Interested in more careers-related content? Check out our new weekly Work Life newsletter. Sent every Monday afternoon.
In the late 1990s, echoing Abraham Maslow’s famed Hierarchy of Needs, consultants B. Joseph Pine II and James Gilmore presented a new model of our economy and how corporations could strategically profit in their best seller The Experience Economy.
The lowest of the five steps on the ladder, where economic history began, is commodities, items that are easily replaceable by alternative offerings; commodities were the basis of the agrarian economy but are still around today as shown by the interest in getting Canadian oil to new markets.
Goods are a level up in economic value, commodities turned into physical, tangible items, which propelled the industrial economy and still provide many jobs. Services essentially came next, as people moved into office jobs, retail, fast food, childcare and the like, companies delivering intangible activities (that have no physical presence) for individual customers.
But amidst those services lay a special strand that Messrs. Pine II and Gilmore illuminated: People will pay for services that include a memorable experience – a “wow” moment. Experience offerings are unique because nobody has the same experience as another person, even if at the same place at the same time. It started on a big scale with Walt Disney but these days includes much around us, from theme restaurants to escape rooms to spas to cruises.
When their book came out, it had a powerful effect, revealing a truth that was all around us but we had not recognized as a significant trend. But while they explained how to take advantage of the idea, they also warned it was not the end of the ladder, the next stage was already emerging: The Transformation Economy, in which people will pay not just for the experience but for their life to be transformed – self-actualized, in the terms of Mr. Maslow’s ladder.
After 25 years of getting his handle on how the Transformation Economy works, Mr. Pine II is back with more insights on why we want more than experiences and how to deliver. Many services dull over time; we’ve been there, done that, and crave something more. As well, he notes, service offerings are “means” when people desire “ends.”
“The ends they desire are to have a better life or a better business. To be healthier, wealthier, wiser. To have meaning and purpose. To not just buy, but to become who they want to become. To not just have, but to be who they are meant to be. To not just go through life, but to flourish,” he writes in The Transformation Economy.
He observes that many enterprises are naturally in the transformation business for individuals, such as health-care systems, counsellors, fitness centres, financial firms, educational institutions, spiritual organizations and coaches of all stripes. But there are also many enterprises offering business transformations, including management consulting, employee training and outsourcing as well as much of technology, accounting and finance.
“However, far too many view their offerings as mere services and fail to compete on guiding their customers in truly achieving their aspirations,” he warns.
He points, as an example, to university business schools: Each has the same ideas, more or less, and similar activities and professors. “Fundamentally, people go to business school to gain insight and skills; to have a better career; to increase their earning potential; and to be a new you. They get an MBA to be transformed,” he says.
He stresses that’s a different mindset, and a different economic offering. People are seeking impactful change and that’s what must be delivered. Transformations, as he defines them, are effectual outcomes that change individuals in a lasting way.
“Where experiences are inherently personal, transformations are fundamentally individual. While experiences happen inside of us, transformations change us from the inside out, whether we’re talking about a consumer or a business. People value transformation above all other economic offerings because it addresses the why, the buyer’s aspiration. That’s also the reason companies that guide transformations ideally shouldn’t refer to their customers as users, clients or even guests, but rather as aspirants,” he says.
You can turn any experience into a transformative one by guiding them through three activities: Preparation beforehand, reflection afterward and integration on an ongoing basis.
Preparation involves helping them imagine the experience before it happens by picturing its sequence of events, thinking about what it will be like, ideally even envisioning what effect it may have on them and how that relates to their aspiration. Reflection happens when the individual looks back on an event not just to remember it, but to ponder it, perhaps to discuss it with others, and of course to consider its impact on them as individuals.
“People don’t reflect on all their experiences and companies don’t do near enough to encourage, instigate or participate in reflection,” he observes. Integration takes that reflection and puts it into action. This is where people go beyond mere experience to begin serious work on the transformation itself, with your guidance.
The Transformation Economy is all around us. Should you be joining in?
Cannonballs
- The cost of inaction is often much higher than the cost of the wrong action, warns author Mark Manson. When you are in a situation where you can’t decide, he suggests asking which option minimizes future regret.
- Never attend a business conference or trade show without a plan and a list, advises Toronto-based consultant Donald Cooper. Figure out the four or five areas where you most need to learn and improve, and in advance contact officials who can help pinpoint who you should talk to at the event. Introduce yourself to them by email, arrange opportunities to meet and show up with a list of three or four specific questions so you can be respectful of their time.
- A few years ago when one of her direct reports was on paternity leave, career coach Jenny Wood took him off a big project, moved his desk and changed his client list so when he came back he had to start over. There was a good reason for each decision in the moment but in her newsletter she says she succumbed to proximity bias, focusing on the people still around her. She suggests talking with people on leave in advance about how much they want to be kept in the loop and what really matters to them so you don’t make her mistakes.
Harvey Schachter is a Kingston-based writer specializing in management issues. He, along with Sheelagh Whittaker, former CEO of both EDS Canada and Cancom, are the authors of When Harvey Didn’t Meet Sheelagh: Emails on Leadership.