–by Pascal Beucler, chief strategy officer, MSLGROUP, Paris
I was recently asked by my EMEA colleagues to write a short introduction to the Financial Services Initiative we’ll soon launch in the region. Watching more attentively – in facts & figures – what’s happening in various European countries, and now in the USA, where the crowds of “indignés” (the indignant, the angry) are growing every day, I have realized how fast the game has changed, within a couple of months: the combination of the crisis with the emergence of a new mindset, in a context of social media explosion, is accelerating everything.
Even if the mistrust has been developing over the past decade (Enron, the burst of the high-tech bubble, 9/11 etc.), the financial crisis has dramatically transformed the landscape, in terms of public opinion. And in fact, far beyond public opinion, we should probably speak of “public acceptance”, if not resistance. And we should be prepared to deal with that in the coming times.
The movement started in Southern Europe, particularly in Greece and Spain. It’s spreading everywhere and from our MSLGROUP office in Paris, last week, we could see “les indignés” camping in front of the Stock Exchange en route to Brussels where a huge demonstration is expected October 15.
Then the USA joined the movement, dubbed Occupy Wall Street. Hundreds of Americans have been camping there for two weeks, and thousands are following their example across the country, from Boston and Chicago, to Houston and San Francisco. The protesters are using social networks, blogs and websites such as Occupy Wall St. , Occupy Together and Ad Busters to connect people all around the country. The Occupied Wall Street Journal is now available in print. If the first “indignés” were activists, most of the newcomers are young employees and graduates. It looks like a whole generation is aggregating here.
In terms of beliefs and values, whether American, Spanish or French, in my view these young people have three things in common:
They don’t trust institutions anymore.
Trust in corporations is at an all-time low across the world.
The destruction of wealth is rarely lethal. But the destruction of confidence, brand equity and reputation among financial institutions and public bodies is terribly damaging.
In a world where banks and financial companies are seen as reckless, fraudulent and disconnected from reality, whilst governments around the world are blamed for their inaction, we shouldn’t be surprised to see more and more social outrage.
They have new power, and they know how to use it.
They are in control. And the more it goes, the more they realise the power they have in their hands. Like Marc Zuckerberg underlined it, during the recent “e-G8” we organised in Paris, “People being empowered is the trend for the next decade: that’s the core social dynamics… People have the ability to voice their opinion, and it changes the world, as it rewires it from the ground up”.
And as Unilever CEO Paul Polma said bluntly, “If [social media activists] can bring down the Egyptian regime in a few weeks, they can bring us down in nanoseconds.”
Never have corporate reputations been so precious, and so fragile.
They demand purpose, and shared value.
Financial institutions, like other corporations, need to not only rediscover their social purpose but also put it at the core of how they engage with their stakeholders.
There is no value creation without solid profits. But profits cannot be the only criteria of value creation.
The “corporate side” of organizations is more and more important. People expect companies, brands, institutions, to commit to core values, among which transparency, sustainability and accountability are central. Value for All is the new mantra, everywhere. As Sylvain Cypel mentions it in Le Monde today, in Boston the demonstrators have invited the Nobel Prize Joe Stiglitz and the economist Jeff Madrick, who recently published the now best-seller Age of Greed.
Exciting and difficult times ahead of us…