“It’s not personal. It’s strictly business.”
Who would have thought that only 50 years after it appeared in The Godfather (yikes, has it really been 50 years?), that once timeless phrase would be entirely outdated.
This week on Elevate Live, we were joined by serial entrepreneur, “Shark” investor, and Dallas Mavericks owner, Mark Cuban, to offer his two cents on why compassion and empathy in the workplace are the future of business, especially in the wake of COVID-19.
When the NBA was cancelled as a result of social distancing measures, one of Mark’s first responses was to make sure all his hourly stadium workers would be paid as if every game were played. When news broke in 2014 that a large proportion of Walmart workers qualified for food stamps, he took the opportunity to review pay structures across his companies ensure that every single person was being paid a living wage.
Why? Well part of the reason is that Mark, like many of us, wants to see his core values and beliefs reflected in his work. He believes fundamentally that people deserve to be safe and secure in their jobs, and that companies have a responsibility to take care of their people.
But also – it just makes good business sense.
Increasingly, consumers care more. They care about how a product is packaged; whether it’s fair trade; whether it’s hand made. An expanding list of socially-conscious angles that would never have been discussed 50, 25 or even 10 years ago.
The trend of consumers preferring ethical brands isn’t new, but it has rapidly accelerated as a result of COVID-19. That means companies are facing a rising tide of consumer expectations, paired closely with job insecurity and its effect on spending.
Here are Marks’ top 6 reasons that your business absolutely must embrace compassion or risk being swallowed whole by the COVID crisis.
Reason #1: Consumers won’t buy products that don’t align with their values. Consumers today are extremely socially aware and conscious, particularly Gen Zs and Millenials. From the rights of employees, to the environment and fair trade, companies big and small can’t afford to be seen as a brand that doesn’t stand up for what’s right.
That means the days of being able to cite the bottom line as the priority for business decisions are gone.
“If you’re a company that’s not treating employees or stakeholders well, then your consumers are not going to want to consume your products or services. And you’re going to find yourself in a really difficult position. For all companies, how you treat your employees during this pandemic will define your brand for decades.”
And he’s absolutely right. Check out a few numbers from a 2019 Certus survey and Edelman’s 2020 Trust Barometer report:
The writing’s on the wall: the old mantra of ‘stakeholders first’ simply doesn’t cut it anymore.
Reason #2: Consumers are managing their personal brand. Before we give customers all the credit for consumer activism, we should consider another key element that’s at play: social media. For the first time , all consumer decisions are highly visible to extended peer groups, and posting a purchase can highlight not only a sense of style or affluence, but passion for a cause.
“We all have our brand that we put on social media. If you don’t have the same level of social responsibility as the person trying to buy from you, they won’t buy from you.”
Social media isn’t going away any time soon, so it stands to reason that this demand for compassion is also here to stay.
Reason #3: Consumers are spending less. COVID-19 has caused severe economic disruption on a global scale, and extreme unease among consumers. And according to Mark, the challenge in the current economy isn’t liquidity, and it’s not borrowing power. It’s consumer demand.
“What we’re seeing is that people are buying things that they need for their home; but they’re buying them online and they’re not buying superfluous things. They’re really sticking to the standard items, and that’s what happens when people aren’t confident that they’ll keep their jobs.”
If we’re all spending less, chances are we’re even more likely to take a microscope to the companies we’re considering supporting. When we’re buying less, each purchase means a whole lot more.
So the question becomes, how do we pump up consumer demand in an environment where people are not confident that they’re going to keep their jobs. Here’s how Mark thinks this could be implemented to reinvigorate consumer spending.
Reason #4: Tech is at an inflection point. Mark is confident that tech is at a tipping point. Take a look at how sees it evolving as a result of COVID-19:
That tipping point means that companies are going to be under tremendous pressure to come up with big innovations (1) to meet the changing needs of their customers and (2) to set themselves apart from the competition.
Reason #5: The idea that saves you won’t come from leadership. So, we know innovation is going to be more important than ever. According to Mark, the best things companies can do to inspire it is communicate with team members. “Everyone is going through the stress and anxiety of what’s going on, so you have to be proactive in talking to your employees, customers and vendors.”
Opening a line of communication is beneficial to mental health, workplace culture, and retention, but Mark can think of another extremely valuable reason to uphold a candid culture in your company. By opening up a dialogue on your team, you’re making it a safe and inviting place for people of all levels to share their ideas; and those are the ideas you want.
The best people to source those innovative ideas from? The ones who are closest to your customer; and that’s typically the frontline employees. “They’re the ones asking customers ‘how are you doing?’ Where do you see things going?’ When you open that line of communication, all it takes is one good idea.” And it doesn’t matter where it comes from.
Reason #6: A tidal wave of companies is coming, and compassion is a surfboard. The temperature just dropped and the animals are getting restless. A storm is coming. According to Mark, we’re about to see a massive acceleration in new companies. With technology, starting a business is as simple as having a laptop and an idea, and he expects that we’re about to see a lot of big ideas coming out of this crisis.
“In the history of business, there has never been a better time to start a business. Never a better time to start a company than right this minute,” says Mark.
Just like Air BnB and Uber were born out of the 2008 recession, he strongly believes that now is the perfect time to start a company. With the job loss and reduced hours caused by COVID-19 people have time, they have ideas and, most importantly, a lot of them have nothing to lose.
With increased competition, much of which will be created by the Millennials and GenZs who we already know favour socially conscious businesses, having a robust social strategy might just keep existing companies afloat. This influx of smaller, more agile, more resilient, newer companies, will accelerate the path to a more compassionate version of capitalism.
“Those companies that are compassionate will excel far beyond those who won’t. And that will lead us to accelerating us in a better direction.”
Mark is a business guy – he makes smart investments and sound decisions. He invests in companies that make sense, have a robust market strategy and, ultimately, create something people want. The picture of pragmatism. And yet, Mark has prioritized compassion and empathy throughout all of his business dealings.
Why? Because it’s good business is personal.
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