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The Intangible Benefits of Category Creation on Customer and Teammate Success

If I could trade marketing careers with anyone in the world, it would be with a man named Duncan Wardle. Duncan’s business card is surely the envy of any marketer who has ever preferred right-brain strategy over left—he was the former vice president of innovation and creativity at The Walt Disney Company. Over his 25-year career at Disney, Duncan was responsible for developing some of the company’s most innovative ideas and strategies, including sending a Buzz Lightyear action figure to (literal) outer space on NASA’s Space Shuttle Discovery to promote the launch of a new attraction at Walt Disney World. Today, Duncan is on the road speaking at events, leading workshops, and hosting ideation sessions at customer sites. His mission? To challenge everyone to claim his or her own creativity, and thus create a culture of innovation never possible before.

One of the ways that companies can create that culture is to realize that, as Duncan puts it, “People are not buying products and services anymore, they are buying purpose. And in order for them to understand your purpose they must understand your story.” That’s a deeply profound statement, and one that is especially true for category creators. I discussed in Chapter Five the importance of articulating and expressing company purpose—in fact, it’s the foundational step of the category creation playbook. Tell your story the right way, and there are transformative implications to be realized on two of the most important constituencies within your category:

  1. Customers, who want to do business with purpose-driven companies.
  2. Teammates, who want to contribute to the mission of purpose-driven companies.

Customers, especially the early adopters in new categories, are entering into commercial agreements with your business because they buy into your purpose—your products and services just happen to be a (critical) part of that expression. Other components of that decision-making framework, on equal or greater footing with the actual product, include the content and event programs you develop to help your customers reach their fullest potential, the experience that you and your team create across the customer lifecycle, and any other expression of purpose that serves the people in the market you are creating. The outcomes, at least the tangible ones, can show up in lagging indicators such as net promoter score (NPS) surveys that measure customer happiness, renewals or retention rates that measure customer loyalty, or expansion revenue (as discussed in Chapter Twelve) that measures customer growth.

Teammates, perhaps as internal customers of the brand, buy into purpose from the moment they sign their offer letters and throughout their journey as employees of your organization. Professionals in today’s economy have more options than ever before of companies they can choose to work for, and the so-called “talent wars” have placed a critical emphasis on keeping employees engaged and fulfilled. In a recent study by Culture Amp, the Culture First employee feedback company, the company proved a correlation of share price growth to employee feedback data from over 70 publicly listed companies. They found that employee perceptions are strong leading indicators of important future outcomes. As the chart in Figure 13.1 illustrates, higher employee engagement in 2017 was associated with 16.5% higher share price growth YTD 2018.1 Combine that effect with product belief, and the association grew to 27.9% higher YTD growth. The takeaways are clear—creating a culture that keeps teammates engaged on the journey to purpose realization impacts so much more than happiness and loyalty (although those are important), but a company’s financial outcomes as well.

The figure shows a chart illustrating association of higher employee engagement in 2017 with 16.5% higher share price growth YTD 2018.

Figure 13.1 Future Stock Price Indicators of Employee Engagement and Product Belief

These quantifiable measures of impact can be true for any purpose-driven organization, but are especially true for category creators. The whole notion of creating a new market category implies a noble endeavor in and of itself, and solving a complex problem that people don’t know they have requires deep conviction and courage. But the journey also reveals a set of intangible benefits for customers and teammates who are enrolled in the mission, aligning hearts and minds behind a movement in the marketplace led by an inspiring and category- defining brand. Let’s unpack some of those intangible benefits here:

While (again) category creation is not for everyone, the benefits both tangible and intangible for customers and teammates alike are enough to attract, engage, and develop the right individuals who identify with the purpose of the company on top. Beyond those constituents, partners will also be interested in aligning with category leaders to share in the thought leadership energy being created with hopes of their paths to monetization.

For integration partners, this could benefit your company by extending product functionality and capability to address emerging use cases within the category, while also co-marketing with the partner in order to share leads and build influence.

For systems integrators and large consultancies, partners may be interested in building a practice within the new category, desiring a piece of your thought leadership in exchange for product referrals. In most cases, these partners are looking to sell services oriented around a business transformation project at large companies—ideally, with your product as the operational element within that transaction.

For private equity or venture capital partners, developing a “friends-and-family” package that can be promoted to portfolio companies could drive lead volume, while also creating value for the firm itself. These opportunities (and others) can help fuel category momentum, while also delivering benefit for company, partner, and customer.

Spotlight on Sales Teams

There’s one team in particular that may require additional perspective for category creation—the sales organization. Depending on the sales leadership you recruit, sales processes you install, the culture you create, and the rep profile you develop, the long-term greed required for success in new categories will be met with different reactions.

One profile of sales professional is extremely goal-oriented around making money—driven by the wealth creation potential of a successful career in the discipline. There’s no judgment whatsoever around that mindset, as the only person within any business who should be compensated as much, if not more than your CEO is your top performing sales rep. But great salespeople are constantly being recruited by companies, many of which have found product-market fit in an established category and are in “land grab” mode. For these types of opportunities, the business is not lead or opportunity constrained, but, if anything, is time or capacity constrained and needs to ramp sales hiring to fulfill its ambition. The compelling recruitment message to this type of rep profile is quite simple—come on board, hit your numbers, and you’ll make a lot of money.

While having some of this sales DNA within an organization creating a category is not necessarily bad, it could present some performance or even attrition risk for those who haven’t bought into the mission. As companies evolve through various stages of category maturity, it’s entirely possible that the risk diminishes as repeatable sales motions are established and high-performing reps have modeled success for the organization.

However, there’s one profile of sales professional that thrives in the category creation environment—value sellers. Value selling is a sales methodology that advocates for understanding and reinforcing the reason why your offer is valuable to the purchaser. The idea is to always sell based on the value your offer provides, not the cost. We know that in modern business, your offer is so much more than just the products you sell (thank you, Duncan Wardle)—so packaging the entire brand value proposition (your content, community, and expertise) will resonate deeply with executive buyers who are looking to drive outcomes, not buy products. Juxtapose that selling motion against commoditized products (think online storage as an example) where companies can often compete on price. Put simply, category creation can make life a lot easier for value sellers, who in turn can create massive impact for the company while creating some personal wealth of their own along the way.

The Alliance of Working and Winning in Category Creation

There’s a phenomenal book on talent management written by Reid Hoffman, Ben Casnocha, and Chris Yeh called The Alliance: Managing Talent in the Networked Age. The reason these authors wrote the book, all well-esteemed entrepreneurs and investors in their own rights, was based on a belief that the employer-employee relationship is fundamentally broken and the old model of guaranteeing long-term employment no longer works in a business environment that’s defined by continuous change. The solution they propose is to stop thinking of employees as either family or free agents, but instead as allies with whom alliances can be formed. Companies are looking for business transformation and impact from their employees, while the employees themselves are interested in career transformation in return. Within the context of that alliance, companies can maintain trust with their employees, while also recruiting and retaining entrepreneurial talent to adapt to business needs as they evolve over time.

The Alliance is an especially important philosophy to embed into the talent management strategy for category creators. The spirit of this was inspired by a recent tweet from my CEO, Nick Mehta (see Figure 13.2). The reality is that companies in new categories evolve through many generations as they go down the long road of building something new. As I described earlier, the opportunity to be part of a category creation story is an extremely attractive offer for the right type of talent, but even the most engaged employees will eventually leave. It’s easy as a CEO to carry the weight of that pressure on your shoulders, but adopting the principles of The Alliance and seeing the humanity of the team (as Nick states) can help rationalize what is otherwise a very emotional concept.

The figure shows a screenshot of a tweet from Gainsight chief executive officer Nick Mehta.

Figure 13.2 Tweet from Gainsight CEO Nick Mehta

Thinking about the humanity of our teammates means realizing that while everyone is invested in the success of the company and category, the extent of that investment is different for each individual. For some, there’s a financial outcome on the other end of that success—whether cash or stock compensation—which can influence performance and retention. For others, being associated with a category creator is motivation enough and can serve as the golden chapter in the story arc of their careers. Understanding that humanity and operationalizing a talent management strategy that builds on those motivators can be a powerful mechanism to engage teammates and prepare them for a life after the company they’re helping to create. Imagine launching a learning development initiative, as an example, that invests in the education and professional growth of the team—building skills that can be applied on the job while also activating passions and curiosity outside of their functional domain. Programs like these can make working for your company so much more than “just a job” and contribute impactfully to keeping employees engaged and retained for the long road ahead.

But ultimately, you can’t be proactive with a human-first talent management strategy unless you are winning in business. Success is the ultimate engagement and retention strategy, as teammates are quite literally betting their careers on companies that are selling them on potential. Of course, success at all costs is not the lesson here, but as companies hit their numbers, improve financial metrics, and deliver an incredible product experience, these wins reassure teammates that they’ve chosen the right brand and can shine a light on the personal impact of their efforts on company performance. In the category creation context, this means not just creating the category, but hitting the right milestones along the journey that signal the category domination strategy is indeed working. The specific definition of winning may be different in each industry, but it’s consistent for any company whether or not they’re creating or disrupting a market.

This revelation leads to a discussion on the other side of The Alliance framework: What do category creators require of employees in order to win in business and, therefore, deliver on their teammate value proposition? Delivering the outcomes that they are measured by may be the obvious answer, but in fact, metrics alone are not enough. This is especially important as companies mature and become increasingly siloed—for example, imagine a case where Marketing hits their metrics as leading indicators of sales, but that effort does not show up as bookings in ARR. Never happens, right? To help drive collaboration and engagement across departments and create a spirit where everyone within the organization can help the company win, here are several intangible aspects of a healthy alliance that companies should consider promoting to their teams:

Conclusion

There’s arguably been no other business strategy in modern times that’s been shrouded in mystery and intrigue quite like category creation. Sure, everyone wants to be a category creator, but understanding how to do it and knowing that it’s working can often stop an entrepreneur or executive right in her tracks. That’s exactly why I decided to write this book—not to provide rose-tinted glasses on how category creation is an easy strategy that every business should deploy. Long-term greed is foundational—if there were an easier path to building a market, then that disclosure may not have been a necessary reiteration throughout the text.

But if you’re still reading this and, after all my words of warning, still believe that you and your team have the courage to create a market around a problem that people may have felt but have never before articulated—then welcome to the club. You’ll find great reward and fulfillment on the other end of your journey—for yourself, your customers, investors, and teammates. While this book may be printed and published, the reality is that there will be many revisions in time as we grow and learn together as a community of creators. Don’t lose that courage, and remember, most importantly, you are no longer alone.

Note

  1. 1 Jason McPherson, “The ROI of Employee Engagement and Culture,” Culture Amp, https://blog.cultureamp.com/the-roi-of-employee-engagement-and-culture