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The Value Creators Podcast Episode #4. Reza Farhani: Navigating the Future of Work: Insights on Culture, Communication, and Entrepreneurship

Successful innovation is a combination of deep customer knowledge and deep technical knowledge. Both are critical, and it is the unique combination of them that becomes a marketplace advantage-serving customers by solving an important problem for them with a differentiated, preferred and technically superior approach.

Reza Farahani, the founder of WFHomie, is a data scientist, who, working at top global companies in tech and consulting, developed great insights into the way data can reveal human motivations and patterns in customer behavior. 

Equipped with deep technical knowledge in data science and analytics as well as deep customer knowledge, he speaks on how we can apply this to startups to solve new problems for our customers, create healthy and productive teams, and create real innovation.

Show Notes:

0:00 | Introduction

0:40 | Introducing guest: Reza Farahani

1:27 | The combination of customer & technical knowledge

2:01 | Becoming a Data Scientist

3:05 | Putting his expertise to work

4:42 | Creating Hypothesis

7:20 | Identifying Qualitative Data

9:01 | Understanding Teams

11:18 | Leap to Entrepreneurship

13:55 | Crumbling of Teams Due to Remote Work

16:18 | Metrics to Measure Performance

18:05 | Engagement with Employees

22:08 | Importance of Recognition

25:12 | Work Culture

28:42 | Future of Work

30:43 | Entrepreneurial experience

33:08 | Acknowledgement

Knowledge Capsule:

In a captivating conversation, Reza, an entrepreneur and former CEO of WF Homie, shares valuable insights on the future of work, with a specific focus on culture, communication, and entrepreneurship. This summary combines the key points from the conversation to provide a cohesive overview of the podcast.

Reza delves into the impact of remote work on culture and observes that the way people work together plays a pivotal role in shaping a company’s culture. He emphasizes that culture emerges from how people collaborate and align their efforts. While top-down vision from leaders is important, lateral communication and learning from peers also contribute significantly to shaping a cohesive culture. However, the shift to remote work has disrupted these communication channels, necessitating efforts to rebuild and strengthen them. Reza proposes that by fixing communication channels and ensuring effective asynchronous communication, a company can cultivate and maintain its desired culture even in a remote or hybrid work environment.

The conversation moves on to the significance of recognition and celebration within organizations. Reza highlights the lack of recognition as a common challenge in remote and hybrid teams. To address this, WF Homie developed tools like the Kudos app, enabling team members to easily send appreciation to their colleagues. Additionally, partnerships with companies providing physical gifts or gift cards were established to facilitate tangible recognition. By making recognition effortless and accessible, organizations can foster a positive culture where small wins are celebrated, leading to increased engagement and productivity.

Culture and communication are deeply intertwined, and Reza emphasizes the importance of effective communication channels within a company. He shares how WF Homie focused on improving communication to ensure the spread of cultural values. By enhancing communication between top management, employees, and lateral teams, companies can create a cohesive and aligned culture. Reza notes that creating an open and supportive communication environment is crucial, especially in remote or geographically distributed teams. Furthermore, the ability to measure communication and engagement through qualitative and quantitative data allows organizations to identify areas of improvement and take actionable steps to enhance the working experience.

Looking ahead, Reza discusses the role of AI in shaping the future of work. He highlights how AI tools act as equalizers in communication, assisting individuals who may struggle with effective communication. AI can provide support in areas such as documentation, improving productivity and output. While concerns about job displacement exist, Reza believes that AI enhances productivity and enables individuals to achieve higher output, leading to a positive impact on organizations.

The conversation concludes with a reflection on the entrepreneurial experience. Reza shares that being an entrepreneur has provided him with a sense of harmony between work and life, as he enjoys what he does. However, he acknowledges that the journey can be challenging and lonely, as entrepreneurs bear the weight of making tough decisions and carrying responsibilities. Despite the difficulties, the joy and fulfillment derived from building something valuable and appreciated by customers make the entrepreneurial journey worthwhile.

In summary, Reza’s insights shed light on the future of work, emphasizing the critical role of culture, communication, and entrepreneurship. By prioritizing effective communication channels, fostering recognition, and leveraging AI tools, organizations can adapt and thrive in the changing landscape of work. With a focus on creating a harmonious work-life balance, nurturing a positive culture, and embracing technological advancements, the future of work holds promising opportunities for both individuals and businesses.

The Value Creators Podcast Episode #3. Jason LaBaw: Culture And Technology Amidst High-Speed Change

You need two types of knowledge to succeed in the business world: specialized technical knowledge and deep customer knowledge. This will allow you to create uniquely valued experiences tailored to your customers and thus build a thriving business.

Jason LaBaw, as the founder and CEO of Bonsai Media Group and a pioneer in web development, AdWords, Google Analytics, and Umbraco development, has accumulated over 18 years of industry experience, client service, and strategic leadership in the digital world and has become an expert in combining technical and customer knowledge to scale.

In this episode, Jason touches on how he believes the future will look and what principles he is certain will be invaluable to thrive in a futuristic economy, such as empathy, planning, and budgeting.

Show Notes:

0:00 | Intro to Entrepreneurial Management

1:56 | Introducing Jason Labaw

3:10 | Businesses Coping with Technology

7:11 | Ways to Engineer Technology

8:32 | How to Work & Run a Business These Days

10:31 | End-user Experience

11:52 | User testing

12:35 | Secrets of Empathy

14:49 | Getting into Depth with Bonsai Media Group

21:01 | Trends: Augmented Reality 

24:40 | Storytelling as a marketing

25:20 | Story about the Future

27:39 | Gamifying Work

29:30 | Risks of Technology to Entrepreneurs

31:52 | Learn More About Bonsai Media Group

Knowledge Capsule:

Combining customer knowledge and tech knowledge.

One of the Value Creator’s mantras is to combine deep customer knowledge with specialized technology knowledge to create uniquely valued experiences for customers and thereby build successful businesses.

Jason LaBaw has done this successfully at the company he formed, Bonsai Media Group. He illustrates how it’s perfectly viable to start simply and advance quickly.

  • An early example of a project is one where the company, in customer service mode, transformed a trivia app request from a client into a social contest that engaged users and immersed them in the brand’s story.
  • This evolved into various combinations of the digital and physical worlds through scavenger hunts – which became an exploration of the potential of AR and VR.
  • AR and VR can be further combined with 3D product imaging. It turns out that 3D experiences are hugely beneficial for conversion rates. 
  • Combining his experiences in both the digital and physical realms, he began envisioning ways to create immersive experiences that merge AR and the real world: to make exploring the world as fun as playing a video game, using technology to encourage people to get out and explore the real world around them.

Simple steps towards a complex future.

With these relatively simple business steps, Jason has now advanced to become a futurist of AR, VR, and AI. While some believe these technologies have been overhyped, Jason believes they have tremendous potential to transform human experiences. He emphasizes the importance of human connection and expresses his hope that future generations won’t be locked in virtual worlds. He sees augmented reality, AI, and voice-enabled technologies as key drivers for positive change. For instance, he envisions a scenario where augmented reality glasses enhance meetings by providing contextual information and augmenting reality with relevant data.

The discussion also touched on the concept of gamification. Jason explains how gamifying networking events can facilitate connections and conversations by using augmented reality cues to identify shared interests. He believes gamification can also be applied to work, where incentives and rewards can be used to motivate employees and create a more engaging and efficient work environment.

There are basic economic principles underlying this futuristic scenario.

Empathy

Empathy remains the essential skill for businesses, no matter how futuristic or high-tech. Jason emphasizes the importance of having conversations and conducting in-person interviews with various stakeholders, including frontline workers, managers, and customers. This qualitative data gathering allows businesses to uncover valuable insights and understand how customers perceive their brand and experiences. Jason recognizes the value of quantitative data, such as analytics and user testing, in making informed decisions and improving products, but it’s best when it is in addition to qualitative data,

This way businesses can focus on their customers’ needs, goals, and preferences to create competitive advantages. He suggests that companies can provide value by enabling customers to perform tasks online, like paying bills. 

Planning and budgeting

Planning, allocating budget, and continuously iterating based on customer feedback and analytics are crucial for adapting to change

Jason suggests a general formula for coping with technological change, starting with a budget-focused approach. By analyzing different options and making design and technical decisions based on budget and return on investment (ROI), businesses can adapt to changing technologies. He emphasizes the need for clarity and defining a project’s ROI from the start. By allocating budget or accruing it, businesses can invest in technology iteratively over time, improving functionality, and user interfaces, and switching components when necessary.

Additionally, Jason highlights the significance of having a contingency plan to deal with unexpected events or disruptions. He shares an example of a company that had to pivot quickly when a technology vendor was acquired. Being prepared with alternative vendors or technologies enables businesses to adapt swiftly.

The Value Creators Podcast Episode #2. John M. Jennings: Mental Models Are The Uncertainty Solution

In a complex world full of uncertainty, all businesspeople and entrepreneurs can draw guidance from shared mental models that help us make better choices. John M. Jennings took this advice to heart and developed a latticework of mental models for financial investing and any other business discipline, which he explained and expanded on in his book The Uncertainty Solution: How To Invest With Confidence In The Face Of The Unknown.

John is a premier thought leader in the wealth management industry and President and Chief Strategist of St. Louis Trust and Family Office, a $15 billion national investment firm. He is also an adjunct professor at Washington University’s Olin School of Business in its Wealth and Asset Management Graduate Program.

In this episode, he not only teaches why we always look for certainty and how we can be aware of certain pitfalls we fall into while dealing with uncertainty but also how to navigate uncertainty to not only come out unscratched but profit from it.

Show Notes:

0:00 | Intro

00:28 | Mental Models with John M. Jennings

1:39 | The Uncertainty Solution

02:25 | Defining Uncertainty

03:34 | Predicting the Future

04:35 | Defining Mental Model

6:08 | Unliking Uncertainty & How to Deal With It

8:48 | When Cause and Effect Don’t Work

12:37 | Extrapolating Trends

17:49 | Business Cycles

20:36 | The Result of Our Luck 

24:36 | Exponential Growth

28:42 | The Latticework of Mental Models

33:57 | Loss Aversion

36:38 | Overconfidence is the Mother of all Biases

41:20 | Wrap Up: Philosophical Advice from John M. Jennings

Resources:

(Book) The Uncertainty Solution – John M. Jennings

(Book) Managerial Decision-Making – Max Bazerman

(Book) Scale – Jeffrey West

Knowledge Capsule

In his book, The Uncertainty Solution, John M. Jennings urges each of us to use a latticework of mental models to simplify the complexity we inevitably face. Here’s a summary.

A. Knowledge: Think of information in four categories: data, information, knowledge, and wisdom, and focus on knowledge or wisdom over data and information. 

B. The Quest for Certainty:

  1. Uncertainty: We dislike uncertainty as it causes stress and triggers our fight-or-flight response.
  2. Seek resolution: Resolving uncertainty brings pleasure, but we should recognize and sit with the discomfort instead of seeking closure.
  3. Avoid information overload: Resist becoming an information junkie or relying too much on expert predictions.
  4. Embrace discomfort: Sit in your discomfort and focus on what you can control. 

C. Looking for Causes in All the Wrong Places:

  1. Causation Is Tough to Determine: Assuming one thing caused another can be risky, as coincidence and multiple factors often play a role.
  2. Correlation Does Not Imply Causation: Strong correlation doesn’t mean one thing causes the other.
  3. Regression to the Mean: Extreme events tend to be followed by outcomes closer to the average.
  4. The Law of Large Numbers: Conclusions based on small sample sizes can be misleading; consider sample size whenever causation is asserted.
  5. The Highly Improbable Happens All the Time: Unlikely events occur frequently, so don’t be surprised and caught off guard. 

D. The Stock Market Is Not the Economy:

  1. Economic Growth vs. Stock Market: Economic and stock market performance are not always correlated.
  2. The Stock Market as a Complex Adaptive System: Predicting stock market movements is nearly impossible due to the interactions of intelligent agents.
  3. Economic Indicators Don’t Predict the Stock Market: Economic indicators and market signals often fail to predict market performance. 

E. Market Cycles and the Two Axioms of Investing:

  1. Markets Move in Cycles but Defy Prediction: Market cycles vary in duration and intensity, but no permanent plateaus exist.
  2. Economic Stability Creates Instability: Stability can lead to bubbles and crashes; opportunities arise when stability appears.
  3. Market Timing Doesn’t Work: Timing the market is challenging and requires being right twice—both at the top and bottom.
  4. It’s Okay to Invest in Advance of a Bear Market: Investing before a bear market can be fine if you follow a disciplined strategy.
  5. The Limits of Arbitrage: Being right doesn’t guarantee winning due to the market staying wrong for extended periods. 

F. Beware Experts Bearing Predictions:

  1. Economic and Stock Market Predictions Are Worthless: Investment predictions are often wrong, and investing without relying on knowing the future is better. 

G. Skill and Luck in Investing:

  1. The Skill-Luck Continuum: Luck plays a significant role in investing, and short-term results may not reflect skill.
  2. Most Investment Managers Underperform the Market: Most active managers underperform after fees, so consider the odds before investing with them.
  3. Most Stocks Underperform the Market: Picking individual stocks is challenging, and most fail to outperform the market.
  4. Monkey Portfolios Outperform: Following a different strategy than the market can yield better results, but it requires discipline. H. The Trend Is Not Your Friend:
  5. It Is Difficult to Spot a Trend Early: Identifying trends early is challenging, especially exponential growth.
  6. Trends Don’t Always Turn Out as Imagined: Established trends can change rapidly due to new competitors and technologies.
  7. It’s Difficult to Find a Successful Needle in a Haystack of Competitors: Picking winners among many competitors is challenging, and early pioneers may not be the long-term winners.

H. The Trivial Many Versus the Vital Few:

  1. The Danger of Using the Bell Curve in Investing: Relying on bell curve statistics may not capture the true nature of the stock market’s behavior, so be skeptical of advice based on such statistics. 2. The Stock Market Is Better Described by Power Law Distributions: Embrace the uncertainty provided by power law distributions instead of relying on projections based on the bell curve. 

I. Navigating Our Behavioral Biases:

  1. The Endowment Effect: We tend to overvalue things we own, including our investments.
  2. The Storytelling Bias: Stories strongly influence our decision-making, so be aware of how they can sway investment choices.
  3. Hindsight Bias: Looking back, we think we should have known the future but realize that infinite possibilities influence outcomes.
  4. Loss Aversion: Losses have a more significant impact on us than gains, leading to risk aversion and irrational behavior.
  5. Overconfidence: We often overestimate our knowledge and abilities, leading to poor decision-making. Recognize and mitigate overconfidence. 

J. Behavior—The Most Important Ingredient:

  1. Choose Inactivity Over Activity: Avoid excessive tinkering and market timing; maintain a long-term perspective.
  2. Prefer Simplicity Over Complexity: Start with a simple approach and add complexity only when necessary to avoid complications and fees.
  3. Establish Simple Investment Algorithms: Create an investment policy statement and follow simple asset allocation and rebalancing rules. These insights aim to provide a clearer understanding of investing and guide decision-making in the complex world of finance.

214. Professor Shawn Ritenour: The Vital Role Of The Entrepreneur In Economic Development

Entrepreneurship is well-defined in economics, and well-recognized as the engine that drives economic growth. That means people enjoying greater well-being, including but not limited to material prosperity. But economic growth can be uneven. Some countries, some regions, and even some firms do not generate the same levels of economic growth as others. How do we understand this variability? We look for what holds entrepreneurship back.

Knowledge Capsule

Economic development can be a self-reinforcing cycle of continuous improvement in people’s circumstances.

Greater material prosperity is a valid and worthwhile goal for economic development. But, says Shawn Ritenour, economic development goes beyond that goal: it delivers a greater variety of goods and services that individuals and businesses can use as means to achieve their own diverse ends. The production of this greater variety requires entrepreneurship in the creation of new ideas and the pursuit of new value, and it generates new entrepreneurship by supplying a greater variety of resources to work with in those pursuits.

To generate this cycle, an enabling environment is required — one that acts as a catalyst for entrepreneurship.

Economic development is a multifaceted process in which several forms of human action combine in a system for economic prosperity. It’s not instructive to try to isolate financial capital or capital goods or technology or even human capital, and culture and social institutions can’t be ignored. These sources of prosperity must work together in an orderly fashion to generate the necessary synthesis.

The vital role is that of the entrepreneur.

The entrepreneur is the one who undertakes production, the one who combines resources to produce a product that meets customers’ needs and enables those customers in their own economic pursuits. Entrepreneurs kick off the cycle. Firms and organizations can act entrepreneurially, but it’s fundamental to understand that individuals — sometimes working in teams or committees — are the ones behind entrepreneurial decision-making. The entrepreneur is not necessarily a single person, but entrepreneurship is always a human action.

How do we get entrepreneurship started?

Entrepreneurship requires customer knowledge, technical knowledge and financial capital. Customer knowledge includes the empathic understanding of what’s needed for customers to be able to better meet their own needs. In the context of economic development, this knowledge is probably widely available to private entrepreneurs, but it may not be available to governments, whose understanding is distorted by predispositions to develop specific industries or subsidize specific economic sectors, or towards a particular technology. For these reasons, there can be no “entrepreneurial state”. Individuals with their own ideas and their own private property will provide the energy o break economic inertia.

Technical knowledge defines a sufficient understanding of the technology and technological resources to deliver the desired new value to the customer. In under-developed economies, this technical knowledge may be thin, so reinforcing the technical knowledge of entrepreneurs is appropriate, through education, injections of new technology, training, mentoring, or other forms of knowledge transfer.

With the right understanding of customer needs and the command of the right technology, the entrepreneurs involved in the development state will always need financial capital, because production takes time to organize before cash flows in to the firm from customers. In development contexts, entrepreneurs often will not have savings of their own, and there may not be an appropriate institutional infrastructure of local banks and lenders and investors.

Therefore, customer knowledge, technical knowledge and financial capital combine to provide the foundation for entrepreneurial leadership and growth. They’re integrated: it’s important for the sources of financial capital to understand and appreciate the nature of the customer and technical knowledge that is being deployed. Typically, this takes the form of venture capital or private equity.

Education is another important element in the institutional environment for entrepreneurship.

Entrepreneurship as a skill or capability can not be taught — it requires a special orientation that’s more developed in some individuals and firms than others. But principles, process and tools can be taught, and experienced entrepreneurs and businesspeople who have developed market savvy can share knowledge that they have acquired. Communicating the entrepreneurial mindset and methods in all stages of education will help to create and promote an entrepreneurial community that’s supportive of economic development.

One aspect of learning is to understand the entrepreneurial ethic of sacrifice, that it takes a lot of time and effort and expenditures and extended commitment before business success can be achieved. There’s more hard work than there is magic.

Institutional elements such as property rights and sound money are important components of entrepreneurial development.

Property rights and sound money may sound like abstract concepts, but they are extremely influential in economic development processes. Property rights mean that entrepreneurs can assemble and go to market with their own resources in whatever way they prefer. Sound money means that entrepreneurs can anticipate a return from their productive activities that’s not eroded away by inflation, and they’re not led into miscalculation by monetary manipulation (e.g., unanticipated escalation of future borrowing costs).

Removing obstacles to entrepreneurship is the best economic development policy.

Traditional approaches to economic development favor centrally planned initiatives, government spending, and policies in the form of subsidies or special incentives. They’re not typically market-based approaches. But the right approach is the opposite of policy-making. Instead of trying to design and add new structures, development should be focused on the removal of barriers — on identifying what’s getting in the way of nurturing a rich and robust entrepreneurial culture, and focusing on the removal of those obstacles. Leave the entrepreneurs to identify the specific products and services and businesses that can flourish, and to attract the investment capital that will support those businesses, without the need for “policy”.

Additional Resources

The Economics of Prosperity: Rethinking Economic Growth And Development by Shawn Ritenour: Mises.org/E4B_214_Book1

The Economics Of Prosperity (Edward Elgar): Mises.org/E4B_214_Book2

Shawn Ritenour at Mises.org/Ritenour

Shawn Ritenour at Grove City College: Mises.org/E4B_214_Profile

213. Sharekh Shaikh On The Digital Revolution In Market Research

Market research is a tool for gathering data about customers and consumers that businesses hope will lead to insights about their behaviors and preferences that can be translated into innovation, better service and better business performance. As with any dynamic system, it has changed over time, and the effects of entropy have begun to show themselves in invalid techniques, invalid data, and invalid conclusions. And as with virtually all business systems, the coming of the digital age provides businesses with the opportunity to review, revise and improve existing practices and existing thinking.

Knowledge Capsule

Traditional models of market research are losing validity.

The Economics For Business approach to market research leans to the qualitative, such as one-on-one conversations with customers and detailed ethnography whereby businesses can observe customer behavior directly. The market research industry grew up favoring quantitative research at scale for its own reasons: that’s where the money is. Sharekh Shaikh points out that a $USD 70 billion industry was built largely on large scale panels — recruited audiences adding up to hundreds or thousands of individuals, to whom the market research industry could launch survey questions (“data gathering instruments”), generating large amounts of response data for quantitative analysis and numerical reporting.

Customers of these research reports use the output for decision support. Consideration of launching, or of purchasing and installing, a software suite or platform costing millions of dollars can be justified with the results of a survey costs tens of thousands of dollars or low six-figures.

One of the planks supporting the value proposition of market research panels is the difficulty of recruiting qualified respondents, such as CIO’s or CTO’s for an enterprise software survey. Panel operators’ revenues reflect their claims to solve this problem, but Sharekh Shaikh tells us that the reliability of their claim has eroded. Panels now may include inaccurately identified respondents (wrong title or role, for example, because the respondent has changed jobs or roles), or even fraud (responses provided by others than the supposed respondent, including bots). The data from the panels is no longer as valid as it once was, and its decision-support quality no longer as high.

This general decline in the quality and reliability of traditional research is taking place in many categories, not just tech — consumer package goods, entertainment, fashion, and any industry that uses these methods.

The digital revolution brings new opportunities for change, including in traditional market research.

It’s unusual to think of digitization as increasing human contact, but in research it’s the case. Sharekh’s research platform, CleverX, has effectively removed the intermediary, the market research panel operator and market research respondent recruitment agency, from the equation, so that the firm requiring research can be connected directly with the respondent with the desired experience and user perspective.

Respondents sign up to a place on the platform by supplying their personal data, career profiles, qualifications, credentials and experience. Their incentives include their desire to participate in and contribute to industry developments, as well as the compensation offered. By learning the questions that are being asked, the professionals who sign up to be respondents can gain insight into the developments that are being pursued in their industry. Being a panel member is career and professional advancement.

The firm seeking to gather data can identify their respondents and assemble their own panel, using their own criteria and specified profiles, and building a direct relationship with their respondents and customers. Moreover, they can use any data collection tool they prefer, whether that is a technical tool such as Survey Monkey, or direct one-one-one conversations on Zoom or Microsoft Teams, digital focus groups, or any other format. By integrating with calendar software, research interviews with CXO’s can be organized and calendarized. These powerful toolsets result in higher quality research being completed up to 10X faster.

Digital technology also facilitates video interviewing, so that researchers can talk directly with respondents, and develop a relationship with them. The video interviewing can be asynchronous: given a query, respondents can video-record their responses whenever convenient, TikTok-style. AI can add enhancements such as sentiment analysis, body language and facial expression interpretation.

The distinction between quantitative and qualitative research disappears and we realize qualitative data at scale.

Market research can become continuous monitoring in the adaptive entrepreneurial system.

The reality of markets today is high-speed continuous change. Market research as a tool has always been at a disadvantage in delivering snapshot that take time to process, by which time the market has moved on. Now, with digital techniques, continuous monitoring is possible. Sharekh mentioned several applications:

  • Customer understanding of digital developments: as platforms and systems evolve, customers may not be able to keep up with the technology, or may not be taking advantage of new feature. Digital research techniques can monitor and measure customer understanding dynamically, and point to gaps in their comprehension.
  • Dynamic product development: as developers move a product towards market, digital research techniques can expose potential customers to the development path, and help developers to integrate real-time findings.
  • Monitoring changing lifestyles and mental models: since digital research technologies can provide a continuing connection with customers, it can measure not only their responses to queries, but also their behaviors, attitudes and thinking in general. It’s possible to develop profiles and personas and segmentations into which innovative ideas can be inserted to simulate reactions and acceptance.

CleverX represents exactly the kind of knowledge recombination that can result in revolutionary change across an entire industry.

A core concept in entrepreneurship is the combining of existing knowledge in new ways for new solutions. Sharekh Shaikh combines his software engineering knowledge with knowledge of the market research space and knowledge of the dissatisfaction of end users with the available research tools. His newly-launched company, CleverX, is a fast-growing new entrant in the research space as a result of providing a totally new service: the facilitation of a direct connection between researcher and respondent with digital intermediation in place of previous-generation tools. The experience for the customer is better data, at faster speeds, gathered more conveniently and faster, and, consequently, of greater use in development and innovation processes.

Additional Resources

CleverX.com

Sharekh Shaikh on LinkedIn: Mises.org/E4B_213_LinkedIn

212. Graceann Bennett: Brands Are Value-Generating Assets, Marketing Is Just Tactics

Peter Drucker famously identified the only two value-generating functions of the firm as innovation and marketing. We propose to differentiate brand building (or branding) from marketing, especially in this digital age. Brands are the vehicle for framing, establishing, nurturing and enhancing relationships with customers. In the digital age, marketing has become mechanized and mathematicised; it’s about numbers more than about human values and emotional bonding. Graceann Bennett is a branding expert who has devoted her career and her research agenda to furthering the science of brand building.

Knowledge Capsule

Brands are assets that drive customer value and business revenue, and they’re more valuable than ever in the digital age.

Our Economics For Business entrepreneurial method emphasizes the facilitation of value for customers — it is customers who create value through their experiences, and the role of entrepreneurship is to facilitate those valuable experiences. Brands are platforms for value facilitation and conduits for value delivery. In the economic system where assets are value drivers, brands are high-capacity intangible assets. They can be developed and nurtured through various types of economic investment, with a high return on that investment because of the closeness to the customer that they can embody. The investment can be creative and intellectual and is not necessarily limited by budgets and financial resources.

Brands hold emotional and relational value, often communicated through symbols and codes.

Brands have meaning for customers, and the meaning is differentiated — customers prefer one brand over another. Brands fit into their lives and connect to them emotionally – they can trust brands, rely on brands, and even love brands. Brands express the essential humanism of economics – the entrepreneurial ethic of improving others’ lives. They represent an understanding of human yearnings. They help people who are striving to be the best version of themselves. They’re a great tool for entrepreneurs.

Brands often communicate via symbols and codes: advertising, logos, package design, social media, and sales presentations. These are important, but they’re not the essence of branding. That role is reserved for the emotional connections that brands make with customers, engendering trusted relationships.

In the digital age, marketing has lost the art of branding.

Brand building is an art, an engagement with customers on a psychological and philosophical plane, enhanced by creativity, design, expressive language and visualization. In the digital age, marketing is headed in a different direction. Marketing has become mathematicised. Digital marketing is all about the numbers: audience reach and likes and engagement metrics defined as clicks and views. It’s the mechanics of the engagement funnel, of clicks leading to conversions. Graceann Bennett called this approach “the attention economy rather than the emotional economy”.

Even worse, marketers are antagonizing customers with an interrupt-and-annoy approach of increasingly invasive pop-ups and intrusions and uninvited invitations in e-mail and text. Annoyingly intrusive marketing can further decay into creepiness as consumers receive offers for goods and services algorithmically triggered by their search history and e-mail conversations or voice requests to Siri or Alexa that they might not have realized were quite as available to marketers as they are.

Branding creates customer relationships through emotion and psychology.

The mathematical, mechanical approach is exactly the opposite of the human approach of brand building. Branding aspires to a relationship with customers, a creative relationship of innovation and renewal that continuously improve customers’ expectations of what’s possible and their anticipation of satisfactions to come from brand usage and branded services. Entrepreneurial brand owners seek to understand the needs and wants of customers, and what they find disappointing in current experiences, with a view to making their experiences and their lives better. A lot of this initiative takes place in the realm of psychology, getting inside customers’ minds to understand their preferences and why they hold them, and their choices and why they make them.

Brandowning firms examine themselves critically to ensure that they are authentic in serving customers’ emotional and psychic needs.

Graceann Bennett employs Jungian archetype analysis to clarify and channel brand approaches to customer relationships, emphasizing what’s authentic in the brand’s character and orientation that aligns best with customer psychology. While the first stage of the entrepreneurial method is a deep understanding of the customer and their needs so as to define and scale a potential market, it’s also appropriate in the solutions design stage for the brand owner to look inward to define the persona for the brand. To establish trust and build a relationship, a brand must inspire confidence on the customer’s part, and to do so must establish authenticity: when claiming to deliver a benefit and facilitate a valuable experience, the brand claims must be consistent with the brand character, the brand heritage and the brand history. A brand can’t claim to be something it’s never been before, or claim a meaning and a purpose that it has never before exhibited. It can add features and polish and update its attributes, but it can’t depart entirely from its historical, observed orientation. Brand relaunches and repositionings risk losing connection with the customer if they are not credible.

Brands should search not for novelty in presenting themselves, but depth, clarity and simplicity in establishing brand character.

Ethnography is the best research technique to develop empathic engagement between brands and customers.

Ethnography is mingling with customers, talking to them, listening intently, and observing their actions and behaviors. This kind of interactive contact with customers should be primary – the analysis of digital clicks and views and followers and even purchase behavior can’t deliver the same rich emotional and psychic consumer understanding and insight. In the digital age, we’ve abandoned the art of mingling, and that’s a difference between branding and marketing.

Additional Resources

GraceannBennett.com

Playbook Studio: Playbook.Studio

Graceann Bennett on LinkedIn: Mises.org/E4B_212_LinkedIn