So, the digital revolution has been in gear for a number of years now. Anyone notice a big improvement in the health of the retail industry? Seems like margins are still eroding. How about customer satisfaction and trust in companies and public institutions? Getting any better? Studies indicate they're pretty darn low.
According to James Maxmin, who addressed a largely IT-oriented crowd at the FMI Show on Tuesday, the revolution isn't working and our system of business is just plain broken. Mr. Maxmin's pedigree is pretty impressive. He's the former CEO of Volvo UK, Thorn EMI Home Electronics, and Laura Ashley PLC. In his current life, he's founder and chairman of a private investment company, Global Brand Development and co-author of The Support Economy: Why Corporations are Failing Individuals and the Next Episode of Capitalism. Mr. Maxmin believes that we are failing to make use of our "unprecedented access to information" in ways that satisfy customers. He explains the problem as a gap - more like a chasm, actually - between an increasingly demanding consumer and the enabling digital technology.
It's Mr. Maxmin's premise that people, in essence, have changed faster than the institutions that serve them. They're better educated, more diverse and in need of a much more customized constellation of services. What's missing - what's supposed to fill the gap - is what Maxmin calls a new "enterprise logic," a process of connecting consumers with products and services.
With the last enterprise revolution, according to Mr. Maxmin, the new enterprise logic was invented by Henry Ford. He came up with the hierarchical management model and assembly lines needed to spur the creation of the mass-market. It put a car in every driveway, but began the inevitable process of distancing consumers from the businesses that serve them.
What we're experiencing now are the death throws of that state...the bottom of a downward spiral that has alienated consumers and dissolved trust and loyalty. We talk about "consumer-centricity" and try to apply new technology but it's not working. We're trapped within an antiquated model designed to serve a mass-market when, in actuality, we've already evolved into a "new society of individuals." Businesses have the digital technology but no new enterprise model to connect it with the multifaceted demands of the new consumerism.
What's the answer? Essentially, turning the model on its head: mass consumption becomes "individuated consumption." The individual consumer decides what's valuable rather than it being pre-determined by producers of generic goods and services for the masses. Rather than the product, the individual becomes the "unit of analysis" that the enterprise uses in determining how to structure itself.
Mr. Maxmin is testing his theses (in the fields of investment banking, health and higher education) with "federated support networks" that allow people to go online and design the suite of services that's right for them. The new model suggests the possibility of integrating a "kaleidoscope" of support services that consumers need to live their lives: learning, finance, security, health, entertainment, consumer goods, etc. Putting the consumer in charge is the big paradigm shift, analogous to the way eBay let the customers run the store. And it brings new meaning to the whole customer-centricity thing, because no matter how targeted your marketing - how granular your data - you're still pushing products through to the mass market the Henry Ford way unless you figure out how to hand control over to the individual consumer.
Discussion Questions: Do you agree that our mass-market model, despite the tech "advancements," is incapable of accommodating the demands of customer-centricity? Do you see ways of serving "individuated consumption"?