Unleashing emotive capital

Unleashing emotive capital

For most of my marketing career, I thought success was pretty straightforward: market share up, bottom line up, everyone goes home smiling.

Then the world threw a few curveballs. Suddenly, “profit first” started to feel like driving by only looking at the speedometer. Technically useful, and also a great way to miss the road.

Here’s my conviction in one sentence: shareholder value needs to shift from a purely financial obsession to an emotive orientation too, assuming we’d all rather build a better, more beautiful world than just a bigger spreadsheet.

The old operating system

Over the past decades, corporate leadership became obsessed with maximizing shareholder value. Nearly every decision in the boardroom could be defended with the same argument: “shareholder value”.

By the end of 2011, the Western world was deep in a recession that began with the 2008 meltdown of the global banking system. Corporations driven by financial greed quite rightfully faced widespread distrust.

And here’s the kicker: you can’t “repair” distrust with cheerful brand communication. Social networks will make sure it backfires.

Most senior managers will recognize (just as I did) the belief system that drove decision-making:

• The leadership team focuses on maximizing shareholder value.
• Bonus schemes align management interests with shareholders and steer employee motivation.
• Senior management is appointed for 3 to 5 years to show hard results.
• Brand marketing drives customer demand.
• Societal concerns, if recognized at all, are handled via CSR programs.

This belief system has had its best days.

Why it stops working

• Shareholder value thinking and bonus schemes push a short-term financial focus, which by definition ignores long-term continuity.
• People are not motivated by money alone, but by developing talents, autonomy in action, and meaningfulness to others.
• Shareholder value often ignores consequences for the community, and it does not develop the organization’s emotive capital.

From greed to great by unleashing emotive capital

Continuity and growth are maximized when profits are not simply taken, but reinvested to add even more value to society.

Most companies were not started for profit alone. They exist to innovate, make an entrepreneur’s dream come true, and help other people.

Autonomy, meaningfulness, and talent development are more powerful motivators than obscene financial schemes.

Financial bonuses work best for simple, repetitive jobs. But for highly educated people in creative roles (often with a decent fixed income), bonus pressure can be demotivating: it reduces autonomy, increases risk aversion, and quietly kills the creativity needed to add value.

Addressing meaningful social issues and helping people better their lives should be the fundamental reason an organization exists. As soon as this is treated as a separate CSR initiative, it signals it is not part of the “real” business.

In that context, the corporate brand needs to be repositioned as meaningfulness: the compelling framework that links people with the organization’s emotive capital.

Brands that rely solely on clever consumer insights, without linking to an intrinsic social purpose, will increasingly lose legitimacy. They’ll be recognized as a marketing trick, not a shared truth.

By Alexander Koene, BR-ND The appeal company