Goodbye Growth At All Costs. Hello Responsible Growth.
In the era of climate change, coronavirus, and social disruption, for the first time in 50 years, the idea of growth is coming under scrutiny. Historically, one of the few things that agency and client marketers could agree on was that they were all there to deliver growth. #MiltonFriedman, in his book Capitalism and Freedom, gave them permission with the famous quote: ‘There is one and only one social responsibility of business – to use its resources and engage in activities, designed to increase its profits, so long as it stays within the rules of the game’. He did recommend avoiding ‘deception or fraud’, but apart from that, pretty much anything goes. More recently a host of other academics and writers like #ByronSharp, #PeterDoyle, #TheodoreLevitt, and others have written extensively about how brands and marketing can deliver growth.
But now there is a counter movement openly questioning the unquestionable. Authors like #RichardHeinberg, #NaomiKlein, and #KennethGalbraith have written titles like ‘The End of Growth’, ‘On Fire’ and the ‘End of Normal’ suggesting that the era of growth at all costs is coming to an end. The key driver is climate change and the need for a more sustainable economy, but the emergence of COVID-19 has accelerated the pressure to think differently. These writers also raise questions about how normal growth is in the history of the world, and whether it is a more recent phenomenon than we realise. Add in the voices of #ExtinctionRebellion, #GretaThunberg, #SchoolClimateStrike, #Greenpeace and others, and the unassailable case for growth and marketing is not so clear cut.
Even the eminent economist #JohnMaynardKeynes predicted back in 1930, in his essay ‘Economic possibilities for our grandchildren’ that the era of growth would come to an end by 2030. He forecast that the economy would be 4 to 8 times bigger than in 1930, so we would live in an era of abundance, where growth was unnecessary. Right now, with 10 years to go till his deadline, we are at the lower end of that spectrum, but the end of growth conversation is already underway.
I was talking recently to cultural strategist #GerardCrichlow, about growth and sustainability, and he pointed out that when important new social trends occur, they tend to start with consumers and ordinary people, then get picked up by companies, before governments finally jump on board. We can see movement in all three areas at the moment, but there is no doubt that consumers are leading the charge.
We see this reflected in a range of research studies. #Deloitte has recently published the #DisruptedGeneration, looking at attitudes amongst millennials and Gen Z towards corporate ethics. This shows a disconnect between what people see companies and brands focusing on, and what they would like to see happen. In their view, there is a disproportion-ate emphasis on profit and not enough on social and environmental impact. They aren’t opposed to companies making money, but would prefer a balanced scorecard, showing contributions across factors such as employment, innovation, equality, and diversity.
Another global study by #Nielsen shows that consumers are ready to pay between 2% and 10% more for ethically sourced and produced products. And a third study by #USTrust, entitled #WealthandWorth, indicates that more than 50% of high net worth individuals, 64% of women, and 87% of millennials want companies to behave more ethically, and this will in turn influence their investment decisions.
Of course there is often a gap between claimed and actual behaviour. Very few people know which companies their pension funds invest in (good, bad or indifferent), and look only at how they perform (if they pay any attention at all). Similarly, several of my colleagues were uncomfortable working for a big oil company, yet freely admitted that #Deliveroo and #UberEats were nightly visitors to their homes, bringing multiple takeaway meals wrapped in non-recyclable plastic packaging.
In summary, we are stuck in two camps, with precious little dialogue. One calling for an end to growth, but still needing access to transport, housing, good food, pensions and the occasional luxury. The other continuing to target revenue and profit growth on behalf of nameless and faceless ‘stakeholders’, who may in the end be the very people calling for change. Surely we can do better than that.
The solution must lie in the middle ground, with businesses leaning in to the social and environmental concerns of their customers, but doing it in a way, which still delivers the growth demanded by investors. Marketers are well placed to lead this conversation as they are generally custodians of brand strategy and purpose. Brands have the opportunity to set out what the company offers, and how it tells its story. If you get the formula right, they can act as a unifying force for customers, employees and partners. They can influence thinking about products, services and marketing. And improve performance, whilst attracting talent and investment. We are calling this purpose-led approach #responsiblegrowth – a lens which creates social as well as economic value, and can be applied to any business or sector.
And what about agencies? So many opportunities to explore including: going upstream to work with CEOs and board members; getting onto new pitch lists based on what you stand for; winning more pitches; new sources of strategic insight; better creative inspiration; more sustainable productions; winning more awards; better colleague engagement and retention; and quite possibly better financial performance. Who knew being responsible could be so interesting!
Stay tuned for more insights on #responsiblegrowth, and please get in touch via #LinkedIn or this website, if you have thoughts to share or problems to solve.
