COVID-19: The global pandemic that lost hundreds of thousands of lives will forever change the way we live and interact. These changes run deep and permeate throughout personal and professional interactions. The fundamental way we approach business has been altered, too, and our expectations on performance should reflect a new model.
According to the PEW Research Center, only 23% of Americans worked from home prior to COVID-19, with that number jumping to 71% during the pandemic. As we emerge on the other side, 61% of the US workforce is choosing to keep working from home, citing an improved work-life balance as a key driver.
For this reason, it’s clear the ‘traditional’ working model needs an adjustment. The current formula of input employment no longer works and companies must adapt to retain current talent, attract new employees and remain a viable business.
Before diving deeper into why businesses need to change, let’s first understand what the input model is.
What is the input model?
Currently, much of corporate America works on an input model i.e. when an employee’s value is measured in time. Think work broken across hours utilized. Some models even detail how many hours employees are permitted to spend on a project. This way of working is familiar, it’s comfortable. This is the way businesses have worked for decades.
The pandemic forced us to learn a new way of working and managing time. We adapted to function in a fully-remote, at-home environment, completing tasks, hitting hours and tending to families in tandem. One might think this is a testament to the resiliency and dedication of a company’s employees… or, did we stumble on a better way of working?
Enter a new way of working: The output model.
The output model focuses on measuring work based on positive results, rather than the hours put in. An employee’s time is no longer the commodity. It’s their efficiency, effectiveness and quality that identifies strong employees and offers the most benefit to employers.
The output model has been the model of consultants for years, but never absorbed into the W2 Full-Time Employee timesheets cycle. With the newfound comfort to work from home (WFH) COVID-19 afforded, the anticipation (if not expectation from employees) is W2 companies will adjust and adopt this new model imminently.
Since the WFH model became feasible, businesses have had to adapt to new ways of engaging with their staff, clients and partners. And with this “new norm” and the idea of remote working becoming more mainstream, the output model must be fully adopted into the business workspace.
Operating on a 100% output model offers benefits to employees as well as to companies. However, trust, work ethic and independence must be established. It would not be surprising if, in the near future, companies first built a hybrid model of half week WFH or new employees are required to work from the office for their initial six months. This would give new employees the time to learn, educate and understand what is fully expected of them and for employers to build the trust needed for an output model.
The output model also provides more flexibility for a work-life balance, which has been the missing piece to the puzzle, the holy grail for employees.
The great balancing act
The world is a balancing act, and with COVID-19 the world had to learn how to rebalance itself. The output model’s new way of working is just one of the changes we can expect to see.
In the end, it’s about the quality of output, not necessarily how much time is spent doing it.
COVID-19: The global pandemic that lost hundreds of thousands of lives will forever change the way we live and interact. These changes run deep and permeate throughout personal and professional interactions. The fundamental way we approach business has been altered, too, and our expectations on performance should reflect a new model.
According to the PEW Research Center, only 23% of Americans worked from home prior to COVID-19, with that number jumping to 71% during the pandemic. As we emerge on the other side, 61% of the US workforce is choosing to keep working from home, citing an improved work-life balance as a key driver.
For this reason, it’s clear the ‘traditional’ working model needs an adjustment. The current formula of input employment no longer works and companies must adapt to retain current talent, attract new employees and remain a viable business.
Before diving deeper into why businesses need to change, let’s first understand what the input model is.
What is the input model?
Currently, much of corporate America works on an input model i.e. when an employee’s value is measured in time. Think work broken across hours utilized. Some models even detail how many hours employees are permitted to spend on a project. This way of working is familiar, it’s comfortable. This is the way businesses have worked for decades.
The pandemic forced us to learn a new way of working and managing time. We adapted to function in a fully-remote, at-home environment, completing tasks, hitting hours and tending to families in tandem. One might think this is a testament to the resiliency and dedication of a company’s employees… or, did we stumble on a better way of working?
Enter a new way of working: The output model.
The output model focuses on measuring work based on positive results, rather than the hours put in. An employee’s time is no longer the commodity. It’s their efficiency, effectiveness and quality that identifies strong employees and offers the most benefit to employers.
The output model has been the model of consultants for years, but never absorbed into the W2 Full-Time Employee timesheets cycle. With the newfound comfort to work from home (WFH) COVID-19 afforded, the anticipation (if not expectation from employees) is W2 companies will adjust and adopt this new model imminently.
Since the WFH model became feasible, businesses have had to adapt to new ways of engaging with their staff, clients and partners. And with this “new norm” and the idea of remote working becoming more mainstream, the output model must be fully adopted into the business workspace.
Operating on a 100% output model offers benefits to employees as well as to companies. However, trust, work ethic and independence must be established. It would not be surprising if, in the near future, companies first built a hybrid model of half week WFH or new employees are required to work from the office for their initial six months. This would give new employees the time to learn, educate and understand what is fully expected of them and for employers to build the trust needed for an output model.
The output model also provides more flexibility for a work-life balance, which has been the missing piece to the puzzle, the holy grail for employees.
The great balancing act
The world is a balancing act, and with COVID-19 the world had to learn how to rebalance itself. The output model’s new way of working is just one of the changes we can expect to see.
In the end, it’s about the quality of output, not necessarily how much time is spent doing it.
1. Smart Modular and Connected Pallets for Logistics and Transportation
Matthew Reali | CEO, Ponera Group
Think of Ponera as the “LEGO” of pallets. A smart, modular, and digitally-enabled solution can be assembled to reach any size. Thermoplastics allow for extended life and reusability — more than 10 years and 100 usages. Embedded sensors in the modules allow for unprecedented traceability and transparency in the value chain, resulting in a 90% reduction of transport-related CO2 emissions. “Approximately 92% of the world’s natural resource consumption is not circular,” says Reali. “The industrial packaging industry still works with inefficient and non-sustainable one-time use consumables. Thirty percent of global industrial wood consumption is used for industrial packaging. Our smart modular and digitally-enabled industrial packaging solution enables circular logistics, reduces industrial packaging costs by up to 90%, and reduces wood consumption by 95% and CO2 emissions by 80%. In addition, we provide the foundations for more digitized and transparent logistics networks.”
2. An Affordable and High-performance Energy Efficiency Window Retrofit Solution
Rachel Rosen & Ron Wexler | president, CEO and cofounder, WexEnergy
WexEnergy’s PolarSkin™ and SolarSkin™ window retrofit panels attach to the inside window glazing of existing windows to optimize the volume of air trapped in between the existing window and the insulation retrofit. Like the gap between panes in a double-pane window (or the pockets of air in a down comforter), this layer of enclosed air — and its thickness in particular — creates an insular barrier and improves efficiency of the window, reducing energy loss by 48% on single-pane windows and 27% on double-pane windows. “Focusing on a solution to poor window insulation allows us to engage with others across socioeconomic strata in battling climate change,” says Rosen. “We can demonstrate that it’s possible to positively impact climate change while improving comfort and quality of life. Creating a solution to poor window insulation is good business sense as it addresses a highly relatable problem with an affordable solution that is easy to understand and implement.”
3. Sustainable Paper and Packaging from Waste
Florence Miremadi-Nafici | CEO, Nafici EcoPulping
Millions of tons of wheat straw and other agricultural wastes are burnt or left to rot, causing millions of tons of carbon emissions globally every year. EcoPulping is an innovative low-carbon process that transforms agricultural wastes (e.g., cereal straw, reed, maize stover, and more) into unbleached paper pulp to produce paper, packaging, or molded products. The pulp produced is an alternative to pulp made from trees. “Millions of tons of agricultural residues are burnt, causing massive carbon emissions globally every year,” says Miremadi-Nafici. “Wheat straw, as an example, is a great source of fibers and a fantastic alternative to felling trees for paper and packaging products.”
4. A Vertical Farm Using Automated and Remote Management Software for Better Crop Growth
Alexander Olesen | CEO, Babylon
Vertical farming is a technology that has been out of reach for many until now. The Cloud Farm is the world’s largest fully distributed vertical farm. It offers remote management of on-site vertical farms and eliminates barriers to entry for businesses looking to grow their own food. The farms provide the most sustainable and nutrient-dense produce on the market. Fifteen square feet produces the equivalent yield annually of 2,000 square feet of conventional farmland, uses 90% less water than conventional farming, and has zero pesticides. “Our goal is to remove the barriers that previously prevented access to vertical hydroponic farming at the community level and, in doing so, enable people to grow fresh, sustainable food,” says Olesen. “This method increases access to nutritious food while drastically reducing the environmental footprint of crop cultivation.”
5. Artificial Intelligence to Reduce Water Losses in Water Distribution Networks
Ainhoa Lete | executive president, BuntPlanet
Water scarcity is one of the most critical global challenges we currently face, and BuntBrain software reduces leaks and commercial losses by up to 50%. The product aims to address this global business problem with a scalable and affordable solution for water utilities that can reduce and prevent water loss in water distribution networks. “Climate change expert James P. Bruce observed: ‘If climate change is a shark, water is its teeth,'” says Lete. With the number and frequency of drought and flood events increasing, we have adopted Smart Water Management to help fight climate change. BuntBrain helps water utility companies detect and pre-locate early leaks, saving water, energy, and time.”
6. A Green Casting Process That Creates Thin Yet Strong Sheets of Iron
Sarah Jordan | CEO, Skuld
Ductile iron has the optimum combination of strength, density, and cost compared to alternative materials. However, its use has been limited because casting defects occurred in thin sections under 6mm. Using the environmentally friendly lost foam casting process, innovations in foam blowing technology, and a metallurgical alloying process that prevents casting defects, Skuld’s ductile iron can be cast as thin as 1mm. The method uses 27% less energy, 7% less raw materials, can save 70% on cost versus iron or steel parts, and 66% versus aluminum. “The lost foam casting technique is the greenest metal-making process there is,” says Jordan. “With our Thin-Walled Ductile Iron solution, we are in discussions with a major automotive OEM to implement this solution. Their interest is three-fold: environmental impact, new lightweight designs, and cost reductions.”
7. Photovoltaic Trackers That Follow the Sun
Louis Maurice | president, Groupe OKWind
Smart photovoltaic trackers allow professionals and individuals to self-consume their renewable energy production at a more competitive rate than the electricity grid and therefore escape the constant rise in the cost of energy. Like a sunflower, smart photovoltaic trackers follow the sun’s course and produce 70% more power than a fixed photovoltaic installation. In addition, their mobile shadow protects crops and grassland biodiversity from sun irradiation and allows farmers to improve crop yields while producing renewable energy. “Energy is at the heart of the transition to a green economy,” says Maurice. “Our self-consumption solutions, combining green energy generation and energy management, give everyone the chance to take their energy destiny into their own hands and contribute to creating a better future. Moreover, self-consumption also offers fixed-price energy during exploitation, freeing our customers from price fluctuation.”
These 7 innovations are all part of the 1400+ clean and profitable solutions identified by the Solar Impulse Foundation, demonstrating the financial profitability of clean technologies. SolarImpulse.com
America’s workforce is on the brink of crisis, and if our country’s leaders — both newcomers and incumbents — don’t prioritize workforce development now, the working class will crumble.
Companies large and small have increasingly turned to automated technologies in the quest to do more with less, leaving more Americans jobless. This trend has been so persistent that, last year, the Brookings Institution predicted a quarter of Americans could soon lose their jobs to automation.
The Pandemic Hit the Working Class Even Harder
Today, quite unexpectedly, many of the roughly 53 million Americans already trapped in a cycle of low-wage work now face unemployment. This is the same segment of the workforce most vulnerable to the threat of automation — and that threat now looms even larger.
The nearly universal pivot to remote work has fueled private-sector digitization efforts and will accelerate innovation advancing automated technologies. While this could ultimately lead to a more efficient, resilient national economy, it makes the future of the American worker uncertain.
Transforming Into a Tech-Driven Society
The pandemic will subside, but many of the jobs that disappeared upon its arrival won’t come back. The newly elected Biden administration must grapple with that reality now and implement policies that empower the working class to thrive in the digital economy of the future. It’s time for leaders to focus on tangible, scalable strategies for moving workers out of low-wage hourly employment and into digital roles that will soon define the workforce. The most critical component of any such strategy? Accessible, accelerated digital training.
Tech careers aren’t launched overnight. In order to be productive in important digital roles, millions of Americans will need to develop new skills and expertise. For that to happen, the country must shift away from the traditional learning pathways that have resulted in ballooning college tuition costs and a national student debt crisis and toward more affordable training pathways.
Before we can make this shift, we must think seriously about the implications of our transformation into a tech-driven society. Some already have: The demand for technical knowledge has fueled the rise of countless online education platforms, massive open online courses and other alternative learning outlets.
New Digital Pathways for the Working Class
Younger, tech-savvy Americans are especially keen to ditch traditional classrooms in favor of more practical learning experiences. According to an Insider and Morning Consult survey, 44% of Millennials with a college degree don’t believe obtaining that degree was worth taking on loans.
So what does a viable alternative to college look like? In order to support and encourage participation in alternative training programs that match the needs of modern workers and the future workforce, the Biden administration must establish incentives — especially for training providers.
Most job training programs get federal workforce funding in a similar way. First, an organization gets on an eligible training provider list managed by a local workforce board. When a trainee enrolls, the program gets half of the agreed-upon cost of training and then receives the rest of the money around the halfway point. In exchange for the funds, providers have to issue regular reports detailing participant graduation rates and success. Generally speaking, programs that don’t maintain an 80% graduation rate can be kicked off the list.
Although these rational requirements intend to ensure funding doesn’t go to programs producing undesirable outcomes, they do come with a couple of damaging consequences:
• The requirements unintentionally discourage providers from attempting to offer more difficult courses — the kinds of courses that could actually prepare unskilled workers for high-skill, high-demand jobs.
• They also push training providers to adopt smaller class sizes with more individualized learning at higher costs. If providers are incentivized to ensure nine out of 10 participants graduate, they might focus on teaching relatively basic career skills or on developing programs that spend intensively on each enrollee.
How to Better Arm Workers With the Skills of the Future
If we want to equip many workers with sophisticated digital expertise, the Biden administration must change how it allocates public funding. Instead of requiring providers to create elaborate reporting systems to receive federal funds on the front end, workforce agencies should allow programs preparing participants for high-difficulty, high-demand careers to collect payment on the back end — but only when a graduate gets a job.
This arrangement incentivizes providers to place as many people as possible into new roles at the lowest possible cost while taking the public system off the hook for the cost of unsuccessful participants.
Of course, there’s more than one way to approach worker training, but there might never be a better time. When again will the federal government distribute billions to state and local governments to invest in human capital?
Workforce development has never been considered a sexy talking point — in fact, it was conspicuously absent from media lists of key campaign issues leading up to the 2020 presidential election.The election results are in, but the leaderswho focus on and provide viable workforce policies still have the unique opportunity to gain new supporters from a multitude of unemployed and underemployed Americans.
America’s workforce is on the brink of crisis, and if our country’s leaders — both newcomers and incumbents — don’t prioritize workforce development now, the working class will crumble.
Companies large and small have increasingly turned to automated technologies in the quest to do more with less, leaving more Americans jobless. This trend has been so persistent that, last year, the Brookings Institution predicted a quarter of Americans could soon lose their jobs to automation.
The Pandemic Hit the Working Class Even Harder
Today, quite unexpectedly, many of the roughly 53 million Americans already trapped in a cycle of low-wage work now face unemployment. This is the same segment of the workforce most vulnerable to the threat of automation — and that threat now looms even larger.
The nearly universal pivot to remote work has fueled private-sector digitization efforts and will accelerate innovation advancing automated technologies. While this could ultimately lead to a more efficient, resilient national economy, it makes the future of the American worker uncertain.
Transforming Into a Tech-Driven Society
The pandemic will subside, but many of the jobs that disappeared upon its arrival won’t come back. The newly elected Biden administration must grapple with that reality now and implement policies that empower the working class to thrive in the digital economy of the future. It’s time for leaders to focus on tangible, scalable strategies for moving workers out of low-wage hourly employment and into digital roles that will soon define the workforce. The most critical component of any such strategy? Accessible, accelerated digital training.
Tech careers aren’t launched overnight. In order to be productive in important digital roles, millions of Americans will need to develop new skills and expertise. For that to happen, the country must shift away from the traditional learning pathways that have resulted in ballooning college tuition costs and a national student debt crisis and toward more affordable training pathways.
Before we can make this shift, we must think seriously about the implications of our transformation into a tech-driven society. Some already have: The demand for technical knowledge has fueled the rise of countless online education platforms, massive open online courses and other alternative learning outlets.
New Digital Pathways for the Working Class
Younger, tech-savvy Americans are especially keen to ditch traditional classrooms in favor of more practical learning experiences. According to an Insider and Morning Consult survey, 44% of Millennials with a college degree don’t believe obtaining that degree was worth taking on loans.
So what does a viable alternative to college look like? In order to support and encourage participation in alternative training programs that match the needs of modern workers and the future workforce, the Biden administration must establish incentives — especially for training providers.
Most job training programs get federal workforce funding in a similar way. First, an organization gets on an eligible training provider list managed by a local workforce board. When a trainee enrolls, the program gets half of the agreed-upon cost of training and then receives the rest of the money around the halfway point. In exchange for the funds, providers have to issue regular reports detailing participant graduation rates and success. Generally speaking, programs that don’t maintain an 80% graduation rate can be kicked off the list.
Although these rational requirements intend to ensure funding doesn’t go to programs producing undesirable outcomes, they do come with a couple of damaging consequences:
• The requirements unintentionally discourage providers from attempting to offer more difficult courses — the kinds of courses that could actually prepare unskilled workers for high-skill, high-demand jobs.
• They also push training providers to adopt smaller class sizes with more individualized learning at higher costs. If providers are incentivized to ensure nine out of 10 participants graduate, they might focus on teaching relatively basic career skills or on developing programs that spend intensively on each enrollee.
How to Better Arm Workers With the Skills of the Future
If we want to equip many workers with sophisticated digital expertise, the Biden administration must change how it allocates public funding. Instead of requiring providers to create elaborate reporting systems to receive federal funds on the front end, workforce agencies should allow programs preparing participants for high-difficulty, high-demand careers to collect payment on the back end — but only when a graduate gets a job.
This arrangement incentivizes providers to place as many people as possible into new roles at the lowest possible cost while taking the public system off the hook for the cost of unsuccessful participants.
Of course, there’s more than one way to approach worker training, but there might never be a better time. When again will the federal government distribute billions to state and local governments to invest in human capital?
Workforce development has never been considered a sexy talking point — in fact, it was conspicuously absent from media lists of key campaign issues leading up to the 2020 presidential election.The election results are in, but the leaderswho focus on and provide viable workforce policies still have the unique opportunity to gain new supporters from a multitude of unemployed and underemployed Americans.
Imagine dealing with a business that offers products that always work, deliveries that arrive as promised, instructions that are clear and understandable, and self-service that’s easy to use. Their customers never have to contact them for the wrong reasons. They’ve created a frictionless customer experience.
Frictionless companies work hard to reduce customer service issues in every aspect of the business, so it’s no coincidence that they’re market leaders in their categories, such as Amazon in retail and online services, Apple in consumer electronics, Dyson in household appliance production, USAA in financial services, and Xero in SaaS accounting software.
These successful companies have long worked out that becoming frictionless has four undeniable benefits:
1. Being Frictionless Reduces Cost
For many years, the media has promoted the view that companies that want to cut costs will offer lower or inferior service by cutting staff or slashing hours. While it’s true that having fewer checkout staff or a lower contact center headcount saves money, doing so creates queues that quickly impact a business’s reputation.
In contrast, a frictionless strategy cuts costs in ways that are more sustainable by removing the need for customer contacts in the first place and reducing processing times.
For example, if order processes are streamlined and effective, customers will receive what they want accurately and on time; they won’t need to call or email the company about delays or errors, and the cost per transaction will fall.
When companies reduce friction, they save a huge amount of money because they’ve:
Streamlined processes so they take less time.
Reduced returns and refunds, thereby saving effort and costly make-good concessions.
Met customers’ expectations, cutting the need for queries and contacts.
Built more effective websites, apps, and other channels that reduce contacts, complaints, and queries about how these channels work.
Replaced assisted contacts with self-service channels that customers want to use.
Yes, there’s a cost to reducing friction. For example, an organization may have to build the functionality to allow customers to track their orders and be notified of major changes to a delivery schedule. However, that cost will be repaid many times over if it prevents customers from having to ask for help or express their frustration.
2. Being Frictionless Drives Customer and Revenue Growth
Studies have shown that customers who have good experiences buy more. It seems intuitive that customers who’ve had on-time delivery from a company, when and where they expected it, are far more likely to place another order with that company, while customers who had to chase their orders or received them late will probably shop elsewhere next time.
According to one study by the Temkin Group, “77% of customers would recommend and provide a referral to a company to a friend where they’ve had a great experience.” The growth of Amazon is a testament to this. It could not have been achieved if Amazon’s processes didn’t work so well.
Amazon’s ACSI scores remain some of the highest, and being frictionless has meant that customers have turned to Amazon for an increased range of products and services.
3. Being Frictionless Delivers a True Competitive Advantage
Companies that reduce costs through less friction create a sustainable advantage via low cost and high recurring revenue. In contrast, organizations that reduce service levels (such as speed of answer, speed of delivery, or length of checkout queues) put themselves in a difficult place, since customers will leave and revenues will likely fall.
The lower costs delivered by becoming frictionless also drive other advantages. Amazon, at one point, compared its CPO (contacts per order) with that of another major online retailer and found its own to be 75% lower. This meant that the cost of each transaction enabled the company to reinvest these savings in lower prices (to drive more revenue) and greater marketing benefits like free shipping. A strategy that delivers both revenue and cost savings is clearly a winning one.
Yet being frictionless isn’t just about cost. Frictionless businesses have created new ways to share value with customers.
One example is Netflix, which, like other digital media sites, offers a different experience from traditional TV. With Netflix, deciding what you watch and when to watch it is a low-friction and more controlled experience. The customer can select the viewing device and tailor the watching experience—no more cable and antenna constraints.
Netflix’s flexible experience enabled the company to invest heavily in original content, further deepening its must-watch reputation with millions of subscribers.
4. Being Frictionless Enables Business Survival
One of the impacts of digital disruption and the emergence of digital-only innovators is that low-friction business models are now essential. Older-style businesses are burdened with high-cost physical networks and clumsy processes, and they face possible extinction if they don’t reduce this friction.
Consider these examples:
Zoom has gobbled up market share from Cisco’s WebEx by being simple to use.
Many regional high-touch banks are now challenged by new “fintech” players.
Amazon has forced many conventional retailers, including BestBuy, Target, and Walmart, to add online channels (with various degrees of success).
In insurance, disruptive businesses are emerging that price risk more precisely to each customer’s need and offer low-cost channels and self-service.
In wealth management, digital or robotic advice models are emerging that undermine high-cost financial advice models.
The airline industry was disrupted by low-cost carriers with simplified business models and self-service facilities, forcing incumbents to adopt innovations like self-serve check-in and online booking.
The outlook is clear: being frictionless is key for a business to survive. Will your business embrace these changes and thrive, or be left behind?
Imagine dealing with a business that offers products that always work, deliveries that arrive as promised, instructions that are clear and understandable, and self-service that’s easy to use. Their customers never have to contact them for the wrong reasons. They’ve created a frictionless customer experience.
Frictionless companies work hard to reduce customer service issues in every aspect of the business, so it’s no coincidence that they’re market leaders in their categories, such as Amazon in retail and online services, Apple in consumer electronics, Dyson in household appliance production, USAA in financial services, and Xero in SaaS accounting software.
These successful companies have long worked out that becoming frictionless has four undeniable benefits:
1. Being Frictionless Reduces Cost
For many years, the media has promoted the view that companies that want to cut costs will offer lower or inferior service by cutting staff or slashing hours. While it’s true that having fewer checkout staff or a lower contact center headcount saves money, doing so creates queues that quickly impact a business’s reputation.
In contrast, a frictionless strategy cuts costs in ways that are more sustainable by removing the need for customer contacts in the first place and reducing processing times.
For example, if order processes are streamlined and effective, customers will receive what they want accurately and on time; they won’t need to call or email the company about delays or errors, and the cost per transaction will fall.
When companies reduce friction, they save a huge amount of money because they’ve:
Streamlined processes so they take less time.
Reduced returns and refunds, thereby saving effort and costly make-good concessions.
Met customers’ expectations, cutting the need for queries and contacts.
Built more effective websites, apps, and other channels that reduce contacts, complaints, and queries about how these channels work.
Replaced assisted contacts with self-service channels that customers want to use.
Yes, there’s a cost to reducing friction. For example, an organization may have to build the functionality to allow customers to track their orders and be notified of major changes to a delivery schedule. However, that cost will be repaid many times over if it prevents customers from having to ask for help or express their frustration.
2. Being Frictionless Drives Customer and Revenue Growth
Studies have shown that customers who have good experiences buy more. It seems intuitive that customers who’ve had on-time delivery from a company, when and where they expected it, are far more likely to place another order with that company, while customers who had to chase their orders or received them late will probably shop elsewhere next time.
According to one study by the Temkin Group, “77% of customers would recommend and provide a referral to a company to a friend where they’ve had a great experience.” The growth of Amazon is a testament to this. It could not have been achieved if Amazon’s processes didn’t work so well.
Amazon’s ACSI scores remain some of the highest, and being frictionless has meant that customers have turned to Amazon for an increased range of products and services.
3. Being Frictionless Delivers a True Competitive Advantage
Companies that reduce costs through less friction create a sustainable advantage via low cost and high recurring revenue. In contrast, organizations that reduce service levels (such as speed of answer, speed of delivery, or length of checkout queues) put themselves in a difficult place, since customers will leave and revenues will likely fall.
The lower costs delivered by becoming frictionless also drive other advantages. Amazon, at one point, compared its CPO (contacts per order) with that of another major online retailer and found its own to be 75% lower. This meant that the cost of each transaction enabled the company to reinvest these savings in lower prices (to drive more revenue) and greater marketing benefits like free shipping. A strategy that delivers both revenue and cost savings is clearly a winning one.
Yet being frictionless isn’t just about cost. Frictionless businesses have created new ways to share value with customers.
One example is Netflix, which, like other digital media sites, offers a different experience from traditional TV. With Netflix, deciding what you watch and when to watch it is a low-friction and more controlled experience. The customer can select the viewing device and tailor the watching experience—no more cable and antenna constraints.
Netflix’s flexible experience enabled the company to invest heavily in original content, further deepening its must-watch reputation with millions of subscribers.
4. Being Frictionless Enables Business Survival
One of the impacts of digital disruption and the emergence of digital-only innovators is that low-friction business models are now essential. Older-style businesses are burdened with high-cost physical networks and clumsy processes, and they face possible extinction if they don’t reduce this friction.
Consider these examples:
Zoom has gobbled up market share from Cisco’s WebEx by being simple to use.
Many regional high-touch banks are now challenged by new “fintech” players.
Amazon has forced many conventional retailers, including BestBuy, Target, and Walmart, to add online channels (with various degrees of success).
In insurance, disruptive businesses are emerging that price risk more precisely to each customer’s need and offer low-cost channels and self-service.
In wealth management, digital or robotic advice models are emerging that undermine high-cost financial advice models.
The airline industry was disrupted by low-cost carriers with simplified business models and self-service facilities, forcing incumbents to adopt innovations like self-serve check-in and online booking.
The outlook is clear: being frictionless is key for a business to survive. Will your business embrace these changes and thrive, or be left behind?
There are three key components to teaching Principled Entrepreneurship.
1. Discover who you are, create a vision for who you want to be, and develop a plan to get there
Creativity is highly correlated with self-knowledge, and passion with purpose. If we want to help students prepare for their lives as Principled Entrepreneurs, we have to move from trying to tell them what to do to helping them find their identity, values, desires, and passion, and then help them figure out a way to create new value from those that generate an economic return. Only then will the work we do on a daily basis no longer be just a way to make a living, but become a way of life. A vocation. A path to human excellence and happiness. In the foundational course we call “Vocation of Business,” we help each student explore their personality, dreams, and identity.
Through various exercises, they create a list of the top values they have and describe how they intend to manifest these in life. Each student learns about mission statements and creates their very own after careful research and deliberation. They determine what virtues they need to cultivate to best support this mission. They go through what’s called the exercise to find out what their core motivations are and how that applies to their work. They are encouraged to explore and find their personal learning style. What many students don’t initially understand is that virtues manifest themselves and are trained in even the smallest everyday acts.
Training in virtue is akin to going to the gym. It takes the constant exercise of our will. Virtues are like a section of a workout routine. They start out as an aspirational activity, like wishing we could get out of bed when the alarm rings the first time. We won’t succeed right away; it’s one step forward and two back. Unless we apply our free will, we would give into our lower desires and give up. But as we stick with it, forgive ourselves for past failures, recommit, and never give up, the activity slowly becomes a habit.
We eventually do it without even thinking about it. Once we achieve that, we can focus on the next such activity, the next virtue to pursue. I ask each student to choose three virtues to which they aspire and practice them on a daily basis for an entire semester. Their reflection write-ups after this period of “training” always amaze and inspire me.
Virtues are so easily acquired, and become so powerful when we possess them. The students often point out that they found it remarkable how these habits come about through small but consistent effort, yet how amazed they are at how far they’ve come in just three months. Altogether, the virtues we possess add up to our character. As people, we are creatures of habit. How we see, how we think, how we act—even how we feel. All of these areas are opportunities for intentionality, for applying our will, for training in virtue and development of firm character.
What this means for Principled Entrepreneurs is that we live in a hopeful reality. Every human being has the ability to grow in their perfection, in their excellence, and it’s easier than most people think. Principled Entrepreneurs believe in humanity. Principled Entrepreneurs always see the human person—and that starts with ourselves—as the solution, the opportunity, the hope. Never the problem. I believe it is absolutely imperative to teach this to aspiring entrepreneurs, to add this to their arsenal of virtues. Discovering our personal vocation is actually the toughest thing for any one of us to figure out. It requires faith, insight, wisdom, experimentation, and determination. It is a very difficult process—much more difficult and complicated than memorizing facts and completing processes step-by-step. As a matter of fact, it is so difficult to do that I suspect a majority of people don’t do it and never find out what their actual vocation is.
They never put the core of their energy into envisioning and becoming the best version of themselves. They go through life without knowing who they really are. You can’t be a Principled Entrepreneur without first discovering who you want to be.
2. Discover and develop your aptitudes, creativity, and strengths
When was the last time you lost track of time when you worked on something? The kind of experience we call “being in the zone.”
It happens when we are so fully absorbed in an activity, so enthralled, that we have such a high level of energized focus and fulfillment that it transcends time. Was your experience related to what you do for work? Most people I meet don’t experience flow in work, and I think any college or university curriculum should find a way not only to teach students about flow, but create situations for them to experience and replicate it and help them discover ways to find a career that allows them to experience flow on a regular basis.
At the Ciocca Center, we go about helping our students find their “zone” by having them try out a lot of different things. Through the various courses we offer the student, we ask them to do a wide range of business-related activities that they have never done before. The “first business” experience of the “Vocation of Business” class taps into creative and online activities and the definition of customer-centered value propositions.
The Small Business Lab requires that students get hands-on experience in a variety of businesses, both established ones as well as startups that we work with. They’re taught to quickly study the competitive landscape, analyze the opportunities, manage the financial aspects of the business, develop strategies, and engage in team work to sell the new vision both inside and outside of the company. The theory courses combine research, presentations, and debates. The Principled Entrepreneurship course has a heavy focus on creativity, innovation, and communication.
The guided studies and internship programs give the students more practical experience in a variety of industry sectors and growth stages. Altogether, the students’ education is designed to expose them to all aspects of business and give them plenty of extended hands-on experience. Throughout this process, students are guided to think about their experience and analyze it from a perspective of growth in personal excellence and service: What value can I add? That context helps them to notice when they experience flow and gives them the support and confidence to make career decisions consistent with their true vocation.
3. Discover and develop how to apply the previous two points to create value for others, and learn to put failure in the service of the pursuit of excellence.
At Catholic University’s Busch School of Business, our freshmen business students’ first assignment in the Vocation of Business course is to start their own company. Specifically, students are asked to start a special interest social media account. By exploring what they have to offer others in terms of their unique interest or expertise, they create a social media effort that explains and explores this topic and recommends various products along the way. Through this three-month-long exercise, students internalize the most rudimentary but essential question of business: “How may I help you?” They are at once customer-centered and self-aware.
These blogs are then monetized in part through strategies such as affiliate marketing. As an affiliate of websites like Amazon, the student earns a bonus each time someone buys through one of their links. Thus, each student creates their own “small business” during the first semester of their freshman year. The hurdle I have to overcome with them is the same every year: fear of failure, especially in the context of a class. I have come to believe that students and aspiring entrepreneurs need to have permission to make mistakes.
There are three key components to teaching Principled Entrepreneurship.
1. Discover who you are, create a vision for who you want to be, and develop a plan to get there
Creativity is highly correlated with self-knowledge, and passion with purpose. If we want to help students prepare for their lives as Principled Entrepreneurs, we have to move from trying to tell them what to do to helping them find their identity, values, desires, and passion, and then help them figure out a way to create new value from those that generate an economic return. Only then will the work we do on a daily basis no longer be just a way to make a living, but become a way of life. A vocation. A path to human excellence and happiness. In the foundational course we call “Vocation of Business,” we help each student explore their personality, dreams, and identity.
Through various exercises, they create a list of the top values they have and describe how they intend to manifest these in life. Each student learns about mission statements and creates their very own after careful research and deliberation. They determine what virtues they need to cultivate to best support this mission. They go through what’s called the exercise to find out what their core motivations are and how that applies to their work. They are encouraged to explore and find their personal learning style. What many students don’t initially understand is that virtues manifest themselves and are trained in even the smallest everyday acts.
Training in virtue is akin to going to the gym. It takes the constant exercise of our will. Virtues are like a section of a workout routine. They start out as an aspirational activity, like wishing we could get out of bed when the alarm rings the first time. We won’t succeed right away; it’s one step forward and two back. Unless we apply our free will, we would give into our lower desires and give up. But as we stick with it, forgive ourselves for past failures, recommit, and never give up, the activity slowly becomes a habit.
We eventually do it without even thinking about it. Once we achieve that, we can focus on the next such activity, the next virtue to pursue. I ask each student to choose three virtues to which they aspire and practice them on a daily basis for an entire semester. Their reflection write-ups after this period of “training” always amaze and inspire me.
Virtues are so easily acquired, and become so powerful when we possess them. The students often point out that they found it remarkable how these habits come about through small but consistent effort, yet how amazed they are at how far they’ve come in just three months. Altogether, the virtues we possess add up to our character. As people, we are creatures of habit. How we see, how we think, how we act—even how we feel. All of these areas are opportunities for intentionality, for applying our will, for training in virtue and development of firm character.
What this means for Principled Entrepreneurs is that we live in a hopeful reality. Every human being has the ability to grow in their perfection, in their excellence, and it’s easier than most people think. Principled Entrepreneurs believe in humanity. Principled Entrepreneurs always see the human person—and that starts with ourselves—as the solution, the opportunity, the hope. Never the problem. I believe it is absolutely imperative to teach this to aspiring entrepreneurs, to add this to their arsenal of virtues. Discovering our personal vocation is actually the toughest thing for any one of us to figure out. It requires faith, insight, wisdom, experimentation, and determination. It is a very difficult process—much more difficult and complicated than memorizing facts and completing processes step-by-step. As a matter of fact, it is so difficult to do that I suspect a majority of people don’t do it and never find out what their actual vocation is.
They never put the core of their energy into envisioning and becoming the best version of themselves. They go through life without knowing who they really are. You can’t be a Principled Entrepreneur without first discovering who you want to be.
2. Discover and develop your aptitudes, creativity, and strengths
When was the last time you lost track of time when you worked on something? The kind of experience we call “being in the zone.”
It happens when we are so fully absorbed in an activity, so enthralled, that we have such a high level of energized focus and fulfillment that it transcends time. Was your experience related to what you do for work? Most people I meet don’t experience flow in work, and I think any college or university curriculum should find a way not only to teach students about flow, but create situations for them to experience and replicate it and help them discover ways to find a career that allows them to experience flow on a regular basis.
At the Ciocca Center, we go about helping our students find their “zone” by having them try out a lot of different things. Through the various courses we offer the student, we ask them to do a wide range of business-related activities that they have never done before. The “first business” experience of the “Vocation of Business” class taps into creative and online activities and the definition of customer-centered value propositions.
The Small Business Lab requires that students get hands-on experience in a variety of businesses, both established ones as well as startups that we work with. They’re taught to quickly study the competitive landscape, analyze the opportunities, manage the financial aspects of the business, develop strategies, and engage in team work to sell the new vision both inside and outside of the company. The theory courses combine research, presentations, and debates. The Principled Entrepreneurship course has a heavy focus on creativity, innovation, and communication.
The guided studies and internship programs give the students more practical experience in a variety of industry sectors and growth stages. Altogether, the students’ education is designed to expose them to all aspects of business and give them plenty of extended hands-on experience. Throughout this process, students are guided to think about their experience and analyze it from a perspective of growth in personal excellence and service: What value can I add? That context helps them to notice when they experience flow and gives them the support and confidence to make career decisions consistent with their true vocation.
3. Discover and develop how to apply the previous two points to create value for others, and learn to put failure in the service of the pursuit of excellence.
At Catholic University’s Busch School of Business, our freshmen business students’ first assignment in the Vocation of Business course is to start their own company. Specifically, students are asked to start a special interest social media account. By exploring what they have to offer others in terms of their unique interest or expertise, they create a social media effort that explains and explores this topic and recommends various products along the way. Through this three-month-long exercise, students internalize the most rudimentary but essential question of business: “How may I help you?” They are at once customer-centered and self-aware.
These blogs are then monetized in part through strategies such as affiliate marketing. As an affiliate of websites like Amazon, the student earns a bonus each time someone buys through one of their links. Thus, each student creates their own “small business” during the first semester of their freshman year. The hurdle I have to overcome with them is the same every year: fear of failure, especially in the context of a class. I have come to believe that students and aspiring entrepreneurs need to have permission to make mistakes.
Back in the days when people began studying how to improve companies, they recognized that managers could help their teams by spending a little more time outside of their own offices.
By walking around, visiting their employees, and having casual one-on-one chats, they could ideally learn how things were going and how employees were feeling. It was dubbed “Management by Walking Around,” or MBWA. Overall, if done well, it was an idea that worked by blending the two vital elements of 1) keeping the channels of communication open; and 2) supporting employees in getting their work done.
But now that Covid has unleashed the work from home and the hot desk era, what happens when those employees are no longer on the premises? This worry became a focal point of fear when examining the post-2021 new normal. How can a manager manage when the workspace has become fractured and remote? For many managers, this is a surprising twist on the path to digital transformation. They feel as if they’re losing their team, the solidarity of the business, and the control they once enjoyed. Even worse, they feel that they’re losing their identity as managers.
But in reality, it doesn’t have to be that way. The transformation is happening all the same because many employees have discovered that they prefer working from home — especially with the cost of the commute getting ever higher. If their job is based on using a computer and a phone, they’ve realized they no longer need to travel to an office to carry out their work.
Managers will still be able to manage, though, and they might even find that their jobs become easier. They can practice “Management by Zooming Around” (MBZA) — even though it’s not about Zoom per se. Zoom is just the brand that currently represents video chat technology in general. MBZA enables managers and employees to still enjoy focused chats, whether spontaneous or scheduled, using video conferencing, while also conveying the body language, empathy, and confidentiality that would take place in an in-person setting.
But MBZA still feels uncomfortable to managers who’ve become used to exerting their physical presence to establish the mood and structure of a team. Here are some standard pushbacks that management presents in their arguments against the hybrid workspace, along with the reality surrounding each.
Management argument #1: Removes opportunities for spontaneous conversation.
Reality: The next generation of collaboration technologies are already here. They replace the Zoom grid style with an environment in which people can exist all day without looking like cartoons. This informal in-office dynamic means spontaneous conversations are just as possible in the new virtual workspace.
Management argument #2: People can only focus on work when they’re at the workplace.
Reality: Many people are discovering that they can focus at home, even with children and pets around, and are consequently joining the ranks of those who’ve already been working from home productively for years. What’s more, the workplace has seldom been a place of focus, with interruptions and meetings happening daily. Most at-work employees discovered they could only get focus time if they hid somewhere else, like an empty conference room or a coffee shop. That says a lot about the actual impractical nature of an office.
Management argument #3: If my employees are working from home, I can’t see what they’re doing.
Reality: That’s true. But why would you need to? The goal is for an employee to get work done. Managers who have embraced the work-from-home approach are unanimous in their endorsement of letting team members work when and how they want so long as the work gets done. Work should be outcome based, not face-time based.
Management argument #4: Employees will slack off and avoid work if I can’t oversee them.
Reality: Managers who feel this way have a bigger problem on their hands than employee productivity. If there’s no trust in a manager-employee relationship, the good employees will simply leave. The work-from-home scenario is in fact a place where trust is established and reinforced.
Management argument #5: Coordinating distributed groups is too complicated.
Reality: No, it’s simply different. Distributed teams enjoy success when the meetings are immersive, sharing the same virtual space where they can all see each other. They also work best when everyone is remote, regardless of where they’re logging in from, including those who log in from the office.
It’s often difficult for people to move into new, unknown territory. To resist this, they hang on to the old ways for dear life. But history is littered with the grave markers of companies that refused to pivot, even when the marketplace offered them the opportunity. Hopefully, managers will perceive through experience and experimentation that there’s actually more to be gained from MBZA than they could have ever imagined.
