COMPANIES ARE AN ORGAN OF SOCIETY
Success over time is only possible when companies connect effectively with external stakeholders and contribute positively to society
Without purpose, reputation and regulation, business serves only self-interest and ignores the common good - eventually it fails
Business needs a system to steward its relationship with the world
The idea of business connecting with the world through CSR is dead - it has failed to build a relationship between business and society
CSR is subordinated silo disconnected from the firm's core purpose and activity - it is a PR play that has become irrelevant
The stronger the sense of community within the enterprise, the greater the firm's contribution to strengthening the social fabric of the larger community it serves
Markets are more efficient, innovative and responsive to a diversity of needs when served by many small firms
Workers and owners become more partners and the conflict between workers and owners dissipates - leaving individuals with a stronger sense of ownership in their community
Local small businesses are key to prosperity
Small businesses are half of the economy
Highly competitive and profitable
They represent the highest job growth
The highest density of small/local business - highest rate of income growth
Smaller scale means less need for hierarchy and bureaucratic inefficiencies
Small companies seek to provide a fair and balanced return to all stakeholders - meaningful family-wage jobs, good service, high-quality products, healthy social and natural environment
An enterprise that is publicly traded or owned by a Wall Street private equity fund is captive to Wall Street financial values and priorities, which are antithetical to the values and priorities of community
Array of business models
Sole-proprietorships, cooperatives, worker-owned, partnerships, nonprofits, family businesses
Contrary to market fundamentalists, there is no reason that all businesses should be for profit
Alliances for buying power and productive scale while still maintaining the principles of human-scale organizations and community-rooted ownership
Wall Street corporation operate as governments unto themselves
Organize their internal economies as private fiefdoms and pass enormous costs of their centralized command-and-control structures onto the public in the form of social, natural and taxpayer subsidies
For too long we have allowed big money and corporations to make the rules and set our priorities
Wall Street interests lobby relentlessly against rules that protect democracy
They lobby against rules that would protect the market - rules that limit the size, internalize all costs and support equitable distribution
When corporations that accept no allegiance to the community or its interests and priorities take control of both the political forum and the market forum, both democracy and the market lose all but symbolic meaning
Great care went into writing and amending the U.S. Constitution as a governing framework for the organization of political power
Society has not created a governing framework for the organization of economic power - essential to the functioning of democracy and healthy markets
Brands are made and lost based on their connections with society
Reputation is the outcome of authentic actions - stand in your truth, not the construct of 'spin'
The networked world has created an environment where brands are being defined by a broader set of stakeholders, TRUSTED voices that have grown in power and influence within the networked world. Trust is now an important prerequisite. For many consumers it is a gate, as 77% refuse to buy from distrusted Company (Edelman Trust Study). They also go on to tell us that the Media Industry is the least trusted Industry and advertising is the least trusted form of media -- advertising is not the way to rebuild trust.
Companies have new associations to consider amongst a brooder set of stakeholders. For example, McKinsey tells us 87% of consumers worry about the environment & social impacts of products they buy and 50% of college chose brands based on social responsibility.
Smart companies will build value-based brands fueled by consumer-generated communities. Communities are taking charge over the brands perception and reputation. Community is the new brand model and intesection between economic, social and environmental. Smart companies will INTERLOCK with them on their purpose and their performance, building voice through community.
Under the old system companies win and consumers lose. In the social world there is justice - everyone wins.
Seth Godin portrays it this way: " If your new media channels are set up as broadcasting systems for yourself & your messages, they will fail. You are headed for the BIG DROP OFF”.
Chris Brogan makes the same point as he calls it the "Trust Wall" and presented the CHRIST formula.
Community is the new Branding Model
Legacy branding is "Build it, Brand it, Sell it". Many highly visual brands are little more than stylized sales stimulants. The goal being to deliver a sales pitch, where the customer is viewed as a commodity to be sold to (note, if you're in it for the sale, consumers are in it for the price). Here branding is no more than a communication layer applied to the surface of the product and the company, with image and perceptioin the focus NOT value.
The networked world has created an environment where brands are being defined by a broader set of stakeholders, Trust is now an important prerequisite, and Trustd voices have grown in power and influence within the networked world.. For many fansumers, trust is a gate as 77% refuse to buy from those they distrust (2009 Edelman Trust Barometer). The Edelman study goes on to say that the Media Industry is the least trusted Industry and advertising is the least trusted form of media. .
Whether you're a company or artist, the market is moving away from excesses to responsibility (both financially and environmentally). The networked generation is now capable of looking past a company's pitch and facade to judge the branding entity on its ACTIONS which they will then inform a wide audience of their findings. Branding still matters, but it is no longer defined by image or perception campaigns. Instead, branding is now defined by how companies nurture and support the communities they sell into.
Put another way, the opportunity in the market is to focus on the goods you do, not the goods you sell which is translated into the ideas and participation you add into communities. Consumers are now determining if companies and artists are acting in the public's interest or just for monetary gain
Businesses are being encouraged to broaden their relationships, adopt a broader and more contemporary approach, coming out of their lanes and partnering and collaborating in new ways to solve complex environmental and social equations. For example, McKinsey tells us 87% of consumers worry about the environment & social impacts of products they buy and 50% of college chose brands based on social responsibility.
Communities are taking charge over the brands perception and reputation. Smart companies will build value-based brands fueled by consumer-generated communities. Community is the new brand model.
Products don't power the internet, people do. The Social World is real and at the center of a new public sphere.
The Networked Generation have established a new narrative with new cultural values. Networks of people willing and eager to share and participate building knowledge and reassess societies values and norms, are reorganizing markets, changing the rules and powering a convergence of technologies, ideas and institutions -- a renaissance of values and systemic change. This changes are the defaults.
Markets and self-interested organizations have lost sight of their responsibility to partner with society. The market economy is attempting to turn deomcracies into market societies (Republics of the Market). Markets have always been planned, either by centralized government authorities or in the case of the US, through a coordination between Wall Street and concentrated industry corporations. Both of these system have failed or are failing. It is time for communities to plan their own markets, -- for community and by communities.
GOOD comapnies should NOT have to compete with BAD companies