CHINESE SWITCHED ON AT FRANKFURT AUTO SHOW
beneficial relationships with citizens or customers in their lived experiences, is the next strategic frontier for organisations with ambitions to live on and serve future generations.
I suggest two critical shifts that, if fully embedded in all aspects of business strategies, can guide organisations and expand their societal influence.
In this age, where trust is distributed across an ecosystem of technology, businesses and society, a deeper consciousness between organisations and those that they serve is required.
According to Statistics SA, between October and December 2018, South Africans spent R11 billion in bank charges and R17bn on taxi fares. This spending has enriched banks and the taxi industry, but are they returning the favour by intervening to improve public transportation or living conditions in townships? I stand to be corrected, but I have not heard of such.
A new social contract between brands and their consumers needs to be created. This contract should outline a clear mandate, action plans and scope of interventions a brand needs to make on an annual basis to progress people’s lives.
If an organisation that has, for example, 9 million customers and continues to assume that sales and lifestyle gimmicks will engender them loyalty, then its playbook is outdated. It must accept that as a leader of a large constituency, acts or interventions are not only a demonstration of doing good, but a commitment to national development.
The shift must view the consumer as a benefactor contributing to shareholder value and not just as a conduit of wealth creation. This idea can be likened to the concept of shared value, but I assert that in this age we need to move beyond creative-shared-value as it ignores the tensions between social and economic goals.
It is lived experiences that foster innovation and allow for an organisation to assume an active role in society. An interventionist mindset requires a sensibility that places people’s full context at the centre of business models.
In a country like South Africa, facing critical challenges, brands have a bigger societal role to play than purely focusing on shareholder returns. Imagine if technology and security companies partnered with the police to bring an end to the gang violence that is robbing the Western Cape of children. These are the acts that our society needs to continue on a path of progress. It takes all role-players to put their money where their profits are created.
More than 200 years ago, Adam Smith asserted that capitalism will move up the hierarchy of consciousness and align itself to human needs and detach from superficiality. There is evidence of this taking place over the centuries, but it has been a slow burn.
One of the reasons is that organisations got it into their heads that responding to customer’s lifestyles is more important than putting an end to shacks that rob people of their dignity. Exponential technology and micro-innovations across sectors present an opportunity for organisations to align with citizens and the public sector in liberating the nation from structural impediments.
Brand differentiation and loyalty exist not only through social change but acts of active participation in structural change. The question is whether brands can step in where the public sector fails. What prevents South Africa’s JSE-listed companies from pooling their excess funds and fixing infrastructure that impedes social cohesion and productivity? Structural change is a definitive intervention that is needed not only in South Africa, but across the continent.
I believe that brands that will lead in future are those that not only exist for social change, but understand interventionist thinking and its application. The first step in this shift is to future-proof employees to understand their active role in client partnerships. Only then can we future-proof industries and give true meaning to governance and active citizenry.
Rupare is the chief executive of Valora. CHINESE suppliers and manufacturers have stepped-up their presence at the Frankfurt auto show, capitalising on a strong position in electric technologies forced on European carmakers by regulators seeking to curb pollution. Although the number of exhibitors has fallen to 800 in 2019 from 994 in 2017, Chinese carmakers and suppliers now make up the biggest foreign contingent, with 79 companies, up from 73. Several European and Japanese carmakers including Fiat, Alfa Romeo, Nissan and Toyota have skipped the show as the industry cuts costs. Europe’s carmakers face multibillion-euro investments to develop electric and autonomous cars, forcing them to rely on Chinese companies for key technologies such as lithium ion battery cell production, an area where Asian suppliers dominate. German firms are striking major deals with Chinese suppliers to help them meet stringent EU anti-pollution rules, which were introduced in the wake of Volkswagen’s (VW) 2015 emissions cheating scandal. “All carmakers face the challenge that they will have to fulfil fleet consumption targets,” said Matthias Zentgraf, regional president for Europe at China’s Contemporary Amperex Technology (CATL). Zentgraf said he expected further supply deals to be struck in Europe this year following agreements with BMW and VW. Daimler said yesterday that it had chosen China-backed Farasis Energy to supply battery cells for its Mercedes-Benz electrification push. Farasis is building a €600 million (R9.74 billion) factory in East Germany, close to where Chinese rival CATL is erecting a €1.8 billion battery plant. SVOLT Energy Technology, which was carved out of China’s Great Wall Motor, said it would start building battery cells in Europe at a new €2n plant in 2023. Chinese companies are also giving Europe more attention since the US and China embarked on a global trade war, which has resulted in tariffs. “We put Europe up in priority,” said Daniel Kirchert, chief executive of Chinese electric carmaker Byton. Byton has taken the company’s prototype vehicles on road shows in Europe and received expressions of interest from 20 000 customers, he said. I Reuters