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Counsel - New Value Shift

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  • 1. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012New Value Shift: RethinkingTraditional Value Models
  • 2. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012The combination of the onlinerevolution and global recessionis causing people to re-thinkfundamental principles ofeconomics and shared value.
  • 3. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Drivers and Cultural Energies- Future Low / No growth economic predictions- ‘Occupy Movement’- Rise of Social Networks- Expansion of Online Worlds and Behaviours- Dematerialization of Products- Increasing Appreciation of Holistic Well-being
  • 4. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012The End of Business as UsualWith many traditional business models being overturned (power of the internet), weare in the midst of a consumer revolution that is changing the future of business,media and culture.What is clear is the future of business will be different.There is much serious talk about ‘rethinking’ or ‘rebooting’ capitalism. Even theDean of Corporate Strategy at Harvard has pronounced the need to ‘reinventcapitalism’.One thing is clear. People are questioning the current value models:“We are waking up to the fact we can no longer carry on business as usual. If the industrialrevolution gave power to the company, digital revolution gives power to the consumer.” [1] - David Jones, CEO of Havas Advertising Group. “The End of Business as Usual” by leading business writer, Brian Solis
  • 5. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Challenging Traditional Value Models One of the most interesting effects of the current global economic situation has been the extent to which traditional value models are currently being challenged and rewritten. This gradual shift in what people value most will have a significant impact on how people live their lives and what they consume. Value is now seen as representing a much broader spectrum of associations.
  • 6. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Evolution of Value ModelsTraditional Value New Value - Decentralized value generation- Traditional ‘production functions’ (labour,capital, materials and energy; knowledge and - Relationship with a diverse stakeholdertechnology) community (employees / customers / users / suppliers)- Profit Maximization - Focus on broader influences which determine- Managerial Capitalism / Creating value for success (assessing the monetary value of thingsshareholders outside the traditional economic sphere)- Optimizing short term financial performance - Connection between competitive advantage- Profit at expense of community and social issues- Outsourcing, downsizing, relocating and - Dealing with wider external factors (Social /globalizing environmental impact)
  • 7. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Reassessing Business ValueCurrent evidence suggests there will be a change in how we defineprosperity, progress, success and wealth in a post / low growth world.One of the many new approaches gathering momentum assessesprogress in terms of levels of happiness and well-being.Constructive Capitalism redefines the value equation at the heart ofcapitalism. It is built on a better economics that creates ‘thicker’ value:value thats meaningful to humans - not just value that pumps upspreadsheets and bonuses.“We will start measuring our progress as a country not just by how our economy isgrowing, but by how our lives are improving, not just by our standard of living, but byour quality of life.” [2] - David Cameron, Prime Minister of Great Britain.
  • 8. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012The Rise of Personal Online Value Individuals are beginning to recognize that new ‘value’ may come from alternative sources such as the ‘value’ of the data they generate from search and social networks. Contemporary theorists like Douglas Ruskoff are particularly vocal in their pronouncement that when it comes to Facebook and Linkedin, users are the product not the consumer. Personal online behavior is so valuable to brands and marketers that it is likely that they will pay to access personal recommendation and publicity via social networks. “The hours Facebook users put into their profiles and lists and updates is the labor that Facebook then sells to the market researchers and advertisers it serves. On Facebook were not the customers. We are the product.” [3] - Douglas Rushkoff, Author of ‘Program or be Programmed’.[4] [5]
  • 9. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Leveraging Personal Online ValueA whole new industry is emerging to provide people with the tools to control andeffectively price their online data.These services will grant people power to demand that companies play by a fair andtransparent set of rules if they want to access your data.A new user-centric marketplace is emerging that respects the sanctity of your data,time, privacy and identity (anonymity is the default).“Data is a new form of currency.” [6] - Shane Green, Chief Executive of Personal Inc.“Personal data - digital data created by and about people -- represents a new economic asset class,touching all aspects of society . . . Granting individuals control over their data is necessary to createa balanced personal data ecosystem.” [7] - World Economics Forum Report. [8]
  • 10. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Refocusing on What is ImportantAll over the world people are questioning and reprioritising what is most valuable to them.In São Paulo an underground movement has emerged around the theme of ‘lack of love’,questioning the values of the city’s workaholic society, where time spent in traffic jamsreduces time spent with the family.The disconnection that comes from ever longer hours in-front of screens or commuting ismaking people think about what is REALLY important in their lives.“The work-a-holic life and time spent in traffic jams made people very anxious and aggressive inSão Paulo. So a concept of ‘lack of love’ was born. It’s not related to a specific brand, but involvesan iconic product that represent the “haters” from São Paulo such as owners of SUVs.” - Counsel Thought Leader, São Paulo. Graffiti in São Paulo reading “Love is important. Damn.”
  • 11. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Business for a World with New ValuesEven corporate multinationals are gradually beginning to adapt to future demandsfrom consumers.2011 saw Unilever launch its sustainable Living Plan, which is committed to creatingproducts that genuinely improve people’s lives.‘We have to develop new ways of doing business which will increase the social benefits fromUnilever’s activities while at the same time reducing our environmental impacts. This is why wehave created the Unilever Sustainable Living Plan.’ [9] - www.sustainable-living.unilever.com
  • 12. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Buy Less, Buy UsedPatagonia‘s ‘Common Threads’ Initiative – “buy less, buy used” reflects changing valuemodels by presenting a new ‘value chain’.Patagonia have set up an online marketplace in collaboration with eBay wherecustomers can buy and sell used and unwanted products.“This program first asks customers to not buy something if they dont need it. If they do needit, we ask that they buy what will last a long time – and to repair what breaks, reuse or resellwhatever they dont wear any more. And, finally, recycle whatevers truly worn out.” [10] - Yvon Chouinard, Patagonias founder and owner.
  • 13. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012New Value Business Models‘One for One’ is emerging as a revolutionary new business model which offers analternative value exchange that addresses and successfully balances the sustainabilityissue.New brands like Warby Parker and TOMS are reinventing the rules of what constitutesbusiness success.“A huge driving force for our entire founding team has been this concept of really being a force forgood in the world.” [11] - David Gilboa, Co-founder of Warby Parker.
  • 14. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Implications
  • 15. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Movements – Embracing HappinessAnother approach to the New Value debate is to focus on ways of monitoring andincreasing personal happiness levels by finding out what truly makes us happy.Urban planners are taking the idea of sustainability in the suburbs a step further bydesigning entire car-free communities to encourage suburbanites to use moresustainable types of transportation.Brands need to find ways to spread a little happiness, restoring the feel good factorby promoting the values of well-being and sociability.“We have gone through a huge financial crisis and there has been a re-evaluation ofpriorities for everyone. Suddenly you are talking about young people’s lives neverbeing as prosperous as their parents’ have been.” [12] -  CA (The Communications Agency) Planning Director James Champ. TWith so many (young) people unemployed marketers need to be sensitive about howthey promote goods to this group. Offering some services free of charge andemphasizing the sociability element, marketers can keep young people engagedregardless of their income levels.
  • 16. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012Welcome to a New Era of ‘Human’ BrandsAccessibility – Facilitated by the advent of social media interaction – has encouragedbrands to become a bit more “human” in the age of new value.Honesty is important in a world where consumers doubt the integrity of business.Companies who are able to demonstrate authenticity, humanity and a willingness toadmit mistakes will be embraced by customers.Domino’s Pizza has recently taken brand transparency to a new level by running anunfiltered customer feedback billboard in Times Square, broadcasting both positiveand negative reviews. [13]
  • 17. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012New Value Business PracticesMore and more companies are realising the benefits of reflecting changingvalues such as readdressing people’s work - life balance.Its not just radical start-up, even established corporations are introducingunlimited vacation and found it actually increases productivity.“Rather than hoard days for times when they really need it then scramble to take days atthe end of the year Hubspot’s open unlimited vacation policy makes these problems goaway… Employees take the vacation when they need it and we don’t have a spike ofvacations at specific points of time.” [14] - Dharmesh Shah, Co-founder and CTO Hubspot.
  • 18. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012 Leveraging Personal Online Value More brands are now helping customers leverage their social capital by rewarding them for promoting through social networks. American Express recently introduced the social credit card which syncs to twitter to enable savings. Uniqlo has its Lucky Counter system - The more tweets, the lower the price.[15] [16]
  • 19. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 20121. Jo Confino . (2011). Time for advertising to steer consumers towards sustainable choices. Available: http://www.guardian.co.uk/sustainable-business/david-jones-advertising-sustainable-consumer-behaviour.2. David Cameron. (2010). Britains Well-being to be Measured. Available: http://www.number10.gov.uk/news/britain’s-wellbeing-to-be-measured/Rethinking Capitalism: An Interview with Michael E. Porter [Video]. (2011). Available: http://blogs.hbr.org/video/2011/01/rethinking-capitalism.html3. Douglas Rushkoff. (2011). Does Facebook really care about you? Available: http://edition.cnn.com/2011/09/22/opinion/rushkoff-facebook-changes/4. Sara Kabiri. (2011). What are you worth to Facebook? Available: http://prote.in/feed/2011/06/what-are-you-worth-to-facebook5. Sara Kabiri. (2011). What are you worth to Facebook? Available: http://prote.in/feed/2011/06/what-are-you-worth-to-facebook6. Julia Angwin and Emily Steel. (2011). Webs Hot New Commodity: Privacy. Available: http://online.wsj.com/article/SB10001424052748703529004576160764037920274.html7. World Economics Forum. (2011). Rethinking personal data. Available: http://www.weforum.org/issues/rethinking-personal-data8. Klout, http://klout.com/home9. Unilever. (2011). Unilever Sustainability Plan:Small Actions, Big Difference. Available: www.sustainable-living.unilever.com10. Warren McLaren. (2011). Patagonia Says, "Buy Our Stuff On eBay". Available: http://www.treehugger.com/sustainable-fashion/patagonia-says-buy-our-stuff-on-ebay.html11. Noah Robischon. (2011). The Vision Thing: Warby Parkers David Gilboa Disrupted An Industry And Improved The Worlds Sight. Available: http://www.fastcompany.com/1797996/dave-gilboa-co-founder-of-warby-parker
  • 20. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 201212. Lucy Handley. (2011). Brands need to spread a little low-cost happiness. Available: http://www.marketingweek.co.uk/analysis/features/brands-need-to-spread-a-little-low-cost-happiness/3029892.article13. Honest By, http://www.honestby.com/14. Lydia Dishman. (2012). Unlimited Vacation Doesnt Create Slackers--It Ensures Productivity. Available: http://www.fastcompany.com/1823415/why-unlimited-vacation-policies-ensure-productivity15. American Express ‘Tweet your way to savings’, https://sync.americanexpress.com/twitter16. Uniqlo ‘Lucky Counter’, http://www.uniqlo.com/uk/luckycounter/
  • 21. FUTURE SIGNS LOWE COUNSEL LOWE + PARTNERS MARCH 2012THIS PRESENTATION IS MADE TO YOU STRICTLY ON THE FOLLOWING UNDERSTANDINGS:ALL RIGHTS ARE RESERVED TO LOWE COUNSEL. NO PART OF THIS PRESENTATION MAY BEREPRODUCED, STORED IN A RETRIEVAL SYSTEM, OR TRANSMITTED, IN ANY FORM OR BYANY MEANS, WITHOUT THE PRIOR PERMISSION IN WRITING OF LOWE COUNSEL.THIS PRESENTATION CONTAINS MATERIAL WHICH IS OF A CONFIDENTIAL NATURE WHICHIS PROPERTY OF LOWE COUNSEL AND YOU WILL NOT DIVULGE ANY OF THE CONTENTS TOANY PERSON OTHER THAN TO YOUR EMPLOYEES OR ADVISERS WHO ARE REQUIRED AS AMATTER OF NECESSITY IN THE COURSE OF THEIR DUTIES TO RECEIVE AND CONSIDERTHE SAME FOR THE PURPOSES OF EVALUATING LOWE COUNSEL, ITS PRESENTATION ANDANY RELATED PROPOSALS AND THEY WILL BE INFORMED BY YOU OF THE CONFIDENTIALNATURE OF THE MATERIAL.YOU WILL NOT USE OR EXPLOIT ANY OF THE CONTENTS OF THIS PRESENTATION FOR ANYPURPOSE OTHER THAN TO EVALUATE LOWE COUNSEL, ITS PRESENTATION AND ANYRELATED PROPOSALS AND IN PARTICULAR ANY DESIGNS, IDEAS OR CONCEPTS PUTFORWARD BY LOWE COUNSEL MAY NOT BE USED BY YOU AS PART OF ANY SUBSEQUENTADVERTISING CAMPAIGN WITHOUT THE EXPRESS WRITTEN CONSENT OF THE LOWECOUNSEL.

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