Yale Center for Customer Insights or Distribute
Transcript of Yale Center for Customer Insights or Distribute
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In partnership with
Stakeholder Capitalism:Does a new mindset require new management science?
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Modern business is being redefined.
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Marketing has an opportunity to redefine its role for this new future.
We can bring historic strengths plus new approaches and techniques to shaping the future.
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What is that future?
Sustainability
Purpose
Business Roundtable
commitments
ESG
Stakeholder capitalism
Conscious capitalism
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What is that future?
Sustainability
Purpose
Business Roundtable
commitments
ESG
Stakeholder capitalism
Conscious capitalism
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It is:
+ creating value for multiple stakeholders who impact the success of the enterprise+ activated through strategic and operational choices+ promises + actions
It is not:
+ a new economic theory+ about social responsibility only+ a communications strategy or platform+ without its critics
What is stakeholder capitalism?
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Why now?
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The new workforce
Finding, keeping top talent is #1 stress point for executives.¹
82% of Fortune 500 executives don’t believe their company recruits highly talented people; 93% don’t believe they retain high performers.²
Millennials and Gen Z make up more than half the workforce today.3 Millennials will be 75% of the workforce by 2025.⁴
75% of Millennials want to work with people and organizations that share their values.5 83% would be more loyal to companies that allow them to contribute to social and environmental issues.6 75% would take a pay cut to work at a socially responsible company.⁷
71% of employees think it’s critically important for their CEO to respond to industry issues, political events and national crises.⁸ Almost 50% of millennials have engaged in employee activism through petitions and walk-outs.⁹
1 The Conference Board 2 McKinsey 3 World Economic Forum 4 INC 5 American Express 6 Forbes 7 Forbes 8 2019 Edelman Trust Barometer 9 Forbes
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The new customer
About 70% of millennials actively consider company values when making a purchase.¹
42% of millennials say they have begun or deepened a business relationship because they perceive a company’s products or services to have a positive impact on society and/or the environment.²
38% of millennials have initiated or deepened relationships with a business whose products and services have a positive impact on the environment.3
80% of millennials would be willing to pay more for a product that is environmentally and socially responsible.⁴
1 Forbes 2 Deloitte Millennial Survey 2019 3 Deloitte Millennial Survey 2020 4 Deloitte Insights
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The new citizen
70% of Americans want CEOs to take stands on important issues.¹
When a company is silent on an important issue, more than half of Americans believe that company lacks integrity.²
56% of Americans trust corporations, while 50% trust media and 48% trust the government.3
72% of Americans trust companies over the federal government to help find solutions related to the COVID-19 pandemic and racial equality movement.⁴
Millennials’ trust in religious organizations, national news media, is declining, while their trust in large corporations is rising.5
1 Axios + Harris Poll 2 Axios + Harris Poll 3 Edelman Trust Barometer-Spring 2020 Update 4 Axios + Harris Poll 5 Pew Research Center
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The new investor
“The Great Wealth Transfer”¹ is underway: Millennials will inherit anywhere from $30² to $68 trillion3 over the next couple of decades.
In 2018, sustainable investing in the US totaled $12.0 trillion – 26% of total assets under management – an increase of 38% from 2016.
Globally, sustainable investments totaled $30.7 trillion, roughly 39% of professionally managed assets.⁴
Projections estimate sustainable investments will grow to $50 trillion globally over the next two decades.5
1 https://www.nytimes.com/2019/12/18/arts/design/great-wealth-transfer-art.html 2 Morgan Stanley 3 CNBC 4 2018 Global Sustainable Investment Review 5 CNBC
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Why. What.The How
Is new management science needed?
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Derive Value Propositions
+ Competitive Assessment+ Must Do/Choose to Do
2Define Impact Program
+ Materiality Assessment
3Measure Authenticity Gap: Promise/ Performance
5Design Impact Program
+ Write the Conjoined Brief+ Generate Conjoined Solutions
4Define StakeholderThesis
+ Purpose
1
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Derive Value Propositions
+ Competitive Assessment+ Must Do/Choose to Do
2Define Impact Program
+ Materiality Assessment
3Measure Authenticity Gap: Promise/ Performance
5Design Impact Program
+ Write the Conjoined Brief+ Generate Conjoined Solutions
4Define StakeholderThesis
+ Purpose
1
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Derive Value Propositions
+ Competitive Assessment+ Must Do/Choose to Do
2Measure Authenticity Gap: Promise/ Performance
5Design Impact Program
+ Write the Conjoined Brief+ Generate Conjoined Solutions
4Define StakeholderThesis
+ Purpose
1Define Impact Program
+ Materiality Assessment
3
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“The trouble with such CEO advocacy is a lack of clarity about its motivations and impact—on the issues themselves, as well as on the businesses in whose name it is undertaken.
Although a lot of it is probably well-meaning, it is muddied by suspicions of hypocrisy and grandstanding.”
– THE ECONOMIST The Political CEO Yale
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Derive Value Propositions
+ Competitive Assessment+ Must Do/Choose to Do
2Measure Authenticity Gap: Promise/ Performance
5Define StakeholderThesis
+ Purpose
1Define Impact Program
+ Materiality Assessment
3Design Impact Program
+ Write the Conjoined Brief+ Generate Conjoined Solutions
4
Write the Conjoined Brief
01De-select irrelevant stakeholders
03Capture constraints
04Identify conjoined constraints across stakeholders
Generate Conjoined Solutions
06Iteration
05Ideation
02Micro-select most critical stakeholders
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Design depends largely on constraints…Each problem has its own peculiar list.”
– Charles Eames
“
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Nike: Lowest Carbon Shoe Ever
Customer Supplier Shareholder SocietyWorkforce Community Government
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Customer Supplier Shareholder Society
Nike: Lowest Carbon Shoe Ever
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● Seamless combination of design, performance and sustainability
● Must meet the Swoosh Standards
+ Athletic Performance+ Durable+ Evokes potential, inspires+ For global taste+ Not one-size- fits-all solution+ Affordable
● Manufacturers must be near the trash
● Manufacturers must embrace a new Nike standard of perfection
● Manufacturable in volume
● Lowest carbon inclusive of packaging
+False constraint: Consumer expectations of ‘out of box’ Nike experience
Customer Supplier Shareholder Society
● Profitable
● At scale
● Contribute to low carbon future
● Do more than popularize a shoe—start a movement
+ Change what consumers expect and ask of a shoe, including packaging
Nike: Lowest Carbon Shoe Ever
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● Manufacturers must be near the trash
● Manufacturers must embrace a new Nike standard of perfection
● Manufacturable in volume
● Lowest carbon inclusive of packaging
+False constraint: Consumer expectations of ‘out of box’ Nike experience
Customer Supplier Shareholder Society
● Profitable
● At scale
● Contribute to low carbon future
● Do more than popularize a shoe—start a movement
+ Change what consumers expect and ask of a shoe, including packaging
● Seamless combination of design, performance and sustainability
● Must meet the Swoosh Standards
+ Athletic Performance+ Durable+ Evokes potential, inspires+ For global taste+ Not one-size- fits-all solution+ Affordable
Nike: Lowest Carbon Shoe Ever
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● Manufacturers must be near the trash
● Manufacturers must embrace a new Nike standard of perfection
● Manufacturable in volume
● Lowest carbon inclusive of packaging
+False constraint: Consumer expectations of ‘out of box’ Nike experience
Customer Supplier Shareholder Society
● Profitable
● At scale
DESIGNER QUESTION
How to make a shoe out of trash that still meets the Swoosh standards?
MANUFACTURER QUESTION
How do you manufacture at scale, with quality, using trash?
● Contribute to low carbon future
● Do more than popularize a shoe—start a movement
+ Change what consumers expect and ask of a shoe, including packaging
● Seamless combination of design, performance and sustainability
● Must meet the Swoosh Standards
+ Athletic Performance+ Durable+ Evokes potential, inspires+ For global taste+ Not one-size- fits-all solution+ Affordable
Nike: Lowest Carbon Shoe Ever
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“Just because you have a noble purpose doesn’t mean the challenges of business will take care of themselves magically.
This requires great management. Great managers design systems for people to do great work. Business systems – supply chain systems, compensation systems that create the right behaviors – these are the result of hard core management.
Without great management systems, great leadership cannot be scaled.”
– Jim Citrin, Leader of North American CEO Practice, SpencerStuart
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AMEX PHOTO
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American Express: Small Business Vibrancy
Merchants/ Small Businesses
● Immediately generate foot traffic
● Help merchants help themselves
+ Enhance their business literacy
● False constraint: Do not favor Amex cards, services
Government / Regulators
● Demonstrate concrete action to revive economy
+ Focus on helping small, local businesses and communities
Consumers
● Build agency
+ Provide actions they can take to revive local economy
● Demonstrate actions to counter #OccupyWallSt sentiment
Partners
● Leverage Amex convening power
● Build agency— provide actions they can take to revive the economy
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Three wishes: Create a Highly Valuable Company in the Healthy Food Segment
Consumers
● “Three Wishes”
+ Grain-free+ High protein+ Low sugar
● Tastes likecereal
● Texture like cereal
● Affordable
Retailers/Buyers/Cereal Category
● Grow category
● Competitive margins
● High velocity
● Buyers must embrace grain-free
Investors/Potential Acquirers
● Profitable at scale
+ Outstanding margins
● Buying a great company, not just great product+ Great brand+ Great culture+ Great distribution+ Great products
Employees
● Culture is our X Factor
+ Scrappy+ Mission+ No jerks
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Derive Value Propositions
+ Competitive Assessment+ Must Do/Choose to Do
2Measure Authenticity Gap: Promise/ Performance
5Define StakeholderThesis
+ Purpose
1Define Impact Program
+ Materiality Assessment
3Design Impact Program
+ Write the Conjoined Brief+ Generate Conjoined Solutions
4
Write the Conjoined Brief
01De-select irrelevant stakeholders
03Capture constraints
04Identify conjoined constraints across stakeholders
02Micro-select most critical stakeholders
Generate Conjoined Solutions
06Iteration
05Ideation
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Design Impact Program
+ Write the Conjoined Brief+ Generate Conjoined Solutions
4
Write the Conjoined Brief
01De-select irrelevant stakeholders
02Micro-select most critical stakeholders
03Capture constraints
04Identify conjoined constraints across stakeholders
Capture Constraints
● Problem Framing
● Active Listening
● Jobs to Be Done
● Jobs-Based Interviewing
● Empathy
Tools
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Design Impact Program
+ Write the Conjoined Brief+ Generate Conjoined Solutions
4
Write the Conjoined Brief
01De-select irrelevant stakeholders
02Micro-select most critical stakeholders
03Capture constraints
04Identify conjoined constraints across stakeholders
Tools Capture Constraints
● Problem Framing
● Active Listening
● Jobs to Be Done
● Jobs-Based Interviewing
● Empathy
Generate Conjoined Solutions Ideation
● Design thinking
● Crowdsourcing
● Functional Organization: Experts leading Experts
● ISRU: In-Situ Resource Utilization
06Iteration
05Ideation
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Derive Value Propositions
+ Competitive Assessment+ Must Do/Choose to Do
2Define Impact Program
+ Materiality Assessment
3Measure Authenticity Gap: Promise/ Performance
5Design Impact Program
+ Write the Conjoined Brief+ Generate Conjoined Solutions
4Define StakeholderThesis
+ Purpose
1
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Go deeper.
Participate in an interview
Prototype to learn.
Jon Iwata [email protected] Dhar [email protected]
01
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