Classic business strategy has always been the path to achieving an organization's vision, while staying true to its purpose and values. Traditional approaches draw on examples of success from the past, which business strategists used to provide organizations with roadmaps that solve challenges and guide them to where they want to be.
But today's problems and tomorrow's opportunities cannot be solved with yesterday's solutions. Thanks to the unprecedented pace of change, strategy is no longer a straight line. Reliable best practices don't always exist, and patterns are increasingly short-lived. For many organizations, this uncertainty is manifesting into a collective confidence chasm, resulting in organizational paralysis, misalignment and missed opportunities.
So, how can contemporary business leaders chart a confident course through uncertainty?
We believe business strategy now needs to become more human-centric, using empathy as its enduring compass, in order to stay agile in an unpredictable modern world. Only by ensuring business strategy has a soul can a brand truly hope to secure growth and maintain relevance with employees and customers alike.
The human shift
To understand why contemporary business strategy needs to be human-centric, it's important to understand three fundamental shifts in the business landscape.
The foremost shift is the pace of digital disruption—the speed of progress makes it incredibly hard for business leaders to know which new available solution would be the right long-term fit. Deciding what should and shouldn't be outsourced, identifying the best platforms for marketing, and even how to organize, all need ongoing consideration. The dizzying pace of creation of new tools and services presents opportunities but can create fatigue. Indeed, one of our clients jokes about being stuck in "pilot purgatory," running dozens of concurrent pilots of new tech innovations, hunting for customer and employee adoption that would lead to new business value.
Secondly, increasingly liquid customer expectations have forced all businesses to up their game when it comes to customer experience. In the same way that the iPhone became a threat to digital camera makers, a customer's experience with one product now affects their expectations with all others—even in previously unrelated categories. This means businesses are no longer being compared to just direct competitors, and 81 percent of companies today expect to compete mostly or completely on the basis of customer experience. Simply put, consumers have more brand and product choices than ever.
Finally, the impact of dwindling trust has emerged as a growing concern as more and more customers demand increased transparency from businesses. Accenture Strategy's research report on the impact of this on more than 7,000 companies' bottom lines found at least $180 billion to be at stake from declining trust. Yet trust is still seen as a "soft" factor for success, its value poorly understood by the very organizations that stand to lose the most by overlooking it. Put another way, while trust is very human, our research uncovered most organizations do not have confidence in how to endure trust with the humans that matter most—their employees and customers.
These fundamental shifts in business are human-centered at the core—adoption, choice, trust, etc. And human-centered disruption requires a human-centered response.
Pivoting to a new paradigm: Human-Centered Strategy
So how are businesses supposed to plan for the future? The answer lies in something new: combining design, which is naturally rooted in human-centricity, with business strategy, which is deeply rooted in data and analytics. This blend of human and business is a powerful combo, and offers a revolutionary approach rarely seen in the marketplace today.
We believe that to create a vision and strategy that is confident in today's rapidly changing world, leaders need to add a crucial empathetic lens to strategy to help understand the wants and needs of individuals—i.e., those humans (customers, employees, investors) experiencing the service or product, and involved in making it happen. That is, leaders need to look beyond customers' and employees' actions to unearth their motivations and attitudes. Studying what people did is yesterday; understanding why people act as they do is tomorrow. And those insights can provide a brand with the compass for the future.
Take new American insurance company Toggle, for example. Toggle was spun out of Farmers Insurance Group with a simple mission—to create a new millennial-focused insurance offering that could compete with emerging, innovative players and create new value streams in the ever-evolving insurance space. Seizing on the total creative freedom they were granted, Toggle was able to build a renter's insurance product with human insight at its core—and disrupt before they were disrupted.
To do this, we worked closely with Toggle to analyze millennial attitudes toward renting and insurance. This research gave us actionable and holistic human insights into why millennials were rejecting existing renters' insurance offerings, enabling Farmers to create something tailored specifically to millennial mindsets.
Toggle's approach demonstrates that empirical data is not antithetical to human-centric strategy, but rather an integral part of it. Prioritizing human insight in the strategic journey rather than broad hypotheses developed in a spreadsheet reduces variables and increases business confidence because we understand "why." As a result, Toggle was able to create something that solved real problems and set up its team with the right culture and framework to remain agile in the future.
The approach used to create Toggle is a useful tool for proving the efficacy of human-centric strategies. Marriott also took advantage of this approach when developing new growth ideas that would help it keep ahead in the highly competitive travel sector. Working closely with Accenture Interactive and startup incubator 1776, Marriott was able to tap into a network of startups to uncover new business models to address their growth objectives.
By putting human concerns (guests, associates, owners) at the heart of its growth discovery, Marriott was able to build confidence in new and emerging business models. This approach allowed Marriott to make the most of the fast-moving digital landscape, and address travelers' liquid expectations. They used this human-centered approach to explore home sharing by starting with consumer need—but doing it in a way that was the right fit for the Marriott brand and shareholder.
This type of change, however, is anything but easy. It requires a new cultural mindset, multiple discliplines working together, and navigating cultural tensions, among other things. It isn't easy, but commiting to change will help you drive the alignment and buy-in you need to move forward.
Business strategy is incredibly valuable for organizations looking to successfully navigate an increasingly uncertain world, but the starting point can no longer be set in the past. Its genesis must be in the present with an eye to the future, focusing on people's wants, needs and expectations. Strategy development still means putting facts and knowledge at the center of decision making, but understanding what people will do and why they do it is the bedrock on which these facts and knowledge bases need to be built—with soul.