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The future of work requires a rethink on economic “productivity”

By | Future of Work, HR, Talent, Team Culture

Adam Smith was 43 and lived with his mother when he wrote “The Wealth of Nations”. His concept of the circular economy (people work, earn wages, buy stuff, which in turn creates work, so we hire more people) ignored the fact that children had to be raised and cared for. It assumed that they magically appeared in the workforce (almost like Smurfs), and also missed that the effect of increased production could pollute and deplete the planet’s resources. Somehow, arguably even against his recommendations, this became our dominant way of thought.

Basically put, almost everything men did was productive, while raising children or looking after frail parents was not. Increasing rent due to scarcity is measured as productive even though it requires no additional work and produces zero new goods or benefits. So the productivity that has been defined is clearly linked to monetary value versus social return or more goods in the marketplace. Largely speaking, more money equals more productivity.

But why does our definition of productivity matter? Because it is a frame against which we evaluate our days and what we consider to be work. We now view the productive parts of the day as those where we earned a living and those parts of the day where we cared for others (or ourselves) as wasteful or a hassle from a productivity perspective. For a future of work scenario that delivers a different outcome both economically, ecologically and socially, we need to rethink the fundamentals of what productivity is. This rethink will allow a lot of the issues we struggle with currently, such as the time spent at work versus the productive value of that time, to be simplified. 

One of the key challenges of the Future Of Work is balancing the growing demand for shorter work days or better work life balance with the need to meet shareholder expectations i.e. profit. These shareholders are often not faceless multi-nationals bent on money grubbing but everyday people who rely on the profits as a way to support their retirements or buy a house, so we need to respect that this is an important outcome. 

Currently many firm’s only way of managing staff cost is through work-hour agreements and not productivity to cost agreements i.e. you will be here x many hours per day, and if you aren’t there is an issue. 

However, this doesn’t mean that firms and their shareholders don’t want (and increasingly will want) to value the greater social impact that they have contributed to over financial return. This is the same social fabric that makes their lives better. A busy executive who might earn less but not be required to pay for an au pair may prefer to finish earlier and pick kids up from school.  Perhaps with a different view of productivity, governments will reward companies whose staff are raising kids or supporting the elderly with incentives to contribute to the fabric of society as this reduces society’s burden. Companies will focus more on productivity measures that are not linked to time (i know this did go horribly wrong in the beginning of industrialisation, but maybe society is better now). 

Our experiments with this have been mixed, but generally speaking, people that have kids and want their own time to pursue passion projects, side-gigs or just gig with us really like it. It increases autonomy and the quality of work is great. For some this is a life choice and for some a phase of life. Where the model suffers is where the expectation is more like a corporate environment i.e. work as many hours as possible to earn as much as possible. While we love this too, output based work is much harder to manage in those environments because people naturally tend to overwork tasks to fill the time and their focus is a little on distraction versus purely output. Looked at in another way, when you give an experienced specialist who is now a stay at home parent (or whatever the situation) the chance to work through some complicated issues, they spend more time on actually doing the work and feeding back than somebody who is doing 10 tasks because they are in the office and distracted by endless meetings. It means more people, each doing smaller chunks of work but at higher quality output because they spend more time actually working.

In many ways we have been trained by remuneration models to behave in a way that justifies time spent in an office, so it’s a deeply ingrained system from industrial age working habits. New ideas feel outlandish and dangerous (at least, they do to me because I am old according to my kids), but that doesn’t mean we shouldn’t be exploring them. If we don’t change the way we work to meet the requirements of the new digital era, we will keep on using industrial age models which miss the point. Working different is critical for doing different (and better) work.

By Nevo Hadas – Nevo is the founding partner of DYDX and has led the development of “The Culture Canvas”—an open-source framework that makes work culture actionable for businesses to shape their team’s behaviours—as well as the latest ebook “ – Remote Team Management”, which is available for free download, and the 10-minute “Remote Team Maturity” assessment tool designed to help companies measure the effectiveness of their remote teams. 

Practical Service Design – first of its kind short course for Cape Town Creative Academy and DYDX

By | In the news

Cape Town Creative Academy, in partnership with DYDX (formerly &Innovation), is launching a new short course that will equip professionals, both in the private and public sector, with the knowledge and tools to facilitate and lead service (re)design, to improve customer and employee experiences. The course will be presented in Cape Town on Tuesday evenings over 9 weeks, with two Saturday workshops.

“Service design is booming globally as a highly sought-after skill. Service designers are critical for organizations to digitize by enabling different teams to work together to solve relevant customer problems. Service design is not pretty pictures but rather how we create new service experiences that delight customers and reduce operational cost. It requires creativity but not limited to being a creative” said DYDX managing partner, Nevo Hadas. He explains that the course includes two practical research projects that participants can choose from, one focussed on fintech and financial services and the other on public sector services. These practical, hands-on learning experiences will help integrate the theory into functional examples.

“This outstanding short learning programme is, again, proof of CTCA’s commitment to offering the latest in high-quality content, in partnership with the best-in-class industry leaders, such as DYDX”, said Francisca Gebert, chief executive officer of the Cape Town Creative Academy.

The Practical Service Design short course is aimed at professionals leading change and innovation within organisations or working to improve customer and employee experience – both in the private and public sector. Participants will gain the knowledge and confidence to apply service design methods and practices to further their career. This nine-week course starts on 8 October and will cost R14,999. The deadline for applications is on 4 October. For more information or to apply, visit

When Good Culture Becomes Bad

By | Uncategorized

In 1997’s Boston Macworld, Steve Jobs was BOOed by Mac enthusiasts. 

He had just come back to save the company he loved and told the audience about the adoption of IE as the default browser. The crowd hissed and booed and Steve Jobs broke into an impromptu sermon: “If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win Microsoft has to lose. OK? We have to embrace a notion that for Apple to win Apple has to do a really good job, and if others are going to help us, that’s great, cause we need all the help we can get. And if we screw up and we don’t do a good job, it’s not somebody else’s fault. It’s our fault. So, I think that’s a very important perspective.”

Do not doubt that Jobs had created the culture which led to his booing by building the mythology of apple being better than the rest during his time leading Mac. He needed to shift the companies mindset away from doing it alone to partnering and encompassing others to be successful.

“Culture in many ways define a company’s response to reality because it becomes the unspoken filter through which all information is processed.”

Microsoft under Balmer failed to shift from their bold strategy of “a computer on every desktop” when smartphones came about. Doubling down on a windows centric strategy was Balmer’s downfall and it happened because the company could not accept the change in reality.

That’s the trap of culture, you can’t see your own blindspots because your mental model doesn’t allow them in. We often espouse “culture east strategy for breakfast” but in truth, culture is often an outcome of success. It becomes ingrained because it delivers/delivered results. It is the companies greatest asset until, one day, it’s the biggest liability. The problem is the stronger the culture the less likely you are to see that switch coming.

This becomes ingrained in behavior; the pride that people have in doing a task really well stops them from seeing when the world has changed. And that by doing that task, a digital environment is destroying value for their customer and not creating it (like it used to). This transition happens so quickly, that their key defense is to create elaborate processes to recreate a manual set of tasks that should be eradicated. “What will our people do” trumps “how do we do a great job faster for our customers”.

This is where the role of a leader is so critical; to be brave enough to change the culture by, like Steve Jobs, changing underlying beliefs that everyone has about themselves and fundamentally, what they do to create value.

By Nevo Hadas – Nevo is the founding partner of DYDX and has led the development of “The Culture Canvas”—an open-source framework that makes work culture actionable for businesses to shape their team’s behaviours—as well as the latest ebook “ – Remote Team Management”, which is available for free download, and the 10-minute “Remote Team Maturity” assessment tool designed to help companies measure the effectiveness of their remote teams. 

The obesity epidemic caused by the low-fat era

By | Uncategorized

In the 90’s the US government proclaimed that unsaturated fat was what made people gain weight. The low-fat category, packed with sugar-laden treats, was launched to help dieters looking for a healthy snack.

All of the research led to a greater variety of low-fat foods being needed because consumers wanted to eat healthy, easily and lose weight. The key underlying assumption was wrong, but everyone took it for granted as a fact. The spiral of research was only looking for answers within the bias i.e. every problem that came up (people are gaining weight) was looked at against the solution of — make more sugary low-fat foods.

A less obvious element, however, is the impact on the entire field of dieting. Diets became hard (or harder). You were eating the right low-fat foods but getting fatter. People became demotivated, the concept of “easy fix” was touted even more, before you know it you have a multi-billion dollar industry that is doing exactly the opposite of what it wasn’t meant to do.

This is the bubble that assumptions cause, they blinker you to the proof around you as you strive forward, researching based on your assumptions versus the outcomes of your actions.

Pragmatically, this doesn’t mean that going against the grain would have been useful. To sell high-fat, low-sugar (which is what occurs today) you need a broader system of belief that supports your product can build on. It does raise the question of what you aren’t asking or taking for granted. What are you assuming to be a given because that is your context that may actually not be true?

For us this came up in a recent study looking at improving the medical care experience for a new healthcare company, SUSU, launching in France & West Africa. The service focuses on delivering better care for patients by improving their medical experience and structuring their treatments more effectively.

One of the common themes was that doctors visits were generally avoided as they were difficult, making treatment more complicated when they did finally occur. On mapping the experience in-country we could see how much friction around payments and general appointment management existed for patients.

Our biased assumption was that western style appointments would work and that arriving at a clinic and waiting for a whole day at the doctor was unnecessary (which is what the current experience is). However, when we dug under the surface we found that many patients found the idea of scheduling an appointment complex and undesirable. In an environment where getting across the city can be complicated (irregular public transport, no consistent street addresses, bad traffic etc) making an appointment that you (or the people before you) may miss is frustrating, as you will just end up waiting anyway. Not making an appointment and arriving to wait your turn seems easier and less stressful.

Just like low-fat diets, we assume the scheduled event is better because that is what we know and have been told. Appointments assume that everyone in the system keeps to them or they fail quickly. Solving the problem becomes choosing between a systemic design challenge (change everyone’s behavior), a transactional design challenge (change behavior just for our clients) or a situational design challenge(change the situation for our clients). Our guiding principle at SUSU is care — which means our solutions were to make the process as comfortable and efficient for the customers as possible.

While we have opted for a situational solution as the best initial approach, the key component is putting in place the benchmarks that test not only the positive feedback i.e. was this a “better” experience, but the actual outcome of the system by looking at the number of doctors visits and attendance. Real metrics that point to success or failure of a solution vs assumptions (number of appointments made).

Uncomfortable in Uncertainty

By | Uncategorized

There is a useful model that breaks knowledge into:

  • what we know
  • what we know we dont know and
  • what we don’t know we don’t know.

It’s a great reminder of uncertainty and our lack of awareness of all the issues in the problem we are trying to solve, especially in bigger systems. Why is this important? because the most critical part of solving a problem is asking the right question, and to ask “the” right question you need to ask lots  and lots of questions. By answering lots of questions you expand the “what you know you know” and the “what you know you dont know”.

Answers mirror the questions they rise, or fall, to meet

Our business cultures are focused on quick results, quick answers, but sometimes slow is better if it creates a 10x better outcome. By slow I don’t mean “thinking” or “brainstorming” or analyses paralysis , but a systemic process using multiple mental models and research tools that expose different facets of a problem… That make you ask better quality questions.

There are too few workshops discussing what the right question is, and too many workshops glibly power-pointing the same answer that you gave a client last week.

By Nevo Hadas – Nevo is the founding partner of DYDX and has led the development of “The Culture Canvas”—an open-source framework that makes work culture actionable for businesses to shape their team’s behaviours—as well as the latest ebook “ – Remote Team Management”, which is available for free download, and the 10-minute “Remote Team Maturity” assessment tool designed to help companies measure the effectiveness of their remote teams. 

First to Market Myth

By | Uncategorized

We’ve been unseasonably busy with two new fintech projects and two new media projects for very different markets happening at the same time.

The fintech projects could be disruptive, while the media projects would be exponential opportunities for our client. Neither are first to market, which is a big plus … because very few first to market (and I struggle to think of any) really end up the winners in a disruptive industry or are necessary in an exponential one (actually second or third is best).

There is an interesting distinction in the type of business model you adopt between “disruptive” (which for the sake of cynicism we will re-phrase as demand-side expansion at price points that traditional sector competitors cannot sustainably meet) and exponential (new customers and new revenue opportunities from existing customers) products.

The big difference is the business model… no, not the customer experience (I can already feel the heat from the burning torches, shouts of the mob and threatening glints of the pitchforks waving in the air)  … the underlying way you generate value must be priced differently to unlock a market that previously could either not access these services due to distribution OR increase demand by making it cheaper.

Here are some examples: 

Google – Google was not the first search engine, it was probably the 50th. All it did was do less, faster and appear to do it better (initially, this could have been debated). The cost per click model (which they “borrowed” from another competitor) was what made them so disruptive. Instead of paying for ads served, you paid for clicks delivered and it was an auction (genius). The self service component meant you could place the ads yourself and many small businesses that struggled to afford advertising before, plus large businesses that understood the benefits of paying for clicks vs impressions were on board. Print ads suddenly looked ridiculously expensive and unfairly priced.

Uber – nope, not the first call-a-car service. Initially it was aimed at high-end hotels and car services and “borrowed” the low cost model from Lyft…but they made it really easy to become a driver and opened up the market for “non-licensed” cabs to be added to the service at a lower cost of operation for the cab, which meant a lower price per mile, which meant more customers would use the service. Yes, it’s a great experience… but a great experience at double the cost doesn’t mean disruption and massive consumer adoption.

A great experience with a real price benefit to consumers that existing companies struggle to meet due to their cost base – that’s all kinds of sexy. It means you get existing customers and attract new ones. This leads to a “disruption” as the entire value chain gets up-ended with both new suppliers and customers at a new price point.

By Nevo Hadas – Nevo is the Founding Partner of &Innovation, now DYDX

Pricing, NOT pretty design, drives digital disruption

By | Uncategorized

Price*, is the key part of a great experience and fundamental to Customer Experience (though hardly ever part of the design phase). It also indicates a fundamental shift in the underlying business model, especially when the price point shifts significantly for the good/service due to a digital channel being adopted.

At its core, digital disruption is caused by the resetting of price due to a change in distribution models as the customer’s point of purchase evolves.

In economics talk:

Price changes are led by an increase in supply (which has been pent up with no access to market) due to a rapid increase in distribution options without a rent seeking gatekeeper (oligopoly/monopoly), restricting access to the market. The supply side increase pushes down the price to the demand side, creating a groundswell of support for the new distribution channel and increasing demand beyond the new supply levels. Demand, once increased, in turn promotes additional supply often at a lower cost. After a few years the new distribution model benefits from a network effect and gains traction. It attracts significant external capital at a low cost to build a momentum moat. The rest, as they say, is a post-modern rags-to-riches overnight success story of ivy league drop-outs.

Shorter distribution lines = lower price to customer at same margin

From an Economics 101 perspective, it’s a little bit backward, as high prices should attract more suppliers and low prices reduce suppliers into a market. Digital disruption fundamentally changes this assumption due to the lower cost base enjoyed by new entrants, due to newer technologies and reduced distribution channels which reduces the price to the customer. The new supplier’s marginal profit and Return On Equity (ROE) is equivalent or higher than the incumbents, at a lower price point.

Before you leave a comment in BOLD saying that better CX through customer centricity and systems thinking is the reason for this – I agree with you. The disruptors come into the market focusing on the customer and building a ground up experience based on today’s points of purchase and new pricing ,while the incumbents are stuck supporting the old distribution.

When your channel is more important than your customer…

I know this sounds either bizarre or obvious, but many incumbents spend more management time on their channel to market than their products. The channel is where the margin sits and where power comes from – it’s their competitive advantage. This distribution focused myopia leads to good decisions (i.e. focus on the ‘fat middle” of your customer base) killing you over time, because the market you see is the market you have created. You cannot see the size of the outside edges of your customer distribution curve.

False quality signals

Incumbents often limit access to their channels using a “quality” argument. This quality is either legislated, supplier power driven or decided by management. The decisions are focused on the “core customer”, which are often the later adopters or the market segment most serviced by the current offering. It is hard to innovate when you cannot see the problem and have investors screaming for margin improvement.

Walmart, with its “fast, faster, fastest” delivery option is a clear case in this. A complicated offering driven by their internal distribution model limitations rather than trying to build a product for the customer.

Why do incumbents die while their industries boom when they are filled with smart, capable executives?

Some basic examples:

  • Music – there is more music being made today then ever before, and more consumed, and more musicians – but music labels died because they were invested in physical production of music
  • Movie rental?  Blockbuster vs Netflix (selection and long tail vs latest releases focus, physical location & complex late fee structures)
  • Bookstores – remember those? Though Kindle is the real disruptor versus just buying books online (that impact is still coming)
  • Investment Management – financial services industry made up of middlemen is beginning to get a fright. Nutmeg, Motif and a number of other low cost investment managers are gaining traction.
  • Travel was disrupted ages ago (who really uses a travel agent?) but its continuing with accommodation (Airbnb) and transport (Uber/Driverless) as this segment continues to change.

These are industries that are booming, but the traditional middlemen/aggregators are dying, died or starting to have some significant health concerns.

The maths is on the side of the disruptors

A successful digital disruption occurs when there is sufficient momentum in these new distribution models that less than 2% of industry spend moves into these new channels (Google, Amazon, Netflix, Uber, Transferwise, AirBnB all became market disruptors at a fraction of market share, getting free PR that further fuelled their growth). While the percentage may seem small, it is enough to create a significant competitive force in any sizeable market. Disruptors attract far cheaper capital than incumbents, giving them an incentive to grow and no fear of destroying established value.

What is also interesting is that this 2% may not have been traditionally served market by the industry i.e. unmet demand or customers with unique (but trending) usage patterns. AirBnB is a great example of this, as was Amazon, Netflix, Spotify etc..

Does my middle look fat in these jeans?

This is where the focus on the fat middle can really impact incumbents, as they are focusing on a limited audience view led by the products they sell, the channel that they have etc. versus a larger market opportunity – which they literally cannot see from where they are.

Who is prone to digital disruption?

Large industries with convoluted value chains based on distribution, versus the quality of the end product are most at risk. At its core, the internet has changed a couple of fundamental elements:

  1. the product/service is now delivered digitally – this means that different things are good/bad in its design versus previous models of product/service delivery.
  2. high margin value chains:- where there is a lot more money in the value chain versus in the creation of the product/service, keep an eye out for disruption
  3. legislative barriers to entry i.e. restrict competition to manage “quality” – i could write a novella on the myth of legislated quality, but I won’t. These industries have often become legislated to keep competitors out rather than make customers happy.

What do you do as an incumbent?

Transformation is often undertaken as an inward gazing exercise, which is not a terrible approach, especially if you can impact your price point and distribution chain… but a more challenging approach is to find the edges of your customer base and start building products that will meet their need. It’s a very hard ROI discussion to have, and I have personally killed a number of these projects when i was on the side of the incumbent figuring out transformation strategies – so i think the complexity of doing this is under-rated.  Even if you kill the projects at the end, looking at new customers is highly valuable as it gives you ideas into what is coming, versus focusing only on what you have.

Enough rambling from me. Always curious as to what other people think, so please share your thoughts…

*Price does not mean cheap, price speaks to the magic mix between perception and quality that creates “value” in a consumers mind.

By Nevo Hadas – Nevo is the Founding Partner of &Innovation, now DYDX

Rethinking Loyalty & Rewards – elitism vs democratization

By | Uncategorized

Rewards are easy to promise but hard to deliver because of the emotional resonance of wanting to feel rewarded. While retailers see it as a discount, from a consumer perspective, whatever you got isn’t really enough. Loyalty is even more emotionally complicated. In a recent US survey, 73% of consumers thought that loyalty programs meant that the brand is loyal to them, while 66% of brands thought it meant the customer was loyal to them.

Digital transformation hasn’t changed most loyalty programs much. New behavioral metrics from IoT and increased digitization have been used to apply the same logic but in a more complicated way because it is easier to collect and manage. i.e. more points, more levels, and more frustration.

“You cant get there from here” – Saying from Maine, USA

The shining light in rethinking loyalty is Amazon prime which has chosen simplification over gamification to deliver over 100 million subscribers paying $99 each per year. Prime members spend close to 3 times what non-prime members do and are growing at a rate between 35% to 40% per annum as estimated by Citi. Prime users do not experience emotional satisfaction.

The Amazon insight:- Shipping costs frustrate customers and reduce transactions. If customers pre-pay for a shipping service, their loss aversion to losing the value of their investment will reduce their interest in shopping around and increase their overall spend.

The ease of execution and ability of customers to join makes complex points and levels look like a 1990s solution to a 2020 problem. The program is inherently egalitarian i.e. to be a prime member you just have to pay.

“what i love about coca-cola is that even the president cannot buy a better coke than” – Andy Warhol

Gamification of loyalty programs through points and levels is rapidly losing its allure. This doesn’t mean that customers are any less loyal or more prone to shopping around but rather that the idea of being awarded points for being a “good” customer is getting harder to justify. Loyalty programs have changing rules, cut off times, points expire etc etc etc. They are expensive to maintain needing not only to manage a mountain of potential liability sitting on balance sheets but also a lot of administration to maintain accurate balances, partnership, provide client care and of course, handle complaints.

If airlines adopted Amazon’s model — they would arguably improve their margins and the effectiveness of their programs. Frequent travelers would pay a cash amount in advance for a year’s worth of benefits, discounts, lounge access etc. Even regular business travelers, who current schemes are targeted at, or companies would purchase perks for in return for lower cost flights or just to look after key executives.

Irregular travelers, who are not budget constrained, would continue to buy business class seats which come bundled with all the perks or add on their preferred perks to their low-cost flight (e.g. choosing seats at a premium, business lounge access, arrivals lounge access etc). While most people claim that “free flights” are the reason they want airmiles — very few who have tried to claim their miles have actually had an experience that grows their loyalty versus disappointed them. Rewards are easy to promise but hard to deliver because of the emotional expectation that comes with wanting to feel rewarded.

The lessons from Amazon are:

  1. Changing our perspective by providing preferential experiences at a price versus as an earned status.
  2. Not seeing digital channels as a way to streamline historic complexity (i.e. make collecting points and managing loyalty systems easier) but rather as a way of democratizing valuable experiences and creating new value points
  3. Understanding the low points or friction within your process and turning that into a new product opportunity

By Nevo Hadas – Nevo is the Founding Partner of &Innovation, now DYDX

Are you thinking about pricing incorrectly?

By | Uncategorized

Renowned investor Warren Buffett has said, “The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10%, then you’ve got a terrible business.” 

This sage advice from a man far smarter than 99% of us – may turn out not to be completely right.

Old School Pricing Theory

Pricing theory tried its best to explain large market behavior. Demand elasticity was touted as the answer to price setting, and, in a pre-computer world when it was developed, held some truth. Digital transformation has obliterated this theory and many pricing models build with it as a logical foundation. This means that the idea of a single price is no longer as relevant as it was.

With the advent of online price comparison you would think that the lowest, simplest price would win, in fact – in many instances, prices are more obfuscated by digital transformation than simplified and pricing simplicity does not increase the chance of conversion.

Dynamic pricing is the the next problem, not the next solution

Digital channels allow businesses to price dynamically based on a variety of factors. Value is not just based on utility, brand or comparative cost benefits of a product – it is a range of factors, many of which are external to the product, which can now be dynamically applied to personalize price. This both increases yield and expands the addressable customer segments.

The challenge is not the technology or understanding the concept of personalisation, but developing robust pricing models and the depth of thinking that enables new pricing variables to be created.

Don’t think in a line

When you stop thinking of price as the economic demand/supply curve but rather as a matrix, your entire approach to product design and pricing strategy changes. You are no longer looking for an elasticity curve to best fit your product but rather looking for a pricing strategy that maximizes revenue (and hopefully profitability) over a given time period. A pricing matrix allows you to look at price points in clusters which, inevitably, increases your price/revenue opportunities.

While revenue management is not a new concept (hotels and airlines have been doing it for years), it is often overlooked in many other industries and the role of methodically testing different pricing assumptions is ignored in favor of meeting a customer need. The best example of demand driven revenue management at the moment is by google, who mix demand based auctions and quality scores to ensure they not only push up price via bids, but also maximize revenue by rewarding ads that are clicked on more.

Product managers, in a desperation to have their product adopted, often prefer to have simpler, lower prices. This doesn’t make these pricing models correct – it makes them common and easy to execute.

How to Think About Price

As a childish rebellion against the need to create fancy, complex charts – the sandwich chart is a nice simple view of different layers of pricing. While not as comprehensive as a full matrix.. it highlights some of the key aspects that need to be put into consideration

Some examples of what these items mean:

Affordability vs Price

Affordability of a product is more important than price in many instances.

When South African mobile operator MTN- one of the largest operators globally, initially launching and expecting around 250 000 post-paid monthly subscribers as its total market.

Then they had a revolutionary ides – to do away with the monthly pricing model. To let consumers (generally lower income) pre-pay for usage as they need it. Not only could they charge much more per minute/per MB etc as a pre-paid customer, but the operator isn’t required you to give you credit (i.e. take risk) and gets upfront cashflow. It was a genius pricing insight, a customer segment will pay a premium to be given smaller increments. It also added around 200 million subscribers to their business and unlocked developing markets for all operators as it gained adoption.

The next idea was expiring the airtime i.e. if you don’t use it, you lose it . This created a new pricing variable – 1 day pricing vs 30 day pricing. The genius of this model is it creates comparative decision points based on when you will use your minute and obfuscate the value of the actual minute i.e. the cost per call. It creates multiple points of value for the same minute (which in itself is a pricing point and in no way linked to how mobile technology cost structures really work).

Inducing Purchase

A recent study by Ali-Baba showed a 114% increase in conversion once special offers were provided after an abandoned cart. When we look at pricing purely as a retail price point versus a sequence of pricing including discounting as part of our strategy, we miss a key component of the matrix. How do we overcome fear or plug into greed in such a way that the consumer is convinced the price is too good to miss right now.

In the MIT paper “ markdowns versus everyday low prices”, the authors show the impact of behavioral economics on price perception, specifically fear and that consumer behavior is orientated towards” buying a deal” versus everyday low prices. In other words, emotional inducements are a powerful contributor in the pricing strategy – making pricing intrinsically illogical from a consumer perspective. Humans, prefer to “hunt” a deal than always pay a lower price.

Maximizing Value

You can test value/price before launching a product .Often, we see prices test well that don’t make sense. A specific pricing peak where we find higher conversion rates, these prices are usually not the cheapest nor are they based on specific rationality/logic other than a consumers value judgement on the right price for a product (i.e. too cheap/too expensive). Sometimes, the same product has two pricing peaks i.e. there is distinct interest for the same product in two different price segments and you need to choose how you will differentiate for the different pricing opportunities.

In a number of research studies we have seen that consumers have a weak link between what something costs them and what the price is -i.e. consumers latch on to a single number as “the price” but don’t understand the total cost of the transaction. This is prevalent in a number of industries like forex/low cost airlines/insurance/banking/investments/car rental/telecoms .

The industries that maximize value well are often finding ways of linking the value of your product to an external element that pushes up the value of your offer when it is used e.g. % of revenue (credit cards) or exchange rates (forex).

By Nevo Hadas – Nevo is the Founding Partner of &Innovation, now DYDX

How do you keep top talent if your company doesn’t want to “change the world”?

By | HR, Talent

There are thousands of articles about how you attract the best people by having a company mission that will change the world, which galvanizes and acts as a true north. But what happens if you don’t?

It seems common wisdom that smart dedicated employees want to feel they are making a contribution to something bigger than themselves.

Sometimes, companies end up with Franken-cultures that use “changing the world” as a way to convince people to “work harder for less so we can make more money and change the world… maybe” but counteracts it with a “we care about your personal wellbeing and have a masseuse in-house for when you are feeling burned out, but there is a long waiting list as many people feel burned out (including the masseuse)”.

“Change the world” is, like many other constructs around work and remuneration, an ego trip. Who wouldn’t rather say at parties, we are enabling small businesses in developing markets to grow vs we run a loan sharking operation providing money sourced from low-interest rate countries intended for social upliftment at onerous interest rates to the impoverished while we have masseuses in our offices. It is the new golden handcuff designed to keep employees engaged in the work they do because it has “Purpose”. I am not against changing the world (for the better), but perhaps I am cynical.

From personal experience, I was far more ruthless and focused on returns working for a large corporation controlled by a charity (effectively our dividends funded schools in Africa) than I would be for myself. Every dollar earned went to a good cause and the means justified the ends. There was never a sense of enough profit because the need to do good was so great. While I am just one example, I know many similar organizations that work people to death for a “good cause” or extract unfair fees because they have ended up with a government licensed monopoly or grant due to their “for good” ethos.

“Good things, that solve hard problems, when done at scale, often create the next set of hard problems.”

This belief, however, is counterpointed by the rapid growth in small, lifestyle-focused, businesses that pursue more free time and a better quality of life for owners and employees.

So how do you engage great employees that aren’t working at companies that are changing the world? One option is giving them other forms of self-actualization that helps them to change themselves.

While I know there are many formulas and answers, what we have experimented with is increasing individual freedom by taking core assumptions people have around “loyalty” i.e. a mission, and turning them on their head.

We don’t expect or want lifelong loyalty and don’t want to gamify the work experience around that. To quote the famous saying “our best assets walk out the door every day”, which is funny because they aren’t OUR ASSETS. They are their own assets (some of these assets even have names and little asset families, with asset pets).

We want the focus of everyone to be on the quality of what we deliver to clients, which means taking some strange decisions:

  1. Permission/freedom to switch off — this is work, you do it for the rewards it gives you — like money, new experiences, positive reinforcement. We prefer people who work partial weeks and would rather add more team members than have people work themselves to death — the quality of work suffers and it’s not worth the extra margin to do crap work in the long-term.
  2. Have a side hustle — really, we don’t mind. consider it your 20% time. A lot of our people are entrepreneurial in the true sense and work with us while they are working on a small business part-time. It’s one of the things that makes them good at what they do — curiosity and drive. I hope they all make it big and what they learned/experienced with us helped them get there. It definitely makes their work better.
  3. No career progression — we don’t have titles, we do have responsibilities (to others) that the roles entail. There are no perks, no special meetings etc. roles change per project so you can be a leader in one and a contributor in another. This keeps the politics to zero and really flattens the organization.

P.S. These are some of the things that have worked for us and we find that resonates with (most) people that work with us. Everyplace is different. We aren’t here to change the world, but (hopefully) to empower people to change their worlds and change our client’s businesses

By Nevo Hadas – Nevo is the Founding Partner of &Innovation, now DYDX. Nevo led the development of “The Culture Canvas”, an open-source framework that makes work culture actionable for businesses to shape their team’s behaviours. The latest ebook on managing remote teams, “” is available as a free download and a 10-minute “Remote Team Maturity” assessment, designed to help companies measure the effectiveness of their remote teams.