Invisble Hand of Empathy

The “Invisible Hand” of Empathy is Gravity for Economics

Invisble Hand of Empathy

Would an engineer ignore gravity in designing a bridge?

Imagine for a moment a structural engineer who has been tasked with engineering a bridge to cross a wide river. The engineer understands the strength and weight of the steel, concrete, asphalt, and other various materials that will be assembled to build a sound structure. The engineer also understands the pressures that wind, water current, temperature, and vehicle traffic will place on the structure.

The engineer also believes an “invisible hand” in some fashion influences the structure but is not easily measured by observation alone. The engineer decides that this force should be acknowledged but it’s influence need not be calculated in the engineering of the bridge.

Would you trust the bridge?

Fortunately the science of engineering has for nearly 400 years understood the force of gravity and how to measure this “invisible hand” that holds together our universe. Measuring the “invisible hand” of gravity allows the construction of structurally sustainable bridges.

Economists today for the most part evaluate our economy in a similar fashion as our hypothetical engineer. About 250 years ago, the economist and moral philosopher, Adam Smith wrote The Theory of Moral Sentiments  and The Wealth of Nations  both of which describe an “invisible hand” as a force that influences our society and economy. While the force is widely acknowledged there has been very little effort to discover its source or measure the effects. Observable examples of forces acting on the economy occur constantly – they are just not given a value.

For example, a significantly undervalued economic force is the value provided by an adult caregiver for a friend or family member with a debilitating disease or injury. The economy is measured solely on the quantity of goods and services sold and all of those measured contributions are part of the Gross Domestic Product.

A domestic caregiver is not selling services to contribute to GDP and if the caregiver has taken time away from work they actually reduce their contribution to the economy.  Additionally by providing care they may have displaced a professional caregiver because there is now one less patient to care for. Standard economic theory could actually consider the domestic caregiver a drain on the economy even though anyone with a conscious understands the value of having loved ones around in a time of need.

In his earlier book, The Theory of Moral Sentiments, Smith notes that while a person may act in their own self-interest there is a sixth sense of sorts “which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.” Smith at the time related this force to sympathy.

Empathy I believe is the source of Smith’s “invisible hand” and since empathy involves understanding the emotional states of other people, he was very close in identifying it as sympathy. Furthermore Smith’s association with a sixth sense could in fact be correct. Empathy is triggered in our minds when we learn of someone else’s condition through what are called mirror neurons which fire as if the experience is happening to us directly.

Most early economists like Smith where also philosophers. Conversely many of today’s economists consider the humanities irreverent. We can no longer allow economic theory to escape the scientific reality that the “invisible hand” not only exists – but can now also be observed and measured.

Any contemporary economist refusing to incorporate empathy into the economic equation is no better than our engineer ignoring gravity.

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Six Years Later, Snickers Continues… Blunders or Brilliance?

snickers-aus-construction-hed-2014An Adweek article showed up in my feed this afternoon from a friend, Construction Workers Yell Messages of Empowerment to Women in Snickers Stunt featuring construction workers yelling at women – with messages of empowerment. The commercial shows construction workers who instead of yelling sexist catcalls, shout positive messages like, “I’d like to show you the respect you deserve!” and “A woman’s place is where she chooses!” which gets you at first thinking, that’s different, kinda cool maybe. Wouldn’t that be a better world?

However, the spot ends with Snickers well used tag line “you’re not you when you’re hungry” implying that as soon as these fine gentlemen get a Snickers they will be back to their normal insulting antics. Additionally as Time points out both men and women have taken offense with women being yelled at regardless of the message and men in general as being portrayed as sexist.

This is not the first time Snickers has attempted to push social boundaries while also raising the ire of more progressive social groups.

Six years ago Snickers ran a Super Bowl ad featuring two male mechanics who accidentally find they have kissed while working on a car together. Their reaction was to scream while pulling out tufts of chest hair to “do something manly” in an effort to repair the gaffe. Again Snickers won props in the first 15 seconds for showing a gay kiss to an international audience but quickly lost the good will by subsequently alienating the gay community.

Blunders or Brilliance?

Humor is a unique medium, especially when all parties invited to view it expect to laugh. Comedians have always enjoyed a freedom to insult and challenge societal norms within the confines of the stage. Tosh.0 and Lisa Lampanelli along with classics like George Carlin can say and do things on stage that are not allowed in normal conversation.

Snickers is not exactly a natural food trying to improve our health and society so off color humor by a brand that really provides no nutritional value might be allowable if you take the message as seriously as you take the value of the calories.

While both ads had insulting aspects to their message that might be blunders for an auto manufacturer, retail store, or insurance company they both brilliantly placed a progressive social message in front a much larger audience than had previously been receptive to that social change.

Snickers Kiss 2008

Snickers Empowering Statements 2014

The Up Side of Looking Down

What are the upsides of looking down?

Today we often read, hear about, or otherwise discuss how being constantly connected by technology through our smart phones and other devices to social media and the Internet is diminishing our appreciation for “real” conversations and building “real” relationships in the physical world. We are encouraged to unplug and disconnect as we fight very real urges to check our phone and update our status regardless of the appropriateness of the timing.

You are Bowling Alone while simultaneously we are Alone Together and all-the-while being told that You Are Not a Gadget. The connectivity is shortening our attention spans and ruining our ability to properly use grammar. As we travel through life we are looking down instead of around us.

Some of the concerns  are valid and the discussion about how we are being affected is absolutely necessary. However, we do not focus enough on the positive impacts of these changes.

What are the upsides of looking down?

  • In times that are challenging we can look to our social networks for encouragement.
  • We have friends on almost every continent doing amazing things that inspire others.
  • We are exposed to new ideas through casual sharing more often than in direct conversation.
  • When tragedy or injustice strike anywhere in the world, we empathize immediately.
  • When friends and family face tragedies like illness or death they simultaneously celebrate miracles of healing and birth.

For the latter half of the twentieth century we experienced growing apathy as we emphasized the individual and immediate family over the society. Looking down into our devices is like looking into a window that brings the entire world into your frame of vision. Because we have personal ties to all of these distant people and places we are becoming personally invested in their well being.

We are not simply looking down, we are observing the world. We are evolving and developing empathy for an ever expanding “immediate” family.

Economic-Laggards

Economic Laggards Face Pending Extinction

It’s been just nine lightning fast quarters since I began writing Corporate Empathy and openly discussing whether corporations acting with empathy could profitably find solutions to big social challenges. In that time I’ve found solid examples of just that. Initiatives like Conscious Capitalism, Benefit Corporations, and Sr Richard Brandson’s, The B Team consist of businesses that are advocates for making profits while also improving the world.

Like all successful business ventures, these movements have been started by entrepreneurs – not economists. Left brained academics and bureaucrats continue to value the study of finance, business, and economics over the humanities, anthropology and other explorations of human behavior. Both are important, however it is in exactly those understudied fields – where empathy lies – that entrepreneurs and brands are finding their motivation and quickly re-shaping our world economy.

Sustainable Brands article posted by Company Man Studios after hosting my talk for Ad 2 Tampa Bay on Tuesday names this movement the ”The CVS Effect” and in it, Claire Sommer details how Apple, Disney and Chipotle have been making “decisions that buck the bottom-line mantra” following the CVS announcement that they would be removing tobacco products from their shelves. In Apple’s most recent shareholder meeting CEO Tim Cook answered a challenge to the company’s sustainability efforts by advising shareholders that ”if you want me to do things only for ROI reasons, you should get out of this stock.” As a fan of Chipotle’s continued aggressive advertising Sommer’s article brought my attention to their most recent SEC filing, where the company listed climate change as a risk to investors which “may have blown a transparency hole in climate-change risk disclosure for shareholders of other companies to climb on through” says Sommer.

A growing group of proactive corporate citizens are throwing off the shackles of post World War II economic theory. Small local businesses and big corporate brands alike are putting people and planet on an equal level with profits at an exponentially increasing pace. The academic institutions, government agencies, and companies that fail to recognize this return to human values in business will be revealed for the dinosaurs they are as they face certain extinction from failing to evolve.

Tim Franklin, President, The Poynter Institute

Franklin Offers New Opportunity for Poynter/Times

Tim Franklin, President, The Poynter Institute

Tim Franklin, President, The Poynter Institute

This week the Tampa Bay Times announced buyouts in advance of job reductions, the result of continued declines in revenue and circulation. Just five months ago the Times implemented a pay-wall while Amazon’s Jeff Bezo’s made a significant investment in a failing industry by purchasing the Washington Post

With the Post purchase in October I reiterated my January 2012 appeal that the Times and The Poynter Institute are uniquely positioned to work with Google to figure out how journalism will regain financial stability in the future.

It has been over four years since Google’s Eric Schmidt openly offered to “work with publishers to help them build bigger audiences, better engage readers, and make more money” and the Time’s Paul Tash grilled Schmidt on intellectual property rights.

Poynter announced in January that Tim Franklin would be the new president of the organization and that “his professional passions are for journalism and education,” making Poynter “the perfect fit for those two passions.” The announcement also confirmed a Tampa Tribune story from June 2012 that the Times was “no longer a ‘viable’ source for support” financially for Poynter.

As an avid reader of the Times and strong advocate for the value of quality journalism I hope that Franklin will make the connection to Schmidt that Tash and former Poynter president Karen Dunlap have yet to make.

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A Psychological Evaluation of Corporations

Last week’s move by Chipotle is a great preview of how corporations may someday keep each other in check without tight regulation as they compete to outdo each other’s social impact. This entry is an excerpt from my book Corporate Empathy that you can read or watch below.

America’s Constitution created a republic and adopted capitalism as the political and economic systems by which our citizens, government and industries would operate. The freedom this provided allowed America to become the amazing innovative country it is today. During that time we have developed large corporations that are able to manage resources on a much larger scale than individuals or partnerships ever could.

We have given corporations many of the same constitutional protections and rights like personhood and free speech that we ourselves are entitled to. In that sense, capitalism is our child and we are responsible for its growth, development and actions, as well as the values it will operate by.

Preschool: 3-5 Years

Early in American history corporations were highly regulated and typically given very specific charters of what their purpose would be. In this time corporations were very much like preschool children with government playing the role of parent. Corporations did sometimes abuse the rights they had, but regulation would typically work to keep the abuse from being repeated. The overall system, however, allowed innovation to thrive leading up to the Civil War.

Grade School: 5-12 Years

During much of the Industrial Age, corporations were like pre-teen children. Our child was amazingly quick to adapt to new technology and learning but often defiant as it learned how to communicate and negotiate. Our child knows right from wrong but tests the limits of parents and other authority in an effort to find themselves.

It was during this period that unions and trade associations developed to help work with government to make sure that corporations stayed within the boundaries of human rights and the law. It is also the period of time when corporations successfully established themselves with many of the same rights as people using the 14th Amendment, which recognized all people as being protected under the United States Constitution.

High School: 12-18 Years

With the dawn of the technology revolution, American corporations have hit puberty and are going through the turbulent growth phase of adolescence. They are increasingly smart and embracing the exponential growth of technology. Like the average teen, they push the limits of authority as far as they can and only apologize and back peddle when caught.

In this period we have added consumer action like awareness campaigns, consumer reviews and boycotts to assist with keeping corporations in line. The Internet and social media have given consumers the voice they need to share information about companies and build movements to help drive change.

College: Adulthood

The current dramatic love/hate relationship we have in corporate America is very similar to that of a headstrong high school student, manipulating the system to their advantage. Our corporations are also exhibiting characteristics similar to someone with sociopathic tendencies defined as a personality disorder manifesting itself in extreme antisocial attitudes and behavior and a lack of conscience.

With the accelerated growth of technology over the next 10-15 years predicted by Moore’s Law, we are in essence about to send our teen to college for their bachelors and masters degrees and likely a doctorate for good measure. Like a college student, corporations must be able to self-regulate their behavior to survive on their own. We can no longer rely on the parenting of government, unions, industry groups and consumers to react quickly enough to the huge jumps in technology and innovation that are ahead of us.

Like Frankenstein’s monster, we as a country created and gave rights to corporations and are responsible for their development. A child with sociopathic tendencies who is mistreated by its parents, yet highly intelligent, will oftentimes become a psychopath.

We must push to instill empathy in corporate America to do the right thing in the same way we expect an individual adult.

You can purchase Corporate Empathy here.

Do you believe that corporations, like individual people, can eventually regulate themselves?

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Chipotle’s Industry Attack – Smart Indeed…

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“Farmed and Dangerous” Movie Poster

This week Chipotle has made another move in their campaign to change the course of corporate agribusiness and continues to expand a brilliant case study in brand development. After the success of last September’s Scarecrow the restaurant chain has stepped into new territory again by debuting an original comedy series “Farmed and Dangerous” on Hulu and Hulu Plus. The series is a satirical look at how the agriculture industry manages perceptions about its practices.

I found the first episode entertaining, funny, and smart. By developing believable characters and good storyline it keeps your attention while smartly integrating Chipotle’s own values. Chipotle’s stated goal is to “engage people through entertainment and make them more curious about their food and where it comes from,” said Mark Crumpacker, chief marketing and development officer at Chipotle and an executive producer of the show.

Chipotle has demonstrated how a brand can not only take the lead on an industry topic but also set and dominate the direction of the conversation. The conventional agriculture industry is on the defensive with David White, director of commodity relations for the Ohio Farm Bureau, asking members to ”try to understand the context in which Chipotle is taking this approach and why it might resonate with consumers who want to know more about how their food is produced.”

Those critical of Chipotle’s previous content because it does not go far enough in pushing a meat free diet will likely raise similar criticism to “Farmed and Dangerous.” While idealistic calls for perfection may be admirable, Chipotle’s mission is about education not being purists. They continue to see success with this strategy because customers loyal to their brand are on varying levels of the food consciousness spectrum and therefore respect the brand for it’s honesty even if they may not agree with all their practices.

Produced in conjunction with Piro, a New York-based studio, the series disrupts traditional advertising and shows that ”brands need to make a decision,” said Tim Piper, a partner at Piro and director of “Farmed and Dangerous.” “They can either continue to interrupt entertainment, or they can inspire it.” They can decide to stand for and operate with purpose.

Chipotle and similarly Whole Foods have learned that bringing the food consciousness conversation to the greatest number of people requires a wide target. To Chipotle’s credit the series intro contains a quick reference to Food, Inc. as “more hippy propaganda” and an obvious nod to the film that exposes the highly mechanized underbelly of the nation’s food industry. Smart indeed…

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While Advertising Leans In, Barbie and Sports Illustrated ‘Jump the Shark’

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Sample image from Getty Images’ LeanIn.org collection.

This week two opposing partnerships in the evolution of gender equality gained coverage for taking big steps; one forward, the other backward – mostly.

As I have said previously and believe more strongly than ever, Sheryl Sandberg is one of the most influential people on the topic of gender balance for her spot-on views, suggestions, and goals. Her book Lean In which I am almost finished reading combined with her TED Talks, MAKERS.com interviews, and other available interviews all illustrate a depth of understanding not often seen and certainly not previously published in such an agreeable format. Her tone is one of understanding and her goals and advice are realistic. She never pushes ideals and knows that all of us are different and therefore should explore our own definition of balance.

Considering Sandberg’s efforts so far and advertising’s influence on society it was not surprising on Tuesday when she posted Time’s 10 Ridiculously Clichéd Stock Photos.. to her Facebook page as a follow up to her announcement that LeanIn.org would be partnering with Getty Images.

You can’t be what you can’t see; how women are depicted is so important to changing the stereotypes that hold women back. We are thrilled to announce the launch of the Lean In Collection today with Getty Images.

The New York Times announced Monday that LeanIn.org and Getty Aim to Change Women’s Portrayal in Stock Photos by offering a library of photos depicting what real familes, mothers, and fathers look like in business as well as personal life. Being familiar with Stock Photography myself I am well aware of the stereotyped unrealistic photos that one would find in these existing categories. The library provides an opportunity to positively influence advertising creative – especially for companies that do not have the budget to cast and shoot their own photos.

That’s one step forward for balance…

Just two days later the New York Times announced that Barbie’s Sports Illustrated Swimsuit Issue Causes a Stir Online as Mattel offers up Barbie to be on the cover of the annual issue. The “unapologetic” promotional campaign by two brands that have historically drawn criticism for their unrealistic portrayal of women strikes me as a very strange move.

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Fierce little girls riot for better toys in new GoldieBlox ad

As modern girls are expanding their talents with toys like GoldieBlox, in revolt against the pink aisle, is Mattel admitting that young girls are no longer Barbie’s target audience and positioning her as a fetish product for aging men?

More sports commentary is available free today then could possibly be delivered in the pages of a subscription sports magazine. Is Sports Illustrated “jumping the shark” hoping a nostalgic Americana status will save their brand?

Barbie’s Twitter feed provides links directly to Sports Illustrated and other media content that doesn’t seem properly targeted towards children playing with or parents purchasing actual Barbie dolls.

Many men and especially fathers are likely alienated or just plain creeped out (as I would describe myself) by the fact that Sports Illustrated would place a plastic toy doll on the cover of what is usually considered a G-Rated version of Playboy – which itself only receives a PG-13 in today’s media landscape.

Is that one step backwards for balance?

Not quite. I believe that LeanIn.org’s partnership with Getty is absolutely a big step forward. However, I do not believe that Barbie’s appearance in Sports Illustrated would be even close to an equal step backward.

I would conclude that both announcements together symbolize a sizable leap forward. Just a few years ago the Lean In stock images would likely have generated a “feminist movement” backlash whereas today the Lean In/Getty partnership seems like an overdue late arrival to the culture party. By contrast Barbie and Sports Illustrated seem so out place in the current media conversation that, while they still have an audience, they are the uncomfortable couple at the party wondering why people seem to be talking about them.

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Betray the Age – Facebook’s Birthday, Bono, Google & Corporate Empathy

In early February we were celebrating Facebook’s 10th anniversary by sharing “Look Back” videos automatically generated by Facebook. On the surface these movies are simply the result of a computer algorithm pulling data from our Facebook timeline and interactions over the past decade. However, when we peer deeper into the roughly 3,650 days that have passed, much larger shifts in human empathy and corporate consciousness are the true creators of this fascinating look back at our lives.

Mark Zuckerberg reflected on Monday about the creation of Facebook and “Why were we the ones to build this?” and came to the simple conclusion that “we just cared more about connecting the world than anyone else.” He continues that currently “only one-third of the world’s population has access to the internet. In the next decade, we have the opportunity and the responsibility to connect the other two-thirds.”

I highlight the year 2004 in Corporate Empathy for a number of events that happened independent of each other, but when connected illustrate the seismic expansion of empathy we are witnessing in society.

My final chapter’s title “Betray the Age” was inspired by singer Bono who in May 2004 gave the University of Pennsylvania Commencement and quotes a line from the Irish poet Brendan Kennelly’s epic, The Book of Judas. I discovered this now favorite video of mine after a dear friend Stephanie Street had recently been accepted to the University of Pennsylvania, triggering me to Google “U Penn Commencement Speeches” to see what caliber speaker she might expect at her own graduation.

There’s a line in that poem that never leaves my mind, it says: “If you want to serve the age, betray it.” What does that mean, to betray the age? Well to me betraying the age means exposing its conceits, it’s foibles, it’s phony moral certitudes. It means telling the secrets of the age and facing harsher truths. Every age has its massive moral blind spots. We might not see them, but our children will. – Bono

Two months prior to Bono giving his inspiring speech to some of the earliest  millennial graduates about changing the world, author and academic Joel Bakan published The Corporation. In the book, Bakan declares that companies are “institutional psychopaths who lack any sense of moral conviction” based on fellow academic, Milton Friedman’s theory that the sole purpose of business is to increase profit.

Fortunately, a key to realizing Bono’s optimistic outlook and fatal flaw in Bakan’s dystopic view of reality also occurred in 2004 when two entrepreneurs who had dropped out of academia announced that they would be taking Google public that August. Larry Page and Sergey Brin had created a corporation that promised to “do no evil” and “organize the world’s information and make it universally accessible and useful” and intended to keep those promises after going public. To do so they had to shield themselves from the pitfalls of Friedman’s economic theory by going public in a unique manner that gave the founders significantly more control over new shareholders.

“As a private company, we have concentrated on the long term, and this has served us well. As a public company, we will do the same. In our opinion, outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations.” – Larry Page

Four years later in 2008 Sheryl Sandberg left Google to join Facebook as Chief Operating Officer and has stated often that because “for-profit companies… were really changing who we were as people and how we interacted” that she choose the for-profit sector over the government or non-profit sectors.

Another four years later in 2012 Zuckerberg and Sandberg took Facebook public using the same public share structure as Google and many other companies in between, so that the corporation could retain the empathetic mission of the founders while still being publicly traded.

The opinion that capitalism and corporate governance must revolve around the exploitative pursuit of profit is a moral blind spot that will be resolved by today’s innovative corporations and the boards, shareholders, employees and consumers that support those companies. – Vinny Tafuro, Corporate Empathy

Connecting these dots over the past 3,650 days must inspire trust that the dots will also connect in the future and that the social network we are building is becoming a central nervous system of sorts that is expanding not only human empathy but also Corporate Empathy allowing scalable collaboration to improve our world.

To read Betray the Age, the final chapter of Corporate Empathy for free, click here for a PDF.

 

James Cash Penney circa 1902 (Wikipedia)

JCPenney: What If Companies Could Die With Dignity?

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© iStockphoto/Dodorema

The announcement by JCPenney this week that they will close 33 stores and lay off around 2,000 employees is generating a lot of media coverage and social media chatter. The company has been in trouble for a number of years and has tried multiple times to update it’s brand appeal with today’s shoppers. According to CEO Myron E. Ullman in a company press release, “this important step addresses a strategic priority to improve the profitability of our stores and position JCPenney for future success.”

In recent years there has been a push to humanize brands and make them resonate with current consumer habits. The catalyst for this shift has primarily been the balancing effect social media has had on the company/customer relationship. At this point the conversation is fully a two-way dialog and successful companies have been shaping their brands to create engagement with customers.

In addition to the trend of humanizing brands, companies are now recognized as corporate citizens – people in the eyes of the law. This fact causes angst in some groups and celebration in others but neither understands the true result of this development.

People age and die. Companies are people. Companies can age and die.

This is a fact of life. It is also another step in the evolution of corporations and capitalism.

The earliest corporations were highly regulated – they were charted by governments, given a specific purpose, and dissolved afterwards. Corporations have evolved over the last 300 years to be allowed to exist in perpetuity.

Does that mean a company must live forever?

Ullman like other CEOs in his position are tasked with making companies profitable again, but in our evolving economy is that the most valid goal to pursue? Is focusing on the corporate entity as whole the best way to create the most value?

JCPenney and all companies in the retail industry are nothing more than on-site consumer product distribution centers. Nothing more or less… consider today how many consumer products are distributed from warehouses that the customer never sees. Yes on-site distribution centers provide a customer experience and create brand connections – but they’ve also created the showrooming phenomenon that has hurt their profitability.

What if we separate the brand from the company?

James Cash Penney circa 1902 (Wikipedia)

James Cash Penney circa 1902 (Wikipedia)

What if the corporate entity that James Cash Penney created was allowed to die and it’s primary asset, the JCPenney brand was marketed in a completely new fashion? What if a retro or specialty JCPenney product brand was re-introduced and made available at some other retail distribution center that is performing better? This brand adaptation would retain value that will otherwise be lost in a liquidation, buy-out, or merger.

Returning to our comparison of companies and people…

Like real people, the corporate entity with it’s aging culture, management, and infrastructure, would eventually die. However, the family name, the brand, could live on. Like desires of real people this would allow companies to die with dignity having the knowledge that their brand name would live on and continue generating value.

Just looking at Penney’s 1902 photo has to inspire one to consider the high end branding opportunities that could be created around a 27 year old American entrepreneur.

Digital Opinions & Observations