Can we agree that making good business decisions is getting harder?
For each business, the reasons vary, but we see common themes:
Volatility: The pace of change of everything (markets, customers, technologies, products and competitors) is accelerating.
Uncertainty: The accelerating pace of change challenges assumptions about what’s invariable.
Complexity: The number of stakeholders, variables, and perspectives involved in a decision keeps growing.
Ambiguity: We’ve become very clever at accumulating data, but having more data does not solve the problem of knowing what the data means.
School didn’t properly prepare any of us for making decisions in this environment. Deductive problem-solving works best in predictable environments. That’s not the world we live in.
Of course, there is no apparent shortage of external help:
Analysts proclaim their best practices.
Consultants promote their proprietary models.
Technologists offer their SaaS tools that aim to automate some choices.
And in their own particular contexts, all of these are, of course, helpful. But for higher-level decisions, “best-practices,” “models,” and “algorithms” share a common liability: they are, by design, reductive.
And so for those early, fuzzy, high-level and massively consequential choices, the question you need to ask is whether the way to make a good decision is to keep eliminating considerations until the right answer appears.
That happens often enough, but is there a better way?
We think so. It’s called: “Possibility-Oriented Thinking.”
The phrase is most closely associated with innovation, but this capacity is one that marketing people should also hone. Put yourself in the shoes of a classic innovator: you’re not yet sure what the product is exactly, or who the customer is yet, or what they will pay, or what exactly your competitors are working on, or who they even are, and when they will make their next move.
The answers are all emergent properties of a system too complex to fully understand. Doesn’t that sound a little like many marketing challenges today?
So what do you do?
The “Possibility-oriented thinking” approach begins with this perspective.
Rather than:
assuming there is a “right” answer, we assume there are a variety of answers, some better than others.
assuming that we have the facts required to make the right choice, we assume we don’t, and so adopt an attitude of humility about assumptions and relentless curiosity about new data and possibilities.
thinking the answer can be arrived at by way of deduction from existing facts, we assume that something new has to be injected into the system, something we imagine; a possibility we conceive, a relationship we speculate about and then explore.
making ballistic decisions with resources, we think about “Safe-fail” experiments, pilots, & prototypes.
thinking that the best idea comes from the most expert or highest ranking person, we think the best idea comes from a diversity of perspectives integrated through thoughtfully designed interactions.
What are some of those thoughtfully designed interactions? This comes back to context.
Are you seeking a strategy of differentiation in an established market?
Are you seeking a strategy of transformation around the customer experiences you create, or the business model that you create them with?
You might consider using the Basadur Simplexity model for discovering challenges, organizing a map of dependencies around them, and prioritizing the action plans that advance your goals.
Are you creating a new category, or something very close to it, and seeking a framework for decision-making that does not rely on asking an as-yet undefined customer group how they would respond to an as-yet undefined value proposition?
You might consider a program organized around the concept we call “Pathfinding” – an iterative process that involves a rotation between stances – strategic sense-making, research, ideation, market ecosystem analysis, and marketing experiments.
Of course, organizations also look to Marketers to solve narrower more routine problems. If that’s all Marketing stands for and contributes, it does run the risk of being seen as the “arts and crafts” department of the business.
It need not be so.
A marketing organization equipped to provide leadership in decision-processes at those moments when the altitude is high, the problems are fuzzy, and the outcomes really matter – is a marketing organization that produces value far exceeding the narrow chores of “filling the funnel” and managing content.
Building your musculature in possibility-oriented thinking improves your chances of doing so.
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Let us know what you think. Are outbound sales dead? Do leaders use technology as a ‘silver bullet’ to try and fix sales, marketing, and the customer experience?
by Glen Drummond Estimated reading time: 7 minutes
Part One in a two-part series
Empathy. It’s such a defining human quality, you could say it’s in our bones. For sure, it’s in our brains. Neuroscience reveals that we have “mirror neurons” that cause other people’s emotional experiences to become our own. That concept would be astonishing if it were not so familiar. Empathy runs in our veins. The hormone oxytocin – makes us closer to those we’re close with.
Beyond this, there are the mental gadgets that history has draped on our biology. For instance, our fine-tuned sense of justice, fairness, and balance. These qualities also incline us to prosocial behavior, such as helping a stranger on the street, supporting a local non-profit, separating our recycling…
So if empathy comes naturally, why call for “Artificial Empathy?” (Presuming, of course, that such a thing could even be possible?) The answer begins with an observation about a trend in scale. Human nature developed over a long period in which there were rewards for co-operation within groups and competition between groups. But compared to today, the groups were small. It’s not clear that biologically-rooted empathy equips us adequately for the scale-change.
It’s not merely that there are more of us, although the human population has tripled since 1945. It’s that the nature of connectivity between us is transformed. As members of media-fueled electorates, our mood-swings are damaging institutions that took centuries to build. As members of a global economy, our collective emissions are generating planet-scale impacts on the environment.
There are broad conversations underway about these forms of our connectivity. Less so about our participation in corporations. Arguably, no prior form of connectivity rivals the modern corporation’s capacity to pursue its objectives with such speed, scale and precision
If you have spent your career inside corporations, you know there are instances where scale acts as a liability as much as a strength. The world knows that something went wrong at Volkswagen, at Facebook, at United, at Boeing. And while the particulars are different, the circumstances rhyme. A group of people sincerely felt it was their job to do something that the public would come to hate and the owners would come to regret. What corporation is free from this risk?
So why does business need “Artificial Empathy?” It’s partly because natural empathy is poorly matched to the scale of the modern corporation. And it’s partly because the consumer and the public are not going to let corporations off the hook for un-empathetic behavior.
Here’s the basis for my confidence in that second observation. People imagine brands as if they were other people. The marketing practice of managing brands using a system of archetypal characters speaks to this fact. So does the blow-back that follows when corporations act in notably inhuman ways. There’s even neuro-imaging research that shows we look at logos and faces in surprisingly similar ways.
So here, in a nutshell, is why brands need artificial empathy:
Because we imagine brands as if they were other people, and
Because we expect other people to be inherently empathetic, so
We also expect brands to be inherently empathetic too, and
Brands have no natural capacity to fulfill this expectation
This fabric of observations explains a lot. Corporations, pursuing their interests without paying attention to this prevalent expectation, violate customer trust. And sometimes, public trust too.
Only on the rare occasion does this violation happen in the dramatic ways cited in the cases of Volkswagen’s emissions masking or Cambridge Analytica’s democracy hacks.
Far more common are violations so banal they barely register. Robotic voice response systems that remind you: “please continue to hold, your call is important to us.” Departure lounges that add acoustic assault to the list of insults suffered by air passengers. Manipulative marketing and sales tactics like the email that arrived this morning in my inbox, by no coincidence, at 9:18 AM with the subject header, “9:00 AM Meeting.”
Viewed through the lens of empathy, (and the lack thereof) the distinction between the dramatic and undramatic instances becomes only a distinction of degree, not kind. And that observation is potentially helpful because it offers some guidance on what needs to be done.
Now, you might say, “Ah, you’re talking about customer experience,” and yes, in a way that’s true. But insofar as the term “customer experience” stands for a department, a performance measure or one in a set of parallel business disciplines, a “customer experience” capability will only act on symptoms while failing to address the root cause. (Sociopaths are known, after all, for their ability to charm.)
Or, you might say, “Ah, so you’re talking about corporate governance.” And yes, again in a way that’s true. But how much real capacity do the people charged with such weighty responsibilities have to intervene in the minor daily violations of the customer’s expectation of empathy? It’s been observed for some time, that “The road to hell is paved with good intentions.”
Since empathy violations appear to take place despite the ubiquity of “customer experience” and “corporate governance” functions the empathy gap – the delta between customer expectations of empathy and the level of empathy corporations are presently organized to muster – is a real business problem.
It seems like a problem that would be worth taking risks to explore, based on the value of the potential outcome if it could be solved.
To summarize, let’s retrace our steps.
Corporations are large, powerful, engines of collective influence and action.
They are growing increasingly large, powerful, and influential in the lives of people.
People expect them to act empathetically, but corporations have no natural inherent capacity, like people do, to fulfill that expectation.
So, we should expect the empathy gap will grow with the power and reach of corporations, until such time as either corporations design a technology of empathy – “artificial empathy” if you will – or face a more concerted backlash directed at individual brands (“United breaks guitars”), at industry sectors (say, “big tech,”) and at corporations in general.
Despite all the technical progress, investment and hype devoted to it, there remains a debate over whether “artificial intelligence” (AI) actually exists. The concept of “artificial empathy,” if it were to enter the public discussion, would be subject to a similar philosophical challenge.
So why talk about it at all?
Because corporations have plenty of resources for tackling challenges once they can be identified. This one is staring us in the face.
Since the processes, which we call “artificial intelligence” will inevitably shape more of the experiences that corporations project and customers and the public will absorb, is there any question that the need for artificial empathy will grow with each passing day?
The conjunction of “artificial” and “empathy” is a provoking framing of a problem that exists. It matters greatly to a corporation’s stakeholders and deserves far more rigorous thinking and effort than has been devoted to it thus far. Rather than being a zero-sum game, “artificial empathy” will be a project that aligns the interests of shareholders, employees, customers, and the public. Rather than being a departmental problem, “artificial empathy” will require a systems-level response.
I’ll leave for a subsequent article the questions of how “artificial empathy” might work and what resources it might draw upon. For now, suffice it to say if corporations need empathy and don’t have it as a natural quality, then the commercial incentive is there to synthesize it.
The ingenuity and organized effort that has made predictive science – machine learning, deep learning, expert systems, big data, or more generally, “artificial intelligence” – such an important component of corporate strategy today, provides at least a framing metaphor for this initiative – and maybe some important tools too.
But intelligence (natural or artificial) is no substitute for empathy. No matter what strides we make in AI, brands need to make progress now on Artificial Empathy. And if AI begins to make strides on its own, there’s a good chance brands will need to pick up the pace.
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Last year, our first full year in business, our marketing services firm delivered seven-figure revenue and was able to return 40% of the initial investment back to our investors. This was done despite having no full-time staff, no overhead, no products and no footprint.
How’s that for lean?
We’re built on a talent management platform. Or, said differently, we use a collection of non-traditional workers: people like stay-at-home parents, semi-retired executives, freelancers and side-giggers who work to get something done and not to “punch a clock.”
It’s now been close to two years operating in this environment, and we’ve learned a thing or two about being agile and lean.
Make no mistake, it’s very difficult, but also very rewarding.
If you’re trying to create a lean organization, or transitioning to it, here are some things to consider:
1. Check yourself before you wreck yourself. Operating lean and agile by definition means removing much of the structure that has traditionally slowed the organization. You will find yourself getting caught in the trap of wanting to add back those things you are comfortable with. You need to become comfortable with the discomfort. find a way to inspect the decisions you’ve made to stay true to the mission.
2. Rent, don’t buy. Better yet, get it for free. The only asset we own is the computer I’m using to write this post. We are the poster children for SaaS. Our online version of QuickBooks back-ends into our accounting firm (we have no finance department, obviously). We operate the business on G-Suite (we have no IT), use Asana for project management (internal and external), Slack for communication, MailChimp (free version) for our monthly newsletter, and our site sits on WordPress (also free, and we bartered services for hosting).
I have two virtual assistants, one live and the other automated (free). Additionally, we are constantly on the lookout for new or better (cheaper) tools. Never sit still.
3. Opt for aggressive, active management. The flexibility of an agile organization is only valuable if you actively manage it. We manage project probability almost religiously. As we watch costs come in, we may merge workstreams, focus on producing outputs faster, shift hours and resources to other projects, etc
If we are engaged in a project using agile design, we use a very disciplined project management approach and proactively run a resource ahead of the delivery schedule. Anything we view coming down the workstream that is anticipated to be out of scope, we bring up during our weekly meeting. Just like the cheer, you have to “be aggressive…b-e-a-g-g-r-e-s-s-i-v-e.”
4. Find someone to make you do what you hate. For me, one of the best things we’ve done is to contract with someone tasked to make me focus on the things I don’t like to do or think about.
For example, my natural state is to “go do,” so taking the time to document how we do things is not usually going to happen, even though I know it’s valuable.
By having someone force me (literally) to get it out of my head and down on paper, we are able to create standard operating procedures that allow for automation, outsourcing, and/or creating self-directed how-tos, guides and videos.
Find a way to address your weaknesses. Don’t ignore them — they will come back to bite you.
Don’t get me wrong, there are a whole host of things that we haven’t learned or addressed yet. We still need to build a pipeline, create a steady flow of opportunity, find a way to scale the business, etc. The business is on a path for more steady growth, but almost everyday I have to keep myself from slipping back into old habits and routines.
It’s not easy being lean…
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Recently we had a chance to discuss customer segmentation with a B2B marketer with a recurring revenue stream. The approach we proposed was “experiential” segmentation. Whereas most B2B marketing segmentation is organized around categorical differences like company size, spend, or industry vertical, experiential segmentation wraps those factors around a core of attitudinal differences.
Here is the list of capabilities B2B brands can radically improve by adopting the experiential segmentation approach.
1. Persuade using stories instead of arguments.
How? By systematically organizing marketing communications around insights into the relationship of customer motivations to the solutions and experiences offered across our industry.
Why is this important? Story-telling activates the connection between a brand’s offering and the identity-related motives that cause people to act. Factual arguments have their role, but research by CEB (now Gartner) shows that B2B buyers are more powerfully motivated to action when identity-value is activated.
2. Reduce reliance on direct mail to drive customer acquisition.
How? By enabling a digital content-marketing strategy that more efficiently attracts and converts inbound traffic through persona-based personalization.
Why is this important? In the short-term, tactics with high customer acquisition costs can be justified based on lifetime-customer-value, but there’s a catch: LTV embeds an assumption about the future rate of customer churn. If churn goes up in the future, the organization will find itself addicted to costly tactics with declining marginal utility. A strong inbound content ecosystem defends against this kind of deterioration.
3. Predict and pre-empt churn in response to disruptive technology.
How? By overlaying churn-model classification with persona insights to understand not just who will churn in response to technology disruption, but also why.
Why is this important? Disruptive technology does show up from time to time. Faced with this situation, and no organized theory about the actual motivations of the people churning out, the response quickly devolves into discounting that harms margins and offers little assurance that you’ve done anything more than delayed the inevitable.
4. Reduce the reliance on aggressive pricing as a lever for influencing buyer behavior.
How? By activating insight into buyer motivations as an alternative to price as a behavioral trigger. (See 1, 2 & 3 above.)
Why is this important? Studies of B2B buying by CEB/Gartner show that price is not typically the most important factor in buyer loyalty. Treating price as the key behavioral lever commodifies your value proposition and leaves money on the table.
5. Elevate solution-selling ability of business development reps.
How? By providing inside-sales with (a) easy-to-grasp persona-based sales enablement tools and (b) visibility into the persona profile attributed to customers and prospects they are interacting with.
Why is this important? Customers expect sales-people to treat them with a certain amount of empathy. Equipping BDRs with personas that speak to customer attitudes helps them do so, despite the pressures of the inside-sales environment, including, in many cases, a short period of time on the job.
6. Increase customer “share of wallet.”
How? By examining the cohort of customers represented by each persona from the standpoint of the trade-offs they experience, and attenuating that experience of trade-offs through thoughtful cross-selling, and by evolving the solution portfolio through new products and partnerships according to a persona-based gap analysis.
Why is that important? If your competitors are accessing a similar value-chain of component providers, business will migrate to the marketer who can integrate those components in ways that make the most sense to the customer.
7. Shift from product-centric to customer-centric offers and experiences.
How? By attaching a persona tag to each customer file, and by using the personas as a core resource in the creative briefs for content and experiences in all channels.
Why is that important? If you have attitudinal insight to drive personalization, you have a choice between leading with or leading to your products and solutions.
8. Migrate marketing spend from paid to owned media channels.
How? Narrow the job of paid media from “selling offers” to the more modest goal of directing traffic towards owned channels where the persona-based design can guide personalized buying experiences.
Why is that important? B2B marketing sometimes demands content richness (currency, depth, personalization) that is at odds with the constraints of paid media.
9. Guide new product/ introduction.
How? By acting as a framework for problem-finding, product screening, market sizing, user-experience design, pre-launch research respondent profiling, and market launch targeting.
Why is that important? Breaking down the silos between product development and marketing can improve the success of both.
10. Build a stronger brand.
How? By taking a systematic step in the corporation’s capacity to treat customers empathetically.
Why is that important? When customers feel that they are seen, heard, understood, and appreciated they are more likely to appreciate (and recommend) the brand in return.
Consider the ten capabilities listed above. They are the core disciplines of marketing in a experience-driven, customer-led, digitally-powered, and fast-moving world. If you’re good at them all now, then your segmentation is serving you well. But if you’re not, then it might be time to ask if outdated theories, hiding in your segmentation model, are the root cause that’s holding you back.
As Peter Drucker pointed out in The Theory of the Business — segmentation is core to the business model and the business model is an integrated framework of assumptions. A segmentation reset can be transformative because it offers a chance for the organization to pause, examine and update its deep assumptions. Those that seize this opportunity stand to gain an impressive jump in capabilities. Those that don’t will likely settle for a solution that rests on industrial-age beliefs and reinforces industrial-era actions.
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It’s not unusual to find companies referring to their relationship with clients as “partnerships.” It’s common to find client logos on vendor websites. But how often do you see an agency or consulting firm’s logo on client websites? If you visit www.evepark.ca – that’s exactly what you’ll see.
Carbon Design, represented side by side with, a global architecture powerhouse, a world-class designer, and the project principal: the innovative green-tech engineering firm, S2E Technologies Inc. Under S2E’s leadership, these firms are inventing a new consumer category – one that integrates bold new ideas about housing and transportation – and radically resets the carbon footprint of both at the same time.
CASE STUDY
Did you know, that until recently restaurant owners only cared about the cleanliness of the food prep area? Most customers, and owners, assumed that if someone got sick after dining out it was because of food poisoning. That was until Carbon Design and Challenger Inc. helped “challenge” the norm by showing owners that half of the outbreaks in a restaurant were caused by people to people transmissions.
Now owners know where the “hotspots” are, and as a result, restaurant are cleaner than ever. Grab your face mask and enjoy a safe night out, but you may want to avoid the raw oysters 😉.
CASE STUDY
How do you do it? By giving clients and users what they want. Using the remaining budget that was to be used to update the site with the new branding we designed and built an entirely new site on a new platform. But audience needs are constantly evolving so the work never stops. Our team continues to audit performance and make improvements.
As a result, the two-year journey has paid off with the site being named #1 in the industry. Even more importantly, their key priority areas (site search, attorney profiles, etc.) were ranked in the outstanding category. Proving that excellence is a journey not just a destination.
