The doom and gloom of the economic downturn, the deterioration of mass markets, the pervasiveness of the digital lifestyle, and the fragmentation of traditional societal institutions are propelling a new search for non-economic value systems. Consumption-driven wealth and status are being replaced by identity, belonging, and a strong desire to contribute and do something “meaningful” rather than just acquire things. With capitalism in not only an economic but also a moral crisis, numerous thinkers have recently crafted visions of a more sustainable, social business. When you browse through their books, manifestos, essays, and blog posts, you’ll find that their voices echo what management consultant John Hagel declared a while back: “The job of leadership today is not just to make money. It’s to make meaning.”
In A Survival Guide for the Age of Meaning, Sohrab Vossoughi, the founder and president of design consultancy Ziba, observes that “Gone are the days when the master brand was king and companies were customer-focused only to the extent that customers generated sales. More than ever before, today’s savvy, choice-fatigued, and cash-strapped consumers crave meaningful connections with brands that allow them to be more authentically themselves.”
Economist Umair Haque argues that we need to reboot capitalism, and he focuses on a redefinition of “capital”: “20th century capitalism … marginally valued pure financial capital too highly, while marginally valuing human, natural, social, and cultural capital at zero — or, at the limit, negatively.” One possible form of the “capital deepening” Haque envisions are carbon assets. “Once they’re capitalized, they become next-gen assets: assets that can be traded, hedged, remixed, tweaked, open-sourced, or shared,” he writes. “The difference is that they’re assets with intrinsic, durable, human value — not the lemons Wall Street was in the business of hawking. It is only by capitalizing the things we really value that the spark of value creation can be lit again.” As an example of really valuable capital, Haque refers to Rypple, an ad-hoc social network that provides simple, direct, anonymous, and ongoing customer and employee feedback: “Rypple’s economic engine is powered by human and social capital — Rypple taps the connections people have with friends, colleagues, bosses, and mentors, to help them get smarter and more productive.”
Haque also published “The Generation M (as in “Meaning”) Manifesto,” which stirred some controversial reactions, from unconditional endorsement to accusations of naiveté.
Inspired by Haque’s proposal, Landor’s Scott Osman writes that “smarter brands are already aligning themselves with better activities, making better actions a brand attribute. Perhaps this is an honest shift by management, perhaps it is recognition that the game has already changed and they need to start turning their ships around before they find themselves going in the wrong direction.”
Jeff Jarvis’ concept of the “Share Economy” and Chris Anderson’s notion of the “Free Economy” are both based on the assumption that there is no viable business in markets in which information and content are abundant (i.e., the news industry) unless you add the value of aggregation, create artificial scarcity, or give away those abundant assets (i.e., music recordings) that drive attention to assets that are truly scarce (i.e., the live concert experience). As Kevin Kelly put it in his blog post “Better Than Free,” “When copies are free, you need to sell things which cannot be copied.”
Retired Harvard professor Shoshana Zuboff is the co-author of The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism. In a recent BusinessWeek article, Zuboff proposes companies charter what she calls the “I-space,” arguing that in order to release new value, “you need to get out of organization space and into the subjective space where individuals live.” As she says, “This means shedding the ‘us-them’ mentality” so that “everyone is an insider.” To succeed in I-space, companies “must federate and collaborate to compete … You can’t do it alone because the needs of individuals don’t conform to existing organizational and industry boundaries. This means learning how to manage what you don’t control or own. These economies of trust are becoming even more important than economies of scale.” Zuboff is wary of the old paradigms still taught in business school and calls all previous “compasses” obsolete: “You’re in a new place. The bad news: There are no maps. The good news? You are the mapmaker.”
Similarly, Roberto Verganti, in his new book, Design-Driven Innovation, argues that there is a “Third Way of Innovation,” beyond radical innovation pushed by new technologies and incremental innovation pulled by market forces. This Third Way, he asserts, is driven by meaning, or to be more precise, by those cultural “interpreters” who have the ability to “make sense of things” and give existing things new meaning — and thus create new markets. They don’t have to be designers, but it turns out they often are — at least by a broader definition. How can companies apply this concept? By investigating the evolution of culture, society, and technologies, says Verganti, and by putting forward visions about possible new product meanings that people have not solicited but that they were eventually just waiting for.
Richard Edelman from Edelman PR believes we are entering an era of “Mutual Social Responsibility,” in which “people (formerly labeled as ‘consumers’ by marketers) contribute to society’s sustainability and well-being in partnership with business, government, and non-governmental organizations. But they demand a seat at the table and real voice in the discussion.”
This new paradigm extends even to the world of finance — arguably the one industry sector that has suffered most from excessive short-term innovation and is in greatest need of real transformation. Social innovation platform Volans calls for a “WeBank” and asks: “Are people replacing institutions?” As an example of alternative micro- and real-time financing models it refers to Zopa, the world’s first online social finance company: ”With no middlemen, less overhead, improved rates for lenders and borrowers, and a sense of transactions between ‘real people,’ it creates trust and shared interests between lenders and borrowers.”
The future of business may indeed be social. Dion Hinchcliffe came up with “12 Rules for Bringing ’Social’ to Your Business,” and the Dachis Group, which calls itself “the first social business firm,” has developed a “social business design framework” for “understanding and applying social constructs to business.” Social business design is “a mutually exclusive, collectively exhaustive way of considering how a corporation, business unit, or project can create and capture value from today’s emerging technologies and evolving operating environment.” The most interesting archetype of social business design is the Dynamic Signal, “the concept that every activity and action is recorded and made available, that every piece of data goes from being a database entry and is instead an event. An event which can be managed, shared, and collaborated on by all of those in the organization,” as Dachis partner Jevon MacDonald explains. This concept resembles the familiar vision of the “real time enterprise.” Real-time business is inherently social — there is no real-time without social.
Yet the accelerated transaction and interaction cycles on the real-time Web need to be balanced with sustainable thinking. Quick decisions are easier to make if they’re grounded in a long-term perspective. Agility requires stability. The prerequisite for openness is a strong (and tight) community. It is evermore important that companies have a stable foundation, rooted in a set of shared of values and beliefs.
For A.G. Lafley, former Procter & Gamble chairman and CEO, “balancing present and future” is one of the key responsibilities of chief executives. “Don’t allow the short-term interests to take precedence over the company’s long-term objectives,” he warns in a recent article for the Harvard Business Review, in which he describes the CEO as the only person in an organization who can link the external with the internal perspective. “It’s a job that the CEO must do because without the outside there is no inside.” You could argue, of course, that the real-time, hyper-transparent social Web has made that distinction obsolete anyway: Inside and outside are congruent; they are one and the same.
Reading all these recent publications, it appears that the term “meaning” (obviously highly elusive anyway) is consistently used in two different ways: one focuses on sensemaking, the social and emotional relevance of products and services (that’s the designer’s perspective represented by Verganti, Vossoughi, and others). The other one is more concerned with meaningful actions, the social impact of brands and their contract with society at large (Haque and others). It is important to establish a clear nomenclature and distinguish these two dimensions of “meaning” in the current debate. Neither dimension is particularly new: The idea of design-driven innovation has been around for a while, and so has the idea of corporate social responsibility. What’s new and interesting, however, is that these two dimensions increasingly converge. You can see more design-for-social-impact-type initiatives emerge and more design-driven innovation that takes social responsibility very seriously. The social media/social marketing/social impact cascade is gaining traction, and product innovation concepts striving for customer-focused meaning are moving to the macro-economic level, providing a template for, that’s right, a new meaning of business.
Some recurring themes emerge: On the organizational and operational side, these themes are “social,” “real-time,” and “micro.” And on the leadership and culture level, they are “authenticity,” “generosity,” and “empathy.” If you combine the two sides, you get an interesting matrix — let’s call it the Meaning-Driven Business Matrix. This is the playing field on which all product, service, and business model innovation will take place going forward.
In light of the economic crisis, companies have a historic opportunity to transform the way they do business and provide customers with more value-rich, sustainable, and meaningful products and services. With this special series on “The Meaning of Business,” design mind invites business leaders from various industries and disciplines to explore new, innovative models of value creation.
A New Era of Meaning - An Introduction
By Tim Leberecht
Chief Marketing Officer, frog design