A general focuses on the battlefield and where the enemy is coming from, while the soldier in the foxhole keeps his sight within a 10-yard perimeter. In a similar vein, business leaders must understand the lay of a more expansive external environment while others define and execute day-to-day tactics.
Leaders supply fresh strategic insights by connecting the dots between things they observe, read or hear about to identify patterns and themes. It’s called conceptual thinking. Let’s see how it works.
Strategists regularly connect the dots to surface important patterns.
Three articles caught my eye in one day’s news. In the first article, The Council of Public Relations Firms was reported to be reinventing itself and the PR profession as traditional PR strategies of media relations and placement backfire in an era of consumer-generated social media. The profession made sense when NBC could reach one third of U.S. television viewers. Now there are thousands of stations and networks and multiple platforms for viewing.
Frank Bruni of the New York Times wrote about the bombardment of our visual and audio space by corporate messages, from sports arenas to music venues to TV show product placements. He ends by predicting our iconic bridges will be renamed after corporate sponsors. (In my mind, I envisioned a U.S. president taking the oath of office surrounded by corporate logos and Super PAC names who influenced the election, but I digress.)
And in the final article – actually it was a two-page ad – Whole Foods claimed that value is about values. Your purchases should advance values you hold dear, the ad copy stated. Amazing what the addition of the letter “s” is to an overused word – value – does. Value references profits (value maximization) and how far your dollar stretches. (“Save more. Live better,” promises Walmart.) “Values,” on the other hand, references the principles we hold dear – that matter, no matter what.
What is the theme connecting these dots in my mind? Values-based business models will break through the communications clutter and earn our attention and dollars, thereby disrupting industries.
Let’s look at disruption and why values-based disruption can work.
We work in an era of disruption. Only 57 of the original Fortune 500 are around and according to serial entrepreneur Jay Samit, the Fortune 500 in five years will be full of companies whose products and services do not yet exist. For example, Uber, he noted at the recent OnMedia conference in New York City, will leverage its platform by summoning driverless cars to our door.
In the tech world, disruption succeeds when new technology advances:
• Cost savings (digital versus printed newspapers).
• Speed (business intelligence software versus IT department coding).
• Ease (messaging versus e-mails, phone photos versus standalone cameras).,
• First time capabilities (mobile computing).
Values-based disruption happens the same way.
Cost: Values-based business models can lower societal costs by reducing or eliminating adverse externalities, which are the costs companies impose on non-customers through corporate actions. Walmart’s low pay and poor health insurance policies cost local governments billions. Not so Costco, which offers all its employees a living wage. Buying from Costco vs. Walmart will save your community money.
Speed & ease: Values-based companies allow consumers to change the world more rapidly and easily than through volunteer efforts alone. Why buy Kate Spade flats when buying a Toms pair will also clothe a shoeless child? With the growth in apps and social media, we increasingly know about the practices of companies we buy from. Purchasing goods and services from organizations whose values you support is a daily way to slowly change the world, and feel good in the process.
Capabilities: Values-based innovation also encourages fresh approaches to societal problems by leveraging business capabilities. Boeing buys sheet metal from the manufacturing arm of Seattle-based Pioneer Human Services, which “serves individuals on the margins of society, helping them to become more successful through housing, employment, training, treatment, counseling, and re-entry programs.” Greyston Bakery sells award-winning baked goods produced by hard-to-employ workers, with profits funding low-income housing and childcare solutions. College grads are flocking to social enterprises and socially minded businesses to find meaningful work.
By connecting the dots I can better understand why the single bottom line of today – profits – will increasingly become a triple bottom line of profits, planet and people. If you want to be heard by customers and young talent, think about values, not just value.
In any case, regularly look for patterns across seemingly unrelated topics. And when you see an outcome that you cannot understand, work backwards to try to explain it. You’ll be preparing your mind for our increasingly complex economy in which strategic thinking is a competitive advantage.
Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. Business model innovation, strategic leadership and smart economic policies are her professional passions. She was an economic advisor for former Wisconsin Gov. Lee Dreyfus.