Establishing Resonance Between Companies, People, and the Environment

Abstract

The final chapter provides evidence that changes in the marketing orientation of companies and other institutions are possible. When companies devote themselves to solving human problems and create meaning for the humans engaged with the company, then H2H Marketing is on the rise. Such a shift is happening now. So far it is a small number of leaders who have picked up and implemented the humanistic marketing idea. We showed you a few of them and more will come. The chapter ventures a look into the future by using the concept of resonance that describes a specific relationship between two vibrating bodies. One of the bodies is the company, and the other is our planet, which consists of the natural environment and the society a company is embedded in. H2H Marketing can play a vital role in balancing the vibration of a company and its environment.

The chapter ends with the newest Patagonia case study on their human-centered approach to marketing.

The final chapter provides evidence that the business world is waking up and recognizing that marketing must do more than just help to increase sales and profits. The Davos Manifesto 2020 from the World Economic Forum¹ stated the universal purpose of a company in the Fourth Industrial Revolution, and the Firms of Endearment² analysis shows how world-class companies accelerate from passion and purpose. Several progressive economists³ state that companies have the obligation to fulfil the needs and expectations of the several stakeholders including societies. They must not only serve the shareholders as the neoliberal economist like Milton Friedman⁴ had postulated. Companies must play an authentic, competent, and significant role in solving human problems to create meaning for the humans engaged with the company. Such a shift in worldview is imperative for companies to create a sustainable world.

After half a century of neoliberalism, when the Anthropocene’s impact was so great that the continuation of the “human epoch” is in doubt, we contend that businesses need to be aware of the needs and well-being of communities, societies, and individuals. By utilizing resonance-based thinking, the chapter and the case study of Patagonia Inc. take a glimpse into the future. In chemistry it describes a specific relationship between two vibrating bodies; in the economic science, resonance characterizes a similar relationship. One of the bodies is the companies, and the other one is people and all elements of our planet, including the natural environment and the society a company is embedded in. Therefore, the new marketing approach of H2H Marketing can play a vital role in balancing the vibration of a company and its environment.

There are companies which have transformed the planet and the economy in specific in a not so human way. Let’s go back to the late 1920s. Industries were booming and “financial reports of corporations gave cause for optimism relative to the 1929 earnings of corporations. Price-earnings ratios, dividend amounts and changes in dividends, and earnings and changes in earnings all gave cause for stock price optimism.”⁵ But then “Black Thursday” and “Black Tuesday” happened and 50% of the stock value was wiped out, millions of employees lost their job, and the world tumbled into recession for the next 10 years till the next disaster struck, the Second World War.

Large holding companies had inflated assets and greedy investors had built a “house of cards” which favored their investments and did not reflect the economic realities. Many companies particularly utilities were overcharging the customers to create margins that were required by the investors. Edison Electric Illuminating Company was amid that, and regulators could not control them. Lord Snowden called it the speculative orgy in America,⁶ which is not far away from the developments of 2022, when greed was driving price increases and driving inflations to more than 8% in the USA and Europe, 12% in Brazil and Nigeria, and 70% in Turkey. The high rates are continuing to put financial pressure on individuals and households. More than eight in ten Americans hate this economy. That’s the highest number since 1972.⁷

For the last 40 years, General Electric (GE) symbolizes the type of companies which “focused on maximizing profits at the expense of all else.”⁸ With his emphasis on cost-cutting and the financialization of all business endeavors, “Jack Welch, the “Ultimate Manager’ who oversaw GE’s rise to the most valuable company,” ⁹established this disequilibrium. During this time, the disparity between average pay of a worker and a CEO grew apart. Between 1980 and 2000, the average work pay increased in the USA only by 12%, and the CEO income grew by 940%. In 1980, the average CEO compensation was $1.85 million, and in 2000, it was $21 million. Now it stands at $24 million and is 351 times more than a typical worker.¹⁰

Before his time, GE was a company “which paid decent wages, employees put in their time, just about everybody paid their taxes, regulations were accepted as necessary safeguards, and the governments invested in things like education and infrastructure.”¹¹ With Reagan, Bush, and Trump as presidents of the USA, many things changed in the political arena, and with the neoliberal concepts, CEOs like Jack Welch applied downsizing, dealmaking, and financialization which created wealth for the shareholder and drove jobs to low-wage countries. After his departure, three CEOs struggled with its legacy and could not keep the momentum.

On November 9, 2021, General Electric announced a three-way breakup of the company. GE HealthCare will be focused on precision healthcare and will be spun out of its parent in early 2023. A new entity focused on energy transition and consisting of a combination of GE Renewable Energy, GE Power, and GE Digital will follow shortly thereafter in early 2024. “Following these transactions, GE will be an aviation-focused company shaping the future of flight,”¹² most likely continually focusing on shareholder value, low labor cost, and high CEO compensation.

To which stakeholder group should a company’s management be most accountable? To employees, customers, shareholder, or management itself? Alfred Rappaport argued that management’s primary responsibility is to company shareholders. During the Welch era, Rappaport thinking has become commonplace in companies around the world.¹³ Till 2015, for us authors, we followed his line of thoughts. The value driver made business performance transparent and controllable for the sake of the shareholders¹⁴; with variations these principles could be applied for a stakeholder-oriented thinking.

But now, we favor only stakeholder orientation and a human-to-human approach. This may need a more Nordic Model like government system but is also possible under existing democratic government systems. As an example, we would like to present the Anglo-Dutch consumer goods company Unilever. Under the guidance of former CEO Paul Polman, the company found its way back to its roots. Sir William Lever had started a caring company with great products and well-treated employees. He believed in a shared prosperity. Now Paul Polman aims to decouple the company growth from its environmental impact and offers brands with a purpose.¹⁵ He wanted to create a more responsible business model. He does no longer offer quarterly results and reduced Unilever’s carbon footprint. The purpose-driven brands could also take market share away from the competitors. He could have walked away from his principle with a large benefit package, when 3G Capital offered to take over Unilever, but he stuck to his principles, and his successor Alan Jope is continuing the purpose-driven market approach with stakeholder emphasis. He also believes a new leadership model is emerging in response to changes brought about by the corona pandemic, which places equal weight on personal and external performance. “People increasingly want to work for companies that take into consideration their whole lives,” he said. “Their work [as well] of course, but also their wellbeing, their family responsibilities, their growth, their identity. And they’re voting with their feet.”¹⁶

Similar developments have been noticed in other countries. The Japanese YKK Group (YKKグループ, Waikeikei Gurūpu) business activities are based on the “Cycle of Goodness,” which is the YKK Philosophy, and its management principles. “YKK seeks corporate value of higher significance.”¹⁷ As the world’s largest zip fasteners manufacturer, YKK Group is most known for making zippers. It also manufactures other fastening products, architectural products, plastic hardware, and industrial machinery.

YKK sees itself as an important member of society. They believe that a company survives through coexistence. When the benefits are shared, the value of the company’s existence will be recognized by society. When pursuing his business, YKK’s founder, Tadao Yoshida, was most concerned with that aspect and would find a path leading to mutual prosperity. He believed that using ingenuity and inventiveness in business activities and constantly creating new value would lead to the prosperity of clients and business partners and make it possible to contribute to society. This type of thinking is referred to as the “Cycle of Goodness” and has always served as the foundation of their business activities. The essence of the “Cycle of Goodness” is the following: “No one prospers without rendering benefit to others.”¹⁸ They have inherited this way of thinking and have established it as the YKK Philosophy.

YKK Group companies seek to delight their customers, earn the high regard of society, and make employees happy and proud. The organization is enhancing the quality of its products, technology, and management as a means to achieve its objectives. They make fairness the fundamental standard for all YKK Group business operations and provide the basis for management decisions. Its core values are based on failure tolerance and experience building. The organization aims to establish growth prospects for its workforce while prioritizing excellence in all aspects through fostering trust and mutual respect, and upholding transparency. The company aims to establish avenues for professional growth among its staff while upholding high standards in all aspects of its operations through fostering trust and respect, and promoting transparency. The diagram depicted in Fig. 11.1 serves as an illustration of the continuous approach. YKK is seeking corporate value of higher significance and pursues innovative quality in the seven key areas shown.

Fig. 11.1

YKK’s management principles [See YKK (n.d.)]

YKK Group has established the YKK Group Code of Conduct that sets the scopes of behavior of which YKK Group employees in all countries and regions should be aware. The YKK Philosophy has been passed down since the founding of the company. It has always served as the foundation for business activities and has supported the Group’s expansion. The Philosophy was updated in 1994 to align with contemporary standards. Subsequently, YKK has been advocating for the implementation of this approach across the organization, with the aim of ensuring that every employee comprehends and adopts it, thereby guaranteeing its continuity for future generations. They had been expanding the promotion activities to their overseas companies and have further solidified the position of the management principles throughout the Group. They continuously engage actively in dialogues with outside experts.

Many Japanese businesses are based on spiritual normative ethics which are composed of both transcendental and group logics unique to Japan. The social dimensions involve the individual, family, wider society in Japan, and the society beyond the Japanese border.¹⁹

Other countries have similar approaches, but these moved nowadays more to the background. In Germany, there is the concept of the “ehrbarer Kaufmann,” the Honorable Merchant. The construct describes the historically grown model for responsible participants in business life. It stands for a pronounced sense of responsibility for one’s own company, for society, and for the environment.

Not too many companies anymore are taking this kind of thinking as the basis of their business action. One example of a company that has done so is the insurance provider HUK-COBURG. The legal name is HUK-COBURG Haftpflicht-Unterstützungs-Kasse kraftfahrender Beamter Deutschlands auf Gemeinnützigkeit in Coburg, which constitutes a supporting association for civil servants when using their cars. HUK-COBURG has a nonprofit status because of its self-supporting activities. They are not aiming at making a profit, but rather focusing at increasing welfare and the quality of life. The company was founded on September 3, 1933, and is the largest self-help organization for the public sector. The Group includes five property and casualty insurers, two life insurers, and two private health insurers, as well as a service company. In 2021, HUK-COBURG had 8.2 billion euros billed revenues and a net income after taxes of 381 million euros.

Ten guiding principles serve as the basis and orientation for HUK-COBURG’s corporate policy. They define how they envision dealing with customers and employees. They are the basis by which products are designed and how the company maintains economic security. They specialize in insurance for private households and all the companies operate on the principle of mutuality. They always assume that customers are well-informed consumers and are considered as equal partners. The company is demand driven. They offer exactly the services the customers expect. The insurance coverage is affordable, and they offer comprehensive, high-quality local service. They are reliable and have an efficient management. They pass on any surpluses generated to members and customers. They consider themselves as a fair, reliable, and attractive employer and have motivated employees.

This mission statement forms the basis and orientation framework for the corporate policy of the HUK-COBURG Insurance Group.²⁰ In addition to the traditional, agent-based distribution system, the company offers an Internet-based service HUK24. Here they offer favorable prices due to online management and personal assistance in the event of a claim with the HUK-COBURG quality.²¹ This unique insurance company with more than 12 million customers and more then 10,000 employees is the market leader in the car insurance market topping the well-known Alliance Group. HUK-COBURG is also the major insurer for private households in Germany and follows the principles of the “Honorable Merchant.”

The dynamics that today’s organizations and leaders are facing is dominated by volatility, uncertainty, complexity, and ambiguity. Therefore, establishing resonance between companies, people, and the environment is an enormous task. All of which are asking organizations and leaders to empower their teams and introduce new ways of working. This kind of transformation can only be brought forth by a powerful catalyst. To our understanding mindfulness can be such kind of catalyst. “Mindful transformation” provides a substantial foundation which relates to the individual, the team, and entire organization. The development of mindful leadership skills in an organizational setting is crucial for achieving mindful empowerment that drives business transformation. This approach is centered on fostering attention and awareness, promoting empowerment, building connections, and facilitating change. Numerous instances demonstrate the effective integration of mindfulness into the strategic toolkit of various organizations.²²

One of these companies is the Aditya Birla Group (ABG) from India, founded in 1857 and now a large conglomerate in Indian subcontinent, spreading its wings to America and Europe. “The real race for excellence is the one where you sprint against yourself, endeavor to outperform, raise the bar, time after time. Excellence is an ever-moving target,”²³ stated Mr. Aditya Birla. He continues: “In our Group, our first and foremost objective is to satisfy our larger family, our family comprising of our customers, our employees, our communities, and our shareholders. Towards this objective, our credo is, ‘strive for excellence and perfection in all spheres of management, through continuous improvement.’ This is the Birla Management Center’s commitment. This is the Group’s philosophy.” Over the years, a participative management by consensus and consultation was established in the company. They pass on excellence in knowledge, created at one center, speedily and immediately to other units. This gives a cutting edge with respect to competition.

As a result, a major Indian conglomerate has been established, featuring well-known brands such as UltraTech, Grasim, Hindalco, Idea, Pantaloons, and numerous fashion brands. Liva, which was previously discussed in a case study, is just one of these brands. They embody the diverse values of independent India, striking a balance between modernity and traditional values, fulfilling their economic obligations to shareholders while upholding a sense of public duty, and exhibiting graciousness towards both invited guests and strangers.

The Aditya Birla Group (ABG), right from its genesis and evolution, has deeply imbued its business philosophy with Gandhi’s socio-economic concept of trusteeship. Since the early 2000s, the group has been following an inorganic growth strategy by building scale through acquisitions and cementing leadership positions in relevant sectors. Today, a US$44.3 billion corporation ABG is active in 14 industry sectors and has achieved global and national leadership in several businesses.²⁴

The group understands the changing dynamics and mercurial nature of current business environment. For this purpose, it has developed a robust innovation platform which is Aditya Birla Science and Technology Company Private Limited (ABSTCPL). The company consistently engages in innovation to cater to the demands of its customers and the market. An example of this is Birla Cellulose’s Liva, a novel fabric made from natural fibers derived from wood pulp, a sustainable and renewable resource, as demonstrated in the aforementioned case study. Novelis possesses more than 130 patents related to the advancement of aluminum products for the automotive sector. UltraTech Cement has implemented innovative methods to enhance the sustainability of cement production (Fig. 11.2).

Fig. 11.2

Aditya Birla Group development and brands [See Finshots (2020)]

The company is being impacted across all areas by these innovations, as they are meeting the increasing demands of the millennial demographic while also shifting their focus from traditional nonrenewable sources to alternative, environmentally-friendly sources. Therefore, it fosters a sense of empathy and creativity within me and motivates all individuals to strive for greater productivity on a daily basis.

Similarly, facing challenges is all about building resilience and having a far-sighted vision. At the end of the day, the outcome doesn’t matter as much as the process through which one undergoes to surmount the hard times. It is these challenges which develop a strong character and a mindset that make us ready for the ultimate battles in life and business.

For proving a future in resonance, deceleration and mindfulness are only a start. In an iniquitous world, we need to be ready to enter into resonance relationships and thus may forego part of our autonomy. As indicated in the conclusion of the H2H Marketing 2021 publication, it is imperative that we prioritize the establishment of resonance relationships and advocate for societal transformation. It is imperative to establish a culture that fosters a creative exchange rather than exclusion when encountering gaps in a résumé. It is imperative to establish a culture within schools that fosters resonance rooms. These areas allow for subjects to be deeply engaged and challenged, promoting self-transformation and ultimately leading to innovative and outstanding achievements and ideas. Just overcoming everyday alienation creates resonances and leads to being connected to the world.”²⁵ When the world moves into an industry-based society and we are creating the knowledge-based society, we hadn’t established resonance between companies, people, and the environment, It is important to acknowledge that there is a pressing need to address issues such as global warming, corporate greed, and narcissistic leadership behavior, as they pose a significant threat to the world and have resulted in a loss of meaning for many individuals. Every individual and organization has the potential to contribute and impact the transition towards a society based on resonance. (Fig. 11.3).

Fig. 11.3

Development to resonance-based society

In the final case study, we would like to give all readers the possibility to exemplify this. We choose the Patagonia Outdoor Clothing & Gear company (Patagonia Inc.).

The Patagonia Inc. is owned and managed by Patagonia Works (PW). The 2013-founded holding company succeeds Lost Arrow Corporation.²⁶ PW oversees Patagonia Inc. (apparel), Patagonia Provisions (food), Patagonia Media (books, films, and multimedia projects), and future investments and joint ventures. The holding company provides its member companies value through “collective services” such as accounting, legal, human resources, etc. But Patagonia Works has been organized primarily to incubate new companies or investments that will, through an infusion of common values, “… use business to inspire and implement solutions to the environmental crisis.”

Unlike a traditional holding company, whose primary purpose is to reduce risk through diversification of assets, Patagonia Works aims to invest in companies working to bring about positive change in five critical areas: clothing, food, water, energy, and waste.²⁷

The Patagonia Inc. story embodies critical lessons and principles for the twenty-first-century business leaders and students of management, innovation, and responsibility for the world. This particular case presents a modern challenge that requires us to reconsider our approach and envision a comprehensive and systematic overhaul of a segment within the apparel industry. The objective is to create a customer-centric, environmentally sustainable, highly competitive, and profitable business model that is designed to thrive in the coming century.

FormalPara Questions for Understanding

• 1. How does the Davos Manifesto 2020 align with the principles of H2H Marketing?

• 2. What is the impact of contemporary advancements in politics, economics, society, and digitalization on the necessity of H2H Marketing as a mindset, management approach, and operational process within organizations?

• 3. What could be an appropriate function for forthcoming enterprises within communities when considering the two potential situations presented by the German philosopher Precht with respect to the growing prevalence of digitalization?

• 4. What are the potential ways to distinguish stakeholders in H2H marketing through the incorporation of The Sustainability Edge?

• 5. How do YKK’s management principles, as illustrated in Fig. 11.1, relate to the concept of H2H marketing?

• 6. What are the major challenges confronting humanity, and which companies have the potential to make a significant contribution to comprehending and addressing them, thereby positioning and differentiating themselves among the key stakeholders?

• 7. What is the significance of “meaning” in this particular context, and why is it imperative for future marketing to focus on establishing this meaning?

• 8. May I know your perspective on the inquiry regarding the factors that influence human behavior? How does this pertain to the future of marketing and the trend of diminishing reliance on politics and media as a source of trust within society?

• 9. Can you provide an explanation of Sisodia et al.’s concept of the social transformation of capitalism? What impact do you anticipate this transformation will have on your personal growth and on the marketing strategies of companies?

• 10. What is the correlation between brand management and reputation management in H2H Marketing and the sociocultural shifts that have been referenced?

• 11. What strategies can companies employing H2H Marketing utilize to create shared value?

• 12. Can you elaborate on the factors that contribute to the profitability of Firms of Endearment, despite their comparatively higher investment in employee well-being?

• 13. Could you kindly elaborate on the definition of the term “resonance” and its relevance to H2H Marketing?

• 14. Please utilize visual storytelling techniques to narrate our story.