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Why Does Identifying as “B2B” or “B2C” Kill Innovation? (Article #5)

By Mark Dancer

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Hello Innovators!

The terms B2C (business-to-consumer) and B2B (business-to-business) have been in use for some time but gained currency as the forces of disruption and e-commerce took hold. Seeking to expand their market share, technology vendors and platform businesses realized they could build on success with consumer goods by offering their solutions to companies that sold products to businesses. Their sales pitch went something like this, “We’ve mastered B2C, and now we can help B2B. B2B is different. We get it. But, trust us. We are the experts. We will help B2B businesses survive in the digital age.” Condescension defined.

Words are essential, especially those that frame identities. As words that define a business, B2B and B2C set up a false distinction. They assume that companies are primarily defined by their immediate customer and operate in a linear from-here-to-there relationship. While it is often true that businesses buy differently than consumers, all businesses coexist in a human world of communities defined by interests, challenges, endeavors, and values. Classifying customers only as “businesses” or “consumers” dumbs down how products and services are conceptualized and how purpose is imagined. Identities like B2B and B2C kill innovation because they extinguish inspiration.

What Does it Mean to Identify as H2H?

The selection of new words can help a movement catch fire, and if real-world businesses embrace doing business as humans for humans, a new lexicon will emerge. And so, we offer human-to-human (H2H) as an alternative to B2B and B2C. H2H includes all real-world businesses seeking to pursue human-centric innovations, including those that previously identified as B2B or B2C. To help get the ball rolling, we suggest three actions for H2H companies:

  1. Pick a “star” to guide your innovations — from a linear perspective, products created by manufacturers are the star of the value chain. Intermediaries add value so that products become solutions. Customers select among choices, spend money, and earn a return on their investment. Doing business as humans for humans requires that your business serves a different star: the humans that value the goods you produce and give meaning to your work. Your star may be a baker, mechanic, entrepreneur, hobbyist, farmer, gardener, project leader, facility manager, and so on. You may or may not sell to your star directly. Enabling the human aspirations of your star defines the mission of every worker, manager, and leader in every function of your company. And through innovation, your company serves your stars in new, imaginative and better ways, over and over again.
  2. Explore your COVID crisis discoveries — every crisis shows the true mettle of an organization. It is an opportunity to discover if its foundational principles are as they were thought to be before the crisis occurred. The COVID crisis is no exception and is perhaps unique in that the pandemic impacts every person in every walk of life all around the globe. The crisis is far from over, but far enough along to take stock of how your business has responded. Did your people cope well with the difficulties and work with spirit and resolve? Did you double down on ensuring the safety and survival of the stars that guide your business? Or, did you pivot to targets of opportunity that offered short-term profits? Did you emerge stronger than before, and if so, how did your business improve? Examining the answers to these questions will make your company more resilient and a valued partner for your stars.
  3. Create human measures of success — one of my previous LinkedIn articles explored what it means for a business to compete on human values. To go further and fully identify as a H2H business requires metrics and measures to monitor progress and evaluate returns for your stars and your business. It’s easy to pronounce values as guiding principles for a business. It’s much harder to identify and track the specific behaviors that implement those values and then compute the results that follow. But, doing so is critically important if only to provide a balance against metrics that measure sales, transactions, share, and profit. I am continuing my search for real-world examples as our work proceeds. In the meantime, I offer several words that may serve as a starting point to identify outcomes aligned with human needs — personal growth, understanding, commitment, esteem, wealth, connections, contributions, and purpose.

Competing with Disruption

Disruption occurs outside-in as businesses offer a valued experience through a revolutionary operating model that attacks (and defeats) a traditional way of doing business. At its core, disruption is more about replacing market mechanisms than building new ones. Disruptors advance big ideas and succeed if customers embrace their offerings. Disruption is a necessary and productive force for modernizing how business is done. But for many real-world businesses, disruption is an existential threat.

The opportunity for real-world businesses is not about defeating disruption, but to develop competing big ideas for doing business as humans for humans. As mentioned in our first LinkedIn article, “traditional businesses must offer online services and leverage artificial intelligence. But platform players will dominate the virtual world. The rest of us must win by dominating the real world.” For real-world businesses, this is the revolution of our time. Starting the revolution requires reimagining how business is done and giving a name to new practices — identifying as a human-to-human (H2H) business is a start.

Looking forward to our journey together,

Mark

This content was originally posted on Distributing Ideas, The NAW Blog. There, you will find a complete collection of posts as a Fellow for the NAW Institute for Distribution Excellence, as well as perspectives from a wide range of distribution experts and thought leaders. Click here.

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Mark Dancer

NAW Institute for Distribution Excellence Fellow

Mark Dancer founded the Network for Business Innovation to drive awareness, advocacy and excellence for B2B innovation, and to enable an exchange of ideas between leaders on business transformation, technology adoption, social impact and community engagement. For more than 30 years, Mark has worked with leading companies to achieve go-to-market excellence across a wide range of industries in developed and emerging markets.