Consider it the Schwarzenometer. The California election has been designated by the media as an official instrument for measuring just about every tic and nuance of the American political landscape. But completely overlooked, at least from where I sit, is any cogent analysis of the business implications of the recall and the election.
This is a dangerous oversight for those charged with running businesses today--particularly big, insular, tone-deaf organizations. After all, politics leads the culture. Environmentalism emerged as a political movement long before corporations were forced to green themselves up. And it was the politically motivated advocacy groups who led the way on issues like foreign labor practices long before Kathie Lee Gifford found herself under attack for her line of clothing.
At the heart of the California upheaval was the stunning depth of popular anger and the immediacy of buyer's remorse. Even the press, which is supposed to be watching these sorts of things, was blind-sided. Susan Goldberg, executive editor of the San Jose Mercury News, recently told a group of newspaper journalists that they underestimated the voter anger that helped oust Gov. Gray Davis. "We--the media--are increasingly disconnected from what people are talking about," she added.
Beware that disconnection. If California is the bellwether state that everyone claims it is--and if resentment is the next force to be reckoned with--consider what that geyser of hostility can mean when it gets pointed toward business. And while it's the establishment that's in the cross hairs, everyone is vulnerable. Market position becomes a tentative calculus. Business relationships grow more fragile. Brand loyalty? Don't bank on it. Incumbent Rage might very well spread to the breakfast cereal we eat and the software we buy.
The Arnold phenom is also the most recent--and perhaps most flamboyant--example of our culture's ongoing rejection of "professionalism." We've seen this flight from expertise for a while now; we barrage our doctors with half-baked health information from the Internet, we are all cocktail-party experts about everything. Think of this in the context of the serious attributes that long-established businesses still use to "position" themselves. We've been in operation for more than 50 years. We have the most expertise. We are the real experts. In more and more businesses, that position is the weak one.
There's a flip side to the California drama that has another set of business implications. We can't forget that Arnold is a classic American entrepreneur, having imagined and brought into successful existence not just himself but an industry built around him. He then used those same skills (and instincts) to become governor of our largest state, which tells us that the American future for entrepreneurs is as bright as the future for time-locked, inflexible businesses is dark--as gray as Gray Davis. Indeed, watching Davis try to get hip late in the campaign was reminiscent of a large, stumbling company trying to become relevant again.
Incumbent Rage is thus an opportunity for fast-growing, entrepreneurial businesses like the ones who read this magazine. As evasive and equivocating big-company CEOs get taken to task along with evasive and equivocating governors, enlightened businesses will be those that focus their energies on staying ahead of the public's demand for the new. California shows us that frustration is poised to erupt into a burning desire for novelty--albeit trustable novelty. (Warren Buffett plus Arnold equals precisely that.) Savvy businesses also will extend a genuine invitation to customers to join them in developing products and finding solutions; that's another way to defuse roiling resentment. Arnold gets this. He's already contemplating a constitutional amendment that would ask California voters to limit state spending.
For a long time, Americans have been patient consumers. We lose a fortune in the stock market and blame everyone except our broker. We hang on the phone tolerating easy-listening music for many eternities, only to talk to script-bound customer service people. But that's pre-Arnold. The post-Arnold consumer is far more demanding and quick to change allegiances. Don't be among the terminated.
Contributor Adam Hanft is president of Hanft Byrne Raboy, a Manhattan-based advertising and marketing firm.