The question of how to reinvent business in the post credit crunch and digital age has been a hot topic recently. Both Umair Haque’s fantastic The New Capitalist Manifesto and Kramer and Porter’s fantastic evolution of their thinking on CSR in this recent HBR article, Creating Shared Value are required reading on the subject.
The basic challenge is overcoming the temptation for businesses to extract value from the market place for the benefit of their shareholders instead of trying to create value for the benefit of all their stakeholders. There have been a couple of examples recently of brands falling foul of this temptation. It is particularly surprising to see, given both brands are not the usual monolithic 20th Century style businesses you associate with growth and profit focused capitalism.
First up, Twitter, who recently announced a massive scale back in the freedom with which developers can use their API. Clearly they need to figure out how to monetise the massive success that Twitter has become. But it is a shame they feel that they need to tightly restrict the user experience to do so and can’t have developers running around doing innovating for them. As is argued in this article on The Guardian’s blog they run the risk of destroying the very thing that made Twitter so successful – the fact that its core communications service was available to users in multiple forms that suited their myriad needs thanks to an open API and committed developers. It is a shame that they have resorted to such old economy methods to find a way of monetising the platform.
Secondly, and much more alarmingly as a UK taxpayer and hopeful Olympics spectator, LOCOG, who started selling tickets for the London 2012 Olympic Games this week. In an act of true corporate arrogance it is only possible to pay for tickets online using a Visa card or by collecting a form from a branch of Lloyds TSB. Surely there were some people advising these brands how to effectively activate and leverage their substantial sponsorship investments who had some conception that the general public might object to this facile and one dimensional restriction of their ability to get tickets Olympics. Do Visa and Lloyds TSB really want brand exposure at any cost to brand reputation? I really hope that there are some plans to use these sponsorship relationships to create something of value to Olympics goers in the near future and that this aspect is a just a small ill-thought through side effect of doing massive complex deals. Lord Coe explained away the decision to make these restrictions by saying:
“In fairness we wouldn’t have had a game without sponsors. This is not unusual. At major sporting events credit card companies do sponsor events…..the staging of the games is paid for by the private purse. it is not paid for by the national lottery or taxpayers money.”
I’m sure that no one is fooled by this financial sleight of hand given the £9billion bill to build the venues and infrastructure that makes it possible for the private purse to stage the games for a profit. And I hope that the overall impact of the games and their massive investment is the creation of value that is lasting and of benefit to the 7 million Londoners who are the games stakeholders.