Illustarion: Sameer Pawar
2011 was the last time we recall having witnessed a heated discussion on the merits of a ‘products versus services’ economy. The topic, at the time, seemed fresh and well researched. However, we soon started to hear about the importance of building personalised experiences to stay relevant in the new ‘experience’ economy—or like its popular term, the digital economy.
Come 2018, we’re bang in the middle of that predicted experience economy; watching businesses, large and small, invest heathy sums into modelling unique experiences for their customers. This pace of change, a move through two different economies, in a span of barely seven years, is shocking. In the near future, we believe, that change may come at an even greater stride. If organisations want to continue to remain relevant, building personalised experiences alone is not going to help.
Have you noticed how consumers have started to become increasingly focussed on the relationships they share with their service providers? Think: How many times have you gone back to a particular place for the same service? Why do we keep going back? It is possible that we keep returning because of the connections we have built with these service providers. In fact, it is likely that we are on the brink of the next big economic wave: The relationship economy.
A relationship economy is built on ‘trust’ between a service provider, its consumers and their partners. How is it going to come into existence? We believe that the advancements we have made in certain technologies are leading to this shift in economy. Recent scientific milestones like artificial general intelligence (AGI), programmable matter and quantum computing are just examples of these advancements. Once these technologies become commercially available, we will notice a paradigm shift from an ‘experience’ economy to a relationship-fuelled economy.
You’re probably wondering how these technological advancements are leading to a shift in economy. We are beginning to see what we once considered science fiction turn to fact.
Google’s online game AlphaGo is based on AGI. It is remarkable how a machine can replicate the fullest form of human intellect, so much so that it has become unbeatable. This gaming software can predict all possible moves because of deep learning algorithms in place. When we start to use AGI as virtual assistants, we will no longer need to rely on people for routine tasks. A small example of this could be a self-driven car driving your child to school every day. When this happens, the only missing element will be a basic human connection.
Another technological advancement is the research on programmable matter by Carnegie Mellon University and Intel Labs. This research studies the use of nanotechnology to enable objects to change their original form, based on its user’s need. This technology can be used with applications like self-growing and contracting furniture, buildings changing their own shapes, and even, automobiles changing dimensions when required. Imagine building a comfortable rocking chair in your living room without having to visit your nearest furniture store. Once again, we will be able to master our own experiences, but what about our basic need for human interaction?
Imagine being able to inject yourself with a new skill when you require it. If you’ve seen Matrix, this becomes easier to visualise. With the advent of quantum computing, applications involving telecommunications, personalised health care will soon be able to function devoid of human interference. In fact, companies like IBM, Microsoft and D-Wave are already making significant investments in this technology.
When the relationship economy kicks in, the survival of any organisation will depend on whether it is able to foster relationships; not only with its stakeholders, but also among them. Here are a few recommendations to help do this:
1) Bringing Customers Together
Mahindra & Mahindra through its initiative ‘Trringo’ has created a call centre platform that allows farmers to rent out their machinery to fellow farmers whenever not in use. ShareGrid and Boatbound are two other US companies that have started similar initiatives to bring their customers together.
Similarly, businesses will have to adopt newer technologies to enable clients to interact and be comfortable so that they can complement each other when the need arises. They may even prefer to repeat collaborations in which they experienced ‘friendly’ gestures in the past.
2) Bringing Together Employees
There are a multitude of people joining social networking applications (almost 30 percent each year). Many organisations have, in some form, enabled social communications tools like Slack or Yammer with an intent to facilitate internal collaboration. Yet, only a few of them have used it successfully. Isn’t this a resource we need to exploit a little more in our work environments? This will make it easier to share information on platforms employees are already comfortable with, in the new relationship economy.
Charlene Li, in her article for Harvard Business Review, stresses the importance for leaders to promote social communication by actively listening, sharing and engaging with their teams on these platforms.
3) Bringing Business Partners Together
In the new relationship economy, success will follow those businesses that allow suppliers and partners to come together and collaborate. We believe consistent quality, optimising supply chains and improving process efficiencies can be achieved if organisations provide their business partners with a non-threatening forum to share best practices between each other.
Frequently highlighting how each vendor is adding value to the larger ecosystem will be a further advantage to the business in the long haul. Technological advancements are inevitable, but are organisations doing enough to leverage them to foster relationships? The suggestions mentioned above can certainly help create a ‘win-win’ advantage in the new relationship economy. As Edward Whitacre popularly put it “… we are 100 percent in charge of how we respond to challenges that come our way.”
The writers are behavioural facilitators with Wipro’s Centre for Behavioral Excellence, Talent Transformation function, Bengaluru