Ready for the relationship economy?

Year 2011 was the last time we recall having witnessed a heated discussion on the merits of a ‘product versus services’ economy. The topic, then, seemed fresh and well-researched. However, we soon started to hear about the importance of building personalised experiences to stay relevant in the new ‘Experience’ Economy — or like its popular term, the digital economy.

Come 2018, we’re bang in the middle of that predicted experience economy; watching businesses — large and small — invest healthy sums into modelling unique experiences for customers. This pace of change, a move through two different economies, in a span of barely seven years, is astonishing. In the near future, we believe, that change may come at an even greater stride.

If organisations want to continue to remain relevant, building personalised experiences alone is not going to help. Have you noticed how consumers have started to become increasingly focused on the relationships they share with service providers? Think: how many times have you gone back to a particular place for the same service? Why do we keep going back? It is possible that we keep returning because of the connections we have built with these service providers.

Ties that bind In fact, it is very likely that we are on the brink of the next big economic wave — the relationship economy. A relationship economy is built on ‘trust’ between a service provider, their consumers and their partners. How is it going to come into existence? We believe that the advancements we have made in certain technologies are leading to this shift in economy.

Recent scientific milestones such as Artificial General Intelligence (AGI), Programmable Matter and Quantum Computing are examples at the tip of the iceberg of these advancements. Once these technologies become commercially available, there will be a paradigm shift from an ‘experience’ economy to a relationship-fuelled economy.

How are these technological advancements leading to a shift in economy? Take Google’s online game, ‘AlphaGo’, for instance, which is based on Artificial General Intelligence (AGI). It is remarkable how a machine can replicate the fullest form of human intellect, so much so that it has become unbeatable. It can predict all possible moves thanks to the deep learning algorithms in place.

When we start to use AGI as virtual assistants, we will no longer need to rely on humans for routine tasks. A self-driven car, for example, can drop your child at school every day. When this happens, the only missing element will be a basic human connection.

Form factor Another technological advancement is the research on programmable matter by Carnegie Mellon University and Intel Labs, among others. This research studies the use of nanotechnology to enable objects to change their original form, based on its user’s need. This technology can be used with applications like, self-growing and contracting furniture, buildings changing their own shapes and even automobiles changing their own dimensions when required.

Once again, we will be able to master our own experiences — but what about our basic need for human interaction? Imagine being able to inject yourself with a new skill when you require it. If you’ve seen Matrix , this becomes easier to visualise. With the advent of quantum computing, applications involving telecommunications, personalised healthcare will soon be able to function devoid of human interference. In fact, companies such as IBM, Microsoft and D-Wave are already making significant investments in this technology.

When the relationship economy kicks in, survival of any organisation will depend on whether it is able to foster relationships; not only with its stakeholders, but also amongst them. Here are a few recommendations to help do this:

Bringing customers together: Mahindra & Mahindra, through its initiative ‘Trringo’, has created a call centre platform, which allows farmers to rent out their machinery to fellow farmers whenever not in use. ShareGrid and Boatbound, two US companies, have also started similar initiatives. Similarly, businesses will have to adopt newer technologies to enable clients to interact and be comfortable, so that they can complement each other when the need arises. They may even prefer to repeat collaborations in which they experienced ‘friendly’ gestures in the past.

Bringing together employees: There are a multitude of people joining social networking applications. Many organisations have, in some form, enabled social communication tools such as Slack or Yammer, to facilitate internal collaborations. Yet, only a few of them have used it successfully. Isn’t this a resource we need to exploit a little more in our work environments?

This will make it easier to share information, on platforms employees are already comfortable with, in the new relationship economy. Charlene Li, in a recent HBR article, stresses the importance for leaders to promote social communication by actively listening, sharing and engaging with their teams on these platforms.

Bringing business partners together: In the new relationship economy, success will follow those businesses that allow suppliers and partners to come together and collaborate. We believe, snags in maintaining consistent quality, optimising supply chains and improving process efficiencies can be achieved, if organisations provide their business partners with a non-threatening forum, to share best practices between each other. Frequently highlighting how each vendor is adding value to the larger ecosystem, will boost the business in the long haul.

Technological advancements are inevitable, but are organisations doing enough to leverage them to foster relationships? As General Motors’ Edward Whitacre popularly puts it “...we are 100 per cent in charge of how we respond to challenges that come our way”. Is India Inc listening?

The writers are with the Centre for Behavioral Excellence-Talent Transformation, Wipro Technologies

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