The Four Pathways to Cultural Change and Business Transformation in China

Our research illuminates the change mechanisms with the most impact, both within China and beyond.

As organizations build resilience amid world-altering shifts, transformation is increasingly relevant. Yet change is challenging, and leaders are often unsure where to start–or where to go next.

For transformations to succeed, the importance of an organization’s culture is beyond question. That said, cultural transformation is often the most significant challenge to take on. Prophet’s 2020 global research based on nearly 500 global transformation leaders, “Catalysts in Action: Applying the Cultural Levers of Transformation,” identifies four pathways of cultural change intended to help companies focus.

“For transformations to succeed, the importance of an organization’s culture is beyond question.”

In this article, we discuss some of the main differences we see between companies in China and the rest of the world, with observations that can help spark uncommon growth.

In many ways, businesses in China approach transformation differently. Compared to other regions, they are more willing to embrace change, and this by a high margin. The Alibaba Group epitomizes this attitude, making “Change is the only constant” one of its core values.

Q: Which of the following best characterize the most recent significant transformation project that you have been involved with in the last two years?

More companies in China are embarking on cultural transformation to keep up with changes internally and to maintain a competitive edge externally. Ping An has started an enterprise-wide digital transformation over the last few years by embracing a culture of innovation and by encouraging to fail often and fast. ByteDance has implemented a bottom-up approach to objectives and results that encourages more transparency and an entrepreneurial spirit. Haier has made employee management and culture central to Haier’s strategy, with hundreds of internal micro companies yielding far better and faster innovations and deeper understanding of local consumers needs around the world. So, we want to understand how business leaders can accelerate growth through cultural transformation.

Proven pathways of change indicate where to start–or where to go next–in transformation. Prophet’s research identifies four pathways of cultural change: Defining, Directing, Enabling and Motivating. All paths are relevant at varying points in time. But it is important to determine which is most relevant to your company right now.

1. Defining the transformation: Don’t overlook middle management.

Consider this the “control tower” for all other pathways. It is where the company solidifies its business and brand strategy, purpose and values. The C-suite is seen as most critical to–and most responsible for–driving the transformation. But this cannot be at the expense of empowering managers, who must serve as key change agents.

This is a regional weakness in China, with only 17 percent of business-unit leaders and middle management given adequate responsibility. While companies in China are more willing to communicate the change widely across the entire organization (46 percent of Chinese companies actively engage most employees, versus 19 percent in rest of the world), decision-making is still led by C-level leaders. And managers are less empowered to drive change.

Q: What level of leadership is most responsible for driving transformation in your organization?

One of the few companies in China that realizes the importance of driving transformation from the bottom up is footwear manufacturer Belle International. A key component of its success has been decentralizing data and using digital as a tool to empower retail managers, giving them more freedom to lead their teams. “I’ve always believed that the vitality of the end market comes from the energy of each store manager and staff,” says Liang Li, executive director, in an interview with Harvard Business Review.

How to accelerate transformation: Find ways to involve BU leaders and middle managers more, creating meaningful roles. They are the connective tissue between the overarching transformation objectives, the marketplace and the day-to-day work of employees.

2. Directing the Transformation: Empowered TMOs yield impact.

This pathway requires taking a holistic view of all the governance, processes, roles, systems and tools needed to enable an operating model that makes transformation real. One way companies do this is by creating transformation management offices (TMOs). Those that have done this have a clear advantage. And those that have given these TMOs the most oversight and influence over decisions are the most successful.

This is an area where companies in China are leading in the way, both in setting up these TMOs and in giving them more oversight. With clear results: 76 percent of companies in China that have established empowered TMOs, are reporting very positive impact.

Q: Which of these best describe the impact that your organization’s transformation management office (TMO) has had?

How to accelerate transformation: A first step toward changing this is establishing a TMO. And if one already exists, make sure its scope is more than just project management. TMOs should be allowed to shape strategy, break down functional silos and coordinate vital initiatives on the transformation roadmap.

3. Enabling the Transformation: Build the capabilities and leadership needed.

This pathway is where organizations identify, source and build capabilities required for employees to thrive. And it is essential if organizations want to succeed in the Digital Age. The current talent landscape demands a compelling employee value proposition (EVP), but this is no longer enough. Companies must take a strategic approach, reimagining where and how they will find the talent needed to power their ambitions.

Although 90 percent of companies in China say that they have aligned talent systems in service of the transformation, there are still some gaps. While China does well-developing employees’ technical skills, it lags when it comes to nurturing the leadership expertise required for transformation. Globally, this leadership upskilling is prioritized by 48 percent of companies and just 35 percent of those in China.

Q: What training topics have been of the greatest need to enable your organization’s transformation?

How to accelerate transformation: Continually assess enhanced capabilities and develop ways to both re-skill existing talent across seniority levels, as well as source new hires through a more strategic approach to workforce planning.

4. Motivating the Transformation: The only failure is failure to learn.

To bring organizational change to life, leaders must behave differently. They must embody the transformation, creating trust among employees as they adopt new ways of working. Stories, rituals and symbols help build belief among employees and connect their day-to-day work to the organization’s new direction. Most organizations rightly celebrate success stories, while failures are less likely to be shared and understood. Focus on levers that create safe spaces and mechanisms for employees to talk about what is working and what isn’t.

This is yet another area where companies in China excel. Despite a directive leadership style, China has embraced a “fail fast and learn” approach that promotes experimentation, with 58 percent of Chinese leaders saying their corporate culture tolerates failure, compared to just 32 percent in the rest of the world.

Q: Which of the following best characterizes the way your organization responds to failure during your recent transformation?

And leaders in China are far more likely, at 79 percent, to encourage experimentation in executing alternative initiatives relative to plan compared to the rest of the world, at 44 percent.

“Risk-taking is strongly encouraged, and failure isn’t stigmatized,” says Jessica Tan, deputy CEO of Ping An in an interview with McKinsey. “What I’ve found is that with each new success, you become more confident in your abilities and your instincts to try the next big thing.”

How to accelerate transformation: Bring teams and divisions together by encouraging the “fail fast and learn” mindset to develop a systematic approach to test-and-learn thinking. The more employees can see these efforts, the better they will understand the transformation process.

Many businesses in China have already made a good start on cultural transformation and recognize its importance in driving growth. Companies in China should continue to pursue those initiatives while shoring up their efforts to teach invaluable leadership skills. But they can’t neglect to take a holistic view to make sure they are setting all aspects of the enterprise up for future success. That means making sure they know how to….

  1. Define transformation: Set a powerful ambition and align with leadership, at all levels, on their role in achieving it
  2. Direct transformation: Establish and empower transformation management offices to optimize operating models
  3. Enable transformation: Match talent strategy to transformation goals, and elevate employees through future-state capability planning
  4. Motivate transformation: Develop culture programs and training to reinforce employee behaviors


  1. Ngai, Joe. Building a tech-enabled ecosystem: An interview with Ping An’s Jessica Tan. McKinsey Quarterly, December 2018
  2. Yuhao, Liu. 别跟字节跳动讲管理 [Don’t Talk Management with ByteDance]. March 13, 2020
  3. Zhen, Wang. 海尔裂变:2000亿公司创业的样本 [Haier’s Fission: A Case Study of How a 200 Billion Company Creates Startups]. May 14, 2017
  4. 百丽国际:让数字化赋能离客户最近的人 [Belle International: Let Digital Empower Those Who Are Closest to the Customers]. Harvard Business Review, January 25, 2019


Rethink Luxury – 7 Actions for Luxury Brands to Accelerate Growth Post-COVID-19

Today’s success stories are using direct-to-consumer thinking, surprising partnerships and new data strategies.

How digital transformation and COVID-19 are forcing the luxury industry to accelerate its transformation efforts and shift toward a new set of values and behaviors.

Building Resilience in Luxury is Both a Marathon and a Sprint

Luxury brands have long been masterful in building strong customer loyalty – many have even built a legacy through loyalty – offering more than just products, the values they embody differentiate them from their competitors and help customers to identify more closely with them while also establishing that elusive emotional bond.

And with COVID-19 putting an abrupt halt on many non-essential sales, the luxury industry should prepare itself by anticipating the societal and economic shifts that may well affect consumer sentiment and behavior. Particularly, if customers start to favor more sustainable and responsible consumption.

Now, more than ever, a luxury icon – like any other brand – needs to adapt, stay curious and constantly be looking for ways to exceed the expectations of its customers. In order to steer that effort, we put together seven actions luxury brands should take now to protect and accelerate their growth:

1. Revisit the Core

How relevant is your core DNA? Does it still evoke the same desire it once did? Have you stayed true to it and ensured your purpose – your reason for being – still resonates and holds strong in the modern age? Think of the stories you are telling, the themes that you associate yourself with. After a longer period of success, a unique heritage often gets cluttered by opportunistic moves and messages. Focus on what makes you strong and let go of the unnecessary noise. And it is not about a new logo, go deeper, find your guiding star, the differentiating quality that guided your previous success.

2. Define and Listen to Your Audience

This should actually be pretty easy because it is by definition a very limited amount of people, right? Unfortunately, the importance of product and service design still sits higher than market insights for luxury brands, lagging behind the approach taken by the FMCG industry with leading brands like P&G and Unilever placing higher importance on qualitative and quantitative customer insights.

Remember, what you offer is exclusive yet attainable and attractive to your target audiences – a group of individuals with unique and specific needs and expectations. Imagine their dreams, think in their context. What is driving those individuals or cohorts? You might apply your very own micro-segmentation, leaving standard sociodemographic or maturity segmentations behind. Take regional specifics into account and make sure that it’s not just a gut feel, but rooted in evidence. When have you last discussed and agreed on two to three core personas to inform your actions? Be sure to install the right antenna for market developments. Do not only try to envision future needs, look left and right to learn from the best. In the end, it is the combination of creative potential and insights that leads to the new edge.

3. Think Direct to Consumer (DTC) First

Luxury brands cater to a select number of clients, so why leave the relationship to intermediaries? Even if those third parties are meticulously curated, you will never be able to collect the entire customer feedback if you are not dealing directly with those individuals. Only that direct response assures you have your finger on the pulse of the market, both to adapt the products but also the service that complements the overall experience. Of course, you want to increase reach, but new business models allow for direct interaction even from afar. Imagine what you can do with the increased intelligence. E-commerce still has a way to go in luxury having been discussed for years and implemented rather hesitantly because of concerns in translating the authentic luxury experience in the digital realm. But concepts and technologies are developing fast and the traditional role of partners and channels are blurring. Accept that going DTC is a joint endeavor and will not be perfect from the start.

The fastest-growing brands like Chrono24, Chronext (watch platforms) or Tesla and Polestar in the electric mobility space are eliminating the middle man. Richemont was pioneering e-commerce with NET-A-PORTER and MR PORTER and they learned their way through, now also partnering with Alibaba’s Luxury Pavilion –  further pushing its Asian exposure. In the midst of the COVID-19 crisis, even Patek Philippe has allowed their authorized dealers to offer their watches online. Watches & Wonders, the Geneva watch fair with a strong Richemont backing, swapped to a virtual-only conference in just a few weeks. Everybody accepted it wasn’t perfect, yet still, it was a blast.

4. Curate the Experience

To provide luxury at scale, you need to tell memorable stories and be able to duplicate experience standards. Selecting and developing the right context and platforms has become as important as curating the living ecosystem. Doing all that without clearly defined experience principles? Impossible. Navigating through the ever-increasing stack of platforms? Necessary! For example, the meticulously curated Las Vegas resort The Cosmopolitan seamlessly integrates stories, guests, platforms and social media to continuously learn and adapt to changing needs and trends. Also, the auction houses like Phillips and Sotheby’s are masters in curation. The sale of the Rolex Paul Newman Daytona was a benchmark example of curation, storytelling, partnership and as a result, was also a game-changer for the whole auction industry.

Pick your core relationship platform – this might very likely be your website – impart your DNA and focus on your audience by constantly refining the platform. Again, make sure you understand every single move of your audience. There are plenty of tools out there to help you understand and optimize. And remember, the most successful luxury brands are not necessarily the most advanced in digital technologies, but they learned to curate an exceptional experience across platforms and channels. They tell the best stories and those stories can live in all formats.

5. Combine Intuition with Hard Data

For centuries, those in the know were able to better serve the needs of the demanding. That has not changed. Nowadays, each and every individual is expecting nothing less than a perfect personalized experience. Data collection has gone way beyond retailers with transaction and credit card data. Loyalty programs and search behaviors are now used to complement the data set and social media is increasingly used to contextualize this data. Despite a reluctance or even allergic reaction, to giving away more intimate data, luxury clients expect you to understand and anticipate what they want, tailoring offers and solutions that will seduce them and lock them into your own proprietary ecosystem. Having the right data strategy in place to combine demographic, transactional and behavioral data has become as necessary as having a content strategy. Leveraging your expertise and intuition with a new set of quality data allows you to anticipate the upcoming moves and outmaneuver the competition.

“Having the right data strategy in place to combine demographic, transactional and behavioral data has become as necessary as having a content strategy.”

The hospitality and travel industry has a longstanding experience with their loyalty programs like Bonvoy by Marriott or Miles & More by Lufthansa. They combine guest insights with agile processes to come up with unique propositions that increase loyalty way beyond awards. Similar to the FMCG brands on customer insights, the luxury industry can learn a lot from the Amazons in the West and the Alibabas in the East when it comes to collecting and using data. Imagine where Rolex, Patek Philippe or Audemars Piguet could go if they leveraged their already rich data set that they collected with their product and client register by enhancing the data quality and using the insights to have a deeper, more direct interaction with their loyal following.

6. Grow with the Right Partners

Partnering along the brand experience has become another high-performance discipline. Originally something that goes back to the Fifties and Sixties, when luxury distributors like Asprey, Cairelli, Tiffany or Beyer were double signing with Rolex, Patek and the likes, new technologies and new consumer generations are supercharging partnerships. Dealers, ambassadors, authorities, celebrities, influencers, brand partners and many more specialized partners are involved to deliver that high-end curated experience. And it’s not just about the next transaction, it’s about creating stories and experiences that you would simply not be able to deliver on your own. It is now widely accepted to collaborate along any step of the experience chain, from comms to product to after-sales and, of course, also in the wider ecosystem of any brand experience. Your customers don’t care whether you do everything by yourself, they just expect the perfect experience from your brand. Lately, fueled by social media, the trend of co-branding has again proved to be a successful way to expand into new segments or reposition your core, like Louis Vuitton with Supreme, Caran d’Ache with Paul Smith or Rimowa with OFF-WHITE. Collaborate with the best.

7. Be bold, stay focused and stick to your plan

Your marketing budget is limited, so be focused. Stick to who you are and whom you are catering for. What is the content that inspires your demanding clientele? Where do they indulge, how do they escape and feel good? Where do you touch them, what are the right messages? Besides extreme value creation, it is also about the right voice and tone at the right time – always like ‘a first date’. Have a clear plan, stick to it, be creative, surprise! And remember, you got rid of a lot of clutter in the first place, do not add any unnecessary noise now. You cannot and you do not want to please everybody. Stay focused.

It was a brave decision by the Swiss watch brand Breitling to reposition and also to step out of the traditional watches & jewelry fairs. Investing more in its own innovative global experience platforms. Launching a new collection via webcasts was obviously also a lucky decision, now that everybody struggles to go virtual at high speed.

The car industry is struggling a bit here. New electric vehicle concepts for example are only very slowly getting traction. BMW, a bold inventor with the presentation of the i3 series concept at IAA in 2011 was not really able to sustain the momentum and stay ahead of the competition, Tesla was.


Get serious about taking a stand and nurture the new luxury. Conspicuous consumption goes out of favor and we’re witnessing a call for a new, silent, meaningful and humble approach to luxury. We saw that trend growing long before COVID, but the crisis has definitely served as an accelerator. Purpose and experience rather than prestige and status are set to take precedent. Removing consumer guilt, living ethically and leaving a positive mark instead of excessive consumption.

But again, always link your activities to your customers’ needs and expectations. Your targets are shifting too, increasingly from emerging markets, female and younger audiences. What will the increasing dominance of Chinese consumers mean for your value proposition?

Now is the right time to pause, re-adjust, focus and then accelerate with a refined proposition. In the end, it is about creating something that we have not imagined before. Something luxuriously new.

Our experts are happy to share more insights on how the current situation impacts the luxury sector and what businesses need to do next. Reach out today!

This article was co-authored by Roland Ott, an expert in Luxury Brand Management. He was part of the successful growth teams at the Richemont Maisons IWC Schaffhausen and Roger Dubuis and the relaunch of Carl F. Bucherer in Brand, Marketing & Communications Management. He is an Alumni of the University of St. Gallen and the Stanford Graduate School of Business.


5 Ways to be a Strong Leader in Disruptive Times

Help create stability by establishing new norms–like focusing on results rather than hours.


Webinar Replays: Leading in Times of Crisis

In times of uncertainty, our research probes what makes some leaders feel strong while others struggle.

37 min

As organizations face difficult choices in response to the ongoing COVID-19 crisis, Charlene Li, author of The Disruption Mindset and senior fellow at Altimeter, a Prophet company, discusses the strategies business leaders can deploy during disruptive times in her webinar series, “Leading in Times of Crisis”.  Watch the replays and access the presentation slides for the webinars “How to be a Strong Leader in Times of Crisis”, “Operating in the New Normal” and “Creating a Culture Capable of Thriving with Disruption.”

How to be a Strong Leader in Times of Crisis

Watch the webinar replay to learn about five ways to help leaders navigate these trying times. Presentation slides can be accessed here. Please feel free to share and utilize with Attribution to Altimeter.


Leading in Times of Crisis: Operating in the New Normal

Watch the webinar replay for insights on what leaders should do and how they can prepare for operating successfully in a post-crisis world. Slides from the webinar are available here.


Creating a Culture Capable of Thriving with Disruption

Watch the webinar replay to learn about the key principles a disruptive organization can deploy to create a culture of change. Webinar slides are available here for download.


Learn more about how Altimeter and Prophet can help you and your organization. Our offerings include:

Interested in a conversation with Charlene or someone from Altimeter? Please get in touch today.


Leading in a Time of Crisis

Grit, empathy, generosity and fierceness–these scary times are eliciting some of humanity’s best traits.

A Letter from Prophet CEO Michael Dunn

Like many others, we at Prophet are intensely focused on the rapid rise of COVID-19. And as this virus spreads in new and unexpected ways, our first concerns are–of course–for human safety.

Our worst fears are the most intimate. We’re worried about our own health and protecting our families, especially the very old and the very young. And we’re increasingly concerned with the well-being of those in all our communities. Coworkers. Neighbors. Clients. Friends. Family at a distance.

As the days continue, many of us are facing other fears. Ones focused on financial security – the health of our businesses and the livelihoods of our teams. Many of us are trying not to voice that concern when lives are on the line. But it is there – and for those of us who guided businesses through the economic upheaval of 2008, 2001, or even the early ‘90s and ‘80s, we understand that now more than ever, it is imperative to be a strong leader to help our organizations survive, and maybe even thrive.

Leading in the face of disruption requires a mix of characteristics that are difficult to harness, even when your business is at its strongest. Grit and empathy. Agility and decisiveness. Creativity and rigor. Generosity and fierceness. We need to bring our “A” game each moment, inspiring and drawing inspiration from teams all around us. If we can, we will all find a way through this, together.

“When you find yourself drifting, draw on your strengths and lean into a growth mindset.”

For more than 20 years, we have been studying how organizations, brands and leaders source growth in the face of disruption. Growth that is purpose-led, innovative, relevant and sustaining. By leaning into our organization’s core values and capabilities, by listening hard to our customers and stakeholders and by understanding how their rapidly shifting contexts are creating new needs, we are finding better ways to serve. We are charting new paths.

We’re already starting to embrace new innovations and shifts. Special shopping hours for seniors, take-out 5-star meals, the explosion of telemedicine and distance learning, yoga streamed “live”, 3-D printing hackathons to backfill medical device shortages: these hopeful responses are unfolding all around us.  Pay attention to these actions that speak to the spirit of humanity, the impact of selfless business and the power of collaborative ingenuity.

When you find yourself drifting, draw on your strengths and lean into a growth mindset. Human-centered, digitally powered, purpose-led – find your way to emerge from the Covid-19 crisis stronger and more confident than ever.

Stay healthy and safe,

Michael Dunn


Five Ways to Be a Strong Leader in Disruptive Times

During disruption, stability and security are important. So are openness and transparency.

Like many of you, the events of the past few weeks have thrown me flat on my butt. My heart goes out to the many people who are dealing with COVID-19 in their families or have lost their jobs. And my soul grieves for the pain that is yet to come.

This past Fall, I published my latest book, The Disruption Mindset, and drawing upon that research, as well as over two decades of studying disruption, I’ve learned that disruption creates opportunities for change. That’s because when a disruption happens, our sense of normal is torn apart into pieces and thrown into the air. The people who thrive with disruption jump into the air to catch the pieces before they fall. Those who duck their heads and hope not to get hit will become the victims of disruption.

My hope is that people will leap high with courage and conviction so that they can be the disruptive leaders we so desperately need in the coming days. Anybody can be a leader because it doesn’t require a title. Rather, a leader is simply someone who sees the opportunity for change and takes action to rally people to that cause.

I want to share five ways you can be the best leader possible in these trying times.

  1. Develop a disruption mindset
  2. Establish stability and security with structure and process
  3. Use openness and transparency to create accountability
  4. Communicate in 3D to nurture relationships
  5. Identify opportunities for the future

1. Develop a Disruption Mindset

Let’s be honest, it’s hard to know where to head with such chaos going on. Personally, I feel whipsawed between dealing with family issues to answering text messages from clients and team members. It’s hard to focus your efforts on things that really matter and effectively manage the noise.

In researching The Disruption Mindset, I surveyed over 1,000 leaders globally and found that an individual most able to thrive with disruption possess a mindset that is both open to change and embodies the leadership behaviors that empower and inspire others. These disruptive leaders are called “Realist Optimists” in that they see the opportunity being created but are realistic about what actions need to be taken today.

At this point, you may have already had to make some tough decisions with your organization just to get through the past week. You likely won’t know the answers as your team asks, “What do we do now?”.

But it’s not your job to have all the answers. Your job as a leader is to ask the right questions – to focus your team on the work to be done. Your job as a leader is to connect with other leaders in your network to fill in the gaps of your knowledge and experience. Your job as a leader is to keep the process moving forward so that together you all find the path forward.

Use this as an opportunity to change your perspective of what it means to lead an organization. Last August, the Business Roundtable redefined the purpose of a corporation from being solely around increasing the value to shareholders to also creating value for customers, employees, suppliers and the community. I can’t think of a better time than now to create new frameworks, metrics and best practices around what this looks like.

Being a disruptive leader requires that you have the courage and conviction to step out of your comfort zone. Courage is when you don’t know what the outcome is going to be, yet you still move forward into that uncertainty. We need courageous, disruptive leaders in these crazy times.

2. Establish Stability and Security with Structure and Process

This new normal requires new norms, especially for leaders now working with suddenly distributed teams. For example, distributed teams communicate, connect and form relationships in vastly different ways from in-person teams. Simply transferring your office protocols isn’t going to work. In a time of crisis, more information sharing is needed.

When you can no longer manage by walking around, you will need to substitute it with daily standups and weekly check-ins. Formalizing what was previously informally done creates a structure and process that will benefit your business because it ensures that everyone is aligned around your strategic goals.

Given the current crisis, traditional meetings may not make sense when people are juggling childcare and working from home. One leader I spoke with made it clear that having a toddler in a lap or a cat walking across a desk was completely acceptable given the circumstances.

Another organization decided to do away with scheduled meetings because it was too stressful for parents to make sure that they were available for a specific time. Instead, they used digital platforms to gather, organize and make decisions in an asynchronous manner. As needed, team members held unscheduled chats or posted feedback over a set time period (typically 24 hours) to move decisions forward.

Lastly, decide on the tools that you are going to use to get work done. RingCentral found that many workers waste up to an hour a day navigating between enterprise apps; so minimize the number of apps that you use. One important process to define is how people will message each other – will it be by email or another platform like Slack or Teams or WhatsApp? Designate one messaging platform that you will use, one place to share documents and one collaborative project management e tool.

You will need to develop your own protocols that work for your organization. The key is to be very clear on how work is going to be done so that you remove uncertainty and confusion.

Use this disruptive time as an opportunity to build agility, flexibility and accountability into your culture and work habits. Make disruption work in your favor as you create stability and security out of new practices and beliefs.

3. Use Openness and Transparency To Create Accountability

To build trust with both your customers and employees, it is important to have one single source of truth that is known by all. Take the time to lay out how you will share information and decisions in a transparent way.

“You will need to develop your own protocols that work for your organization. The key is to be very clear on how work is going to be done so that you remove uncertainty and confusion.”

One leader I spoke with realized that only the leadership team had access to key company data on their collaboration platform, but that the team would benefit from seeing and using it.  Except for a small amount of confidential information, they made everything accessible to the entire organization. Openness in information sharing ensures that everyone knows what is going on, giving them the security to be able to make decisions quickly.

To that end, encourage people to share information and decisions in the open. If you can’t physically see each other getting work done, then you need to tell each other what you are working on. Transparency creates trust, security and stability.

4. Communicate In 3D To Nurture Relationships

By all means, over-communicate in a time of crisis. Nokia Chairman, who guided the company through the sale of their handset business and its pivot into an Internet communications telecom giant, said, “No news is bad news. The bad news is good news. Good news is no news.” Rather than dribble out bad news slowly, deliver it with compassion and empathy as soon as you can. It’s far worse imagining the bad news than to receive it and then be able to take the necessary next steps.

Communicate in “3D,” using every channel available – email, video recordings, Slack, social media and Teams and WhatsApp. It also means using video to make calls. There’s nothing like being able to see each other to develop that connection, rather than a disembodied voice on the phone. Video also creates accountability – you can confirm that the other person is present and focused on the conversation and with you.

Another dimension is looking at communications from the perspective of being “Remote First.” Instead of thinking of remote as a second-best alternative to being face to face, think of it as the default going forward. Even when you go back to your office, keep the processes that work for distributed workers so that it makes sense for both modalities.

Lastly, your communications must also establish a new culture for this new normal. Without the serendipity of running into someone in the lunchroom, you will need to engineer serendipity by designating areas where people are encouraged to share and discuss non-work topics. From sharing pictures of their work area at home to jokes and memes, invest in this connective social tissue to help your team connect and continue to build their relationships. It’s these casual encounters that build trust.

5. Identify Opportunities for The Future

The final area is thinking about future opportunities. My research found that disruptive leaders and their organizations do one thing extremely well: they focus on the needs of their future customers. This is truer than ever in these disruptive times. It may be tempting to go back to existing customers and try to coax them to come back to you. But just as importantly, you must think about where new customers with emerging needs are going to be.

As an example, here’s a figure that maps the U.S. GDP growth rate over the last five years. You can see that times of recession and crisis resulted in great creativity and innovation. Microsoft was founded in the midst of the oil crisis of the 70s. Apple launched the iPod in 2001 after the bust. And Airbnb and Uber were founded in the depths of the last recession in 2008 and 2009, respectively.

Disruption today is creating a need not just for innovation, but also for ingenuity. The need hasn’t gone away with the shuttering of businesses – it’s instead shifted and if you can shift with the need, you can fill the gap.

Multiple examples of ingenuity have surfaced in the past few days. For example, some closed schools rerouted school buses to deliver meals to home-bound kids. In Ireland, small business AMI refurbished high-quality laptops from companies to meet  a demand to rent or buy laptops for working from home employees. And my personal favorite is seeing trainers and yoga instructors bringing their clients together on Zoom calls – it’s gratifying to see my fellow class members also struggling to catch their breath!

As a leader, you can find the next disruption opportunity by aligning yourself and your entire team around understanding the needs of the emerging customer. Instead of asking, “What can I do?”, ask instead, “How can I best serve?”

Here are three ways to better identify and understand your future customer. First, use empathy maps to better understand how these people feel, what they say, what they think and what they do (below is an example empathy map from my book). Deepen your understanding of how they approach a problem or situation.

Second, create a Customer Advisory Board (CAB). It can provide you with insight and feedback on what you are doing well and how you could serve their needs better. Don’t stack your CAB with your biggest and best current customers. Instead, find the customers who push you to do things in a different way. Ask your sales and customer services teams who the most insightful customers are – the ones who challenge the way your company works. These customers will hold you to a higher standard.

A strong CAB will push you further and faster than anything you can come up with. Having concrete examples of what future customers want is a powerful antidote to stuck-in-today thinking.

Lastly, find your customer-obsessed people. Seek out the people in your organization who are already naturally inclined to think about your customers. You likely already know who they are. They walk in customers’ shoes and intuitively understand their pain points. When you find these customer-obsessed people, give them the social proof that their opinions, not only matter but are being heard and are making a difference.

For example, one organization routinely highlights call center staff at monthly team meetings who have not only surfaced a problem from a service call but also taken the initiative to push through a change in product or policy. Recognizing the advocacy that addresses a customer’s needs turns that person into a hero to be emulated, encouraging others to surface the voices of customers.


Every Step Is the First Step on The Disruption Journey

I wish I could promise that the journey ahead is smooth sailing. It’s going to be anything but. That’s what disruption is – it forces us out of our comfort zone and makes us come face to face with our biggest doubts and fears. But if you can look past them to the opportunities to serve created by disruption, you and your team will have a focus that will steady your hand.

Today, you can decide to take the first step on the disruption path. And given the difficulties, every step will feel like the first step all over again. But trust and believe that you are on the journey, which will be so much better than staying mired in the past.


2020 Trends: Achieving Growth in the Digital Age

Prophet’s consultants around the world forecast what’s ahead in the coming year.

The pace of disruption continues to accelerate and redefine how companies drive growth in the digital age. Read our 2020 predictions to learn what trends we believe will drive measurable business impact this year and beyond.

Our global team shared their insights across several key focus areas to highlight the trends we expect to see in 2020:

Download the full report below.

Download 2020 Trends: Achieving Growth in the Digital Age

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Thank you for your interest in Prophet’s research!


Owning Game-Changing Subcategories



The only way to grow (with rare exceptions) is with “must-haves” that define game-changing subcategories. These subcategories must offer new or markedly superior customer experiences or brand relationships, an exemplar brand that positions the subcategory and creates barriers to competitors.

Subcategory-driven growth has exploded in the digital era because of technological advances and the fast, inexpensive market access made possible by e-commerce and digital communication.

The alternative, “my brand is better than your brand” competition, rarely generates growth because markets are so stable and difficult to disrupt. The book includes case studies from numerous companies including Airbnb, Etsy, Warby Parker, Prius and Muji to illustrate how subcategory creation has led to uncommon growth.


  • Explanation of why growth almost always involves “must-haves” defining new subcategories, earning exemplar brand status, and creating competitor barriers
  • Tips for finding “must-haves” and examples with case studies featuring notable leading brands
  • Deep dive into how digital tech trends like e-commerce, the Internet of Things, brand communities and more that drive growth through subcategory formation


I really LOVE this book!! It is so right for organizations looking to drive growth. Through compelling insights, Aaker shows how to employ the Digital Revolution to create and own  Subcategories highly relevant to customers. A MUST READ book for our Digital times!

Joe Tripodi
Former CMO of Coca-Cola, Allstate, MasterCard, and Subway

David Aaker uses economics and case studies to show how growth comes from inspired breakthroughs that create new subcategories and not from expanding market programs.  Use the 20 takeaways to find your own subcategory breakthrough.

Philip Kotler
The Father of Modern Marketing

David Aaker teaches us how to grow in the digital era by harnessing the power of subcategories. A must have for all business leaders.

Yong-Jin Chung
Vice Chairman, Shinsegae Group (Korea’s Largest  Retailer)


“From Brand to Subcategory Competition” in European Journal of Marketing, Fall 2018

“Winning in the Sharing Economy—Six Keys to Airbnb’s Success, ‘ Journal of Brand Strategy, February, 2019.

About the Author

David Aaker, is the author of more than one hundred articles and 17 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.


Want to interview Dave or feature him on your next podcast? Please connect with us or David Aaker directly.

Explore how David Aaker and Prophet can help your business create game-changing brands that resonate with both your customers and employees.


Webinar: Lessons on Leading Business Transformation

Knowing where to start transformations is important. So is knowing how and when to course-correct.

59 min

Culture is a key lever driving transformation and unlocking uncommon growth for organizations today.

Hear first-hand from Prophet’s Chief Transformation Officer, Paul Greenall, and Senior Strategic Advisor, Bill Margaritis, as they sit down with Tyler Durham to share how they have both successfully navigated the challenges faced during business transformations within Fortune 50 companies.

Thank you for your interest in our webinar.

If you’d like help identifying a clearer path to transformation and how to best use culture as a key lever to drive that change then please get in touch today.

For further reading, be sure to take a look at our latest global research report: Catalysts: Cultural Levers of Growth in the Digital Era – referenced in the webinar, it outlines the key fundamentals you need to prioritize now in order to drive impactful change from the inside out.


6 Actions to Build an Insurance Service Strategy that Drives Growth

Our research finds that consumers expect more, and want products combined with services.

Over the past several years insurance companies have faced increased product commoditization due to ubiquitous online presence, more sophisticated aggregators and the increased availability of insurance products. They are faced with the challenge of driving growth while managing their risk profiles to be less capital-intensive. In a market with heightened expectations for digital experiences – which the COVID-19 pandemic raised even more – the likes of Oscar, Lemonade and other new DTC market entrants are raising consumer expectations, spurring companies to develop more experience-led strategies to drive engagement and value. Then there’s other players like American Express and Chase making their play.

Where should insurers look to drive growth?

Against this backdrop, Life, Health and P&C insurers are turning to new services to drive growth and engagement. Services create more compelling and differentiated solutions that focus on customer needs, going above and beyond basic insurance coverages. This enables insurers to identify new streams of less capital-intensive revenue and increase demand for existing products – especially in a category that has historically struggled to drive engagement at moments outside of the core product moments (e.g., purchase, premium payment and claim).

Based on our extensive experience and research within the industry, integrating a services strategy also translates into impactful business outcomes for insurers globally – from initial purchase intent to long-term customer retention. The results speak for themselves:

  1. Customers were twice as interested in an insurance product when sold with relevant services (Source: Prophet Insurer Research)
  2. The presence of services impacts broker interest with three-quarters of brokers stating that services are critical to their choice of provider when recommending to clients (Source: Prophet Insurer Research)
  3. Insurers who offer three or more services on top of the core product see NPS increases between 20-40 points.

When it comes to services, who is doing it well?

Insurers are already recognizing the value services can bring both to their customers and their business. However, as many insurers do not have exclusive relationships with services providers, avoiding services replication across the industry is key. Insurers are therefore partnering and acquiring across the services ecosystem to uniquely deliver new customer value.

P&C providers are already seeing strong integration of services into their offers given their ability to utilize customer tracking and connected devices, not only providing product discounts but also additional services on-top. For example, Progressive Insurance has partnered with TrueMotion to launch Snapshot, a service that monitors and measures driver data through either their smartphones or a plug-in device. This enables customers to understand their driving habits and generate personal discounts. Progressive is continuing to explore expansions to the program and invest in partnerships to combat distracted driving.

“Integrating a services strategy also translates into impactful business outcomes for insurers globally – from initial purchase intent to long-term customer retention.”

Health and Life are also now capitalizing upon the opportunity to integrate services into their portfolios by exploring the way they can utilize health tracking to adjust premiums through improved health. From a global standpoint, Vitality is one example of a brand that has developed a personalized customer health and wellness tracking and support platform. In the U.S. specifically, John Hancock has partnered with Vitality to provide discounts and tailored recommendations to their customers based on their health tracking. While in Asia, AIA has made a focused push to expand the solutions they offer to customer across the region.

Health insurers also are exploring the role of partnerships with preventative health start-ups to help customers manage chronic illnesses. For example, Cigna has partnered with Omada Health to offer customers a personalized preventative health solution to mitigate risk against diabetes, heart disease and stroke.

Six actions for insurers to create impact and drive growth through services

We believe there are six actions insurers take to develop a winning services strategy:

  1. Understand what customers want. What is the foundational understanding of customer wants and needs to guide services development?
  2. Identify the business opportunity. What role could and should services play for your business and what business objectives should your services strategy inform (i.e., acquisition, incremental revenue, retention, efficiency)?
  3. Prioritize unique and relevant services. What are the set of unique services most relevant to your customer base that you will prioritize developing?
  4. Drive engagement. Where and when within the journey do customers become aware of services and how do we improve interest for them?
  5. Improve the experience of access and use. What is the right experience behind driving easier services access and use to deliver greater customer value?
  6. Identify the right internal owners. Who within the organization is responsible for funding, building and managing our services strategy?


Insurers are falling short on delivering value to customers. A well-defined services strategy can nurture customer relationships and earn loyalty to fuel growth.

If you’d like to learn more about the role of services and how we have helped leading insurance companies execute experience-led strategies that drive impact and engagement, get in touch.


M&A Portfolios: Are You Thinking Like a Digital Native?

Companies need radical flexibility, not “house of brands” hang-ups.

After several quarters of near-frenzy pace, global deal-making is starting to slow. But for those in charge of managing portfolio and architecture strategy, the recent mergers and acquisition binge is creating something of a mess.

Many of the decisions about customers, brands and marketing have been addressed too quickly as deals were coming together. And once the integration process starts, those initial plans unravel. As the financial and operations teams that finalized deals hand them off to those responsible for taking new assets to market, tangles of false assumptions and the sub-optimal use of brand assets emerge; the value creation logic of the deal never gets out of the spreadsheet. And with $1.24 trillion in deals already on the books this year, that confusion presents material risk for shareholders.

Increasingly, clients are coming to us for help figuring out the best ways to organize and manage new, post-deal asset bases. Often, they start by asking: “Should we be a house of brands? Or a branded house?”

“Should we be a house of brands? Or a branded house?”

We’re not afraid to say that’s simply the wrong question. Digitally-focused companies can’t afford to think that way. The modern approach to architecture and portfolio strategy, and the one inherently chosen by digital natives, is radical flexibility.

Older companies are coming to understand this, too, focusing on customers earlier in the M&A process, aware that integration management offices are often working with incomplete data.

In order to get this right and maximize the value of today’s deals, we believe the best post-merger decisions come down to answering three essential questions.

Three Essential Questions For the Best M&A Portfolio Strategy

1. Are we customer-obsessed?

Our research on brand relevance offers compelling evidence that companies that are obsessed with customers significantly outperform others. It’s no surprise that the names that dominate the top of the Prophet Brand Relevance Index® are digital-first, including Apple, Amazon and Netflix. And those at the top of the list consistently outperformed the S&P 500 by 3x in revenue and 205x in profit in the last decade. These companies constantly ask themselves: Are we putting customer-use cases and environments first? All decisions are filtered through the perspective of customers and prospects.

When considering customers first—the buyers, the deciders–it’s easy to see how easily a company like Procter & Gamble and Schick might be outflanked. Direct-to-consumer brands like Dollar Shave Club and Harry’s have devoted themselves to changing and improving the razor shopping experience, rather than focusing on promotions and product features.

In post-M&A environments, brand portfolios should be built around key customer use cases, balancing the desire for efficiency with a customer-centric model that leverages the strongest brand for each use case. When J.P. Morgan & Co. and The Chase Manhattan Bank merged, they prioritized efficiency over customers and created a brand mash-up that weakened both brands. After a couple of years of brand value degradation, a new strategy that led with customer needs was founded with a powerful institutional brand, J.P. Morgan, and a powerful retail brand, Chase. This approach allows for effective targeting of clearly defined customer segments with separate brands and tailored offerings, and is paying off for JPMorgan Chase, with a five-year gain in brand value of 53%.

2. Can we find max value?

When M&A deals fail to generate revenue synergies, there is usually a lack of early focus on customer, marketing and branding issues. Playbooks often don’t include these steps and when they do, the discussions are qualitative and overly reliant on opinion and emotion.

The solution is in this key question: Are we deploying our assets to maximize customer use cases?

Companies can find significant incremental deal value when they integrate customer and marketing analytics in pre-close analysis and the integration management office. We studied one deal that doubled the final price of a $5 billion global asset by modeling the financial impact of future (post close) brand use cases. Another estimated market-share gains between 2 and 3% on a $60 billion deal through brand portfolio economic analysis. And on the cost side, we are helping companies lower post-merger migration costs between 15 and 40% by using cost-optimization analysis.

3. Are we serving up the right offer?

The best way to achieve this optimization is to constantly elevate the right offer for each person, on the right device and at the perfect time. Companies like Google, Amazon, Facebook and SAP are experts at this kind of hyper-responsiveness, with nearly-infinite capabilities for personalization, depending on the needs of each customer. They continually ask: Do we have an adaptive brand architecture? To win with today’s digitally demanding customers, companies need to maximize all the flexibility available through digital tools, making sure offers are as adaptive and individualized as possible.

Amazon remains a perfect example. Rather than being a monolithic Amazon or a fragmented collection of sub-brands, the brand adapts to its audience, use case or environment. Do you listen to a book at 9 p.m. each night? If so, it’s likely Amazon will push an Audible brand message just before. Recently ordered paper towels? Alexa will check-in to see if you need a refill. Context is king in our world, and successful companies will deliver an adaptive architecture that ensures maximum relevance.


Older companies don’t have to cede their future to those that came of age as digital natives. Moving forward, all companies–and all brands­–can benefit from a modern portfolio and architecture strategy. And while all companies acknowledge that the future is digital, we’re convinced that those that win are those that also understand that the digital’s primary power is in better serving customers.

For more information on capturing greater value in the M&A, please contact us today.


Healthcare Transformation: How Do We Get There?

On the Healthcare Rap podcast, Jeff Gourdji, co-author of the new book Making the Healthcare Shift, breaks down the 5 necessary shifts for becoming consumer-centric, and how marketing and technology are involved. All that, plus an inside look at launching his book and a shout-out to little moments that make a big difference.

Listen here

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