Listening: A Strategy and Change Blog | Hosfeld & Associates

By Ron Benton and Kathleen Hosfeld

With a global economy in slow recovery and many businesses fighting for survival, what is the significance of sustainability thought, practices, and execution in shaping a better and more prosperous world?  A just-released comprehensive global study conducted by MIT’s Sloan Management Review and partners provides some revealing and reassuring answers including the following:

• Sustainability is continuing to have a material impact on how companies think and act
• Sustainability is surviving the downturn
• Most firms are not decisively acting on the opportunities presented by sustainability
• A small number of firms are capitalizing on the opportunities and reaping the rewards.

What do these findings mean for you and your organization?  In general, the findings affirm that thoughtful investments in sustainability will positively differentiate early adopters in their industries.  The specifics depend on the issues your organization faces and where you and your firm are in your evolution of adopting and benefiting from sustainability practices.

The study also supports our assertion that engagement in sustainability has a developmental aspect to it.  It says that those who have experience in sustainability see more clearly the business case and strategic benefits it can offer. Those with less experience don’t have a clear sense of the business case for sustainability.  This suggests that a good way to explore sustainability is through a well-designed pilot. Well-crafted sustainability strategy projects can help companies explore the potential benefits of sustainability in ways that create value over the long and short term.
Read the MIT Sloan Management Report “The Business of Sustainability.”

Hosfeld & Associates and Ron Benton & Associates work together to offer services to help companies thrive in the sustainability economy. Additional details are available here.

Noticing the gap between what consumers say and what they do.

Recently the radio industry was rocked by the results of using new listening measuring devices to monitor listener behavior. Called “People Meters,” the devices “listened” to the sound in the room of the person wearing them, and recorded what stations they picked up. Prior to the use of these devices, people kept journals of how many hours a day they listened to particular stations. What people reported was that they listened to National Public Radio stations and classical music stations. What the People Meters revealed however is they were actually tuning into easy listening , oldies and country western stations. This is something like reporting that you read National Geographic, Scientific American or Town and Country magazines, when in fact you’re actually reading People, Cosmopolitan or Seventeen.

The difference between what we know we should do and what we actually do is something that smart marketers have noticed for a long time. It’s a lesson many forgot in the dot.com bubble days when focus groups asked people to evaluate whether or not they would use a certain Web technology in the future.

The Hartmann Group, a Bellevue research firm, has explored the gap between our so-called “new thrift” and the actual purchase behavior of many consumers. We clip coupons for the grocery store, but then go out and buy an iPhone. This phenomenon helps us understand why people report that sustainability is very important to them, but their purchase behavior doesn’t necessarily confirm it.  Read more here.

“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.”
— Peter Drucker

By Kathleen Hosfeld

Freeze and wait. That’s been the reaction of many to this time of economic uncertainty. While that works for animals who camouflage themselves in their surroundings until danger has passed, its wisdom only goes so far in the human marketplace.

This strategy assumes that the “danger” will indeed pass, and that things will “get back to normal.” Early signs, however, suggest that the old status quo has been disturbed permanently. How much consumer and corporate behavior will change for good remains to be seen. Many agree, however, that this crisis has changed them in fundamental ways.

In this time those that are thriving are doing something fairly counter-intuitive. They are moving in the direction of their hearts, and doing the things they long to do. As a result, they are stepping out of stagnant eddies into places where new energy and activity are flowing.

I recently watched a short film called Lemonade that tells stories of people in the advertising industry who used their layoffs as a call to action. By unleashing the power of what was meaningful to them, their lives and careers were redirected in important ways.

Around Thanksgiving 2009, I wrote a small blog article titled “Let the Beauty We Love Be What We Do.” It’s a challenge to counteract fear with a move toward what we love.  What do you feel called to do? Now is the time. Take your own career or your organization in a direction you have always longed to go. It may not make sense and yet it’s the right move.

Yesterday’s logic is to focus on the numbers – the numbers you can hit or the numbers you can earn. The new logic is to find the place where you can make a difference, the place that is meaningful to you, and let that energy carry you forward.

No-cost places to start include:

• Watch the Lemonade movie.
• Read the blog article I wrote and spend some time thinking about the beauty that you love.
• Reconsider your value propositions for key stakeholders.  Are they compelling to you? Do they speak to your desire to make a difference in the world?  Use our free value propositions worksheets for this exploration.
• Start a conversation in your workplace around the question: “How do we want to make a difference at this workplace, through this work, or using the assets and resources we have available to us?”

I’m interested to know what changes you decide to make. Let me know.

By Kathleen Hosfeld

By a small miracle, I took part in a recent phone survey conducted on behalf of a local grocery chain that has recently built a new store in West Seattle, where we live. I say it was a small miracle as I’m usually screened out right away because of our work.  For some reason, they didn’t ask, and I didn’t tell.

As a result, I offered what I hoped to be really helpful information for the survey. I was somewhat taken aback when the interviewer called me again minutes later to say that some of my answers “didn’t fit their categories,” and her supervisor wanted me to  please provide responses that fit their categories.

What they wanted to know is who had the 1) best bakery, 2) best produce, 3) lowest prices. The answers that I gave that didn’t fit their categories had to do with sustainability.  One of the things I told the interviewer is that I choose my grocery stores on how easily I can walk to them.   I told her that organic produce was important to me. One of the things I would also tell them – but didn’t have the chance — is that I choose my grocery store on its citizenship, its support of local farmers, and the amount of local produce it offers. None of these criteria fit their survey. Within walking distance of my home, I have three stores that offer great examples of these qualities. They have great bakeries and good produce. One has low prices.

I realize that I am what they call an “outlier” – someone not in the mainstream.  (Or maybe I am in the mainstream but no one is measuring what matters to me, so there’s no data to back this up.)The lesson for companies: listen to the outliers. Give them a chance to give you an answer you don’t expect.  By ignoring the unusual, you may be ignoring the new paradigm that will change your industry forever. You may be ignoring a chance to see where your market may be going before it’s too late.

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In an interview with KUOW’s Ross Reynolds, Temple University history professor and author Bryant Simon raised an interesting question for those of us engaged with the marketing implications of a commitment to sustainability. Simon has recently authored a book titled “Everything but the Coffee,” a book about the impact of Starbucks on culture and society.

In the interview Simon said that buying a cup of coffee whose brand values include fostering a sense of community (the idea of Starbucks’ locations as a social hub or “third place”) does not mean you will actually experience community. This, no doubt, depends on how one defines community. Simon’s definition, as expressed in the interview,  includes democratic debate and dissent. Fostering civic dialogue is not a core element of the Starbuck’s store experience so for Simon it’s not creating “real” community. For many of Starbucks’ customers, however, community may be like the old TV show “Cheers,” a place where “everybody knows your name.” Being a “regular” at a particular Starbucks (or any other coffee place), where the baristas know your favorite order can lead to this type of community feeling.

As he concludes the interview, Simon raises an important issue for those of us bringing the values of sustainability into brands and marketing strategies. He says that the values to which brands try to appeal may not be values that can be realized through how we spend our money. My paraphrase of his statement from the interview is that it’s good news if people really want the values that Starbucks promotes, because the brand promotes positive social and environment change. He says, however, if we think we are creating those changes simply by buying Starbucks coffee, we’ve missed the point.

“If we judge our desires by what we buy from Starbucks – if we want a greener planet, if we want more connections, if we want social justice around the world – (these) are values that could build a more democratic order. The problem is we’re not going to get them through buying,” is my rough transcription of his comments.

Purchase decisions alone are not enough to effect the cultural and political change that we need to address society’s most pressing environmental and social needs. However, purchase decisions are not irrelevant. Does buying a sustainable product relinquish us from the responsibility to be citizens who vote and take part in civic dialogue? No. But every purchase decision is a tiny vote for the things we think are important, and a way to support those companies who are sincere in their intent to create meaningful change through their work.

Listen to the archived interview here. Reynolds interview with Simon starts at minute 34 in the Real Audio file. I’d like to know what you think.

By Kathleen Hosfeld

I’m a fan of perspectives that make sense of seemingly conflicting points of view. This is why I love PEAK: How Great Companies Get Their Mojo From Maslow by Chip Conley.

Conley, owner of the Joie de Vivre boutique hotel chain in California, writes about his own and others’ experiences in cultivating deeply satisfying relationships with employees, customers and investors (this book is a very readable compendium of stakeholder marketing ideas). His stakeholder strategies ultimately contributed to the survival of his company in the travel industry meltdown following 9/11. He based his methods on the teachings of psychologist Abraham Maslow.

“Maslow believed that human beings seek to meet base needs for sleep, water and food (physiological)” Conley writes, and that we focus on the lowest unmet need at a time. “As those needs are partially fulfilled we move up … to higher needs for physical safety, affiliation or social connection, and esteem.” Finally, we aspire to the top of the pyramid which is self-actualization.

Conley used Maslow’s hierachy to map out how his company satisfied these needs for employees, customers and investors (his key stakeholders). His book provides a wealth of detail on how his firm did this, how others have done it and how to apply this to your own firm.

So what conflicting points of view does he brings together?  Depending on your own view of human nature, as a marketer you may find yourself believing one of the following views about how to win customers: 1) customers act from their most base needs (bottom of hierarchy) or 2) customers act (or should) from their highest motivations (top of the hierarchy) and values.  This dichotomy shows up starkly in branding and advertising models, many of which assume we make all our purchase decisions with the most primitive part of our brain. There’s a tension between these and the strategies that try to sell products based on “doing the right thing,” assuming green or social criteria will make a difference. (They can and do, but sometimes not enough).

The truth that Conley articulates so well is that good marketing and good relationships address both of these polarized views and all the needs in between.

Take customer relationships for example. The most basic need a customer has, according to Conley, is that we meet their expectations. Our products and services have to do what they expect them to do. He points out, however, that this alone rarely creates loyalty or the more-coveted evangelism.  Fostering loyalty means identifying the desires customers have, which are typically desires for social connection/belonging and esteem. Evangelism comes when we offer customers the opportunity for transformation and self-actualization – to be more fully themselves, or the self they long to be.

This is solid advice for any firm that thinks it’s not tapping the full potential of its customer relationships. Start with the basics: Are we clear about what our clients expectations are for our product or service?  Are we meeting their survival and safety needs? Second, how are our relationships and interactions – do we provide warm customer service? Do we make our clients feel important and valued? Finally, do we offer our clients an opportunity to be more than just a consumer?

At Joie de Vivre, they meet the top of the pyramid by offering what Conley calls “identity refreshment.”  You stay at a hip hotel and you feel like the hipster you want to be. Through examples such as Harley Davidson, Whole Foods, Apple Computer, the high tech service group Geek Squad, as well as his own company, Conley provides numerous creativity-sparking stories and examples.  The book is packed with tips for how to apply these ideas in your own firm.  Equally valuable are his suggestions for building strong partnerships with employees and investors.

Can companies do reasonably well at the bottom or the middle of the hierarchy? Certainly. If you aspire, however, to levels of relationship that create evangelists for your brand, and resilient companies that can withstand volatile economic cycles, says Conley, you need to deliver value at all the points along the hierarchy: survival, success and transformation.

By Kathleen Hosfeld

As much as organic models of organizations may be taking root, and the industrial metaphor of “business as machine” may be dying back, the latter lives on in marketing. As a result, many companies may be missing one of the biggest opportunities of social media as a tool for growth and profitability – supporting authentic relationships.

In the industrial paradigm, marketing is a machine that makes sales. Depending upon how many resources one plugs into the machine, one can turn a crank and expect sales as an outcome. The machine pumps messages through pipelines directed at target audiences. The messages fall upon the target audiences, a portion of which respond. It’s believed that the more resources one puts into the machine, the more sales occur. The problem is that many companies feel the machine has become unreliable.  They are putting more and more resources in, and getting fewer and fewer sales as a result.

A Machine That’s Running Down

Continuing to conceptualize marketing with this metaphor is to ignore many cultural shifts that point to change. The emerging metaphor depicts marketing as a series of co-creative dialogues with stakeholders. A book published a decade ago, The Clue Train Manifesto, put this idea on the map: “Markets are conversations.” Mutually constructive dialogue builds trust, which leads to sales.

The traditional paradigm of marketing is a push model, where target audiences are passive receptors (or at times victims) of marketing campaigns. While most good marketers understand the role of dialogue, in the push model it’s a relatively small part of the overall mix.

Strengthen Your Core

In the trust paradigm, marketing starts as dialogue with a core group of stakeholders that share the company’s passion for its products or services.  This core group can be viewed as the center of an ever-widening series of relationships, depicted as concentric circles (but not nearly as neatly categorized). In the center of the circle, the relationships with the company are the strongest and are the most likely relationships of advocacy. As word of the company and its products or services travel outward through layers of connection, the marketing message is propelled by the network’s relationships with each other rather that a direct interaction with the company.

What gets lost for many companies is the importance of cultivating that inner core. One of the important tasks for companies is to determine who the key stakeholders are. Who lives in the center circle? And what do they need to be advocates for the company? Traditional marketing focuses primarily on customer prospects, but employees and other stakeholders are often part of the core.

In his book, The Gort Cloud, author Richard Seireeni notes that many of today’s successful green brands used little or no push strategies during their start-up phase. Contrast this with the start-ups of many of the dot.com companies in the ‘90s that spent millions on brand awareness and mass media (many failed). The companies in Seireeni’s book didn’t have those funds and couldn’t grow that way. Instead they cultivated a network of advocates – employees, suppliers, specialized journalists – that grew steadily until the companies reached critical mass and were able to scale.

Pushing less

What’s the role of “push” tactics – traditional advertising and promotion – in a trust-based paradigm? Increasingly such tactics focus on permission-based or “opt in” techniques like search marketing and social networking.  Even when a company is doing all it can to collaborate with its core, there may always be a role for push strategies that invite people into permission-based relationships. The degree to which this is necessary will vary by industry. The point is that push strategies and their associated costs will diminish as a percent of marketing budgets and activities.

Unfortunately, many of the organizations using social media don’t recognize this paradigm shift. They are using social media as another form of push marketing, instead of a tool for dialogue. It’s a step in the right direction to convert to permission-based or opt-in communications with prospects or customers. If that’s where social marketing ends, however, a great opportunity for relationship and mutual advocacy is lost.

Who’s Your Primary Relationship?

Using social media only as a push strategy places the emphasis on customers’ or prospects’ relationships with each other, rather than their relationship with the company. Building a sense of community around your products or services is a great thing to do – it’s what makes Harley Davidson, as one example, as successful as it is. These communities take the company’s message out through viral networks. This works best, however, when the company is an integral part of that community and strong relationships have been established at the core.

What are some ways to capture the benefit of social marketing to foster authentic relationships?

Start With Face to Face Dialogue With Core Stakeholders – Identify your core stakeholder groups. Who cares deeply and passionately about your product or service?  Design in-person, face-to-face conversations with people who are core stakeholders. This certainly will include employees, some customers or clients (but not all), suppliers, regulators, distributors, etc.  Adopt a position of mutual learning. Nurture these relationships over time.

Use Social Networking to Continue and Broaden the Conversation – After establishing key issues with your core stakeholder groups, invite more people into conversations on those issues. Include feedback options social marketing campaigns. These can take the form of polls, surveys, discussion groups, etc.

Networks That Connect Other Stakeholders – Many of the free social networking resources are more appropriate to prospective customers or customers. Remember to support ongoing dialogue with other stakeholders through online collaboration software or other technology appropriate to those audiences.

Not Everyone Uses The Web – While many people do enjoy connecting online, there are many high-value contacts that don’t. An inclusive approach that designs opportunities to connect in person in person or on the phone will ensure you do not miss important customer segments.

Don’t Spread It Too Thin – Nurture the core.  Remember Gerald Weinberg’s Law of Raspberry Jam: “The wider you spread it the thinner it gets.” Keep in mind that the mass communication doesn’t take the place of face-to-face in creating a core of committed advocates.

Many younger companies have used this model because they didn’t have the money to do it any differently. Yet for decades, companies with diverse clients – from highly affluent individuals, other businesses, athletes, foodies, and more –  all have gone to scale, and navigated numerous lifecycle transitions by cultivating relationships of trust with key stakeholders. Social media, in this context, can be a powerful tool for cultivating these relationships.

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This article began as a conversation with my associates Jenny Mish and Ron Benton, at the Portland State University Business and Sustainability Conference in October 2009.  It evolved in conversation with Matthew Wesley of Agility Partners. Thanks to all of you for collaborating with me.

By Kathleen Hosfeld

“Be the change we want to see in the world” is so often used, we have become somewhat immune to its message that it all starts with us. The place we make change most effectively is in our own lives.

As more of us seek to engage in creating economies and communities that work for all, it may be that hope associated with change isn’t enough to inspire us. We’re unclear about what changes are needed to create the world we want. The idea of change begs the issue of strategy. What will work? Which of the many issues I care about should I tackle first?

When such questions paralyze us into inaction, another approach is to move in the direction of what we love. What are we grateful for? What are we so grateful for that we want all to experience it?

The Sufi poet Rumi wrote about how the particular longings of the heart shape our life path. He  said “A rose opens because she is the fragrance she loves.” We grow toward the beauty that most inspires us. We unfold more of ourselves, become more truly ourselves, as we release more of what we love into the world.

Bringing this sentiment to the workplace, to our relationships with clients, customers and other stakeholders involves taking time to ask: “What are we inspired to become? What is our highest aspiration for our work? What joy do I want others to experience?”

It’s not a simple process to bring such thoughts into practical application, and integrate them into our daily lives. But it’s an important process for this time. It means to live a life of faith. Faith in what? Faith in love. In beauty. In hope. In the basic ability of human beings to  work together to create a world that works for all of us.

In another poem, Rumi invites us to “Let the beauty we love be what we do. There are hundreds of ways to kneel and kiss the ground.” Many of us recognize that each person has his or her own unique gifts to give the world. Our individual lives can be a continual exploration of those gifts over time.

So, too, can we as companies and organizations act in service of the beauty we collectively love, and bring it to flower in the world for the good of all. When offered in the spirit of gratitude and generosity, our actions can truly be the change we seek.

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The line “The rose opens….” Is from the poem Every Tree, translated by Coleman Barks in the book The Glance, Songs of Soul-Meeting, published in 1999 by Penguin Books.

The line “Let the beauty we love…” is published in The Essential Rumi, also translated by Coleman Barks, 1997 HarperOne.

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Want a reminder to keep this sentiment alive in your life? Get the “Let the Beauty We Love” mug and we’ll send $5 to Kiva.org to support entrepreneurs around the world through microfinance loans.

Hosfeld & Associates Inc. and Ron Benton & Associates, Inc. have announced an alliance to deliver strategic services to accelerate the return on investment from commitments to sustainability, stakeholder partnerships and trust-based business practices.

Who Is This For?

These services are for companies that have already experimented with and seen benefit from waste and energy management practices, and that are looking for new opportunities for innovation, competitive differentiation, and strengthened customer relationships. Our stakeholder engagement services help companies tap the creative potential of relationships with customers, employees and other partners. Our rapid strategy services help clients get traction on new initiatives and design them for maximum return in value and learning.

Companies that would benefit from these services are those that seek to:

• Convene a team to develop and implement a strategic action plan quickly
• Tap the creative potential of employees, customer and other partners for breakthrough ideas and strategic insights
• Learn more quickly from experiments by measuring what matters
• Increase accountability and follow-through for strategy implementation
• Build capacity for dialogue, collaboration and partnering as they do real work (not in a classroom)

What Strategy Services are Provided?

Rapid Sustainability Strategy – We enable companies and lines of business to accelerate the development of new sustainability oriented products, services and business models. We accelerate and invigorate the planning process so that participants are emotionally and intellectually connected to your strategy and its successful implementation. As a result, you can realize returns and value from your work more quickly.

Stakeholder Experience Strategy — We enable companies to tap the significant business benefit of stakeholder loyalty and trust. We combine principles of stakeholder marketing and Total Customer Experience management to identify all the ways the company engages with stakeholders and the corresponding opportunities to create transformative partnerships with them. We engage the intellectual and emotional commitment of team members, leading to effective follow-through and acceleration of results.

Stakeholder Marketing Strategy — We work with our clients to design stakeholder marketing systems, strategies and action plans that accelerate the realization of value from stakeholder engagement. We help companies use stakeholder marketing approaches to tap tremendous potential for innovation, trust and loyalty. In the face of increasing complexity and potentially competing stakeholder needs, we help clients clarify their objectives, build their capacity to manage stakeholder dialogue, and implement strategic change quickly.

For detailed information on these services, please download our brochure here.