Banks that go on offense and remain committed to innovation will have the competitive edge as the economy returns to growth cycles.
Based on ongoing market research and interviews with industry experts and executives, “Winning the Innovation Game in Banking,”provides insights for senior banking leaders seeking to re-energize their organization’s innovation engines. Specifically, this report:
Provides pragmatic actions for avoiding costly mistakes and translating innovation investments into market impact and improvements on the top line
Defines leading practices and proven frameworks that accelerate efforts to operationalize and scale innovation programs
Identifies the most promising market territories for innovation aligned to the growth agendas of incumbent banks
Find out how we help partners across the healthcare ecosystem transform care experiences, create new enterprises and build empathy-driven sustainable ways of working.
4 min
Summary
At Prophet, we believe the organizations that thrive in healthcare are those that dare to change the game – striving to improve human health, create better experiences, and make the best of care an enduring and sustainable reality for all.
Find out how we help partners across the healthcare ecosystem transform care experiences, create new enterprises and build empathy-driven sustainable ways of working. See our healthcare services.
From URL to IRL: Four Pillars of Experiential Design for the Future of Offline Retail
As consumers begin returning to in-person shopping, it’s time for retailers to revisit the role of physical retail stores.
The last few years saw a boom in e-commerce, with innovations such as shoppable live streams, virtual try-ons and AI-powered recommendations enhancing the online retail experience. Today, as consumers re-enter physical stores, retailers can seize the opportunity to reimagine what in-person shopping looks like in the future of retail.
Consumers’ shopping behaviors have changed. Physical stores are no longer simply places of transaction. Instead, they can serve as storytelling centers that bring brands to life. Offline retail can help customers learn about products, provide an experience value and create stronger relationships. Customers like to view stores as places to experience something unique, memorable and human.
Also, brands must be clear on their story and audience when designing spaces and their content to create an in-store experience. Once the retail strategy is clear, it’s all about execution. To create a distinct offline experience, brands must think critically about what experiences are only possible in person and how technology can be leveraged to deliver them.
Below are four areas for brands to consider when developing an experiential design for the future of offline retail:
1. Beyond POS: Cultivating Community at the Storefront
It’s time to think beyond transactions. Having a physical footprint in today’s world can be so much more for a brand than simply a point-of-sale. Stores can become multi-purpose spaces dedicated to activities and brand activations that create a sense of community. Customers can come to a store to discover and learn about a brand and touch and feel its products.
IKEA has long been known for its one-of-a-kind in-store experience, with its winding paths, tiny model homes and world-famous meatballs. Its new store in Vienna takes it one step further. Rather than the giant blue warehouse that customers are used to, this 7-story structure of stacked glass pods and covered in greenery was designed to resemble the brand’s minimalist shelving units. Inside, the building offers a public rooftop terrace in addition to a hostel and café. Shoppers can shop, scan and pay directly from the IKEA mobile app and have larger items delivered to their homes via emission-free electric vehicles. IKEA plans for this new store to be more than a shopping center; instead, it’s meant to serve as an urban hub for people to gather in the heart of the city center.
2. In-Store Analytics: Connecting the Data Dots
Retail stores are also untapped data mines for brands. By leveraging technology that can track customer behavior in stores, brands can improve the offline journey for their consumers and even create personalized shopping experiences. This behind-the-scenes investment can give brands valuable data about how their customers shop as well as help better predict future trends.
Emart, Korea’s largest retailer, partnered with Seoul Robotics to install patented sensor technology in one of its busiest hypermarkets in the country. In doing so, Emart is able to capture data on customers’ shopping behaviors, such as their typical path around the store and where they spend the most time. Seoul Robotics’ technology also addresses concerns around consumer privacy. By using sensor technology that anonymizes customers rather than cameras that collect their images, no biometric data or personally identifiable information is recorded. This anonymized data is still hugely useful to Emart, though. Through a comprehensive customer data strategy, the information can be used to better manage inventory and product assortment as well as offer customers a highly personalized shopping experience, such as specific coupons based on aisles browsed.
3. Omnichannel 2.0: Bringing Seamlessness Offline
The ubiquity of e-commerce has elevated customers’ all-around expectations of a brand. Consumers have the same demands for ease and convenience when shopping in-store as they do online. Brands should view brick-and-mortar stores as opportunities to weave in technology, create more seamless touchpoints between them and their consumers and offer a true omnichannel experience.
Amazon recently opened its first Amazon Style store, expanding on its offline retail presence portfolio. Amazon Style is the company’s latest foray into fashion and seeks to make in-store shopping as easy and seamless as the online experience. Customers can use the Amazon Shopping app to scan an item’s QR code in-store, which will show them product sizing, colors, ratings and deals. They can then choose to send the item to a fitting room and use touchscreens to request different sizes or colors while also browsing AI-powered recommendations for similar items. Checkout is also a breeze via Amazon One palm scanners: with a wave of the hand, shoppers can purchase their items and be on their way.
But technology alone won’t be enough. Earlier this year, Amazon closed all its Amazon Books and Amazon 4-star retail locations. To fully convince shoppers, Amazon must find a way to create customer-centric experiences that combine the convenience and accessibility of online shopping with the in-store magic that only an IRL experience can deliver.
4. Retail’s Ultimate Edge: Engaging All the Senses
Ultimately, offline retail can win by creating experiences that are simply irreplicable online. Embracing stores as multi-sensorial touchpoints can allow brands to create innovative, memorable and highly engaging customer experiences. Brands that can do this successfully will have no trouble compelling shoppers to move off-screen and in-store.
Scent, one of our strongest senses, has a direct linkage to the part of the brain that controls emotions and memories. When used strategically, scent technology can create a memorable and vivid in-store experience and create desired shopping behaviors. Bloomingdale’s, for example, uses different scents for different sections throughout the store, such as coconut in swimwear and baby powder in infant clothing. Kyobo Book Centre, Korea’s largest bookstore chain, uses a signature scent inspired by trees and wind, meant to relax customers while creating a unified experience across its stores.
Sound plays to another one of our senses and can have a surprising impact on customer behavior, such as increasing brand recall and dwell time by creating a purposeful auditory experience. Genesis, Hyundai’s luxury sub-brand, uses a unique audio identity throughout its entire brand experience, from inside its vehicles to within its showrooms. This auditory expression of its motto, “Quietly Iconic,” is gentle yet distinct, a reflection of the brand’s positioning of modern luxury.
Hyundai recently opened Genesis House in New York, which serves as a brand experience center rather than a traditional showroom, incorporating this meticulously designed sound experience throughout its restaurant, library and event spaces.
While the pandemic posed its fair share of challenges to retailers everywhere, those that have powered through have the opportunity to rethink and redefine their retail experience strategy. Customers are hungry for in-person interactions, and memorable, seamless, multi-sensorial experiences that connect them to the brand – and each other.
Connect with Prophet today to see how we can help reimagine the future of retail for your brand.
Is There a New Love Story Between Brand and Demand Marketing in Southeast Asia?
SEA’s exploding e-commerce scene brings to the forefront the balancing act of brand building and demand generation.
During my recent keynote at DigiBranCon in Kuala Lumpur, I spoke to a congregation of leading marketers on the dichotomy of brand building versus demand marketing. In the post-Covid-19 era, where digital adoption and acceleration changed everything, should you invest more on brand building or demand marketing?
The Context: Southeast Asia’s Rising Digital Adoption
Southeast Asia’s massive e-commerce sector is advancing at a rate that is exceeding expectations. There are over 350 million internet users today and close to 10 million more coming online each year. In SEA, the time spent online has already surpassed the time spent watching TV and the online time spent in China and Japan.
Brands hoping to engage with SEA consumers must keep in mind the mobile-first nature of the market, with high levels of social media usage and influence. Successful brands are already using social as an e-commerce sales channel, catering to a young population with strong consumer ambitions. Established unicorns such as Grab, Lazada, Shopee, InMobi and Tokopedia are investing heavily in digital commerce and beginning to compete with newer, emerging players in the space.
The digital acceleration that took place during the pandemic invariably led to more brands shifting sales online. While there is a myriad of factors that lead to success or failure, one key consideration is the tension of brand building versus demand marketing.
Having a brand that stands out in the sea of competition is especially important online. In e-commerce, becoming a preferred brand is even harder yet critical – how do marketers build brand affinity and grow demand? Given most brands in SEA are small to medium-sized enterprises, this can be difficult given the time and financial investment required. As a result, many brands focus on near-term goals, relying on demand marketing for short-term sales and promotions. While this may convince consumers to make impulse purchases or trials, it doesn’t accomplish the longer-term goal of building true brand loyalty.
Should You Invest in Brand or Demand Marketing?
If no one knows your brand, your demand generation isn’t going to be as successful as it could be. You need brand awareness for demand generation to work and vice versa. Your brand establishes your legitimacy, creates loyal customer relationships and helps efficiently drive demand. Demand marketing is more about “Why buy one now?” It involves education and highlighting pain points with urgency. Branding is more about “Why buy from us?” It entails building your reputation so that people choose your product to solve that problem – even though there are likely other options.
As marketers, we know brand strategies don’t always directly connect to a sales pipeline, and demand doesn’t always lead to increased awareness in the market. But when the efforts from both sides are designed to complement each other, we’re able to reach a new, unprecedented level of cohesion across the entire marketing program –creating a powerful growth engine that helps us achieve the goals of:
Building preference for your brand and products
Reducing price sensitivity
Nurturing loyal and repeat customers
Saving costs with improved operational efficiencies
Creating a sustainable revenue stream
Higher effectiveness and ROI with our marketing investment
Prophet’s approach to brand and demand marketing is grounded in recognizing that there is a better way to engage with modern audiences, which is especially meaningful in SEA. It is a sustained, integrated approach that continuously engages with audiences inside and outside the marketing funnel in a value exchange that drives growth for both the audience and the brand.
How to Strike the Right Balance?
Is there a magical ratio between brand to demand? The conventional 60/40 brand/demand investment split is helpful but increasingly outdated and doesn’t accurately reflect what any medium or touchpoint can do. It also depends on the market situation and your business goals – the ratio will and should change at any given time to adapt to competitive environments.
To be good, we need to do both. But to be great, we need a more intentional, unifying strategy. The ideal state is to develop a long-term strategy across the customer journey to build preference, which helps to achieve faster, short-term quick wins during moments when buyers are more receptive to “demand” campaigns.
There are four golden rules that we identified in our recent, global research:
Build a marketing organization that has the skills and capabilities for both brand and demand, with teams working together against a shared purpose
Design your marketing approaches in an integrated fashion starting with annual planning.
Experimentation leads to success. Build a learning agenda and provide an investment budget.
Track performance and progress with an integrated brand and demand view and laddering up to business goals.
Through expertise and excellent marketing campaigns, you’ll build relationships that showcase how your product really is better than your competitors, and you’ll have a whole audience of loyal fans to back you up on that. The key lies in regularly fine-tuning your brand-to-demand ratios based on the goals of your brand, the product/campaign and audience response.
A good example is the regional fashion e-commerce brand, Zalora. When it was still a lesser-known brand, it focused investments on building its brand through traditional and social media marketing across Facebook and search engines. Today, as the brand matures, Zalora invests more heavily in demand marketing through strategic brand partnerships and social commerce, while still investing in data-driven Google ad campaigns.
Brand and Demand Marketing is the Ideal Couple and Content is a Compelling Aphrodisiac
As we seek out tactics that will lead us to achieve a proper ratio, there has been a trusted hero of the brand-and-demand approach: Content. If brand and demand are the ideal couple to engage audiences, then content marketing is how we amplify the love story of the couple successfully.
Experienced marketers know that one asset or social post does not result in a subscriber, let alone generate a lead. Trust takes time to develop, and the consistent cadence and drumbeat of a long-term content effort can help to build and nurture real relationships with audiences.
Like those addictive Korean drama series, if you can produce a steady stream of engaging and compelling content throughout the customer journey, your audience will be more engaged, and your brand messaging and communication will become more appealing. When this consistent drumbeat aligns with memorable brand campaigns, you build brand recognition and earn loyalty across the marketing funnel.
Through a strategic storyline approach, brands can extend their master narrative and create meaningful audience interactions throughout the entire funnel, ultimately nurturing prospects to conversion, recommendation and ultimately, loyalty.
Take the Indonesia-based e-commerce platform, Tokopedia, for example. The brand has embedded K-pop in its marketing content to better target its younger and female segments across Indonesia since 2021. Not only did Tokopedia present K-pop groups BTS and BLACKPINK as the face of the brand, but it also created a long-term content strategy to feature Korean artists in its programs, campaigns and events to drive customer acquisition, engagement and sales. This creates a consistent customer experience, delivering key benefits to the target audience along every step of its customer journey, thereby building brand loyalty.
During the mobile-first digital age, the new marketing benchmark requires an integrated strategy involving both brand building and demand marketing, calibrated to deliver impact based on the maturity of your brand. A balanced mix of both short- and long-term tactics is key to achieving uncommon growth.
In his book, “The Future of Purpose-Driven Branding,” branding expert, David Aaker, shows a pathway to business and social program leadership and offers five branding “must dos” to guide, inspire and enable effective communication of the program. The book includes:
A thorough case for why social programs are the secret weapon to helping business leaders build stronger brands and more connected work cultures, while supporting important social causes
Powerful case studies from organizations leading with exemplary social programs
Tools and insights for integrating social programs into the organization and business
Five branding “must dos” when building signature social brands
David Aaker is the author of more than one hundred articles and 18 books on marketing, business strategy, and branding that have sold over one million copies. A recognized global authority on branding, he has developed concepts and methods on brand building that are used by organizations around the world.
Connect
Want to interview David Aaker or feature him on your next podcast? Please connect with us or David directly.
Reach out to learn how David Aaker and Prophet can help your business create signature social programs that capture the hearts of leadership, customers, employees and brand followers.
Enabling Transformational Growth in Asia Through Effective Collaboration
Learn how companies in Asia can drive innovation and accelerate outcomes through better collaboration.
52 min
Summary
In Asia, effective collaboration is paramount to unite a diverse set of countries and strive towards a common goal.
Our latest global research report, “Catalysts: The Collaborative Advantage,” unveiled that companies in Asia value collaboration more than other regions, but lag in execution. How can the region work to close the gap?
In this webinar replay, leaders from Prophet’s Organization and Culture practice and the APAC team share insights from our latest global study, introducing clear pathways for leaders to prioritize and accelerate the efforts to build their collaborative muscle.
Learn how effective cross-organizational collaboration can help your business unlock transformational growth through a holistic, human-centered approach.
Key Takeaways
How Prophet’s Collaboration Flywheel helps deliver better, more impactful outcomes faster over time through a 3-phase approach.
Characteristics unique to the APAC region, and why effective collaboration is paramount to unite a diverse set of countries and strive towards a common goal.
Actionable tactics and case studies to unlock collaboration in today’s ever-evolving organizations with remote, hybrid and face-to-face workplaces and the future opportunities for improvement.
Winners in the future will embrace social program leadership … or fade into irrelevance with customers, investors and employees. It’s not enough for companies to commit to reducing energy or have an ad hoc budget for grants and volunteering. The world needs the resources and agility of large businesses to address existential threats in society with imaginative and impactful programs.
In his book, “The Future of Purpose-Driven Branding,” branding expert David Aaker shows a pathway to business social leadership that include four strategies:
Employ resources to address the most pressing societal challenges – like climate change and identity inequalities
Create impactful, inspiring, and mission-driven signature social programs that will help business leaders build brands that are more relevant and purpose-driven as well as impact important social challenges
Integrate the signature social programs into the business to bolster the organization’s brand as a mission-driven enterprise that is “doing good”
Create and manage a portfolio of signature social brands that inspire, engage and communicate with passion and clarity by using the five branding “must-dos”
Highlights
A thorough case for why social programs are the secret weapon to helping business leaders build stronger brands and more connected work cultures while supporting important social causes
Powerful case studies from organizations leading with exemplary social programs
Tools and insights for integrating social programs into the organization and business
Five branding “must-dos” when building signature social brands
“David Aaker, the branding guru, shows how to leverage signature social programs using vivid case studies. Integrating the social program into the business creates a win-win infinity loop. ‘The Future of Purpose-Driven Branding’is a must-read book for the purpose era.”
Joe Tripodi Former CMO at Coca-Cola, Allstate and MasterCard
“Every company should adopt a social cause beyond profit-making. Aaker has written the perfect book to help you find that cause and build a unique program and brand that makes a difference.”
Phil Kotler The Father of Modern Marketing
“This is a roadmap for nonprofits who want to build an inspiring brand and attract active business partners. The five branding “must dos” are game-changing.”
Eve Birge Exec Director, White Pony Express, “All of Us Taking Care of All of Us”
About the Author
David Aaker is the author of more than one hundred articles and 18 books on marketing, business strategy and branding that have sold over one million copies. A recognized global authority on branding, he has developed concepts and methods of brand building that are used by organizations around the world.
Connect
Want to interview David Aaker or feature him on your next podcast? Please connect with us or David directly. Reach out to learn how David and Prophet can help your business create signature social programs that capture the hearts of leadership, customers, employees and brand followers.
A Human-Centered Approach to Digital Transformation
The point of digital transformation is not to become more digital; it is to become a better company.
2 min
Summary
Chan Suh, chief digital officer at Prophet, says that technology-led digital transformations often fall short of the intended impact. Instead, it should be steered by a purpose-led mission. At Prophet, we pull together our range of capabilities and expertise to help our clients transform from within. Learn more about Prophet’s approach to digital transformation in this blog.
Digital Transformation at Prophet
Prophet is a convergence accelerator and purpose-led transformation consultancy that will help you reimagine your firm, integrate and scale digital investments and drive real, defensible growth. We believe that to accelerate convergence we take your existing assets – such as data, brand, culture, business models – reimagine them for today’s customers and employees and look for new ways to integrate capabilities and talent with a reimagined sense of purpose. Then, we drive towards scale.
Get in touch today if you’d like to learn how to bring digital convergence moves to grow your organization.
How to create a change-ready organization through a culture of play.
The past few years have felt like anything but a game – unless that game is Monopoly and you’re losing to your older sibling after landing on Park Place for the eighth time. In this case, the taunting sibling has more teeth: global pandemics, social reckonings and war.
All of these factors have shaken people’s sense of safety, identity and trust. And these challenges have required companies in every industry to accelerate transformation—something that’s difficult in an environment where people are exhausted, frustrated and, at times, scared.
Fortunately, many companies are heeding the call to take care of their people with 90% of employers reporting an increase in investment in mental health programs (come on, the other 10%!) according to Wellable Labs’ “2022 Employee Wellness Industry Trends Report.”
And while holistic well-being is incredibly important, work itself still lacks the humanity (the human beings in “well-being”) needed to sustain change. But that’s where play comes in. Forgive the pun, but it plays a part in the transformation.
What is Play and How Does it Tie Into Transformation?
Prophet’s Change Fitness Model reflects the different starting points for how companies see and address change, ranging from the transactional belief that “change is an obstacle to overcome” to the transformational state of play where transformation can be a sport to be enjoyed.
You can think of play as “batteries not included.” Because, given the constant nature of change, those who have achieved play can spend less energy overcoming each effort and more time being fueled by it.
So how do you get to the state of play? Exactly—you play!
Scientists Meredith Van Vleet and Brooke Feeney define play as: A behavior or activity carried out with the goal of amusement and fun that involves an enthusiastic and in-the-moment attitude or approach, and is highly interactive among play partners or with the activity itself.
Applying this lens to work clarifies the opportunity–making work that people enjoy, that brings out enthusiasm and deepens connections.
The skeptic will say, “We don’t have time for play – we have work to do!” But those ahead of the curve see the intrinsic need to link the two. Better play means better work. In fact, in a 2019 study by Brigham Young University, teams that played video games together were 20% more productive than others.
That’s because play unlocks creativity, helping people tap into new sources of inspiration and ways of thinking—which creates better solutions.
And, especially at a time when the universe is playing chess with humanity, play creates sustainability and safety, encouraging people to enjoy what they’re doing, so they’ll want to do it more. And it deepens skill building, encouraging trial and growth in new ways. Checkmate.
Of course, play is easier said than done and toxic environments will reject it. People can’t experiment if they believe their job or reputation is at risk. They won’t be themselves if they don’t like the people they’re working with. And they won’t prioritize play if they’re getting mixed or conflicting signals from leadership.
Play shouldn’t be isolated to an innovation team, a single brainstorm, an occasional company outing nor the funniest person in the room. Play needs to take place across all levels and contexts – across a company’s culture, teams and individuals. Each reinforces the other with a company’s culture making it easier for teams to be able to play, and individuals bringing their whole selves to both innovation and the everyday.
How to Create a Culture of Play Within Your Organization
So how might you best implement a culture of play? We couldn’t not use the SMILE acronym, could we?
Safe
No one wants to play “the floor is lava” with actual lava. People need to feel safe in their environment. That means feeling confident that they can make mistakes and learn from them, not be punished by them.
According to Peter Temes, founder and president of the Institute for Innovation in Large Organizations (ILO), “that hasn’t changed since we began this work 15 years ago, and probably hasn’t changed from decades prior to that—this idea of lowering the cost of failure.”
Leaders can create safety by modeling and being transparent about failures and growth opportunities. Most importantly, leaders’ actions must speak louder than words – when individuals fail, they need to celebrate those learnings, not focus on the implications.
Leaders can also help create a sense of safety through joy and levity in the workplace. Jennifer Aaker and Naomi Bagdonas, authors of “Humor, Seriously,” have shown that companies that embedded humor in their culture had employees who were 16% more likely to stay at their jobs feel engaged and experience satisfaction.
Meaningful
By nature, games have stakes and meaning – it’s what makes them exciting and, as defined above, creates the enthusiasm that creates play. Giving meaning to play can take many forms.
One way is through reinforcing an organization’s purpose, helping people see why their work matters. Some companies create meaning through competition – whether individual incentives, team challenges or by focusing on external competition.
One company created an internal fantasy league, resulting in an 18% increase in outbound calls and an increase in morale. Making play meaningful like this can be a great cause for celebration and recognition as well—reminding people about why they need to be invested in what they’re doing. Of course, “meaningful” must be rooted in safety – if people fear the stakes are too high, that fear can hold them back.
Individual
Everyone’s favorite radio station is WiiFM – “What’s in it for me.” Ask someone about a project they’re working on, and they might smile. But ask them what they did this weekend, and they’ll light up—even more so if they get to talk about personal hobbies or passions.
Create more ways for people to light up, and you’ll create more ways to unlock that joy and translate it into their work and relationships. At a systemic level, consider how you’re fostering individuals’ passions and making them feel heard and represented. And at a team and day-to-day level, find ways to share them.
Linked
On the other side of the “individual” see-saw is the need to bring people together. Often, people have more fun working with other people, and collaboration creates those all-important feelings of togetherness and belonging. Prophet’s 2022 Catalysts research: The Collaborative Advantage finds that employees achieve better outcomes personally and professionally when they collaborate – 65% of respondents cited higher levels of productivity as a result.
In hybrid environments, it becomes more challenging, where it may seem like people are working together on endless transactional Zoom calls. In reality, there is a shrinking emphasis on true connections which require smaller group interactions and a mix of both work-related and non-work-related focuses.
Exploratory
People need new inputs to get to new outputs. Trying a new dish can be more fun and exciting than eating the same meal for the fifth time this week. Consider how to fuel people’s joy and creativity by putting them in new situations, hearing from new voices or thinking about things in new ways. Then, use that space to give people a chance to get their hands dirty, safely.
Build in the flexibility for exploration. A global airline used the power of play to teach the organization its seating pricing strategy. Leaders used a game of “The Flight is Right,” taking the principles of “The Price is Right” and applying it to the complex principles that airlines face. By approaching the learning in a new way, and allowing people to play and participate, the message stuck.
LEGO’s serious play methodology is another great example of encouraging exploration to envision challenges in new ways while tapping into the joy of being a child.
The creativity expert, Edward De Bono, describes “Rivers of Thinking” – the building nature of experiences that help us to unlock new solutions. When we fill our rivers with the same water, it becomes difficult to explore new ones.
Play isn’t a moment in time or something you do outside of work. Organizations can use the power of play to create a sense of safety in the workplace, give employees a purpose, and build trust– all factors needed to accelerate transformational change in an organization.
How Does an Economic Downturn Impact Your Transformation?
When recession fears increase, companies usually pull back. However, the smart ones know that navigating turbulence builds resilience and exposes growth opportunities.
News that global markets are either in or inching toward a recession is creating uncertainty, causing many companies to consider pausing or reducing transformation initiatives. However, history has shown that challenging economic times can often lead to the urgency that stimulates profound innovation.
For decades, recessions have accelerated change and given birth to giants. Some examples include Hewlett Packard and Hilton in the 1950s; Microsoft in the ‘70s; and new economy brands like Uber, WhatsApp, Venmo, Instagram, Airbnb, Slack and Dropbox all roared into life during the Great Recession, which began in 2008.
New platforms and operating models–from the sharing economy to subscription models to crypto–rise in times of uncertainty. And legacy companies may have a competitive advantage if they have the right components in place. These unpredictable markets offer unexpected opportunities for established companies. Consumers develop new needs and behaviors causing competitors to change tactics and reveal new white space opportunities.
We’re not saying it’s easy to shift course to address these changes, but those ready to step up to the challenge often find exceptional growth, even when competitors struggle.
Incumbents can significantly capitalize on this advantage if they start to act more nimbly, leveraging their strengths and leaning into risk. In many cases, consumer trust in their brand proves invaluable, giving legacy companies permission to capitalize on new consumer behavior with new business models.
Organizations that have already started transformation efforts have a clear advantage. Many that were proactive during the pandemic have positioned themselves in a way that increases their chances in achieving new growth. This is especially true as they emerge from the downturn. But these organizations will need to address the scope and renewed urgency of change within this market by meeting it head-on and accelerating their transformation. Recessions alone are transformational – altering the economy, consumers and the competitive landscape. Just as the pandemic required adapting to new ways of shopping, working and doing business, this new terrain will undoubtedly bring its own paradigm shifts.
While accelerating is crucial, the environment transformation leaders currently face is rife with risk. Leaders need to unlock ways to confidently readjust their transformation strategy and approach.
The challenge to not only transform, but to do so at an accelerated pace in a down economy, requires a new approach. Mike Leiser, Prophet’s chief transformation officer, recommends leaders take a uniquely human view through the lens of our Human-Centered Transformation Model. This model requires a shift in thinking that will help organizations unlock and accelerate transformation.
“Businesses don’t change,” he tells us. “People change, and people change businesses.”
This is particularly true for legacy companies. They often have the capacity to fund transformation but need to overcome significant obstacles, including older operating models and antiquated talent incentives. We suggest starting with some hard questions about each interrelated dimension.
Organizational DNA Focus on Core Transformation Strategies and Driving Near-Term Value
Consumer needs and behaviors are dramatically different than those pre-pandemic, and it’s unclear how today’s inflation and rising interest rates will affect them over the next down cycle. These fundamental shifts will require leaders to evaluate their transformation priorities and roadmaps. However, with all areas of corporate spending increasingly under the microscope, transformation leaders will be called to show immediate impact and results. Very few companies will have the luxury of thinking in long-term “moon shots”, prevalent in stronger economies.
To get a better sense of potential changes, Prophet reached out to several experienced transformation leaders who have weathered the storm of a past recession. One such veteran is Stephen Crowley, former SVP of ATM technology & operations at Bank of America, who found himself in the eye of the financial crisis in 2008.
Crowley explained that, at the time, ATM and check depositing was still a modest business. But when it transformed toward digitizing 25% of all checking deposits, the effort became a massive, yet pivotal play to differentiate itself from other banks. The company radically accelerated its timeline, moving up goals and pouring support into an entirely new way of operating ATMs and check processing centers.
He shared his key lessons in connection with successfully doubling down on the vision:
If you want to focus on the business case around transformation in this economy, concentrate on customer experience–people can defect quickly in a downturn. For Crowley, that required standing in front of a thousand ATMs to watch customers make deposits.
Think about what kind of paradigm shift is happening and what’s transformational about the process itself. From a timing perspective, Bank of America was positioned to succeed where others had previously failed because smartphone technology had caught up to facilitate the transformation.
Questions to Help Clarify Transformation Strategy:
How are customer and employee behaviors shifting? Spending habits? Lifestyle changes? Priorities?
Are competitors creating new growth opportunities that fall under our North Star? Are there opportunities to divest non-core businesses?
Is there a compelling business case, measurement and governance model for the transformation strategy as costs are being cut? Will this transformation help drive growth during a recession? And beyond?
Given market changes, are the transformation vision and roadmap still relevant? Can it be executed faster?
Organizational Mind and Body: Manage the Skillsets and Muscles Required for Change
Within this environment of unknowns, it’s critical to understand how organizations will continue to drive momentum on transformational initiatives. That’s where the mind–the skillsets–and body–the operating model to support transformation–come in. In doing so, it’s essential for leaders to go beyond just thinking about processes for transformation.
Leaders must understand their organization’s aptitude for change, which requires addressing past successes, underlying culture and the values that are going to introduce agility – particularly as leaders seek to accelerate transformation in this down market.
Many organizations are already on this path, thanks to the pandemic. In a matter of months, they provided their workforces with new flexibility and upskilled them with digital collaboration tools, maintaining and even increasing productivity. Many organizations also expanded digital and online capacities to strengthen customer relationships and reconfigure supply chains. They did this by leaning into change and building organizational muscle. These organizations now know–as do their employees–that they can get through the storm and thrive. It gives them the confidence to do more in this environment, although the demands for organizational change will continue to evolve.
In an uncertain, cost-sensitive market, leaders need to encourage unexpected, rapid solutions. Therefore cross-organizational collaboration is essential fuel for accelerated transformation, allowing leaders and teams to break down silos to creatively build new solutions for value – giving them the ability to do (exponentially) more with less.
While this is still a challenge for most companies, our recent research finds that the more organizations promote this cross-functional work, the more successful they are. Employees see themselves as more productive and value the personal and professional growth that collaboration brings.
Secondly, the organizational mind needs to be primed to succeed amid risk, especially in a recession. “When you reward employees for healthy risk-taking, there’s a willingness to try new things,” says Matthew Perry, former vice president of foodservice sales at Kellogg Company. This pro-risk perspective allowed Perry to establish notable food product innovations during the Great Recession – many of which developed from rapid ideation and experimentation.
Perry believes succeeding in a down market requires empowering the workforce with new skillsets and growth opportunities. There are some clear actionable “mind” focused areas organizations can address to ensure employees are able to weather a down market environment:
Reward employees with healthy risk-taking and willingness to try new ways of solving problems. This will be a stretch for some who might not be suited to this environment, but, with the right support, many will be more willing to try.
Empower your workforce with new skillsets and personal growth opportunities that directly relate to the transformation at hand, making their role more relevant and connected to it. Additionally, make it clear that these skills encourage personal growth no matter what the ultimate outcome is. This is especially meaningful in tough times.
Encourage employees to lean into collaborative and cross-disciplinary teamwork. This speaks to the “body” and allows teams to action and accelerate transformation. When the environment demands that all leaders do more with less, encouraging employees to lean into collaborative, cross-disciplinary teamwork is a win-win.
Questions to Build the Organizational Mind and Body:
Do structures support transformation in an uncertain and fast-changing environment?
What skills do we need to get where we need to be?
Are teams and employees empowered to collaborate quickly to produce unexpected solutions in the face of market challenges?
Where can more agility, integration and experimentation be encouraged? How are hybrid work policies helping or hindering collaboration?
How are employees rewarded for actively stretching skillsets? For taking risks?
Organizational Soul: Design Communication for Intentional Motivation, Connection and Comprehension
Employees are every organization’s greatest resource. Teams who embrace and thrive during tumultuous times are key to transformational momentum. That’s why tracking and managing morale around transformation efforts is essential–the entire workforce is paying attention to what leaders say and what they do.
The past several years of change have often left employees too cynical to believe in transformational efforts. Couple this with informal information, and rumor mills go into overdrive, often based on real fears. “Will there be layoffs? Am I safe here?” It creates a significant barrier to realizing transformational goals.
Communication is the best tool to emotionally manage change and build morale. We’ve found it’s essential to provide clear, consistent communication about the strategy, and it’s also important to honestly and transparently report how the transformation is going. Most of all, leaders must acknowledge all the people impacted by the change. Employees should feel connected and a part of it all. Taken together, this builds a culture of resiliency.
Prophet’s recent research reveals a common trend: Accelerating transformation requires a motivated workforce with democratized decision-making. Leaders need to lean on mid-level and junior-level employees more heavily, meaning morale needs to be nurtured more carefully.
Deepak Agarwal chief information officer at the School District of Palm Beach County, Florida, shares that leading the digital transformation of a 27 thousand employee school district wouldn’t have been possible without an emphasis on strong communication. From 2008 to 2012, thousands of employees needed to adopt an entirely new set of operational and educational tools. He believes that the COVID-19 era has created a greater need for communication.
“Leaders need to ask how they can make employees’ work and lives better as they support and adopt transformation initiatives,” he says.
Agarwal sees three interrelated ways he successfully motivates colleagues and teams:
Leaders must provide strong communication systems and clear messaging about what changes are happening and when. Doing so will help employees engage during transformation.
Create better knowledge management systems to educate employees and train them.
Give employees better feedback tools so leaders can monitor how employees are feeling about the change.
This approach allows employees to feel valued, valuable and motivated to drive transformation forward.
Questions to Inspire Morale:
How well are transformation messages getting through? How thoroughly do all employees understand progress reports?
What is the process for making shifts in messaging when required?
What can leaders do differently to strengthen the purposeful connection between employees and the transformation?
Learn how to turn up your business in a downturn economy with Prophet’s Transformation Training.
Over the course of a one-day session, our team of Transformation professionals will evaluate your organization’s readiness for innovation and uncover near-term opportunities to accelerate your growth.
Please contact Kristen Groh, senior transformation partner, to host a Transformation Training with your team today!
As leaders look ahead to the next year, they will need to acknowledge that the latitude for risk is narrowing. Although nothing is certain, applying a Human-Centered Transformation Model allows leaders, particularly incumbents, to be more precise about their transformation. Transformations do pose risks, but there’s also a cost to failing to transform. Changing markets and customers require organizations that change, too. And those that transform effectively will achieve new growth and win against the competition.
Branding in the digital age requires rethinking and innovating experiences.
2 min
Summary
Chan Suh, chief digital officer at Prophet, shares how the firm’s heritage in branding has positioned our teams to tackle digital transformation challenges in today’s dynamic market. We blend science and art; technology and human understanding. Learn more about Prophet’s holistic and human-centered approach to transformation. For more on digital convergence, check out this blog.
Digital Transformation at Prophet
Prophet is a convergence accelerator and purpose-led transformation consultancy that will help you reimagine your firm, integrate and scale digital investments, and drive real, defensible growth. We believe that to accelerate convergence we take your existing assets – such as data, brand, culture, business models – reimagine them for today’s customers and employees and look for new ways to integrate capabilities and talent with a reimagined sense of purpose. Then, we drive towards scale.
Get in touch today if you’d like to learn how to bring digital convergence moves to grow your organization.
The Equation for Growth in Healthcare: Customer-Centricity, New Skills and Balancing Brand and Demand
Prophet recently hosted a healthcare leadership roundtable, moderated by John Ellett, focused on driving uncommon growth in healthcare today. Read the takeaways.
These were the takeaways from Prophet Healthcare’s leadership roundtable, moderated by John Ellett, which focused on driving uncommon growth in healthcare today.
We convene for these discussions a few times a year so leaders from different subsectors and functions can compare notes and share insights. The latest session was all about growth – where it is coming from today, how senior marketers can make it happen and who needs to be on the team.
Key Takeaways for CMOs and Growth Leaders Across the Healthcare Ecosystem
Play the Long Game of Innovation
In healthcare, innovation takes many forms – from new product launches and optimized experiences, to M&A and business model innovation. But no matter the approach, and whether we’re talking about startups or large enterprises, innovation requires both a long-term perspective and a sense of timing. It can take years to develop, say, breakthrough technology, but if the market’s not ready for it, new offerings might not take off.
Relative to growth, innovation must be viewed in the context of core value propositions, as well as future impacts. That means knowing what really moves the business and understanding what innovation will deliver (e.g., future revenue gains, increased profitability, brand differentiation). The support of senior leadership is key to keeping the organization’s eyes on the prize across long time horizons.
Solve for Talent
Executives agree that talent is as important as ever, even as marketing becomes more tech-driven. A few firms were looking for more skilled strategists to set the direction for marketing. But more are looking for tactical and functional expertise to execute growth strategies. There was consensus that “even the best strategy needs worker bees.” Ideally, workers will be self-starters who understand big-picture objectives, think analytically and measure results. As with growth itself, there seems to be no such thing as too much talent.
Focus on The Perennial Value of Customer-Centricity
As much as marketing has changed, customers remain the perennial focus. Everyone agrees that customer insights should be the core of all growth strategies. But participants also noted that it’s easier to say “we’re customer-centric” than to integrate the voice of the customer throughout all brand and marketing efforts, especially when targeting new segments. Many felt CMOs are uniquely positioned to maintain the powerful link between such customer-centricity and growth, including building stronger customer communities. In fact, being a “customer advocate” might be the most important responsibility CMOs have.
Recognize it Takes a Network
As healthcare leaders face an ever-expanding range of growth possibilities, the importance of internal and external networks grows more important. Asking the right questions of mentors, peers and external advisors is key to staying ahead of important industry developments. Socializing and testing your own vision is just as important. A strong network can certainly provide tips and insights relative to engaging customers in new channels. On a larger scale, they can shed light on how new technologies, ecosystems and partnerships, as well as business models, will impact growth strategies over the longer term.
Balance Brand and Demand
Senior marketers and other growth-oriented leaders across industries are trying to balance brand-building and demand generation investments and activities. (Check out Prophet’s blog series on this very hot topic). Demand strategies are easier to measure, a huge advantage in the multi-channel digital world. However, because of the unique nature of healthcare where relationships are at a premium, brands remain critical to building trust with consumers and patients.
One participant mentioned the classic formula of “40% demand and 60% brand,” but the optimal balance will vary based on an organization’s customer base, growth strategy and market position, among other factors. Because both “brand builder” and “performance marketer” are inherent parts of their job descriptions, CMOs must continue seeking the right balance, and recognize that it will evolve continually along with market conditions.
From the most effective channels and platforms to new media that might emerge, to new rules for customer engagement, the only thing that seems certain about the future is that CMOs and growth leaders in healthcare will keep watching developments closely and comparing notes with peers and colleagues.
If you’d like to participate in future healthcare roundtables, please reach out to Paul Schrimpf or John Ellett.
