The great Greek philosophers put the meaning of life over everything else – from which all doing would draw value and utility. For businesses, value and meaning were once simple concepts, contained in the practical aspects of a product. A formula where function and utility would define a product, where the product was the brand and where the value was set by the market. As for value, the simple question of ‘what I get for my money’ has endured the test of time – and indeed, can be traced back thousands of years to our ancestors in sub Saharan Africa. An ‘exchange of things’ has transitioned into a world where we attach ‘money to things’. Thanks to the Industrial Revolution, ‘things’ were democratized and became available to many more people in many more places – Henry Ford’s famous Model-T springs to mind (“You can paint it any colour, so long as it’s black”)[1]
The consistent theme is disruptive Technology enabling us to move, work, live and buy ever smarter – and faster. Who wouldn’t check out a hotel on Tripadvisor before booking – or ordering a well researched (peer-compared and approved!) product on Amazon? Speed and technology only know one direction: continued acceleration. And the next big ‘thing’ is around the corner: IOT, or ‘The Internet of Things’. According to Gardner[2], 25 billion ‘things’ will be connected by 2020. Clearly, when everything is networked with everything, the creation of value will take on a new dimension. It is (re)shaping business models, driving innovation and creating data beyond the realm of our own imagination. For manufacturers and many B2B’s this will undoubtedly translate into ever-thinner margins. For B2C it will mean picking either volume or niche positions to continue operating profitably.
But what about meaning? The abstraction of value away from material prosperity towards a broader appreciation for quality of life will have far reaching impact on brands and companies in the near future. Pluto advocated meaning over value, and his scholar Aristotle brought in ethics. In the already totally connected and transparent world of today, there is no longer a margin for not providing ‘efficient value’; i.e. your service or product has to differentiate beyond utility and function. The quality of what you provide and the associated customer experience better be good – or else the unforgiving wrath of the 24/7 connected individual, specialist communities and consumer protection groups will take you up on it (or quite possibly: apart).
Where is the Lighthouse?
In order to shed a light on where things might be heading, it helps to look at sectors where businesses have operated beyond utility and transformed ‘meaning-making’ into a form of art for decades already: Luxury goods. Nowhere else will consumers happily pay an irrational margin for the stories, the aspirational dream worlds, and of course the quality for the products and services they desire. From the genuinely crafted Hermès Birkin bag to the ultra crystal-clear-water dive in the Maldives. Even in times of slower than anticipated growth in Europe, a dropping GDP in China and Russia struggling for peace… growth rates in the luxury sector are still higher than in most other industries. A world hidden to most, associated with high price tags and a guaranteed aura of mystique, luxury operates differently.
So what can we learn from this very successful sector? A few key themes relevant to the topic emerge:
Stories provide the glue between value and meaning.
Luxury brands will always have rich stories to tell. Louis Vuitton was only 13 when he run away from home in 1835 and travelled the 400 Km to Paris by foot; a passion and a will as strong as steel won him the reputation of the best, serving the kings and nobles of the time. Patek Philippe goes as far as telling you overtly that “you never really own a Patek Philippe” – but you are merely the holder to pass it on to the next generation. Luxury does not think in fashion cycles or earning-quarters, but in generations.
Trust is based on a relationship of equals
Often luxury customers are experts and so closely involved within these companies that joint collaboration on a master timepiece or on an individually configured car would put many new world marketers out of their debt. Whilst the modern discipline of marketing is re-discovering the idea of ‘putting the customer at the centre’, the luxury industry has practiced it all along: expert customer inclusion; more often than not, these would be royalty themselves. Of course the customer represents the very reason these companies exist and do well – but deep down, there is a mutual understanding by both the craftsmen and the customer centred on a shared passion and appreciation for the finest product, the best craftsmanship and an ensuing, mutual respect for the innate meaning of what these brands stand for.
Quality is the output from a total obsession with the product
Passing on the skills of mechanical engineering over generations in fine watchmaking, for example, is no easy feat. In times of contemporary, fast paced living, not many youngsters will opt for a career filled with hours spent over magnifying glasses moving minute pieces of precision parts into place with tweezers. Yet it is exactly in these deeply rooted doings that we find some of the most interesting and differentiating insights: Luxury celebrates product over the customer. Hard to believe, but true. Luxury companies are made up of perfectionists, where only the best is tolerated. This goes for the quality of output, as well as for the dedication and capability of the people they employ.
Think integrity
A trait that transcends organisations, value chains and people. It is built through a continued demonstration of trust, expertise and passion over time. This is not about your vision statement or mission (For the record, here is an excerpt of Enron’s corporate vision statement “We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we won’t do it.[3]” It’s not the words that count to make and provide meaning over time, but actions. And meaningful actions are delivered through people – still.
The more we integrate, the more we trust systems and processes outside our direct control (i.e technology, IOT and the companies that run them), the more we will need partners (Brands) to provide us with trust and meaning for life in the real world.
We are at the dawn of a revolution of what consumers will look for in brands, businesses and the deeper meaning they provide. The ones that do not see these waves of changes rolling towards them will sadly join the graveyards of Blockbuster and Kodak sooner than they might think. For the ones that realise the potential power that lies in this revolutionary movement, the future will undoubtedly be bright.
[1] Unproven quote from Henry Ford, source: http://www.thehenryford.org/exhibits/showroom/1908/model.t.html
[2] source: http://www.gartner.com/newsroom/id/2905717
[3] source: http://thearticulateceo.typepad.com/my-blog/2012/02/why-missions-values-and-visions-fail.html