First there was the agrarian economy, then the industrial economy, followed by the service economy. Now we live in the experience economy. The experience economy was first described in 1998 by B. Joseph Pine II and James H. Gilmore. Pine & Gilmore argued that businesses must orchestrate memorable events for their customers and that memory itself becomes the product: the “experience.” They claimed that more advanced experience businesses could begin charging for the value of the “transformation” that an experience offers. Experience, they asserted, is an increase in the value added by the business over and above its inputs. Since its introduction, the concept of experience (and the experience economy) has expanded and been applied to other fields.
Today, experiences are the basis of increasing competition for businesses and organizations. People of all generations are placing more value on experiences and relationships over things. If the line between customer and employee wasn’t previously blurred, it is now nearly indistinguishable.
According to the Center for Generational Kinetics, 74 percent of Americans now prioritize experiences over products or things. Millennials, the largest generation in the workforce, are leading the charge in placing this newfound value on experiences. They are spending more money and time with businesses and joining organizations and contributing to the proverbial purpose based on the quality of the experiences offered.
Simply put, people expect superior customer experiences from companies they do business with. They expect the same of organizations they work for and with.
And while the COVID-19 pandemic has consequences which will change business and work forever, it has only heightened the value of experiences. The events of 2020 have reminded us of the importance of empathy, living life to the fullest, and engaging in ways with organizations (and businesses) that secure our safety and longevity and enrich our happiness – in life and work.
Organizations looking to the future and strategizing on how to regain strength, trust, and competitiveness must not forget that people are the heart of every business – and that business performance is fueled from the inside out. What makes it possible for people to be at their best and create a meaningful impact nowadays is their experience of working for/with an organization. The quality of their interactions impact how they feel and how they behave – it always has. But it is relatively recently that we have fully recognized its importance.
Leaders that get the human experience of work right are powered by something more significant than any disruptive force. They have the power of the people who revitalize the organization, fully unburdened to innovate, collaborate, and generate sustained performance and value, even in states of near-constant uncertainty.
In upcoming thought pieces, we will dive deeper into how positive experiences of work are vital to business performance and the pivotal role that business leaders and corporate functions play, and the human-centered approaches that can help you make a meaningful impact.
Lisa G. Morris is a Managing Director at TI People Inc. and Founder of XPLOR, LLC. She is a thought leader and passionate advocate of applying human-centered strategy and design to innovate the experience of work.