Contrasting Approaches to Changing the World at The Hub

Last night, the Hub Bay Area kicked off their Hub Innovation Series with a panel discussion between Ben Rattray (founder of Change.org), Steve Newcomb (founder of Virgance) and Matt Flannery (founder of Kiva.org). The event's organizers clearly wanted a discussion that moved beyond platitudes and got into the nitty-gritty of how to create change. Neither they nor the packed audience were disappointed.

Each of the companies in question gives average citizens the ability to be a part of change, but each in very different ways. Kiva allows anyone with $25 to become a credit life-line to a low-income entrepreneur. Virgance launches companies focused on sustainability that use positive financial incentives (carrots) to shift economic behavior. Change.org is a network that uses media to aggregate energy and then partners with nonprofits for advocacy and other sorts of campaigns that rely on many, organized voices.

One of the most interesting conversational subtexts underlying the panel was whether carrots or sticks are more effective when it comes to inducing behavior shifts, particularly shifts in major companies. Ben and Steve actually didn't disagree that both were important, but where they place their time and effort clearly highlights a difference in perspective.

Each of them basically believe that business respond to real financial incentives. For Steve and Virgance, they try to help companies that want to be good by delivering more consumers and clients. Their Carrotmob and 1 Block Off The Grid companies are examples of that strategy. Ben suggested yesterday that he thinks that in today's world, the level of brand exposure that companies have in a social media world makes them particularly vulnerable to pressure from well organized activists. What's more, in his estimation, the huge array of consumer product choices makes the importance of brand even greater, and the importance of protecting brand even more valuable to companies.

It was a great conversation about an important topic. What do people out there think: is the carrot or stick more effective in changing corporate behavior?