The New Normal

Michael Mackenzie and Nicole Bullock write about the new normal for credit spreads in ysterday’s Financial Times.  They quote Scott Minerd, chief investment officer at Guggenheim Partners as saying that “the return of corporate credit spreads to their historical averages will take time, 12 to 24 months if things hold together.”  The comparison the FT’s correspondents make between today and the post-Enron period of extreme risk aversion in 2002 (it’s worse now) prompts us to think about the New Normal in corporate reputation.

In the current environment, it seems as if most people are understandably too focused on keeping their lives together to generate significant heat towards corporations beyond animosity about a  handful of securities industry executives who received bonuses for 2008.  However, as the economy recovers but doesn’t generate jobs quickly enough, we expect to see  a period, which from the vantage point of history, will be called “The Great Anger.”  The extended job dearth, we predict, will coincide perfectly with the ripening of litigation against firms and individuals involved in the global financial meltdown, creating a perfect firestorm of public indignation.

Some companies, particularly in financial services, have keyed their communications to changing public perceptions and are promising a different kind of relationship with customers.  There’s even a new bank calling itself “Ally Bank,” which “values integrity as much as deposits.”  It wants to be your, well, you know, ally.  This is certainly one direction to go, especially if you’re the successor to GMAC, but I can’t help being reminded of Emerson’s comment about an acquaintance of whom he said “the louder he spoke of his honor, the faster we counted our spoons.”

We suspect that the New Normal will neither be the Old Normal (faster! louder! bigger! richer!) nor the current “trust us: we won’t cheat you” rhetoric.  The New Normal will use the instantaneous stakeholder interaction made possible by social media to invite a discussion about product innovation, customer service, business strategy and, above all, the role of the corporation in society. 

To make this possible, companies are going to have to stop buying ads unctiously touting the customer benefits of their transformation.  They will need to start the much harder work of actually involving stakeholders in what they do.  As President Kennedy didn’t say: “Ask not what you can do for your stakeholders.  Ask your stakeholders what they can do for you.” And  act accordingly.


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One Response to “The New Normal”

  1. popthethoughtbubble Says:

    I’m a student from the Philippines taking up BA Organizational Communication at the University of the Philippines Manila.

    I’m currently enrolled in a subject wherein we discuss the importance of new social media in organizations. The magic word now for corporations I think is “co-creation.” We now live in the world where people want to be involved. And so, it is but just right for companies to involve their stakeholders in what they do. And the best and most strategic way to do this is for them to utilize new social media.

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