Tuesday, 16 August 2011

Brands in search of a more enlightened form of capitalism?

 “Conventional capitalism is dying with yesterday’s industrial era model of growth in permanent decline. Increasingly, the advantage will cede to companies that practice a more enlightened form of business, paying more than just lip-service to environmental and social agendas. According to the Irish Times, that’s the central premise of Umair Haque’s thesis in his book which offers a blueprint for a better form of capitalism.
Capitalism, he says, is founded on the equation of creative destruction. The cornerstones of capitalism as we know it systematically and chronically undercount the costs of destruction and over-count the benefits of creation. The result is an oversupply of “bads” with too much economic destruction for too little creation. The sum of over-destruction and under-creation is the deep debt a society incurs. Umair Haque  is clarifying the goal of the 21st Century brand, which is to create what he calls “thick value”—value that matters, value that lasts and value that multiples, not the “thin value” of the 20th Century firm that is artificial and unsustainable, often gained through harm to or at the expense of people, communities or society. It is about making a positive difference in people’s lives, not merely having a differentiated product and brand. The New Capitalist Manifesto by Umair Haque is  also available at Amazon.

Tuesday, 9 August 2011

Towards the customer obsessed brand?

Welcome to the Age of the Customer and invest accordingly says Josh Bernoff  of Forrester Research , author of a new report titled "Competitive Strategy In The Age Of The Customer". According to the report, previous sources of dominance (ie  manufacturing, distribution, even information mastery ) are now just table stakes. This is the age of continuous disruption. Your relationship with customers is the only thing that enable you to survive that disruption. Companies must be more than customer focused, they must be customer obsessed. A customer obsessed company focuses its strategy, its energy, and its budget on processes that enhance knowledge of an engagement with customers, and prioritizes these over maintaining traditional competitive barriers. An interesting piece of work. Find more here.

Friday, 5 August 2011

Restoring Confidence in Brands: What’s your Big Idea?

”Business (and brands ? ) is a necessary evil in society… only the worst sorts of people are involved”, Plato,  the ancient Greek philosopher used to say.
Corporate power, accumulated by the “Arrogant Capitalism” of the inequalities, is dramatically deteriorating, also as a result of the economic crisis. “Disaster Capitalism”(see Naomi Klein’s latest book) and the School of Chicago failed. Now  “Nice Capitalism” is wanted (see at Amazon Costas Kataras latest book here). Long before the crisis, a number of studies showed a growing lack of trust in business and their leaders,. For example, only ¼ of the public trust them. Further on, brand importance goes also steadily down. For example, brand loyalty today is only 9%, from 40% some years ago. The crisis also showed that the notion of “Powerless State” is a myth. Society is now pressing harder for a new “corporate social contract “ and the new issues for the businesses are endless, including: regulation, environment, unions, privacy, safety, off shoring, civil society, governments as owners, consumer activists, NGOs and others. How modern corporations and brands could respond to these strategic and organizational challenges, beyond simplistic CSR, “Green Wash” practices and the recently invented by brands concept of “social missions in the supermarket shelf? . And this, at a moment where “shareholder value is growing increasingly irrelevant as government and society take a larger role in shaping business and industry. This discussion is about sharing ideas. So I am very pleased to ask you what is your big idea on how to restore confidence in brands. Please join the conversation by providing your best idea by sending an email at: costas@costaskataras.org

Thursday, 4 August 2011

The stigma of CSR

Numerous studies in the last decade or so are supporting the view that brands and corporations involved in CSR are rewarded with a number of benefits: from increased brand preference and brand loyalty, to improved financial performance and stock prices. But from now, these CSR conscious brands and corporations will have also to carry a stigma: the stigma of being bad corporate citizens and.. irresponsible. According to a recent working paper by the National Bureau of Economics Research (USA)  " companies are engaged in CSR in order to offset Corporate Social Irresponsibility (CSI)". Authors Matthew Kotchen and Joe Moon suggest that their, more than 10 years, research shows that "harmful companies are those mostly involved in CSR. When companies do more harm (CSI) also do more CSR" , the authors suggest. Or to make it simple: companies do "good" in order to offset "bad". What a nice subject for a debate. Looking forward to hear your opinion. For the full text of the paper, click here . 

Wednesday, 3 August 2011

Focus on “Nice Brands”:Patagonia - Nice Lessons from a Reluctant Businessman

Before the recent global interest in  corporate social responsibility (CSR), there is already a  sustainable company called Patagonia. Yvon Chouinard, the founder and owner of Patagonia, Inc is one of the few business leaders who understand that if your business is not part of the answer, then your business is part of the problem.
Patagonia grew out of a small company that made tools for climbers. Alpinism remains at the heart of a worldwide business that still makes clothes for climbing – as well as for skiing, snowboarding, surfing, fly fishing, paddling and trail running. These are all silent sports. None requires a motor; none delivers the cheers of a crowd. In each sport, reward comes in the form of hard-won grace and moments of connection between us and nature.
The company’s values reflect those of a business started by a band of climbers and surfers, and the minimalist style they promoted. The approach it  takes towards product design demonstrates a bias for simplicity and utility. Patagonia, amongst others,  uses a portion of  its sales to support grassroots groups working to make a real difference .  To make it short , Patagonia is one of the most representative Nice Brands that are emerging in the new brand ecosystem.
Find out more about Patagonia’s environmental initiatives here. In 2001, Yvon also co-founded 1% for the Planet, an alliance of businesses that contribute at least 1% of their net annual sales to approved environmental organisations.

Tuesday, 2 August 2011

Who says beauty is not sustainable?

Why is an ageing society significant for L’Oréal and its consumers? How the cosmetics giant approach biodiversity challenges? What is its position on scientific breakthroughs such as adult stem cell research?
These and other key sustainability topics have been identified by L’Oreal through active engagement and consultation with stakeholders. Each topic has been analysed, both in terms of stakeholder concern and relevance to the company, and mapped on a grid . Click here to see the graph and to download a factsheet summarising L’Oréal’s approach to each of these challenges and topics. For the company’s latest sustainable report click here.
“L’Oréal’s engagement draws on a vision of corporate responsibility in which economic success, human progress and social development go hand in hand”, says Jean-Paul Agon, the company CEO. And he adds: “Providing access to products that add to quality of life, while safeguarding the planet’s natural capital and contributing to society, are the key ways in which L’Oréal can create value to benefit everyone. Contributing to a more beautiful life and a better world is L’Oréal’s constant ambition”. Who says beauty is not sustainable?

Monday, 1 August 2011

Two books and the Greek crisis: A BBC Perspective

BBC’s Paul Mason noticed two books in English on the desk of the Greek ex finance minister a couple of months ago: Andrew RossSorkin’s “Too Big to Fall” and Costas Kataras “Nice Capitalism” . As Mason starts his interesting article “ Greece: Spearing the Octopus ” …. ‘”Greece has had all it is going to have of “nice capitalism” for some time and the Greek finance minister is about to discover if his country is like the book says, too big to fall”. Always relevant analysis, regardless the fact that the country has today a new finance minister.