Monday, April 2, 2012

Greater Implications of Emerging For-Profit Company Trends

In the reading for this week, three emerging trends in the for-profit industry particularly hit home for me: the emphasis on real-time data mining of social networks, the suggestion that “environmental stewardship and sustainability” are becoming increasingly important to upper-level managers,1 and the growing need for more “knowledge workers” in the office environment.2 Each of these trends has impacted my own work in the last couple of years and are likely to continue to do so. In particular, the McKinsey Quarterly article on “Ten tech-enabled business trends to watch”1 cited PepsiCo as a leader in social data mining. Having worked directly with PepsiCo’s Digital Team last semester to improve the efficiency of their social media analytics, I wanted to take this opportunity to describe in greater detail why their method of tracking is so innovative, which will lead into a discussion of the value of environmental stewardship. Other companies, too, are adopting “corporate social responsibility (CSR)” strategies as part of this generation of new business models and focus on innovation. Finally, I will turn to a brief discussion of how the arts might play a role in fostering a modern workforce of knowledgeable, creative employees, ready to succeed in this volatile for-profit business environment.

The McKinsey Quarterly article states that PepsiCo’s social media data is mined to “gauge the immediate impact of their marketing campaigns and to understand how consumer sentiment about their [brand] is changing.”1 While this is indeed true, from my work with the PepsiCo Digital Team for three months last fall, I can verify that their data reports are crafted in a very unique, targeted, and specific way. Rather than measuring performance as the standard return-on-investment of its products or the performance of its products in the digital space, PepsiCo instead measures the impact of its “corporate social responsibility (CSR)” campaign in the digital space. Entitled, “Performance with Purpose” and only tangentially related to its product goals, this campaign is divided into a focus on four separate categories: Company Operational Performance, Human Sustainability, Environmental Sustainability, and Talent Sustainability. To uphold its commitment to each of these areas in the virtual world, PepsiCo invests in content creation on a variety of channels with the intention of demonstrating support for society and generating conversation around these topic areas. The channels include: Facebook, Twitter, YouTube, PepsiCo Women's Inspiration Network Blog, and five other blogs. More than a food and beverage company, PepsiCo cares about the general well-being of all of its customers. Its analytics, then, take the form of a ten-page scorecard with metrics designed to measure consumer engagement in each of these channels. Metrics do indeed include sentiment as well as audience reach, total engagement, and share of conversation per channel. PepsiCo also benchmarks these metrics against those of its competitors. As a whole, the scorecard can tell management how its CSR initiatives are performing in the social space – apart from just the PepsiCo brand and products.

It is innovative and admirable for such a large company to invest so many resources and to pay such close attention to metrics that do not directly impact its bottom-line profits. This is reflective of the trend, also addressed in the McKinsey Quarterly article, toward “environmental stewardship and sustainability.”1 Increasingly, companies are becoming more transparent as consumers choose where to purchase goods and services based on a company’s commitment to the community. Consumers are more than simply price-focused, but instead they are also now environmentally-conscious and health-oriented. In recognition of this trend, the Lundquist group, a consulting firm based in Italy, evaluates worldwide companies’ commitment to CSR initiatives in its annual “CSR Online Awards.”3 Lundquist puts enormous effort into crafting a survey, which it sends to “250 CSR professionals and sector experts from almost 30 different countries.”3 The survey assesses CSR performance based on 77 separate criteria. In 2010, PepsiCo ranked 69th in the index, with renowned companies such as Eni (1st), NestlĂ© (2nd), Hewlett-Packard (2nd), and UBS (4th) leading the pack. The Lundquist annual awards are a testament to how companies are, in fact, beginning to place an emphasis on CSR initiatives. This is all good news for those of us who work in the arts, as companies are also starting to recognize the value of the arts in contributing to a well-rounded, adaptive society by including the arts as a pillar in their CSR strategies.

In the McKinsey Special Report entitled, “What happens next?,” the authors discuss another trend that also provides opportunities for collaboration with the arts industry. They state, “We are seeing a growing talent mismatch…we need knowledge workers…85 percent of the new jobs created in the past decade require complex knowledge skills: analyzing information, problem solving, rendering judgment, and thinking creatively.”2 While the authors do go on to suggest ways to better motivate and prepare “knowledge workers,” I might add one more to the list: invest in the arts. To do this, a company might look to hire more employees with backgrounds in the arts (even at the amateur level), provide incentives for current employees to interact with the arts, entertain clients by attending an arts event, or support the arts philanthropically. The service organization for the arts, Americans for the Arts, makes a solid case for why a business and arts collaboration is worthwhile. In particular, it states, “The arts are about critical thinking, solving and reframing problems and facts in ways that reveal insights and opportunities.”4 In addition, “Whether it’s showing off their own creative talent in a company art show or battle of the bands, or volunteering for a local arts group, the arts let [business] employees use their current skills and develop new ones.”4 These kinds of skills are exactly what the McKinsey Special Report identified as currently missing in the for-profit sector. Americans for the Arts has devoted an entire website to a business-and-arts collaboration, entitled The Partnership Movement. It commends a number of companies for leading the charge to invest in the arts and highlights their stories of why each of these companies believes in the power of the arts, including The Boeing Company, Macy’s, 3M, and Aetna. As each of the trends delineated in the McKinsey Quarterly and McKinsey Special Report become more and more pronounced, companies will want to become more innovative in developing new business processes to adapt accordingly. Thinking more about how the arts could contribute to this innovation might be a place to start. What do you think will drive innovation? Are new corporate strategies, such as an emphasis on CSR initiatives, sustainable?

1Bughin, Jacques, Michael Chui, and James Manyika. Clouds, Big Data, and Smart Assets: Ten Tech-enabled Business Trends to Watch. Rep. McKinsey Quarterly, 2010. Print.

2Bisson, Peter, Rik Kirkland, Elizabeth Stephenson, and Patrick Viguerie. What Happens Next? Five Crucibles of Innovation That Will Shape the Coming Decade. Rep. McKinsey &, 2010. Print.

3Osborne, James. Lundquist CSR Online Awards 'Global Leaders' 2010. Rep. Lundquist, 19 Oct. 2010. Web. 2 Apr. 2012. .

4"The Movement." The PARTnership Movement. Americans for the Arts. Web. 2 Apr. 2012. .

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.