010: Mark Bonchek of Shift Academy

Mark Bonchek is a PhD from Harvard and is on a mission to update leaders’ thinking in a digital age. He received his doctorate in Digital Strategy back in 1997 and was clearly ahead of his time as the internet was just taking off. Love his title: Chief Epiphany Officer!! Who wouldn’t want that?

As the founder and CEO of SHIFT Academy, Mark helps companies become unlearning organizations. With new mental maps, leaders better navigate the ever-changing landscape of business. SHIFT Academy gives teams a shared understanding, a shared language, and a shared purpose through online expeditions, in-person summits, and guided journeys.

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We have a really great guest on, another brilliant guy named Mark Bonchek. Mark comes from Boston, Massachusetts. We worked on a project together about six years ago here in LA. He actually went to Harvard back in 1997, got a Doctorate in Digital Strategy. Just a remarkable guy. He calls himself a Chief Epiphany Officer, which is just a great title. If you can imagine how the landscape out there is changing with all the different social platforms, he really talks about a gravitational pull or trying to create one and so many companies don’t have it. For all you budding entrepreneurs and marketers out there, this is just a really valuable podcast to listen to and get the great tips from the experts that are out there. In this case, Mark Bonchek. As always, we really appreciate when you go in, you rate and review on iTunes. You do raising the ranks. We’re trying to get more awareness out there in what we’re trying to do and help people and overcome things. Go out there, rate, review and help us out. All is very appreciated.

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Mark Bonchek of Shift Academy

 

There’s an old colleague of mine I worked with I think five or six years ago out here in California on a common project, Mark Bonchek. Brilliant guy, very interesting and I’m really excited about this conversation, about the direction it’s going to go. Talking about what he’s up to with Shift Thinking, and also the trends going on with different companies. Mark, welcome to the show.

Great to be here.

You and I met originally a number of years ago. I think you may have been doing a TED Talk or something. The guy that I was doing a project for, Mike Singer with Strategic Partners, saw you, was inspired and brought you in to change the mindset of many of the employees in the way that you guys did business, and the way that we are trying to start this new project. Can we get in to what you’re all about and your business? I think with that, it will help us springboard into other conversations.

I have a company in practice I call Shift Thinking. My title gives some of it away. I like to call myself the CEO, but I’m the Chief Epiphany Officer. I mean it as much of a reminder to myself as to other people because I think of myself as being in the epiphany business, that my product in effect is that a-ha moment for people when they see the world in a new way. My premise is that we’re in a time of transformation and we can’t just do new things. We have to think in new ways. It used to be that you could just do new things and that was sufficient. That was when the world change incrementally, and now it’s changing exponentially. If we don’t change how we think before we look at changing what we do, we’re just going to get the same kind of results. You might get slightly better results but it’s not enough to be 10% better today. You have to be 10X better.

Let’s dig down to that. What does that mean? You’re talking about exponential thinking. If I’m walking down the street and somebody said, “You need to start exponentially thinking better.” How does that relate to what I’m doing in my business?

What makes something exponential is that it’s not just that it increases but the rate of change increases. The way to achieve that is by creating a network effect. If you look at all of these companies today that we think of as being the high flyers, whether it’s Uber or Lyft or Airbnb or PayPal or Facebook or Twitter, all of them have tapped into some kind of a network effect. That’s why they don’t just grow the 10%, they grow to 10X. If you look at the people that are most successful as well, there’s an exponential aspect to the way in which they become successful. The key to it is that network effect. Normally, we look at creating value through the things, either ourselves like, “What am I worth as an individual to a company? What’s my product worth to a consumer?” The key shift in thinking is to say, “It’s not about the things but the relationships between the things. The connections between the things.” Let’s just take Facebook for example. Facebook is basically a publishing platform. Instead of being like The New York Times or Fortune or Time or something like that, they didn’t push the content out through a channel. They said, “No, we’re going to connect people together. We’re going to turn everyone into a publisher.” They activated that network effect where it’s now people connecting with people, instead of just writers to an audience. Everyone can put this into practice by looking at what are the things that you can be connecting together and not just what is the value of you and what you do.

The first thing you’re talking about was push marketing where you’ve got just an outbound conversation going on with no feedback. There’s no exchange. Do you call that then one-to-many or do you call that many-to-many?

That’s a many-to-many. Let’s talk about marketing, but it applies to other areas too, but let’s start marketing. Instead of just that one-to-one, one-to-many push it out, there’s no network effect. You add one more viewer, one more subscriber, one more member of the audience, you’re adding value incrementally, one more subscriber. If you can connect those people together into a community of some kind, then they each can connect with everyone else. One of the best examples I see of this is Sephora and what they have done in creating these communities around beauty and makeup. It’s not just what they push out to people, but the way in which all of their customers share beauty tips with each other.

This is one of the reasons why I think Whole Foods failed and ended up getting acquired was because they didn’t tap in to the many-to-many. They were really good about sending out newsletters and information about eating real food and eating healthy and so on, but they never connected their customers together. I think we all have different quirks in our diet. I have certain things that I don’t eat. I can’t eat sesame and soy and so on. I would have loved to be able to go on to a Whole Foods online community of some kind, and connect with other people who have the same kind of eating preferences or restraints that I did and see what they’re finding and what recipes they’re doing and what foods they find are helpful. They could have done a lot to activate that exponential effect of networking their customer base, but they didn’t do that. That’s one of the reasons why I think they ended up not being able to stay viable as an independent company.

They went halfway down the road and didn’t do the full circle. What they did do well is introduce. When you go to the produce department and you’re picking through apples and oranges, whatnot, there’s typically a little story, “This came from the local guy.” It would connect that way and that the fruits and vegetables and other food that you’re getting is organic or free of pesticides or whatever. Like you said, it’s just an outbound message and it’s not connecting everybody else in the store.

You can see this also with products, so it’s not just with marketing. Look at what Nest has done with their thermostat and then now with their smoke detectors and their cameras. It used to be that Honeywell or whoever made thermostats and the thermostat just sat there and each one was separate and it connected to your HVAC system, but it didn’t connect to anything else. Nest said, “Let’s focus on the connectivity.” Now, the thermostats connect to your phone and they connect to each other. I just installed the Nest smoke detectors and it’s a social network of things, I like to say, instead of internet of things. Those smoke detectors all talk to each other. If there’s a fire in one part of the house, the smoke detector on the other end says, “Fire in the bedroom, fire in the entry way,” because they’re all talking to each other. They’re creating a many-to-many network of the little devices that are in your house.

The name of this podcast is Finding Your Summit. I’m really trying to take a wide angle view at not just things that are straight ahead. Talking about relationships, mountain climbing, businesses, it’s a wide spectrum. You must come into a lot of contact where companies hire you to come in and help with the Shift Thinking, create strategies where they flat-lined. It seems like that would be the obvious. That’s the reason why they have you in there. They’ve peaked and what you’re trying to do is help them overcome these different things to get to a new level.

Usually, it’s that they’re trying new things but they’re not getting results that they’re looking for. The first step when you mentioned bringing me in a similar situation is, usually they’ll hear me speak. The message that they have to change how they think in order to change what they do resonates. There’s enough recognition to say, “The way we’re thinking about this isn’t working, but we don’t know how to think about it.” That’s most of where my work comes in is both to help them see the constraint that their existing mental model is imposing on them. Then to figure out what the new model would be that would be more effective and would enable them to go to a higher summit. Then what’s the story that enables them to align and energize everyone to let go of the old trapeze bar and jump to the new one. That’s very much about thinking.

How difficult is that to create change? It’s old patterns and behavior. Trying to think about it in just a whole new way is always the challenge. Then probably also I would think that it’s to permeate that through other organizations.

It is hard but it’s also not as hard as you think. Back to this trapeze metaphor. Let’s say you’re hanging from a trapeze bar and the rope is fraying and there’s no net below. You know that it’s going to give way at some point but if there’s nothing else to jump to, you’re going to hang on as long as you can. That’s just the rational thing to do. If someone brings a new bar close enough to you, you’ll gladly let go and go to the new bar. Oftentimes, what happens is people are resistant to change but it’s because they don’t see there’s any other way to go. They’ll just keep doing what they’re doing even if they know that it’s not working because there’s no alternative. I find that there’s too much emphasis on yelling at people to jump rather than designing the new bar and bringing it close enough for them to jump to.

[Tweet “If there’s nothing else to jump to, you’re going to hang on as long as you can.”]

When you go in to an organization and they have a certain business model, and the business model then for you is to get them to think in a way that rather than just do your same old marketing, push out emails and newsletters, post once a day on Facebook or Twitter is really create that community. It’s almost like An Army of Davids of getting people to be your advocate to create that springboard growth, right?

Yeah. I divide it into their four parts to what I do. One is what I call unlearning, which is getting people to see the existing mental model that’s constraining them and to move to a new mental model. That’s a foundation. Then you have to look and see where is it that you need to apply this. Sometimes it’s to us, ourselves as individuals, as leaders, where are our mental models of our role as a leader? For example, I’ve been doing some work in education and healthcare. There you have doctors and teachers who for their whole careers have seen themselves as the expert. They are the ones who have the answers. That’s their job, patients and students come to them for the answer. Increasingly, because of technology and change, people don’t expect them to have all the answers. Increasingly, with artificial intelligence, the computer is going to have the answer.

With flipped classrooms, it’s different and people getting information online. They don’t expect the teacher to have the answer. They have a mental model of the role that needs to get changed. It can be who they are as leaders but it can also be, with respect to their strategy, their business model, are we about a product and service or are we about a platform and network that enables others to create value? It could be their marketing about shifting from an audience to a community. It could be in their organization and how do they move from a more hierarchical top-down, cascade the command and control directives from the top into more of a collaborative network agile organization, and that’s a different mental model of organization. My first step when I go in is always the triage to say, “Where is the binding thinking? Is it about people’s sense of themselves as leaders? Is it about the way that they create value and organize their business model? Is it about how they engage with customers? Is it about how they organize their employees and partners?”

It’s amazing to go in in a company that clearly knows there’s a need, but doesn’t know exactly. Maybe sometimes you’re too far in it. The old adage about, “Sometimes you can’t see the trees in the forest,” and maybe that’s it. Is there a common thread that you find when you go into these different companies? Is there a common problem that comes up or does it just equally share in these four different buckets you just talked about?

I think that the one that people are the most aware of I’m finding is on the marketing side. Just because it’s really clear if customers are responding to you or not. You know that you have a growth problem or retention problem. The feedback is very clear with customers today who aren’t responding to the usual kinds of engagement strategies. White papers don’t work in B2B and advertising is not working the way it used to, people are looking online. I think the presenting problem is very much in the marketing area right now. You can keep going with our traditional organizational model and you can keep going with your business model, although those are the ones that people are going to have to content with next. I love the idea of finding your summit. There’s finding your summit as an individual, there’s finding your summit as a company. A lot of what’s really disorienting to people is that it’s hard enough to get to the summit and then people are finding, “The mountain moved. We’re still trying to get to this summit, but now actually the game is over there on that mountain range. What do we do now?”

Which is what you’re talking about where the landscape is changing more than ever in the history of the world.

Did The New York Times ever thought that they’d be competing with Facebook for where people get news? That’s a whole different mountain range. Did Honeywell or whoever thermostat manufacturers are think they’d be competing with Google?

How does that work? What’s your advice in terms of trying to stay in front of this changing climate?

I think the first thing is you have to learn how to peel things back. There’s so much on the surface now. Forget about what’s going on in the political arena. Although that’s an interesting one too in terms of mental models. Even just in business, it’s really easy to have this high-growth companies called unicorns. You can have unicorn envy. If you’re a bank, you look at PayPal or if you’re in publishing, you look at Facebook. You look at Salesforce if you’re in technology, any of these companies. It’s very tempting to think, “We need to do what they do.” Where I always started to say, “No, don’t start there. Figure out how they think.” People are good at this around investing. The Warren Buffett’s annual letters scoured for people to understand how he thinks about investing. I would say the same thing with Jeff Bezos. It is not a matter of how do we build a website like Amazon’s but if you go and you read Bezos’ annual letters, you can start to see how he thinks.

I’ll give you an example. Everything they do is around this mission of being the world’s most customer centric company. Every company, they have to be thinking about what their mission is and really organizing around that. If you look at not only how they think but what they measure, because that determines really what you’re going to do. They have 500 KPIs, Key Performance Indicators, at Amazon that they track in how they manage their business. 80% of those are related to the customer. I would challenge any company to look at what they measure. I would bet that in most companies, they’re measuring 80% are internal and 20% are external. In Amazon, it’s flipped the other way around. You really have to look at who do you emulate, how do they think and are you making investments and measuring the things that line up with the mission that you’ve set out for your business?

It’s a great example of all the things you’re talking about. Creating communities, people talking about it, doing reviews, being customer centric, things showing up with the introduction of the Prime where things show up the next day or the day after. There is just so much customer satisfaction that people want to evangelize about how great Amazon. Now, Amazon is in the position to essentially take over so many different sectors because they’re all about, “Where can we go next?”

They didn’t box themselves in. They set themselves up for the highest summit possible. Some people don’t know, like the logo in the names. Amazon is the world’s biggest river. He had that vision of it being everything. He knew he was just going to start with books. If you look at the logo, the smile connects the A to the Z. That was the idea that they’re going to have everything from A to Z. It was there from the beginning.

There’s a Seattle company, I had some buddies who invested early in and they could see the vision. I’ve talked to them about it. They said, “The guy was just so unique in the way he saw the world.” This is way back pre-internet when he was selling books out of his garage, but the vision was always big. Another Seattle company that I worked with for a long time is Starbucks. Why don’t you tell us a little bit more about Starbucks? I know you’ve studied them in the past, but the way they think, customer centric, bringing people together, why that worked?

[Tweet “It works because they have a mission that’s bigger than the product.”]

I have a slightly different view on Starbucks. I have a view of why it works and why it doesn’t work. Why it works is because they have a mission that’s bigger than the product. It’s this insight that in terms of how they think is they don’t think of themselves as a coffee company. They think of themselves as a third place company, which was Howard Schultz’s original insight. This idea of third places that successful communities have a third place between home and work. When he went to Europe many years ago, he saw that the cultures there had a third place and there was a beverage of some kind that was the currency of that third place. In England, it’s the pub, in Germany the beer garden, in France and Italy, it’s the café or the coffee shop. He wanted to bring that to America. Starbucks was created as the third place between home and work with coffee as the currency. It grew through that as well as empowering baristas with good healthcare and so forth.

If you know the book Onward that Howard Schultz wrote, he describes how when he stepped away from managing the business, it started to suffer. Then he came back in and they started growing again. It’s largely because they started to think of the business as a coffee company again. Their metrics were about how many cups of coffee were they selling, not how successful were they at creating a third place where people wanted to be there, and then they ended up drinking the coffee as a result of being there. It’s a good example of what they did right which was understanding that there is a shared purpose beyond the product and really differentiating the experience around it. That’s the ‘what worked.’

I have a view of what doesn’t work or what’s limiting them. Their mission by the way is to inspire the human spirit, one cup, one person, one neighborhood at a time. It’s great except they do something that I call hoarding their purpose. I believe this, they believe that only they get to inspire the human spirit or I like to say, “Who gets to wear the t-shirt with your mission on it?” I their case, only the baristas get to wear the t-shirt or in this case, the apron. You don’t get to inspire the human spirit, they do, and that’s why you go to Starbucks. It caps the ability of creating a many-to-many. Imagine a Starbucks online community of people sharing stories and doing things of how to inspire the human spirit. You’re an example of that in what you’re doing with Finding Your Summit. You’re inspiring the human spirit. Imagine if there was a platform that Starbucks created that was featuring your podcast and you were then connecting to Starbucks as a third place for inspiration. They don’t do that, so it’s a real missed opportunity in my book.

You’re right, certainly people go there. They collaborate. People use Starbucks as their office. There’s such a great opportunity to share stories and share other things that they’re probably missing out on right now that really springboard them further than where they are today.

Here’s an example of you can reveal where the mental model is. Coffee is their currency and they’ve had a very successful mobile app, it works great. But if I want to send you a cup of coffee, I have to send you an eGift certificate for a certain amount of money that you then redeem towards the coffee, which just takes the whole fun out of it. Instead of being able to just say, “If you have the Starbucks app here, let me send you coffee today,” and you’d send it back to me tomorrow. We’d be “inspiring” the human spirit in each other through coffee. They don’t do that which reveals the mental model that only the baristas get to do it.

It takes away the interactive playfulness.

That’s the many-to-many.

Obviously, they’ve got millions and millions around the world of loyal Starbucks followers. That would be so easy to tap into. Let’s go back to 1997 and I believe you either went into or coming out of Harvard.

Yes, I finished my PhD in ’97.

You’re thinking about things and this whole digital revolution. Pretty much, you’re probably much more forward thinking than anybody else around. The questions is, why were you thinking about things in this way and why could you see the future when so many others didn’t?

Some of it was I had the luxury of being in graduate school where I have time to think. Even more so today, usually you just don’t have time to think. That was part of it. Some of it was also I stumbled down a pathway of looking at networks and understanding networks. I just made that connection that said, “I wanted to understand how the internet was going to change society,” and I was looking at political participation. That’s what an epiphany is. You don’t have it and then you have it. At some point, I was looking at Marshall McLuhan’s work on The Medium is the Massage. Basically he said, “It’s not the content of a medium. It’s the nature of the medium itself.” I was like, “I want to understand what the internet is going to do.” This is really early. Yahoo had barely started. There was no Google and Mark Zuckerberg from Facebook was still in grade school. There was none of this social networking, anything. We barely had email and web pages.

I remember thinking, “I need to understand what’s the internet, the nature of the internet as a medium.” It grew out as a computer network that was designed to be resilient in the face of a nuclear attack, so that it would dynamically reroute the data if something got taken out because the existing systems were really brittle that way. You had to understand it as a network and that was really what started me down the path was to say, “It is not about it being digital. It’s not about it being the internet. It’s about what happens when we move to networks and many-to-many communication.” That was fundamentally different. The last time we had a change of that kind was 400 years ago when Gutenberg invented the printing press. Once you start to look at the changes that the printing press created compared to what the internet would do, you start to realize that, “This is going to change everything.”

As you look over your career, is there a couple or maybe it’s one shining star, either a company that you worked with and helped or just another one that you’ve admired from afar that checked all the boxes in terms of doing all the strategies that you speak about, really engaging the whole community, sharing back and forth, interactive or soaring? Who would that be?

I haven’t seen one yet. I would say that the company that I think gets it the most in terms of the customer side of things. I don’t know about internally what it is to work there but I can say externally, I think Sephora is doing this better than anyone. Largely credit to Julie Bornstein’s original work there. She had started Nordstrom.com and then went to Sephora and now she’s at Stitch Fix, but really put the DNA in place of understanding that it’s about education and connection and creating currencies for their community and going beyond just what you sell in to what I call the brand orbit, the ongoing relationship beyond the individual transaction. I think they do it as well as anybody I’ve seen. Unfortunately, I actually see companies that get it and then take a step backwards. Nike I think got this really well with what they were doing with the Nike+ Running app, and then on the latest incarnation, they stripped out a lot of the community features because they started to go towards a more transactional loyalty model. Just because you get there doesn’t mean you stay there.

I didn’t know that. I know that wristband and everything else. A lot of people were touting it, they loved it, “I ran two miles a day. I walked X amount of steps.” That seem to be creating the conversation and then they could tie in other buddies. Invite five friends in a competition of who walked the furthest or ran the furthest or do the more exercise in a day.

I think we’re really early on in all of these, and there are little bits. The good news for people is that there’s a lot of opportunity. The companies that do make the transition are the ones that are going to really succeed. All of these applies to individuals as well in terms of a personal brand. I’m working with one of the stars of the show Hamilton, the top musical on Broadway now, about her personal brand. Mandy Gonzalez got this great mission around being fearless and inspiring other people to be fearless. Instead of just a typical fan community which is about her, this is really a shared purpose of helping people be fearless in their lives with the notion of finding your fearless squads. You can find it on #fearlesssquad and it’s all about people using social media to support each other to fulfill their dreams. It’s taking off exponentially. It absolutely applies at any level in any industry, in any field.

I just got done reading this book called The Miracle Morning by Hal Elrod. It’s really about changing behavior for people who want to change their life. It could be weight issue. It could be relationship. It could be your business, whatever. Starting before 8 AM in the morning accomplishing all these different things of visualization and goal setting and exercise and things like that, they all encompass in one hour. One of the things that he’s done very successfully is he’s created this community of where other likeminded people who want to change their mindset and their ways, and change their habit in terms of being more productive and everything else. They’ve gone into Facebook, created these different communities. Now, people are with them there sharing their stories and encouragement and inspiring others to stay committed to this new morning routine. It’s just another small example of what you just mentioned.

If you want to change your habit or behavior, do it with other people. All the data shows you’re far more likely to exercise or lose the weight or whatever it’s going to be, quit smoking, if you’re doing it with other people.

Mark, where can people find you?

My website is www.Shift.to. My Twitter is @MarkBonchek. I also write a regular column on Harvard Business Reviews. You can look for me there too.

From my standpoint, my endorsement from you, having worked with you, you’re brilliant and you think differently. It’s really creative to be around. Any of those out there looking to have some organizational change to what they’re doing and understand what Mark is talking about, then I really encourage you to reach out to him, a great guy. Appreciate the interview, Mark. It’s been an absolute treat.

For me too. Thank you, Mark. I love what you’re doing in helping people find their summit. There’s nothing more important than that. It’s been a pleasure to be a part of this. Thank you.

Thank you so much.

Resources Mentioned in This Episode:

• Mark Bonchek
• Shift Thinking
• Onward
• The Miracle Morning
• The Medium is the Massage
• Mandy Gonzalez
• @MarkBonchek Twitter
• Nordstrom.com
• Harvard Business Reviews