Echoes From The Future - Moral Choices & Big Business

Yesterday saw the 2009 Echo Summit, a celebration of the 20 year anniversary of Echo Research, led by the redoubtable and indefatigable Group Chief Executive Sandra Macleod.

Congratulations to Echo

We attended wearing our 'corporate' Pendry White hat, but the issues raised were equally, possibly more, relevant to the concerns outlined to TPPR clients in recent months and years (an edited version of this posting may appear on Whiteboard at a later date).

But first our own congratulations to Echo. As you would expect from master communicators, their own pitch was restrained but informative, placing themselves, rightly, as a significant component in a two decade revolution in global corporate communications that may be reaching a turning point as we write.

What struck us, taking notes in the back row, was that, over eight well planned presentations by senior figures from the international communications community, two visions of the future were unfolding. Our instinct is that, while they may work in tandem for a while, there is not much room for both.

A symbol of change, Severstal's Vadim Saveliev, born into the Soviet world, now a leading practitioner at a global level, gave us his history of the last twenty years. It was the history of the creation of a world of near-autonomous global corporations that existed well beyond any national identity.

Although its 'Russian-ness' was emphasised as part of its culture, Severstal has no stake whatsoever in any rediscovery of nationalism at home or abroad. It exists now as a new type of global mega-tribe, based on physical assets but dislocated across space and now unified by a 'brand'.

This is the 'old' new world, one constructed out of major political events (the Thatcher/Reagan economic revolution and the collapse of State socialism) and ruled by 40-somethings, that has been most shaken by the twin crisis of financial dislocation and the still unclear socio-political effects of 'connectivity'.

Back to the Soft Power Arms Race

And this is where it gets interesting because the sheer scale of the change since 1989 suggests that we are likely to see as major a change in our society and politics within the next ten to thirty years as we have seen in the last economic cycle.

If so, then some of the assumptions of the more Pollyanna-ish of the globalisers about the continued rise of the corporation and of the brand may be more than a little self-serving - a conservative attempt by aging revolutionaries to hold the high ground that they have seized.

The 'old new world' is getting worried about the lack of trust in authority whereas the 'new new world' is much less anxious, considering that authority comes from below.

The 'old new world' still holds to the cult of the leader whereas the 'new new world' is eager to embrace the 'cloud' insights of the citizen-consumer.

Regular readers of As It Happens and of Whiteboard will know that, while we are highly critical of 'evangelism' and of any hyper-enthusiasm for change for its own sake, we are very much on the side of those who think that major structural changes to society and politics are on the way.

An anarchist friend once suggested to us that we will see a soft power arms race between authority and the people. This Summit suggested that he is right, though not in the way he might like.

What may be happening is a split within capitalism. Corporations requiring a co-operative relationship with the State and social 'leaders' such as NGOs will adapt to new times by cleaving to a protective soft corporatism that tries to embed social responsibility without unnerving shareholders.

However, there is another type of corporation that subsists entirely on its relationship with customers. The shift in power that connectivity promotes between the masses and authority of all types means that their future lies in collaboratively empowering the consumer, often against authority.

We might be seeing a hint of this already in the different stances taken by the ISPs and the IP-holding music industry over proposed draconian laws on music piracy but the potential 'internal contradiction' within capitalism is likely to extend far deeper than this over time.

The 'Bubbly' View of Capitalism

The 'bubbly' view of capitalism is that corporations are now out to change the world for the better. The new High Priestess or fashion icon of this view is US academic and intellectual Rosabeth Moss Kanter who writes ebulliently of enlightened Super Corporations.

This liberal Obama-esque view of capitalism has become the new mantra of those who profited out of the last cycle, were shocked by what they did not see coming in 2008 and still have a social conscience. It is, of course, sweet but naive to any unenlightened conservative pessimist.

According to this school, we are about to see a new Age of Enlightenment based on an implicit 'grand projet', really an intensification of the last two decades, which, if you dig deeper, represents a form of bureaucratisation and professionalisation of society under a benign and responsive technocracy.

This new world involves ever further specialisation of function at every level, the transfer of bureaucratic capability to trade and collaborative organisations and the increase of interest in corporate affairs in the academic world with ever more 'qualified' personnel being churned out to feed the machine.

The implicit assumption is that this new world will be regulated and complex (in a bureaucratic sense) and that lots of experts are going to be required, especially at the interface of enterprise and society. Reputation management is going to be a central bureaucratic skill. Drinks all round!

This model also requires new tools for measurement and evaluation and the use of technology to increase response times although the suspicion soon becomes that an awful lot of this could be what is crudely called 'arse-covering' and that the introduction of such a mentality might create sclerotis.

There is an ideological element as well. The word 'excellence' repeats itself endlessly to the point that, like most management terms, it becomes as vague in its real meaning as democracy did in the old communist bloc - an exhortation that is used for social management and political control.

The psychologist Bruno Bettelheim once wrote an invaluable book in which he relieved the neurosis-creating pain and pressure of parenthood by telling mothers and fathers that all they had to be was 'good enough'.

One cries out to the 'evangelists' to learn from Bettelheim, stop burning your people out or constraining their creative spirit, locking them into anal systems, and just aim to be a 'good enough' corporation to reward shareholders, serve customers, treat employees responsibly and be socially responsible.

The 'Other World' of Radical Connectivity

The 'other world' emerged in two excellent presentations by Alec Howe of Breaking Trends, of which more in a moment, and Bob Pearson, CTO of WeissComm, who spoke with clarity on what he had learnt as former Vice President of Communities and Conversations at Dell.

Before looking at Howe's contribution, we should try and pin down the essence of the difference between these future models.

The 'arms race' is essentially between a top-down mentality that wants to control what it often still does not understand and a bottom-up movement which has no fixed point and which can flow with non-localised tribal, emotional and rational interest motivations in any or all directions at a flick of a mouse.

Paul Holmes of the well-regarded industry monitor The Holmes Report who chaired the Summit, made a sensible link between the rise of public relations and democracy. Freedom gives the public choices and authority, in various shapes and sizes, needs to manage those choices.

The corporate communications specialist loves liberal democracy not only for ethical reasons but for pragmatic reasons - it provides the ability for him to have a creative function: otherwise he would be little more than a transmission belt for state propaganda.

But what if the democracy becomes deeper, transformed not only by connectivity but by the political thinking of that paradoxical figure, the conservative radical who sees radical democracy as the next stage in the revolution against the State and socialism.

How easy it might be for history to move on and see populist conservatism, such as the democratic reforms promoted by Cameron adviser Douglas Carswell, combined with connectivity create too much democracy to be managed easily - a nightmare for State and corporation and even NGO alike.

The PR profession has always been a liberal voice in the corporate mix and Holmes sees a 'Golden Age of PR' if only because the massive scale of the possible choices that affect reputation in real time places the communications professional at the heart of the game.

Whiteboard produced a piece on this recently but preferred to see it less as reputation management and more as risk management to mitigate the threats to capital-raising and to the smooth running of the business and from clashes with society and State that might damage shareholder interests.

Nevertheless, from whatever angle we look at it, any massive shift of cultural or soft power from relatively small elites, like the closed circle of contemporary public opinion formation, to the 'cloud' mentality of open public opinion will create new challenges to be met by people with new skill-sets.

The meeting saw the obligatory aggressive defence of capitalism and attack on Naomi Klein by one contributor but this already seems like yesterday's quarrel - a last bout of defensive triumphalism of those who won the war against socialism. The next phase is a war within capitalism ...

Alec Howe & 'Frontier Capitalism'

If only we could tell you more of what Alec Howe thinks! He was cleverer than us. He put together a six minute film which, at high speed, gave us Breaking Trends' findings on a world that we are about to enter far too fast to take any meaningful notes. Deliberately so - it was valuable IP

Frankly, what we saw knocked everything else into a cocked hat. It presented many dozens of propositions about how people will behave and will see the world as full connectivity starts to take hold. This looks to be a highly self-regulating society, wholly unlike anything we have seen to date.

We were actually gratified. Although there was much new to us, Breaking Trends' findings, clearly a work in progress, accorded to an amazing degree with our own analyses, especially on the sexual revolution already taking place, as we slowly turn into a society of family-centred extended tribes.

In our view, much of human behaviour under conditions of connectivity, and as living standards are expected to fall by 10% over the next decade, is likely to be highy defensive.

The construction of trusted peer group networks that morph into tribes that are not dependent on locality but on affinity, especially value-affinity, and where 'weak ties' permit opinion and decision-making to spread rapidly from tribe to tribe, is a massive challenge for authority of any type.

Of course, the paradox is that personality types are more fixed than society so that the 'cultural civil war' will not only be between those who seek to manage and those who seek to represent the mass but between those who will seek out the comfort of authority and those who will instinctively resist it.

Similarly, the matrix between location-based marketing (which sells you fixed things based on your own mobility) and the accumulation of hard-to-reach non-locational cross-border tribes has still yet to be fixed. This alone will help to decide the rise and fall of major B2C and even some B2B service providers.

That is our opinion, not necessarily Howe's by any means, but he does say that 'casino capitalism' is now going to be replaced with 'frontier capitalism', presumably with land-grabbing, innovation and low cost adaptation and with occasional 'Indian Wars' on the way before things settle down.

He also says that we are seeing the death of the passive consumer - and if we are seeing that demise, then we are also seeing the possible death of the passive elector, the passive believer and the passive sexual partner with consequent effects on politics, religion and sex.

Generational Shifts

Howe was also enlightening on another observation of ours - about generational mind-set. Although the actual age he chose may be arbitrary, he pointed out that the world of those under (say) 26/27 is mentally different from that of the generations above.

Our own observation is that the most 'advanced' generation in dealing with new technologies is actually not graded from younger to older with lessening comprehension with age but that, possibly because career and family demands are lessening, the 50-somethings are next most engaged.

But the point stands - under 26/27 and you think differently. Socio-politically this is interesting because the demands of this generation may be so different that resistance may set in amongst the older majority. Resentments may grow.

The cycle of the Baby Boomers may repeat itself not by dint of numbers but skill. The 'world will change' thesis may come come to full fruition only when technologies are fully embedded and these 'kids' are making serious decisions - perhaps from 2016, probably from 2026 and certainly from 2030.

If all this is true (the interpretation is again ours not Howe's), then interest must increase not only in behaviourial and cognitive research, with all the implicit dangers Whiteboard has pointed out elsewhere, but also in anthropological research.

It could be argued that the public relations and communications profession, hitherto obsessed with managing the flow of words and of consistent images, texts and brands into the world, may now melt away or be forced into a new skill set - shared narratives, images and behaviours.

A move from text to image would be a reversal of the move from image to text in the rise of printing but it is logical. Communication can now be verbal and illustrated, with the textual fact lodged for reference in the web as a mental back-up. Memory reduces and instant creativity increases further in importance.

In this world, we will be seeing vast increases in data. Power will lie less in the machinery of distribution and more in the provision of massive amounts of instant multi-origin content. This analysis is for another posting but it is relevant to PR because PR really only subsists on its command of the media.

Lessons Learned

Unlike the PollyAnna approach of the corporate globalisers and stakeholder school, Alec Howe offered us a darker picture of fiercer competition, brutal markets, constant innovation and constant public exposure and a bottom-up war on toxicities in society and business.

This is a (Western) population that has decreasing interest in sub-socialist planning but a great deal of interest in getting value for money, respect for its values and its 'tribe' and (this is our opinion) may be in the early stages of a leap in 'human consciousness', a change in the way of seeing existence.

The citizen-consumer is the other side of our anarchist friend's arms race, contrasted with the further integration of state, academy and business in a benign but constraining soft corporatism that history may see as having peaked in practice with the abysmal failure of 'third way economics' in 2008.

We are not convinced that the regulated economy being proposed as solution to the 2008 crisis is viable as an all-embracing system. A good proportion of productive capacity, especially at the top end of capitalist enterprise, may certainly have to face its partial integration into the governing system.

This is a result that many managers may not be opposed to. After all, good regulation can balance the demands of shareholders and can take responsibility for partial socialisation away from the Board of Directors. A driver here may be a public demand for integrity of information: a coming war on mis-selling?

Outside the regulation of the provision of information, perhaps signalled by the FTC's recent intervention on blogger and celebrity product endorsement, and the public order aspects of capital and labour, the population at large may be less and less minded to be regulated into good behaviour.

And this leads to a real zone of political contention between business as partner and as 'nudge' arm of Government and business as collaborative provider of goods and services to consumer-citizens: what happens when propaganda breaks down and the public don't want a 'good' thing?

This is a serious issue because 'old' communications, through lobby groups, has created complex partnerships on such issues as climate change. But what if the connected free public rejects the activists and resents attempt to 'nudge' them into things that have real costs to them as living standards fall?

The assumption is that a mass connected public will be 'progressive'. In fact, it may not be - it may have conservative or even reactionary demands. All the behaviourial science in the world may not nudge them out of resistance to political correctness, attempts to manage identity or regulatory restriction.

So what will the nice liberal people inside the supercorporations trying to create a better world, do then? Do they try to manipulate their customers even more effectively against their own wishes or do they cave in to the market and go with the connected flow? Interesting choices lie head.

New Labour and the 'Lazy Libertarians' of Britain

There have been two stories in the British media this week that help to demonstrate why the New Labour Government is having a problem connecting with the population at large. They are not stories about foreign wars or economic crisis but about the management of private life.

The first saw a 19-year old Canadian woman effectively kicked out of the country because of new visa rules despite having married a Welsh man and being happily settled with him in an apparently stable relationship on British territory.

The second is the announcement that anyone, including parents, who regularly drives children around for social reasons will have to undergo criminal record checks or (in theory though less so in practice) face major fines.

What these stories have in common is an attitude of mind. In a large and complex society, Government has resorted to sledgehammers to crack recalcitrant nuts. Lobbyists against specific abuses have driven Government into solutions that look good on paper but bad in the street.

In these cases, and in many others, the instinct of New Labour progressives when faced with an abuse by a small minority is to create new rules (often begging the question of effective enforcement) that add petty bureaucracy and inconvenience (and costs) to millions.

There are many other examples, low and high. The identity card scheme (in abeyance but far from forgotten) imposes European style social control mechanisms in a forlorn attempt to manage and control massive social security fiddling. Most middle class people just can't see the point.

Sometimes, these approaches are designed to support special interests. New technologies are creating problems for the creative industries so the Government plans to introduce draconian measures on filesharing that could ultimately have coppers bursting in on private homes to arrest teenagers.

If you think this is extreme, observe the Metropolitan Police Art & Antiques Squad's arrest of a teenage artist who dared to challenge the might of Damien Hirst, actually the might of the protectors of the right to print money of fashionable artists needing to preserve value for their patrons.

At other times, the Government follows a different ideological tack. Its Deputy Leader, Harriet Harman, is a hardline old-school feminist who does not like prostitution. Her solution would be to bring in more draconian Swedish-type laws that would outlaw paying for sex.

In her case, just as the change in visa laws is related to forced marriages and the criminal records registration requirements to the risk from paedophiles, the real driver behind Harman's rather potty idea (under British conditions) is the very real problem of sex-trafficking.

If it is not sexual conduct, then it is right behaviour in environmental matters or in late night drinking. Sensible reforms are often made ridiculous with a bridge too far in attempts to control language (implying control of thought) instead of just behaviour.

In Scotland, it would seem a barman cannot volunteer the phrase 'same again' lest that 'nudge' you into that extra drink. The public are treated as mindless zombies. Much of this legislation appears to be guided by a new breed of manipulative cognitive scientists.

Then there is the security agenda which results in increasingly oppressive and patently daft applications of counter-terror legislation in local government. There is not an amateur photographer in the land who is not angered by the increasingly odd behaviour of the police.

Many of the British are beginning to get increasingly irritated by all this interference because it indicates a Government that is weak rather than strong, unable to deal with particular problems through decisive executive action. It can only create blanket rules which it often fails to enforce.

The net effect is a climate of anxiety, fear and inconvenience in which the majority of the population is cowed into avoiding behaviour that they would probably never have considered in the first place, while the really bad people go ever deeper underground where it can be pretended that they do not exist.

There are other irritations. Most of the specific problems that are emerging are the result of globalisation (the easy flow of peoples from other cultures into Britain to meet cheap labour needs) or of community breakdown under free market pressure. But migration and economic interventionism are taboo subjects.

New Labour is trapped by its ideology in two directions - its egalitarian liberal human rights agenda means that rules should apply to everyone equally and its free market agenda fails to permit any  effective and targeted interventionist strategies that can deal with economic root causes.

Not only are there real and vicious abuses in society to deal with but New Labour is also determined to support certain 'creative industrial' interests as part of its competitiveness agenda and to keep its own ideological minorities as happy as possible given its crumbling electoral base.

We are in the position where ordinary British families, generally a-political and best characterised as 'lazy libertarians', are finding that, increasingly, they have to start owning documents and registering to prove they are to be trusted or fear the heavy boot of Plod at every bit of grey area bodging.

They are not only pushed around by uniformed jobsworths (not necessarily the police) when they try to take a snap but they are being forced to snoop on their own kids.

History is repeating itself. In the early 1950s, the Labour Government that created the welfare state and undertook a massive postwar housing programme lost an election to the Conservatives. 

There were many reasons for that defeat but one was that the 'lazy libertarians' decided that they had had enough of 'socialist' regulation and rules and wanted more basic freedoms.

Admittedly a narrow defeat but Labour was slow to understand that many in the electorate saw regulation as a temporary necessity rather than a way of life.

Even though there is now scarcely a socialist bone in New Labour's body (despite the claims of Tory libertarians to whom Roosevelt was a Communist), it has not shaken off its Fabian-derived instinct to manage the population from above through direction and regulation.

There is an element in the New Labour elite that fears HG Wells' projection of his time into a world of Eloi and Morlocks. To Tories like David Davis, council estates are still filled with Disraeli's 'angels in marble' whereas some sour progressives see a seething mob marked by a 'poverty of aspiration'.

Tories have held on to working class votes since Disraeli's time not only through crass nationalism (as Labour people like to claim) but by ensuring a 'laissez-faire' approach to private life. Beer drinkers would naturally gravitate to the centre-right to the degree that the 'temperance' loons took over the left.

In the current Government's case, the ideological predisposition towards social intervention (perhaps accentuated by its refusal to consider economic intervention) is compounded not only by the chaos caused by economic globalisation but by the attempt to Europeanise British culture.

The regulatory frame of mind is normal in parts of Europe. In Germany, it seems accepted that language (as in the criminalisation of holocaust denial) can be a subject for legislation - and this mentality has drifted over into anti-racism legislation and the debate about blasphemy in the UK.

Wherever you look in British public life, in the dying days of what may be the last centre-left administration for a long time, you see a propensity to use the blunt instrument of petty regulation of private life to solve problems that its policy approaches created in the first place.

The gap between the Tories and New Labour will narrow over the coming months as the special interests underpinning the centre-left start to realise what is in store for them - but the general public have accumulated so many petty irritations that a tipping point may have been reached.