Category — Thinking Differently

Proctor & Gamble have been experimenting with social media since 2001 when a plummeting share price led them to conclude that they needed market responsive R&D. They set up their ‘connect and develop’ programme, and detailed a group of ‘technology entrepreneurs’ to search out new ideas, and connect with “the majority of the world’s consumers” – a tall order. They then left them to work out how to do it. The result is now a huge bank of workable social techniques that gives P&G competitive advantage and which, as a by product, has reduced R& D costs by over 20%.

It is, perhaps, prophetic that one of the great 20^th century mass consumption, product marketing brands, is now doing the same with 21^st century relationship marketing for mass innovation. For as manufacturing moves to lower cost economies that is where Western competitive advantage lies. Sustainable business is why socialising with customers in the long term is of enormous value. Rather than the one way ticket of ‘go to market’ channels and communication media, we have to create the return on conversational marketing and web 2.0.

A friend recently told me that the last London Marketing Society Conference was especially lively and resulted in chaos. Ethics, greenery, friend poking, all were on the agenda and hotly debated. The new heroes are from Facebook and Google, and the new lexicon includes authentic, engaging, and tribe. The conference was titled, new rules for a new world, but, Roger concluded, “I think the consensus is no one knows the rules…or maybe that is the rule”.

If this is the case, and we are indeed living on the edge of chaos, then 2008 promises to be a fascinating and exciting time.

Harbingers of chaos
In 2008 the harbingers of chaos can be summed us as revolutionary change in customer requirements across more diverse customer segments, a quantum leap in customer skills and a metamorphosis in business methods. In detail they include:-

• The rise in consumer power brought about by knowledge sharing and sated markets
• The easy collection and abuse of personal data in a world growing more security conscious
• A rise in socially responsible movements and the power of non-government organizations
• Shifts in global economic power and the creation of a myriad of consumer segments across the world. Whilst the emerging ‘middle classes’ or India and China are looking to consumer more branded good, consumers in Europe and America are starting to deplore the excesses of ‘consumerism’.
• A sea change in attitude and values between the younger technically savvy networked consumer and older, more independent generations!
• A growing need amongst consumers for identity and personal mastery. Leading to the search for, places to belong, kindred spirits and new skills.
• An increase in networks (or eco-systems) of organizations eg a supply chain, to tackle a global market, to fend off large predators.
• Technology that is teaching people new skills in sharing, research, publishing, connecting and activism. The economic downturn caused by credit and wholesale funding instability.
• The economic downturn caused by credit and wholesale funding instability

Heaven knows, but we are all aware of the quickening competitive pace and shift to customer power in our markets. Political changes to the social meaning of business; social changes in customer needs; economic changes in global competitive advantage; and technology changes altering business models, pile up on us daily.

How do you manage this amount of change? ‘In the Dark’, a 2007 study by Deloittes, has found that an increasing number of CEO’s now recognize that non-financial measures, like customer satisfaction, innovation and employee commitment, are as important to their investors as traditional financial figures. But, they don’t know how to tune into markets and what indicators to use. Whilst 87% of companies are happy that their financial measurement is good, only 29% can say the same about non-financial indicators. A fact corroborated by corporate reporting specialists Black Sun. They found that in the year to 2006, although non-financial indicator reporting had risen amongst the FTSE 100, these centred on employee retention and CSR. Markets, customers and innovation, the very essence of sustainable organization, still take a back seat.

So what is needed is an adaptive customer strategy - a shared, directional, detailed, plan for delivering value to customers in an ever changing environment.

How to respond to the ‘man made’ climate change debate is difficult for business.  If you run a staff workshop on ‘brand or product development’ you will encounter swathes of ‘foot dragging’ cynicism: and that goes for customers too.  But if you don’t consider the issue, then other stakeholders and ‘interest groups’ may not look on that favourably. 

Now, in spite of the claim that all scientists agree that climate change is mostly man made, we have had yet more contradictory evidence in the last few months: a film in the US ‘An Inconvenient Truth or Convenient Fiction’ and a court case in the UK which has ruled that ‘The Inconvenient Truth’ has overlooked, well, some inconvenient truths of its own. 

Then comes ‘Cool It - A Sceptical Environmentalists Guide to Global Warming’, by Bjorn Lomborg, telling us that no climate model has predicted the Gulf Stream will turn off.  And ‘Scared to Death’ a book by Christopher Brooker and Richard North which tells us that:-

•  The 1998 hockey stick temperature graph is now a totally discredited scientific thesis. The hottest year of the 20^th century was 1934 not 1998.
•  Many scientists now say world temperatures have fluctuated for centuries, and tend to correlate with the radiation from the sun, not CO2 levels.
•  In 1998 the UN’s enquiry into climate change asked 1,500 experts to report. But in the final huge document the prefacing Summary for Policymakers did not include the caveats that the experts reports had put forward.

The book also states, that consumers will not tolerate the drop in living standards that the EU’s 2050 emission targets demand.  In the end it will be the corporate world that needs to react on behalf of customers: and the Carbon Trust is already advertising for innovators to help business develop new ‘low carbon’ technologies. 

Maybe the best way for business is to depoliticise the whole issue and take the middle ground: split climate change away from CO2 emission, both are happening it’s the correlation that the issue .  Saving resources including energy is laudeable; after all it cuts down customer’s energy bills.  Innovating methods of CO2 control will save customers the extra tax they will be charged at least.  Looking after the natural environment enhances well being. 

In addition make sure your staff have access to ‘An Inconvenient Truth’, ‘Convenient Fiction’ and ‘Scared to Death’ as balanced inputs to workshop thinking and corporate debate.