"The tiny, spontaneous, human act has enormous power." Tom Peters
James H. Gilmore and B. Joseph Pine II are co-founders of Strategic Horizons LLP, a thinking studio that helps companies design new ways to add value. In addition to coauthoring their bestseller The Experience Economy, Gilmore and Pine also edited Markets of One and have written articles for the Harvard Business Review. Their recent book is Authenticity: What Consumers Really Want. Joe Pine and Jim Gilmore were the very first Cool Friends at TomPeters.com in 1999. At that time they were establishing a prominent place for the word experience in the business lexicon, and they are currently doing the same for the word authenticity. Erik Hansen talks to them about the new book.
tompeters.com asks ...
What is authenticity?
JG: We define it—in the context of business—as the new consumer sensibility, or dominant purchase criterion that's emerging in the Experience Economy. It's the strongest motivation for people to buy. The rise of each economic order has given rise to a new sensibility. With the rise of the Industrial Economy, cost became the dominant sensibility; consumers would purchase based on affordability. Could they afford to buy their first ever radio, dishwasher, or car?
With the rise of the Service Economy, quality emerged as a new sensibility. When you pay somebody else to change your oil, mow your lawn, cut your hair, cook your food, that's when quality emerged as a reason to buy. And now we have a world that's increasingly filled with mediated, staged, and multi-sensory experiences—an increasingly unreal world—which gives rise to people desiring authentic or real experiences.
What leads you to believe that?
JP: Jim and I observe what's going on in the business world, try to make sense of it, and develop frameworks around it so that people and businesses can also understand it and then determine what they should do about it. We sometimes describe ourselves as "Frameworks 'R' Us." In trying to unravel the ever-changing business landscape, we always try to offer a multiplicity of perspectives.
After we came out with The Experience Economy in 1999, we noticed how often authenticity was brought up whenever we spoke with people. For, as life is becoming a paid-for experience, we increasingly pay companies to stage these wondrous and engaging experiences for us, so it's natural for people to question what is real and what is not.
JG: Many people would accuse us of wanting to "Disney-fy" everything, turn everything into Planet Hollywood, and that it's all so fake.
JP: I became a visiting professor of the University of Amsterdam, and at the end of every talk in the Netherlands, somebody would bring this issue up. It would almost always start with the same two words: "You Americans." "You Americans, you like your plastic, your artificial, your fantasy, your Disneyland experiences. We Dutch, however, we like our real, authentic, natural experiences."
That made me think about how the Netherlands is a more manufactured reality than Disneyland. It's been around longer, but there isn't a square meter of ground in the entire place that hasn't been reclaimed from the sea or otherwise moved, modified, or manicured to look as if it has always been there.
Yet they desire authenticity, more than Disneyland can provide. And we found that that is true of so many people today; they no longer want the fake from the phony, they want the real from the genuine.
JG: In The Experience Economy, we used the birthday party example of the progression of economic value from commodities—flour, sugar, eggs, cocoa—to cake mix goods, to cake-making services, to birthday party experiences like Chuck E. Cheese's. It resonated with people—they said, "Yes, that is what's happening"—but for many it felt artificial and fake, and some of our terminology rubbed people the wrong way.
We're adamant that you deliver a service, but you stage an experience. For some people, the whole notion of "staging" made it seem fake. They resisted the term. But we're serious about this. We devote three chapters in The Experience Economy to the notion that "work is theatre." We're talking about doing work differently. It's not just what you do, it's how you do the what.
Yet the word staging rubbed people the wrong way. In fact, the very idea that work is theatre did. But think about what people are consuming experientially: birthday parties at Chuck E. Cheese's, Build-A-Bear, and American Girl Place, or the new forms of tourism, whether it's fantasy baseball camps or fantasy rock 'n' roll camps. You might buy in one category of experience. But for those categories that you do not buy in, you look at somebody else doing it, at their behavior, and say, "Oh, that's so fake and phony. I would never buy that."
I agree. I say that all the time.
JG: Right. We like our own tastes. Our definition of authenticity is "purchasing on the basis of conforming to self-image." We like to quote someone we hope is a Cool Friend of Tom Peters, and that's Virginia Postrel . I trust she is.
Yes. We spoke with her about The Substance of Style.
JG: Well, we cite The Substance of Style in our book because she does a wonderful job of capturing the sense of this ethos. She said people buy today when they see a good service or experience and think, "I like that. I'm like that." Consumers say, "I wouldn't be caught dead in that store." Or, girlfriends go out shopping together and one holds up a dress, and another says, "Oh, that's so you." Or a person's criterion is, "Am I the kind of person who ..." Joe once said to me that he's not cool enough to own an iPhone. Some of the decision criteria have nothing to do with the traditional functionality of the product, but, "Hmm, if people see me with this, they'll think certain things of me. I don't want that."
They would see him as being inauthentic, because they would say, "No, that guy isn't cool enough to own that."
JP: Right. And I would feel inauthentic.
But what are you more worried about? How you feel? Or how people perceive you?
JG: Whether one is aware of this or not, it seeps into decision-making when making purchases today. That's what's authenticity is about—purchasing based on conformity to self-image, not just the performance of the offering, the cost, or even the availability. Increasingly, people are making decisions based on whether what's being offered conforms to their own self-image.
JP: Right. Therefore, businesses have to respond by understanding that the number one business imperative becomes that of rendering authenticity, of managing customers' perception of authenticity.
Now, wait a minute. You've taken me too far ahead here.
JG: Okay, so let's address what we mean by rendering authenticity.
Can we do that? I'd like to talk about Holden Caulfield. As a young adult, you're confronted with this notion of all adults being phonies, which is articulated so well in The Catcher in the Rye. That seems to lay the groundwork for a lot of the discussion we're having—
JG: Literature, philosophy, and social commentary are rich sources for seeing the underpinnings of this. But we're applying it to the business context. Some of those same struggles, those same issues, have been voiced for generations—so nothing new there. What's new is that the current confluence of events is such that authenticity is manifesting itself in terms of where and when we buy.
But, as you say, everything around us is fake—
JP: We don't say everything around us is fake. We say all economic offerings—
JG: —all business enterprise—
JP: —are fake.
Okay, you say that all business enterprise is fake. Don't you also say, or was I watching Animal Planet last night and they said, that even nature is fake?
JG: That's us.
JP: Nature isn't natural; nature is, in fact, nurtured. Charles Mann, in his wonderful book 1491 pointed out that when Columbus came to North America, he encountered a land that was already managed by American Indians to have the characteristics they wanted for hunting. Traditionally, we imagine that it was a pristine wilderness at that time. But that wasn't the case. The entire world is much more like the Netherlands, in that nature everywhere is, in fact, manufactured.
That was an eye-opener for me, with my Norwegian background. Much like the Dutch, we think that nature is perfect and pristine and all things should strive to be like nature. It's disturbing to be confronted with the fact that nature isn't quite as real as we think it is.
JG: We just don't know what wild truly is. We cite another wonderful book, Nature's Keepers on that score.
I remember we received an email from a lawyer in Philadelphia saying, "The Experience Economy is a wonderful companion piece to the novel England, England by Julian Barnes." So we checked out this book by the brilliant British satirist. It's the equivalent of Dickens' commentary on the Industrial Revolution.
Without ruining the book for anybody who might, as a result of this interview, go buy it, here's the basic storyline: A rich entrepreneur by the name of Sir Jack decides to buy the Isle of Wight and turn it into a theme park where you can experience all of England in a single day. He convinces the King and Queen of England to end the monarchy and become full-time employees of England, England. And the romp is off.
And we're sure to see, some time this century, the new Las Vegas casino, "Las Vegas, Las Vegas."
JP: That's the one we want to see built next. It's inevitable, all of Las Vegas in a single resort casino!
When you start wrapping your head around the fact that everything is a constructed reality, this isn't such a debased thing for businesses to consider. I think that leads us to your notion of rendering authenticity.
JP: Yes; rendering is taking something that is, in its very being, fake, and getting people to perceive it as real. All economic offerings are ontologically fake, but phenomenologically people can perceive them as real. That's the essence of rendering.
JG: Here's an example. Every day, customers call the 800 numbers of businesses, hoping to get a "real person." Our ancestors would never have qualified the noun person with the adjective real. But we live in a time that requires it. Given that reality, a business can take actions to have that interaction be perceived as real by making the technology more human. When you call the Geek Squad, for example, they prompt you, "Please hold for an actual human." That self-acknowledgment of the artificial interface says, "Okay, these guys are real people," as opposed to not acknowledging the inherent phoniness of it. We think that's a giant step toward rendering authenticity.
It's necessary to acknowledge that all activity of business is inauthentic. This is a mistake many businesses make, particularly if they're locally-owned or they're long-established. They think, "We're the real company. The other ones are the fake ones." That is a big misstep. To acknowledge, "We're just as fake as anybody else, and we have to take steps to earn the perception of authenticity," is key in all this.
As you said before, I think that everyone else is buying fake stuff and I'm the only guy buying real stuff.
But you also make the point that, each and every individual is constructing his or her own reality on a moment-by-moment basis. There are people who think that Starbucks is really cool and people who think that Starbucks is crap because it's no longer authentic.
JP: But the thing is, they're both right because authenticity is personally determined. Two people, buying the same offering, having the same experience, can have two completely different perceptions of authenticity based on who they are and what previous experiences they have had.
Doesn't that make it impossible for a business to figure out how to render itself authentic?
JP: No, but it is difficult. You just have to realize that you may be able to render authenticity for some of the people all the time, maybe all of the people some of the time, but never all of the people all of the time.
JG: Or perhaps to the contrary. A lot of this points to the core topic that actually drew Joe and me together. I read Joe's book Mass Customization in the mid-'90s, before we met and later wrote The Experience Economy. One of the reasons for mass customized offerings is to allow customers to design the product for themselves. Such can't help but conform to self-image. When a company's offerings are no longer the mass produced same ol' thing for everybody, your question is spot on. It's very difficult to conform to the self-image of all the people all the time.
But if you're capable of allowing people to find their individual selves in your offering, then you're rendering authenticity. Joe and I focus on long-term structural shifts in the very fabric of the economy. And authenticity is yet another thing that's driving us towards this atomization of output—
Right. And that's led to all kinds of consumer-generated content.
Does that have a short shelf life? I think it passed its prime when people started making ads for GM. That signaled the downfall of consumer-generated content.
JP: But remember, there are people who love GM. There are people who think that GM has the best cars in the world. They would never buy anything else. They're just not you or me.
JG: I would wager that the entire genre of individual expression of what people think about various brands will win the day versus the 15-second broadcast spot. Individual expression isn't a commercial. I don't even like the phrase "user-generated content." It's the marketers who have given us that god-awful phrase. People are now, openly and freely, and in a much more connected way, commenting on or expressing how they feel about various brands—
The marketers are still speaking from the point of view of the company.
JG: Marketers are trying to manipulate this user-generated content as opposed to letting it go and letting the customers really own it. When Time validates Tom Peters' concept, Brand You, by calling "You" the "Person of the Year," there's your truly milestone event. I mean, what more do you need to prove that the old rules have passed away and all rules have become new?
Right. That raises the issue of personal authenticity, which you don't touch on in your book.
JG: Volumes and volumes have been written on the authentic self. I think we were very disciplined in our book in focusing on having the output of one's enterprise perceived as authentic, and what steps you might take to have that output seen as real, not your employees, not your leadership. You should worry about leadership and your employees to the extent to which they influence the perception of authenticity of your output. That's really what we're focused on.
JP: How do you render authenticity? There are some fundamental things that companies must recognize, which we list as axioms in the book. Axiom one being, if you are authentic, then you don't have to say you're authentic.
JG: As we look at all this phoniness, generated copy on packaging and in advertisements, saying that things are real, it made Joe once quip, "If I were to walk up to you for the first time, face-to-face, and introduce myself, 'Hi, I'm Jim Gilmore. I want to let you know just how very authentic I am.'"
JP: Actually, I quip, "Joe Pine," but you get the idea.
JG: Egad. I got that backwards? Our minds meld so much that I can't help but do that. But that's exactly what companies are doing when they proclaim their Mexican restaurant or their mac 'n' cheese offering or their automobile or their vacation spot to be authentic. It's everywhere. And it's just nauseating.
JP: Axiom two, if you say you're authentic, well then, you'd better be authentic. People are going to be judging you on your words and what you say you are. And axiom three, it's a lot easier to be authentic if you don't say you're authentic.
When I read those axioms, I immediately equated authentic with cool. Someone who says they're cool is definitely not cool. A cool person would never say, "I'm cool." But if you never say, "I'm cool," even when you slip once in awhile you're not necessarily uncool, because you're not working against any self-proclaimed definition of self. Right?
JP: Right. But companies say they're authentic all the time on their packaging, in their advertising. They proclaim to be authentic. Saying that immediately leads one to doubt that it's actually true.
JG: Even if they don't say it explicitly, they do it by pointing fingers at competitors and calling them fake. They do it by looking at their own heritage and thinking they have some inherent advantage over everybody else, because, "We're the company who invented this." That's not authenticity. It's no different than quality or cost, for that matter, in this notion of the ontological reality versus perception. I mean, there is no quality. There is always a defect, even at Six Sigma. There is no low cost. With all commerce, even when offerings are given away, there are always strings attached. There is no free. So it's no different now. It's just that we think it's much more obvious with authenticity.
Do you think that the word real is going to start disappearing from the labels on the bottles and cans and boxes of consumer goods?
JG: We hope so. Now, isn't that interesting? You would think we'd want to see the use of the term multiplied. But in fact success, for our work, is actually to see the terms "real" and "authentic" disappear as a self-proclaimed description of one's offering. To some extent, it's no different than experiences. We see many people self-proclaiming to offer an experience, but it's the same old good or service.
Right, they've just latched onto the word. Clearly the same thing will happen with this book that happened with your last. People love using the term experience, due in part to your book The Experience Economy. So, the effect of the new book will be that people are going to be splattering the word authentic on everything.
JP: That very well might happen because they won't actually read the book. [Laughter] They'll hear about this hot new concept and say, "Okay, well, that's what we've got to be. Let's start using authentic." But that will be judged in the marketplace. It may work for a time, but it's not going to work long-term.
JG: Let's round out the three axioms with number four and five. With axiom four, we say it's easier to render offerings authentic if you acknowledge they're inauthentic.
Axiom five, the fun conclusion of all this, is that you don't have to say your offerings are inauthentic if you render them authentic. So just because you have the self-acknowledgement that your offerings are fake, you don't have to go to market, say, "We are fake. Here's the fake thing."
JP: Although it is a viable strategy, among others.
I foresee a lot of tongue-twisting in corporate boardrooms after some people have gotten hold of your book. "Well, wait a minute. If we don't say we're authentic, we're authentic? Or—"
JG: I'm most curious about the reaction to our book in that regard. It's so unthinking to not deal with the difficulty of this issue. It's so much easier just to go on with the same old behavior. Let's take Starbucks as an example. They're saying now that they're going to do national TV ads, which is anathema to what Howard Schultz wrote in Pour Your Heart Into It. It's hard to find a book that more powerfully articulates that if you stage compelling experiences, you don't have to advertise; that advertising is the opposite of authenticity. Has Starbucks thought hard enough about what alternative steps they really need to take? To me, resorting to such advertising means they're at their wits end.
And there was the famous memo a few months ago about how they weren't even doing the cool barista thing anymore and they weren't brewing coffee in the same "real"—you know, I can't ever say real again without putting air quotes around it. I'm going to have a hard time in conversation.
JG: That may be the lasting legacy of our book, that journalists and managers everywhere will be air-quoting the word real.
Almost everyone has had the Starbucks experience. Although, as you point out, once they become that ubiquitous, it's hard to maintain authenticity.
JP: Right. Ubiquity tends to be the death knell of authenticity. But Starbucks has done an amazing job of forestalling the effects of more and more outlets. In fact, we don't think any company more explicitly manages its perception of authenticity than Starbucks. One way it has done this is by modularizing the design elements in the venues so that every Starbucks can, in fact, be unique from every other Starbucks.
JG: It's quite amazing how long it has avoided being perceived as fake as it's grown, because people have predicted its demise for so long.
Now it has to seek out the next generation of differentiation within any given city. I mean, if there are 25 Starbucks here in Cleveland, Ohio, where I live, one of them, perhaps, should have a larger experiential footprint or have something else going on.
Schultz has long understood that Starbucks can't be cookie cutter. According to Pour Your Heart Into It, he realized this when they had around 300 outlets. He was worried about possible McDonald-ization of the brand, and latched onto this modular design strategy. They have to continue with that approach and ask themselves, "What's the next non-advertising step?"
Ever since this announcement of national ads, I've been making a list of potential next steps. One of the things that occurred to me is, what about delivery service? Every day, thousands of small groups make a "Starbucks run" and spend time going to the Starbucks and waiting in line. Why not invest in the equivalent of the "Geek Squad of Starbucks" to make these barista dashes, as opposed to the all-too-easy, "Let's run some ads?" The ads will make them just like everybody else.
And why do they need the ads? You see them everywhere. They're already ads for themselves.
JG: Well, because their stock price has been declining for the last 12 months. There's the problem.
I haven't read all of these Starbucks books that have come out recently, but they all talk about the wonderfulness—
JP: There are almost as many books on Starbucks as there are outlets!
But clearly, a big space here for somebody to move in and claim that they're making coffee the real, old-fashioned way, right? Starbucks has gone the way of automation. Maybe this has been its shelf life. As Tom Peters says, things show up, have an impact, and then they disappear. Obviously, Americans' coffee drinking habits have changed. They've done their job.
JG: I think they shouldn't give up so easily. They still only have eight percent market share of coffee in the United States. This would be giving up way too early. Eight percent market share of coffee consumption?
JG: Yes. I got that from a review of one of these many Starbucks books. Starbucks has changed the whole patterns of consumption. You know, when I started with Procter & Gamble in 1981 and soon after was issued In Search of Excellence featuring my employer, I was pitching in my 10 dollars a month for the coffee pool to get really bad coffee in a white Styrofoam cup. That's now gone.
JP: You might spend that much a day now.
JG: Right. The whole pattern of consumption has changed. So why couldn't that pattern of consumption actually migrate to every single household? I watched Tommy Lee's episode of MTV's Cribs.
JG: I did! He's proud of having his own Starbucks in his house because Starbucks gave him the official equipment and put it in his home. Why isn't that a dream for every household? Starbucks has got a lot more room to expand here. They're giving up way too early by going out and running these ads. It's way too early.
Are you hoping they'll call you guys next week?
JG: We've talked about writing an open letter to Howard Schultz.
I think you ought to do that. I mean, everybody is passionate about their morning coffee.
JG: Or their morning tea; Joe's a tea drinker.
JP: I have to get this published in Cool Friends: Venti, non-fat, six-pump Tazo chai tea latte, that's my order.
Venti non-fat six-pump chai?
JG: Right. We're passionate about Starbucks, but that's what Joe goes there for. I go for a frappuccino. We're not even coffee drinkers, and we care about Starbucks.
I just drink the coffee, no fancy drinks. The idea of paying four dollars, that's too much.
JG: In the tea space, Teavana is a new sort of tea merchant.
JG: It has no menu board. Basically, all the different teas are in large tins arrayed on a shelf on the wall. The tins are the menu board. Their workers take 'em down from the shelf, take off the lids and wave the lid on top of the tea and spread the aroma towards you. They do such a wonderful job of rendering the tea experience real. They're knowledgeable about all the different kinds of tea. I mean, you have actual, engaging conversations with retail store personnel! What a rarity that is today. And they're pulling it off as they're expanding. It can be done. It gets harder as you grow. Bigness makes anything harder.
What book most influenced you in your research?
JP: Boy, there are a number of them. William Ian Miller's comes immediately to mind, a book called Faking It. He recognizes how he is complicit in his own inauthenticity in front of people at so many different layers. It's just amazing the depth to which he goes and the honesty with which he reveals himself in that book.
JG: The thesis of his book is that we all fake it more than we're willing to acknowledge. The book is at a very personal level.
Sounds very interesting.
JG: I'll tell you about a few other books. We open with a quote from Michael Crichton's book Timeline. That popular novel's mere existence suggests that we were onto something. Some of the early seeds of all this came from The Tourist.
JP: Dean MacCannell's book.
JG: The notion of staged authenticity. We read that book early on, but more for experiential fodder.
JP: It's a classic in the tourism field. We read it for The Experience Economy, then didn't realize until later how important it is for thinking about authenticity.
JG: One of my favorite books, period, is Michael Benedikt's For an Architecture of Reality where he talks about "the direct esthetic experience of the real." It's a book we used to help craft our Four E model in The Experience Economy. But in looking back on it, that book is as much about rendering authenticity as it is about staging an experience.
Do you perceive yourselves differently now after having written this book?
JP: I think we're more aware of what we do and how we come off. There's a person that Jim and I know on the speaking circuit. I told Jim once that when I got up close to this person, all the theatrics the person went through seemed fake to me. I said, "We've got to make sure that our theatrics don't shine through like that." Which means we've got to be better fakers, right?
We're doing things differently now when we're onstage and when we're with clients, because we've written this book. We have to exemplify the principles that we espouse. When we speak about The Experience Economy, we have very experiential presentations with bright colors, lots of pictures, videos, lots of jokes, and so forth.
With Authenticity, we want to represent the content differently. We've been playing around with presentations that have no color, just black and white, occasional shades of gray, and showing not pictures of the example, but just the frameworks, because Frameworks 'R' Us. Instead of blasting you with example after example, it's more, "Let's talk about it." Jim's ideal presentation would be that everybody gets the book ahead of time, and then he shows up and it's just question and answer. "Hey, let's get real. What is on your mind? Let's talk about it."
JG: I'm toying with being so daring as to ask audience members who have read the book to the stage: "We're going to have a conversation. Everybody else is going to listen to us talk."
I think that would be fabulous.
JG: That's where the real knowledge is. Real knowledge happens when 12 people congregate around the podium after the talk is over. That's where the real learning takes place.
We've done some of that with our annual thinkAbout event in times past. We've done reversals where it's a giant break interrupted with ten minutes of actual content. [Laughter.]
I have an aspiration for the book, to speed up the day where people see the emptiness of pursuing authenticity. There are more important issues that lie beyond in terms of meaning, and, more importantly, truth. In the preface of the book, we talk about the issue of real and fake not being the same as the issue of true and false. People today mistake being true to self as truth. But the self can be diluted. The self can believe falsehood. I hope we accelerate the day where there can be more open and honest dialogue about ultimate things. I hope we've provided that service. And we more than winked at that in The Experience Economy where we wrote that all commerce is moral choice, such as the moral decision whether to butcher a cow for meat or not. Authenticity further fuels all these issues.
Who is more authentic, Jim or Joe?
JG: I might be more fake. I don't know.
JP: We both acknowledge our fakeness.
It's been fun talking.
JP: Our pleasure.