How we think

Platforms & Ecosystems, Part 1: Why Growth is Challenging

coral reef.jpg

Platforms and ecosystems. These terms are being thrown around a lot these days, for good reason. Most of the high-growth and high-value firms -- Apple, AirBnB, Uber, Amazon -- have been built on these concepts from the ground up.

But what do these terms mean exactly? Can any organization evolve to this mode of thinking, and should they? What is a useful strategy framework that can handle and simplify the complexity of business and ecosystems? We'll be exploring these questions in a series of articles. Let's start with the groundwork of definitions.

Growth today requires a new mindset

Let's back up and take a critical look at how business works today. We inherited our business practices from Henry Ford over 100 years ago; Ford taught the world how to transcend individual craftsmanship and evolve into mass production and scale. But this model is only effective for linear manufacturing processes; it's not effective within a fast-changing, complex world where businesses must deliver loyalty-building experiences. Linear processes and silos have become barriers to growth and agility. We need a fundamentally different way of working to make our organizations fit for the future.

Let's find an analogy. What could give us insight into how to manage a lot of moving parts (departments, business units, regions, partners, value chain, etc) for a variety of customer types (consumer, small business, enterprise, cultural variations, demographic and mindset variations) and knit them together into a coherent whole to achieve a set of outcomes?

Consider a natural ecosystem like a coral reef, in which numerous unrelated species coexist in harmony. A coral reef doesn't require coordination; it's self-sustaining because one species' waste is another species' food. The value generated within the ecosystem is the engine that maintains and grows the entire system. It serves as a magnet, attracting others that want to participate in this value exchange.

My current working definition of ecosystem is "self-sustaining value creation across interdependent entities with shared goals," and I'm very open to groupthink to evolve this definition.

Why doesn't your organization operate like an ecosystem?

Technically any business today should be an ecosystem. All your departments, business units, partners, etc. are (or should be) "interdependent entities with shared goals." The system should be easily self-sustaining; growth should be natural. And yet most leaders struggle to gain alignment and move their business forward. Numerous transformation efforts (digital! CX! innovation!) are applied more as band-aids without much impact, because the root cause hasn't been addressed.

Any ecosystem is an emergent property of a set of conditions. A coral reef cannot exist without the right location, water temperature and nutrients. Therefore, to get any set of diverse participants to begin operating as a singular whole, we need to look to the properties of complex systems for guidance. That means focusing on the conditions that allow growth to occur naturally... it can't be forced or even directly guided.

Defining the conditions for a self-sustaining ecosystem

I'll tackle this one in the next post, but here's where I'm headed: Condition #1 for a self-sustaining ecosystem is shared value. For example, survival is the core value in a coral reef, and the currency of value is food; different types of food, or nutrients, are exchanged across species.

If your organization is not growing naturally and easily, I'd argue that you haven't defined value - and how to create that value - in a way that is relevant and meaningful across all parties, both internally and externally. More on this in Part 2.

A strategy without the right metrics is called a wish


I've seen a few posts recently arguing that the phrase "you can't manage what you can't measure" is a myth or bad advice. While the authors make some valid points, I worry that these articles diminish the importance of metrics in any transformation effort. 

what you measure reveals your priorities

Managing what you measure is a factual observation, like the sky is blue. Show me what an individual or an organization measures, and I will tell you their entire philosophy of life and success. What you measure is where your attention goes, rightly or wrongly. And you usually measure what you're focused on... again, rightly or wrongly. 

When an organization obsesses over customer acquisition metrics, but can't tell you customer LTV, I can predict that organization's profitability, growth rate and future prospects for staying in business (low). Those leaders are focusing on the wrong things if their goal is (I assume) to create a predictable revenue machine. 

Likewise, if an organization is drowning in a sea of metrics, it reveals that they have no strategic priorities.

"If you have more than three priorities, you don't have any." - Jim Collins, Good to Great. 

a strategy without metrics is a wish

When I ask clients how they're going to measure progress towards their definition of success, they often have no crisp answer. While the goal is usually measurable -- increased revenue and market share -- there can be a lack of clarity on what it's going to take to move the needle on those metrics. Which is a lot like a pilot who wants to fly from New York to Brazil without a way to know if he or she is flying in the right direction. 

I honestly can't think of a scenario in which the thing you need to manage is unmeasurable. There are ways to figure out metrics that are predictive of what you need to measure and manage. If you can think of any exceptions, please post them in the comments. 

So perhaps we should reframe this observation to be, "you can't manage what you haven't strategically decided to measure," or "you can't manage what you don't know how to measure." In my experience, a strategy without the right metrics is called a wish. 

Which begs the question...  

What are the right metrics? 

Right is, of course, a subjective term that depends on what you're trying to achieve. Let's assume your goal is to create a predictable revenue machine. There's a lot of talk about growth hacking these days, usually referring to marketing. But the ultimate growth hack is to fill the holes in your proverbial bucket so you don't lose customers out the bottom as fast as you pour them into the top. When you fill the holes by focusing on retention and loyalty, every new customer is additive instead of replacement. And these customers buy more from you and refer you to others. Ta da! Your predictable revenue machine, which costs a lot less than a sole focus on acquisition. 

So... how do we measure this? I won't go into too much detail here, but here's where I'd start: 

Strategy metrics.

Yes, I'd start with strategy, not with CX repair. I don't believe you should be down in the weeds of "find and fix" before you've set your future-state vision for your priority customer (which is, by the way, contrary to a lot of CX maturity advice out there.) Strategy helps you prioritize which holes to fix, for whom, and how to fix them in a way that is aligned to your strategy. 

Strategy metrics are outcome-based.

They're anchored on what outcomes your priority customers want you to help them achieve, which are both emotional and tangible. Yes, emotional... even in B2B. How do your customers want to feel when they do business with you? This is the #1 outcome you're aiming for, which guides your brand, business and CX strategies. And remember: there's no and in brand. You have to pick one emotion or mindset that is highly motivating and differentiated enough to aim for, and that is linked to driving business outcomes (for example, feeling in control, successful, confident, a sense of belonging, important, etc etc. Every great brand anchors on an emotion, which is what we built our Value Archetypes to inform.) 

They focus on the why.

All the analytics in the world won't tell you the why behind win/loss. And they won't define the overarching why you're in business and the value you should create. You have to get that understanding up front, use it to set your strategy, then use your strategy to inform metrics and everything else (and continue to listen for the why to fill in your journey- or touchpoint-specific knowledge gaps.) 

They can help you manage an emotion. 

You can reverse-engineer everything you say and do from the emotional outcome you deliver and value you create. I call it "getting all the wood behind one arrow." What experience and business model is required to deliver that outcome? When you do this correctly, you can back into a very short set of perception metrics (7, to be precise) that are predictive of attracting and keeping customers -- and these metrics are shared across the entire business to create alignment. Then you can define the descriptive, operational and department-level metrics that will guide you on closing the gap between current-state and future-state experience. Which then guides your repair metrics and focus. 

PS. Note that strategy metrics are NOT oriented around you, and what you make and sell. Your customer is the only one who can decide whether you're creating sufficient value -- on their terms -- to justify giving you value in return.

PPS. This is all included in customer strategy: the organization-wide blueprint on how to attract and keep customers. I'll be covering this topic in my next White Board Wednesday. To get it in your inbox, click here

Repair metrics 

You are probably doing some form of this, but let's get strategic instead of boiling the ocean with a lot of repairs and metrics that may not actually be the right ones.

For which customers?

First, we have to know which customer groups are most important to your success. And yes, these are defined up in your strategy. If you're losing unprofitable customers, no big deal... which is yet another metric you should be tracking by segment, but knowing how to segment and prioritize customers isn't always straightforward in a complex business. I'll save this for another post. 

Which issues?

Identify where the holes in your bucket are for these customers, and how much revenue is flowing out of each of them as they move through the conversion lifecycle (ie. at what stage do they drop out and why).  Journey mapping is another essential tool that can help diagnose which issues and why, along with more sophisticated methods like analytics and regression modeling to understand what's driving customer win/loss.

Now let's filter these holes by how essential they are to your future-state vision. Let's say your future-state is all based on, say, helping customers feel more in control... which means you need to provide tools, information and resources to empower them. And let's say one of your holes to repair is the lack of easy information and guidance. Boom. Put this in your higher priority fixes. 

How do we measure?

Lastly, identify descriptive metrics that are linked to those holes and those positive, differentiated perceptions that we want to create. A descriptive metric for tools and resources might be how often customers access a tool, how much time they spend with it, and whether increased use of the tool helps improve their perception metric of feeling empowered and in control. 

Your navigation system: Strategy, metrics and governance

Oooh, the "g" word. I know governance is a term a lot of people don't like, so let's reframe it as "how we make decisions." If... 

  • you have numerous strategies sitting in silos like marketing, digital, IT, service, product, etc.
  • you are drowning in an ocean of metrics, none of which ladder up to shared goals and outcomes, and
  • your decision-making across the organization is also fragmented and based on different criteria....

... then hoo boy, you're in a world of hurt, as they say back in my hometown in Texas. 

I like to call the intersection of strategy, metrics and governance as the organization's navigation system. It's how effective leaders, like pilots flying an airplane, know the flight plan and the associated metrics to mark your progress. Which then allows you to more effectively make decisions, because your flight plan and dashboard are tightly integrated and boiled down to the essentials that you need to know to reach your objective. 

If these three aren't basically the same thing -- across your entire organization -- well, there's your biggest opportunity to accelerate your growth. 

We'll dive deeper into this topic on next week's White Board Wednesday. Stay tuned. 



Why B2B buyer personas are a massive waste of money (and what to do instead)


If you're in marketing, it's likely that you've created buyer personas. If you're in B2B, then the number of those personas are probably proliferating due to all the variations like role/title, vertical, size of company, relevance to various products or business units, etc. 

Buyer personas are based on the enormous fallacy of something called the purchase funnel. Spend a lot of resources generating awareness and consideration among the greatest number of prospects, and then convert them to purchase. Job done, right? 


It's time to start thinking quality over quantity. When you think with the end in mind --  what are the right products, services and experiences required to keep and grow our most valuable types of customers -- then everything changes. 

See, your product teams can't build as many variations of product to match the variety of customers you're pulling in the door. Nor can your organization build an infinite number of experiences. This is why the trend of data-driven personalization is a band-aid. Sure, it can drive top-line revenue... but how in hell is the rest of the organization going to deliver on 100 different promises? Ending your funnel at purchase is taking care of you, but alas, not helping the rest of the organization. 

Reframing your job

Marketing is the tip of the spear. You're the group who is best poised to understand your customers and prioritize them for the entire organization. You're the only group who can do it. And when you start helping the entire organization attract, keep and grow your most valuable customer types -- which boosts brand reputation, accelerates business growth and decreases inefficiencies -- you win major credibility points with other departments and in the board room. 

Instead of a purchase funnel, start thinking conversion lifecycle: a combination of 'conversion funnel' (ie. from awareness to purchase to loyalty and advocacy) with the major lifecycle stages including, for example, installation and getting support. It doesn't make sense to have two different models for different reasons. 

When you think about who is moving through that entire lifecycle, it's a single human (or group of humans.) There's not a set of buyers who suddenly turn into a different set of customers... which is an artificial distinction created by internal silos, represented by different metrics, goals and funnels. You likely have different personas proliferating around the organization that are built by different departments for their own ends.

With this in mind, your job should be focused on understanding how many and which customers are moving (or should move) past the purchase stage. Your ideal customers may be pouring out the holes in the bottom of the bucket faster than you can keep it topped off -- which happens when your organization isn't aligned on the same customer priorities and takes an all-things-to-all-people approach in a helpless response to customer complexity.  

Throw away your buyer personas

... which are no good to anyone in your organization except for sales and marketing. Instead, build a limited set of priority customer personas, linked together by a differentiated psychographic and mindset, that guides the actions and priorities of the entire organization. Show how each priority role moves through the entire lifecycle, and what experience is required to attract and keep them. NOW you've got the right information to inform your "marketing module" -- how to get these people in the door in the first place. 

"Deciding what not to do is as important as deciding what to do." - Steve Jobs

I've seen too many buyer personas with a laundry list of possible mindsets, needs and motivations. They were built in a bottoms-up fashion without a top-down strategy to guide all employees on the single most important customer outcome that everyone should be aiming to create.  

How to fast-track the right answer

You may be thinking, "Of course, Jen, I know that we need to do this. But I don't have the time or resources to dedicate to a big strategy project." 

Yep, exactly. I know the feeling. I'll let you in on a little secret that consulting firms and agencies don't want you to know (or maybe they don't know it themselves): This process is way simpler than it looks. Why? Because human nature is... well, human nature. It doesn't change. And there are only so many customer variables with which you can build a successful brand. 

After nearly 30 years in the business, I've packaged up all the repeatable shortcuts and frameworks that I built for my own use as a consultant, and I'm making them available to you. It's time to take the know-how and short-cuts out of the minds of consultants and put it where it belongs: in YOUR teams. 

Join us for our upcoming webinar: The Shortcut to Defining Prioritized, Impactful B2B Personas. I'll share my 3-part recipe for getting to the right answer fast. 

Click to register. 

Like this article? Might your teams and peers benefit? Please share! 


What's a B2B Persona Platform, and why do I need one?

Does your business deal with a Rubik's cube of enterprise customer complexity? Verticals, titles, sizes, geos, channels, psychographics and mindsets.

Layer on all the various departments and business units that might be building use-case-specific personas for marketing, sales, products, services and experiences, and you've got an explosion of complexity on your hands. 

While marketers can create an infinite number of personalized messages for an infinite number of customer segments, that's taking the easy way out. You're not helping the rest of the organization, since your product, service, and experience groups don't have that luxury. 

It's essential to prioritize and focus on your best-fit customer... then create a very small number of personas that every department can build on. 

Think of this "master set" of personas as a platform. They are linked together by a mindset, and provide high-level information on the messages and experiences that will drive repurchase and loyalty. Then each department builds on this foundation over time. How does Role A move through the lifecycle? What digital experience is the right one? How does it vary from Role B? 

Apple is a great example of focus. Their target? People who think different. How many unique personas do they need? Not many. Basically a couple variations on a single theme -- Apple consumers are also an enterprise's employees who demand that the IT department allow them to BYOD (bring your own device). That's what has fueled Apple's growth in the enterprise (40% YOY growth as of the last reported statistic in 2016). 

Apple's best-fit customer might be someone who buys Apple for themselves, and is also an employee of a large company, ideally one that has a design focus. They are both a user and an advocate. There's Role A. Role B would be the IT department who's responsible for either enterprise-wide technology purchases, or passing the rule that employees can use their own devices. 

From here, you can define each role's lifecycle -- the consumer who buys either online or in store, gets support at the Genius bar, etc. OR the enterprise IT customer who moves through a different, more personalized experience. And yes, there will be a lot of added detail and perhaps some variations... but Apple's laser focus on a mindset links it all together. 

But wait! (you might say)... Apple sells to a lot more types of people than these two! Yes, you're right. My 75-year old mother loves her iPhone. But we're talking "center of the bullseye" here. Against what type of customer will you design your end-to-end customer experience? If you get that right, others will follow. 

There you go. The first company to hit $1T in value and (I may be wrong, but) I'd bet they don't have more than 4 priority personas. 

Join our upcoming webinar

If you need to solve for an explosion of customer complexity, join us for our upcoming webinar. We'll go through our 3-part recipe for simplifying and focusing your efforts on your best fit customer. Click here to register. 


Three massive flaws in marketing "best practices"

If you're in marketing, advertising or lead gen, you know that what moves the needle is understanding customer mindsets, not demographics. What makes customers tick? What do they fear? What motivates them? Winners of the Effie Awards all know how to tap into emotion. The most successful brands in the world know how to build companies on emotion. Best practices, developed over decades, have told us exactly how to do it. 

The problems with "best practices"

Conventional wisdom dictates that this kind of psychographic insight requires months of up-front research and strategy work before launching a campaign to guarantee effectiveness. Building qualitative discussion guides from scratch, and then (even better!) convincing the client to spend 5-7 figures on a quantitative research project. And only then do you have the insights to create a creative brief and execute. For 25 years I served as an account planner, brand strategist, and management consultant; I've learned, practiced and taught these best practices while conveniently ignoring the problems, which include: 

  1. It takes too long. Best practices were born decades ago, back when there was more time to do everything. Clients weren't demanding results yesterday. Society and business has sped up considerably, and our practices need to evolve with the times.  
  2. It's not accessible to smaller firms. Most companies don't have (or want to spend) the money to do a 6-figure segmentation project. So you rely on existing customer knowledge (often lacking psychographic insights) or conduct a few interviews to make sure you're directionally on target. Or -- as I've heard from many of you -- you throw stuff against a wall to see what sticks.
  3. What customers say does not equal what they do. Now, this feels weird for me to write this. I mean, I've been doing research-based strategy work for decades. But the fact is, no matter how well-done the research, at the end of the day it's only directionally predictive of future success. And if you don't ask exactly the right questions, you'll miss the mark without even knowing it. Only actual behavior can be a better predictor of what's going to generate leads and new customers. 

Best practices were born decades ago before concepts like Agile and digital were a glimmer in some inventors' eyes. They're outdated. And, while still helpful, they aren't absolutely necessary. 

What's needed is a more agile approach to insights, allowing you to create hypotheses based on proven human nature and then testing those hypotheses with behavior (ie. clicks). The key here is "proven human nature." If you're guessing in a vacuum, you are likely to miss the crucial insight that is needed to capture attention and interest.

If your organization is being pressured to produce quality results faster, talk to us about our Value Archetypes, playbooks and coaching.  

How to link brand, CX and digital to drive measurable results

Now that we've reviewed the Value Platform and Value Archetype™ concepts, let's see it in action. I originally designed the Value Platform™ to address a common problem that I saw in the brand strategy world: the lack of connective tissue between the brand strategy and everything else. 

This post provides a sample framework to help you ensure that your brand promise can be operationalized. We help CMOs look good by driving measurable results from their brand work. 

Why your transformation effort is likely to fail

Why your transformation effort is likely to fail

There’s a lot being written about digital transformation. Customer experience transformation. Future of Work transformation. Oh, and let’s not forget innovation. No matter the type, they all seem to be failing. McKinsey reported that "just 26 percent of respondents say the transformations they’re most familiar with have been very or completely successful at both improving performance and equipping the organization to sustain improvements over time" in 2015; two years later, they found that "companies are no more successful at overhauling their performance and organizational health than they were ten years ago."

I'll share my theory, formed after countless conversations with senior leaders over the years and numerous customer-journey/root cause analysis projects....

The Value Platform Archetypes

In the last post, we discussed the purpose of a value platform: to serve as the customer-centric beating heart of an organization’s strategy, informing everything it does in order to bust silos, boost efficiencies, and (most importantly) drive revenue and growth. 

Grounding the Value Platform are the Value Platform Archetypes™, which have emerged over nearly 30 years of customer-insight-driven strategy work. What I noticed after a few years of conducting bottoms-up strategy projects is that we always surfaced variations on the same themes. The first emerged from a brand strategy project for a B2B technology company back in the early 90’s. After numerous 1:1 interviews with technology decision-makers, we noticed three primary needs that drove decision-making:

The hallmarks of ineffective value propositions (with examples)

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Value propositions are a fundamental part of business strategy. When done well, they communicate a meaningful promise to a specific customer type and provide guidance to various departments across the organization. 

However, value propositions often fail to realize their potential for six reasons. These reasons appear more often in complex organizations with multiple products and/or customer types, but they can surface in any business.

1.   Product- or company-centric instead of customer centric value propositions.

Without clear customer segmentation, the only way to craft a value proposition is to talk about yourself – which is typically less relevant and motivating than a customer benefit. This error is especially endemic to companies who serve many different types of customers and have trouble finding the common denominator. Additionally, product-centric value propositions are often not terribly inspiring, and we need inspiration now more than ever. Purpose, meaning, inspiration, emotion… these are all strongly linked to customer and employee loyalty.  

Let's look at Opera's value proposition; what a snoozer. Uninspiring and undifferentiated with zero customer benefits. Wait! You might say. Aren’t “fast, secure, and easy to use” all customer benefits? No. They’re not. They are features of the product, and the company leaves it up to the viewer to infer what benefit that has to them.  Perhaps this is why Opera is one of the least-used browsers.

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Secure, easy to use, simple... these are all tablestakes. Customers expect them. If your product or service isn't secure, simple and easy to use, you might as well go home. Now, if you focus on the related outcome or benefit to the customer (feeling in control or empowered), you can run with that.

By comparison, LinkedIn’s promise of “connect(ing) the world’s professionals to make them more productive and successful” is clearly anchored on the value to the customer: productivity and success. It’s aspirational and motivating to not only customers, but employees as well.  

2.   Value propositions that don’t factor in the exponentially changing environment.

Technology is evolving rapidly. New competitors are disrupting markets. Customer expectations are rising. Successful value propositions must be anchored on what doesn’tchange in order to carve out and own a unique territory for your brand over time, and not subject your stakeholders to whiplash.

This is fundamentally about frame of reference -- how do you define your business? Are you a railroad company, or a transportation company? The former will become obsolete; the latter will not. A Google search of “we are the leading…” produced a billion hits, many of them “we are the leading (xyz kind of company):" an undifferentiated promise that constrains your business. This error is highly related to #1 as it’s company-focused rather than customer- or outcome-focused, but important enough to call out separately.

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3.   Fragmented value propositions due to internal silos.

In a more complex organization, product teams often develop their own value proposition… which is rationalized because each product (and therefore the feature/benefit set) is different. However, when multiple products are sold to the same customer (more often than not) it creates inefficiencies internally and confusion externally.

Let’s look at how fragmented (and unfocused, #4) Cisco’s value propositions are. Each product-centric business unit produces their own value proposition, despite the fact that many of Cisco’s customers buy across the portfolio. There’s no connective tissue other than some overlap with simplicity and security, but as mentioned earlier, these are tablestake features, not differentiated benefits. 


4.   Value propositions that aren’t laser-focused.

A value proposition needs to align against one very clear customer benefit or outcome. This is critical at the corporate level, since every department, product, business unit and experience must deliver on that promise. Multiple customer outcomes mean multiple targets to hit. What is the real goal to deliver on as a company, not a business unit? Looking at Cisco’s fragmented and unfocused value propositions, are teams supposed to deliver on improving productivity, helping customers feel more secure, or more in control? Or perhaps make progress together?

Believe it or not, it is possible to anchor the promises of multiple business units on a single promise if they sell to the same customer. For fun, let's think of an example: Cisco could leverage one of John Chamber's sayings, "We help you see around corners," tapping into every customer's and partner's need for feeling confident today and in the future. Each product/BU's specific value propositions could be anchored by this type of corporate-level promise to knit together a coherent story for customers, employees, and partners.

What should you do if your company serves very different customer profiles (ie. personas)? Start thinking in terms of brand portfolios and stop trying to be all things to all people.

5.   Value propositions that are not applied to the entire value ecosystem.

Again, for complex businesses, the value proposition must be delivered throughout the ecosystem, which includes partner organizations. If, for example, your value proposition includes a values-based component sustainability or CSR, then it must be supported by your entire value chain. Or if you sell a product through resellers, those resellers must support and ideally embody what you stand for.

Nike is well known for orchestrating its entire ecosystem to deliver on 'inspiration and innovation for athletes.' Or, continuing the Cisco example, the "helping you see around corners" value proposition could be applied to partner selection and training regardless of product. 

6.   Value propositions that don’t mirror the internal culture.

If you’re promising to make customers feel valued, for example, but you don’t embody a culture of recognition, your promise won’t be authentic. What is promised externally must be lived and breathed internally. Our increasingly transparent culture will reveal the lack of alignment.

Think of Wells Fargo's promise: “Earning lifelong relationships, one customer at a time, is fundamental to achieving our vision.” Thanks to a top-down pressure from higher-level management to open as many accounts as possible through cross-selling, the company was fined $185 million and still faces criminal and civil suits. According to Wikipedia: “Wells Fargo employees described intense pressure, with expectations of sales as high as 20 products a day.[48] Others described frequent crying, levels of stress that led to vomiting, and severe panic attacks.[49][50] At least one employee consumed hand sanitizer to cope with the pressure.[51] Some indicated that calls to the company's ethics hotline were met with either no reaction[52] or resulted in the termination of the employee making the call.[53]

This is clearly not a culture that promotes earning lifelong customer relationships.

In the next post, we’ll cover a solution to these challenges: The Value Platform.