The value of creating experience
By CINDY YAP
There are many fresh approaches to making a company’s presence meaningful to its potential audience. According to internationally-acclaimed speaker, Joseph Pine II, this can be best achieved by creating experience.
Author of several award-winning business books including Mass Customization: The New Frontier in Business Competition and The Experience Economy, Pine reveals how staging experience leaves a memorable and rewarding impression that engages people.
Pine recollects how he brought customers and business partners into the development process during a special assignment to create the AS/400 computer system in IBM, where he started his career.
Says Pine: “I learnt that every customer is unique and everyone wanted it in a different way. We had no way of resolving that, as it was designed for a general purpose computer market that simply didn’t exist.”
His innovative ways resulted in customers’ needs being met more exactly and quality of the systems being significantly enhanced. He also contributed towards IBM clinching the Malcolm Baldrige National Quality Award in 1990.
He then set off to strategic planning, where he read Stan Davis’ book Future Perfect, which he describes as being akin to “Heaven coming out and the angel’s singing.”
He goes on: “This chapter, called ‘Mass customising’, talks about how technology was bringing down the cost of customisation, so we should be able to give everybody what they want, but do it at the price they are willing to pay.”
Pine was subsequently sent to Massachusetts Institute of Technology’s Sloan School of Management as a reward to gain his Masters of Science degree in the Management of Technology, where he wrote a thesis on Mass Customization, and fixed his mind to turn it into a book after graduation.
In late 1992, the book Mass Customization was published by Harvard Business School Press.
Pine left IBM to strike out on his own six months later, after being offered a half year’s salary to leave IBM. He then formed a small company and started speaking, teaching and consulting around the world.
In Mass Customization, Pine speaks of how we don’t have to live with mass production anymore.
“Although mass production lowers the cost of producing things to benefit the masses, the problem is it entails sacrificing our individual desires to buy something standard,” he argues.
“Mass customisation allows for the products, goods, services and experiences to be obtained at low cost, high volume, and with efficient operations but in a way that allows you to get exactly what you want.”
This eventually led to his subsequent book, The Experience Economy.
“If you customise a service for a person to be exactly what they need at that moment in time, you will turn it into a memorable event that engages people in a personal manner and make people go ‘Wow, that’s an experience!’” he quips.
Pine uses Kidzania as his favourite illustration of how kids get to play adult roles in themes, which are sponsored by either multinational or local companies.
“It’s really marketing experience that they have, both kids and parents. I’ve been to Disney theme parks all over the world and am certain that the smile per kid ratio in Kidzania is higher than anywhere else.”
He claims that, in today’s economy, goods and services which are being commoditised are bought at the lowest possible price without any differentiating factor.
“These days, hard-earned money and time are spent on experiences people enjoy. In order to differentiate yourself and create a greater economic value within your customers, you have to shift up what I call a progression of economic value from commodities, goods, services and now, experiences,” says Pine.
Using tourism – the No. 1 sector of the experience economy – as an illustration, Pine tells of how the Mandarin Oriental Hotel keeps a profile of its guests. Upon checking in anywhere in the world, your profile will be downloaded, preference noted, and you will be taken care in a very personal manner.
For dominant players who are already experienced in the market, Pine advises:
“Business is hard and it gets tougher year after year. If you keep doing the same thing without change and stay in the safety of past practices, then you will be commoditised.”
Fusion between real and virtual
Pine’s advice to graduates fresh out of school is to “decide what business you really want to get into, while recognising that the greatest of value is going to be in experiences, which present so many opportunities.”
In his 2011 book called Infinite Possibility: Creating Customer Value on the Digital Frontier, Pine wrote about discovering the right opportunity to pursue amid the infinite possibilities that are available to us, and using digital technology to fuse the real and the virtual to create experiences on a digital platform.
“If I were looking for a place to go and the world was totally open, I would look at the intersection of the digital and the physical,” he says.
At the core of the book is a humble new framework that builds on the three fundamental dimensions that create the universe (i.e. time, space and matter). What digital technology does is allow us to flip each of these on their heads to create new worlds, first in our imagination and then in our experience, says Pine.
“Space is about real places, and now we can have virtual experiences in virtual places that simply don’t exist in reality and create something that is not possible and never been done before.”
Time is about the actual events unfolding in front of us, moment by moment, but with digital technology we can get rid of the tyranny of time by focusing on all dimensions at one time.
Here are Pine’s responses at the Thinkonomics segment:
Q: Which is more genuine – giving your time or money?
A: If my talent can make money, which can be given to some organisation that has the capability to do things which are not my cup of tea, to me that’s more authentic.
Q: Would you rather have less work to do or more work you actually enjoy doing?
A: I love doing my kind of work. I excel at figuring out what’s going on in the world and developing frameworks that first describe what’s going on, and prescribe to companies what they need to do about it.
Q: If you could bring one character to life from your favourite books, what would it be?
A: My favourite book is Lord of the Rings, and favourite character – Gandalf. He really feels for Middle Earth and his desire in life is to save hobbits from the greater disasters that are going around then. Similarly, I try helping companies avoid all the disasters in the world of business and find the way to safe harbours that allows them to excel.
Pine’s nuggets of wisdom to CEOs
- For whatever experience you’re creating, you need to have a theme and the organising principle of the experience, and decide what’s in or out. If you don’t, you are throwing everything but the kitchen sink.
- When you are working on staging experiences, you are working as theatre.
- You need to direct your workers to act, help them develop characters that play and help them characterise a role. Build a climax and come down again.