Altruism : Achieving Goal of the Organization by using Goal of the Genes

 

Everyone comes to the table with some amount of "altruistic capital," a stock of intrinsic desire to serve, says Professor Nava Ashraf

"Altruistic capital is the idea that every individual has within them an intrinsic desire to serve," explains Nava Ashraf, an associate professor in the Negotiation, Organizations & Markets Unit at Harvard Business School. "In an organization, all the employees already have some of this, in varying degrees

Altruism has been defined as “benefiting another as an end in itself”

At all levels of analysis, altruism results in an improved affect of the helper, higher levels of trust and moral awareness, increased collaboration, and a deeper sense of “we-ness” or collectivism all outcomes that organizations are seeking today.

The mission is not always “margins” for the individuals. People always carry a high sense of pride when they create an impact through their act, be it in the society or in the work place. 

Managements are yet to tap the potential of this capital. It can create immense value to the organization if used effectively like other resources. While the need for compensations and rewards are not to be undermined, but financial incentives are not the only guiding factor and people look for recognition beyond monetary values. 

Moreover, a growing body of research indicates that corporate workers are highly motivated by nonmonetary incentives, such as positive recognition from their peers. The pride factor plays a vital role in bringing self satisfaction to the individuals and that lead to sustained happiness. 

Much of the management in their quest for earning faster and higher returns induces individuals to deliver higher performance for higher monetary gains. While this model has been predominantly successful when the firm is doing well and is in growth trajectory but when there is turbulence, it is the altruistic capital which an organization can depend upon to come out faster from the crisis. 

What is missing from organizational analysis is the notion that other factors can positively impact shareholder Wealth, namely stewardship, collaboration, and critical thinking skills

The time has come to consider ways to shift the focus from individualism and short-term goals to deeper Organizational values such as cooperation and sustainability. Instead of rewarding individual performance, organizations must begin to promote behaviors that lead to higher levels of trust, ethical awareness, and collaboration.

It is urgent that we cast aside old business models and embrace those that value and reward doing the right thing.

Few examples of Capitalist companies practicing Altruism

A Sight For Sore Eyes: Aravind Eye Care System – India:

The hospital has trained individuals in eye care and created a franchise system that makes care more accessible. It handles more than 2.6 million outpatient visits and performs more than 300,000 surgeries. The revenue from paying clients fuels growth and expansion and covers subsidies to treat the poor. Aravind says they are able to treat almost half their patients at low to no cost.

Where The Owners Do All The Work: John Lewis Partnership - The British department store chain:

They put their people first, making them partners who have a say in how the company is run and receive a share of the profits. In consequence, according to their partnership constitution, everyone involved works toward "the happiness of our members, through their worthwhile and satisfying employment in a successful business." John Lewis even owns and runs five holiday resorts for the benefit of its employees. John Lewis employees stay with the company twice as long as is average in the retail industry.

Upping The Ante: Dutch Postcode Lottery

 

When Boudewijn Poelmann started the Dutch Postcode Lottery in 1989, he wanted the business to be all about communities raising funds and supporting organizations that advocate for a fairer, freer and greener world.

The postcode lottery model is a unique one. Individuals don't win -- communities do. If your postcode comes up as a winner, everyone in your community who has bought a ticket shares in the winnings. There have been great block parties bringing everyone together to celebrate.

To conclude, existing business models often reinforce “the end justifying the means” mentality when creating corporate objectives. While shareholder wealth and/or achieving organizational goals are always top of mind, building altruistic management philosophies into the workplace might lead to surprisingly significant business growth.

Measurement of altruistic behaviors is a cutting-edge idea. Aligning pro-social behaviors to business performance in order to manage and reinforce them is the “flip side” of business, but likely, the side that will deliver the highest, most enduring competitive advantage

Valuable feedback's are welcome…

T Margabandhu

M/s Marggo India 

Advocacy, affordable than Advertisiment - The influence of Brand Advocacy on Consumer Decisions

A recent BCG study of more than 300 brands in 12 industries found a very strong positive correlation between BAI (Brand Advocacy Index)  and top-line growth—81 percent, or double that of other measures of customer promotion.

It’s no mystery why advocacy both correlates with and drives growth. Measured accurately, advocacy provides a sense of the quality of a company’s operations and offerings. It also helps companies cut through the clutter in a world saturated with media messages

BCG ‘s  survey of more than 32,000 consumers also shows that people are losing their trust in traditional mass media. When consumers are confronted with an important purchasing decision, they seek recommendations from sources such as friends, family, coworkers, and increasingly, other consumers. This is still a predominantly offline phenomenon, however: an estimated 90 percent of consumer conversations about brands take place in the real world rather than through the much smaller but growing source of social media.

The study from BCG, throws open the debate on the power of mass media advertising. While advertising helps in retaining the brand memory, but the influence of purchasing has shifted from media to advocacy. Today millions of people are connected through internet or Smartphone’s and they get information’s and feedbacks about products on real time basis. 

The networking has become a major power play and people are increasingly getting inclined towards taking opinions regarding the choice of products. 

Interestingly major brands have their top line performance influenced by the brand advocacy. The chart above is a significant proof for products across industries.  

This leads to the major question 

Should there be a cut in mass media spending by brands and products or that should co exist? 

Cutting down on advertising and spending more on product quality and service standards can play the trick. If the biggest influence is customer advocacy on products and services, then quality of the same will be more critical than spending on connecting with the people.

Word of mouth can be a powerful tool and less expensive in connecting with the people. 

The challenge will be tradeoff between media spending for visibility and investment on meeting ever increasing customer expectations. Many organizations believe once a product is created and quality is established, the rest will be taken care by the visibility levels created for attracting people to buy. 

But then the process doesn’t end there as the world has moved head from customer satisfaction to exceeding customer expectations to customer delight. So continuous innovations, and collaborating with people in the process of improvement on the product and services are key factors which will play positively on brand advocacy. 

Successful companies are embarking on such new thought process to ensure they not only work on retention memory through media source but also get connected with customer for brand advocacy.

T Margabandhu

Marggo India

Made in America - Focus on Value, the Wallet will Follow

 China’s overwhelming manufacturing cost advantage over the US is shrinking fast. Within five years, a Boston Consulting Group Analysis  concludes, rising  Chinese wages, higher US productivity, a weaker dollar, and other factors will virtually close the cost gap between the US and China for many goods consumed in North America.

There is a perfect case for manufacturing coming back to US in full swing in the coming years, if the trend is anything to understand.  The sign post is clear and quiet obvious.

There are factors within and outside the US which will influence the way manufacturing trajectory will move 

External Factors:

•  Rising labor and other costs overseas,
•  The desire to reduce supply chain uncertainty
• Increased transportation costs
• Volatile fuel costs
• A little over 10% of all jobs created in the economy over the past two years            came  from the manufacturing sector 
• Labor costs in China have risen by some 22% in 2013 alone, with a further doubling of wages expected over the next five years.
• This has eroded China’s competitiveness, as it loses manufacturing business to its neighbors and economic competitors worldwide

Domestic Factors:

• The amount of output per hour worked in the U.S. has steadily grown in recent years, with a 0.5% increase in 2011 and a 1.5% increase in 2012.
• The rise of new domestic sources of shale oil in the U.S. has raised the distinct possibility of energy independence for the country within a few decades, maybe less.
• The development of alternative energy sources such as solar power points to a cheaper energy environment for the United States
• The U.S., meanwhile, is becoming a lower-cost country. Wages have declined or are rising only moderately. The workforce is becoming increasingly flexible.
• The dollar is weakening.
• Productivity growth continues

This must be a wakeup call for country like India, since the wage inflation will come and haunt like China as the economy moves into growth phase.  The Indian manufacturers have already started losing few of outsourcing deals and there are instances where German producers are cost competitive than Indian manufacturers.  

The aftermath of global meltdown has created positive impact for the developed economies since the competitiveness gap is getting bridged on account of converging wage pattern given the steep rise of wage inflation in China. That’s bringing manufacturing back to reckoning in US.  

Indian manufacturing, especially SME’s will be challenged by other smaller economies through competitive pricing and the key differentiator will be value creation. There is going to be no free lunch in the future and business has to be earned through competitive advantage based on productivity, value excellence and innovation.

The gap between Chinese wage cost and other developing economies is still wide and the rate of increase is also divergent, countries like India, Vietnam and Indonesia can crab the share if they can respond to the changing dynamics. 

Made in America may taste bitter, but can become sweet if the recipes are right……

Marggo India

T Margabandhu