Change Is Now

INTELLIGENT DIALOGUE:

CHANGE IS NOW

WINTER 2008/2009

Many Minds. Singular Results.

Cover photo: Creative Commons/pdam2

Many Minds. Singular Results.

DECEMBER 10, 2008—For years now, people have been reveling in the incredible pace of our hyperconnected world: Fickle consumers switched allegiances; wave upon wave of innovative technologies hit the market; companies went from zero to superstar at record speed. But in hindsight, that pace was a crawl compared with what we are suddenly facing. Big changes now occur in the space of hours or days, not weeks or months. Rises and falls come in double-digit percentages, not single. Loans and losses are spoken of in billions rather than millions. We can’t and shouldn’t pretend that these are not worrying times for governments, businesses, customers—and marketers. However, they’re times that allow Porter Novelli to play to our strengths, and to help clients find theirs. We work hard to stand by our core proposition of Intelligent Influence, and to deliver it consistently to our clients. Intelligence is not only back in style, it’s also in demand. Right now, intelligence means the ability to spot trends, track pattern shifts and determine how they affect channels of influence. Trends are the coherent patterns we can see forming in large-scale, complex interactions. Identifying relevant trends is vital to making sense of what people are doing and why—and how we can influence them. Tracking trends over time enables us to understand their momentum and forecast their staying power and their reach—and how much they will affect our activities. Developing an intuitive awareness of the currents that shape behavior helps Porter Novelli deliver on our Intelligent Influence promise. The basis for Intelligent Influence is ongoing dialogue. Our goal with the Intelligent Dialogue series is to provide perspective and stimulate conversation. The Winter 2008/2009 edition, “Change Is Now,” identifies the 10 key trends for 2009 we will be factoring into our work as we help clients face their individual marketing communications challenges. At Porter Novelli, we believe ours is a learning culture. We challenge assumptions and cultivate creative questions, and we invite you to join the dialogue by checking out our blog, PNIntelligentDialogue.com. It’s your forum for discussing the issues raised in “Change Is Now,” and for proposing your own questions. This is an opportunity for individuals and organizations to demonstrate thought leadership on issues that affect all of us. —MARIAN SALZMAN, CHIEF MARKETING OFFICER, PORTER NOVELLI

Many Minds. Singular Results.

INTELLIGENT DIALOGUE: CHANGE IS NOW

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INTRODUCTION

WE’RE LOOKING AHEAD

to a new year that no one expects will be easy. Optimism is the message people want to hear; change is the one thing we can count on, for better or for worse. And the yearning for change isn’t some vague, abstract mantra; it’s born out of crisis. We have to change for the better—personally, professionally, globally. But how far are we willing to go? The global economic crisis is triggering a wave of soul-searching that will spur many powerful people to action—hopefully concerted action. The coming year will be a time when what should happen will exert far more influence than usual on what actually does happen. At Porter Novelli, we understand that the world is complex and ever changing. 2008 has been unlike anything before it, and 2009 will again be unprecedented. Porter Novelli’s proprietary methods, utilized across our entire global network, help to pick up threads of constantly shifting conversations that are relevant to our clients’ objectives. We work hard to capture and influence those conversations in ways that will have the biggest, most beneficial impact. We call this Intelligent Influence. We believe that dialogue eliminates the need for assumptions. One of the tools we utilize in order to jump-start the conversation is our Intelligent Dialogue series, in which we examine trends, raise questions, encourage critical thinking and provoke debate. In this issue, “Change Is Now,” we ask Big Questions about the shape of things to come:

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Will lifestyles, needs and expectations change in the wake of the economic crisis? What will be the chief drivers of consumption?

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Is “change” more than a buzzword? How are attitudes, behaviors and relationships changing, especially generational and gender dynamics?

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In an age of less-is-more, how radical are we willing to get with change? What will our collective mood be?

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In the thrifty, post-crash, always-tuned-in world, where and how will we find personal refuge?

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Now that we have experienced a systemic failure firsthand, how will we address the looming health care crisis? At Porter Novelli, we genuinely get to know people across the world, and knowing people allows us to shape their changing lives and lifestyle choices. We are connected to people, whoever and wherever they are. We think about their attitudes and beliefs, and work hard to alter their behaviors. Why? Because we are committed to Intelligent Influence on behalf of the brands and clients we steward.

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Many Minds. Singular Results.

In the two decades since the publication of “Liar’s Poker,” I had been waiting for the end of Wall Street. The outrageous bonuses, the slender returns to shareholders, the never-ending scandals, the bursting of the Internet bubble, the crisis following the collapse of Long-Term Capital Management: Over and over again, the big Wall Street investment banks would be, in some narrow way, discredited. Yet they just kept on growing, along with the sums of money that they doled out to 26-year-olds to perform tasks of no obvious social utility. The rebellion by American youth against the money culture never happened. Why bother to overturn your parents’ world when you can buy it, slice it up into tranches and sell off the pieces? At some point, I gave up waiting for the end. There was no scandal or reversal, I assumed, that could sink the system. Then came Meredith Whitney with news. Whitney was an obscure analyst of financial firms for Oppenheimer Securities who, on October 31, 2007, ceased to be obscure. On that day, she predicted that Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust. It’s never entirely clear on any given day what causes what in the stock market, but it was pretty obvious that on October 31, Meredith Whitney caused the market in financial stocks to crash. By the end of the trading day, a woman whom basically no one had ever heard of had shaved $369 billion off the value of financial firms in the market. Four days later, Citigroup CEO Chuck Prince resigned. In January, Citigroup slashed its dividend. —“The End,” by Michael Lewis, Portfolio, December 2008

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INTELLIGENT DIALOGUE: CHANGE IS NOW

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BIG QUESTION

1

Will lifestyles, needs and expectations change

in the wake of the economic crisis? What will be the chief drivers of consumption?

> A RETURN TO

VALUE AND VALUES

Who knows how much anything is worth now? Just a few months ago, crude oil fetched almost $150 a barrel; now in early December it’s down to $44. As house prices and stock prices fall all around the world, and businesses offer massive discounts on everything from designer clothes and HDTVs to family meals and vacations, how do we know a good deal when we see it? “Value” is the worth or importance a buyer places on what he or she is paying for. In just a few months, the economic crisis has overturned our boom notions of

the concept. During those prosperous times, consumers measured value by how much they got for the price—bigger, faster, brighter, more powerful, more features, more convenience, more choice, more prestige. It was a time of supersize expectations—although ironically, the more consumers got for their money, the more demanding they became. For consumers now, value no longer means “as much as possible.” The greedy rise of “more” has hit a ceiling. In this anxious, uncertain environment, real value means “just enough to satisfy at a good price.” It means meeting needs and having a sense of money well spent, not wasted. Listen out for more vocal consumers: “I’m not

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paying for all those extra features, I just need the basics.” And now that financial uncertainty abounds, entitlement is out the window, and change is on the way, what sort of values are we living by, and how do we expect our purchases to measure up? (page 9)

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Many Minds. Singular Results.

“Ladies, we know J. Crew. You can get some good stuff online!” —First Lady–to-be Michelle Obama, appearing October 27 on the “Tonight Show With Jay Leno” wearing a J. Crew outfit that cost less than $450

Today’s philanthrocapitalists see a world full of big problems that they, and perhaps only they, can and must put right. Surely, they say, we can save the lives of millions of children who die each year in poor countries from poverty or diseases that have been eradicated in the rich world. And back home in the United States or Europe, it is we who must find ways to make our education systems work for every child, instead of failing so many students. And if these children are to have a decent life when they grow older, we must find a solution to climate change and the underlying causes of terrorism. And so on. ... Philanthrocapitalists are “hyperagents” who have the capacity to do some essential things far better than anyone else. They do not face elections every few years, like politicians, or suffer the tyranny of shareholder demands for ever-increasing quarterly profits, like CEOs of most public companies. Nor do they have to devote vast amounts of time and resources to raising money, like most heads of NGOs. That frees them to think long-term, to go against conventional wisdom, to take up ideas too risky for government, to deploy substantial resources quickly when the situation demands it—above all, to try something new. The big question is, will they be able to achieve their potential? —”Philanthrocapitalism: How the Rich Can Save the World” (Bloomsbury Press), by Matthew Bishop and Michael Green

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INTELLIGENT DIALOGUE: CHANGE IS NOW

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I hate to tell you Boomers, but putting a yellow ribbon on the back of your $50,000 SUV is not sacrifice. Our claim to fame is living way beyond our means for the last three decades, to the point where we have virtually bankrupted our capitalist system. Baby Boomers have been occupying the White House for the last 16 years. The majority of Congress is Baby Boomers. The CEOs and top executives of Wall Street firms are Baby Boomers. —“The Shallowest Generation,” by James Quinn, The Big Picture, November 15, 2008

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Until the economic crisis, having more, doing more and being more were dominant values. Now, as people scale back the greed and feel empowered by new leadership, watch for consensus building around values such as stability, sustainability, cooperation and peace of mind. Consumers will be less about quantity of product and much more about the quality of experience a brand delivers and the ethics the brand lives. Parents will be more tempted to buy memorable quality experiences for their kids rather than cheap impulse satisfiers. And buyers are looking to actively take part in change via their purchases. A Duke University study of 1,000 online consumers this year found they spent almost twice as long reading cause-related ads than generic ads. Says lead researcher Gavan Fitzsimons, “One thing we know for sure, consumers are paying more attention to cause messages, and as a result, are more likely to purchase.”

temporary slowdown or the start of a longterm change in consumer behavior?

> LOOKING BEYOND

President-elect Barack Obama sees longevity in the shift. He told Time’s Joe Klein in October, "The engine of economic growth for the past 20 years is not going to be there for the next 20. That was consumer spending. Basically, we turbocharged this economy based on cheap credit.” Now cheap credit has dried up and is unlikely to flow again soon. That’s not all. Relying on cheap raw materials such as oil, water, metals, minerals and food has put a huge strain on the environment. It seems that the world can’t afford— economically or environmentally—to rely on old-style consumer spending for another generation of growth.

What will drive business as consumers put on the brakes? All over the world retailers are slashing prices to tempt buyers, but sales are still weak. The more doubts shoppers have about cash flow, the more second thoughts they have about buying. Is this a

But don’t expect a wartime austerity mentality. In a recession and beyond, people still have to buy food and furniture, clothes and cars, appliances and personal care products—but if they are no longer the growth drivers, what will take their place? Said Obama, “Finding the new driver of

CONSUMPTION

Many Minds. Singular Results.

our economy is going to be critical. There is no better potential driver that pervades all aspects of our economy than a new energy economy.” Expect a significant shift of resources away from consumer-focused industries and toward future-critical industries that are working to address major long-term needs such as clean, renewable energy, energy efficiency and water management. With governments increasingly looking to foster such industries, they’ll become sexier career choices for the types of graduates and professionals who were previously drawn to finance, banking and IT start-ups. As businesses are forced to make cutbacks, they’ll have to make decisions about how (or whether) to carry on with high-dollar corporate-citizenship commitments made prior to the crisis. Economist business editor Matthew Bishop recently cited Coca-Cola’s investments in water projects for developing countries as an example. How will reputation and responsibility factor into shortterm and long-term strategy now, when cash is scarce but values are key?

INTELLIGENT DIALOGUE: CHANGE IS NOW

9

BIG QUESTION

2

Is “change”more than a buzzword? How are attitudes, behaviors and

relationships changing—especially generational and gender dynamics?

> GENERATIONAL POWER SHIFT

The election of Barack Obama as President of the United States represents more than one first for a nation intent upon change. Not only will Obama be the first African-American to hold the country’s highest office; he’ll also be the first U.S. president from the Cusper generation. Obama’s move to the White House signifies a shift in generational power and leadership taking place in

government and business. As Baby Boomers inch closer toward retirement (the eldest will turn 63 in 2009), Cuspers (born 1955 to 1964) are beginning to take the reins, bringing their own life experiences and mind-sets to the table. Cuspers were once considered Late Boomers—lumped in with the Baby Boomers yet dismissed as late to the party, too young to have partaken in formative events such as the Civil Rights movement,

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the Summer of Love, the peace movement. Not until recently were they even recognized as a distinct generation in their own right. For some they are Generation Jones, a moniker coined by sociologist Jonathan Pontell. For others, they are Tweeners or Cuspers, because they straddle the divide between Boomers and Generation X. Cuspers have an instinctive grasp of the Boomer mind-set, because for much of

Many Minds. Singular Results.

their lives, they were classified right along with them. But they’re more adept at tuning in to the viewpoints and technologies of younger generations. Newsweek columnist Jonathan Alter, a Cusper himself, noted that Cuspers have typically been swing voters. The generational shift doesn’t necessarily mean Cuspers will take over the commanding heights of power everywhere. But it will see them increasingly setting the style and tone in politics and business. The process will unfold as Barack Obama and Cuspers in his cabinet (Treasury Secretary Timothy Geithner, born 1961; Homeland Security chief Janet Napolitano, born 1957; U.N. Ambassador Susan Rice, born 1964) add their clout to prominent Cusper leaders such as French President Nicolas Sarkozy (born 1955), rock-star activist Bono (born 1960) and Caroline Kennedy (born 1957), the heiress apparent to the Kennedy family leadership dynasty. How will marketers engage with the Cusper-driven mind-sets through the economic crisis and beyond?

> REEVALUATING THE

ROLE OF THE SEXES

With unemployment rising, cash tighter and uncertainty all around, many men will undoubtedly find themselves feeling powerless, with time on their hands and at the mercy of events beyond their control. They’ll find a renewed sense of purpose and self-respect in rugged, masculine activities, whether with a toolbox around the house or in back-to-nature activities outdoors. Gender equality is now so firmly established that men can enjoy traditionally masculine activities, and women can enjoy feminine pastimes, without worrying about gender stereotyping and political correctness.

The growing appeal of rough and rugged is behind the success of the deliberately macho ’70s-flashback cop show “Life on Mars.” The appetite for untamed entertainment is fed by the likes of extreme adventurer Bruce Parry, motorbike adventurer Charley Boorman and TV producer Thom Beers of Original Productions (makers of TV series “Deadliest Catch,” “Ice Road Truckers,” “Ax Men” and “America’s Toughest Jobs”).

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In the super-earnest, cash-strapped America of today, you can no longer define yourself by a flashy purse or the number of Louboutin porno pumps in your closet. Ding-dong, the Sex and the City female archetype is melting! That post-feminist woman, the gal who thought drinking Cosmos and buying Blahniks made her an empowered and contributing member of society, is now lying in the fetal position in her closet, clutching fistfuls of credit card bills and cringing with embarrassment at her previous excesses. In order to stay relevant in this brave new world, you must reinvent yourself and develop new interests that take you beyond knowing how to spell and pronounce the words ‘Balenciaga’ and ‘Lanvin.’ It's time for change! Obama aside, you owe it to the sisters of yore to become a more substantive chick. The suffragettes and hairy-legged gals of the ’70s feminist movement did not throw themselves on the ramparts so that you could live your life like one of those blond dingbat shopaholics on The Hills. Regarding shopping: Chances are you no longer have the shekels to splurge the way you once did. Even if you have the cash, your consumer confidence has taken a nosedive, and you are now, horror of horrors, shopping in your closet. Deep is the new superficial! —“Does Obama Era Mean No More Blahniks?” by Simon Doonan, New York Observer, December 2, 2008

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and outperforming men in universities. When women get a fair shot at education and employment, they are generally able to pay their own way in life and function perfectly well as Singletons, pairing up (or not) in their own time. It’s no accident that microfinance initiatives in developing countries have focused almost exclusively on women, with great success.

It’s barely 20 years since men and women last went through a financial crisis—in the late 1980s and early 1990s— but gender relationships have changed a lot since then. Back then mostly women (read: secretaries) used keyboards; there was no Internet. White-collar men used pen and paper, and blue-collar men worked with their hands. Now computers dominate the lives of every gender, race and age group, and the workplace for the most part exists without gender barriers. Today in the United States and many other countries, women are outnumbering

Many Minds. Singular Results.

The Female Economy is going to be a major factor in getting the world back on its feet. In a 16-country survey of almost 8,000 women (single, married, etc.) commissioned by Omnicom’s G23 consultancy, 57 percent agreed strongly that professionally, women can be as successful as men, and another 24 percent agreed somewhat; 34 percent rated financial independence as absolutely essential in their life and 42 percent rated it extremely important.

dual-parent households women are more likely than men to bear the burden of housekeeping and caretaking. Women tend to deal with the budgeting and buying, and survey results consistently show women feeling more apprehensive about the economy than men. However, as the crisis bottoms out and things begin to stabilize, many women will be better equipped than ever to work their way out of it.

The economic crisis will inevitably interrupt the progress of women, especially those carrying the load as the head of a single-parent household. And despite all the progress in gender equality, even in

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“Men don’t generally deal as well with unemployment as women. A lot of anger comes with redundancy and men tend not to talk through their emotions as women do. Traditionally, the man provides, and for a man to lose his job, it’s not just about money, it’s loss of status, which can be a huge knock to his confidence.” —Steve Miller, business coach, quoted in “The Credit Crunch Hits Relationships and Marriages,” by Becky Howard, The Times (U.K.), December 6, 2008

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Many Minds. Singular Results.

BIG QUESTION

3

In an age of less-is-more, how radical

are we willing to get with change? What will our collective mood be?

> THE ULTIMATE REBOOT

Anybody with money or a job or a business at stake has probably wondered whether “the system” is truly broken, whether it can be fixed and who’s going to fix it. Can brands and businesses do anything, or is it all up to governments, regulators and international organizations? The economic crisis has made everyone acutely aware of just how interconnected global systems are, and not just the financial ones. In the past, major economic crises (the Wall Street Crash of 1929, the

Many Minds. Singular Results.

Great Depression) increased people’s appetite for change and their willingness to try something different in order to solve problems. Will the same apply now, in a much more complex world where we are constantly deluged with information, and we have much more context for forming our own opinions? A “fundamental reboot” of the basic systems that drive the world’s economies and societies was the call from 700 experts discussing 68 global challenges at the World Economic Forum’s recent gathering in Dubai. They debated not just the

economic crisis but also the environment, development, energy, mining and mobility. The term “reboot” conjures an image familiar to anyone who has faced a computer system crash. It implies starting the system fresh, and figuring out what caused the crash in the first place. Critics argue that rather than getting a reboot or even repairs, the systems should be replaced. Either way, there is agreement that we need a radical change. It’s no coincidence that “change” was a core theme of Barack Obama’s

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(page 16)

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presidential campaign. And once Obama is sworn in January 20, the Reboot dynamic will swing into action. Most of the global players will be in place and can start making decisions that will aim to reshape the country. Only time will tell whether the decisions of individual countries or even groups of countries can reboot the world’s systems, let alone replace them. So anything and everything is up for questioning, as individuals, communities, industries and governments work to figure out ways to put things back together in a more robust and sustainable way. With so many businesses and brands hunkering down to make it through the economic winter, which ones have the desire and the resources to play a part in rebooting the world’s systems? Could contributing to the Reboot become an option for corporate social responsibility? Big oil companies such as Shell and BP may ironically turn out to be among the best placed to fix the carbon-heavy energy systems of the world by developing carbon-light alternatives.

> DEVELOPING EARLY WARNING SYSTEMS

For a while people were asking, Why didn’t anyone see this economic crisis coming? Now it turns out there were plenty of warnings. In retrospect we can see there were warnings about other recent disasters as well—9/11, Hurricane Katrina and Mumbai. The warnings came, but people were not properly prepared to receive them or act on them. It’s clearly time to get comprehensive early warning systems working more effectively. The trouble is there’s no shortage of doomsday warnings out there, from the fantasy world of sci-fi to the pragmatic world of science. It’s very hard even for experts to agree on which threats to take seriously and which risks are so remote they can be ignored. But now that we are experiencing such distress on a global level, people are going to increase their expectations of leadership.

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Might pop culture have a role to play in spotting new developments? Movie and TV writers (“The Shield,” “The Wire”) are typically critical thinkers who research their subjects and play out possibilities no less plausibly than professional scenario analysts. Every season of the hit TV show “24” has focused on a complex evasion strategy for terror threats from viruses to assassination plots to nuclear weapons. Whether or not authorities mine pop culture resources, there’s no doubt that technology has a crucial role to play in early warnings. We’ve seen downsides of technology—how the ease and speed of communications can generate volatile, reactive behaviors in the markets, in leadership and among the general public. However, with the right systems in the right hands, technology can also be harnessed to spot emerging threats early enough to head them off or at least prepare for the consequences. Security authorities listen for spikes in (page 19)

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“2008 is the precursor to a perfect storm like we’ve never seen before. We have a problem deeper and more fundamental than the financial crisis. Our missteps could be irreversible. This is not a fringe discussion. ... We need a fundamental reboot of the system.” —Josette Sheeran, executive director of the UN World Food Program Oil prices could slump to just $25 a barrel next year, as much of the world sinks into recession and demand falls, according to the latest predictions from Merrill Lynch. The U.S. investment bank thinks prices will decline well into next year before recovering in the second half of 2009. The news came as the International Energy Agency cut its forecast for world oil demand in the next five years. Oil demand is expected to grow by just 220,000 barrels a day next year, said the agency, which advises 28 industrialized countries. The Paris-based agency had previously predicted 350,000 barrels a day. The IEA also expects new investment in oil refineries to boost crude distillation capacity in the next five years at a faster pace than growth in demand. —“China Slowdown Could See Oil at $25 a Barrel, Bank Predicts,” by Julia Kollewe, The Guardian (U.K.), December 5, 2008

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“The Queen asked me, ‘If these things were so large, how come everyone missed them?’ I answered: ‘At every stage, someone was relying on somebody else, and everyone thought they were doing the right thing.’” —Professor Luis Garicano, director of research for the London School of Economics management department, on his talk with Britain’s Queen Elizabeth about the origins and effects of the credit crisis in November

“It did open up minds and hearts a little bit to the notion that if the right man came along … a black man could be president of the United States. I think we have a similar approach to who and what we believe the president is.” —Actor Dennis Haysbert in an interview with TV Guide, on whether his “24” character, African-American President David Palmer, paved the way in some part for President-elect Barack Obama

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communication that may foretell a breach or attack. Global health authorities pool their observations looking for repeated incidences of viruses. On a more everyday level, Google Flu Trends tracks increases in flu-related online searches, which could indicate an imminent outbreak. In the spirit of the Reboot, if used wisely and fairly, the same technologies that have driven Global Panic have a good chance of providing more effective early warnings.

> A HEARTLAND HOME BASE

In barely a year, the Second City has become the focus of intense global interest, largely thanks to Chicago resident Barack Obama. Deeply rooted in the heart of America, Chicago is a microcosm of what’s bubbling to the surface across the nation right now. And in the weeks leading up to Obama’s inauguration January 20, Chicago has become an essential destination for the powerful and influential seeking time with the President-elect. With its combination of pragmatic Midwestern values and multi-ethnic, big-city

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vibrancy, Chicago is setting the tone for the rest of the country. Like any major metropolitan city, Chicago has dealt with its fair share of challenges and scandal. It’s now grappling with corruption charges in the governor’s office for the second time in a row. At press time, laid-off union factory workers were staging a protest over lack of warning and pay after a sudden shutdown. The company blamed the woes on its creditor, Bank of America—a recent recipient of $15 billion in federal bailout funds— further infuriating the union. And the Tribune Company, owner of the city’s largest newspaper, the Chicago Tribune, had filed for bankruptcy. But the yin to the highpressure yang of the city is its people. Porter Novelli surveys show Chicagoans are more active than the general U.S. population in social causes such as health research, HIV/AIDS, the environment, people with disabilities and public safety; their belief in self-organizing initiatives is especially strong. And the formative influence of Chicago on Obama has become part of his success story. When Obama and senior Illinois politicians and advisors head to Washington, D.C., they’ll take with them their Midwestern, nononsense, can-do perspective.

According to Porter Novelli ConsumerStyles, a comprehensive survey of American attitudes, Illinoisans and Chicagoans define themselves as pragmatic, creative, competitive and familyoriented. Compared with the general population, more Chicagoans (64% vs. 57%) are concerned about the legacy they are leaving for their children. 55% of Chicagoans agree “I can take actions that will help reduce global warming” vs. 46% of New Yorkers and 46% of the overall U.S. population. As the stock of Chicago rises, watch for prominent people to strengthen their ties with the city. Who knew that Hillary Rodham Clinton was born in Chicago and raised in the nearby suburb of Park Ridge? Or that Oprah Winfrey has lived there since 1983? Now the city can add the 44th U.S. President to a roll call that includes legions of famous Americans: sportsmen (Michael Jordan), actors (Bill Murray, John Cusack), musicians (Kanye West, Buddy Guy) and authors (Saul Bellow, Scott Turow). And as the world decides that Chicago indeed holds a certain cachet of its own, we’ll see a surge of support for the city’s bid to host the 2016 Olympic Games.

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BIG QUESTION

4

In the thrifty, post-crash, always-tuned-in world, where and how will we find personal refuge?

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> THE TRUE THIRD PLACE

Many dimensions of our lives are total opposites: workplace versus home, business versus pleasure, real versus imaginary, inside versus outside. But now we’re creating a new space that stands in the middle: a unique, adaptable Third Place that each of us tailors using the rich mix of multimedia available. The Third Place phenomenon is not new in itself—the term has long been used to denote the place where people retreat that is neither home nor work. And people have been using media as a Third Place for a long time, whether engrossed in a newspaper or magazine, absorbed in a TV show or sharing a film with others in a theater. What’s new is that 21st-century media provides us all with the means to curate a Third Place that’s original to each of us. The range of possible building blocks has expanded beyond what even sci-fi buffs could have imagined little more than a decade ago—multiple layers, both tangible and virtual.

Your Third Place has your personalized maps of media destinations you can drop into regardless of where you may be physically located. It’s a long-legged trend driven by the absolute lust for news, current events, pop culture and escapism, as well as the expectation that it’s all available anywhere at a moment’s notice, at no cost, or at least very cheap. Even in traditional media such as television, the range of options has grown enormously with cable and satellite, timeshifted programming on DVR, and of course DVDs. Then there are all the new channels opened up by broadband and wireless: podcasts, online versions of traditional media (TV, radio, print), blogs, Twitter feeds and multiplayer interactive games, not to mention the endless variations of user-generated content such as photo sharing (Flickr), original video (YouTube), social networking (MySpace, Facebook), virtual worlds (Second Life), instant messaging, text messaging, multimedia messaging—the permutations seem truly infinite. This True Third Place may feel like a den where we retreat to shut out the world. It may feel like a meet-and-greet

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where we connect with people we know or have never met, or a lab where we experiment and explore, or a playground where we cut loose and have fun. And with the economic downturn likely to dominate life for a while to come, it’s a space where we can get as near to or far from the Reboot as we want. We can obsessively follow the twists and turns of events, or we can seek lighthearted diversion and respite. For people with skills and self-discipline, the True Third Place will be a great resource, enabling them to gain access to the things they need in a cost-effective, timely way: information, connections, entertainment, distractions. For others who struggle with life at the best of times, the True Third Place has the potential to become a space where they completely disengage from the practical needs of the real world.

> NEW MEANINGS OF PRIVACY

The modern perception of privacy is turning into a generational divider. Older people hark back to longheld notions as antiquated as rotary phones and nine-to-five jobs—to the day when there was a clear separation between

what was and was not for public consumption. But the concept is defined differently by the younger generation. Public figures and wannabe celebrities invite tame and not-so-tame media outlets into their homes to photograph their bedrooms and bathrooms, talk about their personal sorrows and joys. Paparazzi relentlessly pursue anybody whose photo will sell, with special determination to snap the most private moments. Celebrities and ordinary people expose themselves to the judgment of millions on reality shows. Leading public figures such as French First Lady Carla Bruni and U.S. First Lady–to-be Michelle Obama feel compelled to share some aspects of their private lives (such as Barack Obama’s snoring or his bad morning breath) in order to ingratiate themselves with the public. As for the rest of us, our daily movements are captured on millions of CCTV cameras; our telephone conversations and e-mails may be monitored; our purchasing preferences and Internet browsing habits are tracked; anyone in the world can peer into our backyard on

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Mark Zuckerberg of Facebook is convinced that with his accurate map of the social world, he has created an irreplaceable tool for people to stay in touch with, share with—hell, even feel each other. Eventually, he thinks, if he gathers enough users and persuades them to share enough, he’ll have a site that no new rival could ever catch up with. —“Boy Genius of the Year: Do You Trust This Face?” by Alex French, GQ, December 2008 Technology has made casual hookups, and infidelity, simpler than ever: A wellplaced digital photo and a reasonably witty online profile can bring dozens of responses within a few hours. And there are niche markets for everything (among the more obscure I’ve come across: love connections for the freakishly tall and even for devotees of the American writer Ayn Rand. But what a friend of mine calls “the crack cocaine of online dating” does have its risks. Ultimately, it’s much easier to hide one’s true intentions behind the anonymity of a keyboard, and to lie. I’ve met men who happily crop out years of their life (and children!) as easily as the woman standing next to them in their profile picture. Of course, not everyone online is a cheater. Some people are completely open about their alter egos, and use their avatars to have cybersex on sites such as Second Life. And many see it purely as a form of escapism, and have no intention of actually meeting in person. —“Modern Sex: Catherine Townsend Logs on to the New Revolution,” The Independent (U.K.), December 6, 2008

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Google Earth. Determined criminals can hack into our personal data. The World Future Society’s Futurist magazine predicts that by the late 2010s, everyone will have their own unique IP address, and all online activity and conversation will be recordable and recoverable.

New attitudes toward privacy are creating headaches for corporations. Digital natives may think nothing of sharing personal information online, but corporations have to beware of confidentiality and legal liability issues. Casual throwaway comments about coworkers or clients in digital media can end up being retrieved and reproduced around the world.

Many Minds. Singular Results.

Old-style privacy is virtually impossible now. And for all the talk of civil liberties and human rights, most people seem to have accepted that nobody has a true right to privacy as we once understood it. Rather than simple discretion, millions of us now rely on a policy of radical transparency— making our lives an open book. Instead of hiding everything from view, we manage the sharing of our sensitive personal information by deliberately choosing what to let people in on, by posting our personal happenings on blogs and social networking sites. And paradoxically, as hundreds of millions of people embrace

this approach, the vast majority will be effectively hidden from view, because they are just ordinary individuals in a vast crowd. Personal insights into our lives may be universally accessible, but in most cases they will be of interest only to people who are connected to us in some way. As we all work through the Reboot and readjustment period, people will be feeling the need to share their sob stories and heartbreaks online, seeking and giving advice and comfort. Our new privacy is not what we hide from others; it’s what lives within our hearts when we feel our most open and authentic.

INTELLIGENT DIALOGUE: CHANGE IS NOW 23

The Internet is the greatest generation gap since rock ’n’ roll. We’re now witnessing one aspect of that generation gap: The younger generation chats digitally, and the older generation treats those chats as written correspondence. Until our CEOs blog, our congressmen Twitter and our world leaders send each other LOLcats—until we have a Presidential election where both candidates have a complete history on social networking sites from before they were teenagers—we aren’t fully an information age society. —“Why Obama Should Keep His Blackberry—But Won’t,” by Bruce Schneier, The Wall Street Journal, November 21, 2008

Everything you say and do will be recorded by 2030. By the late 2010s, ubiquitous, unseen nanodevices will provide seamless communication and surveillance among all people everywhere. Humans will have nanoimplants, facilitating interaction in an omnipresent network. Everyone will have a unique Internet Protocol (IP) address. Since nano storage capacity is almost limitless, all conversation and activity will be recorded and recoverable. —”Cybercrime in the Year 2025,” by Gene Stephens, The Futurist, July-Aug 2008 When Kjerstin Erickson decided to start blogging about [her organization’s] problems on [online], her board discouraged her. It was actually a pretty dumb idea by traditional standards. But Kjerstin was actually doing something that to her generation (she’s 25) seems completely natural. She was living her life online. —“Radical Transparency Update,” by Noah Flower, Working Wikily blog, The Monitor Institute, October 31, 2008

A new digital divide has been created between a generation of young Canadians and a generation of managers and executives they work for. Young people have a unique perception of network privacy, in which they consider personal information private as long as it is limited to their social network. Organizations reject the notion of network privacy. They believe that information posted online is public and deserves no protection. —“The Next Digital Divide: Online Social Network Privacy,” The Privacy and Cyber Crime Institute, Ryerson University

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BIG QUESTION

5

Now that we have experienced a systemic failure

firsthand, how will we address the looming health care crisis?

> TAKING RISKS

TO CHANGE HEALTH CARE No matter how many

pennies people pinch or cutbacks they make, health care remains an essential. The trouble is it costs too much. Fixing and fostering health care is going to be a major imperative for restoring physical, emotional and economic well-being in the Rebooted world. No nation, rich or poor, developed or emerging, is immune to the problems of illness and limited resources. The problems are global and so are the opportunities.

Many Minds. Singular Results.

The health care crisis looks particularly acute in the U.S., which spends more per capita on health care than any other country and devotes a greater share of GDP to health, without achieving significantly better outcomes. In fact, at least 47 million Americans don’t even have health care coverage. But other countries have problems too. Britain’s National Health Service is the world’s third-largest employer (after the Chinese Army and the Indian State Railways) but ranks only 13th in the Euro Health Consumer Index. Japan has successful universal health

coverage delivering excellent health outcomes; but with a fast-aging population, it’s facing unaffordable increases in costs. All around the world, cancer, heart disease, malaria and HIV continue to devastate. Chronic conditions such as obesity-induced diabetes combined with a fast-growing elderly population increasingly threaten to place huge burdens not only on patients, but also on caretakers and health care systems. The more chronically ill people there are in a society, the more physical, financial and emotional resources are tied up. According to a World Bank

–>

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INTELLIGENT DIALOGUE: CHANGE IS NOW 25

study, the European labor force peaked in 2008 and will start to decline as more elderly workers retire than there are young workers to take their places. It’s projected that by 2011, two thirds of the workforce in developed countries will be part-time caregivers. What are the prospects of fulltime salary earners being willing or able to become part-timers, staying home to care for aging relatives? Despite the economic gloom, we see a lot about health care that offers real hope. Our present painful experience may be just what the doctor ordered to focus minds on getting really, really serious about health care and elder care. Limitless demand has been seen as a growing problem because costs grow fast and resources are limited. But there are huge opportunities to be seized and markets ready to be served. Heartening news is that many smart people have already identified the problems ahead and are working on ways to address them. For example personalized medicine (which Porter Novelli covered in its most recent Intelligent Dialogue paper) has the potential to harness genetic analysis to make medical treatment far more effective and cost-efficient with better detection of illness, more focused therapy and greater emphasis on preventive medicine. This could reduce the length, cost and failure rate of pharmaceutical clinical trials, and

even revive drugs that failed trials or have been withdrawn from the market. UCLA professor Gregory Stock recently told the Futurist magazine that humanity is ready to pursue biomedical and genetic enhancement; the money is already being invested. The magazine dubs the 21st century search for biomedical and genetic enhancement the new space race.

Patents for branded drugs worth more than $43 billion in annual sales are expected to expire by 2009. Large pharmaceutical companies may not be able to depend on cash cows when competitors bring out much cheaper generic versions of the patented drugs. The coming years will see a battle of wits (and public policy) between big pharma companies, generic manufacturers, regulators and health services.

Health care has been slow in harnessing the power of IT, which means there’s huge potential for improving efficiency and outcomes with so-called e-health technology. The Euro Health Consumer Index says information will drive changes, reshaping health care as it has reshaped other industries. It expects e-health to drive costs down, opening up quicker access to treatment and advancing patient safety. Health care is a vital vehicle for growth in flagging economies. There’s huge potential for creating win-wins that will unleash new levels of scientific, economic and health benefits, provided stakeholders can find the wit and the will to overcome the hurdles of vested interests. With the stakes so high, we’ll see new levels of smart thinking, negotiating and leadership to make health care a motor for real prosperity.

Another encouraging but daunting aspect of health care is that it straddles public service and private enterprise, government and corporate. While the health of individuals may be a private concern, with individual costs and benefits, the health of communities is a public issue, with large-scale social costs and benefits. Public and private need each other. They need to work smarter together to deliver the outcomes everyone wants at costs that are both manageable and profitable.

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“I’m a self-employed American who can’t afford worthwhile insurance. When asked about what I do for health insurance, I say I have the Thailand express health plan. With the cheapest insurance that I can afford leaving me with a $5000 deductible, it seems that I might as well stretch my dollar and recover from treatment on a beach for two weeks. I’ve done the math, and it still comes out cheaper than health care in the United States.” —Gary, commenter, NPR Talk of the Nation blog

Mr. Brin was therefore setting a public example with his announcement at (Google’s most recent) Zeitgeist (that he has inherited a gene called LRRK2 that appears to predispose carriers to familial Parkinson’s). Let everybody discover their genomes … and then feel comfortable sharing the code so that others—patients, doctors, researchers—can get to work crunching the data and looking for the bugs. Throughout history, the prospect of greater access to knowledge has frightened some people. But those are not the people that Sergey Brin mixes with in Silicon Valley. —“Brain Scan: Enlightenment Man,” Economist, December 4, 2008

Many Minds. Singular Results.

INTELLIGENT DIALOGUE: CHANGE IS NOW 27

The market frenzy that sent the world of finance cooking up dizzyingly exotic products might have also derailed the hopes of young professionals who previously considered paths less stable than finance. The Gilded Epoch, where bankers could sit back, relax and watch the money roll in may be over, but if unemployment sparks any dormant creative channels, we could be entering a new kind of Renaissance. It’s said that necessity is the mother of invention. Now, perhaps, recession may be. —“The Lost Age of Bankers,” by City Girl of the London Paper, Vanity Fair Daily’s Politics & Power blog, November 25, 2008

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IN CONCLUSION

PROFOUND CHANGES are happening fast—faster than we have ever experienced. Many will be spontaneous, driven by uncontrollable circumstances. Some will be voluntary but reactive—quick, BandAid solutions to acute problems. That’s inevitable, because just about everybody is behind the curve of change, even those in the highest levels of leadership. Change will create a degree of uncertainty most societies haven’t experienced for generations except in

Many Minds. Singular Results.

times of war. By its very nature, change is a state of chronic questioning, in which people are prone to playing out catastrophic scenarios in their minds. Anxiety will begin to subside only when people start to believe in a new kind of success, set long-term objectives and look for strategies for moving toward those objectives. Rebooting isn’t about getting everything back to the status quo, it’s about moving toward a smarter status quo with a new understanding of what’s desirable,

what’s possible and what needs changing. For all the distress of the economic crisis, the difficulties will create opportunities for new thinking at every level—self, community, business, government and world. In a time of simultaneous deep insecurity and great hope, we confront the opportunity for more intelligent leadership at every level. We have to ask smart, strategic questions that spark Intelligent Dialogue and articulate objectives that galvanize and inspire.

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Many Minds. Singular Results.

The Porter Novelli

INTELLIGENTDIALOGUE Principle

WHAT PORTER NOVELLI UNIQUELY OFFERS can be summed up in two words: Intelligent Influence. The basis for Intelligent Influence is Intelligent Dialogue. As yesterday’s mass media morph into today’s interactive media, people expect to talk back at journalists and opinion leaders. Yesterday’s way was setpiece monologues broadcast to passive audiences by powerful brands and media owners. Today’s way is fluid, evolving dialogues conducted across multiple, linked channels. Ongoing dialogue is now possible and is truly the best basis of dynamic long-term relationships. Easy sound-bite answers are seductive; they give a comforting but illusory sense of resolution. Instead, we need to cultivate open, questioning minds that ask smart, creative questions. Smart questions spark Intelligent Dialogue, open up thinking and tap into the power of many minds. Join the conversation on our Intelligent Dialogue blog, at PNIntelligentDialogue.com.

PORTER NOVELLI

was founded in Washington, D.C., in 1972 and is a part of Omnicom Group Inc. (NYSE: OMC) (omnicomgroup.com). With 100 offices in 60 countries, we take a 360-degree view of clients’ business to build powerful communications programs that resonate with critical stakeholders. Our reputation is built on our foundation in strategic planning and insights generation and our ability to adopt a media-neutral approach. We ensure our clients achieve Intelligent Influence, systematically mapping the most effective interactions, making them happen and measuring the outcome. Many minds. Singular results.

CONTACT: Marian Salzman, Chief Marketing Officer, Porter Novelli

Worldwide, 75 Varick Street, 6th floor, New York, New York 10013; 212.601.8034; [email protected]

Porter Novelli Worldwide 75 Varick Street, 6th floor New York, NY 10013 porternovelli.com

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