As the business world becomes increasingly aware of its social responsibilities, stakeholder trust is essential to staying competitive. Now more than ever, organizations face government, shareholder and consumer pressures to offer innovative, responsibly made products and services. Failing to do so can be destructive.
Globalization and the advent of the Internet have enabled transnational companies to maintain relationships with stakeholders and expanding supply chains all over the world. But it's not just businesses that are tapping into knowledge sharing. Individual and civil society groups, community action groups, social entrepreneurs, lobbyists, activists and any number of the world's 50,000 NGOs are forming coalitions, better known as "smart mobs" -- groups on the fringe that are highly connected and eager to keep government and corporate giants honest.
These fringe organizations -- farmers, consumer groups and NGOs -- brought down Monsanto's multi-billion dollar agricultural biotechnology empire with public outcries of human health impacts and concerns about impoverished farmers' rights. How did such a powerful and thriving company with a highly innovative business model come to fall so hard? This is the power the smart mobs have.
Fear them not; they may be an invaluable resource.
Engaging the smart mobs
Smart mobs not only possess custom skill sets and unique insight that businesses can learn from, they also have well thought-out concerns about and opinions on important systemic issues. Reaching out to bridge new communities of stakeholders and finding creative ways to voice those concerns and share ideas can confer competitive advantage, leading to meaningful, long-lasting organizational change.
Firms can engage fringe stakeholders by extending search activities into unfamiliar fields. Metaphors such as "using peripheral vision" or "searching for weak signals" emphasize that such searching extends beyond conventional market intelligence and activities. In other words, relying solely on known or powerful stakeholders concerning existing businesses detracts from organizational transformation and creates tunnel vision. Weak signals, which are precursors to significant trends and change mechanisms, emanate from diverse sources, including the activist groups, social entrepreneurs and NGOs mentioned above.
In the foreseeable future, more differentiating products and lowering prices will not be enough to stay competitive in the market. The future of maintaining competitive edge will involve your firm's ability to change the status quo, partner with creative groups and combine diverse bodies of knowledge to improve your products and foster what researchers are calling "competitive imagination."
Smart mobs don't have to be the enemy.
Unilever shares fringe knowledge for product creation
Unilever's Indian subsidiary, Hindustan Lever Limited (HLL), has started reaching out to fringe communities to assess needs and create innovative products and services. HRR requires its managers to spend six weeks living in rural areas of India to learn about the hygiene needs and practices of the rural poor. This has resulted in new product ideas, such as a combined soap and shampoo bar, and promotional programs, such as street theater, specifically designed for poorer, rural markets. These innovations also have been adopted by Unilever subsidiaries in Brazil and other developing countries.
This is an instance where it may have suited HLL to locate and partner with Indian NGOs or groups that advocate for underserved, rural populations. Engaging customers and other stakeholders on the fringe led to the creation of more accessible products and allowed the company to tap into new markets.
Partner with smart mobs and share their unique, tailored knowledge. Reach outside your company's comfort zone to foster competitive imagination and create disruptive organizational change.
Keep afloat of the knowledge being shared by your fringe stakeholders; stay honest and transparent, or the smart mobs will do it for you.
Reprinted from Network for Business Sustainability.