There is no denying that we are living in a turbulent time of fast changes and paradigm shifts. Things that mattered yesterday can be of little value today. The productivity-driven industrial model designed in the 19th century - a model upon which we have built our businesses and societies for the last 200 years is being very much questioned today by the younger generations of consumers.
Industry and business leaders of our times, therefore, are being challenged to come up with a vision that is more desirable than that 200-year-old narrative. The clients are asking for more: more respect for social wellbeing, more consideration towards nature, better quality, more equality. More adventures and daring concepts, but more respectful ones all the while.
As clients are becoming more engaged, they expect the same from businesses. According to a study by Deloitte, 65% of respondents expect CEOs to “do more to make progress on societal issues, including reducing carbon emissions, tackling air pollution, and making business supply chains more sustainable.” These expectations are indeed backed by policy makers, with more and more stringent climate and environment policies. By 2019, there exists a total of 1925 climate change mitigation policies reported by EU Member States (a 27% increase between 2017 and 2019).
Indeed, businesses do try to respond to those demands. By 2021, one-fifth of the 2000 largest publicly traded companies had made a "Net Zero" commitment. Surely, promises are one thing and concrete actions must be followed, but this is still one of the weak signals showing that businesses need to shift towards a new narrative to stay relevant in the future.
The true WHY toward a more desirable future
Beyond regulations and pressures from clients and policymakers, business and industry leaders do have a more personal interest to shift toward a new, more desirable future. By creating a new narrative of how businesses should be done, leaders are holding in their hands an immense power to shape the society of the future. Either that society of the future continues on this trajectory of the last 200 years, or it could become something else that is more exciting, more daring and yet humane.
No leaders would wake up in the morning and be excited over a goal of a two-fold annual sales increase, or the takeover of a new emerging market. As important as they are, numbers figures are certainly not the drive that inspires us to do what we are doing. The true why lies in the daring visions and ambitions behind: What are the biggest challenges of humanity that we would like to tackle? Why should it be done by us and not by someone else? What is the personal agenda that we would like to turn into a reality?. These visions are the hidden driving force, the reasons that we wake up everyday.
This applies to individuals, business leaders, but also to businesses. A business vision that focuses solely on the sales performance or other productivity-driven KPIs no longer speaks to clients, stakeholders and employees. It does not inspire, and it does not comply with the changes demanded by the market, either.
Draw me your desirable future
The question now is: what are the elements that would make a future “desirable”? What is the new narrative, the new story-telling that would inspire your future clients, stakeholders and employees? What would make your brand not only relevant but also desirable?
One important shift might happen when the intrinsic values of a product or a service prevail over the brand name. Procter & Gamble alone, the largest advertiser worldwide in 2020 spent more than 8 billion US dollars (equivalent to the GDP of the entire country of Moldova) to promote their fast-moving consumer goods. In total, the world spends 622 billion US dollars to advertise and enhance brand names. What if companies don’t advertise at all because the intrinsic value of their products/services is undeniable? For example, the electric automobile manufacturer Tesla, the iconic Sriracha hot sauces or Supreme, one of the world's most expensive clothing brands never spent a dime advertising their products, but still enjoy a strong engagement with their consumers and sales revenue is always on the rise, from one year to another.
Another shift in values could happen in the approach of “client-first” vs “society or nature-first”. The obsession with “client-first” of the giant retailer Amazon might become not that desirable in a near future, as criticisms and accusations of terrible warehouse working conditions, reckless care for drivers and their safety, forced labor in China, etc. have gradually become an associated part of the brand. As 64% of consumers stated that they have a relationship with a brand because it shares their values, the narrative “client-first” despite all other human and environmental factors, before long, will be not enough to sustain a desirable brand. Meanwhile, Patagonia is on the other end of the spectrum. Their consistent narrative of “planet and people first” has become one of the best-in-class examples of demarketing, product circularity and recyclability and therefore, has created a community of extremely loyal customers.
Another example in the clothing industry with a shift from affordability - today’s value to durability - tomorrow’s value could be already observed in Generation Z or Millenials. Being born into the challenges of climate change, biodiversity loss and social injustice, they are emerging as the sustainability generations. The dominant narrative of affordability backed by fast-fashion brands is no longer desirable, with examples found in the events of Arcadia going into administration, Forever21 filing for bankruptcy, and H&M making plans to shut 250 stores globally. Meanwhile, the value brand resale market is growing now at a rate of 12% per annum, reaching €31 billion in 2021, fueled mostly by millennials. As value brands offer products with much better durability than fast-fashion brands, this shifting mindset of the younger generations signals a radical change in the narrative that brands should adopt in order to stay relevant.
Businesses are asked to “reinvent” themselves all the time in order to stay ahead of their games. We, on the other hand, believe they should stop doing that before figuring out their desirable future first. It is no longer enough to stick to the narrative of productivity and rapidity that has been persisting since the 19th century.
Future clients, stakeholders and employees are demanding a different story-telling, one that is more adventurous and daring, but more respectful all the while. It is the only way for businesses to stay relevant in the upcoming years and step up to become the shapers of our future societies and economies.
Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Energy & Sustainability writers, their opinions do not necessarily represent those of illuminem.