Godzilla vs. Social Governance

 Drawing courtesy of www.lostonwallace.com

Drawing courtesy of www.lostonwallace.com

Two interesting things happened this week that illustrate how the court of Social Governance is changing the rules of corporate accountability.  

Godzilla is famous for his ability to wreak havoc and destruction wherever he wants and for whatever reason he wants.  

Here's where the two meet.   

Papa John's and Amazon found themselves in front of collective actions from consumer/market groups that disagreed with them this week.  The disagreements weren't primarily business related, but they very easily could have been, i.e., customer service, or product related.   They were reactions to quasi-political stances that each company took.     

As of today, there is a Facebook page with 1,500 likes who support a Papa John's boycott and a Reddit post with 4,000 comments. The group that is unhappy with Amazon claims 50,000 who want to make Amazon "pay a price."  While not the first time this has happened, what's starting to emerge is a pattern of increasing scale, frequency and change in tone to these group actions.

There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
— Sam Walton

Sam's comment is right of course.  Any individual can walk and take his or her wallet with them.   The right of an individual consumer or customer has always reigned supreme in this context.  

Social Governance Court Is In Session

But companies have never been that worried about one customer walking, like they've never really cared about one employee or one shareholder being dissatisfied.  However, unions and shareholder activism have allowed employees and shareholders to collectively bargain and act, albeit inefficiently, so that companies do care about these groups, somewhat.  But companies have been basking for a very long time in their ability to ignore or stifle any singular voice of customer or market discontent.  

Not any more.      

Customers have now discovered the court of Social Governance - their ability to collectively hold corporations and their CEO's accountable.  When will we see the first 1,000,000 person boycott that has a material financial impact on a company?   I predict in the next 2 years.  

Where will this come from?   That's the frightening part…anywhere.  Just this week we saw political/social attacks but what about business performance or practice issues, environmental issues, or just plain because?  What if a group of 1,000,000 customers wanted a CEO to resign or Board to do the same?  

Mass customer exodus also gives way to mass customer acquisition. What will competitors do to acquire these disenfranchised customers? 

What regulators or Boards have struggled or failed to do, massive market actions and forces will now attempt to achieve, or to just plain disrupt.  How do companies, boards and CEO's address this?  There is only one way, and Godzilla shows it to us.  

Godzilla vs. Social Governance

godzilla vs sc.jpg

How You Can Win

Godzilla does seem to reluctantly work on the side of humans occasionally although we can never really fully trust him which means that we have to actively monitor and adopt new governance practices to control the every changing risk profile.    

But we also have to try to understand, to make him our friend because we know he isn't going away.   Social technology is no different, it is a tool that will yield massive economic and intellectual productivity gains if you let it, and it is itself, the best defense against it's potential to do you harm.        

And one more thing, I know you are wondering…who wins straight up...Godzilla vs. Social Governance.   We do, we use social technology to take that big lizard down hard.

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