When we look back, 2017 will be remembered as a watershed year for corporate governance. The perennial focus on technological disruption, was itself disrupted when complex sociocultural issues came to the fore. So what are the “new rules of business” to which companies will be forced to adhere, whether they like it, or not?

Back in 2013, a Havas Global “Prosumer” Report (Communities and Citizenship) revealed that 68% of its global respondents believed that businesses bore as much responsibility as governments for driving positive social change. The same survey also revealed that 55% of respondents thought corporations were better positioned than governments to combat climate change, while 61% wanted their favourite brands to play a bigger role in their local communities. The survey involved over 10 000 respondents across 31 countries, which illustrated a fast-shifting mood in the global consumer mindset (and yes, South Africa was part of the survey).

In the report, David Jones, CEO of Havas observed that “We’re entering the age of damage, where social media has empowered people to hold businesses accountable. As corporations have grown in size and power, people are expecting more from them – to drive positive change and to work toward the greater good rather than acting solely on the basis of their own agendas”.

That bit of sage advice apparently fell on deaf ears: corporate ears in particular. Brands in the retail space took heed and have learnt to kowtow to their real masters – their digitally armed customers rather than their shareholders. In the aftermath of numerous corporate scandals last year, 2018 will see corporate business desperately cleaning house, as well as taking a crash course in the “business of being ‘Woke’.”

DEFINITION OF ‘WOKE’ – Urban Dictionary

Being ‘Woke’ means being aware. Knowing what’s going on in the community, specifically in relation to racism and social injustice. 

It’s going to be an uncomfortable year for businesses that are used to a blinkered focus on the bottom line, keeping their shareholders happy and without too much concern that they might be driving roughshod over their customers, or staff. A tipping point has been reached, and none too soon.

2017 was bookended with Donald Trump becoming president, and Robert Mugabe being removed from power: two pivotal and historic events that illustrate seismic change in the world. But what happened in between these events is what will determine the trajectory for the year ahead.

Here are three fuses that were lit in 2017, which will change business behaviour and governance irrecoverably.

1. Corporate Misconduct

At the close of 2017, the bombshell that was the Steinhoff implosion was added to a growing list of dodgy dealings within the corporate world, which now include: KPMG, McKinsey and Naspers. In all cases, the CEOs apologised for their indiscretions, but as many pointed out, the apologies were less about a show of contrition and rather penitence for their wrongdoings exposed.

South Africans have had their fill of political corruption, and to now add corporate corruption into their already depressed psyche, is going to spur a backlash. However, it’s easier for consumers to punish a retail brand for inappropriate behaviour or not upholding their values: they simply vote with their wallets, which is why consumer brands understand, very clearly, what the impact of ‘Woke’ customers has on their bottom line. It’s more difficult to make the same impact in the corporate world. More difficult, but not impossible. Today brand reputation, and therefore brand association, is becoming more important, so while consumer sentiment might take longer to create change, the business to business relationship hits where it hurts most. Look how fast KPMG clients severed ties with the auditing firm in the wake of their scandal. There must be a flurry of hurried and hushed conversations taking place in C-suites at the moment: and if not, there should be.

2. Sexual Misconduct

David Jones could not have dreamt how prophetic his words were about social media, when one little hashtag (#metoo), not only spread virally but also leapt from the entertainment industry into the political arena and then into the business world. While sexual misconduct is the driving force behind the hashtag, it brings with it parallel conversations that have been bubbling to the surface: patriarchy and white monopoly capital. Some would argue that the latter is the spawn of the highly controversial, but nonetheless successful, PR campaign by Bell Pottinger (another name to add to the list above), but it would not have inflamed tensions if there were not a grain of truth behind it. Aggressive male behaviour, whether towards women or in business, has been exposed and confronted, and what we’ve witnessed in 2017, is just the bellwether of change for entrenched, patriarchal systems.

3. Issues of Identity

It’s no coincidence that the spelling of woman or women is increasingly being spelt “womxn” or “womyn” by female activists. The re-spelling is a statement that women no longer wish to be defined by men because, they argue, that in our patriarchal societies men are the ‘norm’ and women a mere sub-category of that ‘norm’. This neo-feminist movement is just one of three identity issues that erupted last year: the other two being issues around race and cultural identity.

Brands and businesses were caught in the crossfire of these socio-political undercurrents (think racial spats at Spur and Dove’s hapless journey into the minefield of skin tones), and it’s only going to get more complicated. The issue of gender, specifically, is becoming very complex.

When you add the emerging, and very nuanced, issues of gender fluidity, and the well of complexity just becomes deeper. The first signs are already here.

Last year, the UK banned any advertising using traditional gender stereotypes (eg: girls should no longer be portrayed as aspiring ballerinas, nor should boys be portrayed as wanting to be firemen).

The ripple effect was immediate.

London’s John Lewis department store announced that its own children’s clothes would no longer be divided by gender on the shop floor, but also that they would remove binary labels on the clothes themselves, so the clothing labels now read “girls and boys” or “boys and girls”.

New words, new worlds 

You might think that we’re headed for an overtly politically correct era, but I disagree. A new world order (in every sense of the phrase) is finally crystalising. It’s not so much political correctness, but outdated thinking and systems that need to be reviewed, or simply thrown out.

Take the issue of gender fluidity. Already 52% of American Gen Zs do not identify as heterosexual or cisgender (someone whose personal identity and gender corresponds with their birth sex), which has exposed a complex world of gender and sexual orientation subsects.  

Gen Z is now coming of age. They’re leaving school and are, therefore, your new entry-level workforce. They’re also your new customer (who has been subtly steering the household budget for years – ask any parent who decides on the family’s meal plan, holiday destination and tech purchases).

‘Woke’ issues matter to them more than you can imagine. If you thought Millennials were a handful, brace yourself for this generation. They are a post 9/11 and post Great Recession generation, the recipients of a damaged earth, and the first generation of true digital natives – it’s a potent combination that has given them a unique perspective on the world as it is right now, as well as guidelines on what systems have failed and which mistakes should never be repeated. They demand transparency, and even if it’s not proffered, they will sniff it out like a bloodhound.

The Gen Z mindset validates the Havas Prosumer Report. It’s almost as if the report was written with them in mind. Take this excerpt as an example:

Transparency is NOT optional: There was a time when people bought products without really giving thought to who or what was behind the brand. This era is long gone. 70% of Prosumers actively seek out information on the companies that provide the products and services they buy.

Prosumers have continuously higher expectations of companies and brands. And since it’s easier than ever today to determine who has been acting “good” or “bad”, companies that fail to meet prosumers’ expectations will pay the price. Two-thirds of Prosumers globally avoid buying from companies deemed to have a negative social or environmental impact. These consumers are actually making purchase decisions based on those values. Eighty percent of Prosumers agree that a clear set of values can help a company be more profitable.

It’s clear from what transpired in 2017 that most corporate businesses do not have a clear set of values, but rather distasteful values that have been exposed. Businesses need to clean house, urgently, and then still consider these new curveballs which will become crucial to a company or brand’s survival in years to come.

But it’s not only about catching curveballs and embracing the new rules of business but also being fully transparent. Transparency makes business uncomfortable. It shouldn’t, but it does, which is telling. It’s becoming the main currency that secures positive brand reputation. We’re soon going to reach a point where companies actually compete on transparency, in a bid to prove to their customers or clients that they have nothing to hide, but everything to boast about.

That day cannot come soon enough.

“The issue of gender, specifically, is becoming very complex”

“Gen Z is now coming of age”

“Transparency is NOT optional...”



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