On June 3, 2009, the day before their official graduation, 400 Harvard MBA’s took an unofficial oath to “serve the greater good”, “act with the utmost integrity” and guard against “decisions and behavior that advance my own narrow ambitions, but harm the enterprise and the societies it serves.”
Is a values-driven agenda re-entering the workplace?
In 2001, Enron kicked off a two-year run on financial fraud (WorldCom, Adelphia, Tyco, Global Crossing, etc.) which gave a good jolt to business and consumer confidence. Accenture’s brand took a beating but other than that we seemed to return fairly quickly to ‘business as usual’.
That is until 8 years later, a financial crisis of epic proportions in conjunction with global climate change tied to a lack of responsible business oversight has even business students re-committing themselves to just what it means to be doing good business.
It may seem idealistic or even naïve for students to be taking this unsanctioned oath yet holding the business education community accountable may have greater implications for business management. A set of shared values is one that helps define a profession. As business students enter one of the worst hiring environments in decades, ethical decision-making is driving them to demand new approaches to shareholder value and 21st century company leadership.
Day 2 of the Sustainable Brands conference down in Monterey and there is relatively little new news. Well, at least no new revelational news. I don’t know if this is a bad thing or just the status of an industry going through natural growing pains, but I am disappointed by the lack of provocative discussions (perhaps its the format?). We are still trying to figure out how to simplify the consumer message of what is inherently an incredibly complex thing and still acting as if transparency and accountability were new concepts (Enron anyone?).
Perhaps what I’m reacting to is our inability to recognize that we are stuck and that we need to flip our perspectives, re-frame the questions and acknowledge that what we haven’t figured out is a serious barrier to adoption. Aren’t we supposed to be ingenious, inspired innovators down at this conference? Admittedly, we come to this conference for the comfort and inspiration that comes from working with others of like-mindedness. But perhaps we are guilty of being lazy, expecting each other to do the heavy brain work instead of basquing in our vacuum of do-gooder intent. But thus far we haven’t admitted to ourselves that we’re stuck and there has been no frank “panel discussions” that confront us on this issue.
It is not all terribly mediocre. There have been a few interesting conversations and themes in the conference which does mean that some progress is getting made. There were a few, just a few, who touched on the field of legal and financial mechanisms as a means of regulatory approaches to governing market-based solutions – thank you Jay Coen Gilbert of B Lab and Hazel Henderson, author of Ethical Markets. And the theme of low impact via local consumption (CSA’s) and local investment (Slow Money) came up as more evolved mechanisms for engagement.
I guess the good news is that despite the fact that 52% of all “green” special issue magazines sell less than their standard counterparts, there are no indicators, as presented by Chris Coulter of Globescan, that we are reverting back to pre-sustainability mindsets. In fact, perhaps despite our marketing attempts, there is very strong evidence that sustainable operating practices are in fact driving brand equity which means the market is responding, if only subtly.
But the blush of romance feels like its dwindling and perhaps this emerging trend is hitting its difficult teen years. Like the .com era did. Which is not bad news it just means that we’re in the throes of the reality of hard work which never feels very sexy or warm.
Adapt or die. Never has this statement been more true. Consumer brands are dealing with an overnight change in attitudes and values that is unprecedented in modern consumerism. From travel to jeans to soap to museums – no product or service or experience will survive this tumultuous period without re-examining their value proposition and the role they play in their consumer’s life.
Between the economic crisis lead by Wall Street and AIG, the environmental crisis and now adding insult to injury – the AIG bonus payout – consumers are retreating and rethinking every single dollar that leaves their pocket and who it will go to. In fact, the Edelman Trust Barometer reports that U.S. consumer confidence is even lower than it was after the dot.com bust and the Enron scandal. Things aren’t much better internationally, 62% of respondents across 20 countries included in this same survey report less trust in business than a year ago.
The result is that the brand relationship with consumers is about to get very interesting. Current brand equity will still play a critical role in consumer decisions but each and every brand needs to get out there and understand what their new consumer needs are a.s.a.p. There are a plethora of marketing reports coming out on issues of sustainability, moderation behaviors and other factors that will play a role in future consumerism. These reports are valuable but are simply the backdrop for independent research that should be done to understand these trend drivers first hand as they relate to a company’s brand. This shift doesn’t mean that brands need to lose or even change their core brand assets. They simply need to look for new ways to relate and to re-look at how their products communicate with their current audiences and their new behaviors.
For example, the New York Times reported last week that museums across the country are now opening their doors to entirely new audience segments via discounted special events that build on their core offerings. In San Francisco, the Academy of Sciences has debuted Nightlife – a weekly evening event incorporating DJ’s and special science activities that brings together a much different crowd than the kids, parents, tourists and science geeks the Academy usually attracts. Not only are they finding new hours to open their doors but they are attracting new audiences that have traditionally dismissed this type of cultural institution en masse.
It’s this type of re-invention and exploratory relationship building that needs to take place across the spectrum. Simply speaking to green or pricing trends via advertising or promotion will ultimately miss the opportunity to play an important and trusted role throughout the upcoming years of significant value and lifestyle restructuring.
In a swath of green fury, there is a whole new market emerging which most consumers have heard of but for the most part, have no clue if it will ever become relevant to their daily lives. To some degree none of us know what role our march toward a carbon neutral economy will play in our not-too-distant future yet there are signals locally and globally that the carbon market may ultimately play a significant role in our daily choices. The question is – who will guide us in the adoption of practices that will truly help us understand this market.
To a certain degree, it is probably too early to ask this question. The early days of the mobile phone industry were governed by industry wide regulation, distribution and demand. Demand drove consumers to purchase despite mass confusion over cost protocol and brand authorities didn’t emerge until the market had stabilized and penetrated the most sought after consumer – the teen. It took us over a decade to begin to feel like we understood how to evaluate “Rollover minutes” against “Nights and Weekends Free” against “myFaves” (although one could argue we still don’t know why we’re locked into two year contracts).
So, it’s likely that we are ten even twenty years before we truly begin to understand what the outcomes of all the debate in Washington and abroad is about as it relates to understanding our role in neutralizing the carbon in our atmosphere. This is an operational challenge that will be driven by regulation not demand. Yet there seems to be market activity that signals this evasive concept-commodity could and actually is being productized at a mass consumer level.
Many airlines now offer individuals the opportunity to purchase carbon offsets at the point of their ticket purchase and online calculators such as Terrapass provide individuals and businesses the opportunity to purchase carbon credits to offset their output. Termed “offsets” these credits are the product of a financial mechanism created to regulate carbon output and including organizations naturally protecting sequestered carbon. Most of us have begun to hear the term “offset” but will readily admit we have no idea what it really means, let alone starting to dig deeper to know what “standard” the carbon has been verified against to determine its true value.
The interesting question is, who will emerge to be the (brand) authority in this new market? What business and in what tier of the consumer eco-system will emerge to establish credibility and drive the standard to which we will make our assessments? And what industry can we look to previously that might shed some light on where this new market might be going?
Very rarely do big brands get it right when inserting themselves into historic moments in time. The SuperBowl ads have become an event within an event but we’re ok with that because the entire event is about pure unadulterated exploitation for entertainment. The Olympics have sold their soul and we’ve come to accept it. Brands who pay the global big bucks are simply spending our money to be able to get our money. We all know its part of the game.
But it takes the right kind of brand to dare touch a nation that is in a delicate stage of heightened optimism – driven mostly from an eight year period of feeling duped – and actually do it with class and inspiration. By building on its authentic efforts already commited to the communities it serves, Target has managed to do just that on MLK day. By tying into the historic inauguration of our first black President, his proclamation towards a day of community service, and by leveraging Oprah’s star-studded homage to this two day time, Target has brilliantly connected to their audience and promoted the message of community service that lives within what this day is all about. To say that their vision is altruistic would be foolish. But if all brands could use their name to drive home messages of helping others – just imagine. “I have a dream”
Changing consumer behavior can be a slow painful process. Not only does it require educational efforts but often widespread systemic conformity is required. However innovation has radically altered some of our most fundamental behaviors. Globally, we now access cash from a machine and we carry and use mobile phones for a significant percentage of our calling. Its this type of basic change that will be required to have significant impact on socially and environmentally responsible consumption habits.
Shai Agassi has just such aspirations. The electic car has been the talk of the town at the Detroit auto show this year but Shai’s concept is the most intriguing and well thought out. In this week’s Newsweek, Fareed Zakaria talks to Shai about his idea for a Better Place in “Switched-On Highways”. Shai does exactly what is necessary for radical innovation – he flips the approach. Instead of framing the problem as “how to build a better car”, he frames it as “how to run a country without oil”. He takes an ambitious approach that looks at both the infrastructure, the model of ownership and of course, the power source.
Return to electricity
Even with oil returning to under $50 a barrel, Shai’s new model is betting on the electric car to remove our dependency and make the switch to clean electricity. With the required infrastructure in place, the cost ends up somewhere between six and eight cents per mile which is motivation in and of itself, even if oil got down to $25 a barrel.
The razor model
Taking a page from the razor, printer and video game model, he has also separated the car from its core function – the electric battery. A truly radical idea when it comes to car ownership but one that makes a lot of sense. The basis for this is the need to re-charge batteries after they drain all of their power. This drops the price of the car and its operation even further and makes acquisition a lot more appealing.
Leveraging existing behavior
But what’s important about this model is that it leverages our existing and well-established behavior of stopping at the “gas” station. For long haul driving – or even for convenience during a normal day of driving – it doesn’t make sense to have to stop and re-charge an electric battery when it’s run out of its juice. So, Shai proposes switching stations where you just pick up a fully charged battery.
There are flaws in this model but radical innovation generally doesn’t happen perfectly the first time. What is exciting about the Better Place concept is that it addresses consumer behavior from the get-go. Plugging an electric car into your own garage sounds exciting but offering a car at a reduced price with the “benefit” of a switching station somehow puts the consumer at ease simply by offering them the comfort of a long-held tradition. Eventually we’ll get to fully plugged in at-home cars (cuz after all we all hate to stop at the gas station), but first Shai has to get them to buy the cars.
And the really exciting thing….California is already set to begin adoption of a Better Place this year!
image credit: Better Place logo by techpulse360 on Creative Commons
Landor – a leading brand strategy firm – published their 2009 trends forecast last week and I was very excited to see this language as they commented on the softening of the “green” trend: “Brands will need to integrate their commitment to sustainability into a larger message of efficiency, effectiveness, and value.” I was excited because it means that perhaps we’re starting to actually use the rationale behind why these products and services should be green and get beyond the moniker of “green” itself (which just feels totally stagnating and short-lived, if not totally off-putting to the greater society as an outcome of the hippy movement).
Landor notes that the intensity of this trend is softening. I think they’re right and wrong. Symptomatic marketing relative to eco and green might be less appetizing given the concerns of the world right now (in other words adios B*S*#), but consumer motivations are actually becoming even more grounded and inclined to respond to products and services that are community minded, built simply and incorporate honest claims. This isn’t exclusively green or sustainable but can be traced to the same roots. In fact, smart marketers should look to the motivators behind the interest in “green” (and social responsibility and philanthro-capitalism and CSR and cause marketing) and work to connect with consumers leveraging any trace of these values found within their own brands – not simply give the prescribed nod to “green” and “sustainable” but be a little more clever in connecting with what underlies these trends.