The Authenticity Factor™

1. The Authenticity Factor™ An important emergent phenomenon reshaping green business Integral Partnerships,LLC

2. The Authenticity Factor™ Personal Authenticity Concept: • Real, genuine, honest, trustworthy, true, natural • “What you see is what you get” • “Walking your talk” • “True to your own natural self” • Being “real” and self-revealing in relationships • Mutuality and trustworthiness in relationships Inauthenticity Concept: • Fake, hype, pretense, hypocritical, deceptive, hiding, lying, shilling, artificial, false claims, advertising come-ons, exploiting the unwary

3. Four Levels of Authenticity • Simple Honesty: Telling the truth • Personal Authenticity: Truth-telling + Personally Self-revealing • Social Authenticity: Truth-telling + Transparency + Fair Dealing with Stakeholders + Showing Ecological Processes of an Organization • Systemic Authenticity: System-wide context creates truth-telling + accurate feedback + process transparency + wiser long-term views of whole system

4. The Growing Demand for Personal Authenticity in America • 1900-1950 - Existentialists: a few 100s • 1950s-1990s - Civil Rights, Women’s, Peace and Humanistic Psychology Movements Popularized “Walking your talk” & “Living an authentic life” from 100,000s to Millions • 1995: 39% of US Adults: 76 Million Adults • 1999: 47% of US Adults: 92 Million Adults Europe is probably stronger than that!

5. 3 Key Drivers of Authenticity Trends Since the 1960s • Personal Authenticity popularized by Civil Rights Movement, Women’s Movement, Peace Movement, Self-Help & Personal Growth Psychology, Alternative Health Care • Knowledge Economyas a System can’t afford distortion and poor quality feedback. It needs Social and Systemic Authenticity • Planetary Ecology &Triple Bottom Line: Changing cost structure + Survival of planet + Planetary issues. ALL of these are only soluble with Systemic Authenticity

6. The Authenticity Factor™ 70-75% of Americans distrust Big Business because of its inauthenticity Business Authenticity is Commitment to what’s real, and to the honest truth: • To find out what’s real and true • To act from what’s real and true • To take a public stand for it • To align organizational culture with it

7. Demand for Business Authenticity is the Demand for Transparency: • Investors burned by business fraud: Dot.coms, Enron, WorldCom, etc., etc. • Customers burned by advertising lying, cheating, come-ons, bad products • Stakeholders burned by corporate lying • Voters burned by politicians lying • Citizens burned by environmental destruction + corporate lying

8. Authenticity and Transparency Cultural Creatives will judge how good you and your product are by your degree of transparency: • The way you show who you are • Who your employees are • Your sources for materials, products • Sustainable production processes • How you treat your customers • How you treat your stakeholders

9. Authenticity sets the context for “What’s Real” vs. “What’s Fake” • “What’s real?” is a new, emergent factor in the Western World • Cultural Creatives are the key: • They raise the questions, • They account for the trend • They are the opinion leaders: • Personal • Social

10. The Cultural Creatives Based on 15 years of research 150,000 (cum.) people surveyed 500 focus groups 60 in-depth, 4-8 hour interviews on life histories

11. THE CULTURAL CREATIVES50 million in United States = 26% of U.S. Adults80-90 million in European Union= 30-35% of E.U. Adults

12. THE CULTURAL CREATIVESTotal Disposable Income(After Taxes) = $1.2 TrillionUnited States Population, Year 2000

13. THE CULTURAL CREATIVES Driving customer force of the LOHAS Industries**Lifestyles of Health and SustainabilityUSLOHAS Sales2005 est $280BWorldwide Sales2005 est $800B

14. THE CULTURAL CREATIVES US LOHAS Industries in Year 2000: 1. Ecological Lifestyles $81.2B 2. Sustainable Economy 76.5B 3. Alternative Healthcare 30.7B 4. Healthy Lifestyles 27.8B 5. Personal Development 10.6B Total: $226.8B Source: Natural Business Communications

15. ValueGraphics • Values and Lifestyles Segments from Cultural differences • NOT Psychographics or individual differences • Cultural Creatives: an emerging subculture, with all psychological types: smart/dumb, inward/outer, good/bad, enlightened/regressive. • As distinctive as French Canadians in Quebec

16. ValueGraphics • A Subculture has different: —Values = “Most important priorities” —Worldview = “How Life works. What’s real. What Life is all about” —Lifestyle = “What to buy. How to live”

17. The Culture Wars 50 Years Ago 50% MODERNS 50%TRADITIONALS • Secular, materialist • Conservative, pious • The big city • Small town, country • Hip, up to date • Square, out of date • Style & efficiency • Character, reliability • Cary Grant • Jimmy Stewart • Lauren Bacall • June Allyson

18. There are 3 Subcultures Today • Traditionals 24.5% • Moderns 49.4% Creatives 26.1% • Cultural Total: 100%

19. Three Preferred Cognitive Styles • Traditionals:Fend off a bad, complex, ill-understood world. Black-and-white, good-and-evil, simple categories. • Moderns:Tightly focused attention on what succeeds. Ignore side effects. No distractions. Linear analysis. • Cultural Creatives:Synthesize, take in from a wide range of sources. See the whole system. Inner experience is valid.

20. Cultural Creatives’ Values • Ecology, beyond environmentalism • Planetary awareness • Social Responsibility & Concerns • Authenticity • Relationships, Helping others • Personal Growth, Spirituality • Feminism

21. Demographics Are Almost Useless—Values Go Deeper • CCs a bit more upscale, overall — wide range of income, educ, occup. • Close to national averages on age, race, ethnicity, region • BUT 60% women overall • Core group (opinion leaders) are 67% women, or 2:1 women:men • “Where are all the good men?”

22. The Cultural Creatives Story It’s about floods of new information world-wide over last 40 years: • Planetary environment/ecology • Health beyond catastrophic medicine • Organic food vs. environmental-poisons • Spiritual traditions from everywhere • Nuclear, infotech, biotech, nanotech - all go from promise to threats

23. The Cultural Creatives’Story • It’s about women’s values and concerns going public for the first time in recorded history • It’s about the role of the new social movements and consciousness movements in educating the Western world over the past 40 years

24. Origins: ALL the new social movements of past 40 years • Civil Rights, Social Justice • Peace (1960 to 1990, and Now, again) • Women’s (to Eco-Fem, Fem-Spiritual) • Environmental, becoming Ecology • Planetary: Anti-globalization, Hunger • Personal growth & New spirituality • Alternative Health Care • Organic Food & ‘Natural Everything’

25. Cultural Creatives’ Lifestyles • They drive the markets for: • Natural and Organic Products / Foods • Alternative / Holistic Health Care • Eco-Travel • Socially Responsible Investments • Education and Workshops • Arts and Culture • Personalization of Home • Psychotherapy and Counseling

26. Cultural Creatives’ Lifestyles • They’re “Foodies”: • Talk about food a lot, eat out a lot • Innovate, experiment, buy equipment • Enjoy cooking with friends • Buy any and all organic/natural foods • Healthy cuisine, but not self-denial • Try functional foods • Healthy + natural + gourmet + ethnic

27. Cultural Creatives’ Lifestyles • Media Habits: • Watch Half as Much TV (Don’t waste $$) • Read Twice as Many Books • Listen to MoreRadio • Read More General Market ANDMore Lifestyle Targeted Magazines • Just Now Catching Up on Internet Use • Very Critical of the News Media

28. Green Market Challenge:The Demand for Authenticity The LOHAS / Green Customer says: “Show me the sources of your materials, and your process and your people, and who you are… …and I’ll judge for myself whether you are a good company to buy from, or to have a relationship with.”

29. The Green Market Challenge Every green and healthful product must first solve the “what’s in it for me?” problem BEFORE it saves the planet: • Solve a practical life problem for the household and fit into its lifestyle • And also solve a sustainability problem • …and that’s just your basic requirement to play in this market. • It doesn’t buy you any extra market share.

30. The Green Market Challenge To gain market share you must add extra benefits beyond green: • Better technical performance • Health benefits • Convenience • Style • Prestige • Virtuous Company

31. The Green Market Challenge To gain market share build up virtue points as a company committed to authenticity: • Be transparent • Be green • Be socially responsible • Be customer friendly • Be employee friendly • Offer excellent service

32. In Marketing, Authenticity is all about our CLAIMS for products and services, and the personal authenticity of the people • It’s NOT about the products and services themselves — except that they’re not faked on the outside to hide what’s underneath • The claim can simply be “good value for money”

33. In Marketing, Authenticity is all about our CLAIMS for products and services • When a salesman says, “It’s the real thing,” grab hold of your wallet. • He’s diverting your attention to the object or the service in front of you, and away from his tricky or exaggerated claims. • He’s lying to get your money.

34. Authenticity Claims in Marketing: WYSIWYG = What you see is what you get: • Not faked: the surface shows what’s below • Made from a good/appropriate substance with good/healthful properties, and no bad side effects • The underlying stuff does the job: materials, processes, parts, are clean-pure-unadulterated, has good properties • Well made: good parts, good design, good manufacture, no defects • Performsas claimed

35. Authenticity Claims in Marketing Claims about the claim itself: ‘It’s the Truth!’ • Shows Transparency & Evidence: Origins, Sources, production process, quality controls, How you treat your people and customers • Shows Precautionary principle = No Harm • More Evidence = Justify higher cost: It is well-made, in short supply, rare, or one of a kind • Expert Authentication = Origins, processes • Celebrity Endorsement= prestige claim • Customer Testimonials= “I’m satisfied” All Obvious, Evidence-Bearing Truth-Tellers

36. The Big Green Marketing Problem BAD MESSAGE—WRONG MESSENGER 1 Using Modernist Advertising 2 Using Modernist Direct Marketing • Conventional ad agencies have no clue about the values of your customers —so they’re losing business for you • But most green businesses don’t see any alternatives for building wider visibility! • Solution: Go to small creative agencies

37. The Big Green Marketing ProblemBAD MESSAGE & WRONG MESSENGER It Looks Fake, So It’s Rejected by Cultural Creatives market • CCs hate adman’s + direct marketer’s … • Cultural assumptions, language, imagery, inauthentic values • Manipulative and coercive tactics • CCs don’t trust it: Been there, done that

38. The Green Market Challenge: Speak authentically to your customers CCs lead the demand for authenticity in marketing communications: • Every message has to be honest …AND fit their values and cultural assumptions • Modernist messages offend them! • Face to face communications have to be from authentic people

39. Show who you are Customers will judge both you and your product by your authenticity and transparency • The way you show who you are • Who your employees are • Your sources for materials, products • Sustainable production processes • How you treat your customers • How you treat your stakeholders

40. Bigger, Harder Inauthenticity Problems of Today: • Digital fakery of images is inherent in the art • Easier to fakesubstances and appearances with new materials • Harder to judge appropriate substitutions of the chemistry in products • Medical advances/dangers areharder to judge • Pollution and health problems are much greater • Destruction of planet is vastly more dangerous • Greenwashing is all too common, hard to detect • Solution: Be the Consumer’s Friend and Educator

41. The Authenticity Factor™ may disrupt your internal processes • Demand for instant responsiveness to new complaints and problems • Need for very rapid development and market testing of line extensions • Need to involve consumers at all phases of product development process. Get their feedback early

42. The Authenticity Factor™ may reshape everything you do in customer relations and contacts • Without authenticity, no advertising message will be believed • Authenticity demands: • New marketing behavior to differentiate your brand • New criteria for product development • New sales behavior • New customer service experiences

43. From Customer Interface to Customer Interaction Field Bring customers into every part of: • Product design & development • Options development (Honda vs GM) • Packaging and channel development • Message development • Breakdowns, complaints, problems • Customer feedback • Product evolution

44. What’s Inauthentic: Transaction-Based Marketing + Hype (Financiers + Admen want it, NOT customers) • Maximize Profits from Every Transaction! (Fits inauthentic Financiers) • Generate lots of new contacts and transactions! (Fits Ad Agencies, PR firms, Media) • Based on very short-term, cash-flow tactics (Burning your furniture to heat your house)

45. What’s Inauthentic: Transaction-Based Marketing + Hype Why disliked by customers? • Built-in bias toward: • cheating, • distorting the truth, • short-life products, • no mutual loyalty • They’ve been burned in the past

46. What’s Authentic: Relationship Marketing (Sales Should Grow Out of the Relationship) • Maximize Profits over the Lifetime of the Relationship! • Maximize Access to New Customers through Good Word of Mouth! • Depends on repeat purchases: consumables, replacements, upgrades, etc. • Depends on cheaper repeat sales: Cost of new sale = 5 times the cost of repeat sale

47. What’s Authentic: Relationship Marketing (Sales Should Grow Out of the Relationship) • Why preferred by customers? • Good long-term value for money, • Long-life products and services, • Mutuality and Fair Dealing, • Honesty and Trust, • Loyalty to the Relationship All are in everyone’s long-term best interest, so it’s a sustainable pattern

48. Managing for Authenticity • Declare a “soup to nuts” and “top to bottom” organizational commitment to authenticity. • Align organizational culture and management processes with processes that emphasize internal authenticity

49. Contact information: Paul H. Ray and Dixon de Leña Founding Partners Integral Partnerships, LLC1630 North Main St,#127Walnut Creek, CA 94596 USA 925-906-5366 or 415-897-2894 ddelena@integralpartnerships.compaul@integralpartnerships.com