Conversation: The Future of Social Enterprise

Harvard Business School professors V. Kasturi Rangan and Susan McDonald are hosting a conversation based on their recent paper, The Future of Social Enterprise. Click here to read a summary of their findings and join in the conversation.

The questions posed center around social sector evolution and measuring ROI and social impact – the conversation started today and already has some interesting posts.  These web forum conversations generally only last a week or two, so check it out now in order to participate!

Better fuel efficiency through better labels – gpm vs mpg

We all know how important language is in persuading people to think certain ways, and that certain words and phrases in common use are politicized rhetoric (think pro-life and pro-choice).  However, I never thought of “miles per gallon” as one of those potentially misleading phrases.  Until I read this in a Fuqua Alumni email:

For example, most people ranked an improvement from 34 to 50 mpg as saving more gas over 10,000 miles than an improvement from 18 to 28 mpg, even though the latter saves twice as much gas. (Going from 34 to 50 mpg saves 94 gallons; but from 18 to 28 mpg saves 198 gallons).

These mistaken impressions were corrected, however, when participants were presented with fuel efficiency expressed in gallons used per 100 miles rather than mpg. Viewed this way, 18 mpg becomes 5.5 gallons per 100 miles, and 28 mpg is 3.6 gallons per 100 miles — an $8 difference today.

“The reality that few people appreciate is that improving fuel efficiency from 10 to 20 mpg is actually a more significant savings than improving from 25 to 50 mpg for the same distance of driving,” Larrick said. (See table.)

See the full article here, including a video link.

Going Negative with Green Messaging

Struggling for years with a decreasing market share and tumbling stock price, Nortel is going negative with a campaign against Cisco.  This Wall Street Journal article details their PR blitz utilizing bloggers, YouTube, anti-Cisco websites, and trade show demonstrations.  The message?  Use Nortel to avoid “the Cisco energy tax.”

Nortel is countering with the argument that Cisco’s technology, as successful as it has been in the marketplace, is an energy hog. In its ads, Nortel claims that Cisco’s data networks “are costing you 100% too much.” At trade shows, Nortel staff attach wattage meters to comparable Nortel and Cisco gear in an effort to show that Nortel’s gear is much more energy-efficient. The company posted a film of the demo on YouTube.

Energy prices are finally rising to a point where being energy-efficient is not just something to make a consumer feel good, but something that affects purchasing decisions by price-sensitive customers.  That Nortel is taking this message to large corporate customers is evidence that at least some people in corporate purchasing departments are concerned with cutting costs by conserving energy.

In a previous post, I talked about the strategy of going negative with marketing, and why it’s rarely done.  This is one of those cases where a very small company with much to gain and little to lose takes on the market leader with a campaign aimed at gaining some awareness and hoping to steal just a bit of the leader’s market share.  Or, as pointed out in the WSJ article, survive and keep their current customers as their competition makes persuasive presentations to switch.  It’s not unusual for a smaller company to paint the larger one as evil, and it’s not that unusual to use an environmental rationale to make that argument.  What might be unusual is that with the price of energy rising so quickly, customers might listen.

And frankly, Cisco’s response that “there are no industry standards to measure “green”; and Cisco’s gear meets the environmental requirements of the product-testing company Miercom” falls a bit flat with me.  Not a counter-argument about green manufacturing or building initiatives, but a lack of industry standards? No pledge for improved performance or details of why the additional energy usage creates a superior product?  This lack of rebuttal leaves me thinking Cisco either isn’t taking Nortel seriously or isn’t taking energy efficiency seriously –  either case may not be a big mistake now, but could be a huge mistake in the future.