This presentation is all about the social dimension of the way in which brands make an impact.
And it all starts with a crisis in corporations that’s emerged over the last 10, 15 years, with scandals around Enron, Lehman Brothers, BP.
And all of this has created new expectations from society. We expect, we insist that corporations have a positive impact on people and on the planet. We expect them to have a purpose beyond profit.
There used to be seen to be a trade-off between a positive commercial impact and a positive social impact. You can’t do both, people thought. Anything you did to make a better social impact tended to cost you money and so reduce profits. But increasingly, people are seeing these two things as connected, actually, in a virtuous circle. So a positive social impact, a purpose in the world, creates commitment from people, from consumers, and from employees that you need in order to deliver profit, in order to make a positive commercial impact. It’s only by having a strong sense of social purpose that you get and keep permission to stay in business from the marketplace, from all of us, from ordinary people.
But equally, it’s profit, it’s the positive commercial impact that creates the resources that sustain purpose. And it’s only by making a profit that you continue to have permission from that thing called the markets, meaning the banks, the investors, the people with the money that keep you in business. So there’s a virtuous circle. And this is really important in the world of branding.
Increasingly, businesses are, therefore, focusing on purpose. And here’s Bill George from Harvard Business School saying, “Just as people cannot live without eating, so a business cannot live without profits. But most people don’t live to eat, and neither must businesses live just to make profits.” So what is the role of brands in all of this? How can brands change people’s behaviour so that a company achieves social as well as commercial value? Here’s a theory for how that could work. We all know that brands are ideas that influence how people think and feel and act. How could they influence people to think and feel and act in a socially positive way?
Well, they could help consumers make good choices in the way that fair trade helps people choose things that are made in ways that benefit the producers. Or Zipcar, the car-sharing company, takes cars off the road because it means that private car ownership becomes less important.
And brands could also help employees to minimise the damage their company does. Innocent, the smoothies company, chose that name so that, if it ever did anything wrong, consumers would hold it to account. So it forces employees to do the right thing. And also, brands can help employees or the people who work for them to build up human and natural resources. And Wikipedia, when you think about it, free encyclopaedia, that gets 80,000 unpaid workers to create content. And that is an extraordinary amount of human intellectual resource for all of us.
So here is a model for how brands could create social value in the short term and the long term. Helping consumers to make good choices, which pushes benefit up; helping employees to minimise the damage their company does, which pushes harm down, creating well-being. And in the long term, helping consumers to reuse and share things rather than to keep buying, and therefore keep having things produced, keep using up resources. So that means resource destruction goes down. But also, more positively, can help employees in the long term to build up human and natural resources so resource creation goes up, and that is one way of talking about sustainability.
And perhaps the combination of short-term well-being and long-term sustainability is a good way of thinking about social value, just like the way that we thought about commercial value. So here is our proposed model for how brands could create social about. Whether they’re doing that yet is a good question.