How brands derive behavioural benefits via radical approaches to social value

To deliver on societal goals, there is a case for 'polycentric' approaches which mean greater decentralisation & less measurement but resulting in greater trustworthiness

We live in a world of ‘wicked problems’, where the big societal challenges we face are complex, their resolution unpredictable and, crucially, there is no single right answer.  So just how do brands, with purpose as core to their missions, operate in this space?

In particular, government has set net-zero targets industry with the understanding that industry will be a key driver of societal change and yet a relatively recent report found that only 10% of banks (the subject of the report) manage these risks comprehensively and take a long-term strategic view of the risks. 

Just what does a good strategy look like?  Received wisdom suggests a triple bottom line, measuring the financial, social, and environmental performance of a company over time. But some commentators are arguing that a more radical approach needs to be adopted; in an environment which is so unpredictable and uncertain, is measurement really viable and indeed are there certain advantages to lowering the priority that measurement has in this space?

We argue there is in fact an interesting behavioural case to be made that brands can enhance their trustworthiness by focusing less on measurement for social outcomes and supporting a ‘polycentric approach’ of decentralised, individual and community decision-making to deliver social good.

The context

Firms are increasingly attempting to manage rolling crises whether climate change, technology disruption to their business or, more recently, COVID (and other pandemics that are threatening to follow).  Added to this, the purpose of companies has been changing to not only generate profits for the benefit of shareholders but also to have a bigger role to play in society which comes with a requirement to engage in a range of complex issues.

To this end, concepts like VUCA (for something that is Volatile, Uncertain, Complex and Ambiguous), wicked problems (for which no known solution exists) and ‘polycrisis’ are entering the business vocabulary.  These seem to call for a very different sort of approach as these complex challenges they describe are not only rarely solved but tend to have multiple stakeholders who frequently have different views of both the problem and the solution. This requires leadership which is best demonstrated as asking intelligent questions, weighing up options, gathering information, and getting to grips with complexity. 

In fact, the term ‘wicked problem’ was adopted as a management concept by Keith Grint who argues that the ability to deal with this type of problem is at the heart of the ability to be an effective leader.  Of course, one of the biggest challenges is first recognising that problems are wicked, ill-defined and open-ended and that you don’t necessarily address them by trying to reduce them to predictable, clearly-bounded, and what we might call ‘tame’ problems.  The danger of attempting to simplify the problems and decisions means we can easily make misguided decisions: it is better to look at all the issues and embrace the complexity.

But what does good leadership look like? The starting point is often to set out a programme of measurement to guide activity.

The lure of measurement

But this raises a problem – measurement of wicked VUCA style problems are inherently harder to measure. So how does this square with one of the most famous mantras of business from Peter Drucker that “[only] what gets measured, gets managed.”

In many ways this makes absolute sense – how would we otherwise determine what works, how to invest resources and so on? The challenge though, as COVID showed us, is that we are in a period of radical novelty and uncertainty that, in the words of science historian Lorraine Daston, means we are “like a squid obscuring itself in ink”.

We cannot see what this new world means for us, but we are nevertheless renegotiating how to live in it.  The world of Peter Druker where we can be confident of what to measure, and why, seems to be a distant memory. 

And, of course, measurement of social value outcomes has simply never been easy.  Indeed, Professor Geoff Mulgan suggests there are four unavoidable complexities that bedevil the measurement of social value.

• The first is the lack of hard-and-fast laws and regularities in the social field so that very few areas of policy and strategy making allow precise predictions about what causes will lead to what effects.

• A second reason is that measuring social value is hard as people do not agree what the desired outcome should be. For example, many people want to imprison criminals to punish them, even when incarceration costs more and confers fewer benefits than do alternatives to prison. Philosophers have long recognized that societies are made up of competing and conflicting systems of valuation and justification. But, Mulgan suggests, measurers of social value have often tried to deny this.

• Even without these concerns, many social value metrics are inherently unreliable. Measurements of social return on investment (SROI), for example, often quite arbitrarily estimate costs and paybacks, which dramatically affects the final calculated value. Whilst SROI calculations may help in broad-stroke predictions, they can’t help with finer-grained decisions.

• Finally, measuring social value is difficult due to the problem of time—estimating how much good an action will bring about many years in the future, relative to how much it will cost to implement it now. Much can happen between the start of a social initiative and the eventual delivery date meaning that it can be difficult to determine the best course of action by measurement alone.

So the issue of measurement of these complex social outcomes is by no means a straightforward process.

The case for polycentrism

And yet it seems we are in polycrisis world with a business culture that all too often fetishizes measurement for a set of issues that are inherently hard to measure. This creates a challenge, as stated by World Economic Forum:

“as traditional policy development processes lag behind the rapid pace of technology innovation, citizens increasingly expect the private sector and other non-government entities to take on new responsibilities and develop new approaches to support the diversification and speed of governance”.

They suggest that organisations are in danger of suffering from a structural lag where their internal ‘time signatures’ are out of sync with the external pace of change. But what else can an organisation do? One answer comes from ‘The Bloomington School’, which advances the concept of ‘polycentrism’, reflecting a dissatisfaction with exclusively monocentric ‘top-down’ approaches to governance.

The Bloomington School highlights the ‘human capacity for self-governance’, suggesting there is rarely a single ‘best solution’ to wicked problems, but there is a role that decentralised, individual and community decision-making can have in determining a more cohesive and resilience way forward.

This means that rather than a group of detached analysts presuming what is in citizens’ interests, it is more helpful to engage them to understood how they themselves understand their environment, needs and options, and how they chose to act. In other words, we need to stop assuming that people are not able to reflect and act but that in fact we all have a great deal of capacity for agile problem solving.

Clearly this is much harder to control but also difficult to measure: if responsibility has been devolved identifying what is being done let alone what is measured is challenging.

Polycentrism and trustworthiness

As such, while a polycentric approach seems sensible and reflects many of the points we have made previously about ‘from me to we’, it does require a potentially seismic shift for businesses.  No longer is measurement being used to guide activity in the same way but, in its place, we are using trust as we are conferring people (both inside and outside the organisation) with the capability to enact decisions locally. This suggests a space in which there is an absence of data and measurement – if we were able to measure, then we do not need trust which is there to bridge the unknown. 

A polycentric approach to social value involves deprioritising measurement which, of course, creates anxiety but may in fact have reputational value for brands.  The reason for this is that when we trust people we are not just signalling how we think another will act but also how they should act, and this is critical. Because when we talk about generating trust, what we really want is trust that is ‘well deserved’. As philosopher Onora O’Neill points out, what we are seeking is not more trust but more trustworthiness.

Rhea Karuturi suggests that to answer the question of how to increase trustworthiness, we need to rely on a theory of ‘therapeutic trust’ where the act of being trusted can make a person more trustworthy. A good example is parents trusting their children to carry out certain chores at home— in entrusting the task to them they are teaching them how to become trustworthy as well.

Phillip Pettit captured this in his paper “The Cunning of Trust” suggesting that when we trust another person, we signal that we hold them in esteem, and that they will act to honour that trust. The social contract encourages people who are trusted to behave in a more trustworthy manner because they are “compelled by the force of norms” or by the force of social constraints.

While the act of placing trust in people means they are more likely to be trustworthy, there is also a virtuous advantage for brands who are similarly seen as more trustworthy themselves for this investment.  For example, retailers with generous ‘no questions asked’ returns policy are an example of the way in which trust is placed in the hands of customers to not abuse the policy. Of course, while some abuse in inevitable, we suggest that the majority of people feel the pressure to act in a trustworthy way because of the trust that has been placed in them.

Conclusions

In 2020, governments were forced to make a series of decisions in a short period of time—with limited information— compared with prior crises. As Radical Intimacy, writer Sophie K Rosa pointed out, this era meant that there was little choice but to trust people to self-organise and find solutions to a range of pressing challenges. As we discussed last week, was a huge amount of successful ‘polycentric activity’  included getting to know our neighbours better, grass-roots development of community led food co-ops, collaborative home schooling and the proliferation of WhatsApp groups to co-ordinate delivery of provisions to people isolating and to ask for, or offer, other kinds of support. 

Alongside this, it has long been understood that while metrics have huge value to guide business activity, surely in a complex world we cannot cling onto them in quite the same way.  Indeed the classic book by Jerry Muller (and a great read) ‘The Tyranny of Metrics’.  Muller argues that while metrics can provide valuable information, they often oversimplify complex realities and lead to unintended negative consequences.

Rethinking metrics in the context of brands and their social value activity is not simply a matter of losing something that would otherwise be helpful. Instead, we can argue that it offers us an opportunity to try a different form of approach that has the potential for a much higher return, both for society at large but also for organisations that are willing to take this less trodden path. 

And to drive the much-needed change we are seeking, a polycentric approach is surely an interesting consideration for brand and sustainability strategists.