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New Economy Rules: Social Business, Culture, and a Purpose

Why the new economy demands a hybrid approach to business strategy and what to do about it.
by

Nathan Meffert

on 15 June 2011

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Transcript of New Economy Rules: Social Business, Culture, and a Purpose

Environmental & Social Regeneration We live in a new economy... Global Competition "'At least 3.3 million white collar jobs and $136 billion in wages will shift from the U.S. to low cost countries like India, China, and Russia by 2015."

-Forrester Research Developed nations such as Japan, Germany, and the United Kingdom will see similar job loss. The UK will lose nearly 25,000 IT jobs and upwards of 30,000 finance positions to developing nations in the next few years. Europe will lose 1.2 million jobs to offshore locales between now and 2015. Automation and Technology Garry Kasparov was the undisputed world chess champion from 1985-1997. New Media Nature and Society “Industrial capitalism…neglects to assign any value to the largest stocks of capital it employs—the natural resources and living systems, as well as the social and cultural systems that are the basis of human capital.”

- Paul Hawken, founder of Smith and Hawken garden tools, and author of "Natural Capitalism: Creating the Next Industrial Revolution" Since, then Twitter, Facebook, and YouTube alone have been used to topple governments, get presidents elected, and reform whole industries. How would you know if you were living through the most significant communication revolution since the printing press? In fact, there is no equation to accurately calculate the true cost of an out-of-season apple shipped from Chile... We don't know. That's not how accounting is done. Cost of clean water polluted and cost to replair it Cost of fresh air polluted and cost to repair it Cost of increased risk of cancer and other serious health problems for all of us ? But, the ROI of trying something new is this: ...but if there was, it would look like this: Rewarding jobs, healthy families, and a much higher quality of life. ...and there are major forces shaping it. Cultural Design Social Business Science shows us that our can only react in of ways to such massive changes, opportunities, and threats.... Option 1: (go to sleep) Option 2: (wake up!) Think of it as "downshifting" and "upshifting". Wild animals are wild because the only brain they possess is the lizard brain. In an upshift, on the other hand, the brain shifts into "genius" mode. Hungry Scared Angry Horny But, most of all, it is resistant to the higher brain. In a downshift, the "higher brain" goes to sleep, and our older brain - the "lizard brain", takes over. The lizard brain is: Great ideas Groundbreaking insights Generosity Love Connection Kindness The genius is the source of: or.. Here's the kicker: Whole groups of people - businesses, industries, communities, governments, and schools can be stuck in "lizard mode". "I want to know God's thoughts; the rest are details." "Hiss." Fiercely independent Competitive Collaboration Lizards may survive. But they never succeed. It took radio 38 years to reach 500,000 users. T.V. did 500,000 in 13 years. The iPod took a measly 3 years to hit 500,000 users. 500,000? That's chump change.

Facebook added 100 MILLION users in less than 9 months. The Internet pulled it off in 4 years. How long do you think it took... It's the first time media has been a two-way conversation - ever. Success on these platforms is requiring transparency, authenticity, and engagement - much like the "good old days" of family businesses and small towns. And he remained the reigning "classical chess" champion until 2000. But, in 1997, Garry lost to an IBM computer named "Deep Blue". The loss was a blow for chess. But, it created deeper ripples than that. The computers had won. Any job that can be reduced to a list of commands is at risk of replacement. So what can you do that a computer or a well-trained, courteous Asian engineer can't?

That's the question. The message was clear: To put it bluntly:

If Asia doesn't get your job, the robots will. As if that weren't enough... The cost of doing nothing may be too high to measure. (A quick story...) Do you sense a trend? ...to add 500,000 users? Those who fail to adapt face yet another survival threat. But it's just another gear in the new economy... + + = Geniuses not only survive - they change the game entirely. As in any great transition...

Some downshift.

And others upshift. Zappos.com is number one in their category worldwide, and was just purchased by Amazon.com for $1.2 billion. Best Buy is a leader in the revolution, responding to the widespread adoption of social media technologies by making it's marketing and customer service more responsive, transparent, and authentic. Apple's new corporate campus in Cupertino, CA will set the stage for a new era of innovation in business 2,300 new trees. Surface parking will decrease 90%. Landscaping will increase 60% The building will be powered by natural gas, with the grid as a backup source. Huge courtyard in the center. Fred Keller, CEO of Cascade Engineering in Grand Rapids, Michigan has built one of the most innovative companies in the history of manufacturing by focusing on social and environmental sustainability. Cascade voluntarily cut emissions 20 percent from 2005 to 2010. Cacade also supports a mandated phaseout of U.S. oil imports. In 2007, Cascade became a certified B Corporation, a sort of LEED certification for socially responsible businesses. Cascade and CEO Keller are simultaneously building a profitable and sustainable business, uplifting an entire community, and transforming an industry by constantly asking, "what good can we do?" While other businesses buck against regulation, Cascade seeks out stricter limits, seeing them as an opportunity to build a better business. Best Buy has enlisted thousands of employees in its "Twelpforce" - a Twitter-driven community of one-to-one customer service. Executives want employees at all levels "know all that we know as fast as we know it". But Zappos didn't get there by chasing dollar signs. And, although they are known for some of the best customer service on Earth, that's not how Zappos won either. Zappos understands that its brand is its culture, and that, in an increasingly connected world, "culture talks". Amazon had the money to dominate Zappos as a competitor. When Amazon laid down. $1.2 billion, they were buying something much greater than a shoe store or a great brand. Culture is the next playing field in business. And visionary Amazon founder Jeff Bezos knows it. They were buying a movement. Zappos just happens to do it best. Twitter is the ideal tool to enable Best Buy employees to take an active role in a global conversation about emerging trends, products, technologies, ideas, and practices. This is happening across industries, but Best Buy is a leader. And their movement has grown by leaps an bounds as a result. Here's how: IBM is another pioneer. In February 2011, IBM held their first "Social Business Jam", a Twitter-driven event that explored "new approaches for the next era of busines". Social media technology is changing the very structure of our businesses and communities.We must develop innovative new approaches to culture and governance. Here are some of the insights that the event generated: High-tech collaborative approaches to business will become the norm. It is becoming increasingly important to master open and honest communication at all levels of an organization. In order to thrive, businesses of the future must become "customer obsessed", and priortize a non-stop one-to-one conversation with their communities. Over-emphasis on financial ROI can be a distraction to the work of building a sustainable new economy organization, and new metrics for success must be developed. New economy organizations are sustainable organizations. They focus on developing three key areas:

Culture
Social business
Environmental and social stewardship They often take immediate financial "losses", in favor of prioritizing long-term resilience. The build cultures and movements, not brands. Upshifting. Downshifting. They are geniuses in a world of shortsighted, fearful, and
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