Friday, April 30, 2010

Being Disruptively Good... for who?

Umair Haque had another thought-provoking post on the Harvard Business blog not too long ago. He called it The Case for Being Disruptively Good, and in it he provides his perspective on why "doing good" is in the self-interest of business--and will be increasingly so as the world becomes more and more connected.

Consider for a second, the parable of the rug merchant. He'll never see the tourist he's chasing again. He's got a local monopoly in his corner of the bazaar. His suppliers are poor, starving, and stuck in the hinterlands, cut off and isolated. The result: rugs are made in sweatshops by kids and sold at massively inflated prices. The lesson: "In a disconnected world, the costs of evil are minimal."

But in an hyperconnected world, Haque says, the costs of evil for the same rug seller explode.

If he faced repeat business tomorrow from the same customers, if his suppliers worked in the next corner of the bazaar, if his corner of the bazaar was chock full of rival rug sellers, the incentives for evil would decline, swiftly and severely replaced by incentives for good. That world is what the economics of the 21st century are, slowly but surely, approaching.

It's an interesting perspective, and well worth a read--but do you buy it? Do you agree that the world of business is going to focus more and more on "doing good" and less and less on "doing evil" as the world becomes more and more connected? Haque's argument is that with fewer and fewer "rug bazaars" for corporations to create monopolies in, success will be redefined as doing good for the community rather than just selling more product and driving up shareholder value. I think we certainly see signs of this, but it's difficult for me to know if it is just another form of niche marketing or truly the revolution Haque describes.

But here's the thing. If Haque is right, and the for-profit world is going to become an across-the-board force for social good in society, then I see tremendous risk and tremendous potential for the association community.

We run the risk of having the business sector co-opt the missions of many associations and non-profits, making us even less relevant and even less capable of affecting the change we seek. What good will associations be if the finanical and resource muscle of the for-profit sector gets solidly behind transformative social movements instead of just selling "unhealthy sugar water"? And who are the talented young people of the future going to want to work for? The ineffective association that pays 50 cents on the dollar compared to the socially conscious and highly effective corporation? How can associations win a talent war with those kind of battle lines?

Haque and I had a brief Twitter discussion about this very thing yesterday (read from the bottom up):

And there's the potential--associations partnering with "disruptively good" businesses for mutual gain. Associations and non-profits are traditionally seen as more altruistic than business, so a business seeking to "do good" could gain visibility in the community through such a partnership--and the association could leverage the resources and talents of the business for better execution of their core mission.

Is this discussion anywhere on your radar screen? What about the companies that belong to your trade association? Or the employers of the members who belong to your professional society? Are they seeking to become "disruptively good"? In doing so are they thinking about embracing or replacing you? Is there anything you can do to help nudge them in one direction instead of the other?


Carol-Anne Moutinho said...

Thoughtful post!

Umair Haque is right: Access to information is leveling out the supply and demand curve. All of a sudden, there are lots of options available in most markets. The result is that organizations need a competitive edge to succeed. Doing good is just another competitive edge - a way to stand apart from the crowd. and ultimately to get more marketshare.

I see this as an opportunity for the non-profit world to sell for-profits on their experience, infrastructure, networks and reputation as partners to help these companies achieve this goal.

Eric Lanke said...

Thanks, Carol-Anne. I prefer the opportunity side of the equation, too, because the risk side is too horrible to think about. I wonder if corporations who embrace "doing good" will be more inclined to see association participation as part of their success formula?

Carol-Anne Moutinho said...

I think associations need to start thinking a little more like businesses in this respect - it is their job to 'sell' themselves as valuable partners to the private sector. Those who can find a way to add value to prive sector companies stand to gain a lot of ground.

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