Huffpost Business
THE BLOG

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Simon Mainwaring Headshot

What #OccupyWallStreet Must Ask of Corporations and Themselves

Posted: Updated:
OCCUPY WALL STREET
Saki Knafo
Print

As the #occupywallstreet movement gains momentum, much attention in the press and across social media channels has been focused on the clarity of their demands. Yet the tragic reality is that irresponsible financial practices and social inequality have impacted almost every aspect of American life, inspiring grievances ranging from environment damage, health care and education to basic democratic rights. So while each protestor may sing a different song, their voices represent a harmonized choir for change. And when you consider that 1 in 6 Americans are now below the government set poverty line, that real unemployment is estimated to be 16 percent, and that over 40 million Americans now rely on Food Stamps in some way, it is hardly surprising that the experience of life for so many Americans has become so acute that they have no recourse but to take to the streets demanding that something substantive be done.

All these grievances have something in common because, at their heart, they all stem from the same lack of explicit expression of the values-based agreement between corporations (including Wall Street) and their customers, or in other words, a social contract. Such a contract would serve as an official statement setting forth a list of guiding principles about how they will act towards each other and society at large. And given the declining -- or at best inert -- state of the economy, and the gathering momentum around the #occupywallstreet movement, I believe the need to lobby for such contracts is now more critical than ever if we are to avert unwanted and unnecessary violence stemming from the protests and to return business to surer footing through a partnership between corporations and their customers.

Social contracts make more sense today than ever, given the new technology platforms that make close brand-consumer engagement more possible than ever. With the spread of social media, consumers have greater power to dialogue with their brands and ask (or demand) of them greater socially responsible behaviors. At the same time, the tools of social media give corporations great new opportunities to connect with their customers and promote the values they want their brands to embody. What's more, in participating in a social contract, a corporation will be forced to define its purpose, what it stands for and its core values, all of which offer incredible strategic, employee-based and bottom line benefits beyond the goodwill, loyalty and purchases of their customers.

These new technologies are the perfect backdrop for social contracts that can improve the relationship between the two parties. Both sides have a lot to gain -- and nothing to lose. What they gain is a greater understanding about the intersection of their mutual interests, their shared values, and how the brands fit into today's consumer-driven world. A proactive social contract negotiated between a brand and its customers -- using social media and crowdsourcing, for example -- can go a long way to build trust, loyalty, and commitment among consumers who love a brand. In fact, I believe the first companies that make an effort to develop an authentic, transparent, and meaningful social contract with their fans and customers will turn out to be the ones that are the most successful in the future. While brands that refuse to make the effort will lose stature and customer loyalty. In both cases, one fact remains undeniable. Corporations cannot survive in societies that fail, and given the current state of the U.S. economy, purposeful consumer engagement by brands will not only enhance their reputation and sales but also shore up the well-being of the society on which their very survival depends.

The theory of social contracts extends as far back as Plato. However, it was the great 18th century social philosophers John Locke, Thomas Hobbes, and Jean-Jacques Rousseau who brought the concept of a social contract between citizens and governments sharply into political thinking, paving the way for popular democracy and constitutional republicanism.

While there are sharp differences in their thinking around the expression of a social contract, in essence they share the theory that human beings are born into a natural state that has no laws, governments, or moral rules to guide them. This natural state, of course, leads to social disorder and chaos, given that individuals can do whatever they want regardless of its impact on others. However, as logical thinking creatures, humans have come to recognize the need to eliminate the potential for disorder and mayhem. To live in society, we agree to yield some of our natural freedoms in exchange for the benefits of peace, prosperity, and the pursuit of mutual self-interests. Everyone living under the social contract we call democracy has a duty to act responsibly, to obey the laws, and to abandon certain types of self-interested behaviors that conflict with the general good.

It is time to extend the concept of social contracts to corporate-consumer relationships. Think of the analogy this way. In their natural state, companies can behave any way they want in the name of making money for their shareholders, as long as it is legal. Corporate law shields them from having any obligations to society other than paying taxes and abiding by the federal, state, and local regulations that relate to them. This state of affairs allows corporations to do pretty much what they want, such as utilizing the earth's resources without regard for sustainability in any sense. It entitles them to conduct manufacturing and business in the least costly ways, even if their shortcuts result in air, water, or soil pollution, the depletion of our forests and fish stocks, urban blight, gross disparities of income, poverty and urban blight, and so on.

Meanwhile, we also need to recognize that most Western consumers live in a state of equal freedom when it comes to their consumption attitudes and behaviors. They too purchase products without regard for the sustainability of the resources utilized to make them. They buy and use products that harm the environment. Through their purchases, they support companies that operate unethically, immorally, and those who produce just plain bad products that waste our resources and energy.

A social contract is the way out of this dilemma for corporations that want to lead in the 21st century by showing consumers how seriously they take customer loyalty and goodwill. Launching a social contract helps corporations by forcing them to think about the future of their business and the relationship they would like to build with their customers. It encourages them to formulate smarter strategies that respond to the values and expectations of their customers. It causes them to make decisions about what social responsibilities they will assume and transparently convey them to their customers.

From a consumer point of view, social contracts equally make sense because they can engage more deeply with brands and see which of them are most attentive and responsive to their vision and hopes for the world. Helping create a social contract also helps customers gain a better understanding of their own foibles in shopping and consumption, and so it can act as a reminder that they too need to abdicate some of their consumer rights in favor of supporting the general good of society and the planet.

For social contracts to become a reality, shoppers must start by using online, offline and social media to promote the idea of social contracts between brands and their customers. I created this sample social contract below based on thinking in my book We First, that explores how brands and consumers use social media to build a better world. It's designed to inspire shoppers to hold the brands they support accountable for their behavior, and for companies to customize if they wish to create a social contract that will build their business, brand and profits.

While politicians and pundits argue over the merits of the #occupywallstreet movement, there is no doubt that the way both corporations and consumers practice capitalism has to change because it is simply unsustainable. The change in thinking and behavior that's needed is a shared responsibility. Right now the #occupywallstreet movement is performing a critical role of drawing a line in the sand for Wall Street and corporations, and their efforts will not abate. But now that the point of intolerance has been reached we need to structure meaningful social contracts that serve as roadmaps for shared prosperity for both business and citizens. And to enforce them, citizens and customers must celebrate or admonish corporations that live up to the values outlined within them using their purchasing powers to impact what corporations care about most -- their bottom lines. Without doing so, the demands of #occupywallstreet may yet fall on deaf ears because corporate incentive schemes haven't unchanged, or because companies will feign a response and quickly return to self-serving and unconscionable practices as we have seen since 2008. The tragic cost of which will ultimately be borne by those same corporations, countless long-suffering Americans and the country itself.

Sample Social Contract Between [insert Name of Your Brand] and Customers

We are seeking a new way of looking at the world we live in. We believe that a better future depends on the integration of profit and purpose. To that end, our company and its customers intend to become partners in social change to build a better world. This partnership is guided by this social contract between us. We agree that the following principles will direct our behavior and the relationship between us:
  1. We believe companies have a right to innovation, entrepreneurship and profit-making while citizens and our consumers have a right to a healthy society and planet for living.
  2. We recognize an interdependent, global community requires an expanded definition of self-interest that acknowledges the needs of all inhabitants of the planet.
  3. We define success through prosperity, which means the well-being of many, not the wealth of a few.
  4. We believe that future of profit is purpose. We will commit ourselves to working with our customers to create meaningful results that impact the world in positive ways.
  5. We believe that the interests of companies and consumers are best served through the sustainable practice of capitalism -- economically, morally, ethically, environmentally, and socially.
  6. We believe that corporations and consumers owe each other an equal duty of transparent, authentic, and accountable communication.
  7. We believe that social technology, business, and shopping have the potential to change our world through new modes of engagement, collaboration, and contribution.
  8. We believe in the following values for our daily practice of capitalism: sustainability, fairness of rewards, fiscal responsibility, accountability, purposefulness, engagement, and global citizenship.
  9. We believe that corporations and consumers are duty-bound to serve as custodians of global well-being for this and all future generations.
  10. We believe that the private sector must cooperate, collaborate and coordinate with governments and NGOs to create a unified force for social good.