Why should I give up flying for the environment if almost three billion people in India and China don’t give a damn?

We’ve all heard this line of argumentation. Heck, most of us have gone down that rabbit hole of thought ourselves from time to time. There are many versions of the same line of reasoning and boiled down to its basics, it goes something like this: it does not matter one bit what I do, because there is a myriad of people doing the exact opposite which negates all the effects my actions had. This might refer to our actions against climate change, efforts to keep our neighborhood garbage free or trying to uphold tax laws at every opportunity to not do so.

Economists have a term for this phenomenon: tragedy of the commons. The term originates from a British economist back from 1833 named William Forster Lloyd. In a nutshell, the example he gave was a commonly owned pasture where herders could graze their cattle. The pasture could sustain many herds if the surrounding ranchers all let the pasture regrow its grass periodically. In other words, everybody’s cows could eat the grass in no-man’s land from time to time, but not all day every day. If everyone would stick to this regime, all would be fine, but if someone cheated, the grass would be munched too often, and the land would dry out and everybody would be worse off.

And of course, there’s always some cattle rancher who takes advantage of the situation, gets their cows a bit fatter than everyone else and ruins the pasture. Call them calculating psychopaths, cunning social pariahs, or as we say where I come from, selfish assholes. It’s a common realization that there’s always someone who makes sure we can’t have nice things. This has left us with problems like the overfishing of our seas, the overuse of antibiotics, public bathrooms that are in ungodly condition, and the Holocene mass extinction.

One sobering fact seems to murky the waters here. And that has to do with numbers, or better yet scale. When it comes down to it, you don’t matter. Nothing you will ever do in your life won’t matter. Not even a little bit. Not on a global scale. Heck, not really on a national scale either. Most of your good deeds barely have an impact on even your kids. Your trip to the recycling center won’t matter. Neither your choice to buy a hand-crafted re-usable shopping bag made from recycled Ikea furniture, which will save you from buying at least a dozen plastic grocery bags. To make things worse, your vote doesn’t count for anything either. There have been practically zero elections in the history of our species where a single vote ever changed anything – and Radiolab truly tried to find one!

It is the very essence of egocentrism that gives us the power to influence each other.

There are closer to eight than seven billion people on the planet. You don’t have to dive deep into Google to blow your mind on the scale of human activity to realize how tiny you are and how little impact you have. Just to toss one example in the mix, on average, eighty billion pairs of chopsticks get discarded every year. That’s billion, with a b. But I bet you still have a used pair in your drawer from that one time you got Chinese takeout and felt bad about just throwing them away, don’t you? For scale comparison, let’s say, not throwing those away extended one minute of mother earth’s lifespan. Eighty billion minutes is 152 106 years. The scale here is one minute to 152 106 years.

So, why should I give up flying for the environment if almost three billion people in India and China don’t give a damn? Or do any other environmentally conscious act to save the planet. First, because it seems that the risk of an upcoming environmental catastrophe – a climate emergency – is very high, according to the information we have at this moment. So, we must deal with that – not as an individual but as a species. At least if we want the species to survive. And this is the hard part – thinking as a species, not as a single actor.

Especially in the west, we have a long egocentric worldview and life philosophy. We have a rich history of a so-called dignity culture, where we state that every human being is born with inalienable human rights. Rights that do not have to be earned, as in some honor cultures, but the dignity of the individual is seen as a birthright. The Universal Declaration of Human Rights includes the well-known rights such as freedom from unlawful imprisonment, torture, and execution. But a right that is talked less about, but nevertheless is under the same declaration, is the right to your own name. This is a right to individuality. The right to personhood. This fundamental philosophical principle has arguably given rise great things such as freedom of thought, speech and expression, but has also given us a very individualistic and egocentric mindset. If it’s usually hard to see the tree from the forest, this mindset makes it hard to see ourselves as nothing more than a single tree, and we miss the forest. But in this moment of history, we have to move and take action as a forest, not a tree.

The good news is we are a network, a superorganism and a collective. We are a family, a group of friends, a coven, a football team, a school, a nation, a union of nations and a species. We are arguably the only species we know of capable of higher-conscious thought and abstract experience. Maybe the only species capable of transcendent qualia, hypothetical wonder and deep love. We might be the only thing in the universe capable of pondering its existence. We might be the universe figuring itself out.

Poetry aside, what can we do? Our psyche is tuned for cooperation. We do not operate in isolation. It is exactly our ability to move together that has gotten us so far – our capacity to create culture. Culture is a collection of values, norms and scripts that move all of us. Culture is a feedback loop where we’re both influencing it and influenced by it. Norms create culture. Culture creates group identity. Group identity creates tribes, tribes create nations and nations form global unions. Projecting our values creates manners. Manners create norms. Norms create laws, laws create treaties and treaties create mandates for global actions.

It is the very essence of egocentrism that gives us the power to influence each other. The capacity to make decisions by ourselves gives us the power to create values and to project those values around us. Evolutionary psychologists have argued that the very fact that we have unique features and capabilities to identify ourselves and those around us as individuals has given us the higher capacity to work towards a mutual and complex goal. And that that goal can be altered together if necessary. The very same capacity that makes you able to point fingers at peoples across the oceans is the same capacity you can use to show that we can be and do better.

It’s time to be more of a virtue ethicist or a deontologist. We need values and rules to solve this. Doing the moral math of individual actions versus everyone in India, that is to say, personal consequentialism, only works if you are omniscient. We don’t know how the clockwork of our ecosystem works. We can’t really predict the future with high certainty. The math here is too hard, and we cannot do it alone. I bet you didn’t know that eighty billion minutes were 152 106 years. And I bet you couldn’t even guesstimate it. Me neither. None of us can. But it was computable because many of us working together created math, calculus and relativity. Not one of us figured any of that out by themselves. We created a culture of learning, norms about schooling and built universities as a nation.

So, when someone gives you the headline argument, throws a cigarette butt to the ground or refuses to recycle, they might call it a teleological, consequential or even a utilitarian approach. But we have a better term for that. Being an asshole.

Jori Grym
Doctoral Student

Photo: Pixabay

When start-ups dance with elephants

There are many stories about start-ups. Sometimes they end happily – sometimes not. Obviously, the road to success is all but preset and easily navigated. Rather it takes a great portion of purposeful action, perseverance and passion to succeed. When a start-up introduces technologically advanced solutions that change the rules of the game in an entire industry, the complexity of the mission escalates.

For a few years, I had the opportunity to follow a start-up during such an excursion. The art of navigating the company to a position where the visioned business opportunities could be commercialized proved to be based on three capabilities: keeping track of the terrain, getting appropriate team-mates on board, and securing the position in the emerging business field.

Keeping track of the terrain. The ability to interpret a plethora of signals and translate them into insights about future business opportunities is critical. These insights are key when creating a convincing vision of the shape and guise of the emerging business field. The vision serves as a tool for
a) outlining a roadmap for how to proceed,
b) convincing others of where to head, and
c) not running astray.

The start-up company obviously wants to influence both the direction and the speed of the emerging business landscape. If the speed is too fast – capacity becomes an issue, if it is too slow – the pockets run empty, and if the direction is wrong there may not be any business at all. Sprint orientation in a volatile terrain where the map comes out while running is an illustrative metaphor. Siestas are not recommended – if you lose speed and foresight, your chances may be blown.

Sprint orientation in a volatile terrain where the map comes out while running is an illustrative metaphor.

Onboarding appropriate team-mates. Start-ups are generally characterized by scarce resources. Building ground for the emergence of a new business field is neither a solo project. Thus, networking on a broad scale in order to scout for and mobilize strategically critical resources, is necessary. The incumbents, i.e. the big players in an industry, are often those in possession of relevant resources. Breaking the mental frames of these, moreover in conservative industries, is not an easy exercise. It could even be compared to training dragons. Think of Hiccup and Toothless.

Indeed, you need a lot of patience, perseverance, and psychology to pull it off. Being able to understand how individuals think and what motivates them is a true super-power. The clue is to focus on those who are most reluctant to change, the so-called brakers. If you get them to join you, you might win an entire department. Then, along the journey, it is wise to regularly and critically evaluate the portfolio of team-mates. Should someone be replaced? What new team-mates should we onboard?

Securing your position. Start-ups that are keen to preserve and leverage their position when business begins to roll, need to prepare for survival from the very beginning. Otherwise, you face the risk of being swept away when the dragons start to fly. Mice dancing with elephants indeed need nimble feet. Data is nowadays often described as “the new oil”. The ability to continuously and purposefully harvest relevant and unique data from test runs and pilot projects can be the start-up’s best rescue. When the time is ripe, it is also crucial to elevate the position in the value system by migrating to new segments that add lateral growth to the business portfolio.

This post gives only a glimpse of all the nuances of the capabilities a start-up needs in order to manage the many facets and turns a start-up journey may take. These days the SLUSH event takes place in Helsinki. Thousands of participants convene to begin or accelerate their start-up journey. At this event, start-up wannabes can glean signals, windfunnel-test visions and roadmaps, and jam with possible team-mates. The most important take away, however, are those whiffs and puffs that enable new traces in the mental map of where and how to leverage business opportunities of the future.

Annika Ravald
Associate Professor

Text published in Swedish in Vaasainsider 27.11.2018
Photo: Pixabay

My invasion to Slush 2019

Dear readers, in my previous blog post, I discussed my story with service design and design thinking and how I conducted a part of my MSc. study on the understanding and using of design in different businesses in Slush 2013. After 6 years, I plan to come back to Slush 2019 to conduct a similar research. If you may not know about Slush, it is the biggest start-up event in Nordic countries which focuses on innovative business sectors.

People standing and mingling in a big room in blue lightning.

Not only start-ups but also several corporates present there to showcase their business excellence and to look for business opportunities with start-ups and other stakeholders. Hence, Slush is a great event to take part in because, in such a short period of time, one can see and experience a lot of happenings in contemporary business and meet many key players in the field. I decided to take part in Slush this year for several reasons, and one of them is to meet companies and do interviews with them.

My objectives for this research are to explore what companies are thinking about design (or service design particularly) and to understand how they use it in their business process, operation and strategy. More interesting, I can use the data from this study to reflect on my previous study 6 years ago and see how things have changed or improved.

I want to take this opportunity to go to Slush, which is a big, safe and interesting event to meet and talk with as many businesses as possible.

Why is this sort of study needed and why do I need to do it at Slush? I remember 6 years ago when I entered Aalto MSc. program to study business design, my professor told me that we needed to understand how companies understand and use design because there had not been any studies about it. Until today, there still is no study for it. I have collected 175 articles on service design and none of them looks at how companies really understand and use service design in their business. I want to take this opportunity to go to Slush, which is a big, safe and interesting event to meet and talk with as many businesses as possible to explore that research question. Furthermore, I can use this event as a trial for further studies. For example, follow-up interviews can be appointed for further in-depth interviews with the companies I meet during the event.

On December 2019 I will have a conference trip to NYC and I consider meeting some businesses there and discuss with them about this topic. Learning how business in different territories and backgrounds understand and use design can be a very interesting thing. I am having an open mind, so if you have any suggestions or interests in the topic, I am ready to talk with you.

Dao Phuong
Doctoral Student

Photo: Slush.org

“Innovate or die”

Sometimes attributed to Peter Drucker, “Innovate or die” is a tagline embraced by media, managers and academics alike. But then again, what is innovation? In the simplest form, it boils down to introducing a change (i.e., something new). If you were to take an organisation’s perspective then innovation is a new offering (e.g., a product or a service). Academic research distinguishes between radical and incremental innovation. While the former is an innovation that brings a fundamental change to the market and even to society (i.e., something truly new), the latter is an innovation that brings a smaller, less consequential change (i.e., something new, but still somewhat similar to what we already have and know).

Let’s take the telecommunications market as an example. Fifteen years ago, major players were competing on developing unique-looking mobile phones with all sorts of new features. Remember LG Prada, Motorola Razr or Nokia N-Gage? Each such new phone was an example of incremental innovation. And then Apple introduced the iPhone, which many argue is an example of radical innovation. I for one think that iTunes (the software platform developed years before the iPhone that consumers were familiar with and that served as the application store for the device) was the real radical innovation.

In any case, the iPhone was not the first phone to be connected to the Internet, it was not the first phone with a touchscreen and it was not the first phone to offer applications, but it was the first phone to offer a true, seamless smartphone experience. The change that the iPhone brought to the market was in shifting the focus from the phone’s design and its features to what normal people could do with the software housed within (that is, the applications that went far beyond calling, texting, listening to music or playing games). All the iPhone iterations that came in the next decade are examples of incremental innovation. Yes, they house technology that puts the original iPhone to shame and provide consumers with a better, faster and more fun experience, but the change they brought to the market was not as big as the original iPhone release.

Can you become so exasperated with the change (that you didn’t particularly ask for) that you will quit using the application altogether?

So then “Innovate or die” boils down to, at a minimum, introducing some incremental innovation to stay competitive and in the best-case scenario introducing some radical innovation that will bring some serious competitive advantage. But, let’s be realistic, radical innovation usually implies considerable R&D investment or a combination of entrepreneurial spirit and pure luck! Most organizations will not introduce any radical innovation, and most organisations who will attempt to introduce radical innovation will fail in the process… Hence, for most organizations, introducing incremental innovation (i.e., somewhat new products and services or improved versions of existing products and services) is the key strategy to stay competitive.

But what about the consumers?

So, companies need to innovate to stay competitive and the most common form of innovation is incremental, but what does that mean for consumers? Again, it’s a matter of change, or something new in how consumers use products or services. Let’s take the example of digital service providers. What is incremental innovation when it comes to e.g., a software application? At the end of the day, the developer can change how the application looks like (i.e., its design) and what you can do with it (i.e., its features).

Think about the many times each week your smartphone, or computer asks you to install updates. Most of the times, you don’t notice any difference, so if there’s a change it’s in the background (e.g., the developer is fixing bugs). Every now and then though, an application that you have installed and are using suddenly looks different and all sorts of new things are trying to catch your attention.  Remember, the developers of those applications are on the one side trying to improve your experience with their incremental innovation, while at the same time trying to maintain an edge over their competitors.

But how do you, the consumer, feel? Do you have to make efforts to figure out how to use the new version of the application? Do you feel like the new version is something that you would like to avoid or are you excited to try it out and figure out what is new? Can you become so exasperated with the change (that you didn’t particularly ask for) that you will quit using the application altogether?

Together with my co-authors Dominik Mahr and Gaby Odekerken-Schröder I’ve tried to address these questions in a study that was recently published in the Journal of Business Research. We started from the idea that I have been presenting so far: Incremental innovation introduces some change that is noticed by the consumer and if the consumer wants to continue using the service then they must somehow deal with that change. Then, we drew inspiration from studies in psychology that tell us that when individuals are faced with a change they first try to understand if the change is something threatening or something challenging and then they try to cope with the change.

Our results show that the change introduced by incremental innovation takes away from the consumer experience. So, what are organisations supposed to do when the incremental innovations they introduce are potentially bad for the consumer experience? They can help consumers see the incremental innovation as a potential gain, rather than as a potential loss. It might seem obvious that with each incremental innovation introduced organizations should explain why the change was necessary and how it is meant to improve the customer experience, but how many times does that happen? Another way organizations can help consumers deal with the change is by encouraging them to explore what is new or by giving them the possibility to express their excitement or frustration about the change. The bottom line is that instead of expecting that consumers will deal with the change on their own, our results show that it is key for organisations to help consumers in the process.

Robert Ciuchita
Assistant Professor

Reference
Ciuchita, Robert, Dominik Mahr, and Gaby Odekerken-Schröder. ““Deal with it”: How coping with e-service innovation affects the customer experience.” Journal of Business Research 103 (2019): 130-141. https://www.sciencedirect.com/science/article/pii/S0148296319303492

Photo: Jens Johnsson

Passion for marketing in everyday life

I fell in love with marketing pretty much exactly 6 years ago, when taking my very first marketing course “Principles of Marketing”. I still remember that huge book by Philip Kotler and hours I spent with it, mostly because I was absolutely fascinated by the content, but also because my English was so poor, I had to translate and make sense of all the marketing terms. Now, marketing plays a special role in my life; and in this blog post I would like to share some of the habits I have developed after becoming passionate about marketing.

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  1. I spend a lot of time in grocery stores. No, I do not like grocery shopping that much per se, but I cannot resist looking at all the products on the shelves, their packaging, design, flavor… especially when it comes to product novelties and new brands coming to the market. Already in Finland this takes quite a while, especially as seasons change, and you can only imagine me being abroad.
  2. One of my special skills is knowing who owns what. There are so many brands and so many choices, and as a consumer and as a marketer I want to know who makes the money. This does not only refer to packaged goods, but also to fashion, automotive and even movie industries. It does not take a lot of effort to check information online, and media talking about mergers and acquisitions. I do find it interesting to know brand portfolios of different companies, and changes in them, as this tells a lot about companies themselves as well as changes in consumer behaviour globally and locally. Besides, I despise some of the big companies, so I never want to make a mistake of buying their products or services.
  3. I subscribe to newsletters of brands I buy and admire. Yes, receiving coupons is nice, but what I am more interested in is how companies use different communication strategies, and how such strategies evolve over time. For me, it is a fun exercise to see how practice reflects marketing research and vice versa. This can also be applied to the following habit.
  4. I check Instagram accounts of brands I admire. I do follow some of them, but I find it more interesting to occasionally check Instagram accounts of different brands to see what content they are using and how it fits their brand promise (or my perceptions of it).
  5. I give feedback. No, you are not going to find a review written by me anywhere on the web, I do not do that. BUT I always fill in feedback forms sent by companies online, and I sure let them know when they fail to match my expectations and when they manage to exceed them. So, don’t sell me a chocolate bar with too little hazelnuts, or you will hear from me.

This is all I would like to share for now, but the truth is, I have many more “marketing habits” that some of my friends and family find strange. But all these habits make me… me. Thank you, marketing.

 

Valeriia Chernikova

Doctoral Student

 

Photo: Pexels

 

 

 

“Size matters” – I will be a millionaire, I have the formula

I assume that nobody who has been to Hanken this year has missed that Hanken is celebrating its 110th Anniversary with creativity / ART as the main topic. Art that splits opinions! I will not go into the discussion of what is good or bad, nice or ugly, understandable or completely non-understandable art. No, let us be more serious! Let us talk about money (that should fit a business school blog).

For years I have been wondering how art is priced, how art paintings are valuated. In search for an answer to this, maybe not the world´s most important question, I have done some desk research (googled around), and the answer is there. A very simple formula according to Lori Woodward at Artistsnetwork: a formula with three quantifiable variables.

ʃ(art painting price) = size * labor + material

For pricing an art painting, we should calculate the size of the canvas (length * breadth) and multiply that with 6$ per square inches (labor costs based on earned practice, Artistsnetwork.com) or 0,93€ per square centimetres. Conclusion is that “size matters”, and of course the cost of materials will rise if we use a larger canvas and more paint, which we should take into account when pricing.

Let us calculate. I found an A4 size paper (29,7 * 21,0 cm) in my trash, and I use a pencil I borrow from my colleague (no costs there) and draw a boat. This implies that the price tag on my painting should 580,00€ . Nothing is said about my drawing skills, motive of the painting, painting styles, etc.

For real, this is the formula offered when you read art blogs and try to find support for how to decide on price!

This cannot be the true formula, of course not. But let us till stay with this simple formula. In year 2014 a painting of a size of 65,6 * 45,4 cm was sold for 453 000 000$ (410 776 000€). Let us assume that the material costs are 500€ (maybe way too much). This ends up with a labor cost of 137 425,75€ (= price of a square centimetre), which is far different from the recommended 0,93€. Ok, I am not da Vinci, I cannot paint (definitely not a picture of Jesus), and I am still alive (as we know when artists die, their works tend to increase in price) (picture 1).

Picture 1. Salvator Mundi (Leonardo da Vinci)

peter_blog_19_bild_1.png

Source: https://en.wikipedia.org/wiki/Salvator_Mundi_(Leonardo)

 

Back to Hanken, and the contemporary art paintings, can they be of value?

Now comes the reason why I picked pricing of art as my topic for my autumn 2019 blog. In searching for the most expensive art paintings in the world, in the place number 7 we find art piece “No 6” by Mark Rothko (picture 2) sold in the year 2014 for 186 000 000$ (168 663 000€) (https://www.infoplease.com/top-10-most-expensive-paintings-ever-sold). I can also paint three colours, and you remember the formula – I can make a very big painting too.

 

 

Picture 2. No. 6 (Mark Rothko)

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Source: https://en.wikipedia.org/wiki/No._6_(Violet,_Green_and_Red)

Pricing of art is art in itself. More reading highlights that I (if I decide to become an art painter) should do some research, we may even call it a market analysis. Recommendations I get are:

1) I should give my painting a name

2) I should compare and set price in line with other painters in the same category (type of painting and market). I should not stick out in terms of price

3) I should have consistency in my pricing. If I sell my art in many channels the price should be the same

4) I should not give friends discount (at least not much)

5) If commissioners are used, I should add the extra costs, and

6) if I have many paintings a master Price List should be created (https://www.format.com/magazine/resources/art/how-to-price-your-art.com).

 

With all this knowledge, I cannot hold back (I must give it a try). I have one painting, only to be sold in one channel, and I position it in the same category as Mark Rothko, abstract expressionism, and I give my piece a name “Thesis_redonred#1” (you recognize the number, my point is that if I get it sold there will be a number 2 but no more, limited edition you see) (picture 3). By this, and the price is not negotiable, I ask 27 459 248€ for my 38 x 135 centimetre sized painting (5 352,68€/square centimetres = the same as Mark Rothko).

 

Picture 3. Thesis_redonred#1 (Peter Björk)

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Source: Foto, Hanken / Vasa

You may say that I am out of track for two reasons: 1) my painting is not art, and 2) my price is wrong. First, look at the art at Hanken, I think my painting fits in. Second, the price is wrong. Right, here we have a small catch. There is a difference between what I am asking and what it is sold for, meaning that there must be someone willing to pay the price (why must everything be so complicated?)

In my reading, trying to understand the mechanism of pricing of art, there comes another clear signal. I should namely target my offering to a certain segment, those who purchase art not only for the reason of an investment but for all the branding value it brings to them, be it a single person, an organisation, a company or a country (Savior of the World in picture 1 was bought by Saudi Arabia). This brings me to the conclusion that high-end art business is not at all about the painting (or very little), but about everything else: the painter, the story of the painting, and craziness – let us call it marketing.

 

Peter Björk

Professor

 

New measures for societal impact and media hits are needed

One conventional measure or indicator for the societal impact of research has been the number of media hits that a press release about a new piece of research receives in the media.

While this indicator continues to have relevance in future, too, it recently stroke me that new versions of the indicator are also needed.

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This idea caught me when I observed happenings around our recently published article about the sharing economy and co-ownership of cars in the Journal of Consumer Research: “Sharing-Dominant Logic? Quantifying the Association between Consumer Intelligence and Choice of Social Access Modes” (Green Open Access version).

Namely, we did not publish, in the first place, any press release about the new article. And still, the piece of research got picked up by one of the biggest monthly magazines in Finland Tekniikan Maailma (originally by journalist Pauliina Grym). What is even more interesting, is the cross-media referencing that started taking place after the story was published in Tekniikan Maailma: the largest private TV channel in Finland, MTV3, published a news item based on Tekniikan Maailma’s story, and so did, after that, the largest print newspaper of Finland, Helsingin Sanomat.

So, one could say that a conventional “media hits per press release” indicator would have shown plain zero for this article since no press release was ever published. And even if the original story in Tekniikan Maailma was counted as one media hit on our research article, because it reported directly about our article, the two other media hits – even in bigger mass media channels – might not have gotten counted, because they were “only” referring to the story already published in another media.

In other words, my point is that in order to track the societal impact of our research articles in terms of media hits, new measures need to be developed. The new measures should (1) also identify media hits that reference to our research “organically”, in the absence of any press releases.  Further, the new measures should (2) even identify whether and how other media outlets start to refer to and report about one media outlet’s original story or news item about the research.

And even this is of course not enough. Namely, when the traditional media post their news items on digital platforms and social media, the views of and comments to those postings should also be tracked. For instance, on the digital version of Helsingin Sanomat., the aforementioned story accumulated 140 comments from readers in just one month. About the number of views (without comments) on social media platforms, I have no clue – which just proves my point about the need for new media tracking measures 🙂

 

 

Jaakko Aspara

Professor

 

 

Image: StockSnap, Pixabay

Building the leaders of tomorrow

 

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Last week I was invited as one of the speakers to hold a session on sales and customer experience for a group of talented international participants of the Integration Programme Business Lead, run by Hanken & SSE Executive Education. When I arrived to the classroom, I found a folder with an agenda for the day on my table. The text on the folder said: “We build the leaders of tomorrow for business impact”. It got me thinking which dialogue I, as a researcher, should bring from the academic world into the classroom. Obviously, it had to be relevant for the participants of the program in their future work life and have a business impact.

The Business Lead Programme is an integration programme, providing a fast-track into Finnish working life for refugees and immigrants who have degrees from abroad. First, the students attend four live modules addressing the Finnish and European business landscape and organizational culture, strategic leadership, finance, and a sales and service mindset. Then, the classroom sessions are followed by a 3-month internship where the participants have an opportunity to apply the new knowledge.

As a foreigner myself, I particularly enjoyed being a part of this integration programme. Having experienced what it is like to establish oneself as an expert in a new country, I was happy to get onboard. Together with my CERS colleague, Pia Polsa, we shared CERS’s customer-focused perspective on doing marketing and sales with the students within one of the four live modules.   

During my afternoon session on sales and customer experience, I particularly wanted to share the service logic perspective with the participants on the sales process and sales activities I take in my research. With my presentation, I wanted to acknowledge how important it is for a business to understand the customer and its needs and be customer-oriented in its processes. During the session together with the participants, we had a chance to elaborate on the steps the customer goes through in the buying process and how a business-to-business setting is different from the business-to-consumer setting. We also had an opportunity to discuss the customer journey and different interactions between the company and the customer on this journey.

With these insights in mind, we then discussed the sales process and selling activities and how these can become more customer-oriented. The participants also had an opportunity to apply what we discussed to the business projects they have been working on during the programme. It was great to see how application of customer-oriented approach brought an additional nice touch to the projects.  

Overall, it has been a wonderful experience to be a part of this programme, which contributes to Finnish business and society in such a meaningful way. It was great to share my research perspective with the programme participants as well. I hope that my session, at least on a small scale, has contributed to building the leaders of tomorrow.

 

Anna Abramova

Doctoral Student

Vinyl Records, Craft Beer, and Latent Needs

Emergent and marginal market trends have the potential to teach us something about more general socio-cultural developments which, in turn, may have far-reaching consequences for companies and consumers alike. However, such marginal phenomena are often dismissed as mere flukes not worthy of serious attention. Sometimes such dismissals are, in retrospect, arguably justifiable. In other cases, they turn out to be misjudged. Therefore, surprising developments that challenge conventional wisdom and that seem to contradict our best predictions may very well be worthy of our attention, regardless of their marginality.

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Around 2006 a peculiar trend increasingly got the attention of music lovers and record companies alike. Sales of the already declared dead vinyl record were surprisingly on the rise while sales of CDs, i.e. the reigning physical format for music reproduction, continued to diminish. Since 2006, sales of vinyl records in Finland have increased yearly with around 30%, making it by far the fastest growing physical format for music reproduction (IFPI). This trend has year after year been dismissed as a bubble about to burst. Year after year, however, the sales numbers have contradicted these predictions (IFPI). Record presses are being reopened around the world as the demand for new vinyl is far greater than the present output capacity. Simultaneously, the prices of used vinyl are rising as especially millennials are starting to explore this alternative way of consuming music.

 

The so-called craft beer revolution started in the US and the UK as a reaction to the uninspiring standardization and uniformity of the beer sold to consumers. After decades of centralization and homogenization, independent actors took matters into their own hands and started to commercialize beer recipes that they had been developing in their basements and garages. The craft beer movement was originally an underground movement of sorts, taking on the big players by challenging the prevailing notions of what beer is supposed to taste like as well as what its cultural role and status should be. In 2010 there were less than 40 microbreweries in Finland (Vesalainen, 2017). Today, there are more than 100 of them (Suomen pienpanimot). New beers are made available almost daily, which means that walking into a grocery store these days always feels adventurous as you never know what new types and styles of beer you can find there. It is also kind of confusing, but in a good way.

 

Neither the revival of the vinyl record nor the craft beer revolution was anticipated. The digitalization of music and the convenience and cost-efficiency offered by services like Spotify understandably seemed to provide consumers with everything they need and more: Ubiquitous availability for a low price. The beer industry seems to follow a similar logic, working from the assumption that their best strategy is to produce and market beer that is unchallenging and easily approachable for as many consumers as possible, ergo the extreme standardization.

 

In both cases, the big players are arguably right. Most consumers seem to be, if not happy, then at least content enough to keep on buying their products and services. However, tellingly, the major brewing companies have started to emulate microbreweries by developing a greater array of beer types, while record companies are releasing many of their top artists newest music on vinyl as well as digitally. There is, in other words, market potential in these perhaps no longer so marginal trends. What then, if anything, can one infer from these developments?

 

The German sociologist Max Weber (1864 – 1920) famously developed his theory of rationalization to describe the advance of what he termed formal rationality. Formal rationality involves the rational calculation and optimization of means to ends by following institutionalized rules, regulations and laws. Weber was mainly concerned with the expansion of bureaucratic institutions in modern society and viewed them as taking on an increasingly autonomous and domineering existence. His fear was that as these bureaucratic structures grow in complexity and size, they increasingly come to define the behavioral patterns of everyday life, and thus run the risk of substituting the human ends that they originally were designed to serve with increasingly prolonged chains of means designed to optimize the performance of the bureaucracy. Weber calls this state of unreflective optimization and its occasionally dehumanizing consequences the irrationality of rationality (2002 [1905]).

 

American sociologist Georg Ritzer makes use of Weber’s ideas by arguing that the clearest manifestation of rationalization in present-day society can be found in fast-food restaurants: “It is the fast-food restaurant that today best represents and leads the process of formal rationalization and its basic components—efficiency, predictability, quantification, control through the substitution of nonhuman for human technology, and the ultimate irrationality of formal rationality” (2013, pp. 45-46).

 

The process of rationalization is, however, not restricted to fast-food restaurants. The digitalization of music consumption tick many of the boxes of McDonaldization, such as efficiency, quantification and substitution of nonhuman for human technology. Many consumers who have turned to vinyl have done so because of a feeling of a lack of control and agency when streaming music online. They find themselves cherry-picking songs, often without listening to the end of the song (never mind whole albums), leaving them with a feeling that the design of the services they use causes this type of superficial listening (Schauman, 2019). The homogenization of beer culture leads to similar frustration among many consumers who feel that there is a lack of substance not only with regard to the way mass produced beer tastes but to the broader culture structured around the product as well.

 

In both cases, convenient and cost-efficient solutions seem to come at a price an increasing number of consumers are unwilling to pay, at least not without complementing these with alternative solutions. The growing popularity of so-called craft or artisanal alternatives to mass produced commodities seems to suggest that new modes of consumption that emphasize the importance of a rich and engaging culture into which the individual can plunge are emerging. An understanding of these nascent trends may very well help us discover some latent needs that an exaggerated adherence to formal rationality has made us overlook.

 

Thus, instead of focusing exclusively on the hows of formal rationality, perhaps we should sometimes ask why, that is, pay more attention to what Weber called substantive rationality, which is concerned with questions of the values and purposes that ultimately guide us in everyday life. This could, in turn, entail paying attention to Weber’s colleague Georg Simmel, whose rather enigmatic words, “only man himself is the real object of culture” (1908, pp. 41-42), may help us readjust our focus. Such an endeavor is probably even more challenging than buying beer from a grocery store these days, but perhaps just as, if not more, rewarding.

 

Sebastian Schauman

Doctoral Student

 

 

References

  • IFPI, Organization for the recording industry worldwide. https://www.ifpi.fi/tilastot/
  • Ritzer, G. (2013) The Weberian Theory of Rationalization and the McDonaldization of Contemporary Society, in Illuminating social life: Classical and contemporary theory revisited. Sage Publications.
  • Schauman, S. (2019) The Revival of the Vinyl Record: A practice – theoretical approach. Sociological Discussions. Occasional Papers from the Unit of Sociology at Åbo Akademi University.
  • Simmel, G. (1908) “Vom Vesen der Kultur” Osterreichische Rundschau, 15: 36-42.
  • Suomen pienpanimot = Finnish local breweries. https://www.suomenpienpanimot.fi/
  • Vesalainen, S. (2017). Pori on pienpanimoiden pääkaupunki, Helsingissä lähiolut loppui kesken. YLE uutiset 26.7.2017.
  • Weber, W. (2002 [1905]) The Protestant Ethic and the Spirit of Capitalism. London, Blackwell.

 

Photo by Luana de Marco on Unsplash

 

The Big Question

A recently published report by, among others, researchers at Aalto University and Sitra points to the need for drastic changes in our consumption patterns if we want to meet the 1.5-degree target of the Paris Agreement. The study highlights the magnitude of the required change, calculating a required reduction in greenhouse gas emissions of 86-93% for Finland by 2050.

 

Such a massive reduction can only be achieved by fundamentally changing our consumption patterns. The study identifies a wide range of changes that need to be implemented if we are to reach the target, including shifting from meat and dairy consumption to plant-based diets and minimizing private car use and airplane travel.

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Research has long documented the environmental degradation stemming from our current ways of living. It is also becoming more widely acknowledged that our efforts to mitigate environmental problems to date, focusing on improving the efficiency of production, will not suffice. Calls for changes in the ways we consume are moving from the margins of the discussion to center stage.

 

However, even if we know what change is needed, the perhaps most challenging question is yet to be answered. How are we going to achieve this change? This is the million-dollar question that we need to turn our attention to.

 

Research and policy on sustainable consumption has tended to favor the idea of a green consumer, making ethical decisions of their own volition. Experience has shown that relying on individual consumers to make informed consumption decisions makes little difference. A growing number of researchers are pointing out the need to instead focus on systemic change. A systems perspective recognizes our consumption patterns as intertwined with societal structures, including the political and economic system as well as cultural practices. Change in complex systems cannot be left to individual consumers, but needs to be system wide.

 

Taking a systems perspective reveals the difficulty of managing societal change. Research is needed to address the question of how to manage systemic change towards consumption patterns that are environmentally sustainable. We need to move from studying the present to understanding processes of change. We need theoretical lenses and methodological tools to understand and study sustainability transitions. As researchers, we can contribute with knowledge that supports society in transitioning to ways of living that do not degrade the natural environment.

 

Maria Sandberg

Doctoral Student

 

 

Image by Tero Vesalainen from Pixabay