I'm often talking about PSR -Personal Social Responsibility- in the context of each of us should try to save water, recycle, help others and so on. But, actually in the last 20 years especially, we are all losing our sense of personal responsibility.
A recent article in the Telegraph newspaper puts a humerous twist on it:
-Did the credit card company force us to sign up to 6 credit cards and spend the money available on them?
-Do McDonalds force you into their restaurants to eat unhealthy food?
-Does your employer force you to not wear a safety mask?
Of course an employer should make sure their workplace is safe. Of course they can provide healthy products as well as unhealthy products. Of course they should not use advertising irresponsibly to attract you (or especially children) to smoke.
But it is almost sad when companies are providing training to their employees about sexually transmitted diseases or about traffic safety; because their employees do not know this information already (and the company does not want employees missing work from illness or injuries). Yes -there is a business case for companies to protect their employees from themselves, but why do employers have to do this?
Thursday, June 08, 2006
Monday, June 05, 2006
innovation, CSO and BoP
I was having a discussion with a friend about Nike and it developed into a new realisation for me. I suddenly realised the obvious linkage between innovation, CSR as CSO (Corporate Social Opportunity -not as just a responsibility) and BoP. BoP is the Bottom of the Pyramid theory that is popular nowadays, as a reason to motivate companies to create more products to sell to the poor in society, since they have some money, and if companies can create accessible products for them, they will be able to improve their quality of life.
In Nike's case there is not such an obvious proposition. They need to keep their products at a certain price to maintain the brand's status as well as make a profit to pay for their manufacturing and marketing costs. The proposition would be that Nike could create another brand (not called Nike at all, or called Nike Base or something) that would be at prices to rival local products (or the fake brand's products!) but would be based on Nike's quality standards. The products might be made from cheaper materials and would be proftable because there would be no need for R&D costs, promotional costs etc. It would not have maybe the same design benefits -since many people at the BoP require products for their use, not for their image. Thus this would differentiate it from the main nike products.
The conundrum though would be how to not lower nike's brand globally whilst still being able to sell these new products at a profit.
The next line of thinking is how to not just sell products to the poor -the idea is that the poor will benefit from these products, by the way, not just be exploited. How can Nike help the poor make more money (either to buy their products, or just to become less poor)? This would require looking at new manufacturing or distribution models. For distribution, you could look at a simple coca-cola model, where local distributors would sell their products and make money by doing it. One may ask why would poor people need nike clothes.. quality is not that big an issue for clothes. The locally made ones might be very similar to Nike's.
What makes this interesting is to tie this in with one of the key aspects of Nike's brand: of an active life. Sports and physical activies DO have huge benefits for people -anod not just in keeping them healthy, but in bringing people together for team activities as well as developing individual skills (team-work, motivation etc) or inspiring young people. This is the problem fo r Nike. What they can bring to the poorer people is a brand that will inspire people to be active..but they would need to keep their brand on these lower costs products to do this. What's the answer? Comments please, but there might be one somewhere out there.. Alternatively a low cost retailer might want to create a new brand: the ethos of Nike, but at lower costs!
How else could Nike help poor people? Apart from paying them to be distributors, they could also pay them to do marketing, to be sports coaches (if there was a business case to this then leading to greater sales), or to be involved in manufacturing.
There has been renewed debate against global supply chains and for local supply chains. Global Supply chains are the best way to maintain quality and be cost efficient, but the goods have to travel with climate change impacts and affecting the time to market from production. Groceries is a key player in this discussion at the moment: sourcing locally rather than centrally. But what if Nike's products could be made locally in small workshops, in local houses -much like 200 years ago in pre-industrialisation times.. and what if this was more beneficial than centralising everything, someway?
The point of this post is to show that for any company there are various options of innovating that might provide new market opportunities. Of course none of these might be feasible.. why should nike bother about producing locally, let a local entrepreneur or a mother stitch her own clothes! But, what if companies started to investigate and ask themselves these kinds of questions, to explore all kinds of new opportunties? Then, with some radical thinking, some determination and some innovation, we could get something, maybe. Maybe it won't benefit Nike, but if it can benefit society, someone else can take it up!
In Nike's case there is not such an obvious proposition. They need to keep their products at a certain price to maintain the brand's status as well as make a profit to pay for their manufacturing and marketing costs. The proposition would be that Nike could create another brand (not called Nike at all, or called Nike Base or something) that would be at prices to rival local products (or the fake brand's products!) but would be based on Nike's quality standards. The products might be made from cheaper materials and would be proftable because there would be no need for R&D costs, promotional costs etc. It would not have maybe the same design benefits -since many people at the BoP require products for their use, not for their image. Thus this would differentiate it from the main nike products.
The conundrum though would be how to not lower nike's brand globally whilst still being able to sell these new products at a profit.
The next line of thinking is how to not just sell products to the poor -the idea is that the poor will benefit from these products, by the way, not just be exploited. How can Nike help the poor make more money (either to buy their products, or just to become less poor)? This would require looking at new manufacturing or distribution models. For distribution, you could look at a simple coca-cola model, where local distributors would sell their products and make money by doing it. One may ask why would poor people need nike clothes.. quality is not that big an issue for clothes. The locally made ones might be very similar to Nike's.
What makes this interesting is to tie this in with one of the key aspects of Nike's brand: of an active life. Sports and physical activies DO have huge benefits for people -anod not just in keeping them healthy, but in bringing people together for team activities as well as developing individual skills (team-work, motivation etc) or inspiring young people. This is the problem fo r Nike. What they can bring to the poorer people is a brand that will inspire people to be active..but they would need to keep their brand on these lower costs products to do this. What's the answer? Comments please, but there might be one somewhere out there.. Alternatively a low cost retailer might want to create a new brand: the ethos of Nike, but at lower costs!
How else could Nike help poor people? Apart from paying them to be distributors, they could also pay them to do marketing, to be sports coaches (if there was a business case to this then leading to greater sales), or to be involved in manufacturing.
There has been renewed debate against global supply chains and for local supply chains. Global Supply chains are the best way to maintain quality and be cost efficient, but the goods have to travel with climate change impacts and affecting the time to market from production. Groceries is a key player in this discussion at the moment: sourcing locally rather than centrally. But what if Nike's products could be made locally in small workshops, in local houses -much like 200 years ago in pre-industrialisation times.. and what if this was more beneficial than centralising everything, someway?
The point of this post is to show that for any company there are various options of innovating that might provide new market opportunities. Of course none of these might be feasible.. why should nike bother about producing locally, let a local entrepreneur or a mother stitch her own clothes! But, what if companies started to investigate and ask themselves these kinds of questions, to explore all kinds of new opportunties? Then, with some radical thinking, some determination and some innovation, we could get something, maybe. Maybe it won't benefit Nike, but if it can benefit society, someone else can take it up!
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