Posts Tagged ‘New York Times’
Will business pick up the signals?
What a different world we awoke to on November 5. For most of us voters, the future looks a little more hopeful, less divisive. For the rest, well, let’s just say not everyone was feeling the love we Obama supporters were feeling.
I’m not certain what this staggering political act by the American electorate means for those of us in business. But I do think voters sent some strong signals our way.
I keep returning to what Rob Walker, author of the recently published book Buying In, calls the “fundamental tension” of modern life: “We all want to feel like individuals. We all want to feel like we are part of something bigger than ourselves.”
Obama personifies this tension. Many see in his achievement the hope and possibility that any individual anywhere can achieve his or her dreams, no matter the odds. Others are drawn to his larger calling to fulfill America’s promise of a perfect union.
Thomas Friedman quotes Harvard University political philosopher Michael Sandel in his New York Times column about Obama’s victory: “Obama’s campaign tapped a dormant civic idealism, a hunger among Americans to serve a cause greater than themselves, a yearning to be citizens again.”
Sandel and Friedman weren’t addressing business directly, but I can’t think of a greater insight for business to take from this election.
With few exceptions, businesses have catered exclusively to our desire to feel like individuals. Our products and our marketing have appealed overwhelmingly to the fulfillment of personal needs and wants through consumption. And because it was good for business, we managed to elevate the role of Americans as consumers above all others, including citizens.
If Sandel is right, Americans want more. Not more stuff; more opportunity to make the world a better place and more leaders who inspire the greatness in all of us. Businesses must recognize the pendulum is swinging away from the all-consuming, me-first excesses of the past quarter century. Those that respect and engage customers and other stakeholders as whole human beings — ready to “serve a cause greater than themselves” — will lead the way in our brave new world.
One great cause is sustainability. Like civil rights, the sustainability movement is a struggle for the ages. From where we stand today, the challenge of preventing catastrophic climate change, healing our natural systems and creating more equitable economies appears as a mountain summit beyond reach. Will the climb be worth the effort? What do you think the civil rights warriors who can now stop dreaming of an African-American president would say?
Tags: Buying In, equitable economies, New York Times, Obama, Rob Walker, Sustainability, Thomas Friedman
Posted in Business & Economics, Climate Change, Consumerism, Current Affairs, Marketing, Politics, Sustainability | 1 Comment »
Painful choices along the path of sustainability
Imagine for a moment you’re an executive for a fertilizer company. And let’s say you have a genuine commitment to the triple bottom line: people, planet, profit. Worldwide demand for fertilizer is off the charts, so that’s good for your company’s finances (profits). You sell a terrific product that dramatically increases crop yields, making a meaningful contribution to the world’s food supply (people) and to increased biofuel production (planet).
End of story, right? Well, not exactly. A New York Times article on the worldwide fertilizer shortage gets at some of the potentially agonizing tradeoffs in following a commitment to sustainability.
First, the good (taken from the article):
“Putting fertilizer on the ground on a one-acre plot can, in typical cases, raise an extra ton of output,” said Jeffrey D. Sachs, the Columbia University economist who has focused on eradicating poverty. “That’s the difference between life and death.”
And now the bad:
Environmental groups fear increased use, particularly of nitrogen fertilizer made using fossil fuels. Because plants do not absorb all the nitrogen, much of it leaches into streams and groundwater. That runoff has long been recognized as a major pollution problem, and it is growing. A barometer of the pollution is the rising number of dead zones where rivers meet the sea. In the Gulf of Mexico, for instance, nitrogen runoff from fields in the Corn Belt washes downstream and feeds plant life in the gulf. The algae blooms suck oxygen from the water, killing other marine life. More than 400 dead zones have been identified, from the coasts of China to the Chesapeake Bay, and the primary reason is agricultural runoff, said Robert J. Diaz, a professor at the Virginia Institute of Marine Science.
You’re the fertilizer executive. With one hand you’re helping to eradicate poverty, plus you’re creating good jobs in your company because your product is in such high demand. With the other, you’re helping to destroy marine life and adding to greenhouse gas emissions because of the fossil fuels required to make a usable form of nitrogen.
My in-laws and their ancestors have been farming in Oregon since the 1850s. I remember my mother-in-law saying awhile back that it wasn’t until chemical fertilizers came along in the 1950s and 60s that they were able to move out of pure survival mode. For them, it meant the difference between a family farm that remains in operation today and one that would have long ago been plowed under.
I believer her, and I still wish the runoff from agriculture wouldn’t find its way into the murky Willamette River running through my hometown of Portland.
I understand why the financial bottom line rules in business. Who really wants to confront the choice of feeding the poor or destroying ecosystems?
Tags: fertilizer shortage, New York Times, Sustainability, triple bottom line
Posted in Business & Economics, Sustainability | No Comments »
Consuming our way out of poverty?
An economist and writer at the Federal Reserve Bank in Dallas tell us household consumption — not income — is the best measurement of “financial well-being.” The incomes of the top 20 percent of US households may be 15 times greater than the bottom 20 percent, but the top group’s consumer spending is only four times greater than the bottom group’s. And on a per person basis, the richest household only outspends the poorest by 2.1. to 1 (because richer households are larger on average). Writing in the Sunday New York Times, the bankers explain:
To understand why consumption is a better guideline of economic prosperity than income, it helps to consider how our lives have changed. Nearly all American families now have refrigerators, stoves, color TVs, telephones and radios. Air-conditioners, cars, VCRs or DVD players, microwave ovens, washing machines, clothes dryers and cellphones have reached more than 80 percent of households.
So there you have it. Because nearly all of the poorest households have all or most of the “conveniences we take for granted,” they really aren’t that poor. In fact, the bankers tell us, “the abstract, income-based way in which we measure the so-called poverty rate no longer applies to our society.” By their definition, the truly poor are those who don’t have the modern conveniences nearly everyone else has. In which case, that odd millionaire couple that opts out of a consumerist lifestyle would be poor. They say no to the so-called conveniences because they don’t want to add to the human and ecological toll our consumer economy extracts.
The bankers praise “a capitalist system that has for generations been lifting American living standards.” Yes, if you define standard of living by material things. We certainly do have more material things in the average rich and poor households. And I suppose that means all of us — rich and poor — are happier than generations before us? And Earth has infinite capacity to lift the world’s material living standards for generations to come? Just wondering.
Tags: economic prosperity, Federal Reserve Bank, household consumption, New York Times, poverty, standard of living
Posted in Business & Economics, Consumerism, Sustainability | No Comments »
Trusting word of mouth, but for how long?
In advertising circles these days, “word of mouth” has its own acronym (WOM) and trade association (WOMMA), signaling its arrival as a marketing discipline. Companies love good WOM because they believe their customers are likely to believe friends and peers who recommend their products more than any commercial source. While that marketing axiom has been around for decades, what’s changed is the dedication and technology marketers are applying to monitor and generate WOM — or buzz.
So with a raised eyebrow I read an op-ed piece in the Sunday New York Times, “Loose Lips Win Elections.” The authors, executives at a research firm, claim that John Edwards and Mike Huckabee performed better than expected in the Iowa caucuses because they benefited from what they called “word of mouth advocates” — evangelistic supporters who spoke to friends and colleagues before and during the caucuses.
Whether by chance or design, such citizen advocates created the explosive growth in support for Mike Huckabee and sustained John Edwards, even as both were vastly outspent by their opponents.
I don’t believe sophisticated presidential campaigns leave anything like this to chance. It was by design that Edwards and Huckabee got their citizen advocates out in large numbers. Good for them. As the op-ed writers noted, both candidates had to do something to counteract the much larger TV advertising campaigns mounted by their chief rivals. And they understandably chose a WOM strategy. According to the authors:
Public trust in all kinds of communication is eroding, with a notable exception: word of mouth…Our mid-December survey of Iowa voters found 38 percent saying they trusted information provided by TV ads, while 69 percent trusted “comments from friends, relatives and colleagues.”
There’s reason to believe even word of mouth will soon suffer the same credibility loss as other forms of communications. Why? Because marketers are increasingly manipulating and instigating word of mouth, as Adweek magazine explained in last week’s issue:
People, of course, have always acted as brand ambassadors by sharing recommendations with friends and associates…Now, however, these interactions have become supercharged thanks to a new breed of brand ambassadorship programs that formalize the relationship between marketers and average consumers passionate about their products. These programs “hire” consumers, via incentives and rewards, to act as part PR agents, part sales reps and part evangelists. They mix the spontaneity of buzz building with technology to instigate, guide and measure what repeat customers are saying to each other about their brands.
As citizens begin to understand how these so-called ambassador programs work, it won’t be long before many of us start doubting the credibility of certain acquaintances or colleagues who speak with unbridled fervor for a brand — whether a product or a candidate. After all, they may be receiving compensation of some sort for speaking out. I say “may” because right now there’s no guarantee these enthusiastic consumers or voters will divulge their relationship to a commercial or political entity. As Adweek explains:
The Word of Mouth Marketing Association, a trade group of agencies and marketers who use word-of-mouth marketing, has instituted an informal, but largely unenforced, industry policy that brand reps must always disclose their relationship to the product or service when promoting it.
So whether on behalf of products or candidates, word of mouth appears destined to become yet another suspect source of communication. That means the Huckabees and Edwards of the next Iowa campaign won’t be able to count on vocal supporters to sway opinion like they did this time around. And worse yet, the rest of us are left to wonder whose words we can still trust and whose opinions have been put up for sale.
Tags: Adweek, marketers, New York Times, WOMMA, word of mouth
Posted in Business & Economics, Communications, Marketing, Politics | No Comments »
The few, the proud, the tycoons
If ever there was an article tailor-made for debate across America, it would be the lead story in The New York Times on Sunday: “The Richest of the Rich, Proud of a New Gilded Age.” Read it and decide for yourself whether this is an era we can look upon with great pride.
Certainly, Sanford I. Weill, retired chairman of Citigroup, does. He tells the Times, “People can look at the last 25 years and say this is an incredibly unique period of time. We didn’t rely on somebody else to build what we built, and we shouldn’t rely on somebody else to provide all the services our society needs.”
Somebody, as you might imagine, is government. I am no expert on political or economic history, but one thing government surely did in the past 25 years is roll back regulations that businesses claimed stood in the way of their ability to generate jobs and wealth for all Americans. Reporter Louis Uchitelle also cites the example of President Clinton, who in 1999 revoked the Glass-Steagall Act of 1933. The Act outlawed having commercial and investment banking and stock brokerages under one corporate roof because 74 years ago government thought this structure created too many conflicts of interest and contributed to the 1929 crash and the Depression. And who might have benefitted from Clinton’s repeal of the Act?
So it rings mighty hollow when Weill claims successful corporations like Citigroup “didn’t rely on somebody else” to reach the heights they have. I suppose he could argue that government simply got out of the way of business and that’s why the wealth of companies like Citigroup is now so great. Any way you look at it, however, big businesses have relied on government to take actions that make it possible for them to grow as fast and large as they have. Meanwhile, for only the third time in the last century (1915-16 and the late 1920s) has “5 percent of the national income gone to families in the one-one-hundredth of a percent of the income distribution,” according to economists cited in the article. Hence, the new Gilded Age is upon us.
I do believe individual leaders can make a huge difference in the fortunes of companies and societies. And they deserve to be recognized and fairly compensated. But the leaders I most admire come from a place of humility about their accomplishments and realize their great accomplishments are not theirs alone. They are quick to credit and thank others for their success (including government), not because they are excessively humble, but because it’s true. They also will tell you when they’ve been lucky, as when living through the great bull markets over the 25 years Weill speaks of.
As Paul Volcker told the Times, “The market did not go up because businessmen got so much smarter.”
I don’t have the answers for addressing the great worldwide income disparity today. But I do know the situation isn’t going to get better if our wealth leaders believe they have only themselves to thank for living among the .01 percent.
Tags: Citigroup, Gilded Age, Glass-Steagall Act, income disparity, New York Times, Paul Volcker, Sanford Weill, tycoons
Posted in Business & Economics | No Comments »