*That builds on someone else’s theory

By Kathleen M. Hosfeld

Imagine a bell curve (or Ann Elk’s theory of a brontosaurus) which is very thin at one end, much, much thicker in the middle, and then thin again on the other end.  On the far left point is a small group called “innovators.” To the right of the innovators are the “early adopters.” In the much, much thicker part we find first the “early majority.” As the thicker part begins to decline again we find the “late majority,” and finally at the thin-again part we have the “laggards.”

You may have heard the term “crossing the chasm” and wondered what it meant. It’s an insight that builds on the bell curve described above, which was the work of Everett Rogers , author of “Diffusion of Innovations.” Geoffrey Moore, who penned the book “Crossing the Chasm,” used Rogers’ work to help market new  technology. Moore’s book centers on a key insight that applies to many types of change, including – my theory — sustainability in business.

Innovators snatch up new technology even before it comes on the market. Moore says they do this because “technology is a central interest in their life.” Early adopters, like innovators, are able to quickly perceive the potential benefit of new technology for their lives. They look to innovators as guides for what is worth trying.  The early majority also relates well to technology, but tends to be more selective. Its members need references and proof of concept before they invest. The critical point Moore highlighted is that winning the early majority is the key to profit and growth. Yet, insofar as many technology firms are made up of innovators and early adopters, it’s often hard for them to relate and sell to those who don’t share their passion.

Proponents of sustainability may face a similar challenge. The innovators – the Body Shop, Ben & Jerry’s, Tom’s of Maine – and locally Harriet Bullitt’s Sleeping Lady Mountain Retreat – were those for whom sustainability was a central interest of their life. They inspired the early adopters — Seventh Generation, Fetzer Wines, Whole Foods,  and others  –   many of which are now at scale and thriving. The next step beyond the second wave is to increase sustainability in traditional firms – to create the early majority.

But watch out for that chasm. The next step is a doozy. As Moore points out, a wide gulf separates the first two groups – innovators and early adopters – from the early majority, and the gulf has to do with motivation.  Innovators and early adopters love sustainability for its own sake. The terminology they use is “because it’s the right thing to do.” They want the potential early majority to love sustainability the same way they do, but the early majority doesn’t share their passion. As Moore says in his book, innovators and early adopters want revolution; early majorists want evolution.  They want proof that something works.  The chasm is built on these differences. To further sustainability, we need to find a way to bridge the chasm.

Three things will help:

Discernment. Companies that are just starting out are not going to be exemplary. They’re going to start small. The business community and media need to encourage nascent attempts and not crush them with premature accusations of greenwashing.

Empathy. A colleague of mine recently started a Seattle-based solar nonprofit. She came from a traditional business background but had an infectious passion for evangelizing solar energy. Members of the green community to whom she reached out for help treated her like an outsider.  The ability to take the perspective of others, understand their  frame of reference  is a critical success factor for creating change.

Experience. The early majority cares about what works in operating a business. The motivational bridge is the business case. In this regard, the best thing innovators and early adopters can do is share their stories of achieving and sustaining their own profitability, and how sustainability contributed to their success.

In a recently released MIT Sloan Management Review, most of the 1,500 executives interviewed didn’t have a business case for sustainability in their organizations.  Most said sustainability initiatives in their firms were a response to regulatory pressures. Regulation plays a crucial role in catalyzing change, but ultimately it only goes so far. Winning hearts and minds is the key to sustainability adoption, and that begins with meeting and respecting people where they are.

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Kathleen Hosfeld (Ms.) is a strategy and marketing consultant. She has a second theory.

With a global economy in slow recovery and many businesses fighting for survival, what is the significance of sustainability thought, practices, and execution in shaping a better and more prosperous world?  A just-released comprehensive global study conducted by MIT’s Sloan Management Review and partners provides some revealing and reassuring answers including the following:

• Sustainability is continuing to have a material impact on how companies think and act
• Sustainability is surviving the downturn
• Most firms are not decisively acting on the opportunities presented by sustainability
• A small number of firms are capitalizing on the opportunities and reaping the rewards.

What do these findings mean for you and your organization?  In general, the findings affirm that thoughtful investments in sustainability will positively differentiate early adopters in their industries.  The specifics depend on the issues your organization faces and where you and your firm are in your evolution of adopting and benefiting from sustainability practices.

The study also supports our assertion that engagement in sustainability has a developmental aspect to it.  It says that those who have experience in sustainability see more clearly the business case and strategic benefits it can offer. Those with less experience don’t have a clear sense of the business case for sustainability.  This suggests that a good way to explore sustainability is through a well-designed pilot. Well-crafted sustainability strategy projects can help companies explore the potential benefits of sustainability in ways that create value over the long and short term.
Read the MIT Sloan Management Report “The Business of Sustainability.”

Hosfeld & Associates and Ron Benton & Associates work together to offer services to help companies thrive in the sustainability economy. Additional details are available here.

In the interview Simon said that buying a cup of coffee whose brand values include fostering a sense of community (the idea of Starbucks’ locations as a social hub or “third place”) does not mean you will actually experience community. This, no doubt, depends on how one defines community. Simon’s definition, as expressed in the interview,  includes democratic debate and dissent. Fostering civic dialogue is not a core element of the Starbuck’s store experience so for Simon it’s not creating “real” community. For many of Starbucks’ customers, however, community may be like the old TV show “Cheers,” a place where “everybody knows your name.” Being a “regular” at a particular Starbucks (or any other coffee place), where the baristas know your favorite order can lead to this type of community feeling.

As he concludes the interview, Simon raises an important issue for those of us bringing the values of sustainability into brands and marketing strategies. He says that the values to which brands try to appeal may not be values that can be realized through how we spend our money. My paraphrase of his statement from the interview is that it’s good news if people really want the values that Starbucks promotes, because the brand promotes positive social and environment change. He says, however, if we think we are creating those changes simply by buying Starbucks coffee, we’ve missed the point.

“If we judge our desires by what we buy from Starbucks – if we want a greener planet, if we want more connections, if we want social justice around the world – (these) are values that could build a more democratic order. The problem is we’re not going to get them through buying,” is my rough transcription of his comments.

Purchase decisions alone are not enough to effect the cultural and political change that we need to address society’s most pressing environmental and social needs. However, purchase decisions are not irrelevant. Does buying a sustainable product relinquish us from the responsibility to be citizens who vote and take part in civic dialogue? No. But every purchase decision is a tiny vote for the things we think are important, and a way to support those companies who are sincere in their intent to create meaningful change through their work.

Listen to the archived interview here. Reynolds interview with Simon starts at minute 34 in the Real Audio file. I’d like to know what you think.

Who Is This For?

These services are for companies that have already experimented with and seen benefit from waste and energy management practices, and that are looking for new opportunities for innovation, competitive differentiation, and strengthened customer relationships. Our stakeholder engagement services help companies tap the creative potential of relationships with customers, employees and other partners. Our rapid strategy services help clients get traction on new initiatives and design them for maximum return in value and learning.

Companies that would benefit from these services are those that seek to:

• Convene a team to develop and implement a strategic action plan quickly
• Tap the creative potential of employees, customer and other partners for breakthrough ideas and strategic insights
• Learn more quickly from experiments by measuring what matters
• Increase accountability and follow-through for strategy implementation
• Build capacity for dialogue, collaboration and partnering as they do real work (not in a classroom)

What Strategy Services are Provided?

Rapid Sustainability Strategy – We enable companies and lines of business to accelerate the development of new sustainability oriented products, services and business models. We accelerate and invigorate the planning process so that participants are emotionally and intellectually connected to your strategy and its successful implementation. As a result, you can realize returns and value from your work more quickly.

Stakeholder Experience Strategy — We enable companies to tap the significant business benefit of stakeholder loyalty and trust. We combine principles of stakeholder marketing and Total Customer Experience management to identify all the ways the company engages with stakeholders and the corresponding opportunities to create transformative partnerships with them. We engage the intellectual and emotional commitment of team members, leading to effective follow-through and acceleration of results.

Stakeholder Marketing Strategy — We work with our clients to design stakeholder marketing systems, strategies and action plans that accelerate the realization of value from stakeholder engagement. We help companies use stakeholder marketing approaches to tap tremendous potential for innovation, trust and loyalty. In the face of increasing complexity and potentially competing stakeholder needs, we help clients clarify their objectives, build their capacity to manage stakeholder dialogue, and implement strategic change quickly.

For detailed information on these services, please download our brochure here.

We live in an exciting time during which companies are questioning traditional models of marketing, and are pioneering new approaches that create better financial returns. More importantly, more companies are raising the ethical bar on their marketing and seeking to earn both the trust and loyalty of the market. Stakeholder marketing is an approach that does both. It’s something that you may hear more about in the coming months.

What is stakeholder marketing?  It’s an approach that recognizes that the “market” is not just a narrowly defined customer target (or series of customer segments). It perceives that customers are interconnected with employees, vendors, government and community, the environment and more.  It’s based on the premise that in order to effectively conduct commercial transactions companies must engage with a system of interconnected partners, known as stakeholders.

In the article Transformation of Marketing, I have identified three elements of the emerging model of marketing practiced by high-integrity companies: embracing a systems perspective, creating social good, and living the brand. Stakeholder marketing is an important part of embracing a systems perspective because it engages with the marketplace as such a dynamic system. It can also reflect the intention to create social good, depending on the degree of mutuality to which the company aspires.

The intention of those who’ve practiced stakeholder marketing is to establish, cultivate and deepen positive relationships of trust between their organization and the groups directly affected by their activities. These relationships result in cooperation that helps a company further its goals. For many who practice stakeholder marketing, their goals include service to stakeholders as an end in itself not as a means to an end. Some organizations may see the value of stakeholder relationships only in terms of how they might help the organization achieve goals for growth or profit. Research indicates that stakeholder orientation in a firm correlates to improved financial performance. However, as those who have practiced stakeholder marketing will tell you, the rewards can be far greater.

In the book Firms of Endearment, the authors assert that stakeholder marketing creates such positive relationships and perceptions with stakeholders, that those who practice it spend less to get the word out and to shape public perceptions of their brand. They benefit from significant word of mouth that is fueled by customer loyalty and advocacy.

Serving Instead of Managing

A primary characteristic of stakeholder marketing is that it is not an attempt to manage or control perceptions or behavior. Rather it expresses itself in efforts to engage stakeholders collaboratively to create value together. It incorporates a strong ethic of service not just to customers but also to other partners in the value chain. The following provides an evolving series of stances that organizations can take or have taken in response to stakeholders.

Prior to the advent of the Internet, companies with the financial resources to do so could more easily control the information that audiences received about products or services. Customers and other stakeholders had neither the time nor the money to fully investigate all the companies from whom they might purchase products or services, or with whom they might work. As a result, during this time companies assumed that marketing’s role was to create and protect perceptions of the firm and its products in order to sell.

With the advent of the Internet, all stakeholders gained considerable new information about and influence over perceptions of companies, products and services. Stakeholders were better able to communicate out their experiences of a product, service or company. Other stakeholders were able to access this information, giving them information to either confirm or undermine the company’s own messages. As companies lost some of their ability to control those perceptions, marketing became somewhat more collaborative and transparent. “Managing” perceptions and key stakeholder relationships was an evolution in marketing that acknowledged the difficulty of maintaining control while still seeing control as desirable.

Stakeholder marketing takes a leap into the void by ceding a great deal of control and shifting to an attitude of servant leadership in the exchange process. According to research on companies who practice stakeholder marketing, such companies disclose more, share their standards, ask for feedback and act on the feedback they receive. A company that adopts stakeholder marketing sees innovation potential in finding ways to align stakeholder needs with its own, and has confidence in the good will, loyalty and trust that the process will generate.

Implications for Marketing Planning

How does a stakeholder orientation change marketing planning? In a traditional environment, the company takes in information (from the sales force, from research, from analysts) and uses this to formulate its marketing strategies. In stakeholder marketing, the information gathering process broadens to employees, vendors/suppliers, distributors, communities and regulators – the stakeholder groups that the company identifies as appropriate to its situation  — and continues as a form of dialogue. Gathering information from stakeholder groups, feeding this information to the right internal audiences within the company, and formulating responses are the inhale and the exhale of stakeholder marketing. This can seem overwhelming if the company does not have a clear sense of direction and mission. This is provided by clear value propositions.

Value propositions are important ordering agents in traditional marketing planning. They are also extremely valuable in helping companies align stakeholder needs in a stakeholder marketing planning process.  The process of establishing a value proposition allows a company to define what it does best and how it contrasts with competitors or substitutes. In traditional marketing, however, the value proposition is created with only one target audience: the customer.  In stakeholder marketing, value propositions created for each stakeholder group help to fully develop and articulate both marketing goals and brand values. Creating these propositions also helps identify areas that need to be aligned or reconciled. As a result, marketing strategies become more robust, and marketing efforts more focused. (See related article on value propositions.)

Is it Marketing or is it Management?

One of the tricky things about stakeholder marketing is that it is difficult to isolate the actions of stakeholder-oriented firms that are discretely marketing focused. This, of course, depends on your definition of marketing.  In the Michael Porter Value Chain model, marketing is the function of communicating and selling that happens later in the process of supposedly “creating value.”

If, however, your definition of marketing is like Peter Drucker’s – the entire company as seen through the eyes of the customer – then you believe that all departments and functions hold pieces of the marketing function, and stakeholder marketing identifies the opportunities all along the value chain to create value for all partners – not just customers.  The transformation of marketing requires the adoption of such a systems view which breaks down the silos between strategy, management and marketing.

The Firms of Endearment authors assert that companies with a stakeholder orientation spend less money “on marketing.”  Based on the case histories of the book, which include Costco, Harley Davidson, and other recognizable names, I disagree. What may more likely be true, however, is that these companies spend less money on sales and promotional efforts – such as advertising – that seek to form or build positive awareness for their goods or services.  Why? By virtue of their organizational behavior, and fostering authentic, positive relationships with stakeholders, they have earned such positive awareness. They don’t need to buy it.

As a result, I am tempted to think of principle-based stakeholder marketing as more than an approach. It’s also a philosophy of marketing that is collectively held by all members of the firm. If all company’s decisions are focused on the question of “what creates mutual value between our firm and our partners” the decisions that have the potential to benefit profit and growth can be made virtually anywhere in the organization.

Getting started. Would you like more information on how to get started exploring or understanding how to implement stakeholder marketing? I am working on another article to describe that process. Let me know what you’d like that to cover. Please contact me with your questions and ideas.

It’s not what Seth Godin may have said. It’s what someone else heard in what he said that I found intriguing. In a recent radio interview, a Seattle entrepreneur quoted Godin, a celebrated marketing author, as advising people to refine their strategies when times are difficult. He said Godin had written that it’s difficult to steer when one is going swiftly down-hill (i.e. when times are good). That much I’ve been able to confirm is Godin’s advice. The interviewee went on to say that it’s when you’re on the uphill climb (visualize riding a bike uphill)  it’s time to focus on the right destination. So far, I’ve not been able to find where Godin says this exactly, but I think the entrepreneur has the right idea.

Many of us are seeing signs that the economy is improving, although long-term forecasts for jobs and therefore consumer spending predict a long recovery process. For this reason, now may be an excellent time for companies to invest in clarifying their value propositions and refining their competitive strategies.

What’s your personal value proposition? What’s the value proposition of your firm or its products or services? The term value proposition, like many, gets tossed around fairly indiscriminately. When we use it we mean a value propositions formulated according to a defined process.  A formal value proposition can be a useful tool for clarifying and stating what you offer, who you serve, what benefit you create and how you are different from other resources available to customers. Clarifying the value proposition allows firms to identify what is extraneous, what can be cut without compromising what keeps customer relationships strong, and what strengths to leverage.

For those who may never have created a value proposition before, or those who need to refine theirs, we offer a worksheet to guide your reflection.

Research becomes useful in two key places of establishing or refining a value proposition. The first place is understanding the benefit or value you create for the audience. Many a company has mistakenly offered a benefit to an audience that the audience didn’t fully appreciate. Companies that failed during the dot.com bust offered a value proposition that users didn’t want. It’s important to use research to see from the audience’s perspective how the firm, individual, product or service can create value.

The second place research is valuable is in defining the difference between your offer and that of the competition or substitutes. Many service firms and service professionals don’t know how they are different. Some firms don’t know the importance of defining that difference. Sometimes it takes research or an outside evaluation to determine how you are different, or how to build more unique advantage into what you offer.

Social and environmental benefits or differences are emerging as important criteria to all stakeholders as the economy recovers.  If your prior value propositions have not addressed them, now is a good time to review and update them.

Companies engage in sustainability initiatives in stages.  Starting small, and usually with operations-oriented steps, companies’ first experience with sustainability is focused on saving money.  Creating new revenues from sustainability happens at deeper stages of engagement.  At these deeper stages, marketing, which may have been only peripherally involved before, now plays a strategic role in creating new opportunities to fulfill sustainability’s potential to the company and to stakeholders.

We’ve written before about the various stage models of sustainability engagement and how marketing shows up at each stage. In the early stages, when companies are experimenting with waste, energy and resource management issues, their focus is on cost savings. This doesn’t translate well to marketing action, although in some rare cases, such as Cisco’s used equipment recycling program, it can become a new line of business.

Changes in the environmental features of products and services that occur in the middle stages of sustainability engagement can prompt marketing departments to redefine their respective value propositions. They can also activate marketing’s promotional, publicity and public affairs capacities to manage perceptions around green washing (allegations of superficial claims of environmental benefits).

At the deeper levels of sustainability engagement, where companies seek to fully integrate sustainability into product and service design and business model development, marketing plays a strategic role. At this stage, the ability to research and interpret customer wants and needs is essential to tapping the top line potential of the commitment to sustainability. It’s a significant opportunity for marketing to make a strategic contribution to the direction and focus of the organization.

Team-Based Innovation Planning: Baking it In

Up to this point, the changes the company has been undergoing are technical changes. You can hire a consultant to help you conduct a lifecycle analysis, measure your carbon footprint, advise on resource, energy and waste strategies.  But redesigning and re-imagining whole products, services and lines of business from a sustainability standpoint is “adaptive change.” At this stage, sustainability has been bolted on, now the task is to bake it in from scratch. It’s probably not something that anyone in the organization has done before. As a result, executives assembling and commissioning teams to do this work need to consider how best to convene, commission, guide and support them.

Start from the Future – In the September 2009 edition of Harvard Business Review, R. Nidumolu, C.K. Prahalad, and M.R. Rangaswami write about research they have conducted with 30 companies integrating sustainability into their operations. “Don’t start from the present,” they advise.  Rather, start from a desired future state and work back. When Hosfeld & Associates works with clients on these issues we like to start with the question: “What is the change we want to see in the world because of our work?” What business should we be in as a result?

Feed the Process With New Insights – At this stage of sustainability engagement, customers and other stakeholders can play a co-creative role. Effective design and implementation of customer and stakeholder research can tap insights that will feed the innovation process. Marketing specialists on the innovation team best help other departments interpret research and learn how to understand customer needs.  Great ideas can also come from anywhere in the organization.  Effective approaches to sustainability innovation will tap the hidden genius of the organization.

Build Engagement From the Start — The result of the planning process will be a strategy that must be implemented. As my colleague Ron Benton says “to be effective, strategy has to be constructed and owned by those who execute it.” This means creating cross-functional teams across organizational silos that can work together to solve complex problems. It also means creating opportunities for engagement during the planning process with those who may not participate directly in it.

Mitigate the Challenges of Change – As an adaptive process, strategic sustainability innovation has the potential to create anxiety. It’s important to anticipate the anxiety of change and provide innovation teams with new tools. Building the team’s capacity to have fearless, frank and authentic dialogue and move quickly through areas of disagreement is fundamental. This means using conflict and resistance as tools for learning. Clear objectives and metrics can also provide guidance and support for making good decisions, assuring engagement and supporting execution.

Keep It Moving – If the goal is competitive advantage, strategic sustainability innovation can’t get hung up on internal turf squabbles, or get squashed by the tyranny of day to day operations. Organizations seeking this type of advantage must support teams with clear direction and the resources to keep it a top priority.

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If you are interested in knowing more about how to integrate marketing’s capacity for innovation with your sustainability initiative, please contact us.

Check out the Sustainability and Innovation edition “How Green Will Save Us” Harvard Business Review

By Gigi Yellen

Conventions are like massages: they feel great, while somebody skilled goes to work on you, but you have to follow up with your own work, or the energizing effects soon wear off. So here’s hoping that there’s good work getting underway now by the recently-energized eleven hundred plus conventioneers who came to Seattle for the Americans for the Arts convention in June.

Funny name, “Americans for the Arts.” Sounds a little contrarian, if you think about it, as though you had to put it on a placard and carry it in a street demonstration  to counter, say, “Americans against the arts.” Well, nobody’s going to carry that sign, but clearly, in the struggle about how to spend America’s money, the arts need every supporter they can get.

Or do they? What exactly ARE “the arts”? Ironically, the keynote speaker for the Seattle convention challenged this gathering of arts managers and executive directors to imagine their work in terms of not “the arts” but “the creative orientation.”

Yes, it’s not just a product that you can play at a concert or display at a museum or a bus stop; not just the created thing that matters, but the manner of thinking that brings it about, that lives—or should live—within people who declare themselves to be “for the arts.”

This keynote speaker was Dr. Peter Senge. He’s not an arts administrator. He’s an organization analyzer. Understanding change is what he is all about, from his post as senior lecturer at MIT, to the Society for Organizational Learning, which he founded.

Have you read The Fifth Discipline: the Art and Practice of the Learning Organization? Or his more recent The Necessary Revolution: How Individuals and Organizations are Working together to create a sustainable world?  That’s him.

Here in Seattle, Dr. Senge challenged those who fund and manage artists and their work to be aware of the wider world situation. “We—meaning human beings—don’t have much of a future if we keep living the way we’re living,” he said.

He was on here his way back from China, where he was studying a society that’s poised to develop, either in a way that will pour more fuel on the fire of a planet-threatening way of life, or that will help begin the process of healing the earth. And that process would be based on the kind of thinking that doesn’t even have a word for “the arts.”

Memorizing one’s values through chant or dance or visual patterns is the original, ancient human creative orientation.  Comfortably settled in our western-civilization chairs, we at the convention center needed reminding that native cultures don’t have words for “art.” Or “nature” for that matter. And did Peter Senge remind us.

To a roomful of people who spend their days answering questions like “how can we fund this art?” and “how can we afford art when we have people who need food and housing?” he threw down a challenge: stop. Stop participating in a thought process that brings about those survival–of-the-creative-questions in the first place.
The challenge is to start thinking about what it is we’re trying to create.

In front of a convention whose theme was “Arts in Sustainable Communities,” Peter Senge crumpled up the word “sustainable” and threw it in the garbage can—ok, the recycle bin—The clean and quotable way he said it was,” Sustainable is not much of an aspiration!”  Is your mission just to keep your organization alive?
“In some ways,” said the change expert, “climate change is a kind of gift.” “The problem is not climate change but how we live.” Here’s his question for us lovers of the esthetic: What is the esthetic of sustainability?

How should we live that esthetic? The answer is not in the appreciation of the products of creativity, but in the attitude that brings about those products. That attitude is none other than…play. Peter Senge calls it “the creative orientation.”
Like the artists for whom these Americans for the Arts campaign, we are, in this historic time, being called on to live in the question “what are we trying to create?”

“Maybe we’re at the end of the period of marginalization,” said the keynote speaker. “The end of objectifying of that thing we call “the arts.”

So here’s what I conclude: as we support and enjoy the work of people who refine their skills at making what we call art — we can recognize that the reason we support them is because we all need this support. It’s the little human child in each of us that recognizes what they do as what we know we need: not desperate problem-solving but simply play. The way humans work things out before we learn about problems and work.

Children play. And parents, wise parents, encourage that play, guided by a mission statement that asks the question “what are we trying to create?” and answers it simply: It’s — a good life.

If we arts-lovers ask ourselves “How did this mission guide our actions today?” every day, we’re on our way. We have not just had our energies massaged by convention talk about Renewable Resources, but we’ve gone to work on creating, renewing and sustaining a good life.

You can check out the whole report on the Seattle convention of Americans for the Arts at their website americansforthearts.org.  Seattle looked good, with awards to a number of local artists, and a moving tribute to ArtsFund’s founder, the late Peter Donnelly, whose presence was not only missed there but continues to be missed here at king fm.

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KING FM’s weeknight host since 2004, Gigi Yellen represents a barrier-breaking generation of women: one of America’s first female classical music announcers, she has introduced listeners to great music at stations in New York, Houston, and Washington, DC, at Seattle’s KUOW, and at National Public Radio. This essay was originally broadcast on KING FM’s Arts Channel.

Creating improvement in performance, marketing or otherwise, usually involves change. Many of us are keenly interested in any thing that creates positive change faster and with lasting results. So, I was intrigued when I  read that the science of neuroplasticity has some implications for how individuals and organizations can change. The headline: Focus on Solutions Instead of Problems.

This is something I thought I already knew. In the spring of 2007, we worked with a non-profit board focused on generating earned income from events. In researching what would increase attendance at their events, we tapped market research that explored how similar organizations and similar events elsewhere managed to do well. But one board member was flummoxed. “Why didn’t you research why people don’t come?” he asked.

We had, in fact, studied the surveys that talked about reasons people don’t attend events like his. In fact, the Executive Director of the organization had ordered and studied three white papers on why organizations like theirs had failed. I read those, as well as national studies on the challenges of similar organizations.

In order to turn things around, we had chosen instead to look at best practices of what others had done to solve their problem. What solutions were out there? What was already working? Having practiced “appreciative” approaches like this to marketing for quite some time, I was pleased to learn this fall that the implications of neuroplasticity for creating change in organizations supports this approach. The study of neuroplasticity concerns how the brain can and can’t be “rerouted” to support new ways of thinking and behaving.

According to an article in the Autumn 2007 Special Edition of Strategy + Business, focusing on a problem (”why does this keep happening?”) builds stronger neural pathways associated with the problem. An appropriate metaphor might be that it wears the ruts deeper in the existing road. Making new ideas possible (and new behavior) starts with focusing on solutions instead (”what will create a different outcome?”). Focusing attention on solutions helps build the short-cut between the road we’ve been on and the road we want to be on. So, focusing on solutions that are working is a faster way to create change.
While the non-profit I worked with did not ultimately adopt all the best practices we identified, the result of the assessment was hope. They had previously convinced themselves that their prospects were small. Now they had compelling evidence that others similar to them were making similar transitions and accomplishing their goals.  Compelled by this hope and a vision of greater possibility than they had imagined, they were able to chart a new course, recruit a new Executive Director and embark on a more successful program.
Focusing what you want to achieve, and new solutions to get there, are the keys to faster change and faster marketing results. The full article on Neuroplasticity is here at the Strategy + Business website:  You must register to read it but registration is free.

We in the Seattle area watched this month as nearly three decades of changes in the newspaper industry brought down the Seattle Post-Intelligencer. It would be simplistic to say that loss of the original purpose was the turning point in the newspaper industry’s demise. Many complex factors including the rise of the Internet have contributed to their current dire circumstances.

While many reporters and editors remained motivated by the ideal of a free press, their management was focused on a specific form of revenue creation (selling advertising) which did not allow newspapers to adapt as the market has changed.

Ted Levitt made this point years ago in his famous “Marketing Myopia” article: adapting over time means focusing on the evolving needs of customers, not selling a particular business model. Holding fast to the importance of a free press as an agent of enlightened democracy might have helped newspapers cling less tightly to the advertising paradigm and evolve their revenue models in service of the greater purpose.

A focus on how we seek to make the world a better place helps companies stay clear and resilient in troubled times.  When economic conditions are volatile, business models focused on purpose provide clarity about what needs to change and what should never change in the business. This focus on purpose does four things for an organization:

• Provides a strategic focal point for aligning all aspects of the organization
• Creates the basis for powerful, trust-based marketing
• Establishes a foundation for positive corporate culture, and
• Taps the motivation and passion of employees and other stakeholders.

According to an article in the February 12 Gallup Management Journal, it’s more critical than ever that businesses and customers know what companies stand for.

The article describes the work of GSD&M Idea City in Austin Texas, a branding agency, as it helped Southwest Airlines describe their purpose. While many see Southwest as simply the low-cost provider, for founder Herb Kelleher, the point is making air travel accessible. The agency gave him the language to describe his purpose: “democratizing the skies.”

A friend of Hosfeld & Associates, Kip Gregory, author of Winning Clients in a Wired World, also runs a purpose-driven business. He works with clients to help them tap the enormous potential of the Internet and everyday technology to make their businesses more profitable. For Kip, the Internet is a banquet and many businesses can’t find the door in.

In talking with Kip about his purpose, I paraphrased: “You’re not in the technology business, Kip, you’re in the abundance business. Hundreds of the resources you share with clients are free, and yet they offer the opportunity for breakthroughs in productivity and profits.”

Kip is successful because people recognize he’s not a geek who loves technology (not that there’s anything wrong with being a technology-loving geek); but a client champion who uses technology to make them more successful.

Studies suggest that purpose-driven businesses outperform companies without a purpose. Southwest Airlines is one of several firms cited in the book Firms of Endearment, which describes the characteristics and performance of companies committed to a purpose. Firms of Endearment (or FoEs) that they studied returned a 1,026 percent for investors over the 10 years ending June 30, 2006, compared to a 122 percent return for the S&P 500.

Companies with purpose are not immune to economic downturns. Some of the firms described in the book, including Harley Davidson, have taken significant hits in the last several months. Yes, further studies suggest that companies committed to purpose recover more quickly after economic challenges.

Companies with purpose, those that take a stand and build their business on making the world a better place, stand out with consumers. They foster trust and loyalty. Companies with loyal customers succeed in good markets, and have more going for them in difficult times.

If you’d like to find out how to align your organization’s operations and brand around a compelling purpose, please contact us.