Are you ready for the Emotional Economy?
Although commentators use different terms to describe the coming caring, sharing, collaborative or emotional economy there appears to be significant agreement on two things:
- The thinking (knowledge) economy has passed its use by date. The knowledge economy is dead — or at least in terminal decline — and a new and different world is emerging.
- A feeling economy that involves people and their relationships is on the way
I’m not even sure that ‘economy’ is the correct word to describe that overall environment in which we do business. It worked in the past since business and management were founded in economic theory.
Right at this moment I am unable to think of anything better (let me know if you can) so this will have to suffice.
I have been following this trend for about eight years since I first wrote about it, and can only say “it’s here”. But what does an ‘emotional economy’ mean for you and your leadership?
This is the way I talked about it four years ago, reprinted below (with a few updates) as the original is no longer available online.
Emotionally aware individuals will play a leading role in the near future, as increasing complexity and technology contributes to the emergence of an ‘emotional economy’ to replace the knowledge economy.
Four key forces are underway that are contributing to this shift: depersonalisation, saturation, acceleration, and fragmentation.
Depersonalisation occurs when we feel that we have been treated like a number, or a machine, rather than a person. This happens when, for example, we are forced to navigate a maze of complex interactive voice response systems, and just long to talk to a real person.
Sophisticated technology often creates frustration as it treats us like another piece of technology, not a person with intellect and emotions.”
Depersonalisation has increased rapidly in the four years since I wrote those words. Advances in Artificial Intelligence is making it easier for firms to invest in algorithms rather than assistants for customer management.
I understand the economic rationale, but completely fail to grasp the customer strategy as my frustration mounts as the computer compels me to use words it understands — such as “Do you want to talk about Broadband for your office? If yes, say ‘yes’ etc” Please tell me I am not alone in thinking this is back the front as I am shaped by the machine.
The sheer volume of information can overwhelm us and create a feeling of saturation. While the volume of useful information is growing, the ‘signal to noise ratio’ is getting worse, requiring intense effort to find information that matters.
We know more and more about less and less. Paradoxically, this fosters an addiction to technology as we slavishly seek the next piece of often useless information.”
While people talk about a ‘digital lake’ which is a repository of vast amounts of data, I rather fear the lake is submerging much around it, including many of us who are wired in to our devices.
Despite having an abundance of time saving devices we have become an ‘always on’ society and have less time than ever. Complex global linkages and interconnections accelerate our daily exposure and compound the saturation.”
While technology collapses geography we find ourselves less personally connected than ever. We can feel closer to someone in another part of the world, with whom we engage online, while completely disconnected from our immediate neighbours.
This gives rise to a sense of fragmentation — of belonging in different places at the same time, of belonging to everywhere but nowhere, of feeling pulled in competing directions.
With increasing technological capability fewer people will be required to produce what we require to run our lives, and we will be able to spend more time doing human interaction type tasks and less time doing intellectual tasks which can be automated.
Much functional work will be done by artificial intelligence, and the remaining core staff in a business will be focused on caring for customers, tailoring services to each specific individual and their needs. These employees will be highly skilled and trained in emotional intelligence.
The outcome of this will be an emotional economy, which will place far greater premium on care — the ability to meet the needs of others in a way that is emotionally engaging and fulfilling.
Leadership will be a core competency for every employee, and will be vital in every successful role. People who cannot lead themselves before leading others will find it hard to obtain meaningful work.
The emotional economy will encourage a distinction between the transaction and the transpersonal. Real value-add will occur person to person as basic transactions are automated.
This will enable a range of choices about the level of interaction a customer wants and how much they will pay, with some choosing to pay a premium for human interaction. This is a market opportunity that few appear to have recognised, given the tendency to downsize organisations, automate interactions, and use logical rather than emotional measures.
In a knowledge economy we say people are our greatest asset, endeavour to manage by objectives, and use words like ‘mind share’, and value.
In an emotional economy we recognise that relationships are our greatest asset, manage by meaning, and use words like ‘heart share’ and purpose. Leadership is more about character than vision, and successful organisations focus more on social contribution than profit.
In a knowledge economy personal value is directly related to how much you know, how much you can create or generate, and the quality of your judgment — in short the ability to acquire and apply knowledge.
But the digital revolution is completely disrupting work. Computers will do most of the work currently done by knowledge workers. And this could be you. Is your job at risk?
You will spend less time doing intellectual work and more time engaging with people. Therefore, the ability to deeply empathise, to apply emotional know-how, and to reach out and touch people will be the new source of wealth.
Your personal value will be the size of your heart, not the size of your ideas.