We live in a world characterised by uncertainty, where trust in both companies and institutions is declining, where on the one hand populism is on the rise, and on the other consumer behaviour is rapidly evolving.
Simplicity vs Complexity
We live in a world characterised by uncertainty, where trust in both companies and institutions is declining, where on the one hand populism is on the rise, and on the other consumer behaviour is rapidly evolving. Disruption – once a simple marketing buzzword – has instead come to describe our era.
In few places are these ‘known unknowns’ more widely discussed than in the
world’s corporate boardrooms. Where once corporate leaders could stick to
a traditional script, safe in the knowledge that if they did nothing interesting,
said nothing controversial, and generally avoided undue attention, they
could expect to be left quietly alone to manage themselves.
Today, not only has that script been thrown out the window, but the scrutiny individual business leaders are under has increased exponentially via social media. Meanwhile, the prospect of politicians providing clear frameworks has faded rapidly as factionalism has risen, leaving a widening policy vacuum.
One of the casualties of this challenging communications landscape is an over-reliance on simplification.
One of the casualties of this challenging communications landscape is an over-reliance on simplification. While consumers want to support companies who are more purposeful, information that is more complex or nuanced is often viewed by a sceptical public as defensive and deceitful, or simply an attempt to be dull to obscure a lack of action. Across industry, this has led to an awkward twin tracking of communications strategies.
A good example is in the approach to plastics, where the introduction of
a paper straw has been seen as an easy win for many companies that can
be momentarily heralded by press and public.
But this simplistic and short-term solution leaves many more difficult issues
lingering for businesses: how do they rethink the wider supply chain? Can the
majority of plastic bottles be replaced when the alternatives are so limited?
Alternatives like aluminium cans weigh more and carry a significantly larger
carbon footprint and still need to be melted down to be recycled, and tetrapaks, while having the advantage of being light, are still widely unrecyclable.
A Beta World
Most of these high-volume solutions are unpalatable to The Public, while
the local authority waste systems are often still not fit for purpose.
Once companies would attempt to solve these difficult problems with a call to the R&D department leading to an attempted solution being wheeled out at a grand unveiling three or four years later. But today, firms no longer have the luxury of time, or of working in silos for the long term.
This means many struggle with explaining the necessary complexity going on
behind the scenes, yet fail to consider how they can marry the two approaches. They are not helped by consumers who struggle to distinguish the difference between an ethical business that is truly leading the way and one that simply hopes to grab the spotlight and PR their way out of trouble.
So, how do firms provide themselves with some immediate air cover in the short term, while working towards a longer term objective?
Today, we are seeing the question answered by a different approach;
a move towards on-going experimentation which engages with the public at every stage. In 2015, Adidas introduced the first footwear concept with upper materials made entirely of yarn and filaments made from reclaimed and recycled marine waste. In 2019, the company will produce 11 million pairs of shoes containing recycled ocean plastic intercepted on beaches and coastal communities.
Meanwhile, Mars brought in journalists to witness the first stages of a small,
targeted initiative to give Madagascan farmers more security and increase vanilla quality recently – with an admission that they aim to make the crop fully traceable within a decade.
Elsewhere Carrefour and waste recycler TerraCycle created an initiative for
shoppers in Paris to buy orange juice, detergent or shampoo in reuseable
containers in conjunction with 25 other big name consumer goods partners.
Technology is easing this path, with companies like Tesla providing downloads to its customers, with a range of new and innovative functions every day.
An additional advantage of this approach is its ability to engage consumers on
a deeper level than business-as-usual allows. The subject of the climate change impacts of milk might be more compelling for a potential coffee purchase, than a brand that simply quizzes its users on their milk preferences.
While consumers consistently continue to demand purpose-driven change, many of the world’s leading multi-national corporations are emulating the start-up style techniques advocated by the entrepreneur and author, Yale graduate, Eric Ries, in his book, The Startup Way: How Modern Companies Use Entrepreneurial Management To Transform Culture and Dive Long-Term Growth.
A good example is in the approach to plastics, where the introduction of a paper straw has been seen as an easy win for many companies.
As US billionaire Scott Cook and founder of financial software company Intuit
explained to management consultancy McKinsey “Normally, companies put up a phalanx of barriers, hurdles and mountains to climb that may not seem hard for me or the CEO, but are intensely hard – impossibly hard – for young innovators to conquer. “Our job as leaders is how do we get all those barriers out of the way so we put in a series of systems and a culture where the expectation is that if there’s an idea that someone’s passionate about, we put in a system to make it easy and fast and cheap for them to run an experiment. Strip it down to what leap-of-faith assumption you want to prove, and how you can run an experiment to test that idea.”
As populism calls for increased simplicity, this technique allows good leaders to respond in the right way. It means that those leaders who were once timid, can also embrace a more confident style, finding safety in leadership and experimentation.
Where CEOs once sought safety in the pack, today, the logical approach means it makes more sense to be out in front.
Dr. Arlo Brady is Chief Executive of The Brewery and Freuds