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Perspectives

Making Sense of Code Halos via the Crossroads Model: Stage 2, Spark

2014-04-08


As discussed in the previous installment, the Crossroads Model takes companies that embrace Code Halo™ thinking through a predictable five-step model that rewards winners with market relevance and growth and helps avoid Extinction Events. This installment focuses on Spark.

What happens when a company matches a customer Code Halo, built from bits of virtual information, with its own Code Halo, derived from its big data initiatives? When such Code Halos collide, a fool–proof business model emerges. This is the phase of creating tangible results from creative ideas that emerged during Ionization. This is when consumers discover the launch of innovative products and services that meet their requirements. This is when CVS began its personal message service to customers' mobile devices when a prescription is ready for pickup.

Ionization spurs a relentless flow of ideas on ways to analyze and utilize inbound Code Halos. As the company enters the Spark phase, consumer Code Halos collide, and corporate halos merge, giving rise to highly tailored and customized products. The Spark of innovation may be a tiny beginning for a company, but it nonetheless commands attention from customers and competitors, alike.

When Pandora began its music recommendation service nearly a decade ago, it gradually built its business by accumulating and understanding customer Code Halos. Now with over 35 million listeners, the company has put in place a robust system of managing customer halos of likes, interests and dislikes of different albums, genre or songs. The Music Genome Project, initially created to bring together all kinds of music in a predictable pattern, now virtually knows the likes and dislikes of every listener.

Code Halos meet head on, setting off a Spark that transforms an idea into a successful business model. If a company is backed with sophisticated algorithms and is constantly fed with well–researched analytics to decode the Code Halos, sustainability of the Spark is assured. These embryonic ideas that evolve out of the Ionization stage redefine the customer experience. For example, when Progressive Insurance launched its instant online comparison quotes for motorcycle insurance in 1999, it had already glided through its Ionization stage, cataloguing customer preferences, to create an effective operating model.

Changing the Future of Work: Spark

Here are some pointers to kindle Sparks in your company and move toward the Enrichment phase:

  • When a process is ripe for disruption and joins hands with technology, Code Halos expand. Not long ago, buying behavior was just a humble entity that played a small part in predicting companies' future sales and revenue prospects. With the endless flow of unstructured Code Halos, however, companies can now cut through the data wilderness to make sense of buying behavior. That is how companies like Amazon, Netflix and Pandora spotted the pain points of customers and came up with products that improved the shopping and entertainment experience.

  • Every process must go through a "continual use" test. Innovation must lead to a product that could be of everyday or near–everyday use. Code Halos need to be constantly nourished with information to keep them growing. To keep information volumes increasing, the product or service needs to be of continual use to the customers. With the help of SMAC Stack (social, mobile, analytics and cloud) technologies, the regular flow of Code Halos makes the product more customer–centric.

  • Code amplifiers redefine the business model. Every time you access your smartphones or put on the Nike FuelBand, Code Halo "amplifiers" are hard at work. The amplifiers are IP–addressable smart devices in any form that can enrich Code Halos with a continuous feed of data. Disney's MagicBand, Progressive's Snapshot and UPS's tracking information... all these inflate Code Halos with a persistent flow of data.

  • Consumer–grade technology reshapes corporate work processes. In a world of growing importance for consumer experience, consumer technology redefines business models at every point. The era of retail banking (which signaled an end to long waits for banking transactions) is here, and enterprises need to stay ahead of every consumer demand. Pharma companies' clinical drug trials, CVS's mobile prescription notification service and GE's IP–addressable jet engines that integrate the company's Code Halos with those of customers–all of these have transformed their corporate processes by infusing consumer–grade technology.

The use of social technology to ignite Sparks, though they sound like a foreseeable event, can be tricky. Companies that spotted the early signs of Ionization have successfully created Sparks by letting their algorithms collide with incoming Code Halos. This period is also marked by fast–paced growth, in terms of users or usage.

Our next installment covers the Enrichment stage.

To learn more about the Crossroads Model and how Code Halos transform companies – and entire industries – read our white paper Code Rules: A Playbook for Managing at the Crossroads, available on our Code Halos website. Once you understand Code Halos and the Crossroads Model, you can begin crafting a strategy for winning the new " code rush."

In addition, check out our new app at the Apple App store and look for our book, " Code Halos ... How the Digital Lives of People,Things and Organizations are Changing the Rules of Business," recently published by John Wiley & Sons.

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Making Sense of Code Halos via the Crossroads Model: Stage 2, Spark