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Fusion is the new business blend

by Diana O'Brien, Andy Main, Suzanne Kounkel, Anthony R. Stephan
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    10 minute read 15 October 2019

    Fusion is the new business blend How the convergence of ecosystems sparks new business models and greater collaboration

    10 minute read 15 October 2019
    • Diana O'Brien United States
    • Andy Main United States
    • Suzanne Kounkel United States
    • Anthony R. Stephan United States
    • Anthony R. Stephan United States
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    • Marketing in the fusion era
    • What business are you in?

    Traditional boundaries between companies are disappearing, creating an unprecedented fusion of new business models. Consider what new collaborations and opportunities could be in store for your organization.

    With ecosystems becoming the norm across industries, it has never been easier for companies to enter areas outside their domains. There are likely a couple of reasons for this: First, the rise of cloud data and connected technologies has led to a large number of interactive platforms which have brought once-isolated industries together to solve customer needs holistically. Second, our collective ability to access external resources through the gig economy has made new categories of cross-industry talent accessible to companies. To put it simply, traditional boundaries between industries are disappearing, signaling a great fusion of once disparate industries (see sidebar, “Fusion 101” for more information). Consequently, brands are transcending from being isolated entities to becoming members of far-reaching ecosystems.

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    Many companies, even those that are leaders in their industry, are being compelled by this wave of fusion to find new ways of establishing themselves in these much broader ecosystems—or risk being disrupted by new competition. Many leading brands are now asking themselves: “What business are we in and how do we move outside the conventional construct and redefine who we are?”

    While fusion may be new territory for some, the idea that businesses should expand their scope to find growth opportunities and fend off competition has existed for decades. As far back as 1960, Harvard Business School professor Theodore Levitt cautioned businesses on the dangers of narrow thinking.1 In his seminal article, “Marketing myopia,” Levitt takes the reader through a litany of examples in which companies were hurt by focusing primarily on product superiority. For instance, the railroad industry was overtaken by automobiles and planes because it didn’t acknowledge it was in the transportation business; the film industry didn’t know it was actually in the entertainment business and, therefore, was quickly outpaced by television; and corner grocery chains didn’t see the value of one-stop supermarkets—even if the customer had to travel a little further. In each case, company executives missed the point: They were focusing too narrowly on what they did, and not on what the customers they were serving needed.

    Fusion 101

    Fusion denotes the erasure of boundaries between traditionally distinct industries, enabled by companies’ newfound abilities to access technology and talent that spreads across boundaries. It requires businesses to move beyond industry silos and recognize they are operating within broad ecosystems, requiring a rethinking of capabilities, brand, partnerships, and its entire existence. Businesses embracing this convergence, or fusion, are capitalizing on symbiotic relationships by reconsidering:

    • Scope of customer insights beyond their industry of origin
    • Cross-industry competitors and partners relevant to their business
    • Participation beyond traditional industries in ecosystems

    In the 60 years since Levitt’s article was published, fusion has only amplified in impact. Earlier, businesses risked being disrupted because they were too focused on the product rather than the customer. Now, as technology rapidly erodes traditional barriers to entry, companies that do not fully comprehend the value of participating in ecosystems will likely remain more susceptible to disruption by those other than their usual industry competitors.

    Indeed, there is a monumental shift underway in how businesses operate—and, in many cases, how they perceive themselves. Many of the businesses that succeed in this climate are taking an unconstrained view of how they serve customers and are rightly breaking out of their traditional industry silos. This typically includes engaging with new partners in the ecosystem, sharing data with many of these partners, and working with different types of talent who often operate outside the four walls of the organization. Promisingly, businesses that ambitiously solve unmet needs through fusion with smart, open ecosystems can systematically displace competitors who are unwilling (or unaware) to do the same.

    Fusion at work

    Companies are putting fusion to work in innovative ways—from embedding it in their business models to partnering with cross-industry peers in their ecosystems to deliver value to stakeholders. Here are two examples that illustrate the power of fusion:

    • Evolving spaces. On the surface, coworking spaces historically provide inexpensive, shared office space for giggers, startups, and anyone looking to find accessible working space. But a closer look shows coworking spaces are evolving by providing the same collaborative, interactive space in new settings. For instance, Life Time Fitness opened coworking spaces at four of its US-based gyms to allow patrons to work and have easy access to exercise in order to “promote a healthy and flexible workstyle.”2 Similarly, hotels such as Hobo in Stockholm and TRYP by Wyndham in Dubai now offer full-fledged coworking options. With over 200 guest rooms, Hobo offers all the usual amenities of a hotel, while presenting itself as “a meeting point, a workplace, an office, or just a nice place to hang out” for the Stockholm community.3 TRYP by Wyndham Dubai has a coworking space called “NEST”—one of the world’s first fully functional and integrated coworking spaces within a major international hotel.4 NEST, which offers services to both hotel guests and nonguests, has evolved into a hive of activity; it offers traditional coworking offerings in an eclectic space, business services, and networking engagements combined with dining, pool and gym access, and free valet parking.5
    • An ecosystem for better air quality. Smart city initiatives across the world are at the forefront of fusion. Consider AIR Louisville.6 Louisville, Kentucky’s largest city, previously had one of the highest instances of breathing disorders. By enlisting partners to solve the common unmet need for improved air quality, Louisville’s smart city planners brought together once-separate sectors—health care providers, private technology companies, local government, and citizens—to improve citywide air quality with the help of “smart” inhalers. By aggregating and sharing inhaler usage data, the planners were able to help citizens and medical providers uncover troubling patterns of breathing. Concurrently, city officials redesigned high-risk neighborhoods with more trees and/or altered truck routes to reduce emissions. The initiative led to an 82 percent decrease in inhaler usage throughout the city.

    We are seeing the effects of fusion across multiple ecosystems. Messaging platforms such as WeChat are becoming mobile payment and ridesharing platforms; department stores are opening their doors to e-commerce giants and fitness centers to provide more cross-industry wellness services; and automotive companies are turning into ridesharing and micromobility providers. In each case, they’re looking beyond industry boundaries to address customer needs, identify growth opportunities and areas for collaboration, and create new value for customers. Fusion is making brands relevant outside of their industries of origin.

    Marketing in the fusion era

    At face value, operating in times of fusion may seem like a daunting task. After all, how does one take an unconstrained view on serving people?

    The complexity of the task doesn’t mean organizations are unequipped to navigate the fusion wave. It’s simply about leveraging your current assets to expand the scope of who you are serving and why. Specifically, businesses can use their existing assets to identify opportunities where partnerships can create new experiences within relevant ecosystems or continue providing existing experiences but at greater convenience.

    This can start with understanding the areas in which your company has capabilities to serve unmet needs, along with the opportunity to partner with others across the ecosystem to holistically serve them. Here’s how marketers can function effectively in the fusion era by redirecting the valuable assets they most likely already have:

    1. Treat data as the new “dowry.” One way to attract others to participate in an ecosystem is through data. In many cases, this means matching information with new capabilities. For instance, a grocery chain may have accumulated years of purchase data on consumer food spending. In this case, they could potentially partner with health insurance companies to provide lower rates to those who hit certain thresholds for purchasing healthier food.7
    2. Expand your scope through human-centered insights. Nearly every company today has access to data science capabilities. Rather than deploying these capabilities to solely understand opportunities for customer retention and price optimization, companies can direct these capabilities to uncover where human needs are unmet. This can involve using insights to empathize with people and serve them more deeply and richly to further their end goals.

      For example, Kinship, a division of Mars Petcare, wanted to curate new approaches to better address the needs of its customers. To this end, the company launched its Pet Insight Project. Leonid Sudakov, president of Kinship, explained, “We started with this idea of being able to get to understand pets and pet parents in the best possible way, to be able to offer solutions that are really fitting to what their needs are and create the type of solutions that today might not even exist.”8 As part of the Pet Insight Project, Kinship partnered with Whistle to provide pet parents with a Whistle FIT (think Fitbit for pets) to constantly monitor their dog, tracking behaviors such as scratching, eating, and drinking. Data from the Whistle FIT is synced with the dog’s health records during checkups and veterinarian visits with the aim of predicting and preventing potential health conditions.9 Kinship’s goals with partners are to create relationships that allow the company to better serve and understand pets.

      Companies are applying human-centered insights to identify gaps in the holiday shopping season as well. Holiday purchasing is not just about online buys or walking through the mall; it’s often a full-day, time-consuming event that includes navigating traffic, finding parking, and trying to beat the holiday rush. Last holiday season, recognizing the unmet need to mitigate traffic and parking hassles during holiday shopping, Old Navy and Lyft teamed up for two days to offer free rides to customers who opted for in-store pickups after making online purchases.10
    3. Brand permission goes beyond traditional boundaries. Marketers are always looking for access to new segments and areas where they can leverage their existing influence. To this end, they should broaden their scope by untethering their brands from traditional sectors, rebuilding them in a way that shows they stand for something across industries, and redefining who they are without conventional constructs. For instance, Virgin Group, whose purpose is “Changing business for good,”11 parlayed its brand from music to air travel to space travel. Building your brand in this manner creates an asset that can facilitate your entry into new ecosystems while making the brand desirable for new partnerships.

    By repositioning core company assets to better navigate the fusion wave, marketers can thus develop solutions with a longer-term, more effective view of addressing human needs—with some help from carefully chosen partners.

    What business are you in?

    Levitt’s “Marketing myopia” aptly demonstrated the importance of expanding a brand’s perspective beyond what it does today. In the era of fusion, this can mean looking beyond industry boundaries and finding new ways to serve customer needs, uncover disruptive threats, and partner with those who may have once been viewed as the competition. It’s all about asking yourself, “What business are we in?” The answer will guide businesses in navigating the world of fusion, enabling them to define themselves to all stakeholders, and building new and necessary capabilities to extend their work across broader ecosystems.

    Acknowledgments

    This report would not be possible without the subject matter expertise that results from working alongside executives on the front lines to understand the impact of these trends in the marketplace and how to embrace them to drive growth for organizations.

    Thank you to the following contributors:

    OUR GLOBAL LEADERS CONTRIBUTING ACROSS THE ENTIRE 2020 GLOBAL MARKETING TRENDS REPORT

    David Redhill, Partner, Deloitte Consulting Global CMO, Australia
    Mike Brinker, Principal, Global Deloitte Digital Leader, US
    Will Grobel, Director, Customer & Marketing, UK
    Andrew Jolly, Partner, Digital Mix Lead, UK
    Peter Sedivy, Partner, APAC Deloitte Digital Lead, US
    David Phillips, Partner, Brand, Creative & Media, Australia
    Pascual Hua, Partner, Deloitte Digital, China
    Ryo Kanayama, Director, Chief Brand & Corporate Affairs Officer, Japan
    Desiree Phakathi, Senior Manager, Marketing, South Africa
    Tharien Padayachee, Manager, Marketing & Communications, South Africa
    Livia Zufferli, Income & Associate Partner, Customer & Marketing, Canada
    Pablo Selvino, Partner, Consulting Director, LATCO
    Heloisa Montes, Partner, Digital Customer & Marketing Transformation leader, Brazil
    Renato Souza, Director, Communication & Brand, Brazil
    Victor Press, Partner, Acne, Northwest Europe
    Jennifer Veenstra, Managing Director, CMO Program leader, US

    THE EDITORIAL TEAM FROM THE CENTER FOR INTEGRATED RESEARCH

    Tim Murphy, Senior Manager, US
    Josh Schoop, PhD, Manager, US

    THE GLOBAL MARKETING TRENDS TEAM

    Anna Syrkis, Manager, Global Marketing Trends Program Manager, US
    Julie Murphy, Manager, Marketing Manager, US 
    Marion Cannon, Lead, Content & Insights, US
    Natalie Melamed, Senior Manager, Content & Insights, US

    Purpose is everything

    Jennifer Barron, Principal, Brand & Growth Strategy, US
    Torsten Gross, Managing Director, Customer & Applied Design, US
    Richard Prévost, Senior Manager, Branding, Marketing & Advertising Lead, South Africa
    David Olsson, Partner, Acne, Sweden
    Ori Mace, Senior Manager, Acne, Sweden
    Andy Sandoz, Partner, Chief Creative Officer, Deloitte Digital, UK
    Mark Hutcheon, Director, Risk Advisory, UK

    Paying down experience debt

    Amelia Dunlop, Principal, Customer Strategy & Applied Design Leader, US
    Ashley Reichheld, Principal, Customer & Marketing Automotive, Transportation, Hospitality & Services sector leader, US
    Stacy Kemp, Principal, Customer & Marketing Strategy, US
    Maggie Gross, Senior Manager, Heat, US
    Megan Fath, Senior Manager, Customer & Applied Design, US
    Emma Gu, Manager, Customer & Applied Design, China
    Thomas Kant, Manager, Deloitte Neuroscience Institute, Germany
    Olivier Binse, Partner, Head of Digital Advisory, Deloitte Digital, UK
    Deborah Womack, Director, Customer & Marketing, UK
    Susie Nursaw, Director, Deloitte Digital Insights, UK
    Peta Williams, Senior Manager, Deloitte Digital Marketing & Insights, UK

    Fusion is the new business blend

    Paul Magill, Managing Director, Customer & Marketing, US
    Larry Keeley, Managing Director, President, Doblin, US
    Mike Barrett, Principal, President, Heat, US
    Will Grobel, Director, Customer & Marketing, UK
    Tom Day, Director, Market Gravity, UK
    Alex Curry, Partner, Monitor Deloitte, UK
    Dan Adams, Partner, MarTech & Insight leader, UK

    Are you a trust buster or builder?

    Jeff Weirens, Principal, Global Business Leader of Financial Advisory, US
    Jeff Simpson, Principal, Customer & Marketing, US
    David Cutbill, Principal, Marketing and Advertising Risk Services Leader, US
    Cameron Brown, Director, Head of Privacy, UK
    Will Grobel, Director, Customer & Marketing, UK
    Peta Williams, Senior Manager, Deloitte Digital Marketing & Insights, UK
    Wendy Stonefield, Director, Customer & Marketing, UK
    Nick Purdon, Director, Customer & Marketing, UK

    The amplification of consumer participation

    Jennifer Lacks Kaplan, Principal, Customer & Marketing, US
    Melissa Schwarz, Senior Manager, Deloitte Pixel leader, US
    Balaji Bondili, Senior Manager, Hybrid Solutions & Incubation, US
    Grace Ling, Partner, Consulting, China
    Emma Gu, Manager, Customer & Applied Design, China
    Andy Sandoz, Partner, Chief Creative Officer, Deloitte Digital, UK
    Matt Guest, Partner, Deloitte Digital, UK
    Monica Hu, Manager, Deloitte Digital, UK
    Alex Curry, Partner, Monitor Deloitte, UK

    Valuing your most important asset—talent

    Jannine Zucker, Principal, Human Capital, US
    Ashley Reichheld, Principal, Customer & Marketing Automotive, Transportation, Hospitality & Services sector leader, US
    Hilary Horn, Managing Director, Human Capital, US
    Yohan Gaumont, Equity Partner, Digital Customer leader, Canada
    Will Grobel, Director, Customer & Marketing, UK
    Gillian Simpson, Director, Customer & Marketing, UK
    Rupert Darbyshire, Director, Human Capital, UK

    Diffusing agility across the organization

    Mike Barrett, Principal, President, Heat, US
    Jocelyn Lee, Senior Manager, Head of AI, Heat/Deloitte Digital, US
    Alan Schulman, Managing Director, Chief Creative Officer, Deloitte Digital, US
    Ed Grieg, Senior Manager, Chief Disruptor, Deloitte Digital, UK
    Martin Willets, Partner, Customer & Marketing, UK
    Yohan Gaumont, Equity Partner, Digital Customer leader, Canada
    Verusha Maharaj, Senior Manager, Monitor Deloitte, South Africa

    Special thanks to the CMO Program team and the leaders of Customer & Marketing and Deloitte Digital for their insight and support through this journey.

    Cover image by: David Vogin

    Endnotes
      1. Theodore Levitt, “Marketing myopia,” Harvard Business Review, 1960. View in article

      2. Life Time Work, “Home,” accessed September 17, 2019. View in article

      3. Hobo Hotel, “About,” accessed September 17, 2019. View in article

      4. TRYP by Wyndham Dubai, “NEST,” accessed September 17, 2019. View in article

      5. Ibid. View in article

      6. Tiffany Dovey Fishman and Michael Flynn, Using public-private partnerships to advance smart cities, Deloitte, 2018. View in article

      7. Seth Nagle, “Enhancing your B2B grocery partnerships through data,” RW3, June 5, 2017. View in article

      8. Leonid Sudakov (president of Kinship), interview with Deloitte at the Cannes Lions Festival of Creativity 2019, June 17–21, 2019. View in article

      9. Pet Insight, “Home,” accessed September 17, 2019. View in article

      10. Old Navy and Lyft, “Old Navy and Lyft team up to make last-minute holiday shopping easier than ever,” press release, December 11, 2018. View in article

      11. Virgin Group, “Our purpose,” accessed September 17, 2019. View in article

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    Topics in this article

    Technology Management , Chief Marketing Officer (CMO) , Customer Service , C-suite , Marketing , Future of Work

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    Diana O'Brien

    Diana O'Brien

    Global Chief Marketing Officer

    Diana is the global chief marketing officer for Deloitte responsible for driving growth across all businesses. Reporting to the global CEO, Diana leads a network of brand, communications, marketing, and insights organizations. Her responsibility is to champion the voice of the customer, surface deep insights with advanced analytics, increase sales velocity, and gain greater competitive advantage with stronger, differentiated experiences. Her goal is to align global customer data, creativity, and innovation with business strategies to accelerate Deloitte’s ability to solve customers’ most complex issues. She also leads the C-Suite CMO Program, and serves as an advisory partner to global life sciences clients. Since joining the firm in 1985, she has held a number of leadership roles across global client portfolios. Appointed in 2015 as the first chief marketing officer for the US, she reimagined marketing by combining independent marketing functions with PR, communications, and digital to create a cohesive, agile, client-centric organization. She led the ground-breaking and opening of Deloitte University, our 700,000 square-foot, $300 million leadership center and as its managing principal, was responsible for industry and professional learning, leadership development, leader succession, and community and inclusion engagement. Diana has been included in Forbes’ World’s Most Influential CMOs and Business Insider’s "Top 50 Most Innovative CMOs in the World." Her passion extends to charities related to autism and diversity. She is the chairman and founder of IMPACT Autism, a forward-thinking organization that creates and delivers life management solutions to combat the educational, emotional, and social challenges of living with autism. Diana holds an MBA in finance and a BS in behavioral management from Xavier University. She lives in Cincinnati with her husband and 22-year-old triplets. For the latest marketing insight and trends, visit CMO.Deloitte.com or Deloitte.WSJ.com/CMO.

    Andy Main

    Andy Main

    Principal | Global Head of Deloitte Digital

    Andy is a principal with Deloitte Consulting LLP, and is the Global Deloitte Digital leader which includes the Global Customer and Marketing business. He also leads our Digital Transformation offering globally and in the US. He firmly believes the customer is at the center of a company’s digital experience and transformation. He helps clients imagine their futures and achieve their ambitions using our high-end creative and design capabilities and a human-centered approach, combined with our deep industry and technology knowledge. When not helping clients with their business futures, you can find Andy outside on skis or bikes, watching football (the original kind of football), hanging out at the Denver Art Museum, or volunteering at the Keystone Science School.   

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    Suzanne Kounkel

    Suzanne Kounkel

    Chief Marketing Officer | Deloitte

    Suzanne is a principal in Deloitte Consulting LLP and the chief marketing officer (CMO) of Deloitte. As the leader of Deloitte’s integrated marketing and sales organization, Suzanne challenges her team to push the bounds of creativity and collaboration in pursuit of two intertwined goals: happy clients and healthy business growth. Suzanne’s trifecta of business, technology, and marketing experience provides the essential foundation for spearheading marketing and sales in an era of rapid change and ground-breaking innovation. She recently served as the CMO for Deloitte Consulting LLP, a role that further grounded her marketing and sales leadership in business-specific insights. Additionally, she ran Deloitte’s US Consulting Tech sector industry practice, one of Deloitte’s largest and fastest growing businesses. A driver of transformational change throughout her Deloitte career, Suzanne’s track record also includes leading Deloitte’s US Customer market offering (which involves CMO services), creating Deloitte’s Next Gen CMO Academy, and developing Deloitte’s customer, market, product, and M&A integration methodology. Suzanne’s ability to connect with clients, understand their challenges, and help solve their problems is recognized and respected throughout Deloitte. She has led relationships with many of Deloitte’s largest clients, helping them to reimagine how they attract, engage, and retain customers. Never content with the status quo, Suzanne has been a result-oriented advocate for women in leadership roles throughout her career. She led the Women’s Initiative in Consulting, where she helped to significantly increase the percentage of female leaders in market-facing roles. A dedicated coach and advocate, Suzanne is passionate about mentoring Deloitte professionals on their path to leadership roles. Lending her voice to broader industry conversations, Suzanne is a frequent speaker and published author on issues close to her CMO heart, including purpose-driven brand, elevating the human experience within B2B marketing, and the ethical use of data within marketing. She sits on the Board of Directors for the Ad Council and is a member of the Adweek Diversity and Inclusion Council, as well as a member of ANA’s Global CMO Growth Council, with a focus on helping CMOs leverage data and technology to connect with customers.

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    Anthony R. Stephan

    Anthony R. Stephan

    Executive Leader, Project 120 | Deloitte Consulting LLP

    Anthony is the US Consumer Industry Leader for Deloitte Consulting, LLP, where he inspires businesses to amplify the human experience, transform the enterprise, and disrupt traditional boundaries. Prior to leading the Consumer industry, he led the US Deloitte Digital business for Deloitte Consulting, LLP and served as the National Business Unit Leader for the Customer & Marketing business. While leading effective teams and serving clients are his highest priorities, Anthony also invests heavily in the growth of others. He is the Executive Leader for Project 120, a $1.4 billion investment in advancing technology and leadership skills for our people. This is a bold transformation of our approach to learning and development (L&D), setting a new industry standard for how L&D should be designed, delivered and experienced. He has also served as the Co-Dean of the LEAD Program, which is the yearlong development program for new US Partners, Principals & Managing Directors, as well as Co-Dean of the Art of the Story program. For more than 30 years, Anthony has guided businesses on the verge of transformation, leaning in with aspirations to inspire change, and drive balanced growth through strategic initiatives.

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