Person-centric services are set to change the way individuals interact with organisations (including large corporations, governments and public services). In doing so they will trigger far-reaching economic and, perhaps, political change.
But why should person-centricity be happening now?
The first answer is, because they are only now becoming possible. Person-centric services depend on individuals’ ability to gather up and pass on rich information about themselves, their needs and their preferences, to organisations – and to ‘slice and dice’ services in response to this information, which in turn requires very low transaction and coordination costs. These three core elements – rich personal information, ‘bottom up’ flows of information and low transaction costs – are only becoming a mainstream reality with the rise of broadband internet and related technologies.
Quite simply, until now, our economy lacked the infrastructure necessary for person-centric services (many more specific building blocks still need to be put in place).
The second answer is that the opportunity is rendered invisible by the seller-centric mindset. Person-centric services are designed to improve the economics of individuals and earn their keep by doing so. That is, their role is to help individuals achieve personal goals (big and small) more effectively at lower cost. This is how their business models are constructed and where their economic incentives lie. In contrast, our current seller-centric commercial environment revolves around improving the economics of the firms.
The prevailing seller-centric mindset divides the world of economic opportunity into two: those things that improve the economics of the firm (which it takes a big interest in); and those things which don’t (which it ignores).
Producing products and services which consumers want to buy improves the economics of the firm, and so therefore becomes a focus of intense interest in the seller-centric firm. This is the source of rich and powerful win-wins between buyers and sellers in a seller-centric economy.
But things which don’t improve the economics of the firm either get left to the individual to do for himself, or don’t get done. And there are more of these than might appear at first sight: things which seller-centric firms cannot or do not want to do. Providing the individual with the information he needs to make the best possible purchasing decisions is one example: if this information influences the individual to buy a rival’s wares instead, the firm has no incentive to provide it. Saving the individual time is another huge area: the time individuals spend going to market or trying to make products and services work (or work together) rarely figures in a seller’s P&L. If it did, queues would not exist.
Person-centric services have their roots in this no man’s land by-product of seller-centricity. That does not mean they cannot generate win-wins between buyers and sellers. In fact, as other articles on this web site demonstrate, they can and will generate huge benefits for both buyers and sellers. But from their current vantage point, sellers can’t ‘see’ these win-wins because they are counter-intuitive to the current mind-set. They can only see those markets which reflect their current obsession and priorities.
A good example of this counter-intuitivity is the ideology of ‘customer focus’. This seems like a 100% watertight answer to any criticisms of seller-centricity. What could be possibly wrong with identifying and meeting the needs of customers better than your competitors?
Answer: Nothing. Except for the seller-centric assumptions it carries with it. The reality is, ‘the consumer’ or customer is an invention of the seller-centric mindset. ‘A consumer’ is an entity which buys and consumes what the firm happens to make. When an ice-cream maker ‘focuses’ on the consumer, it sees a different entity to a financial services seller focusing on the same consumer. That is because they are not focusing on the person. They are focusing on those attributes of the person that relate to their ability to sell ice-creams or financial services. When they ‘focus’ on ‘the consumer’ seller-centric firms do not see a person at all; they see a mirror image reflection of their own needs and preoccupations. That is why we need a different type of service that starts with the person, rather than with a product or service to sell.
We have already discussed the other assumption: that improving the economics of the firm comes first. ‘Customer focus’ is not the purpose of the seller-centric firm: it is a means to end – of selling more stuff, more profitably. ‘Customer focus’ is invisibly and inherently constrained by this caveat. What the customer focus slogan really means is ‘focus on those needs that we can turn into profitable markets for our particular organisation’.
Within the parameters of seller-centricity there is nothing wrong with this: it makes precious little sense to meet customer needs unprofitably. All this will produce is a firm that goes bust, and then no one’s interests are served. It is simply ‘common sense’ that this caveat applies … just as it is common sense that the earth is flat and lies at the centre of the universe.
Changing the way individuals interact with organisations and reconfiguring the provision of private and public services around the economics of individuals has the potential to unleash a new – and very long – economic boom. Home, health, money, travel, knowledge, communication: these are just a few of the economic arenas potentially transformed by person-centric services.
Time and time again, common sense renders the truth invisible. Right now, common sense is exactly is doing exactly that to our biggest economic opportunity.