The Progress Economy

Uncovering strategic moves to fix sales, innovation and growth problems comes from understanding how progress is made

Progress as an operating model

Progress – our deceptively simple concept – blossoms into a powerful operating model explaining how the world works. When you understand its inner workings, you unlock strategic insights that drive sales, fuel innovation, and accelerate growth.

Our operating model is best looked at through four layers:

• foundation layer – the underlying service-dominant logic and definitions of key concepts (like progress and value) that we build upon
• decision layer – the decisions that actors, predominantly the Seeker, make during progress journeys
• operational layer – how progress is made (resource integration, applying capabilities, decision process)
• strategic layer – strategic choices a progress helper should embrace, aligned to Seeker’s progress

Within and across the layers lie a set of powerful insights and progress levers. These offer practical ways for a Helper (you) to improve the progress Seekers make, reduce their friction, and enhance the perceived value of what you offer.

Let’s jump into each of these layers. We’ll start with the strategic layer as it’s the most impactful. Before that though, a couple of up-front definitions: a Progress Seeker is the entity looking to make progress, and a Progress Helper, an entity that offers to help.

Strategic layer: setting the direction

At the strategic layer of the Progress Economy, we shine the light on where progress leads. We’ll uncover four strategic insights that help us improve sales and innovation.

Seeking Progress

Our journey starts with believing that everyone is trying to move from their progress origin (where they are right now) toward a more desired state (their progress sought). We’ll call them Seekers. These progress journeys form the key mental picture in the Progress Economy. In fact, we’ll often visualise them using a progress diagram, the simplest of which is below.

While a Seeker’s progress sought spans all aspects of their life, we often focus on one aspect at a time for practical analysis.

Such journeys are ones of change where the Seeker attempts to change the three equally important dimensions of progress – functional, non-functional, and contextual – in their origin state to those in their progress sought state. Though each dimension behaves differently:

The functional progress sought is often the easiest to identify. It’s the ran a half marathon, arrived in Oslo, learnt Mandarin Chinese to HSK level 5, increased wealth, defended against missile attack, recovered from an illness, etc. The functional progress origin may be quite varied, but is important to know. The marathon journey is different for a non-runner, to a first timer, to a seasoned competitor.

Non-functional progress accompanies functional progress. This includes how one wishes to experience the journey – quickly, safely, easily, enjoyably, flexibly. Perhaps the seeker values gaining autonomy, or the emotional reward of a sense of achievement.

Wheras contextual progress captures the environment in which progress is attempted. Conditions like “in rush hour” or “no driver’s license” fundamentally alter the nature of a progress attempt. As Christensen rightly observed:

A job can only be defined – and a successful solution created – relative to the specific context in which it arises

Christensen, C (2016) “Competing against luck”

Seekers attempt the journey by applying the capabilities they have in their possession: skills, knowledge, strength, availability (time), natural forces, etc. We’ll look at this more in the operation layer. What’s important here is that the Seeker may lack some, or all, the capabilities needed. The Seeker has a lack of capabilities progress hurdle. That’s the opportunity for Helpers: to offer progress propositions – bundles of supplementary capabilities – that Seekers may engage.

Progress Origins and Progress Offered / Sought: strategic fit decisions

A Helper’s proposition offers to help a Seeker reach a particular progress state of progress offered. Ideally, this matches the Seeker’s progress sought. But with a diverse landscape of Seekers, this is often coincidental. More often, the progress diagram is as follows. A number of propositions exist that are close, but not equal to, progress sought on one or more of the dimensions.

Propositions also have their own progress origin. It’s an origin that a Helper assumes they will help from. That supports them determining what supplementary capabilities to offer; and has implications. If a Helper overestimates the capabilities a Seeker has, they risk offering too little supplementary capabilities, and leaving the lack of capabilities hurdle still too high. Offer too much supplementary capabilities, and they risk providing unnecessary or even unhelpful support (often with an increased inequitable exchange hurdle – cost).

When origins and progress sought/offered states align well, progress happens with ease and value emerges quickly. When they don’t, friction rises. Seekers face steeper effort curves, capability gaps, or may not get close enough to their desired outcome.

Strategic Customisation

To reduce misalignments, Helpers may offer to customise their proposition’s origin, progress offered, or both. Such customisation requires effort, which often translates into a higher inequitable exchange progress hurdle (or, more simply, higher cost).

A Saville Row tailored suit (highly customised) takes more Helper effort to produce than an off the peg suit from a high street retailer. As such, you would expect the price to be higher (price in the progress economy signals amount of effort expected in service exchange – we’ll come back to this too).

A Helper needs to strategically decide how much customisation they feel their market will support.

Yet there is also a strategic opportunity here too. Where there are markets that offer little customisation, is there an opportunity to offer customisation? Progress Seekers are adept at chaining propositions to cover more of their progress journey than one helper offers. Some retailers might offer an additional limited tailoring service; tailors offer more for those who seek that progress. The after-market customisations for cars is a sizeable revenue generator that car manufacturers leave for others to grab.

Strategic segmentation

An approach strategic Helpers employ is to segment propositions by the three progress dimensions (not by the usual product features or demographics). This opens the door to designing multiple variations (potentially up to nine), but not all need to be executed. Often, several segments share common origins or sought outcomes.

Take learning Mandarin Chinese. Segmentation does not exclude the idea of personal one-one teaching. But we often find three proposition classes, one targeted at beginners (say HSK level 1 to 2), one at intermediates (HSK 3.to 4) and another at advanced (HSK 5). Providers tend not to offer a proposition for HSK 1-5, or 2-4. Instead, Seekers appear happy to move through the 3 propositions in a chain.

The power of segmenting on progress comes when we think of context and non-functional. These help drive the above propositions into in-person class room, on-line class room, online recorded (or other recorded, for those of us still with CDs, or tape players…). Or “functional” segmentation – learn what you need for holiday or dedicated to specific careers like medicine or computing.

(you could even argue “learning” is too restrictive here. Perhaps the Seeker wants “to communicate whilst on holiday” – learning Chinese is one solution, a translator app another, access to a translator is another, I’m sure there’s more. “Learning” is fine if the non-functional progress sought is, say, “sense of achievement” – this is why understanding all three dimensions is important)

Four strategic imperitives for helpers

From the above, four strategic imperatives emerge:

1. deeply understand Seekers’ progress origin and progress sought – across all three dimensions: functional, non-functional, and contextual.
2. identify the Seeker’s missing capabilities – and understand the specific context in which they’re needed.
3. design propositions that minimise the progress gap – between your offer and the Seeker’s situation, reducing friction and increasing perceived value.
4. Segment by progress, not by demographics or product features – group Seekers by similarity in progress journeys, not demographics or product features, to reduce unnecessary customisation.

These imperatives have implications for sales and innovation.

Sales as a strategic alignment

Sales, viewed through the Progress Economy lens, is no longer about pitching features, it’s about aligning your proposition with the Seeker’s progress journey. It is persuading the Seeker that your proposition helps them make the best possible progress, from where they currently are, with the lowest hurdles acceptable to them.

Key alignment questions include, does the Seeker believe the proposition:

• gets them closer/closest to their progress sought?
• begins close enough to their progress origin to make engagement feel easy?
• lowers the six progress hurdles enough – such as lack of competence, adoptability, or inequitable exchange (simplified here as cost)?

On a progress diagram, it looks like this:

The more complex the progress you are offering to help with, the more you need to deeply understand your Seeker’s progress origin and progress sought. It’s a discovery process before they engage your proposition, and then a continuing journey together as the progress is made. Your aim is to minimise value destruction – which, unlike in the traditional value-in-exchange model of value, is defined as when one or both parties do something to hamper progress.

Crucially, front-line teams play a strategic role. They uncover local adaptations, workarounds, new use cases, and organic innovation. These aren’t anomalies, they’re signals. Smart organisations capture, interpret, and scale these insights across their sales process, operational model, and offerings.

Sales doesn’t end at the start of progress attempt. Continued dialogue during the progress journey ensures alignment, helps steer outcomes, and surfaces new needs and innovations. That said, the simpler the proposition (low progress hurdles and minimal progress-making activities), the less interaction may be required, and indeed may be possible..

innovation: Making better progress

Peter Drucker famously wrote that a business has only two functions: marketing and innovation.

Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation.

Peter Drucker

In the Progress Economy, these two imperatives take on new clarity. Marketing becomes the act of identifying the Seeker’s progress origin and progress sought, segmenting them based on their progress journeys, and interacting with them throughout their progress attempts.

Innovation becomes the act of improving progress:

• improving progress that can be currently made
• improving progress towards progress sought from progress origin – filling in more of the progress journey
• reducing one or more of the six progress hurdles – more adoptable, lower equitable exchange etc

In short, marketing discovers and aligns; innovation enables and improves.

Innovation can be driven by Seekers themselves – for example:

• using propositions in alternative ways beyond their original intent
• combining available propositions to span more of their progress journey
• creatively reconfiguring their own progress-making activities using available capabilities

Mostly we’ll focus on Helpers, where innovation revolves around creating or improving a proposition (to better help a Seeker). That itself relates to:

• updating proposed progress-making activities
• introducing new capabilities
• improving or swapping resources (that carry capabilities) in the resource mix

Strategically, it’s time to retire the notion of innovation as episodic or in parallel to every day business. Innovation (and marketing) must be part of daily business, not an add-on.

Why innovation must be continuous

A Seeker’s progress origins and progress sought are constantly evolving:

• progress sought becomes more ambitious as Seekers are influenced by their other progress attempts and what they observe in other domains or industries
• progress origin evolves as Seekers gain reusable capabilities from other progress attempts.

And in the background, externalities – who insert elements into a Seeker’s progress sought to protect Seekers and society – also evolve there constraints.

Together, these dynamics render static propositions obsolete. Capabilities that once felt distinctive become common. Frictions once tolerated become deal-breakers. What was once desirable becomes insufficient.

Helpers must continually revisit what “progress” looks like from the Seeker’s view – not their own. Competitors, including the Seekers themselves, are continuously improving their ability to reach progress sought. Standing still is falling behind.

Now we know why Peter Drucker put it bluntly:

Innovate or die.

The Progress Economy shows us that’s not a slogan, it’s the operating reality.

If this is the where of progress, let’s now look at the mechanics.

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