How is social media driving conscious capitalism?
Social media is driving conscious capitalism and compelling corporations to become increasingly socially responsible.
Over the last few years of rapid technological change, social media has become the cornerstone in most organization’s digital marketing strategies. Shaping a brand’s image was once the sole preserve of a marketing team, but the transparent and collective nature of social media has shifted the balance of power.
Consumers can now wield great influence and damage a brand’s image at the click of a few buttons, forcing organizations to respond publicly or face worsening resentment. Social media is a major driving force behind the rise of Conscious Capitalism, compelling organizations to become ever more socially responsible and aware of their actions.
What exactly is Conscious Capitalism? Carlos Bremer, an EY Brazil partner, and Raj Sisodia, FW Olin Distinguished Professor of Global Business and Whole Foods Market Research Scholar, identified the four main components of Conscious Capitalism that an organization should have:
- Higher purpose — pursuing a higher purpose beyond profit-seeking
- Stakeholder orientation — generating value for all stakeholders and not just shareholders
- Conscious leadership — leaders who care about the higher purpose and stakeholder well-being
- Conscious culture — creating a more humanistic environment based on trust, authenticity and transparency
Traditionally, corporations were generally the only entities with the budgets and resources to communicate to the masses and dictate their brand image. However, the last 25 years of technical advances have changed this through greatly increased access to information, transparency and connectivity. Technology, particularly the web, has made us far more aware and conscious than ever before about corporate behavior and there is one extremely powerful and free communication tool to level the playing field — social media.
Social media’s double edge
With some 2.3 billion active users globally, social media channels are a valuable feedback mechanism to directly understand customers’ needs and perspectives. But they also provide open platforms for people to directly and publicly attack brands or corporations at little or no financial cost.
Given that 91% of retail brands use two or more social media channels, there are plenty of avenues of attack by activists and consumers. Furthermore, 74% of customers believe shaming a brand on social media leads to better service, giving a compelling incentive for customers to try bring about corporate change.
Charities harnessing social media
Online users can easily unite and rally like-minded people against brands and corporations who have been accused of perceived immoral behavior to affect change. However, individuals are not the only ones that use social media to affect corporate change.
Charities and NGOs also harness the powers of social media to cast a bright light on the perceived failings of corporations. Recent years have witnessed many successful high-profile charity campaigns against corporations, resulting in influencing long-standing corporate behavior and policies.
The younger generations
The pressure on organizations to change will likely only increase given the high social media use rates of millennials and particularly Generation Z. Seventy-four percent of Generation Z spend at least two hours a day on social media, while 44% spend more than four hours a day. This has arguably made these generations far more aware of social issues than their predecessors, pushing organizations to follow a conscious capitalist business model.
Furthermore, pressure on organizations will increasingly originate from employees. Seventy-nine percent of Generation Z are not just interested in money but will seek work that will make a difference and positively impact society. To attract and retain the best future talent will require a clear Conscious Capitalist purpose that creates shared value among all stakeholders — and not just short-term value for shareholders.
Be genuine, offline and online
Conscious Capitalism and creating a purpose are not purely external marketing exercises — they require changing the very culture of the organization. As EY’s CEO Mark Weinberger says, “For purpose to really matter, it needs to go beyond an initiative that sits on the margins of the organization. It needs to be a central part of the culture.”
Only through genuine attempts to transform and remove any disconnect between promises and deeds can organizations thrive on social media and survive in a future business environment increasingly characterized by Conscious Capitalism.