Roger OngRecently, I saw a Facebook post from an acquaintance, asking friends to fill in the blank: “Vacant Space x ____ = Money”. He was trying to address the problem of vacant houses in Japan, especially in rural regions of Japan. He wanted ideas to create something valuable in monetary terms. It would be great to see creative ideas that would revitalize local economies too!
However, I saw it as an opportunity to change our mindsets about businesses in the new era that comes after the coronavirus outbreak. Because there is a weakness in our pre-coronavirus business models that is putting businesses at risk.
The connection between businesses and customers
Previously, I talked about how we are starting to visualize the connections between persons, and between person and brand. When we are cut from accessing our favorite brands, we realize how we miss them. On the other hand, we are also reevaluating what we don’t really need.
Of course, with unemployment and tightened income sources, it is natural for consumers to think about what they need or want. With the raising awareness of global climate issues and human rights policies, it also becomes part of their consideration when they begin to weigh the impact of what they choose to consume. They are also reminded of the vulnerable who are suffering from the effects of the self-quarantine period, which include those living in poverty and those dealing with domestic violence.
Consequently, it becomes a question for businesses, “Who is supporting your business during difficult times?” While admittedly blunt, it is a very relevant one instigated by the coronavirus outbreak. How are we relevant in such times? In what way are we contributing to others’ lives? Are we a need or a want?
The key consideration is the role of any particular business in a post-coronavirus period. Not thinking about their purpose is a risk as we move forth from this crisis.
However, many Japanese businesses struggle to stay relevant in an evolving landscape
Unfortunately, there are many businesses who are still struggling with the purpose of their business, letting their means dictate their goals.
When the coronavirus pandemic hit, only 40% of Japanese companies encouraged remote working, while only 28% of workers actually did so in early April 2020. By early May 2020, about 59% of employees still went to work everyday. This was above the international average of 44%.
Japan has a high focus on producing results, thus their key ideas tend to be sales and efficiency. While their Western counterparts are already discussing about workplace humanity in an evolving world, Japan workplaces are still pushing for growth, some at the expense of their employees.
For example, Japan has norms that instruct a herd mentality, including ideas like “it isn’t work if you aren’t traveling to a physical office” and “it instigates jealousy if only some get to work remotely”. Furthermore, a survey on SMEs in Tokyo revealed that 42.3% they had no systems in place to adopt remote working, while 31.7% shared that they did not have enough laptops or communication infrastructure. There is even worry that it will become a self fulfilling prophecy, that because businesses can’t implement remote work effectively, they will think remote working has no benefits by the end of self-quarantine.
It’s time for a Purpose Economy
Furthermore, with the advancement of information technology, customers are beginning to be the initiators of exchanges with brands. While businesses are still bombarding internet users with ads in hope of a click, customers are already saying, “I will contact you when I need your service.” Search engines are improving by the day, ad-blockers are beginning to be used commonly, and there are plenty of choices for consumers. Customers decide where their attention goes to.
Now comes the young generation, leading a new need. They want something more than just the best products, more than being sold too. We saw how Fridays for Future Japan grew from 15 to 5,000 members in four months. More and more youths are taking interest in Japan politics by following No Youth No Japan. They want to be responsible for what they consume, to positively impact with their actions.
The trend is clear. We are moving away from an attention economy into a purpose economy. More and more customers are looking for brands that are environmentally-friendly and support human rights. Awareness for keywords like sustainability, circular economy, regenerative thinking, food waste, fair trade, ethical products and zero waste are getting more and more penetration in the public.
Outside In thinking as a catalyst for a Purpose Economy
The purpose economy then reveals to us how we can free ourselves from boxing ourselves in and limiting our thinking. Just because we have the problems of vacant houses in Japan, doesn’t mean we’ll have answers by asking how we can monetize them. That focus will just lead us down the same route as before: What is our unique selling proposition? How should we market our service? Where to get our first customers? That was the attention economy.
Instead, there is an answer to meet the needs of this new and growing audience. It is the Outside In approach, which we have talked about before. It is an approach suggested by the UN, albeit it is not well-defined because of its wide usage. The concept, however, is simple: looking outside your own company to address a social need. Then using skills, experience and technology available within your company to meet that need, and thus creating success and value for the company.
The purpose-driven thinking in a post-coronavirus era
What this means is that we have redefined parameters and changed equations. Instead of asking how to monetize, we should be asking who in society will benefit. The purpose is social impact, not monetary.
This thus shift us away from asking how we can monetize vacant houses in Japan. The purpose-driven question is how we can use vacant houses as a resource to address a social problem. This purpose will then attract those who believe in the same, including customers, business partners and government. They will see the value of a purpose-driven product or service too, and will support it, even in times of crises. You will then have created something of value beyond just monetary terms. This is not a new concept, as American author Simon Sinek has been asking businesses to “Start with Why“.
Little Ones: An example of purpose economy in action
In fact, there is a startup that is already using Japan’s vacant houses to (social) good use. NPO Little Ones is located in Tokyo that provides cheap housing to single parents.
It is estimated that every 1 in 10 households is a single-parent household. Living in Tokyo makes it particularly difficult, because of the high rent, particularly nearer to the city center. Little Ones works with the government and real estate companies to match single parent families with vacant homes in the city. (You can read more about NPO Little Ones in English here.)
By starting from a social problem, the representative director, Kunihisa Koyama, has found a unique solution to solve multiple issues. He turns vacant homes into resources, alleviates financial worries of single parents, helps support child poverty in Japan, all while extending their services to include other households in need.
Purpose becomes the essential connector between businesses and consumers
If there’s anything we can take away from this coronavirus crisis, it’s realizing how connected we are to one another. We start visualizing these connections because they are suddenly cut from us. Self-quarantine has made us realize how much we want to hug our loved ones, or even just to have a stroll in the park to connect with nature.
Businesses and customers too realize how important their connection with each other is. Appeals through crowdfunding projects were successful because their followers wanted to support their favorite businesses. Food and Beverage outlets received financial and spiritual support from their local communities.
Representative director, Yumi Komori, from ethical fashion brands TSU.NA.GU and Liv:ra shares that we also start to realize how connected we are to nature. Both TSUNAGU and Liv:ra use a made-to-order system, and have very strong followings for their minimal impact on environment (eg. through traditional dyeing methods). Consistency with their ethical mission and high transparency win trust with their fans, who are sticking with them through this difficult period.
Support for Florence too has not waned in this coronavirus outbreak. Florence has an excellent and consistent track record in providing support for children in need, from babysitter services to medical support for children. Even in this pandemic, their fans and partners continue to donate, understanding the need of the vulnerable in this pandemic. This allowed Florence to deliver aid to vulnerable households and children in urgent medical care.
In the end, it is never about the vacant houses
It’s starting to be a cliche at this point, but we should not be looking forward to “business-as-usual” when the coronavirus crisis comes to a close. “Business-as-usual” will mean the climate crisis will get worse, mankind will become more divided, and our children’s future will still be endangered. Furthermore, another unforeseen crisis will further plunge society’s outliers into more vulnerable situations. And for businesses, vacant houses may become abandoned once more.
Instead, let’s create purpose-driven social businesses by tackling social problems. Purpose will rally people with the same drive for solutions, and will create valuable and resilient relationships. Financial sustainability will then become something natural, from stakeholders of a like-minded community.
