The Thank You Economy – a development review, part 1/2

I came across Gary Vaynerchuk through the South By Southwest (SXSW) conference and decided to have a look at what an expert on social media and marketing has to say and whether and how it may actually be relevant for international development (synopsis of book; Amazon link). It is a quick and interesting read to catch up with some key developments of social media, get some practical insights from a range of case studies and a more comprehensive picture of the future Thank You Economy. 

The Thank You Economy is about something big, something greater than any single revolutionary platform. It isn't some abstract concept or wacky business strategy—it's real, and every one of us is doing business in it every day, whether we choose to recognize it or not. It's the way we communicate, the way we buy and sell, the way businesses and consumers interact online and offline. The Internet, where the Thank You Economy was born, has given consumers back their voice, and the tremendous power of their opinions via social media means that companies and brands have to compete on a whole different level than they used to (from the official product description)

Before I venture into the ‘development’ part I would like to make a few general comments, but keeping the development theme in mind may already be a good idea.
Although Gary makes some interesting and compelling points about the TYE and its role in the future, I have difficulties seeing the ‘Economy’ part in the near future. For small and medium-sized companies the dialogue with the consumer will be a key component of successful business and this needs an adequate organisational culture to support authentic, critical relationship building with the customer. As much as I appreciate a nice GroupOn discount on my Yoga classes, when I think about banks, mobile phone companies, supermarkets, ISPs, airlines, insurance and utility companies and their bad service which costs me a lot of time and money I wonder how quickly this will change – and these are key companies in organising my life as much as I like a great wine shop or cheese boutique. I think that Gary overestimates the willingness of customers to pay for good service or their willingness to shift to a ‘better’ company. Price still is a key factor and people have become used to bad service – so who wants to pay 30% more for a sandwich and a bit more legroom on a short-haul flight?
The other key issue I would like to highlight is that Gary overestimates the willingness of companies to ‘walk the talk’ and create an open, critical culture where employees are allowed to Twitter and blog about the company and its products. It may take just one court case against a company that offered support in a short Tweet or casual blog comment and the TYE will face serious backlashes. Also, just watching 1-2 episodes of ‘The Office’ reminds me of a world in which there are many ‘Dundler-Mifflins’ out there. Outside a relatively small range of web-focused companies (Gary likes Amazon, Zappo and an innovative dentist from San Francisco) I see more ‘Up in the Air’ than ‘Social Network’ in the future. But Gary is a visionary and I am an academic...

So how does ‘development’ come into the picture? The most striking feature for me was that development really did not come up that often. If you pay into the vision of the TYE you are reminded how little of that spirit is actually in this ever growing ‘industry’ and how many, especially bigger organisations are still stuck in ‘1.0’ mode. Maybe some social enterprises are closer to ‘2.0’ mode, but I will elaborate more on this at the end of my post.

TYE and the power of relationships

Right at the beginning of the book Gary mentions the importance and power of building and maintaining relationships which reminded me a lot of the interesting work on ‘relationships matter’ that some colleagues at IDS have been doing. The relationship agenda together with systems or complexity thinking or qualitative work around mindsets and attitudes is still at the fringe of the current development discourse, even as some NGOs like ActionAid have started to invest in more accountable relationships with stakeholders. But my experience is experience is that this is not yet reflected in the organisational culture of bilateral or multilateral donors, the development equivalent to the big companies I mentioned before. Right now, there is not really an incentive for, say, the UN system or the World Bank to change. I have doubts that the Bank’s blogging policy is translated into learning and change inside the organisation.

TYE and fundraising

One of the big challenges in development is that most organisations do not engage directly with ‘customers’, but those who are will have to think more carefully about the TYE. If your organisations does fundraising you will meet increasingly educated donors that most likely demand more than a newsletter and your annual report. T-Shirt-Gate may have involved mostly aid bloggers and critical non-donors, but the demands for transparency and admitting failure will increase. ‘I wonder why so many business leaders have such a hard time being real’ Gary writes (p.75) and that rings very true for NGO leaders as well.

Social entrepreneurs – TYE in action?

Gary writes convincingly about attracting and mentoring talent and that even losing ambitious staff may reflect well on the company as a creative launch pad for ambitious people. But the development industry is not exactly Silicon Valley and give the huge talent pool, many (young) people are so glad when they finally found a job that rather than challenging the organisation from within with all their critical knowledge from university courses to internships they easily go silent. Imagine a critical JPO of an international organisation starting a blog. He may get his 15 minutes of Internet fame, but then the organisation would ask him to delete the blog or let her/him go. But is there not a ‘parallel economy’ on the horizon that may have an impact on development, talent and how organisations work? Scott Gilmore’s job advertisements on Twitter are not just a gimmick, but a good example of a new type of organisation that are neither just NGOs nor simply private sector, but combine approaches and mindsets from both. Social entrepreneurs are entering the development industry and even as I agree with Elmira Bayrasli that social start-ups are for technology and not transformation, they are introducing a new understanding of networking and relationship building. And they attract new talent. But as Elmira rightly points out '“social start-ups” still belong to the technology geeks, rather than the civic-minded innovators working in the developing world. That is troublesome. Moreover, it indicates the continued isolation social enterprises will continue to operate in'.

My feeling is that these new organisations will not become a competition for established organisations that meet in OECD-DAC sub-committees in fancy places outside of Paris, but that those organisations will have to do better to defend receiving taxpayers money. The apparent absence of a communications policy for blogs at the UN may look a bit techno-phobe today, but missing out on innovative ideas and debates may not be an option, especially if social entrepreneurs prove successful under the agreed terms of development success.

And what about the poor?

One chapter of TYE starts with the line ‘If you live in New York...’ (p.84) and I think that is indicative of some of the TYE and development debates. Most of us do not live in New York and outside certain innovative bubbles the world seems to adapt slower to change. It’s not exactly that new foundations and social entrepreneurs are kicking out embassies and established international development players in, say, Geneva. My post has focussed a lot on the ‘supply side’ of aid, but a key questions is, whether the TYE may become part of the relationships between donors, recipients and all the other stakeholders in developing countries. Some social entrepreneurs are very closely involved with local communities, but it is definitely too early to talk about a cultural shift. In the second part of this post I will introduce a few more examples that use principles of the TYE, but one of the emerging challenges is that those who work in the TYE of development actually need to make some form of income and right now it is often a combination of receiving a salary 1.0 and working 2.0.

 
Conclusion

The concept of TYE is an interesting starting point to think about social media and its increasing role in our lives/economy. Gary compares the TYE to the old days of local stores, reputation management and interacting with customers. Many organisations in development never had those ‘good old days’ and despite all the criticism, persistent discourses and problems of organisational learning I do not want to imagine going back in time to the World Bank of the 1980s, for example. And I also do not believe that the near future will be like today only with more social media, more Twitter or more this or that. The quality of interactions will change. The Centre for Global Development was announcing an event with Esther Duflo a ‘professor of poverty alleviation and development economics at the Massachusetts Institute of Technology and [...] best known for her work applying randomized controlled trials and other forms of impact evaluation in field experiments to identify which development interventions actually work’ (my emphasis). In the TYE of the future, the word ‘actually’ will be the really interesting point of engagement, contestation and debates – at least that’s what I hope...
As always, comments are highly appreciated and the second part of this post will follow on more concerete examples from the development social media universe next week.