This post by Piers Fawkes really caught my attention (thanks to my old buddy Greg Verdino for the tip). Piers has an interesting theory about the future of business - that it will be much more about "social" and much less about profit, in fact it'll probably be 50/50 of each. He defines this new "50/50 corporation:"
To leverage the opportunities that digital connectivity has fueled a company should be a 50/50 Corporation. 50% about being social, 50% about making profit. By doing so, that organization should attract more profit than a company that follows a 100% Profit strategy. Being 50% social doesn’t have to be all about having a social network. Having a corporate social responsibility policy that your customers love should work too.
He cites an example of a 50/50 corporation: American Apparel. "AA hasn’t grown into a global retailer just through sexy ads and bright t-shirts. It’s socially aware approach towards its staffing, partners and raw materials sources has a vast impact on the popularity of the brand."
A few reactions to the interesting argument he is presenting.
First and most importantly, I actually have trouble making a distinction between the 2 (startling I realize coming from a graduate of Harvard Business School, the "West Point" of capitalism). At Digitas we talk a lot about marketing that adds value and marketing as a service. We always start by trying to figure out how to give the consumer something meaningful (information, entertainment, promotional content, user generated content, even utilitarian value by making something easier). In today's world where consumers trust each other more than they trust brand marketers, it's pretty logical that a degree of "social" will work its way into the marketing - and that provides value to the consumer (and presumably profit to the marketer).
For me, social and profit aren't at odds, they're just 2 sides of the coin of the marketing realm today - adding value. If customers want social we give them social and hopefully that grows the client's business.
Relatedly, I think you can doggedly pursue a profit goal (do things which increase the likelihood of profitability - e.g., offering a good product for a fair price) but the social piece is a bit harder to achieve - because you are relying on people to invest themselves in what you're dong, which is about more than just a simple transaction. How often have we seen "social" ideas that don't take off at scale because they don't strike a chord in users' hearts?
I think a good interpretation of what Piers is suggesting is - to interconnect "profit" motives with "social" enablement. Meaning, don't just run a business like you used to, instead get people involved and sharing with what your business is doing. That way you are more likely to unlock the profit potential of social.
Regarding American Apparel, I wish I were more literate with how they've used "social" in their approach. For me it seems primarily like cool clothes for cheap photographed on hot young models ("porntastic," as David Droga and I joked HoneyShed is).