If recent stories about the state of small business had you in a bit of a panic, there’s new news that might ease your fears somewhat. On Oct. 10, Quartz ran a story about the ways in which large corporations are rapidly losing their competitive footing in this shifting culture.
Things companies were able to control just a few years ago, like publicity and branding, are being overtaken by the influence of social media on corporate image. (Quartz mentions United Airlines losing $1 billion after a video was released of security guards violently dragging a passenger off one of their airplanes). And as new generations grow up with this as their constant visual backdrop, their trust of corporate America is falling to record lows.
The Quartz story explained that a new study, “America’s Next Commercial Revolution: Influence vs. Affluence”, conducted by global consulting firm A.T. Kearney, found that social-media moments like the United incident are leading to massively decreased trust in large corporations. From United to Wells Fargo, Equifax, and whatever tomorrow brings, and we can practically watch faith in big business eroding.
And it hasn’t gone unnoticed by consumers. One of the study’s lead authors, Greg Portell, told Quartz that “the destabilization goes deeper than anyone really appreciates.”
“A Lack of Competition Itself”
In a recent Forbes article, contributor Alex Verkhivker compares the state of politics to the state of big business. While business might be crumbling as consumers are becoming more woke about behind-the-scenes practices, government is flailing because there’s no competition: “[T]he root cause of our political gridlock and dysfunction is lack of competition itself,” writes Verkhivker, “…our political system is made up of actors who are gain-seeking with the two major parties competing to grow and accumulate resources and influence for themselves.”
Verkhivker points to the Five Forces, a well-established framework for understanding the competitive marketplace. The Five Forces note that industries — governments included — rely on competition, the threat of new entrants to the field, and the threat of better products in order to provide the best service to customers, and thereby to stay alive in the field. When new entrants or products do come into play — like, say, those that your small business might be creating even as we speak — disruption can occur.
The Small Will Rise
What this means for small businesses, then, is that it’s a good moment to strike. After all, as we wrote in a previous story, a recent Gallup poll showed that just 18 percent of respondents reported a high amount of confidence in big business. And a 2012 report from the Pew Research Center found that 75 percent of respondents felt that “there is too much power concentrated in the hands of a few big companies.”
That means that consumers are already primed to look for alternatives to the big businesses that have been shoved down their throats for so many years, and now, with constant reminders fueling their skepticism, the playing field is primed for new entrants.
There are several qualities that small businesses have (and big corporations don’t) that make them particularly attractive to growing, young consumer bases. For instance, most small businesses pride themselves on their customer service: rapid responses, personalized answers, typically a human-to-human interaction. That pays off big for younger customers. According to Entrepreneur, “it’s vital for companies to now be engaged with their consumers… [and] if they like what a brand stands up for, they want to get behind it.”
A Hackable System
Additionally, as Dan Keldsen, co-author of The Gen Z Effect: The Six Forces Shaping the Future of Business, says, Gen Z is extremely interested in lifehacks: finding ways to do things that are cheaper, easier, or just make more sense. “Gen Z kids have less tolerance for rules that have stood unquestioned — they have no issue with working around or ‘hacking’ the system,” said Keldsen. Sound familiar? It’s also generally the ethos of small business. If you can tap into that common ground, you’re going to gain trust faster than you can say “3-D printer.” Of course, this isn’t to say that all Americans hate all large corporations. A recent survey by the Pew Research Center found that a solid 56 percent of adults polled had a favorable view of corporations, with that favorable view being higher among Republicans, those over age 50, and those whose family income is $75,000 a year.
That’s still down, though, from a total of 65 percent of adults viewing corporations positively in 2001. And when you think about everything that’s happened in the past decade and a half, it makes a whole lot of sense.
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