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.
People aren’t robots. In a changing environment, companies shouldn’t be robotic, either.
It’s a truth older than Darwin: The ability to adapt grows more valuable whenever uncertainty in the environment increases. With the world’s markets tiptoeing toward recession, companies have the opportunity to make their next evolutionary leap–the chance to become more human.
We know –”more human” doesn’t exactly sound like how we’ve traditionally been taught to think about organizations. Businesses have spent the last two decades pursuing digital transformation and embracing artificial intelligence and advanced robotics–technologies that generally assume tasks previously reserved for humans. Additionally, business leaders have spent the last two centuries absorbing the Industrial Age organization theory, painting organizations as machines.
However, enterprises are not machines and people can no longer pretend that they are. Organizations are living organisms with behaviors and abilities like the humans who staff them.
The last few years have made that clear. Profits, while essential, aren’t all that matter. The market’s definition of success has shifted, and while people still expect organizations to make money, they increasingly value environmental sustainability, social equity and inclusion as well as efficiency. They expect human behavior–that means ethical, compassionate and transparent–from the companies they do business with.
Organizations can’t behave like single-minded robots to thrive in this new era, marching mindlessly toward the next quarter’s financial results. They need to evolve and become more complex, adaptive and creative organisms.
Three Ways You Can Build an Adaptable Operating Model
Adaptability is an acquired skill, and enterprises can take inspiration from our own human biology. We see three critical ways companies can evolve their operating model to become more adaptable and flexible, using the human body as a starting point.
1. Distributed Intelligence
People’s bodies can react quickly without involving the brain. Think about knee-jerk reflexes or yanking a hand away from a hot fire.
Organizations do the same thing when they empower people to take action throughout the company instead of having all decisions centrally controlled by a handful of leaders.
In a pharmaceutical company, for instance, engineers and planners can be embedded into production teams so they can deal with any issues locally, continually improving performance. The production quality gets improved locally and immediately, without involving the company’s central leadership.
This pivot to decentralization is evident in flexible manufacturing. For the pharmaceutical industry, for example, this concept is increasingly important when using cell and gene therapies to make advanced biologics. Often, these drugs are aimed at small patient populations, especially in oncology. Manufacturing cells need to reconfigure quickly to respond to market needs and be first to market.
It shouldn’t be local intelligence and action versus global intelligence and action. It’s about both. The human body has neurons in muscles, gut and extremities as well as the brain–and so do organizations.
2. Learning Through Data
Our brains learn through external stimuli, and people’s knowledge and capabilities represent everything they’ve individually learned or experienced. In other words, they are built by the data available to them through the senses. That’s why neural networks, modeled on the structures of human brains, can only be as smart as the training data available to the model.
For organizations to be more nimble, they need better and more frequent access to data of all types. They need to develop robust “sensory organs”–mechanisms to ensure they intimately understand customers’ needs, wants and desires. And they need to feed that data (as real-time as possible) into organizational decision-making.
That’s especially true for design functions, so that customer and employee experiences adapt to the needs of 21st-century consumers. Many companies believe they already do this, of course. But in adaptive enterprises, it is as natural as the human eye adapting to bright sunlight.
Samsung has built regional design studios around the world, which leverage design thinking and market knowledge to rapidly innovate. With its main hub in San Francisco, its multidisciplinary designers help it tap into the entrepreneurial spirit of Silicon Valley. That enables it to reign as Apple’s most formidable competitor.
3. Embrace the Ecosystem
Humans are exquisitely social animals. Most of us cannot exist independently from one another. Societies are complex ecosystems, with people mutually dependent upon one another for survival. And as environments have changed, new civilizations have grown up in response to new human needs.
In organizations, this spurs ever-expanding ideas about partnering and collaborating with other organizations. Technology incubation centers have spawned new developments–enabled by these networks and connections in ways that didn’t exist even a decade ago. It’s driven by sharing platforms– companies like Uber and Airbnb–and the subscription economy, led by companies like Salesforce and Apple.
Thriving in a VUCA World
There’s no escaping the VUCA (volatility, uncertainty, complexity, ambiguity) world we live in today. Organizations are still scrambling to embrace the changes wrought by the pandemic, including shifting customer values and hybrid workforces. And while the recession is by no means certain, rising inflation, energy costs and interest rates are pressuring consumer and B2B customers.
But organizations are by no means helpless. These sweeping changes offer opportunities for evolution and adaptation. For some, it may even be the right time for organizational transformation, including a new approach to human-centric operating model design. And no matter what, this uncertainty requires an entirely new approach to collaboration, a holistic view of the organization that takes in a company’s eyes, ears, heart and soul–as well as its brain.
Transform Your Financial Services Retail Experiences with These 9 Levers
9 key levers across 3 development stages, each enabling financial institutions to transform their retail experience towards the future.
In many Asian markets, financial services companies used to grow alongside the macro economy and compete heavily on products. But things are changing. Product innovation within established incumbents is becoming more difficult under a slowing economy and tighter regulations. Fintech companies are disrupting legacy brands – with offers across saving, credit, insurance and more. The new generation of consumers is increasingly looking for more than short-term returns. These macro shifts indicate that in the future of financial services, reimagining the customer experience and offering benefits beyond transactions will be critical in driving sustainable, ownable growth.
Study1 shows that nearly 70% of Asian financial services companies understand the importance of “customer-centricity,” and are investing heavily to improve digitally enabled customer experiences (CX). Yet surprisingly, only 20% of customers consider FS companies providers of truly “customer-centric” experiences2. This gap is not a favorable truth but indicates a great opportunity for a company to take action and lead the future. We have identified nine key levers across three development stages that will enable financial institutions to transform their retail experiences for the future.
Fix the Basics: Become a Financial Services Company that Meets Customer Needs
1. From “Experience” to “Branded Experience”
Speed and convenience have become critical for customers in the modern digital world. But focusing efforts solely on “ease”also tends to create very similar sets of experiences and/or functions. So how can a company cut through the clutter?
The answer is simple: brand. A solid brand strategy clearly defines what promise a company makes to its customers and how it uniquely delivers on the promise. Next, this will be translated into a brand identity system that closely aligns with the strategy and guides the development of truly ownable experiences.
For many financial services companies, brand has not been considered and managed as a strategic asset. Therefore, before aspiring to create any signature experiences, companies need to build a solid foundation first by carefully looking into their brand strategy and identity to define their own experience principles.
2. From “Product Distribution” to “Omni-Channel Experience”
Internet companies and FinTech pioneers have disrupted and transformed the retail side of financial services (e.g. Ant Finance and Ascend Money). Many companies now rely heavily on these platforms to broaden their reach to retail customers. But platforms can be restricting, and the company could face constraints in building distinct experiences and owning customer relationships.
As a solution, some leading companies have started to invest in their own digital ecosystem. For example, Fidelity created SmartRetire, a one-stop retirement solution platform. By building their own digital experience, companies can not only design and own the customer experience, but also collect data to enable targeted, more relevant engagements, that in turn can improve the customer journey in the long term.
If creating owned ecosystem is not feasible in the short term, companies should at least build a holistic plan across touchpoints and identify opportunities to maximize owned experience and relationships.
3. From “Experience as External Resources” to ‘Experience as Internal Center of Excellence”
Many financial service providers leverage third-party vendors to deliver service and experience at lower costs. However, service quality could be at risk under this outsourcing model and differentiation could be harder to sustain if the vendor relationship is not exclusive.
Companies should prioritize experiences that are most desirable to customers, viable to businesses and feasible to execute, building an internal “center” that breaks the silos, connect the dots and assures quality. A strong center of excellence enables great experience from within, bringing higher efficiency and sustainable competitive advantage in the long term.
Excite with Experiences: Become a Financial Services Company that is Loved by Customers
4. From ”Fill the Pits” to ”Elevate the Peaks”
There could be a huge perception gap on “excellent customer experience.” Research3 shows that 80% of financial services companies believe they deliver excellent customer experiences, while only 8% of customers agree. One of the reasons behind this is that most companies focus only on fixing the pits upon functional pain points, but not on creating any peaks that delight and excite customers in memorable moments.
Customer lifetime could be quite long in financial services. To become a company that customers choose, trust and love, companies must build a holistic view of the customer lifetime journey, by identifying and prioritizing moments that matter and creating signature experiences that customers truly desire.
5. From ”Transactional Moment” to “Real Life Relationship”
Many financial services companies are facing infrequent interactions and transactional relationships with customers. Research4 shows that 60% of Asian customers have had zero engagement with their financial service provider in the past 18 months.
To go beyond the transactional moments, companies should look to expand their role and presence in other areas of customers’ everyday lives through partnerships and co-branded experiences. For example, Neo Bank MOX in Hong Kong partners with merchants favored by its customers and provides exclusive cash back. Another example is insurance company Beam, which partnered with a smart toothbrush brand and launched an oral health solution, offering premium incentives based on customers’ usage and behavioral data.
Companies should take a broader view of the customer journey, identify opportunities to meet people where they are in life and enable their lifestyle beyond financial needs. With expanded partnership and engagement, companies could also build an enriched understanding of customers on top of transactional data and enable future products and service innovations.
6. From “Data Enabled Personalization” to “Human Enabled Personalization”
Research5 shows that 80% of financial service customers desire more personalized experiences. In Asia, customers are 1.5 times more willing than customers in Europe to share personal data in exchange for personalized experiences. Yet it takes time to build data and analytics capabilities that enable meaningful personalization at digital touchpoints. Customers in Asia also still desire a certain level of in-person engagement – even in younger customers, research6 shows more than half believe financial services are not human enough.
So, while building data capabilities, companies should invest in empowering their front employees (e.g. RMs, agents) to deliver better, more relevant experiences with smarter tools and insights (e.g., need analysis, claim tracking). These tools should be designed not only to enable higher quality engagement but also to capture customer insights/data into the centralized database – to maintain customer understanding and relationships at risk of potential people turnover.
Lead the Future: Go Beyond the Frame of Reference as a Traditional Player
7. From “Proactiveness” to “Intelligence”
Customers are increasingly sophisticated and their expectations will rapidly evolve. Being “proactive” will become a table-stake part of the experience and companies could aim to lead by creating “intelligent” experiences that are three steps ahead with AI technology. In 2021, HSBC HK saw 10 times higher engagement between relationship managers and customers when it leveraged AI to offer 22 thousand different sets of wealth management solution advice to individual retail customers7.
Deep learning and hyper-personalization are among the top strategic priorities for CX leaders in 20228. Leading financial service companies should not only identify close-in use cases, such as product innovations or credit risk assessment but also stretch-out use cases that help the company go further into customers’ lives.
8. From ”Valued Customers” to “Empowered Customers”
Being “customer-centric” has been the center of gravity when creating experiences, but it still treats customers as “buyers,” in the position of receiving. As we move into the future, this relationship will be disrupted, and we will see customers as active stakeholders in deciding what type of experiences are created for them.
Creating better experiences requires data, but customers are increasingly conscious of their privacy and the power of data ownership. Research9 shows that although Asian customers are more willing to share data in exchange for better service, 90% of them are concerned about data privacy and 84% of them desire more control over how their information is used.
Leading companies should see this more as an opportunity than a challenge. Financial service brands should look at customers as empowered individuals, transform data collection into a “value exchange”, enhance data transparency with a sense of “co-ownership” and develop solutions and experiences through customer “co-creation.”
9. From ”Boundaries” to ”Boundless”
In the future world of Web 3.0, traditional boundaries will be blurred – online versus offline, virtual versus physical, consumers versus owners, etc. This boundless space will change how financial service companies organize and deliver value to customers throughout the lifecycle.
The entire model of “financial services” might change in the context of this – the role of a company could transform from a “service provider” or a “transaction middleman”, to an ecosystem or a community that enables peer-to-peer connections and better decisions among employees, partners, and customers.
The fast disruptions of fintech will never stop. Financial service companies should be open and embrace the changes to experiment with new ways of delivering value in the future, starting from small use cases.
Data source:
Harvard business review, Taking the Financial Services Customer Experience to the Next Level
Salesforce, Trends in the financial service industry
Bain, How to achieve true customer-led growth and close the delivery gap
Genesys, The era of 4.0 experience in Asia financial service industry
Mckinsey, Future of Asia financial services
Capgemini, The customer engagement imperative for financial services
South China news portal, HSBC leverages smart analytics to develop new tools that enhance the personalized customer experience
Genesys, the state of customer experience in financial services
Warc, APAC consumers increasingly concerned about data privacy
With advancement in customers, technology and society, experience will become a critical driver of sustainable and transformational growth in the future. Financial services companies should take actions early and carefully assess which stage they are currently at, what levers they could invest in building towards the next stage and start with smaller test and learn today to lead the future.
Under the Covers of Brand and Demand: A Love Story
Learn how marketing leaders can break down silos and turn their departments into growth machines.
58 min
Summary
Marketers are under intense pressure to make every dollar count, prove return and drive impact. That pressure can create competition between brand marketing and demand generation efforts for prioritization and funding, undercutting growth and harming performance.
This led us to wonder: How can companies rewrite that rivalry and turn it into a love story where everyone wins?
Prophet’s Marketing and Sales Practice leaders join executives from T. Rowe Price, Trane Commercial Americas, and Salesforce to discuss the results of our latest global research report, Brand and Demand Marketing: A Love Story.
We asked 500+ global marketing and advertising leaders how they are breaking down silos and balancing brand and demand marketing within their organizations. Watch the webinar to learn how to build agile marketing organizations that are customer-centric, aligned to business objectives and how to balance brand and demand marketing.
Key Takeaways
Marketers are under intense pressure to make every dollar count, prove return and drive impact. That pressure can create competition between brand marketing and demand generation efforts for prioritization and funding, undercutting growth and harming performance.
Through our research we learned the most effective marketers follow four common principles:
Anchor Marketing Investment in Business Objectives
Experiment to Win
Build a Modern Marketing Organization
Put the Customer at the Center
Hosts and Panelists
David Novak, Former Senior Partner, Prophet
Mat Zucker, Senior Partner, Prophet
Theresa McLaughlin, Head of Global Marketing & Digital Solutions, T. Rowe Price
Portia Mount, VP of Marketing at Trane Commercial Americas
Paul Stoddart, Chief Marketing Officer Customer Success, Salesforce
Contact us to learn how Prophet can help you overcome common challenges while integrating brand and demand marketing capabilities.
Learn about the power of collaboration and how it can fuel resilience across your organization.
55 min
Summary
Collaborative initiatives are becoming even more critical. Mounting evidence shows organizations that demonstrate effective collaboration across their business also benefit from having a greater resilience – particularly essential in these challenging times. Mastering it allows businesses to act nimbly, anticipate, adapt and respond to incremental and sudden changes – benefiting customers, employees and the bottom line. The trouble is executing it effectively.
As hybrid and remote working proliferate and disruption becomes the norm, it’s never been more important to ask: Are we collaborating effectively?
In this webinar replay, leaders from Prophet’s Organization and Culture practice discuss the results of their latest global research report, “Catalysts: The Collaborative Advantage.”
Learn how to unlock the power of collaboration across all working environments through a holistic, human-centered approach and how to structure collaboration to ensure resilience is achieved.
Key Takeaways
Why collaboration is a muscle that can unlock the potential of a more human-centered and resilient organization.
Actionable tactics to unlock collaboration in today’s ever-evolving organizations with remote, hybrid and face-to-face workplaces and the future opportunities for improvement.
The enhanced business outcomes and benefits of effective cross-organizational collaboration.
Digital transformation isn’t about technology. It’s about driving growth through digital convergence.
7 min
Summary
Chan Suh, chief digital officer at Prophet, explains how technology has enabled businesses to grow better. However, the businesses that grow best are those that embrace the concept of digital convergence – the approach of orchestrating digital transformation efforts around a singular purpose that has been reimagined for today’s customers and employees. Watch this video to find out what digital convergence looks and – even sounds – like. For more, read this blog post.
Learn the five best practices to get M&A naming right.
Despite the uncertainty of the global pandemic and recessionary outlook, M&A activity continues to surge across all industries, with a record $2.9 trillion in transactions in 2021, and 2022 is expected to be even bigger. While not every deal requires naming, the large transformation deals do. In these cases, a new name is the most visible, symbolic and longest-lasting M&A decision. It’s an opportunity to start fresh and signal unity to employees and customers alike. But shockingly, many companies still get it wrong.
Getting to a great name in these fast-paced environments requires significant care and attention. What sometimes starts out as “let’s brainstorm and come up with something cool,” can often turn into a highly emotional, intensely subjective process that can create leadership friction and decision-making paralysis, ultimately delaying a brand’s launch.
Following are five best practices to get M&A naming right.
1. M&A naming is not a democracy.
Since naming a new enterprise is something many executives experience just once in their careers, many leaders don’t want to make the decision alone. So, they invite stakeholders from every angle to weigh in. However, there will likely already be numerous decision-making voices at the table—including multiple CEOs, private equity partners, other investors or board members. In these multi-stakeholder environments, we believe the decision-making body should be kept to the right balance of as few executives as possible, but as many as necessary, with focused participation early in the process (yes, even CEOs).
Despite the perception that naming is a fun, creative exercise, the reality is that it’s a high-stakes, emotional decision that will carry your organization into the next several years, and maybe even the next several decades. With this in mind, getting lean on the decision-making team, and ensuring they’re active participants from the very beginning, will lead to a more successful outcome.
We also recommend that clients resist the temptation to test name candidates with employees—while inclusion is a noble goal, this step gives employees a voice in the decision, rather than treating them as an audience we want to inspire with our ultimate reveal.
2. The name you want is probably taken, but there’s a better name out there that isn’t.
This one is a tough pill to swallow. But with most M&A deals being highly global, getting a name to clear across many trademark classes and geographies requires deep, divergent thinking. Yes, ‘Mosaic’ is taken. No, you cannot have the name ‘Fountain’. ‘Iris’ does indeed tell an intuitive metaphorical story, but four other organizations already beat you to it!
While we wish it was easy enough to just call the U.S. Patent and Trademark Office and ask for an exception, unfortunately, it’s not. But by exhausting creative exploration, you can uncover an adjacent or new idea that tells an even richer story. Sometimes that means you’ll get lucky with a simple, metaphorical real word that isn’t yet taken. Sometimes it’s about coining a gettable, “sticky” new word, and sometimes it takes getting comfortable with an idea that is more abstract—and more ownable. With an estimated 213 million companies in the world, naming isn’t just a creative game. It’s also a numbers game. And arriving at an answer that is inspired, strategic and viable requires diligence, objectivity and a willingness to push past your comfort zone.
3. Every name has varying degrees of legal risk—but not every risk is a deal breaker.
To add on to point #2, almost any name you consider will have some degree of risk associated. No name is ever given an ‘all clear,’ so getting legal involved early on can help you understand what degree of risk your organization is willing to take on, which will then influence the types of names explored. What’s more, different legal teams may employ different legal strategies to pursue or secure a name, from acquiring a mark to petitioning for co-usage with another party.
When Google launched Alphabet, even an enterprise of their size and influence couldn’t clear the pure URL of alphabet.com or secure the pure ‘alphabet’ social handles, which were currently being used by other organizations with the same name, including a division of BMW. But Google believed Alphabet was the name that best represented the story they wanted to tell, so they went to market understanding there were legal risks associated with that name and launched with another URL—the very clever www.abc.xyz. All to say, legal baggage associated with your favorite names can be investigated and often worked around, as long as you have legal embedded in your process from the very beginning.
4. Fast-paced M&A deadlines can work in favor of a successful naming outcome.
With all the critical decision points and process gates leading to deal closings and ultimately a new brand launch, getting a name identified, cleared, designed and launched can feel like a daunting process. At Prophet, we believe sticking to an objective process and adhering to a thoughtful naming brief as the source of truth enables teams to use time pressure in a way that works in their favor. Having less time can actually be the forcing function teams need to evaluate ideas objectively, leave emotion and biases at the door and make quick, but meaningful decisions. When there is no time to second guess or decide by consensus, teams often trust their guts and arrive at impactful answers.
5. And finally, remember that a name is a powerful asset—but not the only asset.
Although we always say your name is your most visible asset, it is not your only asset. This is especially important in M&A environments, where there are multiple parties coming together under a shared value proposition that is oftentimes broader and more aspirational than their previous strategies or stories. While the name can certainly signal part of this new experience, it cannot tell the complete story on its own. We help clients see their name in the context of other strategic levers, like the promise they make to their customers, their visual language, or the experiences they aim to create.
Naming in M&A environments poses its own challenges but launching a new brand at this scale and on the global stage—and doing so with a name you feel confident in and inspired by—is a deeply rewarding experience.
Enabling Effective Collaboration in SEA: The Way Forward
Our research shows companies in SEA value collaboration but lag in execution. Learn how to close the gap.
More than ever, collaboration is top of mind as companies ease out of the pandemic and build towards a new normal. The past few years showed us the challenges of collaborating amid changing COVID-19 restrictions and hybrid setups. However, they have also shown us the transformative potential that can be unlocked via technology, agility and a human-centered approach.
In Southeast Asia in particular, effective collaboration is paramount to unite a diverse set of countries and strive towards a common goal. But this is not without its challenges. The region continues to struggle with heightened competition for talent, fluctuating COVID-19 policies and different development stages of hybrid work in an ever-competitive market landscape. Moreover, collaboration in SEA can be particularly challenging due to a number of characteristics unique to the region: varying cultural and language backgrounds of employees, different levels of economic development across the region, nascent stages of digital transformation and – for international corporations – a wider cultural difference between HQ and regional offices.
Despite, or perhaps because of these challenges, our 2022 global research report, “Catalysts: The Collaborative Advantage”, shows that SEA companies value collaboration more than other regions (52% versus 44% globally).
Diagram 1: Value of Cross-Organizational Collaboration
However, only 28% of SEA respondents feel they are very effective at collaboration across their organization.
Diagram 2: Effectiveness of Cross-Organizational Collaboration
How can the region work to close the gap and reap the benefits of strong, cross-organization collaboration?
The Collaboration Flywheel
A key output of this year’s “Catalysts” report, Prophet’s annual global culture research study, is the Collaboration Flywheel, a model that reveals a path for leaders and organizations to prioritize and accelerate the efforts to build their collaborative muscle.
The metaphor of a flywheel helps capture the inherent complexity of the adaptive system that is organizational culture. A flywheel works by reinforcing positive behaviors and outcomes while minimizing negative feedback loops, thus building and maintaining momentum over time. Most importantly, each specific action we’ve identified in the Collaboration Flywheel model helps deliver better, more impactful outcomes more quickly.
Using this framework, we can understand how SEA can leverage its strengths and unique regional characteristics to drive greater organizational effectiveness.
Diagram 3: The Collaboration Flywheel
1. Coordination
The first phase in the Collaboration Flywheel is Coordination. This is where many organizations begin their development journey by empowering groups to work horizontally rather than just in their vertical silos. Coordination centers on connecting an employee’s effort to the larger picture – the organization’s purpose – and modeling “what good looks like.”
In our research, when compared to respondents in other regions, SEA respondents were more likely to emphasize the importance of connecting individual work to the organization’s purpose. In SEA, 75% of respondents believe it is important to be able to connect their work to the company’s business strategy, however, only 36% think they are able to effectively contribute to the organization’s purpose.
Diagram 4: Value versus effectiveness When Connecting Employee Work to Business Strategy
While many factors can inhibit an individual’s ability to contribute to the organization’s purpose, we see the three biggest factors in the region as top-down management styles, lack of understanding of “what good looks like” and early stages of digitalization. To overcome these hurdles, companies can enable cross-organization coordination by empowering decision-making at lower levels of the organization, showcasing best practices and pushing the digital transformation agenda forward.
In 2017, MB Bank, one of the largest financial services groups in Vietnam, set up a new digital bank as an independent business unit, separate from its legacy bank. This radical approach to digital transformation helped MB Bank’s speed to market, but it also made coordination between the two BUs challenging. Employees knew the bank’s digital transformation goal, but those in the legacy bank couldn’t always contribute to it.
MB Bank recognized this disconnect and saw the impact it had on employee coordination and how that translated into the customer experience. By leveraging digital transformation to instill agility and a more nimble way of working across the organization, MB Bank was able to transform its legacy bank, driving the efficiency of its operating model and increasing cross-organization coordination. To further create a culture of collaboration, the company focused on shifting the mindset of its people, encouraging an entrepreneurial and agile approach that embraces risks and a fail-fast new culture. This has propelled MB Bank today to become the fastest growing and most digital bank in Vietnam.
2. Cooperation
The next phase is Cooperation, which builds on coordination by adding trust and shared ways of working. It is characterized by clarity of objectives, capability building and incentive alignment.
Relative to other regions, SEA respondents place more emphasis on aligned incentives as necessary means for collaboration. In our research, 78% believe incentive alignment is important to collaboration effectiveness, and a quarter believe incentive misalignment is also one of the biggest barriers to achieving this goal.
Diagram 5: Value versus. Effectiveness When Aligning Incentives That Encourage Cross-Organizational Collaboration
Keeping in mind SEA’s highly diverse workforce, the definition of a good incentive can vary widely.
For example, companies in more developed countries such as Singapore, tend to consider soft incentives (benefits, training, recognition, etc.). However, companies in developing countries such as Vietnam, often prioritize hard monetary incentives. Beyond cultural differences, unrelated parts of the organization are often incentivized by siloed outcomes and metrics of success, making cooperation difficult. To solve this, companies can enable cross-organization cooperation by aligning incentives with relevant business outcomes that build towards a common goal, while taking cultural nuances into account.
In 2020, HSBC merged its retail banking, wealth management and global private banking into a new global wealth and personal banking unit. This change in the organizational structure allowed for greater operational efficiency, reducing redundancies and combining related capabilities, talent and infrastructure resources. By breaking down silos and creating a shared mindset around collectively achieving goals, HSBC was able to reduce cooperation barriers to drive more effective client outcomes.
3. Collaboration
As cooperation builds interdependence and synergy between formerly independent groups, it creates the opportunity to pilot and embed new ways of working. In the Collaboration stage, leaders reward progress – not just outcomes – and there is a culture of evaluating both process and priorities within the context of the organization’s purpose.
When compared to other regions, SEA is better at both recognizing and rewarding cross-organization progress. Almost half (41%) of SEA respondents believe their organization is good at recognizing and rewarding progress. However, to enable effective cross-organizational collaboration, organizations need to both recognize progress and be open to constructively challenging the ways things are done.
Diagram 6: Value versus. Effectiveness When Recognizing and Rewarding Cross-Organizational Progress, Not Just Outcomes
Many of the companies in the region tend to be more traditional in their approach to workplace organization and culture, emphasizing their top and bottom line over individual wellbeing. This is especially true for small and medium enterprises, which make up 97% of all businesses in the region. This conventional mindset often inhibits individuals from innovating new, more effective ways of working.
To open the door for innovation, employers can empower employees to think critically about how they can better contribute to the organization’s purpose and be innovative in their ways of working. By allowing a more bottoms-up approach to organizational culture, employers will not only see more effective outcomes in the market but will also make their workplace more attractive to employees. This can be achieved through test-and-learn environments where employees can propose new ways of working and implement integrated planning processes where functions can share wins, risks and priorities. And if the organization is in the midst of a transformation, this is where setting up a Transformation Management Office (TMO) to connect different parts of the organization around a unified set of goals can take place.
Singapore’s Government Technology Agency (GovTech) has adopted a flat, tech-like organizational structure that gives semi-autonomy to its sub-groups. This enables the agency to have not only speed to market, but also high levels of collaboration across the groups. In addition, when recruiting, GovTech specifically looks for a sense of learning agility in candidates, ensuring its employees are eager to adapt, pivot and stay ahead of the trends. This internal culture of collaboration helps GovTech stay competitive with other tech startups and incumbents that prospective employees might be considering. The results are astoundingly impactful: In 2021, 99% of citizens surveyed expressed satisfaction with the overall quality of Singapore’s government digital services.
At Prophet, we believe that people are at the core of any organization. And people working together collaboratively is what drives change, delivers results and sets organizations apart. SEA faces unique challenges: from its uneven regional economic development to its early stages of digital transformation to the diversity in its workforce. However, these present an even more pressing need for organizations in the region to build towards a culture of collaboration. By using Prophet’s Collaboration Flywheel, organizations can work towards:
Coordination: Illustrate the linkage between an employee’s individual effort and the organization’s purpose. Guide individuals by showcasing “what good looks like” and giving decision-making authority to lower levels, while leveraging digital transformation as an enabler.
Cooperation: Align incentives across the organization, balancing differing definitions of what a “good” incentive is. Take these cultural differences into account to create incentives as well as a shared mindset that collectively achieves unified goals.
Collaboration: Focus on the process, not just outcomes to make room for more agile thinking which allows synergies and interdependences to form. Empower employees through a bottoms-up, test-and-learn approach that encourages them to challenge the status quo and implement new, fresh ways of thinking.
Prophet’s 2022 global research report, “Catalysts: The Collaborative Advantage,” aims to help companies better understand how effective collaboration works and identify opportunities for growth. To learn more about how insights from the report can apply to your organization and your region, contact our team today.
Powering Positive Impact: A Recap of Prophet Impact Day 2022
Reflecting on our firm’s annual volunteer day and our goal to drive positive impact in our societies.
On Friday, July 15, over 435 Prophet employees around the globe gave back to their local communities as part of Prophet Impact Day—an annual event where our entire firm pauses and focuses on elevating the work of organizations that are making a positive impact in our societies.
The last few years have presented significant societal, economic and environmental challenges and, of course, a global pandemic. While we have reinvented what Prophet Impact Day (previously known as P4NP) means for us as individuals and as a firm, we remain committed to taking on these challenges head-on and doing our part to amplify the work of nonprofit organizations where we live and work. In broadening the scope of this volunteer day, we have a renewed focus on addressing the causes that our employees are most passionate about: sustainability, equality and social mobility.
This year, on our 8th annual Prophet Impact Day, we partnered with over 25 organizations and dedicated over 1400 hours to create an impact in our communities.
Propheteers engaged in a wide array of activities this year supporting a diverse range of causes:
Sorting donations and preparing meals to help underserved communities in Atlanta, Richmond, New York, Chicago and Hong Kong
Remodeling temporary shelters for Ukrainian refugees arriving in Berlin
Getting our hands dirty in efforts to help community farms and keep parks and beaches clean in London, Singapore, Zurich and San Francisco
Empowering the next generation of young leaders in Austin and Shanghai
Using our business expertise to consult local nonprofits–including Florham Park Educational Fund, Charlotte Rescue Mission, Alaina’s Voice and Austin Pets Alive– to help them grow and achieve their missions.
Whether our employees were in-person, virtual, working in groups or independently, Propheteers across the firm had flexible opportunities to support the causes they’re passionate about. Prophet Impact Day also provided a chance for our teams to connect with colleagues outside of the regular day-to-day, building new relationships and nurturing old ones.
“It was so energizing to see the photos and hear a bit about the experiences that were shared around the globe. It’s this type of leadership, sense of understanding, empathy and excellence in our work that makes me extremely proud of our firm and what we can accomplish together.”
With our ever-growing headcount, we continue to find ways to build participation in our offices and give our teams the opportunity to make their own impact. With the world more in need than ever before, we continue to look for more ways to make a difference in our local communities through our Prophet Impact initiatives including volunteer time off, our pro-bono program and beyond. Together with our partners, we strive to build a healthier, more compassionate, more just world.
Companies often want to cut back brand marketing during recessions. It’s a mistake.
Buckle up, brand marketers. While a recession is by no means certain, it’s clear that the markets are unsettled. As consumers cut back on their spending, layoffs start and revenues slow, jittery leadership will begin to look for ways to slash spending. Brand marketing budgets are often high on the list.
However, that’s a mistake. A well-built portfolio of brands is critical in a recession–or even just a downturn. Healthy brands generate more trust, they’re more in demand and have more resilience and strong brands retain customers, even in the face of lower-priced alternatives. In fact, in past downturns, companies that held marketing budgets steady or increased them bounced back best, reports the Harvard Business Review.
For example, Reckitt Benckiser increased marketing spending by 25% during the 2008 financial crisis, as rivals trimmed their budgets. With a larger share of voice, the UK-based consumer goods company saw revenues gain 8%, and profits rose 14%. Most of its competitors posted profit declines of 10% or more.
The 2021 Prophet Brand Relevance Index® (BRI), which was fielded in late 2020 during the pandemic and a period of high market uncertainty, proved this point. . As obvious as it seems in hindsight, consumers flock to names they trust in times of instability. They’re less inclined to take risks, and trust is significant to them.
In the 2021 BRI, the average relevance score of the top brands jumped 5%. In other words, in a time of uncertainty, these leading brands became more relevant than they had been in times of relative calm.
Strong brands allow companies to justify and maintain pricing power because consumers understand the value equation. Products from companies like Apple, KitchenAid, Dyson, Bose and USAA on the whole cost more than competitors. But because consumers appreciate their value, they are willing to pay more.
That advantage holds for B2B companies as well. When selling through intermediaries, B2B firms that deliver greater value can retain a negotiation advantage with channel partners. Weak brands have less leverage and are easier to squeeze.
An economic downturn may mean fewer people are spending on a given category, reducing the size of the pie. But strong brands get to take a bigger bite. Here are three ways to protect and build brand value, even in stormy economic periods:
1. Strengthen the Brand’s Foundation
Strong brands, often with a years-long history of consistent investment, already have a robust foundation. Brand equity stems from clarity of purpose. These brands know what they promise and how to deliver on that promise in the market. That clarity of purpose ensures an efficient spending of dollars.
Even companies that believe they’ve adequately defined their brand’s purpose need to take a closer look, finding new ways to sharpen, deepen and extend that focus. Purpose–the reason a brand exists in the world– should be clear internally. And it should shine through to customers in every offer, channel and message.
This is also a great opportunity to lean into the stakeholder networks. With a well-defined purpose, it’s easier to ask key stakeholders–customers, employees, investors, influencers and community members– to step in and act as brand ambassadors. They can amplify a brand’s voice and purpose. Because trust matters so much more right now, word-of-mouth endorsements carry even more resonance.
2. Make Sure the Story of Value is Clear
While this is most evident in B2B marketing, it’s just as important when dealing with consumers. People are worried about money, especially with inflation and interest rates rising. There’s an increased focus on the value equation of their purchases. They want to understand all the trade-offs they make between price and quality.
Customers have a lower tolerance for confusion. This is a moment for marketers to be exquisitely clear about the value in each part of their portfolio. It’s too much to expect people to confront a number of brands and sub-brands and understand why they are priced or marketed differently. Spell out precisely what they get by trading up or down within the portfolio.
3. Stay Nimble, Rebalancing Brand and Demand Investments
Agility is important. Marketers should be having earnest internal debates about how and whether to rebalance spending between brand and demand marketing.
Brand marketers will–and should–argue it’s an important time to continue building trust and equity. Demand marketers, as well as financial leaders watching revenue trends most closely, will want to focus more on driving immediate sales. Our latest research, Brand and Demand Marketing: A Love Story shows that brand and demand marketers must find ways to work together – and those that do are able to deliver better outcomes that are tied to the overall business goals. Everyone wants to ensure they are the brand chosen at the end of people’s purchase decision.
We’re betting that a year from now, CMOs will have plenty to say about how they’ve threaded this needle and which investments yielded the best results. But right now, brand and demand need to work in tandem, more closely than they have in the past.
Strong brands can be confident that they’ll continue to lead the way, delivering the innovations that matter most to consumers.
As economic conditions continue to soften, brand marketers should brace themselves to defend budgets–even if the U.S. enters a recession. And they should take steps to ensure those brand investments. By shoring up brand purpose, clarifying each offer’s value, tapping stakeholders’ networks and carefully considering the balance of brand and demand marketing, they can keep brands strong through every downturn and in the next cycle of recovery.
Get in touch with our team today to help make the case to your board and executive leadership team on the value of investing in your brand during uncertain market conditions.
How Financial Services Brands Can Position Themselves for the Next Growth Cycle
When charting your next growth move, here are three ways smart financial services brands are already preparing for what comes next.
So far, this economic cycle is so loaded with 1970s throwbacks like soaring gasoline prices, inflation, and interest rates that we half expect to see a resurgence of the Burt Reynolds mustache and tie-dye ponchos. Whether we are at the beginning of the next Great Recession or just a minor downturn, history tells us that when brands scale back investments in growth, they typically end up with regrets. This is because when the next growth cycle begins, they tend to trail the field as competitors capture significant opportunities.
For financial services companies, the current times seem particularly dire. CMOs in this industry are increasingly less optimistic, with 44% of those in banking, insurance and finance saying they are less upbeat about the U.S. economy compared to 39% of all CMOs. No one is happy about saying goodbye to the sizzling stock market, red-hot housing sales or consumer spending swagger.
Scary? Maybe. Time to invest in growth? History resoundingly says yes.
Research shows that companies who double down on defensive plays tend to limp out of recessions. But those that fare best invest in new markets, products and services. A “Harvard Business Review” analysis of companies in the Great Recession of 2008 to 2010 found that 17% of the 4,700 public companies studied fared quite poorly, either becoming bankrupt, private or acquired.
Though the majority muddled through, 9% emerged from the downturn as elite success stories, outperforming competitors by at least 10% in sales and profits growth. Why? In simple terms, they stayed focused and invested in areas of relatively lower opportunity costs.
“You cannot overtake 15 cars in sunny weather… but you can when it’s raining.”
– Ayrton Senna, Formula One Champion
This is a lesson in how firms build resiliency in uncertain times. They evolve and make intelligent choices, ultimately emerging stronger than competitors.
So what should you do now? We believe those financial services brands that lean into these three areas are more likely to tap into uncommon growth once the economic engines reverse course.
Below is a summary of each of the three areas. In future articles, we will dive deeper into each to provide actionable recommendations to set your organization up for uncommon growth.
Align Everything You Do to Your Customer’s Values
“Three classes of factors affect what an organization can and cannot do: its resources, its processes and its values.”
The importance of a company’s purpose has changed dramatically in the last several years. It is no longer enough to establish purpose-driven brand messaging.Companies need to align everything they do to their customer’s values. The growing demands for progress on racial justice, climate concern and social issues no longer come just from consumers. Investors, employees and other stakeholders expect purpose-led thinking too.
But how do you make your purpose part of your organization’s DNA? Part of the operating model that is core to how stakeholders hear, see and feel the business? Prophet’s Human-Centered Transformation Model serves as a framework for effectively aligning the way your purpose and values are integrated throughout your organization.
Customers and stakeholders want to see corporate purpose defined in a more meaningful sense. They expect products, services and experiences that align with what matters most. It has become a core component of a brand’s reputation and relevance.
Example Winning Strategy: Define your purpose-driven operating model
Financial services brands that are leaning into driving purpose throughout the organization are positioning for the future. Some firms are beginning to build purpose-driven operating models, incorporating purpose into project charters and establishing “Purpose Teams” into the project management structure.
ESG commitments continue to be a focus of a brand’s purpose, promise and principles. Aspiration, an online financial services company and Certified B Corp, is a favorite example. Its “Leave your bank, save the planet” positioning allows customers to decide how much they will pay for services. It has even built a mobile tool to help customers assess their overall impact on climate change based on where they shop and how they invest.
While ESG was once about compliance and risk mitigation, we believe it is now a requirement for unlocking uncommon growth. And the companies having the greatest success with their ESG strategies are the ones who have created authentic changes in the culture of their full stakeholder ecosystem.
Financial services firms can maximize their impact by choosing ESG-driven growth strategies that are specific, ownable, applicable and measurable.
Invest in Humans Over Technology
Today, companies have more technology at their disposal than they could ever use in a coherent customer journey. It takes a combination of sensibilities and methods to create value. Humans–not digital tools– are better at building these interactions.
Humans–the roster of employees and all stakeholders–matter more than equipment. That being said, in no way should we diminish the importance of the continued digital transformation across the industry. At its recent Investor Day, for example, JP Morgan revealed it would spend a staggering $14.1 billion on technology this year. However, the firms that will win in the future are those that can also build an organizational focus on the humans using the technology.
Example Winning Strategy: Build a compelling employee value proposition – develop an EVP that:
1. Articulates what makes your company an awesome place to work and to grow a career
2. Improves how your company wins in today’s talent marketplace
3. Develops an enhanced foundation to support future talent needs and can evolve in line with future business and brand strategy
Leading companies are using technology to focus on pattern recognition, then inviting humans to understand it and put the relevant insights in context. Technology is great. Human capital is greater.
These companies are also actively working to decentralize, freeing human capital by shaking up organizational structures. Decentralized companies emerge from recessions with higher levels of innovation and more resilience, adapting better to changing conditions.
Prophet’s research has shown that this human-centered approach leads to greater levels of innovation, especially in the financial services industry. The key to it all? Finding ways to heighten avenues of cross-organizational collaboration.
Define Your Brand’s Role in Embedded Finance Era
Customers need financial services, but they do not need the current legacy construct of delivering those services. Whether you use Affirm to buy a mattress, the Starbucks app to buy a latte or a Lyft for your transportation needs, embedded finance is all around us and presents an opportunity for financial services brands to extend into other industries, such as healthcare and retail. According to recent research, the U.S. embedded finance industry is expected to grow at a CAGR of 23.5% from 2022 through 2029, reaching $212 billion by 2029.
Long viewed as a transactional element of the customer journey, we are now seeing an expansion of use cases. Take DriveWealth as an example. It is working with healthcare companies to offer comprehensive investment advice as part of healthcare savings accounts. And with the emergence of companies such as Column, billed as the “only nationally chartered bank built to enable developers and builders to create new financial products,” we are poised to see an exponential increase in use cases that cut across all industries.
What does each of these companies have in common? They have defined the next market battleground using a combination of platform and design thinking, focusing on the value of activating ecosystems. So, it is easy to understand why incumbent banks, insurers and investment managers feel threatened. However, they should not.
As the industry moves from linear finance to embedded finance, understanding your organization’s role in the new value chain created by this disruption is the first step.
Will you play the platform-creator role? How should you think about the allocation jobs-to-be-done? How will you control the experience customers have with your brand?
The faster financial services leaders realize the value of delivering an omnipresent financial services experience in people’s daily lives, the faster that value can be achieved for both the customer and the enterprise. The concept of Time to Value (TTV) will play a critical role in the embedded finance era.
By positioning an organization’s brand and core capabilities around its aspirational role in the evolving value chain, companies can embrace the embedded finance era.
If you are a senior financial services leader and have not yet embraced the implications of the pivot from linear finance to the embedded finance era, you are putting your organization at risk of lagging behind in the next growth curve.
Just as “buying the dip” can produce above average returns in your stock portfolio, financial services brands can prepare themselves for turbulent markets by committing to an offensive strategy through this current economic downturn. Finding new and uncommon ways to build embedded finance era strategies, aligning more closely with customers’ values and investing in human-centered transformation – even as investments in technology continue – will help accelerate growth as we move into the next economic cycle.
