Human Centered Business

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This presentation is about the power of starting with value instead of profit when doing business. How you can create value beyond calculation and be successful beyond the status quo if you you a a human centered focus. A human centered focus in how you create value, the value you deliver and how you capture the value.

Published in: Business, Health & Medicine

Human Centered Business

  1. 1. ‘The main objective that dominated companies the last decades is profit maximization.’ Powerful financially strong organizations dominated industries. These efficient organizations were build by rational thinkers. They were based on traditional economic foundations that believe that the actions of people only have a rational explanation.
  2. 2. ‘They achieved profit maximization by focussing on the short-term, but they didn't build strong foundations in the long-term.’ The financial crisis is a important consequence of the short-term focus. Profit centered organizations preferred short-term profit maximization instead of building strong foundations and focussing on long-term value.
  3. 3. ‘I believe that Human Centered Business thinking creates value beyond calculation and helps us being successful beyond the status quo.’ It is in everybody's best interest to build organizations that are not focussed on profit, but on maximizing value for people. Organizations that primarily focus on the long- term and see profit as a result of creating something valuable for people. Not only human centered in the value that is created(outcome), but also in the way the value is created(process). Human centered organizations don't see people as pawns but as players. They treat people as people and motivate them intrinsic. They give them the possibility to direct there work(autonomy), they help people to get better in something that matters(mastery) and they give people the possibility to do things in service of something larger then themselves(purpose). I believe that if you do this, people are willing to challenge the status quo and want to design better solutions. In these Human Centered organizations, innovation will be an ongoing process in every aspect of the business. These organizations are leaders, they are the ones that others have to adjust to and follow. Because of their design spirit they differentiate themselves with better products that have an embedded promotion. Money is still important for success in these organization, but it isn't a guarantee or stating point. Being successful is not only a privilege of the left brain rational thinkers. Right brain minded people that are heuristic thinkers, love to create and synthesize, that are creative and emphatic have equal or even better changes on being successful. Robert van Geenhuizen
  4. 4. Understand structure and you can build a company. Understand people and you can build a business. Simon Sinek
  5. 5. Profit centered business What? Making products that can be sold at the highest possible margin to the mass market. How? By building efficient organizations with primarily rational thinking. They are focussed on the short-term to please the interests of shareholders. They standardize as many as possible processes and they mostly motivate people extrinsic ('sticks and carrots'). The products are optimized for mass market and therefore mainly excel in outside-in mediocrity. WHY HOW Why? To make and maximize profit. WHAT
  6. 6. Human Centered Business Why? To create value with a meaning for people. A meaningful purpose that is larger than the organization itself. How? To have a Human Centered focus in the way value is created, delivered and captured. The people that create the value are intrinsic motived by purpose, autonomy and mastery. Because they want to maximize the value, they challenge the status quo in everything they do. These organizations are innovation, they are inside-out leaders and others have to adapt to them to survive. WHY HOW What? An organization that is successful beyond the status quo with an incredibly strong foundation. WHAT
  7. 7. ‘The whole is greater than the sum of its parts.’ Aristotle
  8. 8. ‘The most important starting point of Human Centered Business is a meaningful purpose.’ Success begins with why, with a sense of purpose and not profit. Apple, the Wright brothers, or Martin Luther King, they all share a strong drive that distinguishes them and helps them to be successful. A drive that goes beyond the outcome of value creation for people, profit.
  9. 9. If Apple would start with a profit centered purpose instead of a meaningful purpose, their proposition would sound probably something like this… 'We make great computers. They are beautifully designed and simply to use. Do you want to buy one?'
  10. 10. But Apple starts with a meaningful purpose and therefore they got a completely different proposition… 'We believe that in everything we do, we have to challenge the status quo. The way we do this, is by designing our products beautifully and making them easy to use. We just happen to make computers. Do you want to buy one?'
  11. 11. ‘Success is not the key to happiness. Happiness is the key to success.’ Albert Schweitzer
  12. 12. ‘Human Centered Business thinkers believe that success starts with maximizing value for humans in which profit is the result, not the other way around.’ If you want to design a business model that effectively creates value for people, you need to start with the following question:’Which value can we create for customers?’
  13. 13. ‘T effectively create and maximize value, you need o to look beyond what traditional marketers and R&D departments are used to do. ’ Traditionally, they focus primarily on what people say and do (public attitude).To effectively innovate and create value for people you must not look only at what people say and do but also what they hear, see, feel and think. What are their pains and which things do they value the most? On the next page you find a 'Customer empathy map' which makes it more comprehensible.
  14. 14. What does she think and feel ? What  really  counts?  Major  preoccupations  worries  &  aspirations What does she hear ? What  friends  say What does she see ? What  boss  says Environment What  influencers  say Friends What  the  market  offers What does she say and doe? Attitude  in  public  appearance Behavior  towards  others Pain Gain Fears “wants”  /  needs Frustrations Measures  of  success Obstacles Obstacles she=customer
  15. 15. ‘If you understand people better, it's easier to create relevant value for people.’ This is an idea that the discipline behavioral economics tries to tell us for quit some while now. We should not only study money, but also the behavior of people. The behavior of people can not only be explained rational. We also should consider humans as irrational beings. In these times where social media is increasingly gaining ground it is more easier to listen to customers and effectively create value with the 'Customer empathy map' in mind. Passive listening or active participation and even in some cases co-creation and crowdsourcing.
  16. 16. ‘ s an emotional A catalyst, wealth maximization lacks the power to fully mobilize human energies.’ Daniel Pink
  17. 17. ‘Thinking with the left hemisphere is still a basic requirement for success, but not decisive. T create o distinctive value for people design thinking is absolute necessary.’ Left brain thinkers are sequential, factual, functional, textual and analytical, and they dominate 'Profit centered business'. The right brain thinkers are very creative, empathetic, aesthetic, have the ability to see big picture (contextual) and are able to synthesize. They are the ones that dominate in 'Human Centered Business'. More and more algorithmic tasks of left brain thinkers are outsourced to foreign countries, while heuristic abilities are becoming increasing more important to succeed. these are the tasks that create distinctive organizations. New solutions must be designed and constructed, there are no algorithms for it. According to from McKinsey & Co. currently only 30 percent of the job growth in the U.S. is for algorithmic work, while 70 percent is for heuristic work.
  18. 18. 'You can't motivate right brain thinkers with extrinsic motivation. You need to see these people as players, not as pawns.' Scientific research has repeatedly shown that extrinsic motivation in the form of rewards and punishments only works with linear work with only one possible result. Science does also show then you want to motivate people with heuristic tasks, extrinsic motivation had even a very negative effect on the outcome.
  19. 19. The three essential elements of intrinsic motivation 1. Autonomy The urge to direct our own lives. 2. Mastery The desire to get better and better at something that matters. 3. Purpose The yearning to do something that we do in the service of something larger than ourselves.
  20. 20. ‘Imagination is more important than knowledge.’ Albert Einstein
  21. 21. ‘Because Human Centered Business is focused on value maximization for people, innovation is important. This creates the natural ability to distinguish.’ If you know to distinguish yourself as an organization you are able to create a strong foundation. But to be distinctive, you must look beyond existing resources. Not solve problems and challenges with existing resources and not directly stop at the first good idea. Solutions must be found by designing new answers. Organizations that are able to think 'out of the box' are ready at any moment to challenge the status qou.
  22. 22. ‘If you want to innovate successfully and create new possibilities, you have to start thinking as a designer.’ If you want to create an innovative product, it is important that is technical feasible(feasibility), it has a value for customers(desirability) and that there is an economically attractive business model for it(viability). Usually people or organizations are focussed on only one or two of these aspects. Someone with a design mentality tries to see the big picture and is able to synthesize successfully al three aspects.
  23. 23. A Design Thinker’s Personality Profile • Empathy: They can imagine the world from multiple perspectives – those of colleagues. clients, end users, and customers (current and prospective). By taking a ‘people first’ approach, design thinkers can imagine solutions that are inherently desirable and meet explicit or latent needs. Great design thinkers observe the world in minute detail. They notice things that others do not and user their insights to inspire innovation. • Integrative Thinking: They do not only rely on analytical processes ( those that produce either/or choices) but also exhibit the ability to see all of the salient – and sometimes contradictory – aspects of a confounding problem and create novel solutions on existing alternatives. • Optimism: They assume that no matter how challenging the constraints of a given problem, at least one potential solution is better than existing alternatives. • Experimentalism: Significant innovations don’t come from incremental tweaks. Design thinkers pose questions and explore constraints in creative ways that progress in entirely new directions. • Source: Tim Brown's article on Design Thinking in the Harvard Business Review
  24. 24. Human Centered Business and value maximization for people is only possible if there's is not a short-term, but a primarily long-term focus.
  25. 25. At the moment it is very important in the world to focus on maximizing value for people. It provides businesses where people are happier, more productive and are able to achieve personal growth. But it also provides companies that want to challenge the status quo to deliver the best possible value for their customers. Companies that create a strong foundation and thereby contribute to more stable economies.
  26. 26. "The idea of Human Centered Business is inspired by the work of respected thinkers that all share the human centered thinking." For example the great work from Daniel Pink about what motivates people in organizations. Tim Brown about design thinking, the 'Golder Circle' of Simon Sinek, Dan Ariely on behavioral economics, Joseph Pine on authenticity and Alexander Osterwalder about business models. All inspired thinkers who give us new perspectives and help us the status quo to challenge.
  27. 27. Given the importance of the idea of Human Centered business to grow, I find it valuable to receive your contribution. I would like to invite everyone to contribute in any form whatsoever. Input for this presentation, case studies, good stories for the blog (www.humancenteredbusiness.com), every contribution is valuable and welcome! Robert van Geenhuizen info@humancenteredbusiness.com http://www.twitter.com/hcbusiness
  28. 28. Stay inspired and follow the latest great ideas, innovative business models, videos, presentations and challenges of the status quo ... www.humancenteredbusiness.com
  29. 29. www.humancenteredbusiness.com

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