When building a purpose brand your building a purpose product. I don’t think you can I have one without the other. Here’s what I mean;
Products fall along a chart called the progression of value. When you assess where you are, you’re one of four places: Commodities, goods, services, experiences.
The capabilities of a product typically fall along the lines of how well it’s integrated with the product value and reflected by pricing. It’s very rare that you find rich experiences that are cheap. They are out there there’s just hard to find as people learn the value of what they produce.
Let’s take for instance the business of coffee which is a classic example of the progression of value. Green coffee beans would be considered a commodity. They’re not going to do much for you without work. You could say that a green coffee Bean has low capabilities. Moving up, ground coffee in a store would be a consumer goods product. I think you see the direction we’re going in. Eventually, you get to services and then experience. A well-refined coffee shop with many locations is beyond a cup of coffee. It becomes a meeting place, somewhere you can get work done. Coffee is the centerpiece as far as the product goes but the experience is beyond a cup of coffee. One could argue, Disney has become one of the brands representing a high level of integrated experiences. There are several products all tied together. For the most part, it’s all one brand. There’s not much opportunity for another brand to get mine share from that customer. They even have a cruise line.
When we combine progression of value with business operating system architecture we get a new quadrant based system. Where does your brain sit on this chart below?
By combining the progression of value with modular or interdependence architecture, you get a way to judge the brand in a different light. Modular architecture benefits allow products to get to market fast and satisfy customer demands in a nimble way. Interdependent architecture is a lot like Apple. Pretty much everything is made by them with some exceptions on peripherals. The downside to this model is slow adaptation IF you cant predict customer’s unmet needs. It’s hard to react fast and it requires the organization predict the customer very well. Companies like Apple and Netflix do a great job of this because they don’t just consume ‘data of the past’ to predict customer unmet needs. They have a model that uses theories, which are statements of causality to ‘estimate’ the future. Their customer value proposition is always ahead of the competition and even ahead of the customers themselves.
When you think of your product, obviously, you want to increase the progression of value if you like your paycheck. How well you can organize and respond to customers changing demands puts you in a position of either modular or inter-dependent architecture. If you really don’t know a lot about the customer and it’s difficult to assess their needs, you’re likely to be modular and where you sit on the progression of value is your story to tell. Unlike the concept of the magic quadrant, there’s really no one quadrant to be in. You can make progress in a good direction, improve profitability but it doesn’t necessarily mean that you have to jump into a different quadrant.
So just a review there’s four quadrants I’m proposing:
Commodities and goods, modular business architecture
Commodities and goods, interdependent business architecture
Services and experiences, modular business architecture
This is an experience, interdependent business architecture
I see a lot of brands that are doing well in their own quadrant and they should make progress moving towards more profitability but not overthink the problem. Creating a Disney or a Starbucks like product is a major ordeal if you are not in their quadrant (Let’s not even go down the path of good money versus bad money, how are you finance all this). If you are running a museum that has a giant ball of string with an attached gift shop, you don’t want to pretend to be Disney. That would be a lot of work. Can it be done? I guess… one day but a lot has to change with the product and the organization.
Understanding where you are; a) contributing to satisfying the unmet needs of customers, b) how customers will choose you, and c) how you will deliver those experiences are the three elements to building a purpose brand no matter what model you are in. Understanding the progression of value and how it relates to your business architecture is also vitally important in making progress for both the customer and the organization.