Photo: Lluís Martínez-Ribes
(Fragment of the Berlin wall)
A product only really makes a difference if it tangibly improves people’s physical, mental or social well-being, or improves their lives economically in an enduring way.
How much does a kilo of the usual tea bags variety, sold in (Spanish) supermarkets, cost?
You can probably find it for around €50/k. But if you buy “Just T”, it will cost you around €90/k. Few people have heard of this brand, which is growing thanks to word-of-mouth. If you look at their website (www.lifebrands.de), you will find a company that promotes itself not only by saying that it makes innovative, high-quality products, but also by talking about clearly healthy products, honesty, social responsibility, ethics, mutual benefits, returns not based on a “get-rich-quick” attitude, its refusal to pay for entering a supply chain,to be listed in a retail chain assortment, its responsibility towards its suppliers, protection of the family and the free time of its employees, and so on.
And despite these values, it is still profitable.
This company, among many others, could be an example of what Umair Haque, an author who is gaining great significance, is advocating both in his book “The New Capitalist Manifesto”, and in his online articles. Haque, Managing Director of the Havas Media Lab, studied Economics and Neuroscience.
He talks of three phases in the market society: the industrial era, our current knowledge society, and the wisdom society, for which he is advocating.
The industrial society
In a context where no one thought the planet’s resources were limited, the objective was clear: to obtain the maximum profit. To do so, companies usually tried to create -very efficiently- affordable products for a lot of customers. Innovation was usually focused on product enhancement. Haque calls the ideal type of company for this phase,“executors”: the ones that made things more productively. As a result, technical skills were the most sought after. The yardstick with which to check that things were going well was (and still is?) profit, and on a macroeconomic level, the GDP.
The knowledge society
We are currently living in a different context: the knowledge society. It is no secret that companies that best fit in this playing field are those that know how to learn new things and implement them quickly. One of those things is knowing that it is more useful to be customer-centric than only being obsessed with the product or the store. The companies seek to be the customer’s preferred option, not only because they satisfy him/her, but they also know how to use persuasive means (for example, throughout social shopping: Groupon, Privalia, Letsbonus, etc.). Emerging with great force in companies today, apart from the usual management disciplines, are psychology (Daniel Kahnemann, 2002 Nobel Laureate in Economics, is a psychologist), neuroscience, artificial intelligence, etc. In this scenario, it is logical to have a network of competent external experts, with a versatile relationship and variable cost in this type of society. Most innovations aim for an enhanced product, or a more comfortable way of selling it, based on the incorporation of new technologies. On the other hand, environmental awareness is present in certain customer segments, although they are not majority.
The wisdom society
This is Haque’s proposal. He advocates for what he calls a “meaningful company”, better adapted to a world context where the collective (both at an environmental and social level) is more important than short-term individual satisfaction.
If you sell a product that cost €8 for €10, there is a €2 profit. But if the damage to the environment or to society is worth more than €2, the company has not created value.
Before being consumers, customers are people. Companies should create products or services that are meaningful for them and truly improve their physical, mental, creative, social and economic well-being in a way that is sustainable for the planet, society and the future.
Rather than spending money on persuading, firms should spend it on listening, and then on being strategically creative –even ground-breaking-, innovating for customers-people, in a world that has a future.
Companies that neglect this deeply humanistic aspect in their management, will end up being ignored by customers-people who are increasingly more aware and inter-connected. Making the company more humane is not an outdated attitude, but rather a more intelligent way of understanding business. The World Economic Forum also asserted this in its 2011 report “The Consumption Dilemma”.
Umair Haque (2011): The New Capitalist Manifesto: Building a Disruptively Better Business, Havard Business Press.