-in state or a first-party cookie. This will enable consistent visibility into the same consumer’s behavior over multiple visits, especially if your products have a longer consideration cycle.  

Additionally, having a good tagging strategy and metadata is critical. Organizations will want data scientists to mine the data to understand exactly what users were engaging with at each stop across digital properties. One of the big mistakes we’ve seen among companies who use digital data for demand prediction today is that they look at all the behaviors on aggregate, which can mask a dip or rise in demand behind outlier behaviors. Organizations’ goal should be to predict the demand for each individual and then aggregate demand at the other end. Otherwise, they risk forecasting inordinate demand for a single consumer or household.  

Also, strive to migrate complex engagement data (“log-level” data) into a flexible big-data environment. This should be done so that data science models and business applications can be easily built on top of it. A good example of this would be the big-data warehousing products within any of the ‘big three’ cloud providers (AWS, GCP and Azure).  

While it might sound like a lot, most mid-to-large-sized organizations already have most of the key elements in place and will simply require a few small pieces to complete the puzzle. Building the infrastructure can take as little as three weeks or as long as three months, depending upon the current maturity and toolkit. But the value is there: Many companies who accurately predicted the Covid-19 demand shock and subsequent demand spike did so by getting real-time signals from individual consumers based on changing digital engagement with their brands and products.  

2. Empower Data Scientists and Engineers to Design and Automate New Demand Models—but Don’t Sleep on Strategy.  

Another lesson every business has learned over the past decade is that all the data in the world is worth nothing if you don’t know how to use it. A small, dedicated task force of data scientists, engineers and at least one strategist is ideal for building this capability.  

The strategist role is critical for developing any sort of data science application, akin to a product manager but with more specialized skills to serve as a subject-matter expert on digital data and sources. This person acts as a steward of the business to ensure data scientists and engineers have the appropriate context in designing their analysis and setting up the infrastructure to support it. “Demand” as a concept isn’t one-size-fits-all. Multiple ideas and approaches need to be evaluated and prioritized over the course of the project. With that in mind, the strategist also acts as a liaison to the stakeholder teams when decisions need to be made regarding proxy measures, model outputs and historical techniques for comparison.  

Data scientists ensure the data is organized to interpret cause and effect, that the model is as accurate as possible, and that the output is responsive to new information entering the ecosystem. If they’re working in a cloud environment, they will have access to data processing tools and ML-as-a-service. The data science team will likely lean on those tools and their native integrations with the data platforms to develop scalable and up-to-date demand models.  

Data engineer(s) should ideally have expertise in ML Ops and some exposure to digital analytics and demand-side platforms, as source data can be somewhat ugly and difficult to work with. Key tasks for this team will be the processing of source data, staging of data for analysis (and eventually reporting) and automating the model outputs. The latter is of critical importance, since getting updated forecasts frequently is the key to understanding shifting trends and reacting before it’s too late.  

Working together, this team can generate not just improved demand forecasts to inform downstream applications such as inventory, but also outputs powering higher-funnel tactics such as dynamic creative optimization and offer management. Keeping the team online as new capabilities launch and managing a roadmap of prioritized future applications is a great way to get continual value out of your digital infrastructure. 

3. You’ll Need User-Friendly Tools if You Want to Drive Adoption of New Techniques  

The only thing better than having all the smartest tools in the industry: actually using them. Getting the outputs of the organization’s data assets into the hands of decision-makers is just as important as developing those assets themselves. Business intelligence (“BI” or Data Visualization) tools and specialists are the keys to disseminating new data that suits each stakeholder’s needs. BI specialists should work with stakeholders to understand their requirements and with the engineers to produce user-friendly outputs from the models upon which they can design visualizations.  

Reframing team roles and advancing technology and tools allows businesses to democratize critical data and serve business units based on their purpose and key decision points. Regional merchandisers may want to see shifts in demand with the ability to drill down on specific geographies. Others may want broader, national demand (or individual product propensity) visualized alongside incentive, inventory or media spend. Targeting a few stakeholders early who are interested in trying new techniques can be important; building internal advocacy and developing case studies early on can speed up the process of getting new tools to market.  

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As the pandemic and its fallout have demonstrated, the importance of having a pulse on demand cannot be overstated. But with a willingness to invest a little in digital platforms, underlying data assets and the right people, sustainable improvements in forecasting are attainable for every organization. Furthermore, this relatively small investment enables more agile teams and better-informed decision-makers at the heart of a billion-dollar problem.  

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Four Steps to Optimize Digital Product Creation

Whether you’re a B2B, B2C or DTC company, Prophet’s proprietary hypotheses-led approach to innovation takes product concepts from 0-1 efficiently and successfully.

Necessity is the mother of invention as they say. And many successful companies and products were started in times of an economic downturn, from the inception of Netflix in 1997 (now valued close to $100B) to that of Airbnb in 2008 when the Great Recession saw demand for short-term, low-commitment housing increase exponentially. However, when the stakes are high, the reality often is that the bets are fewer, there is less room for error and the need for more certainty of success goes up. You can’t simply take the old corporate RND approach to “Spray and Pray”, that one of your concepts will be market driving.   

Oftentimes, businesses will have identified a new opportunity area, market, audience or digital channel that looks potentially valuable for their growth. However, they are not at the point of concept definition and design to immediately hand it to internal development and product teams to begin to build. While they will have a concept of what they think would be valuable for customers, many businesses lack the evidence and detail of where they should invest first, what they should (or more importantly shouldn’t) build and in what order to deliver customer and business value quickly.  

Across all industries, B2B/B2C/B2B2C/DTC, and phases of company maturity, Prophet’s proprietary “Hypothesis to Action” (H2A) approach enables us to take product concepts from 0-1 successfully. It helps get from idea to minimum viable product (MVP) in the most efficient way possible; cutting through ambiguity and defining where to start at the minimum possible investment, with a clear direction of what is going to build traction in the market, reduce risk and increase the likelihood of a successful digital product that meets the true needs of customers.  

The H2A Model  

(Enlarge)

Leveraging our own learnings from decades of successfully shipping net-new products, we have optimized the most successful product creation engine of the past 15 years in the approach of Silicon Valley venture capital. The H2A model was created from years of work and insight and aims to provide cross-functional teams with a minimal structure to make better-informed digital product decisions and enhance design progress. It is comprised of four key stages: Hypotheses, Findings, Conviction and Actions – and in many instances we have executed the entire H2A process within two weeks.  

In one instance, a financial services client came to us with the desire to improve lead generation among prospective customers; the company had impressive loyalty among existing customers but struggled to attract net new to the business. Thus, formed the idea for a digital product, “a predictive profiler,” through which the business could predict and offer a tailored product mix and accompanying advice to its prospective customers based on user-provided information. With the problem-to-solve and initial idea in place, we were ready to begin cycles of H2A to take this idea from a concept on a page, to a user-validated, defined and designed MVP.  

Let’s take a closer look at each of the H2A stages in turn as we put it into practice with Thrivent.

1. Generate Hypotheses

Hypotheses are critical assumptions you are making about your product or idea, articulated as a testable premise. Most often, the riskiest assumption you are betting on at the start of product innovation is simply that your idea is in fact solving a problem or addressing the needs of your target user.

Taking the example of the financial services company, we were assuming that prospects would be more likely to convert if guided to the right product mix and provided tailored advice. We took that overarching assumption and broke it into more specific hypotheses to answer specific questions, starting with what is the right “way in” to lead prospects to a recommended set of products. Our hypothesis: Rather than answering generic questions, users will prefer to self-select into different archetypes, then answer more specific questions to achieve greater levels of personalized results. We quickly designed a lightweight test to prove this, balanced by business ambitions.  

2. Extract Findings

After rapidly testing the hypotheses in real-world situations, often sourcing feedback from real customers or users, we build an evidence-filled set of findings. These findings are observed truths made in a test that repeats across more than one participant or scenario.  

In our example, we found that we were, in fact, correct. Presented with four different potential “ways in” to kick off the user flow, the majority of prospects preferred to self-select into an archetype group, then answer more specific follow-up questions to deliver tailored results, citing a desirable balance of entertainment (perusing the archetypes) with the rigor of analysis of more targeted questions. Luckily, this user-led finding coincided nicely with the business ambitions of strong data collection (questions) with minimal PII risk (leading to self-selection).  

3. Form Convictions

Our findings are swiftly synthesized into convictions that form the basis of the new product. These convictions are the “so what” – product declarations, informed by findings, that become product decisions to be taken forward into design.  

Because user feedback conveniently converged with business needs, convictions for this H2A cycle for our financial services client were clear: the optimal “way in”, from both a user experience and business POV, is to lead with archetypes followed by questions to inform the product mix recommendation.  

4. Determine Actions

All of this comes together to form the specific actions to move the team forward in designing and defining the user value proposition.  

With our client, in closing out this cycle of H2A, we determined that the next best action for the predictive financial services product was to play out a complete interaction model across archetypes and questions, exploring means to delight the user with feedback/findings along the way to encourage completion of the full experience.  

We repeated the H2A cycle across a series of six two-week sprints, through which we tested, learned, adjusted, and optimized the product until we reached a fully defined and designed MVP, backed by user data and aligned to business priorities, ready to enter development. Ultimately, when launched in the market, the product achieved 12X the conversion rate of previous lead gen campaigns within the business, evidencing the power and speed of hypotheses-led innovation in driving high-impact products at the minimum possible investment.   

The H2A approach has led to the successful launch of B2C, B2B and B2B2C products and services in everything from home goods to healthcare. At its core, the value lies in its ability to find a way to start small, learn quickly and launch successfully. By unearthing the riskiest early assumptions that might be being made – and proving or disproving those rapidly with data-driven evidence – when the product does go live its chances for success will be that much greater and the path to scalability that much clearer.  

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When resources are limited and risk tolerance is low, you need to move at pace through evidence-led decisions to get to market quickly. Product market fit is never guaranteed, but our methodical approach continues to drive customer and business success regardless of industry.

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Walking the Culture Talk: How We Developed Our New Values and EVP

We’ve updated our company’s values and Employee Value Proposition (EVP) –and learned plenty in the process.

At the core of an organization sits its DNA, which includes its purpose, values and Employee Value Proposition (EVP). A strong DNA can inspire, provide clarity and accelerate growth. And for the last decade, our purpose, values and EVP have done just that for our organization.   

But the world has changed– and so has Prophet. More than 60% of our colleagues started during the global pandemic. We’ve evolved from a brand strategy firm into a growth and transformation consulting firm, with a newly defined purpose. And, the needs of our clients have rapidly changed, which is why we recently redefined our values and EVP.   

Our new cultural touchstones are more modern, inclusive and transparent and directly connect to our aspiration as a firm. And while our values are not the right ones for every organization, we are proud of how we lived them out through the process of defining them. We believe there are valuable lessons for others looking to reinvigorate their organization through this kind of work.   

Four Best Practices for Creating Strong Values, as Shaped by Prophet’s New Values

Create with Courage

When something could be better, we don’t settle– we create. Pushing boundaries. Tackling the biggest challenges that grow our clients and move society. We put our heart into our work while applying our intellect, creativity and rigor to execute.

To power your talent strategy and drive top line growth, you need to be bold about your values. Ask yourself: “what are the mindsets and behaviors we need to connect our teams and power our business?” Create with Courage, Open minds, Give and Grow, Share Joy. 

At Prophet, our mission is to help our clients unlock uncommon growth. So, we challenged ourselves to not just evolve our values but to also step back and connect each value to that growth. Specifically our new value, Create with Courage, was created to help give every Propheteer the common language and inspiration to push boundaries and tackle the biggest challenges that face our clients and society.   

That courage also takes dedication. We expanded Prophet’s visual identity to create an “uncommon visual system”. We are measuring their presence to ensure we deliver our new values. We have updated our quarterly employee engagement survey to measure the impact our new values and EVP have on our employees. We will also be updating our external client survey to see how they are impacting the work and being experienced by our clients.  

Open Minds 

We’re united, but different, which allows us and our clients to achieve more together. It’s in our nature to seek diverse voices and embrace all backgrounds and lived experiences. By showing up honestly and openly, we discover new paths for connection and creativity. 

Values can’t be written in a boardroom. If everyone at the organization truly owns them, then your people’s voices need to play an important role in shaping them. This can be more difficult as your organization becomes more digital, global and hopefully diverse. 

We took a highly inclusive approach to develop our new values. We wanted to make sure we heard not only the distinct perspectives of our organization but also the new ways we work together. We used both synchronous and asynchronous input mechanisms and leveraged co-creative digital tools to maximize reach and input opportunities across our new hybrid organization. 

Our value, Open Minds, takes the traditional adjective of being open-minded and makes it a verb, encouraging each of us to actively open the minds of others and elevate voices that need to be heard.  Working with our head of DEI, we brought that lens to our full set of values to make sure they resonated and created psychological safety for our community.  

We also worked with our global leaders to ensure our values and EVP reflected our global organization. To do so, we collaborated with our international colleagues to translate our values into Mandarin Chinese and German to ensure the translation reflected the true meaning of our values. 

Give and Grow 

There’s no shortage of generosity here. We invest in the personal and professional growth of our people and our clients, by being a coach, a sounding board or a cheering section. We all have unique needs and goals, but we’re in this together- and by offering our time, empathy and brainpower to support the collective potential of our teams, clients and communities, we all flourish together. 

Introducing and living new values and EVP is a long-term journey, which is why they need to be aspirational but clearly define the path forward.  

Our value, Give and Grow, is anchored in the truth of our business. How we drive uncommon growth is through our people. And our people require support in their growth pathways to continue living out our purpose. Prioritizing the investment we make in each other and celebrating that outcome is critical to our success. When asked what makes Prophet different, this willingness to support each other, our clients and our communities sings loud.  

But we’re not done, and we have room to grow across all of our values. Through our research, we have identified which parts of our business resonate with each value most to guide how we invest in creating new tools and guidance in strengthening our connection.  

One immediate change we made was connecting our new values directly with our kudos system. Within days, we saw everyone take ownership of the values and recognize each other for living their values. We were able to transform our kudos system on our company intranet into a self-sustaining storytelling system. 

Share Joy 

Joy is vital– to our relationships, our work and our well-being. We don’t take ourselves too seriously, enjoying the ride, while making time for what brings us joy. Protecting it. Sharing it. It feeds our spirits, and keeps us connected to what, and who, really matters to us. By building in more space for rest, community and fun, our humanity shines a little brighter. 

Values and EVP should be fun!  Joy is vital to work and what keeps people energized for whatever is to come. Of course, it’s important to prioritize clarity over cleverness, but having values that reflect your organization’s culture is paramount.   

We had quite a bit of fun making our values. Of course, the core team that built them enjoyed many puns, a mid-workstream magic show, moments of in-person collaboration and the rush of creativity in delivering exciting work.   

But we made sure to share that joy with the rest of the organization. Leading up to the launch, we offered a “tease” previewing fake values, including values that we would never have used like, “likability.” At the launch, we made light of some old habits from our previous values and encouraged “uncommon” attire that worked perfectly for one office’s Halloween party.  

We also gave out individually uncommon hip packs made from sustainable materials filled with custom decks of cards that reflected the unique shuffles we made as a team. The kick-off was a communal, celebratory and exciting moment for our team.   

Check out our new values.  

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While Prophet’s new values and EVP are specific to our culture, any organization can benefit from the experience of updating its values and EVP. Make a start by securing the support of top leadership, then build cross-functional teams who vow to become expert listeners. From there, construct the values and EVP that will attract the people best suited to bring your purpose to life. But it doesn’t stop there – like anything living, your DNA needs to be fueled to fuel your business so find ways to embed it across all parts of your culture.   

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Rebalancing Your People Portfolio 

Six actionable steps you should take when developing a winning workforce strategy. 

With layoffs and hiring freezes dominating headlines, it would be easy to think the war for talent is over. And if one were to judge talent acquisition trends by past economic downturns, many organizations would shift their hiring strategy. 

But this economic environment is different. In the U.S., the Federal Reserve projects the current downturn might cause the unemployment rate to rise from 3.8% to a still-low 4.4% in 2023 and 2024. And in the U.K., unemployment hovers at the lowest level in 50 years.  

Despite these challenges, there is still a war for great talent and acquiring the right people with the right skill set to do the job. And it is vital to your firm’s success. According to Forrester’s recent Budget Pulse Survey, most leaders reported they would not decrease spending on talent, with 60% of leaders expecting to increase spending on personnel and 62% expecting to improve external services.   

Strategic workforce planning is by no means a new concept. As far back as the 1960s, management thinkers prescribed methods to balance the talent supply and demand equation. And in financial downturns, the topic usually finds renewed interest among the c-suite.  

Here are six fundamentals you should consider when building your talent strategy.  

1. Strategic Workforce and Talent Planning Should Be an Activity of the Entire C-suite  

As of 2020, 80% of all assets in the S&P 500 are intangible. And one of the most important intangible assets of any organization is its people, which is why it is essential that the entire leadership team participates and has a responsibility in the firm’s talent acquisition and workforce planning process- not just human resources.   

The leadership team should start with a clear vision of the company’s business strategy over multiple horizons- say six, 12, and 24 months. While no one has a crystal ball for the future, even a directional view of the organization’s immediate, mid and long-term needs will provide a solid foundation for strategic investments in talent.   

2. Identify Critical Talent Segments to Deliver on Your Business Strategy  

Once companies are clear on where they want to go, strategic priorities come into focus. To identify your critical talent segment, you should assess three key areas:

  1. Internal labor market: Identify the emerging trends within your workforce and how these trends will impact your business priorities.
  2. External labor market: Analyze the external labor market to determine who you should hire and what skill sets you will need to match your business priorities.
  3. Assess talent needs and prioritize critical roles at the enterprise level: Uncover each business unit’s capability needs to sharpen your recruitment efforts.  

3. Invest in Your Workforce Like You Would a Financial Portfolio   

As your leadership team makes strategic investments in immediate needs, it’s easy to lose sight of your future vision – and the talent you’ll need to succeed. 

To help you avoid this common pitfall, we recommend approaching your workforce planning as you would with your investment portfolio. Consider a 70/20/10 investment framework to ensure you have the talent you need today to drive critical business outcomes and the workforce you need in the future:

  • Dedicate 70% of your talent investment to core business needs  
  • Reserve 20% of talent investment for emerging business opportunities
  • Devote 10% of talent investment for future growth opportunities  

4. Build a People Analytics Team   

A robust people analytics team can help translate the refreshed strategy to the future workforce, even as the hiring picture changes. Consider building a people analytics team (with access to workforce planning tools) who know how to leverage your data to answer critical questions like:

  • How many people are needed to execute current plans?   
  • What skills will our future people need?
  • What roles and responsibilities can we outsource?   
  • What work, if any, should be outsourced or automated?   
  • What structural changes are required for future initiatives?   

5. Invest in a Compelling Employee Value Proposition and Company Culture   

There’s no secret to this. People want to work for companies that value them. New graduates stampede toward firms like Alphabet and Apple because they are good employers. That creates a flywheel: They attract and keep the best people, and these gifted workers help them grow faster. And because they grow faster, they can better invest in people, enabling their growth and success.  

In addition, a compelling employee value proposition and company culture help you build trust, engagement and performance within your workforce, which is critical when implementing significant change within your organization.   

6. Develop Flexible Ways to Deploy Your Talent   

New strategies–and new markets–create opportunities for employees to diversify their skill sets. Make it easy for them to do so with formal and informal ways, such as project-based agile squads, partnering models and centers of excellence.   

These flexible ways of working will empower your employees to mesh their interests with the needs of the business.  

Individual employees will immediately see the benefits, recognizing new avenues of career development. And the organization benefits from a more flexible, multi-talented workforce.  

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If your organization isn’t yet taking a strategic approach to workforce planning, consider starting with a solid foundation around these six principles. You’ll find that reimagining your workforce strategy with the same passion and innovation as customer-facing aspects of business doesn’t just prepare your organization for your future vision; it will also help ensure you have the right talent to weather current storms.  

Learn more about our organizational transformation strategy and capabilities.  

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Banking on the Metaverse: The Imperatives of Web 3.0 for Financial Services

How should financial service companies build resilience for the decentralized future?   

The massive financial services industry (including wealth management, retail banking and insurance) is a powerhouse player in today’s globalized economy. Despite (or perhaps due to) its scale, this sector has traditionally been slow to change, encumbered by legacy businesses, ever-changing regulations and complex business models. However, as the boom in fintech players and investments has shown, incumbents in the business are not immune to disruption.  

Metaverse – The Next Wave of Disruption  

Given the foreseeable growth of the Metaverse economy, digital currency and payments will be key to all transactions. However, amid recent controversies surrounding cryptocurrencies, such as the collapse of FTX, there is a heightened opportunity for financial services providers to build a strong sense of trust and security in the Metaverse with a commitment to strong governance. Both established, traditional companies and newer, digital players would be wise to think proactively about what their presence in the Metaverse can and should be. 

Preliminary forays into the Metaverse by financial services firms have been focused mainly on brand building. In 2022, HSBC, Standard Chartered and DBS all acquired virtual plots of land in The Sandbox, a Metaverse game, with the goal of creating Metaverse experiences and touchpoints to engage with a new generation of customers. Similarly, J.P. Morgan opened a lounge in the virtual world Decentraland earlier this year but has been involved in Web 3.0 since 2020, when the bank launched Onyx, a blockchain-based platform for wholesale payment transactions.​ Meanwhile, new players are pushing in. Cryptocurrency exchange platforms such as Coinbase and Binance have annual exchange volumes in the trillions. Cryptocurrencies themselves are being created by a wide range of decentralized organizations and individuals. 

With these waves of disruption shaking up the sector, financial institutions must consider both the why and the how of their Metaverse strategy. Below, we discuss what financial services brands should consider when building their brand presence, future offerings and new business models. 

Defining the Why: Clarify Business Objectives and Your Audience 

As mentioned, many leading financial services brands have already invested in the Metaverse. But it’s not just about being there; it’s about being there with a purpose. First, a brand must have a clear definition of why they are in the Metaverse. Is the goal to build brand awareness or create brand differentiation? Or is it about engaging with customers, improving loyalty and onboarding a new generation? Or do they want to educate a new generation of investors? Having clarity and alignment throughout all levels of the organization is critical to setting a visionary Metaverse strategy. 

To define the why, brands first need to understand the profile of who is in the Metaverse today, including demographics, attitudes and behaviors. “Metazens” are drawn to the Metaverse for a variety of reasons – from entertainment to self-expression to community to creativity. How can brands enable their customers to achieve these goals in the Metaverse? 

Then, as with any go-to-market strategy, financial services brands should be clear on their target audience within the Metaverse and how they want them to behave and engage with the brand. In Web 2.0, brands cannot be everything for everyone. The same is true in the Web 3.0 world. In turn, a Metaverse strategy should also align with the overall brand strategy and value proposition to ensure that the customer experience across all touchpoints– from offline to mobile to web to Metaverse– is consistent and cohesive. 

Understanding the How: Innovating Business Models to Capture Emerging Opportunities 

Once a brand’s objective on the Metaverse is defined, it must be translated into a feasible business model that can ultimately drive revenue. Unlike the fashion companies that have dominated the early stages of the Metaverse by selling digital apparel for avatars, financial services companies are posed with a more challenging but also potentially more exciting “how” when it comes to monetization in the Metaverse. The blurred physical and virtual realities will create new opportunities when it comes to payments, loans, investments and even new types of financial products not yet in the market today. As the Metaverse is still in its early stages, we’ve only just begun to explore what is possible. 

When considering ways financial services brands can drive revenue, we see two near-term prospects.  

1. The Evolution of Services With Rich Data. 

In Web 2.0, customer data is centralized and comes from the limited customer touchpoints throughout the journey – from website visits to phone calls, from advertisements to purchases. In the Metaverse, customer touchpoints will evolve to become more experiential, multisensorial and multidimensional. Salespeople can interact with customers “face-to-face,” no longer confined by phone lines or chat boxes. Products can be showcased in real-time rather than on a webpage. All these interactions will generate an incredible amount of data points. Financial services organizations, thus, have the opportunity to define and evolve their experience principles on the Metaverse to offer more customized and higher-quality services. However, it is important to note that these data points are also decentralized and anonymous. Collecting data and attributing data to concrete customers will also become more difficult.  

2. The Reimagination of Traditional Revenue Models.

As they do in the current Web 2.0 world, financial institutions have the expertise and resources to provide security, risk mitigation and fraud prevention for Metaverse transactions. They can also offer financing or protection for digital assets just as they do physical ones. Financial services brands can provide loans or insurance for NFTs, virtual real estate and other assets that users in the Metaverse will own. The merging of the online and offline worlds will allow brands to play in both spheres and find the opportunities for crossover.  

(Image source)  

Founded in 2018, ZELF calls itself the first bank of the Metaverse. It started as a messaging-first “neobank,” issuing cards to customers in a matter of minutes, simply by chatting with them via Messenger, WhatsApp, Viber or Telegram. Since then, it’s become the first financial services provider to allow customers to manage their gaming assets, cryptocurrency, digital art and regular (fiat) currency in one place. ZELF simplifies and democratizes access to financial services, facilitating financial transactions in the virtual world of crypto and gaming, enabling NFT trades, and allowing players to trade (or use as collateral) their digital assets earned from gaming for fiat currency.  

Prophet defines the customer-centric framework of business model innovation as one that creates more value for customers while also increasing the amount of value available to be captured by the business.  

Building a Roadmap For the Future 

While the commercial and technological infrastructure of the Metaverse is still be developed, financial services providers need to start innovating their offerings for the future virtual community. In developing a roadmap for the future, financial institutions also need to identify the current knowledge and capability gaps and invest in the appropriate resources to fill them. The multidimensional Metaverse will also require a multidisciplinary effort across organizations.  

As the Metaverse and Web 3.0 continues to evolve, new capabilities, technologies, use cases and business opportunities will continue to emerge. To seize these opportunities, innovation needs to happen across all platforms; thus, financial services brand should be ready with short- and long-term Metaverse activation roadmaps. 

FINAL THOUGHTS

Defining the “why” and understanding the “how” is core to the way Prophet builds brands today. When designing a Metaverse strategy, it is just as essential for the process to be rooted in sharp consumer insights, a compelling value proposition, and a differentiated experience.  

Prophet combines its deep expertise in financial services with a wide breadth of capabilities across customer research, brand building, experience design, business model innovation and digital transformation. Get in touch to see how we can help your financial services brand formulate a strategic roadmap to respond, adapt and transform in this next wave of the Metaverse. 

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The Keys to Improving Patient Engagement in Pharma  

The notion of patient engagement has been taking shape for over 30 years. Here are 10 tips to accelerate and embed patient engagement systematically in your organization.

The notion of patient engagement has been taking shape for over 30 years. Going beyond patient advocacy, patient engagement is the active involvement of patients in processes and decision-making in their care experience, across the entirety of the development lifecycle and beyond.

Patient engagement works to address health disparities and inequity more systematically by including and elevating diverse patient voices across the key touchpoints of drug development, ultimately raising the standard of care all patients receive and the outcomes they experience. It’s about going beyond clinical outcomes and driving a more holistic understanding of patients and the treatment effect across their preferences, social phenotypes and circumstances – socioeconomic or otherwise. Ultimately, the goal is to create medicines, treatments and experiences with (not for) patients. 

And we’ve seen the business and clinical results at key points across the development cycle.  

So Why Haven’t Pharmaceutical Companies Cracked It? 

Pharma is the only industry that has not fully embraced the end user in its product development. The practice of understanding patients and applying that understanding systematically to treatment development is complex and difficult.  

There are several barriers to successfully engaging patients in pharma:

  • Historic Disregard of the Patient – The industry has historically been wired to disregard the perspectives and needs of patients outside of the clinical outcomes related to therapies of interest. Practitioners can often be resistant to centering on patients, with a typically paternalistic relationship with patients, coupled with a lack of time and capacity to actively involve patients in their care.
  • Regulations and Resources – The regulatory requirements, time and investment required to engage with patients mean it often doesn’t happen. Or at best, it happens sporadically.
  • Corporate Culture – Fragmented and siloed corporate structures and cultures result in ad hoc and unsustainable attempts at patient engagement. Not to mention, they are often not built into the drug development lifecycle.
  • Limited Pharma-Patient Interactions – Patients have limited capacity and agency to engage with pharma, leading to difficulties in diverse and representative patient groups.
  • Lack of Faith as a Strategic Priority – Due to the delayed ROI associated with patient engagement, pharma struggles with prioritizing patient engagement as a sustained and systematic business imperative.

The only way to initiate and scale patient engagement sustainably is to take a systematic approach across the entire organization and at key moments throughout the drug development lifecycle.   

External Pressures for Patient Engagement are Mounting 

All of that said, the lack of impetus is changing. Patient engagement is no longer a nice to have, with a range of forces driving an increased focus on patient engagement. Industry leader, Roche, is in the process of training 10,000+ employees in patient engagement. The most important medicines regulators in the world, the FDA (Food and Drug Administration) and EMA (European Medicines Agency) are strongly invested in expanding Patient-Focussed Drug Development (PFDD). In 2016, the FDA codified patient engagement as a key pillar of its mission, formally requiring records of Patient Perspectives in drug review under PDUFA VI. It will become increasingly difficult and slow to get new indications approved and paid for without showing patient engagement throughout the development process and treatment regime design. The global COVID-19 pandemic has also seen familiarity, scrutiny and pressure on pharma corporate brands as their reputations increased hugely, presenting a timely and important opportunity to build trust and understanding between pharma and patients.  

The Solution? Systematically Embed Patient Engagement into Your Culture and Operating Model 

Through the learnings shared by different businesses and patient engagement leaders, it has become evident that no existing business function can fully own patient engagement. An overarching function, or center of excellence, must focus on shifting mindsets of each therapeutic area and motivating change while permeating tools, training, new ways of working, processes and systems through all cross-functional aspects of the organization to deliver impact for patients and ensure patient engagement practices are adopted cohesively.  

Leaders must be bought into the need for patient engagement and must be willing to drive home the message within their teams and prioritize it as a focus across the organization. For a patient engagement function to be able to identify and navigate the appropriate channels within the organization, the correct process, governance and stakeholders must be in place. This requires organizational, operating model and cultural adaptations to bring an enterprise-wide and systematic approach to patient engagement. Getting it right brings not only better results but renewed purpose and inspiration to teams across the business. 

10 Tips to Embed Patient Engagement (PE) Systematically in Your Organization  

From our experience globally we have distilled the key areas of focus that will help you build and embed a systematic approach to Patient Engagement across your organization 

Set Up Strategically 

  1. Embed patient engagement holistically, X-FN and enterprise-wide approach
  2. Clearly articulate the value of patient engagement – and link it to the corporate and therapeutic strategies 
  3. Ensure the patient engagement function sits strategically in the organization and is clearly distinguishable from other patient-facing functions, acting as a key enabler for other functions 

Initiate Meaningful Work 

  1. Create a comprehensive patient experience blueprint that drives equitable access to care and an improved experience
  2. Start by piloting patient engagement initiatives and tactics in the “moments that matter” across the lifecycle 
  3. Develop a patient insights function to understand patient experiences and improve outcomes  

Disseminate and Scale Rapidly 

  1. Build patient engagement infrastructure quickly by codifying best practices into repeatable processes
  2. Fill gaps in understanding with bespoke learning and development programs 
  3. Maintain momentum by creating visible platforms to articulate the importance of patient engagement 
  4. Focus on the value of patient engagement to society – the “S” in ESG (Environmental, Social, Governance)   

Making Patient Engagement Happen

To become systematic in your organization, patient engagement needs to be driven by enterprise-wide momentum while being bolstered simultaneously with enterprise-wide infrastructure. Why? Proving the ROI of patient engagement is still challenging for most organizations. As a result, the patient engagement function needs to develop a strong and robust proof of concept across drug development and commercial processes. This means partnering and collaborating across the business to make sure everyone is clear on what ‘including the patient’ looks like in their role. This will reconnect employees with the organizational purpose, which in turn attracts top talent, galvanizing them to build enterprise momentum around the value of patient engagement.  

At the same time, for this to be sustainable, we need to ensure a systematic approach so pharma can realize the full ROI of patient engagement – building the right infrastructure to make this happen. You need momentum to be able to build the infrastructure. These two things can’t be done sequentially, they need to be done in tandem.  

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The good news is that it’s easy to get started. Patient engagement is inherently motivating to your people and every pharma organization has teams with an immediate need for support.   

To figure out how to accelerate the momentum of your patient engagement strategy and embed it across your organization, Prophet conducts a 2-hour workshop that helps clients define and articulate their challenges and where they need to focus efforts based on our top 10 insights outlined above. Get in touch with our Organization & Culture experts at Prophet to learn more.  

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5 Common Mistakes in Managing Healthcare Data Products

How healthcare organizations can avoid and navigate data pitfalls while building data products.

As we embark on another chapter of technology adoption, moving from the Internet of Things (IoT) to web3 and the metaverse, and as a greater degree of interoperability takes hold, data in all things healthcare is no longer a differentiator but a table stake.  As we cover in our research, “Transforming Healthcare: The Changemaker Playbook,” the ongoing healthcare data revolution opens the opportunity to deliver better clinical decisions, faster and more appropriate care delivery and ultimately more equity and context to patient treatment. Everyone by now knows that by using data and managing it the right way, organizations will see costs go down and both clinical and business processes get smarter and more efficient. However, where does data specific to your needs come from?  Who’s generating it, curating it and selling it?   

There is a massive gap emerging in organizations as it relates to managing and extracting value from their data, namely the productization of it. Yes, there are seasoned players in the healthcare data space such as Optum, Merative and IQVIA that have a high degree of maturity as it relates to data-as-a-product.  But there are also new entrants, such as growing physician groups, amassing unique and compelling data sets, as well as device and equipment manufacturers, whose smart products are also accumulating data.   

We are finding that these fringe players in healthcare data are extremely eclectic as it relates to their product management capabilities with data. These organizations are oftentimes shining examples in product development with their core products (e.g. specialty practices, vital signs monitors, claims clearing houses, etc.), but when it comes to data-as-a-product, they are often overlooking a variety of fundamentals. These mistakes are having a dramatic impact on their ability to create value with data. Generally, we are seeing three categories of data products that exist in healthcare:  

3 Categories of Healthcare Data Products

  1. DaaS: Data as a Service – When you take raw or transformed data that can be sold or licensed to additional parties
  2. Data Resulting From a Feature – By utilizing features of an existing product or service to generate data that may be productized
  3. Algorithmic and Logic Based – Where you take data, apply logic and algorithms to it to give outputs or aid in decision making 

The following highlights a set of frequent mistakes to avoid when entering the healthcare data space.  
   

1. Prioritizing “More” Data Instead of Necessary Data 

Date range or depth are often things companies will tote as a major selling point. As you peel this back, we found that customers look for the quality and completeness of the essential data that they need to solve problems they’re working on.  

Focusing on who wants or needs this data, and why, is a critical question to answer when defining the data product. Adding lots of nice-to-have data sets to your product may not create customer value. Sophisticated customers who take the time to examine your data will often try to poke holes or find gaps that will impact their decision to purchase and adopt your product.   

2. Lack of Data Accessibility  

Whether your product is a database, web platform, App or API, thinking through the end-to-end customer journey is often a gap. Data is usually part of a broader workflow that combines multiple systems, tech stacks, integrations and processes.  

As you build your product, it’s crucial to envision the data’s entire journey. Make sure your customers can pull and access the data! Rarely does a customer only use a single data source, so being able to integrate and distribute with their other solutions is essential. Often data may need to be mapped to your customers’ existing data models. A helpful tip is understanding your customer’s personas, and their level of understanding and skills, as they will be the day-to-day people interacting with the data.   

3. Loose Data Governance Practices 

As your product’s data is generated or compiled, it is critical to creating a formal taxonomy (hierarchical grouping which gives structure and standardizes terminology). This allows you to keep track of the attribution (source, rights, ownership) of where the data comes from.  some of the things included in data taxonomy are clear definitions of what data means, whether those terms are generally accepted in your industry and knowledge of how to explain the data. Another critical element to data governance is understanding your meta-data. For example, it is essential to document things like time stamping, user, source, security, segmentation and IP rights. Data in healthcare can be sensitive with regulations and policies affiliated with it so understanding what is classified as HIPAA when data can remain identified or needs to be de-identified needs to be considered.  

There will be a number of team members working around your data (engineers, data scientists, database managers, statisticians, researchers, product managers, etc.), so creating a taxonomy and decision for access rights ensures the integrity of your data is preserved. Continuously auditing change logs and benchmarking data is essential and good hygiene. Furthermore, you need to ensure that this data is protected and that your business model for monetization is secure with accessibility. Whether it be in your technology or contract terms, protect your data’s IP. From the business and legal side of governance, your MSA, EULA and contract language (whatever is applicable to your product) need to clearly spell out ownership, give the right to anonymize, create derivate or redistribute data. Knowing where you are or what you can’t do must be relayed back to the product and technology development process.   

4. Data Analytics and Tools as an Afterthought 

Along with #2, we have found that customers want to generate more insights out of their data. This is often why clients ask for periodic data dumps or direct lines of access to the data. It is an important product decision to determine if and how much you want to invest in analytics and tools that enable your customers to generate more insights on their data.  

The more you understand their needs and what they are doing with the data outside of your product, the more you should consider what would make your product stickier if you built those capabilities in. These can be simple things like filtering, searching, scheduled reports or extracts or dashboards. We often see customers still taking data and using excel or tableau to generate basic insights that can be offered inside your product.   

5. Overly Technical Products Can Deter Adoption 

Knowing your user, their technical abilities and their thresholds should be accounted for in your product development process. User retention will suffer if it takes too long to develop skills and understanding to use your product. This will manifest itself with low user activity, as well as unsatisfied business stakeholders who made an investment in selecting and implementing your product. If you are building products that are technical in nature, be sure to engage that user type/ persona early-on and understand how big that sellable market is. Don’t expect a large population of non-technical people to easily embrace your product. You will get early and stronger usage with intuitive products, short-term implementation cycles and onboarding processes, FAQ/help documents and quality customer support offerings.   

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As data, product and strategy experts, we have built and worked with numerous healthcare organizations that are challenged with building products that thrive in this rapidly evolving environment. Many companies that are in the early stages of building data product(s) are working through the prioritization of a backlog through current experiences – face a set of common obstacles.  

As a growth and transformation firm, we focus on partnering with our clients to enable the building of the highest quality products possible. Our specialization in healthcare, data and product management practices is a great resource to support you on your data product journey. We cover this subject more in our new report, but please reach out if you’d like to learn more. 

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The Missing Secret to M&A Success: Organizational Culture 

5 cultural pitfalls to avoid in pursuit of maximum M&A value.

Despite economic uncertainty and a slower rate of deals, organizations will continue to utilize mergers and acquisitions (M&A) to grow, diversify, penetrate new markets and develop new capabilities.   

M&A events represent a unique opportunity to transform a business, externally and internally. Externally, it can serve as an opportunity to enhance reputation, deliver on emerging or underserved needs and increase market share. Internally, it serves as an opportunity to drive lasting cultural change and inspire renewed purpose within the evolved organization.   

There’s a lot written about mergers failing because of culture. Unfortunately, most organizations are not using company culture effectively or systematically to maximize value and minimize risk in their deals. Organizations and deal team’s care. But it’s not a significant part of the integration playbook and doesn’t receive the required attention to make it accretive to the deal.  

At Prophet, we view culture as a hidden asset in determining the success of an M&A deal. Yet, culture is integral to the success of an organization. As organizations become more digitized and automated, people change businesses, which is why we have developed the Human-Centered Transformation Model. Our Human-Centered Transformation Model provides an easy and accessible, holistic lens for unpacking complexities and highlighting and understanding specific components to address cultural integration.  

With this framework in mind, here are five common cultural pitfalls many companies face during M&As and actionable insights on how you can turn the tide and achieve maximized return on your investment.   

1. Not Applying the Same Rigor to Cultural Analysis as to Deal Economics  

M&A teams pride themselves on meticulous due diligence. They dig into every financial, legal and operational element they can find. But they are often under-equipped for systematic analysis of the culture of the company they are acquiring. Nor do they detail the pathway to cultural integration in the same way that they would for the financial and legal elements to prove the viability and value of the deal.  

To overcome this challenge, M&A deal teams must determine cultural similarities and differences between the two organizations before finalizing the deal. To help our clients do the proper cultural due diligence, we build this critical cultural analysis and integration process into our transformation and integration playbooks. Gathering cultural data pre-deal reduces risks and speeds up integration by informing the strengths and differences between companies.   

It’s critical to find common ground to build on. Identify the bright spots that should be preserved due to intrinsic or financial value. It is also an opportunity to anticipate friction and allocate resources to support rapid integration.  

2. Lack of Transparency and Intention About Strategic Cultural Choices  

In most merger situations, leaders don’t clearly articulate the type of culture required to make the integration and future NewCo growth strategy successful.   

However, being honest and upfront about the cultural preferences that best support strategy, brand and integration strategy will begin the merger on a solid foundation and earn the trust of both sets of employees.   

Whether there is a dominant culture, a selection of specific attributes from both organizations worth merging, or a net new culture, executives must be transparent with employees. Be honest and open about the decisions, processes and rationale for every choice to preserve trust and respect across organizational lines.   

One critical choice to get right is who is selected for leadership positions. Individuals chosen for the top jobs within the NewCo signal to employees whether or not elements of their legacy organization’s culture and values will endure. The goal at this stage is not to be popular. Instead, it is to set a clear strategic frame for the people and cultural aspects of the journey ahead and a clear “why” that explains the decisions and the approach.  

3. Failure to Align Leaders From Both Parties  

M&A deals often come together in a rush. There may be multiple bidders. Or companies aware of the market anxiety that comes from a prolonged rumor phase, are anxious to make deals official. Once signed, the focus shifts rapidly to the physical and operational integration elements – there is always a lot of work to be done, and it’s very easy to overlook perceived ”softer” topics such as values and beliefs.   

That’s a mistake. As early as possible, leadership groups from both organizations need to come together to co-create purpose and values, the ambition for the desired culture and a roadmap to get there. It’s also essential to involve employees as early as possible. Regardless, if leaders from both sides don’t have the opportunity to debate and align on a shared ambition, direction and journey, the road ahead is much harder. Leaders from both sides of the NewCo must have a shared message for the organization’s purpose and values rather than deferring to their unmerged entities’ old purpose and values.   

Aligning the cultural direction and ambition during the early stages of an M&A deal is especially important when acquiring start-ups, which are often based on a radically different ethos than larger companies. Without deciding how to protect that difference from the outset, the acquirer can wind up squashing the cultural traits that are most valuable for growth.  

The nitty-gritty of cultural integration can come later. But there must be some initial high-level sense of how that might happen amongst the leadership group. Without a shared vision for what the united cultural DNA will be–the NewCo’s purpose and values–the deal is unlikely to fulfill its promise.  

4. Not Managing Cultural Messages – Everyone Is Watching Everything  

Once leaders from both parties have reached a consensus on what this new DNA will be, they must actively and consistently model those values as integration begins and beyond. Our research on Catalysts highlights leadership behavior as a fundamental lever in cultural transformation, especially during M&A events.  

In times of uncertainty and change, all eyes are on leadership. Every action and message–intentional or not–is analyzed and interpreted by employees. Never mind the top leader appointments, even decisions that may seem tactical, such as the choice of ERP platform or brand color palette, can send a cultural message. Senses are heightened in times of change. An organization failing to manage cultural messages consistently creates unnecessary fear and upset, impacting productivity and value.  

Intentional signaling early on and careful consideration of decisions, timing and positioning –with specific details about this new, merged culture–will be critical to building trust and engagement for the journey ahead. Being thoughtful about language, decisions, symbols, and rituals in the moments that matter will enable the integration to proceed at a quicker pace. Understanding employees’ experiences, perceptions and needs are essential.   

Put yourself in the shoes of employees. Use tools rooted in neuroscience, such as “SCARF,” to establish a standard toolkit and language, invite dialogue, track trends and equip your leaders to make good decisions and deliver consistent messages in line with your chosen culture strategy.   

5. Stopping Too Early 

It takes longer than most teams expect to holistically embed the “new” culture–to make it the culture. Leaders involved in the deal are like the elite athletes in a marathon. They are off and running before the employee base has even reached the start line and can quickly move on without thinking about those behind them. Once leaders have passed the initial messaging phase, they are often surprised at the depth and time commitment required to make cultural changes stick.  

This work requires detailed roadmaps to be clear on the destination and the steps to get there. These need to be measured and managed, even beyond the early integration phases, to help leaders stay the course and bring people with them.  

 Prophet’s Human-Centered Transformation Model (HCTM) provides leaders with an accessible lens for unpacking complexities and highlighting specific components that require focus–such as required skillsets and capabilities, important behaviors and symbols and the central structures, processes and governance mechanisms. The priorities can then be easily explored and understood to support rapid integration and drive sustainable value.   

Throughout the journey, leaders can promote the foundational DNA elements of the organization’s mission, purpose and values to act as the north star as they track tangible outcomes and signs of progress against the roadmap.  

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The effort is worth it – your people and shareholders will thank you. M&A events offer a unique opportunity to transform an organization’s business strategy and customer perceptions and to drive lasting cultural change. Building a human-centered approach into your M&A playbook is essential (or adopting Prophet’s playbook!) –people are the way to unlock the deal’s success. Co-create and share the “new” organization’s cultural ambitions as early as possible. It will build trust, create transparency and help realize the deal’s value.   

Ready to unlock the value of an M&A event through culture? Connect with our experts today. 

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Winning Web 3.0: Creating Immersive Metaverse Experiences

Understanding the web 3.0 metaverse and its key characteristics is essential to creating immersive and engaging metaverse experiences for your customers.

Rewind 10 years: Smartphones have already hit the market, but their potential is just beginning to be recognized. Now, whenever we need to purchase something on the go, run an errand at the bank, or share an update with our friends and family, we intuitively pick up our phone and complete the task in a matter of minutes or even seconds.  

In the same vein, we will see the Metaverse gradually blend into our lives, providing added convenience, multi-layered connectivity and unprecedented experiences in ways we have yet to discover. Brands need to pave the way for this future. In Web 2.0, brands serve as identities, externalizing purpose, values and personality, while engaging with customers and consumers. In Web 3.0, brands have evolved into entities. The Metaverse enables brands to come alive and interact with consumers in novel, innovative ways.  

To prepare for this uniquely immersive future, brands must start thinking of how to create unique experiences in the infancy of the Metaverse. What test and learn experiments can be launched in the near-term future? First, we must understand what differentiates the Web 3.0 Metaverse from the Web 2.0 we know. 

5 Characteristics of the Web 3.0-Enabled Metaverse

1. User-Owned  

Enabled by blockchain technology, the true Metaverse will be a decentralized platform, where users are given ownership over their data, assets and experiences. Unlike in Web 2.0, where consumer information is constantly being tracked, stored and sold, users will be able to decide how they want to collect and even monetize their own data in the Metaverse.  

In the Sandbox’s Metaverse, for example, players who hold SAND tokens make up the platform’s governance through a DAO (decentralized autonomous organization) where decisions are made by voting. 

2. Anonymous 

 The Metaverse allows users to have the freedom to shape their identities without being limited by their age, race, gender, appearance, citizenship and more – constraints that are unavoidable in the physical world. Instead, users rely on avatars – and can shape them to be any persona they want, choosing physical traits and a pseudonym they desire.  

3. Infinite 

 In the Metaverse, there can be an unlimited number of users as well as interoperable virtual worlds. And these users can move freely, unrestricted by constraints of the physical world such as distance, time and borders.  

For instance, rapper Travis Scott performed a larger-than-life concert in the video game Fortnite. The surreal spectacle was watched by over 12 million players, earning the artist $20 million according to reports. 

4. Boundlessly Immersive 

 With the continued advancement of 3D, VR and AR technologies, the Metaverse will continue to offer more interactivity and a more immersive digital presence for users. It will increasingly become a parallel reality of people’s everyday lives, with virtual and physical experiences reinforcing one another.  

Farzi Café, in India, has partnered with OneRare, a Metaverse built for the food and beverage industry. Users can play games at the Metaverse version of Farzi Café, minting tokens that can be exchanged for actual food items at the restaurant’s physical location. 

5. Persistent 

 The Metaverse is a permanent virtual space (which can be continuously built upon and is constantly evolving) that is independent of whether an individual user is online or offline. The persistence of the Metaverse allows users to share experiences synchronously or asynchronously. 

How Brands Are Building Metaverse Experiences Today and Tomorrow 

When foraying into the Metaverse, brands must take into account these characteristics that are unique to Web 3.0 and build accordingly. Brands that are pushing into the Metaverse understand that reimagining their brand experience and their business model will be key to finding early success. 

(Image source) 

The 2020 pandemic posed a major challenge for countries that rely heavily on tourism revenue. To create a virtual alternative, Singapore’s Sentosa Island partnered with Nintendo Switch’s popular game, Animal Crossing, to offer a unique experience – to explore the island of Sentosa in the Metaverse. Visitors from all parts of the world were also able to purchase unique merchandise and take part in social events and experiences, creating a new revenue source for the island in the absence of traditional tourism spend.  

(Image source) 

Fashion house Ralph Lauren announced that its Q3 2022 revenue increased by 27% to $1.8 billion as it tapped into an all-new market in the Metaverse and a new Gen Z customer base. The brand partnered with gaming platform Roblox to launch the Ralph Lauren Winter Escape experience, which includes winter-themed activities, a Ralph’s Coffee Truck and exclusive digital apparel. On South –Korea-based Zepeto, Ralph Lauren similarly offers clothing to users to dress their avatars, selling more than one hundred thousand units in the first few weeks post-launch. It’s become clear to Ralph Lauren that virtual product sales will grow to become a significant revenue stream for the brand. 

3 Considerations for Business Innovation in the Metaverse 

However, creating one-off brand campaigns on the Metaverse is not enough. Brands must think deeply about their customer journeys of the future. In our conversations with tech leaders and brand owners alike, this recognition is shared by many: “Consumer behavior and the battlefield of brand marketing have changed. Digital natives are the early adopters in the Metaverse. Brands must build their brand, create new experiences and reimagine their products in the virtual world,” said Grace Huang, head of B2B marketing at Yahoo Taiwan. 

In the Metaverse, users can explore virtual worlds that exist in parallel with their lives in the physical world. As technology advances, the lines between these worlds will become increasingly blurred and the transition between them nearly seamless. Brands must consider how the above characteristics will shape the future of brand experiences. We anticipate three major shifts: 

1. Persona 

 The current standards by which our social value system is defined may change. “Metazens” may have professions that don’t yet exist today, possess far more virtual assets than physical ones and restructure the entire social hierarchy. As a start, brands can rethink how they design their products. For instance, apparel in the Metaverse can span a much broader range of sizes, shapes, colors and designs than in the physical world, but items that can be recreated offline as well might have additional appeal.  

2: Behavior 

 A significant amount of time will be spent online, from work to hobbies and from shopping to personal banking. Most activities can and will be completed in the Metaverse in the not-so-faraway future. Brands can consider which interactions with their consumers can be replicated in the Metaverse. Which will disappear entirely? What will emerge that does not yet exist in the physical world? 

3. Business 

 Gaming and entertainment are the initial sectors to have entered the Metaverse, but eventually, every industry will be reimagined and reinvented. Similar to e-commerce’s evolution over the past few decades, the Metaverse has the potential to become a major contributor to the world’s economy. What are near-in and far-out revenue streams that brands may be able to create? 

With this future full of untapped opportunities, what can brands get started on today? 

  • Start to get immersed in the Metaverse, as a brand builder but also as a user. Designate Metaverse experts within your team and organization. 
  • Ideate on how your industry and intersecting industries will be reshaped by the Metaverse. Look to both in and out of category examples to find opportunities for innovation. 
  • Choose one or two ideas to build out, implement and test, leveraging an agile approach to gather immediate feedback from partners and customers. 

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FINAL THOUGHTS

Designing Metaverse experiences is the next frontier of creating relevant and engaging brand experiences for your customers. Companies across industries are testing out bold ways to launch into the Metaverse, through partnerships, business model innovation and test and learn approaches. 

Prophet has both the digital expertise and the experience innovation to be your partner in the Metaverse. Connect with us today to discuss a Metaverse experience strategy for your brand. 

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Gen Z Revealed:

6 Myths Busted

Gen Z is the target customer of the moment. Though it feels like every brand is out to win them over, too many brands miss the mark when it comes to serving this generation. Prophet set out to understand the truth behind Gen Zs preferred DTC brands and what’s driving their purchasing decisions. Our latest report busts six myths about how to win with this demographic: 

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MYTH-BUSTING GEN Z

Gen Z reveals the motivations driving purchasing decisions by responding to six myths.

Gen Z is screen-time savvy.

Gen Z prefers authentic creators over influencers, and they like to be the creators themselves.

Gen Z is respectfully outspoken about important issues but avoids face-to-face confrontation in daily life.

Gen Z uses both digital and in-store channels to get what they need.

Gen Z invests in its passions and saves on everything else.

Gen Z feels they compromise their values to purchase more practical options.

Gen Z has at least $360 billion in disposable income, a number that is only growing as they enter the workforce and advance their careers, according to Gen Z Planet. They are quickly becoming the driving force of the consumer market today. 

WHAT YOU’LL FIND IN THIS REPORT:  

1. The factors shaping Gen Z shopping behaviors   

2. Six myths impacting what Gen Z cares most about and their buying motivations  

3. Best-in-class examples of brands winning with Gen Z   

4. Actionable steps to reach Gen Z using the DTC Trifecta: Content, community and commerce 

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Prophet works with leading DTC companies in establishing and optimizing winning consumer strategies. Whether that’s launching a DTC brand from concept through launch, or updating customer acquisition and retention strategies or expanding into new categories – Prophet is a growth and transformation partner with deep expertise in DTC and all things Gen Z.

Check out the full list of ways we can help your DTC business grow.

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Transforming Healthcare: The Changemaker Playbook

Tackling the top four areas ripe for innovation and transformation in healthcare, this report inspires action and impact with big-picture strategic ideas and tactical tips for driving change.

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Change is hard, especially in healthcare. But in the sometimes lagging, but always vital industry, transformative change enables real people with real needs to live better lives. Not to mention, change strengthens bottom lines, improves investor returns and supports a more productive and sustainable society. That’s a powerful and synergistic business case to inspire all people that work in healthcare to take on the challenge of driving innovation.  

At face value, becoming a “changemaker,” can be daunting. It requires bravery and a clear sense of direction. This new report, from Prophet’s Healthcare team, was written to empower and guide healthcare’s future changemakers so they can ignite change in the industry and realize their transformation goals.  

Based on interviews with 29 senior leaders in healthcare, extensive market research and decades of experience helping healthcare organizations transform, “Transforming Healthcare: The Changemaker’s Playbook,” provides insights and recommendations to drive necessary change in healthcare.  

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  • Deep dives into four areas ripe for innovation and transformation in healthcare:
    • The rise of connected and empowered consumers
    • The expansion of care outside the hospital
    • The ascendancy of Value-Based Care
    • The decentralization and democratization of data
  • Highly relevant commentary and insights from industry leaders across the ecosystem 
  • Digestible and achievable “next steps” for leaders seeking to become changemakers

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