corporate responsibility

One of the reasons that reputation has become so complex has to do with the vast portfolio of stakeholders that companies are asked to engage with. Years ago, companies primarily worried about financial analysts and labor unions. Today the stakeholder audience is deep and wide, ranging from one to many. Some companies have to consider the entire general public and others only 25 people whose opinions and perceptions count. The question that often arises is what's external engagement worth?  For that reason, I like what I read in some research by Witold Henisz at Wharton, Sinziana Dorobantu, senior research fellow at Wharton, and Lite Nartey at University of South Carolina ("Spinning Gold: The Financial Returns to External Stakeholder Engagement") As they said, external engagement pays.  "The researchers' goal was to figure out what role these stakeholder events played in companies' efforts to maximize profits. The answer: a very large role." The researchers looked at 26 gold mines over a 15 year period and coded over 50,000 stakeholder events covered in the media.  Stakeholder events included actions or expressions about cooperation or conflict with mine owners.  As for stakeholders, they included just about everyone..."local and national politicians and community leaders to priests, war lords, paramilitary groups, NGOs and international bodies like the World Bank."  The researchers designed a stakeholder index that revealed the level of stakeholder cooperation or conflict. Communicating and building bridges with their stakeholders led to profitability according to the researchers' anlaysis.

"We found in our research that the value of the relationship with politicians and community members is worth twice as much as the value of the gold that the 26 mines ostensibly control."

 Stakeholder engagement and cooperation helped companies deliver on budget and in a timely manner leading to competitive advantage and profitability. When cooperation was blocked, they found that mines were are open to delays, unrest and additional costs that led to closure or suspension. 

"It used to be the case that the value of a gold mine was based on three variables; the amount of gold in the ground, the cost of extraction and the world price of gold," he states. "Today, I can show you two mines identical on these three variables that differ in their valuation by an order of magnitude. Why? Because one has local support and the other doesn't."

This research can be applied to other industries and does a fine job of making the case for engagement and dialogue. A reputation for cooperation and meeting stakeholders half way at least is critical. It is good to have data to back up the importance of minimizing conflict and its link to financial performance but I agree with the authors who say "it is not just corporate social responsibility, but enlightened self-interest."

   Interesting article on what boards talk about when they talk about sustainability.  The interview was in MIT's Sloan Management Review with Christoph Lueneburger, head of Egon Zehnder's sustainability practice. He tells a wonderful story about something that was said by the founder of Patagonia that is worth repeating.

"I think Patagonia is a leader. I had a conversation with Rick Ridgeway the other day, who leads sustainability at the company, and he said something fascinating. They were doing their Christmas catalogue, and Rick was down there, looking at the always-beautiful pictures and so forth. And Yvon Chouinard, the founder, says in the meeting, “That’s a nice catalogue, but tell me how it is that we’re not just incenting people to buy more stuff they don’t need?”

As Lueneburger says, Patagonia is not saying that its all about growth but instead saying, “It is not growth that will ensure our sustainability, but values.” Yes, Patagonia is exceptional and privately-held but this is where the intersection between value and values happens in the right way.

 Strategy + Business reported on the power of the post-recession consumer in a recent article that was sent to me.  The article uses Young & Rubicam's Brand Asset Valuator (BAV) which I am familiar with. This extraordinary database on consumer values, attitudes and shopping behaviors is something we used to use at my former agency. And I got to know Ed Lebar who started it all. Ed is terrific and I have always admired the smarts that went into this enormous undertaking that started some 20 years ago and which provides data on over 40,000 brands worldwide.  The research revealed in this article on the  new consumer found that there is a return to purpose and connection.  As well, people are making their decision-making over whether sellers meet their standards and reflect their values. In fact, this research confirms what we just learned in our new survey on Civility in America which reports that consumers are turning away from buying products/services where the companies or their representatives are rude or uncivil.  Here's the part from the BAV research that made my heart beat faster:

Among the once-prized brand attributes that declined in this period were: “exclusive” (down 60 percent), “arrogant” (down 41 percent), “sensuous” (down 30 percent), and “daring” (down 20 percent). On the opposite side of the scale, the brand attributes Americans found more important as they began to sense the impending recession and then suffered through the crisis were: “kindness and empathy” (up 391 percent), “friendly” (up 148 percent), “high quality” (up 124 percent), and “socially responsible” (up 63 percent).

Just think about it for a minute -- Kindness and Empathy as corporate reputation drivers. Of course!  As the authors write, the search for empathy in the companies they do business with "is the biggest shift in any attitude that we have ever seen during the BAV survey's two-decade history."  Generosity might just be the new thread in corporate DNA. " The vanguard companies understand that showing kindness and humanity is now a competitive advantage."  Making sure your company has the generosity gene is an imperative to growth and meeting customers' needs.

Totally agree. Just read an article about teaching reputation management in business schools. I gather it is not happening. Actually, this topic has been circulating for as many years as I have been in the field of reputation management. How is it possible that nothing has changed?  An analysis of highly ranked MBA programs by the Public Relations Society of America (PRSA) found that only 16% offer a single course in crisis management, strategic communications, public relations, or whatever on a company's most competitive and valuable organizational asset -- its reputation. With all the reputation failures we have seen over the past decade or more -- starting with Enron, it is hard to believe that business schools are still treating communications as an elective, if at all. [Weber Shandwick's "stumble rate" shows that nearly one out of every two companies lost reputation in their industry last year.  Isn't that enough reason to teach MBA students how to communciate to avoid such reputation disasters?] The article written by Anthony D'Angelo rightfully says: "One can't blame organizational leaders for not understanding that the way they operate the business is inseparable from the way they communicate about the business, inside and outside the organization. They're not educated sufficiently to know these are inextricably linked leadership requirements: You can't have effective leadership without an effective communications strategy. The latter is based on authenticity and transparency because nothing else works." Communications is a requirement of good governance and smart leadership. New CEOs understand very well today the importance of communicating internally when they confront their first 100 days.  Nearly all those I have worked with are eager to communicate with employees and desperate to do it well. There is always a perception that the prior leadership did not do enough to communciate the strategy or to movitate and rally employees. But when does" communications amnesia" set in if they are all so eager on Day One?  It is too late to get the communciations bug when crisis is on the doorstep. Reputation or communications management is sorely needed in business schools today. What's keeping it away? Is it the perception that communications is all about excuses and spin? Responsible communications needs to be taught.

First, happy Memorial Day to those of us in the US. And many thanks to those who have fought valiantly in defense of the USA!  We are honored. Turning now to reputational matters on my mind, I was thinking about reputation rankings over the long three day weekend. I happily concluded that our national obsession with rankings is actually a good thing.  Although I often  post about the endless number of top 10 and "best of" lists that quantify the meaningless to the meaningful, there is a silver lining to our rankings mania.  Companies -- in all regions -- work hard to be admired. Instead of complaining about the information fog we now live in brought on my all this quantification, I realize that we are lucky to have them in the first place. These reputation yardsticks help to challenge companies to measure up reputationally or move out!  Companies, from good to great, want to be seen as the most admired, most respected, most reputable and be chosen over their peers. The end result is good for us all  because companies now must regularly apply their resources to being good corporate citizens, best places to work, good quality providers, etc.  And what could be wrong with that.  Just a thought for the lovely weekend that we are having here in the US and thanks again to those who have made Memorial Day what it is.

As reputation watchers, we are always watching the big barometers of reputation such as Fortune World's Most Admired Companies and its sister, Fortune's Best Companies to Work For (BCTWF).  Below is an analysis and comparison of data points examined on the Fortune Best Companies to Work For list between the years 2006 and 2011. Even further below is some analysis on LGBT offerings, healthcare benefits, job and job sharing growth and other unusual benefits as factors in the 2011 winners of the workplace. All Data 2006-2011

	2006	2007	2008	2009	2010	2011
%Companies with Unusual Perks	7%	5%	15%	8%	16%	13%
%Companies with On-Site Child Care	33%	32%	29%	32%	32%	30%
%Companies with Fully Paid Sabbaticals	25%	22%	18%	19%	19%	21%
%Women Average	N/A	N/A	49%	49%	49%	48%
%Minorities Average	N/A	N/A	28%	30%	29%	29%
%Companies with 100% Paid Health	14%	16%	21%	15%	13%	14%
%Companies with Job Sharing	N/A	71%	63%	61%	68%	56%
%Companies with LGBT-Friendly Policies	N/A	92%	95%	95%	96%	99%
%Companies with On-Site Gym	N/A	N/A	69%	69%	69%	67%
%Companies with Subsidized Gym Membership	N/A	N/A	59%	78%	72%	71%
%Companies with Compressed Work Weeks	N/A	N/A	82%	75%	81%	81%
%Companies with LGBT-Friendly Benefits	N/A	N/A	70%	79%	83%	88%
%Companies with No Layoffs	N/A	N/A	N/A	9%	17%	15%
Average Job Growth	7%	9%	9%	8%	1%	2%
Average Voluntary Turnover	N/A	N/A	N/A	12%	7%	7%

LGBT As a Factor In the past decade, American companies have increasingly provided programs and initiatives to recognize the LGBT community in the workplace.  A large 95% of The Best Companies to Work For had LGBT-friendly policies and seven in 10 (70%) had LGBT-friendly benefits in 2008. In 2011, the number of Best Companies with LGBT-friendly benefits was an astounding 88% coupled with an almost perfect 99% of Best Companies with LGBT-friendly policies. While the Best Companies' LGBT-friendly benefits have always lagged behind LGBT-friendly policies, each year the gap between the two has narrowed; in 2008 there was a difference of 25% which has since shrunk to a mere 11% in 2011. The LGBT community has become a widely-recognized group within the American workplace and the Best Companies have been quick to make headway in this area. Health Benefits as a Factor Major corporations at Davos this year came together for the World Economic Forum Workplace Wellness Alliance. The Alliance consists of 31 companies committed to advancing wellness in the workplace. Goals of the alliance include knowledge sharing and developing and promoting the use of standardized metrics to create a global standard of wellness, hopefully increasing worker productivity. Looking at health initiatives for Best Companies, after rising from 2006 to 2008, 100% paid healthcare was in decline from 2008-2010.  2011 saw the first uptick in two years moving from 13% to 14% of Best Companies but still not near the peak of 21% in 2008. While 100% paid health seems like a luxury not all companies can afford, a healthy work force can be a powerful tool that may make the investment worthwhile. On a similar note, only 59% of Best Companies offered subsidized gym memberships in 2008 compared to a whopping 78% in 2009. The number of Best Companies with subsidized gym memberships has fallen in the past two years, but far from pre-2009 levels (currently 71%). Best Companies are still trying to keep their workforce fit and healthy even in the wake of a recession which demonstrates that employee health is a staple of a great workplace. Unusual Perks as a Factor Recently, more employers have been offering not only physical health perks, but mental health programs as well for their employees. Health isn’t confined to gym and fitness centers. Companies like Zappos.com offer employees an on-site resident “life” and “goals coach” that advises employees on work/life balance and discovery of  higher meaning in their lives (sounds awesome, right?). Defense contractor SRC/SRCTec offers employee-led support groups that focus on alleviating the stress of caring for an aging parent. And starting with a yoga room at Ebay in 2008, the idea of peaceful exercising is re-emerging in 2011 with Intuit’s free Yoga, Pilates and Zumba (Latin-inspired dance fitness--first time I heard of this, oops) classes. Job Growth & Job Sharing as a Factor While perhaps a reflection of the economy, average job growth at the Best Companies ticked up slightly after falling to its all-time low of less than 1% in 2010. Traditionally, average job growth for Best Companies had hovered between 7% and 9% (between 2006-2009) before falling sharply in 2010. For the Best Companies, average voluntary turnover also moved in a similar direction. Voluntary turnover fell from almost 12% in 2009 to 7% in 2010 where it has remained flat through 2011. The past three years have proven to be difficult for the unemployed, perhaps pushing more workers to hold onto their positions. Job sharing reached its zenith in 2007 with 71% of Best Companies offering such a program. The offering steadily declined for the next two years with a small surge in 2010, but ultimately falling to a five-year low of 56% in 2011. Job sharing may be on the decline lately as more Americans are pressed for income, looking for full-time employment as a suitable solution. [Many thanks to Ross W for his help on this.]

MIT Sloan Management Review and Boston Consulting just launched a new study that found that nearly 7 in 10 companies intend to accelerate their investment in sustainability this year. The global survey among 3,100 corporate leaders also found that improved brand reputation is the biggest benefit of addressing sustainability....nearly 50% agree that this is true.  Brand reputation seems to be the bottom line these days.

It is now the end of the week and I promised to mention something about the other half of our results on executive top-tier conferences, especially as the World Economic Forum is happening this week. Nearly three out of 10 industry-leading CEOs spoke at one or more top- tier business events in 2010, according to our new analysis.  [For each of the 55 industries identified in the World’s Most Admired Companies survey, Weber Shandwick examined where each CEO spoke in 2010.] Key findings are:

• Among those who took to the podium, the World Economic Forum at Davos was the leading executive speaking platform for industry-leading CEOs.
• The World Economic Forum was followed by the Clinton Global Initiative among our list of Five-Star conferences in 2010. Other forums are below.

Industry-Leading CEOs’ Top ThreeExecutive Speaking Engagement Venues in 2010

(1)   World Economic Forum at Davos

(2)   Clinton Global Initiative

(3)   Fortune Most Powerful Women Summit (tie)

(3)   The Wall Street Journal CEO Council (tie)

Other Events:  (alphabetical order) Committee Encouraging Corporate Philanthropy’s (CECP)  Board of Boards,  Chief Executives Club of Boston, Milken Institute Global Conference, National Press Club, Wharton Leadership

 

• The global economy and outlook was the leading topic for industry-leading CEOs who participated in these events. Other themes included education, gender equality and company- or issue-specific opportunities.  What will top executives talk about throughout 2011 if the economy recovers.....perhaps they will focus on their positioning and differentiation and corporate responsibility will rise again in popularity (it has slowed we think). I did hear that regional forums on corporate responsibility are increasing.

Since we always like to look at a different segment of the executive conference business -- this year industry-leading CEOs and leading women -- we are looking for any ideas for next year.  Got my thinking cap on.  Let me know what you are thinking too.

 Yesterday we released our analysis on where industry-leading CEOs and the most powerful women in business invested their time speaking in 2010. Reputations can be shaped at such top-tier events and company stories can travel the world, if properly socialized. We used to depend on media coverage to get the message out about a speaking platform but with social media at our fingertips today, a speech before 50 people can travel fast to many more influential people than ever imagined. If companies can properly distribute their executives' speech-making online, they can now realize an even healthier ROI for their executives' time than ever before. And let's not forget how much time, resources and energy goes into just one speech or presentation. It is never a walk in the park! I am going to blog backwards about our findings by starting with what we learned about the most powerful women in business first and get to the industry-leading CEOs later this week.  Like we had in grade school, today is backwards day. I am quite pleased that we decided to look at the most powerful women in business because this is a small, exclusive club that demands further research in the communications field. Greater demand for female leaders was recently underscored when we learned that the World Economic Forum now requests that 20 percent of this year’s strategic partnership delegates be female. That polite request is sure making the rounds because I see it popping up all over. Despite the small sample size of these most powerful women (alas!), we did learn some interesting trends about what they've been doing on the speaking circuit over the past 12 months. And they've been busy. Here are some snippets from our analysis:

• This elite group of powerful business women was extremely active on the speaking circuit in 2010. A large eight out of 10 (82 percent) spoke at one or more events in 2010.
• In addition, the average number of events that each woman spoke at in 2010 was 3.2 events, with 11 women having spoken at five or more events.
• The leading speaking forums in 2010 for the most powerful women executives included the World Economic Forum, Fortune Brainstorm: Tech, the Women’s Conference (hosted by former California First Lady Maria Shriver and Governor Arnold Schwarzenegger), Daily Beast’s Women in the World, and not surprisingly, Fortune’s Most Powerful Women Summit (although not everyone who makes the list is a speaker). However, there was also a wide range of other types of conferences where top women in business spoke such as Business for Social Responsibility (BSR) Annual Conference, Committee Encouraging Corporate Philanthropy (CECP) Board of Boards, Milken Institute Global Conference, and The Wall Street Journal CEO Council. Micho Spring, our chair of the Global Corporate practice at Weber Shandwick said: “The vast majority of these women leaders are taking their communications and storytelling roles seriously. There are not only many women’s conferences for female leaders, but many other non-gender specific platforms as well.” 
• Leading women executives are out in force.  This is quite a broad range which shows that there is demand for these top executives. The types of conferences can be categorized as follows:

Types of Speaking Engagement Venues Most Powerful Women in Business Spoke in 2010

Industry Events (50%)

Women’s Leadership Events (43%)

Academic Events (40%)

Five-Star* Events (35%)

Function-Specific (18%)  (i.e., ANA Masters of Marketing, NACD Directorship Forum)

    Just as rankings are growing leaps and bounds every year, I see the executive conference business expanding even further.  Companies are shaking off the economic woes from the past two years and getting back on the trail to differentiate their companies, narrate their responsibility and possibly turn back the anti-business wave that has beset so many. Conferences have an untapped way of  validating companies by tacitly endorsing that their executives have something to say that is meaningful and forward-looking about our collective futures. And women execs are clearly doing their part as well.

Came across an interesting statement about CEOs this morning. It was in a Justmeans  blog post about how CSR needs to get more humanized, meaning making a stronger link between the CSR director or manager with a company's CSR initiatives and thereby giving it a face. The author Akhila Vijayaraghavan wrote:

This year will see the beginning of a shift from CSR itself to the CSR practitioner. Just like brand image is beginning to collate itself with CEO image, so will CSR with the CSR practitioner/manager. I believe this could be an important trend because putting a 'face' on CSR makes it not so 'corporate'. CSR practitioners deal with far-reaching environmental, social and ethical issues on a daily basis that are profoundly human. Taking the corporate out of CSR will bring to the spotlight of what the people in businesses are really capable of . This is a good thing not just for CSR but also CSR practitioners.

As a long-time CEO reputation watcher and if I understand what she meant in her post (people often speak about brand and corporate reputation/image in the same breath), brands -- not just corporations -- will increasingly be linked with CEOs. For many years, the research I did found that nearly one half of a company's reputation was tied to that of its CEO. However, the reputation of the brand was not as tightly correlated until the Internet came along and changed the game. Now that anyone anywhere can find out the parent company of a brand and also who its CEO is, that is most probably changing. And I expect it will change quickly.