Archive for October, 2009
Since public trust in the private sector has hit historic lows, demonstrating corporate responsibility has become even more important for today’s corporate leaders. Effective corporate responsibility – meeting (or exceeding) stakeholder expectations for financial, social and environmental performance -restores trust and credibility. Unfortunately, when companies attempt to talk about corporate responsibility, they often do more harm than good, causing even more damage to the company’s reputation. Common pitfalls are communicating instead of improving performance; ignoring reasonable critics; and reporting only what is required.
How can companies talk about corporate responsibility without shooting themselves in the foot? In my experience, companies that communicate corporate responsibility effectively follow seven rules.
1) Demonstrate, don’t assert.
Resist the temptation to demonstrate corporate responsibility via press release. Whenever a company talks about corporate responsibility, communication should follow action. Many skeptical audiences assume that corporate statements, if not misleading, will be self-serving and provide only a limited perspective. Assertions of corporate responsibility without the appropriate due diligence, policies, and actions backing them up will quickly prompt critics to highlight inconsistencies between word and deed. Just last week at the annual Business for Social Responsibility Conference, eBay CEO John Donahoe put it this way, “You can’t tackle your reputation until you tackle your actions.”
2) Get the facts.
Responsibility begins with accurate information. Without a clear understanding of conditions on the ground, companies cannot improve corporate responsibility performance. Accurate information, collected through due diligence tools like human rights impact assessments, not only informs smart business decisions, it minimizes the risks of communicating. Companies that provide policymakers with reliable information can reduce pressure for regulation. Companies that audit their operations can reduce the risk of legal liability. Accurate information is just as important for advocates who seek to improve corporate performance. A common set of facts provides a basis for engagement and collaboration among stakeholders.
3) Engage critics.
Most companies are exceedingly cautious and reluctant to engage critics. While a company may not agree with or ultimately adopt the recommendations of a critic, engaging critical external stakeholders in honest dialogue can earn credibility and demonstrate a corporate commitment to addressing the issues at stake. After Amnesty International released a 2003 report criticizing the human rights impact of a BP pipeline project, BP engaged Amnesty in dialogue, and sought to address the concerns by incorporating international human rights standards in the legal agreements governing the project. Engaging its main critic and taking stakeholder concerns seriously earned the company credibility. Engaging reasonable critics can also provide a company with valuable information and expertise, and set the stage for collaboration or partnership.
4) Be transparent.
Demands for greater corporate transparency are common in the wake of the financial crisis. Transparency has always been a hallmark of effective corporate responsibility. Communicating accurate information that is complete, relevant and measurable allows stakeholders to make their own assessments of corporate performance. As a rule of thumb, more information is better than less. High levels of transparency earn credibility with stakeholders and critics, create incentives for continuous improvement, and encourage the adoption of best practices. While companies that embrace full disclosure risk criticism, choosing to report as little as possible is a short-sighted strategy. For years, apparel companies resisted calls by advocates for full disclosure of factory locations. Despite its experience as a target of criticism, in 2005, Nike reversed the company’s longstanding position. By unilaterally disclosing all of its contract factory locations, Nike earned credibility while leveling the playing field among apparel brands and competitors. Nike’s principal rival, Adidas, ultimately disclosed its factory locations three years later. Companies must overcome cultural biases against public disclosure and seek levels of transparency sufficient to establish facts, demonstrate performance and earn credibility among stakeholders.
5) Define the company’s “sphere of influence.”
No company can, or should, assume responsibility for all the issues of concern to its stakeholders. Companies fall into the trap of accepting too much responsibility when other entities – governments, for example – must act to achieve lasting improvements. Conversely, companies that define their influence and responsibilities too narrowly risk a stakeholder backlash. A clear definition of a company’s sphere of influence, consistent with a company’s business, can go a long way toward meeting the expectations of stakeholders. The multi-stakeholder Global Network Initiative, for example, calls on its member companies to “prioritize circumstances where it has the greatest influence and/or where the risk to freedom of expression and privacy is at its greatest.” Leading companies evaluate and prioritize the corporate responsibility issues they face and allocate resources accordingly.
6) Earn credibility.
Third parties are the most powerful corporate responsibility communicators. The opinions of credible experts and independent stakeholders almost always carry greater weight than corporate assertions, especially in an atmosphere of mistrust of corporate motives. Independent monitoring was one of the first expectations of stakeholders when companies began to adopt voluntary codes of conduct. A single statement of support from a respected former critic can do more for a company’s reputation than years of corporate communication. But you have to earn that credibility. Ways companies have earned credibility include adopting widely accepted external standards, partnering with stakeholders, and acknowledging problems. The best corporate responsibility reports, for example, are notable for the candor with which they acknowledge failures and address performance obstacles.
7) Connect corporate responsibility to business strategy.
Stakeholders who value information on social and environmental performance look for evidence that a company’s corporate responsibility initiatives reflect an ongoing organizational commitment rather than an ad hoc response to an isolated issue. Are corporate responsibility efforts integrated, well-understood and rewarded at all levels of an organization, from the boardroom to the factory floor? Is every corporate function able to make the business case for corporate responsibility? The most effective communications demonstrate how a company’s corporate responsibility efforts advance key business objectives.
By adopting these best practices for communicating corporate responsibility, corporate leaders can avoid common pitfalls and focus on improving financial, social and environmental performance.
Consider this post Part 2 of Emotions are Stubborn Things. Part 1 happened such a long, long time ago that I won’t even say anything more about it. But, I’m back now and feeling stubbornly emotional about communication.
Twitter! I can’t capture in a small number of words – much less 140 characters – how my life has changed since my tweets debuted, just 6 short days ago. I’m now 49 tweets and 49 followers into the Twitter Matrix.
Let’s just say that up until last week, I suffered from a generational bent away from Twitter. Before my conversion, tweeting represented rapid technological transmission (a significant plus) aggravated by an accelerated loss of privacy (a catastrophic minus). But, I buckled up anyway and got on this Social Media ride, precisely because I am determined to stay contemporary. I want to avoid being that person who shuns technological breakthroughs. I’m not calling out any names here (like my mom’s), but you know that person I’m talking about, the one who, in decades gone by, didn’t want to hear about call waiting, wouldn’t leave messages on answering machines, and poo-poo’d email, saying, “ahoo, yahoo, what’s the difference?!” So, yup, I joined the Twitter corps and got the esprit. I started tweeting about emotion, a subject near and dear to my heart, and, apparently, I can’t stop.
As a consultant, coach and lecturer, I’m always emphasizing how emotion lubricates communication… or makes true dialogue skid to a stop. After an initial tweet or two along those same lines, I felt wildly invigorated. And, then, I got some followers. Wow! And, then, I noticed that those followers followed intriguing tweeters. Cool! So, then, I started to follow them. And, then, I heard so many voices out there, talking about everything and nothing all at once. Some of their messages resonated deeply. Others gave me belly laughs. Some left me feeling disturbed. Hmm…
True: What every tweeter chats up in cyberspace is not always engaging or even interesting – just as my own tweets are not to everyone’s tastes – but when the periodic updates fuse together with clever vignettes about the tweeters’ ideas, their passions, their friends, their blogs, and, of course, the 9 quick ways to monetize Twitter, the result is a lively, delectable, followable mix.
Clearly, tweeters inhabit a parallel universe that so many people don’t even know about. Yes, I think I’ll stay here.
The trouble with staying in the Twitterverse is that it’s hard to tear myself away. Calls still have to be returned, dishes still need to be washed, and books still need to be read. More importantly, bills still need to be paid, so I’m taking my colleague Laurel Hart’s advice and being very strategic in how I engage with Twitter, and how I permit it to engage me.
As time goes on, what I’ll have to develop more of is what Howard Gardner has called the synthesizing mind, something I learned about due to my organic, free range grazing on Twitter: “The synthesizing mind is about knowing how to deal with an avalanche of information; knowing what to learn and what to reject as irrelevant.”
All that being said, here are some other interesting tidbits for the Sticky Wicket:
–A video clip of Clay Shirky, discussing the “transmission of emotionally engaging messages rippling around the world at nearly the speed of light.” (Social Media Enhances the Emotional Dimension of News)
–Brian Solis blogging about “connectivity through inspiration.” (Social Media is Rife with Experts but Starved of Authorities). Communicating on Twitter in the age of viral sound bites requires observing and listening, he says, and I agree.
–A completely fascinating but somewhat scary search tool called spezify.com. Start by typing in your own name.
*For those of you wondering why I’ve used Jimi Hendrix’s image here, well, I’ll just leave you guessing (Hint: “Freedom”). In the meantime, feel free to follow me on Twitter:@emoticomma
The Paradox of American Power
Between the 9/11 attacks and the US invasion of Iraq in 2003, the foreign policy establishment focused on the difference between “soft power” and “hard power.”
The concepts were elaborated in a 2002 book by Joseph S. Nye, Jr., then dean and now University Distinguished Service Professor at the Kennedy School of Government at Harvard University. Nye is consistently ranked one of the most influential US scholars on foreign policy.
His book, The Paradox of American Power: Why the World’s Only Superpower Can’t Go it Alone, was remarkably prescient. (more…)