Companies know that their reputation is important for purchase and profitability. While they may have been slower to catch onto this than we would have liked, they do acknowledge the power of social approbation, and are actively trying to acquire it. The “it” being providing meaningful reasons for people to spend time with, purchase, consume, be loyal to and trust. The question is – do we believe them?
There are those entities who are clearly in repair mode and support initiatives that present a reshaped, reformed corporate self. For example: Exxon Mobil – the company responsible for the world’s largest oil spill - knows it needs a body of skilled employees, so they are investing millions in training teachers in science, technology and engineering. Or Mark Zuckerberg, the controversial Founder and CEO of Facebook has contributed/invested $100 million to Newark schools, and announced it on the Oprah show, along with then Mayor of Newark, Democrat Cory Booker, and Republican New Jersey Governor Chris Christie.
There are those entities trying to achieve competitive distinctiveness by presenting as human, humane and honest about the values they believe we want to live by. UBS the Swiss Financial Institution asks us, in a full-page ad in The New York Times, “Can I truly make a difference? Do I invest in the world I’m in? Or the one I want?” The piece ends with copy that reads - “We think it’s possible to do good and still do well. For some of life’s questions, you’re not alone. Together we can find an answer”. Signed “ubs.com/makeadifference”. We need to remember that the Swiss National Bank provided UBS with over $50 billion dollars in order to alleviate $60 billion of toxic assets from its balance sheet. Is it easy for them to now commit to making a difference?
There are the companies who want to assert that they really are making the world a better place. Oppenheimer Funds tells us to “Invest in a Beautiful World. Invest with active managers who have a long-term view, a global perspective and the courage to go against the herd mentality. That’s the right way to invest in this big, bold, beautiful world.” Signed oppenheimerfunds.com/beautiful. But please note, Oppenheimer Funds are ranked in the top 10 worse funds. So whose world is going to be more beautiful?
And then there are the companies that are duplicitous, deceitful (often but not always deliberately), that think they can escape our scrutiny and or believe they are immune from our collective disapprobation. Best recent example - Volkswagen, the original “car of the people” who has been telling us that they are “THE CAR” = “Das Auto”. What they didn’t tell us was that they were intentionally creating systems that would deceive us about emissions.
So what, as Marvin Gaye asked many years ago, is going on? In our uber-observed world, where we are all watchers and watched, corporations are finding it increasingly difficult to hide their insides from view. Which means that they not only have to improve how they recover from errors, they actually need to be trustworthy. Pretending, hiding, obfuscating is no longer an option; social good coating is entirely insufficient; and words alone are wholly inadequate.
The challenge of the watched marketplace is that our media-cum-advertising savvy is so well developed that we smell disingenuousness and are extremely reluctant to believe words or actions. Corporations need to figure out how can they speak and act in ways that are going to be believed.
What earns believability? There are four essential criteria:
1. First act as you speak. Some consultants advise “walk the talk”; environmentalists assert “don’t green wash”; and spinmasters say don’t say things you don’t want to be accountable for. The point is to minimize your credibility gap by make sure your actions match your words.
2. Second, be honest. While all your legal counsel will advise against it, honesty is the best approach to recovery and protection. If you are honest internally you will at least know what your real risk areas (and behaviours) are; and this then makes it a whole lot easier to be honest externally.
3. Third, be respectful. The best way to win the commendation and approval of any and all of your audiences is to treat them with the respect advised by the Golden Rule. This will not only capture the loyalty of your employees, and maybe of your customers, but more importantly it will ensure people forgive you when you err.
4. And fourth, know what you stand for. Define why what you do is important to the world. Then make sure this is the centrepoint of all that you do and say. This is how you cultivate coherence and consistency, allegiance and profitability.
None of this is complicated, but neither is it easy. Companies span a wide continuum of performance against these Believability criteria. There are those companies that are Standing Ready: as all companies, they know they need to be responsible for social issues, address poor customer treatment, environmental management and financial management, but they are doing only what they must according to reporting and regulatory requirements. These companies are vulnerable to severe condemnation when they err, and earn only minimal respect and purchase in the best of times. For example, VW Group, which has a Sustainability Report, complete with a delightfully informative video, tells us that they are taking care of the Economy, People and the Environment with numerous initiatives around the world. The combined effort however looses almost all believability in the face of the company’s deceit and trickery.
There are those companies that are Standing Up – defining key social issues that they are going to do something about through a combination of philanthropy and sponsorship support. These companies have the potential to earn respect and commendation, but are at risk in the Believability department. For example, Loblaws - Canada’s largest grocery retailer, is known for food sustainability. This is reflected in their commitment to sustainable fish and their Blue Menu offerings. Yet in the face of the Rana Plaza catastrophe do we believe that caring for labour trumps their interest in profit?
And then there are the companies that are Standing Out: they understand that when they know what they stand for in the world, and ensure that it informs everything they do, they not only gain confidence, respect and allegiance of people, they improve their function and are more profitable. Yvonne Chouinard of Patagonia offers a believable stance. Committed to environmental sustainability, he is also honest that it is challenging to get everything absolutely correct. Hence the Footprint Chronicles which explain the supply chain story of how any piece of Patagonia clothing got to your body, with a description of what is still requires improvement. This honesty approach earns believability, which translates into respect, and permission to not have it perfect. Indeed it may be that the real benefit of believability is forgiveness with a heavy dose of patience that we allow you to improve and get it right.
For the next few months we are going to provide commentary on the words and actions of companies. Are they believable? Are they trustworthy? Are they standing for something meaningful? We commit to sharing our investigations and analysis, and rating companies into three categories:
1. Standing Ready, and need to pay attention.
2. Standing Up, but vulnerable.
3. Standing Out and redefining what it means to be a great company in the 21st century.
We want to start a conversation about what we believe to be the new and most overlooked driving force of business today: companies need to be clear, consistent and coherent about what they stand for. The only way that C-Suite folks will be convinced to stand for something beyond simple function is when they hear our collective voice .
Please join the conversation. What companies do you think are: