Figure 9-3: The Economic Pyramid
So transformations cannot be extracted, made, delivered, or even staged; they can only be guided. As the old saying goes, “You can lead a horse to water, but you can't make it drink.” No one can force someone to change. All transformations occur within the very being of the customer and so, in the end, must be made by the customer. As Mark Scott, retired CEO of Mid-Columbia Medical Center, told us, “We found that some patients just did not take to stress relief well during their cancer treatments, perhaps understandably. In such cases we tried to draw in the whole family, so they could help guide the patients as well. When it worked, it worked wonderfully.”
Transformation elicitors can, at best, bring about the right situation under which the proper change can occur, meaning staging the right experiences that involve the right services that … well, you get the idea. But that alone is not enough; there is more to guiding a transformation. As shown in figure 9-4, this economic offering requires three separate phases: diagnosing aspirations, staging transforming experience(s), and following through.
Diagnosing Aspirations
To what do customers aspire? Where are they today relative to this aspiration? Along what dimensions can this transformation be achieved? Without a proper diagnosis, customers cannot achieve it. And—as is the case with mass customizing mere goods and services, where customers often do not know or cannot articulate what they want—aspirants often do not know or cannot articulate their hopes and dreams.22 Or they may even have the wrong aspirations—goals and desires deleterious to their own well-being. Just as financial service firms have a fiduciary responsibility to prevent clients from making terrible investment decisions and theme park operators have a custodial responsibility to prevent guests from acting in an unsafe manner, all transformation elicitors have an ethical responsibility to prevent aspirants from attaining inappropriate or immoral traits. Of course, what those may be necessarily depends on the conscience and worldview of the particular elicitor.
Figure 9-4: Phases of guiding transformations
Essential to every transformation, then, is understanding what customers truly need to become and how far away they are from fulfilling those needs within themselves, even if they do not realize it or delude themselves about the direction or magnitude of the change required. Are they really capable of achieving the aspiration? If so, how can they be guided to the proper transformation? In some cases—and this explains why triage should often precede diagnosis—individual people or companies may not be capable of becoming that to which they aspire. There's no sense even starting down the transformation path in these cases unless some other preformation activities first fortify aspirants in those areas in which they are too weak to proceed.
During the diagnosis phase, a fitness center, for example, must learn the weight, muscle strength, or body tone (or all three) desired by customers and assess their current state along each dimension before it can design a physical regimen aimed at fulfilling their particular desires. But it must also understand aspirants' medical situation to guarantee that recommended regimens first do no harm, and it must ascertain their mental and emotional dispositions to determine the possible obstacles that may arise along the way. And in the healthcare field, doctors (including psychiatrists) presume that all patients want to be physically (or mentally) well, but specific aspirations may vary greatly, from being “good as new” to returning to work with “good enough” function, from just wanting to get out of the hospital and go home as soon as possible to wanting to die in peace. Like other transformation elicitors, physicians may think some goals are set too low and may reject others for being too optimistic, but they must in any case focus on the patient's best interests when designing the proper procedures (while always leaving room for the miraculous to occur). Similarly, management consultants must understand the strategic needs of a business as well as its current capabilities, taking into account the fact that both the company and the consultant are biased observers, before designing an implementable course of action.
If you desire to offer transformations, think of diagnosis as a concrete from–to statement. Consider some of such statements we have already used here: from flabby to fit; from sick to well; from being stressed to being relaxed; from smoker to nonsmoker; from single to married; from team to champion; from grief to normal living; from just wanting to get out of the hospital and go home as soon as possible to wanting to die in peace. These statements obviously serve as generic, broad transformational directions; you must always go further, applying the from–to diagnosis down to the individual aspirant.
Staging Transforming Experience(s)
What experience or, generally, set of experiences will bring about the necessary from–to transformation? How can customers be changed from where they are today to where their aspiration lies, or should lie? Transformations, of course, build on experiences, specifically, the life-transforming experience(s) that cause customers to realize their aspirations, whether or not they can articulate what those aspirations are.
Psychiatrists, for example, hold a series of counseling sessions with patients, each one often with a different motive but all with the overarching intention of moving patients, over time, from a state of relative mental illness to one of mental health (although many psychiatrists can be accused of viewing no one as mentally well and others of “treating” the perfectly healthy). Educational institutions, including business schools, provide a series of experiences within experiences, some major, some minor, but all with the intention of educating, grooming, and molding students into graduates who will have a certain store of knowledge and abilities. Golf pros and other sports instructors combine intellectual understanding and emotional encouragement with the physical activities necessary to improve their customers' skills. As is the case with many transformations, golf pros do not limit improvement experiences to the one small act of hitting a golf ball. Rather, to turn duffers into adept players, they offer guidance on mental preparation, address, and swing; woods, irons, chipping, sand shots, and putting; rules, course management, and scoring techniques; and so forth.
Elicitors may use any one of the four realms of experience as the basis for a transformation. Entertainment experiences can alter our view of the world, while educational experiences can make us rethink how we fit into that world.23 Escapist experiences can boost our personal capabilities and characteristics to new levels, while esthetic experiences can imbue a sense of wonder, beauty, and appreciation. But again, the most engaging life-transforming experiences center on the sweet spot composed of multiple elements from all four realms—no matter the ultimate aim of the transformation—for it is in the sweet spot that an experience best engages us and focuses our attention on its transforming nature.
Following Through
Experiences thus set the stage for transformation. But once it has occurred, how can it endure? What must be done to ensure that the change does not degenerate? It's not truly a transformation unless it is sustained through time. To make a great shot, a golfer has to have a great follow-through as well as a great swing. The same goes for great golf instruction. No one can dramatically improve his stroke after one lesson or sustain any gained improvement without continued practice and playing. Alcoholics Anonymous and other self-help groups excel in the follow-through phase of transformation, acknowledging that while it's possible to forgo one drink at one time, it's hard as all get-out to forgo that drink time after time. Similarly, marriage counselors can get a couple talking again after an adulterous affair, and perhaps even bring them to the point of forgiveness, but rebuilding the shattered trust requires a lot of long, hard work from both parties.
Transformation elicitors find follow-through the most difficult phase, and it is the one in which many fall short. Management consultants who deliver strategic analysis without guiding the client through implementation of the recommended changes remain in the service business; they are not in the transformation business. Educators
who impart knowledge without ensuring that students can apply what they learn ascend only to the experience business (at best). And doctors who treat physical diseases without considering their patient's emotional needs do only half the job, a realization that is slowly dawning on the healthcare community.
Getting the Acts Together
In September 1994, the British medical journal Lancet created quite an angry furor in the healthcare community when it published an article applying to the work of doctors the principle that work is theatre. In “Acting in Medical Practice,” Hillel Finestone and David Conter of the University of Western Ontario asserted that physicians must be trained as actors and follow the same three-phase approach outlined here to truly transform each patient. They showed how doctors, and by extension all other transformation elicitors, should employ each phase:
If a physician does not possess the necessary skills to assess a patient's emotional needs [diagnosis of whole person] and to display clear and effective responses to these needs [series of experiences] the job is not done. Consequently, we believe that medical training should include an acting curriculum, focused on the conveying of appropriate, beneficial responses to those emotional needs.
In my practice … I frequently treat individuals who are in chronic pain. I find it essential to convey an encouraging, hopeful, often cajoling message to the patient [follow-through] to communicate concern and, more importantly, the need for the patient to work on self-improvement.24
We would simply add that, since work truly is theatre, physicians should always act to convey the proper responsiveness and concern, and not only when it is more difficult to do so naturally.
Many physicians disagreed with, disparaged, or ridiculed the notion of doctors becoming actors. One humorous physician wrote that with drama “an official part of medical school curriculum” we would see scenes like this one: “Problem: Obesity. Old way: Doctor gives printed diet sheet. New way: Music swells as doctor stands in front of brilliant sunset, tears welling up, and makes the emotional, heart-rending promise, ‘As God is my witness, you will always be hungry again.’ ”25 But proper acting does help a patient tell more of what ails him during diagnosis, better understand treatment choices and determine the right set of experiences that will best treat him, and, finally, more readily handle the therapy and other actions required to follow through on treatment and sustain the transformation. Further, medical research backs up the contention that doctors must be actors. Numerous studies demonstrate that those doctors who deal with their patients in a more caring, empathic manner—in short, those with a better bedside manner—not only face fewer lawsuits but also have better patient treatment outcomes.26 The personal, caring doctor of yore is not an anachronism; it's a role that must be assumed by every physician—no, make that every transformation elicitor.
The three phases of transformation—diagnosis, staged expe ri ence(s), and follow through—not only distinguish this economic offering from lesser experiences but also together represent a deeper sense of commitment to the well-being of each individual buyer than experience stagers alone may (or need to) demonstrate. Transformation elicitors must care enough to offer up-front diagnosis, to direct the staging of multiple events required for the buyer to change, and to follow through relentlessly. Noted philosopher Milton Mayeroff wrote perhaps the definitive book about this subject: On Caring. It should be mandatory reading for anyone truly interested in the business of offering transformations. “Caring, as helping another grow and actualize himself,” writes Mayeroff, “is a process, a way of relating to someone that involves development, in the same way that friendships can only emerge in time through mutual trust and a deepening and qualitative transformation of the relationship.”27 By a “process,” Mayeroff means a series of experiences that not only indicate but also develop caring over time. (Aren't your best friends those with whom you've had the greatest, most intense experiences?)
Further, the ongoing relationships with individual aspirants needed to sustain a transformation are possible only if executives abandon “flavor-of-the-month” imperatives in favor of enduring—yes, even timeless—operating principles. Mayeroff uses terms such as knowing, patience, honesty, trust, humility, hope, rhythm, and courage to describe caring. Why don't we find more of these terms in the mission statements of businesses? After all, transformation elicitors must also focus on the continuation of care. One-off experiences seldom yield a transformation, if there is no care there. Ensuring that aspirants achieve their aim usually means providing a series of experiences, each guided by a constant set of principles.
The first requirement for workers in a transformation business is that they truly care. Transformation elicitors, therefore, must first transform their own employees into caring people enriched by the work they perform before those workers can act differently to transform customers. As C. William Pollard, former chairman of The ServiceMaster Company, reminds us, “The spirits and souls of people can be enriched by what they do as they serve and work. And they can grow in the process of who they are becoming.”28 In his book The Soul of the Firm, Pollard relates how ServiceMaster trains and motivates employees not to deliver services but to serve. This requires a willingness among leaders to sacrifice their own needs in favor of the employees', and for employees to sacrifice their needs in order to eliminate the sacrifice of customers. Pollard relates that while Socrates said, “Know thyself” and Aristotle counseled, “Control thyself,” “another great thinker changed history—and the hearts of people—with His unique approach to a meaningful life. ‘Give thyself’ were the words spoken by Jesus.”29
Now, gauge your own reaction to the mere mention of Jesus' name in a business book. How does it make you feel? In the forthcoming Transformation Economy, aspirants will entrust their futures only to those with whom they share a common worldview. The transformation elicitor must embrace a context for change—the values the business enterprise seeks to promote—leading eventually to companies that practice worldview segmentation. No longer can an enterprise take an agnostic attitude toward moral rightness and wrongness, hiding from such sensitive issues beneath the cloak of mere goods and services. Consciously—as with ServiceMaster—or not, all enterprises promote a worldview. Transformation issues cannot be avoided. Extracted commodities transform the earth into a subdued planet, with implications for all its inhabitants. Goods transform buyers into users of those goods, for ill or for gain. Services transform clients into recipients of those services, whether debasing or edifying. Experiences transform guests into participants in the encounter, whether the long-term effects are deleterious or therapeutic. And transformations turn aspirants into “a new you,” with all the ethical, philosophical, and religious implications that phrase implies. All commerce involves moral choice.
CHAPTER 10
Finding Your Role in the World
IN THE END OF WORK, a book decrying the loss of agricultural, manufacturing, and service jobs caused by technological innovation, author and professional pessimist Jeremy Rifkin rightly points out, “We are entering a new phase in world history—one in which fewer and fewer workers will be needed to produce the goods and services for the global population.”1 Rifkin acknowledges that a “fourth” economic sector exists, which he calls the knowledge sector, but he doesn't believe it will “absorb more than a fraction of the hundreds of millions who[se jobs] will be eliminated in the next several decades.”2 Still, he confesses, “There is reason to be hopeful that a new vision based on transformation of consciousness and a new commitment to community will take hold.”3
Indeed, there is great reason for hope: it is the natural evolution of the economy away from goods and services that brings about the need for new and more work based on experiences and transformations. As shown in figure 10-1 (an update of figure 1-3), the agricultural and manufacturing sectors actually lost jobs over the fifty-year period between 1959 and 2009. In both employment and nominal GDP growth, the higher-level offerings dramatically out
paced the bottom two sectors, with transformations far exceeding even experiences in growth.4
Figure 10-1: Growth in employment and nominal gross domestic product (GDP) by economic offering
Source: U.S. Bureau of Economic Analysis; Strategic Horizons LLP; and Lee S. Kaplan, Lee3Consultants.com analysis.
Similarly, figure 10-2 updates the U.S. Consumer Price Index (CPI) statistics provided in figure 1-2, using medical care services as a transformation industry that can be cleanly separated from the “service sector” statistics gathered by the federal government. Healthcare “inflation,” as it is mislabeled, not only outpaces all services, it even (as expected) increases faster than experiences.5 But healthcare isn't alone. Management consulting fees increased tremendously in the past two decades. Today it is not uncommon for junior staff at the top consulting firms to charge more than $5,000 a day, five to eight times the per diem rates charged in the 1980s, on projects reaching eight or nine figures in size. And the nominal cost of total tuition, room, and board at colleges and universities quintupled from 1976–1977 to 2008–2009, greatly outpacing the rate of inflation.6
Figure 10-2: Consumer Price Index (CPI) by economic offering
Source: U.S. Bureau of Labor Statistics; Lee S. Kaplan, Lee3Consultants.com.
In short, just like the experience stagers before them, trans formation elicitors are greatly increasing their share of the total economic pie. Today, the only thing better than being in the business of staging experiences is being in the business of guiding transformations. Both represent not only viable sectors of the economy but also the very engines of growth that will create more than enough jobs and output to supplant slowdowns in the lower-level sectors. This fact will take some getting used to. As former Reason editor Virginia Postrel accurately said, “We are, in fact, living more and more in an intangible economy, in which the greatest sources of wealth are not physical. We aren't yet used to an economy in which beauty, amusement, attention, learning, pleasure, even spiritual fulfillment are as real and economically valuable as steel or semiconductors.”7 Exactly. For the sources of wealth in these new economic sectors are not physical but intellectual.
The Experience Economy (Updated Edition) Page 27