What If

Experience Economy

Unless you've been living under a rock in Malaysia recently, you would have probably heard of the controversy regarding the 7th Harry Potter novel. Just to recap: MPH, Popular, Times and Harris bookstores decided for a brief period in time to not carry the Harry Potter and the Deathly Hallows novel in protest against the “indiscriminate price discount” by Carrefour and Tesco.

Now that the dust has settled on this controversy, it is probably high time that these four big bookstores started to rethink and reinvent themselves to not only focus on how cheaply they can sell their books. Because heaven forbid what if one day the mother of all hypermarkets (Walmart) decides to open up shop on our shores, or what if Amazon is able to offer free shipping or dirt-cheap shipping charges to Malaysia. What happens then? And it wouldn’t be a surprise if Carrefour and Tesco decides on a permanent basis to carry selected book titles.

So the bookstores better start to think beyond prices; they need to move away from the commodity game and start playing in the experiences economy. According to Joe Pine and Jim Gilmore, authors of "EXPERIENCE ECONOMY: Work is Theatre and Every Business a Stage", there are four levels of value starting with raw-materials economy at the base. Next up, the goods economy. Then, the services economy, and at the top of the totem pole is the experience economy. Examples of two companies that are reaping rewards by playing in the experience economy are Starbucks and Harley Davidson. Starbucks is not in the business of selling cups of coffee but is in the business of selling an experience referred to as the “third-place” between home and work where customers can find refuge, unwind, chat and connect with one another. Harley Davidson is not in the business of selling motorbikes but is in the business of selling an experience that Harley calls the “Rebel Lifestyle”. According to a senior executive in Harley, “What we sell is the ability for a 43-year old accountant to dress in black leather, ride through small towns, and have people be afraid of him.” Former Harley CEO Rich Teerlink's success in changing Harley’s “persona” from “motorcycles” to “Rebel Lifestyle” has added billions of dollars to Harley Davidson's stock-market capitalization.

Some in Malaysia might argue that people here are only concerned about the prices of things and nothing else; especially not this touchy-feely thing about experience. Well, if that is really true then the most sought-after portable music player should be the cheapest player that one can find in Low Yat and not the iPod. And if Malaysians are truly only concerned about prices, then coffee places like Starbucks and the modernized kopitiams (traditional breakfast and coffee shops found in Malaysia) that are popping up everywhere should be as empty as ghost towns but they are not. This goes to show that the experience economy is alive and kicking here in Malaysia... and local companies need to realize this fact.

So the “Big Four” bookstores that flexed their collective muscle by boycotting Harry Potter and the Deathly Hallows novel should take heed of what Managing Director of Penguin Singapore and Malaysia said, “Avid fans are looking for a magical atmosphere rather than just cheap price”. Or in the words of Tom Peters, “Experience is the Beginning and End of Value Added. Not just at Disney World. Not just at Starbucks. But in every kind of company and for every kind of profession... from fur trapping to high finance.”

What is simplicity?

" Pare down to the essence, but don't remove the poetry." Leonard Koren
Now that is what I call keeping it simple ... with style.

Want to settle or not?

Having come back to "boleh"-land after a long hiatus overseas, I’ve not had the pleasure of enjoying certain experiences in a long time, and one of them is to be stopped by an unscrupulous traffic cop in this country. But that changed recently. After the usual formalities of telling me my grievances towards the law and asking me for my driving license, the cop proceeded to utter the following words - “want to settle or not?” This basically translates to “do you want to give me a bribe or do you want me to give you a traffic ticket?” Anyway that got me thinking about that phrase with respect to the topic of innovation in general and three thoughts came to mind:

1) Firstly, should SMEs in this country innovate or not? After all it seems that for the time being, businesses here in Malaysia can just kind of follow the trends set by developed countries or just adopt them wholesale and still be successful. What do I think about this? I think a quote by Niccolo Machiavelli shared with me by my business partner puts it best - "Whosoever desires constant success must change his conduct with the times." So the question that should be asked is “Should SMEs settle or not settle for the status quo?” 


2) Secondly, is there a need for an appropriate innovation champion for a project or program? Let me begin by saying that having an innovation champion is definitely wise when starting a project or program that is innovative in nature. I say this because when one embarks on a project or program that is even slightly radical, there will be a lot of people in a corporation that will act like corporate antibodies and try to kill off the project or program. That is why there is a need for an innovation champion to push ahead and fight these battles. It is important also to identify the most appropriate innovation champion. I think Steve Jobs captures the spirit of an innovation champion well when he said the following upon reflecting on his current success: 

“I’m pretty sure none of this would have happened if I hadn’t been fired from Apple. It was awful-tasting medicine but I guess the patient needed it. Sometimes life’s going to hit you in the head with  a brick. Don’t lose faith. I’m convinced that the only thing that  kept me going was that I loved what I did. You’ve got to find what you love, and that is as true for work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work, and the only way to do great work is to love what you do.” 

So qualifications and skills aside, what is more important for an innovation champion is to have passion, commitment and the resourcefulness to make the program successful. This is because any project/program that is radically innovative will have its ups and downs and will encounter a lot of internal resistance. Therefore, the question that should be asked is “Should a project/program settle for an inappropriate innovation champion or not settle and keep on searching until they find an appropriate innovation champion?”



3) Finally, how big should an innovation team be before they embark on an innovative project or program? Well I say form the smallest team possible and no smaller, but probably anthropologist Margaret Mead puts it best “Never doubt that a small group of thoughtful, committed  people can change the world: Indeed it’s the only thing that ever  has.” The question that should be asked then is: “To settle on the mindset that only huge teams can embark on innovative projects or not settle for this kind of mindset and go off doing something incredible with a small, passionate and dedicated team?”

Have I put forth ideas that are not practical and reasonable? Well here is what George Bernard Shaw has to say about being reasonable -- “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all  progress depends on the unreasonable man.” So the phrase “want to settle or not?” is a phrase very relevant when thinking about innovation. Oh and by the way I didn’t settle with the  cop and in fact the cop let me go without a traffic ticket – must  have been my lucky day.