Obama's Business Model: We the People
Last week, I attended the annual board of directors meeting for Wharton's SEI Center for Advanced Studies. Everyone in attendance was brimming with thoughts on leadership, business, and of course, Barack's election win. I began the conversation by pointing out that Barack had won based on a simple premise that many of us have long since forgotten – that the United States of America is based on– 'Government by the people and for the people'. During his campaign, Obama managed to rally and inspire millions of Americans with his promise of "hope and change". While his message was different from Hillary Clinton's and John McCain's, what made him more unique was how he found success. The three key elements to his winning campaign are simple. They are:
- He ran a campaign based on 'change' to differentiate himself from his leading competitors
- He used social technologies to scale his organization and connect with his constituencies and
- He created a grassroots community (my.barackobama.com) to market his campaign, support his constituencies, and raise capital.
However, what's even more important are the lessons that you, company leaders, can learn from Barack that will help you succeed at your company and at your job. Simply, you must accept his premise, government by the people, for the people – can be equally and successfully translated to – BUSINESS BY THE PEOPLE, FOR THE PEOPLE. Now you are asking, what does that mean and how does that apply to you, the leader or manager of your company. Simply, for your company to win in this highly connected and social work world, you must have:
- Leadership that is focused on Change (not the status quo) – Business leaders need to be enablers of change. Our country is facing arguably the worst financial crisis since the Great Depression and if our leaders don't believe in progress, our economy will never get better. We need to recognize that systems are flawed and need to be corrected. But that is also the case for companies and their leaders. If you– it is because you are not a change leader.
- Social Technologies that changes what you do and how you do it – Companies need to make an investment in social technologies in order to be successful. Barack Obama won this year's election by 6 points. Recent numbers show that youth voter turnout only increased by 1.3%. In the business world, where 6 points is an entire profit margin, that 1.3% matters. Companies do themselves an extreme disservice by denying the benefits of these technologies – more customers, lower costs, more leads, higher efficiency, and higher profits.
- Engaged Communities that drive innovation, action and support – Companies need to employ community initiatives in order to maximize the collective potential of their employees, partners and customers. Barack Obama raised a reported $639M using a grassroots model where the average contribution per donation was $84. The groundswell of support proved to be way more effective than McCain's traditional tax-based funding. Further, he used the community to educate his constituency, provide peer support and stay connected – all at a fraction of the cost of traditional campaigns.
Using these three guidelines to run your company – Businesses by the people for the people - I believe leaders have the real potential to improve their top and bottom line results. However, they will only do so if they can overcome a serious problem that I have continued to witness in business - CSD - also known as Corporate Social Dysfunction.
After helping hundreds of leaders think about and deploy social technologies, leaders struggle with three primary components of Corporate Social Dysfunction: change promulgated by the leader, the value of social technologies, and their unwillingness to relinquish control to their communities – be it customers, employees or partners. Further, because they have CSD, they are under the false impression that business is not personal. THEY ARE WRONG. Business is very personal. When people are fired from jobs, they feel it. At the same time, when employees and customers feel supported by the organizations they are connected to, they also feel it.
The reality of the matter is that the more personal business is, the more valuable and resilient it is. We are standing on what is potentially a massive paradigm shift, one in which businesses will finally be about what matters most - people.
LIke Barack Obama said in his speech on February 5, 2008 during the Democratic primaries, the time for change is now. "We are the ones we've been waiting for. We are the change that we seek."
And even though his message is one that is "WE" based, in the end, all of this boils down to individual change and responsibility. It is up to you, the leader of your community, the head of your business to be a leader of change. It is up to YOU to invest in social technologies. It is up to YOU to empower your constituencies through community efforts.
In the words of Mohatma Ghandi, "Be the change you wish to see in the world." Believe in change, act on it, and then we will truly have businesses by the people, and for the people. YES WE CAN.
Stay tuned for more posts where I address the possible skepticism surrounding my thesis and also how Barack Obama is already following through on his campaign promises. The slides I used for my presentation can be found here.