The Experience Alignment Model. What to innovate on and how

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As I was preparing an innovation workshop for one of my clients I was looking over some of the models I wanted to use. And I happened to check out Niel Nickolaisen’s Purpose Alignment Model and Joseph’s Pine Experience Economy models right after each other.
It was then that it hit me that they compliment each other perfectly.

So let’s see if we can use the Mojito Method to take 2 great ingredients and make even more awesome.

Purpose Alignment Model

The purpose of the Purpose Alignment Model (pun intended) is to figure out how to invest and run different initiatives. It works with a simple 2 by 2.

Purpose Alignment Model

Purpose Alignment Model

It is simple. If it is something you want to differentiate yourself with and it is important to your business, invest in it. If it is differentiating, but not really important or your core business, partner with someone. If it is not differentiating, but important to your business (like billing), only try to be as good as the competition, but not any better. If it is neither important to your business and not differentiating, why are we still talking about it?

The Experience Economy

And it is about differentiating that Joseph has something to say.

Experience Economy

His point is that we are moving from a service industry into an experience economy. After raw materials and goods it is now the turn of services to be commoditized. When things become a commodity people care only about three things: Price, price and price. And differentiating yourself on price is a quick race to the bottom.
So the way to differentiate ourselves is by offering experiences.

Watch his excellent TED talk for more information, including the Starbucks example at the end of the talk.

Experience Alignment Model

So what does the experience alignment model look like? Not too different from the Purpose Alignment Model. We still have the 4 different squares, except with the differentiation pre-filled. Just so you can not accidentally try to differentiate on services or goods.

The other thing is that delivering experiences is in a large part about authenticity. It is about you as company and doing what you promised you would do. That is why you can not outsource the core of your experience. Thus the box mission-critical experiences box is called Do It Yourself. On some aspects of the experience you can still partner with others. For the mission critical goods and services you either have to invest just enough to stay close enough to the competition or buy what is needed.

So let’s illustrate this with an example. Take energy companies. Energy is a commodity. I do not really know who supplies my energy, but I get a couple of calls a year from competitors who tell me I can save a lot by switching to them. Problem for them is I can’t even bother to figure out if that is really true, believing it can not make that much of a difference.

So enter the A Better Tomorrow Energy Company. ABTEC’s mission is not only to be a carbon neutral energy company themselves, but also to help their customer become carbon neutral. This is not for all customers, but it will certainly get others fired up and excited. They are an energy company that is helping their customers conserve energy, completely paradoxically, but true to their mission.
This is how to transform a service (delivering electricity) into an experience (conserving the planet together)

Their Experience Alignment Model might look something like this:

Experience Alignment Model Energy company example

In the top right is the Carbon Neutral mission. The most important thing for the entire company. All the other initiatives have their place. The new wind park is a mission critical thing they use to differentiate themselves, so it is part of the experience. The announcement will be on their homepage and the building will be featured in company blog posts on how it is the greenest wind park in the world.
Contrast this with their support for the installation of recharging points for electric cars in every major city. Their goal is to be able to drive from one side of the country to the other side in an electric car. However this is not their core business, but it is part of their experience, so they partner with another company.
Their network is their most important asset. Without it they would literary not have any customers. But as it is a commodity it is not an experience, only part of it. So they should invest only as much as to not fall behind competition and increase efficiency. Money is better spend on improving the green experience.

So there you go. Free strategy advice for electricity companies looking to go green. Everyone else will have to fill the model for themselves. If have given it a try, please let me know what you think in the comments. Remember my I will work for free blog post if you want me to facilitate a session on this topic.

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There has to be a better way. A better way to engage people at work. A better way to capture the creativity of your employees. A better way to improve the sustainability of your organisation and it's environment. Stoos is a movement that tries to capture and share those better ways to inspire others. See my Stoos overview page or go to the Stoos Network site.