By N. Pfeffermann, February 1, 2018
In a world where almost every aspect of our lives is somehow tethered to technology, experiences that engage our bodies, our senses and our souls are at a premium. Digital is what we've become but visceral is what we crave.
What means growth in the digital economy? It all started with the World Wide Web and rapid growth of new technologies and connectivity among users leading to new investments in fast-growing Internet-based companies and social media platforms. After this period of extreme growth 1.0, most businesses are facing nowadays a variety of challenges in business innovation and digital transformation as they are looking for new ways to achieve growth.
This article focuses on the tech-human connection and provides a definition of growth 2.0 including platform solution designed for advanced co-creation. It also presents a new value chain and is a series of three articles by the author exploring the impact of communication on both individuals and systems from a multidisciplinary perspective.
For so many years we have built businesses and learned about value creation based on Porter’s value chain (1985): Innovation was understood as a closed, primary production process from idea generation all the way to commercialization—meaning from inbound logistics all the way to customer service—supported by activities such as human resource management, procurement, and technology development / information management.
After coming to terms with the extreme period of growth 1.0 with all the fast-growing Internet platforms and dot-com bubbles, a supplementary e-value chain was introduced by Kollmann (2016) to explain value creation in the so-called net economy (interchangeable with digital business): Information is thereby key to succeed in digital business, for instance, a platform creates value by gathering, selecting, and offering new information via mobile devices (e.g. UBER, Airbnb.com). In this context, the following three main added values for users are:
Linking the two value chains is the ultimate formula for digital business success including activities to transform and adapt businesses to open innovation. Many business consultants and startups are involved in developing new IT-driven operating models and strategic programs to perform open innovation and expand into new (e-)markets. The firm infrastructure represents thereby still the foundation of digital business and the design of innovation-information processes including design workshops has become the key factor underpinning successful innovation and firm’s growth opportunities, as illustrated in Fig. 1.
What are the main challenges?
In fact, I would like to say it again and speak the truth: It is NOT complex, it is a paradigm shift and the ‘old’ familiar world is not working any longer. We have become digital and focus all our human energy and manpower on (a) ego-based power-control games to win the digital race and (b) new IT-driven operating models to desperately find ways to re-create the growth 1.0 pattern. What is the outcome? We build enmeshed² (engagement level) and enmeshed³ (co-dependent level) systems. And the new bubble is already in the making… read more on www.marketwatch.com and learn more about it by reading the articles ‘It’s Time to Re-Think Ways to Create System Growth’ and ‘Leadership Communication vs Political Communication’.
One of the first questions in my digital business courses and classes with professional (MBA, BA) students usually is: How can we become the next Google, Amazon & Co.? In the 90’s, when I was a student, my assignment was entitled ‘Amazon.com versus Bertelsmann bol.de – Who will survive?’ It was an interesting presentation because our student group argued that the new online platform Amazon.com will be successful in digital business in the long-run. In fact, I felt only a few students could believe it because Bertelsmann had a well-established firm infrastructure, a multi-channel strategy, a customer base, etc.
This reaction makes sense because it is our collective, learned belief system—our navigation system and world map—how we think businesses are built and individuals relate, engage and connect with other individuals in systems to successfully innovate and achieve goals. We have learned how to communicate, innovate, and strategize to get a job done, achieve greater impact, and make progress in the world. If we want to change it, we must understand how we can modify our navigation system and how we communicate at a system level.
Growth 2.0: The New Value Chain Approach
As illustrated in Fig. 2, I would like to present a new value chain approach and understanding of a solid foundation for long-term growth (growth 2.0). From a dynamic capability view, (a) the innovation communication capability with its five management principles is understood as the firm’s foundation and (b) interaction activities are the linkage between innovation and information processes. Hence, the new value chain is divided into support activities (five management principles) and interaction activities, which play a pivotal role in productive thinking and (re-)connecting with individuals in innovation-information processes.
!!The main difference: The innovation communication capability bridges the gap between innovation and communication at both strategic and operational levels and is a managerial capability for individuals and organizations alike. The new value chain approach is applicable at both individual and system levels and therefore aligned to truly empower individuals to create value and invest in their capabilities to be part of an organization (co-creation view – re-thinking human resource management incl. the role of human beings in organizations).
In other words, there is no innovation and information process without interactions and, hence, the innovation communication capability is key to build a solid foundation for long-term personal and business growth in the digitalized information age.
Understanding the tech-human connection means understanding information-interaction designs, and more precisely understanding how we inform and interact with individuals by using technologies and learned communication blueprints. It can positively and negatively affect our relationships, culture, and system innovation.
In my humble opinion, the three following basic information-interaction designs are currently important in the world more than ever before (Fig. 3):
Sophisticated technologies and IT-based enablers (programs) can lead to an imbalance in systems. Yes, we need to learn programming skills but more important is to learn the basics, i.e. how to inform and interact with human beings in teams, collaborative projects, media, etc.
As far as Amazon.com is concerned, it was so successful because they had understood how to build trustful relationships online and then started offering other tech products & services.
Please read more about the innovation communication capability in other articles and learn more about information-interaction designs in the online program ‘Innovation Communication’ or eBook ‘The Communicating Mind’.
A New Platform Concept: MAZ for Empowered Tech-Human Connection
MAZ—MultiArt.Zone—is the pioneering art and lifestyle experience platform to combine high-tech with resourcefulness and human senses to connect talent, empower individuals, and inspire human leaders across the globe. Together with platform users and members, we co-create next growth opportunities and envision the future, support the changemakers of tomorrow, and embrace diversity and high quality to meet the needs of the global creative-tech industry. MAZ stands for high quality, personality, and human ingenuity
Besides offering new insights & inspiration, the MAZ platform explicitly focuses on interactive, sensory art dialogs and advanced co-creation. The two MAZ platform services are as follows:
TECH: MAZ Lounges are connected, informative-interactive touch displays within and across smart cities and organizations that offer the easiest way for open-minded leaders, artists, and talented individuals to showcase & connect talent, discover art work, experience the power of co-creation and grow ideas in open learning spaces around the world.
HUMAN: The MAZ Membership services are designed for (1) businesses and smart cities and (2) artists and creative professionals to personally join the experience platform, get easy access to high-quality web content in leadership, art, and innovation, and gain new insights & inspiration in trend reports, workshops, advanced co-creation activities and exclusive events.
MAZ Lounge Displays: Three Versions
Insightfront (Standard): This standard version offers easy access to three web-based content sections in (1) leadership, (2) art & design, and (3) innovation. The individual web-based content sections can be tailored to the needs of regions, cultures, and consumers.
Artfront (Premium): This premium version is designed for art enthusiasts and offers (1) art-tech installations at displays (in/outdoor) and (2) digital display space for artists to showcase creative work at displays. By touching the display the web-based content is shown.
Youthfront (Special): This version is adapted to young people—the changemakers of tomorrow—to grow their talent and ideas, find new ways to learn and express themselves, and co-create with like-minded individuals worldwide including role model engagement.
A good summary of how to co-create unique value with customers is presented by Prahalad & Ramaswamy (2004):
“Companies can no longer act autonomously, designing products, developing production processes, crafting marketing messages, and controlling sales channels with little or no interference from consumers. Consumers now seek to exercise their influence in every part of the business system. Armed with new tools and dissatisfied with available choices, consumers want to interact with firms and thereby co-create value. The use of interaction as a basis for co-creation is at the crux of our emerging reality. In the conventional value creation process, companies and consumers had distinct roles of production and consumption. Products and services contained value, and market exchanged this value, from the producer to the consumer. Value creation occurred outside the markets. But as we move towards co-creation this distinction disappears. Increasingly, consumers engage in the processes both of defining and creating value. The co-creation experience becomes the very basis of value. The firm cannot create anything of value without the engagement of individuals.” (p. 5)
To answer the question of what growth means in the digital economy, the article focuses on the tech-human connection, innovation communication, and information-interaction designs, as shown in Fig. 6. One example is the new MAZ platform—MultiArt.Zone—designed for platform users and members to co-create unique value and engage human beings in art dialogs via connected, informative-interactive touch displays and advanced co-creation activities within and across smart cities and organizations around the world.
In sum, the new value chain can truly empower individuals and facilitate business innovation:
And, yes, it also leads to measureable financial assets and transaction value. But the new value chain primarily leads to a capability-driven organization design with sustained interactions in innovation-information processes to ensure long-term business performance and empowering transactions with human individuals in healthy, balanced systems.
Simple understanding of turning ideas into standout successes
What economist fail to include in the ‘ingredients list’ for growth
The human-leadership shift in the open innovation economy