21 April 2009 | Strategy | Jennifer Rice

From Financial Times today, a good article on how social responsibility is surviving the downturn. Cost savings and consumer expectations are the drivers that are keeping sustainability and fair trade high on exec’s priority lists.

They have worked out how to make it pay. Many of their initiatives help to cut costs or sustain supplies. They allow customers to continue to regard themselves as ethical during difficult times. They also help the companies to improve their public reputations at a time when business is widely held to be responsible for the downturn.

As more companies discover that CSR is not only a risk mitigation tool but also a competitive advantage (and often a source of new revenue) we should see this becoming the new face of capitalism. What is your company doing to align your brand and business with social impact?

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14 April 2009 | Brand and Marketing, Strategy | Jennifer Rice

Last week I wrote about lessons learned from Liberty Mutual’s focus on responsibility. 24/7 Wall St provides some much better, albeit disappointing, examples in their list of top 10 greenwashers. GE, what on earth are you thinking? I have been searching for good examples of companies that are delivering corporate social opportunity (profitably aligning brand with social impact) and finding woefully few. GE’s Ecomagination had been a good role model in my mind for a) aligning their core mission with environmental impact and b) creating profitable products and services that deliver on that mission.  Yet this article shows that GE is a poster child for “good theory, poor execution.” While I don’t believe that using historical pollution stats from 1947 – 1977 is entirely fair (hey, people change), continuing to be in the top 10 of the Toxic 100 list is clearly a huge concern. At least they’ve dropped to #7 in 2008 compared to #4 in 2006.

That said, I do agree with Kathrin Winkler (of EMC) who wrote in a guest post on Kevin Moss’ (of BP) blog:

“there are other less worthy targets for the (greenwashing) label. There is the slightly naïve company (or, more likely, marketing communications person) who is genuinely proud of positive steps that were taken in their own right, but hasn’t looked at them in the greater context of materiality…. What about the more aggressive companies that push the edge of the envelope, by necessity running up against the untested and controversial, and then getting slapped down for their efforts?… And then there’s the “whitespace” situation in which a company is doing something relevant and material, so gets chastised for something else they haven’t (yet) done, even if it’s far less material.”

I’d add a fourth consideration to Kathrin’s list: the context of each individual industry. So while BP also showed up on the list of top 10 greenwashers, I’m not entirely sure it belongs there. The company is emerging from an entrenched position in an unsustainable category, and it takes time to turn the Titanic without compromising current shareholders. The article says that it spent “a paltry 6.8% of BP’s total revenue on alternative energy,” yet it fails to put that into context of other energy companies which it outspends. Why are we bashing BP as much as Exxon, whose CEO  refuses to even get on board? In an article last year about lawmakers’ criticism of big oil:

“Markey hammered Exxon’s Simon over the company’s investment in renewable energy. “Why is Exxon Mobil resisting the renewable energy revolution?” asked Markey. Simon said Exxon has given $100 million to Stanford to study renewables. “$100 million?” said Markey. “But you made $40 billion last year.”

IMO, criticizing BP is like criticizing the turtle for not being as fast as the hare. It’s still leading all the other turtles. Before we start throwing the greenwashing label around, I think it’s important to consider a) the context of the industry and competitive activities, and b) demonstrated improvements over time. Let’s give some credit where credit’s due, even if companies aren’t yet living up to ideal standards. It’s a journey and we’re nowhere close to the finish line, but I think we’re making progress.

I’d love to generate a discussion on this subject. How do you separate fair from unfair criticism? What’s the real dividing line between a greenwasher and a company with good intentions but just can’t change fast enough to please everyone?

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08 April 2009 | Socially good brands, Sustainability | Jennifer Rice

From New York Times, a good article on how luxury brands are embracing responsible business practices.

“Increasingly, consumers are demanding that the goods they buy be made in ways that do not harm the environment or the workers who make them. They are often willing to pay more for “green” products or “fair trade” goods. And in the current economic downturn, luxury brands are searching for new reasons to persuade consumers to pay for their high-priced products.”

It makes sense for luxury brands to take a strong stand in this area. “Slow fashion,” like the slow food movement, emphasizes the amount of labor it takes to create a product and support for those small suppliers who provide quality inputs. In the case of Ermenegildo Zegna Group, that translates into improving the water supply for farmers in Mongolia, which not only raised the living conditions of farmers but has also created a more reliable, higher quality cashmere wool.

Let’s hope this trend-setting category continues to build the momentum in sustainable business practices.

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07 April 2009 | CSR risks | Jennifer Rice

Ok, I’m a bit late to the game, but I just stumbled upon Liberty Mutual’s The Responsibility Project that was launched last year. The discovery led me to investigate whether its focus on responsibility was rhetoric or real.

“Through The Responsibility Project, Liberty Mutual is using entertaining content, including independently produced short films, online content and television programming, as catalysts for examining the decisions that confront people trying to “do the right thing.”"

This appears to be an excellent example of leveraging brand into social responsibility. The effort is part of their overarching brand campaign targeting a demo/psychographic of “responsible people.” From the standpoint of marketing communications, this is a very well strategized and executed campaign. It’s simple, easy to understand, consistent, and taps into a core customer mindset.

But what’s much more important is seeing how the brand lives up to its rhetoric. On the positive side, Liberty Mutual’s mission to “help people live safer, more secure lives” is manifested in substantial ways across the organization. Liberty Mutual Foundation supports communities through grants to education, health and human resources non-profits. The company also offers educational seminars and activities on safe driving, identity theft protection and other topics. Its commitment to environmental stewardship is demonstrated through EnergyStar status for two corporate buildings. And on the customer-facing side of sustainability, it recently introduced a collection of green property coverages called Green Select.

On the negative side, here’s what the Consumer Affairs  site has to say about the company:

Liberty Mutual is one of the nation’s biggest insurers. Whether that’s a good thing depends on your point of view. It’s been caught up in the insurance industry scandal unearthed by New York Attorney General Eliot Spitzer’s kickback probe. The company also faces charges in an Illinois investigation.

Visitors can also click through to (quite a few) customer complaints across all of its divisions.

My point here is not that Liberty Mutual is “good-washing.” I see consumers and media bashing CSR leaders like BP and Unilever in ways that I think is pretty unfair given how hard they’ve worked to lead their respective industries in responsible business practices.

But I do think we can learn a few lessons here.

• the responsibility for creating a socially good brand can never solely reside in the marketing department. It must be pushed through the entire organization.
• today’s information transparency means that any negative viewpoint is going to get airtime.
• companies that proclaim their commitment to responsibility are likely to get hammered by consumers more than those who don’t.

The latter is one of the risks of committing to a socially responsible path. All eyes are going to be on you, because you’ve set the bar for yourself. Corporate hypocrisy seems to be as magnetic as a car wreck, with everyone slowing down to point and stare. There are plenty of rewards for leading your industry when it comes to social impact, but be sure you understand the dangers and go about it in the right way. That means living and breathing your promise throughout the customer experience, not just through special programs and initiatives.

Liberty Mutual has a campaign about ethics and doing the right thing. It cannot, for example, allow itself to be sued for “intentional infliction of emotional distress” without undermining consumer trust. If your company is embarking on a responsibility effort, you might want to conduct a risk audit to identify those areas that can put your entire brand in jeopardy and take steps to close those gaps.

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03 April 2009 | Brand and Marketing, Strategy | Jennifer Rice

Whether you sit in marketing, CSR, supply chain, HR or the executive suite, you’re likely doing your part in ensuring your brand “does no evil” and perhaps even is doing some good. You can probably point to a laundry list of company initiatives from employee volunteer programs, fair labor practices, cause marketing, cradle to cradle manufacturing, and so on.  However, in most companies these efforts are not coordinated to tell a coherent brand story, and fragmented responsibilities means that no one is seeking the profitable white space opportunity that lies at the intersection of your brand and social impact.

The key to building the socially good brand is a mindshift from silos to systems… from independence to interdependence. There should be a single strategy anchored in customer insight that defines not only what the organization does, but also how it behaves and interacts with all stakeholders. When each department is left to create its own vision of social impact, the result is inefficient and contradictory at best, and self-sabotaging at worst.

Each group has its own strengths and weaknesses when it comes to setting this type of strategy. A CSR department focused on compliance, fair labor and philanthropy doesn’t usually have the skill sets of customer insights and profitable innovation. A marketing or public affairs department can unilaterally decide on a cause-focused direction only at its own peril; customers are increasingly jaded and intolerant of companies who don’t fully walk their talk. Brand managers are often focused on their own products’ brand equity and have little to no influence over corporate alignment with a cause. It’s time to pull it all together, which is admittedly a tall task for most.

Creating the socially good brand is likely the single biggest opportunity for internal and external collaboration for companies today.  Employees and customers want to be part of something bigger. And more importantly, it alleviates the risk of PR fiascos, builds consumer trust through consistent words and actions, and has a positive bottom-line impact even in the downturn.

So how do you shift from fragmented programs to a unified strategy to build a socially good brand? Here’s our top 10 list. If you have more suggestions, comments are very welcome.

1. Ensure executive leadership in recognizing the company’s role in the larger societal ecosystem, committing to conscious capitalism, and being willing to make tough decisions that align actions with rhetoric.
2. Gain buy-in across departments that “singing from the same songbook” will lead to significantly greater impact than one-off programs.
3. Be willing to cut pet projects in favor of a laser focus on initiatives that drive brand and business goals.
4. Develop a deeper understanding of what each group can bring to the party. For example, marketing should be bringing stakeholder insights and competitive analysis to work with CSR pros on identifying the most fruitful way to build brand equity through social impact. Marketing is also great at simplifying messages to be readily understood by stakeholders.
5. Leverage innovative thinkers and departments to come up with your company’s version of GreenWorks or Ecomagination – profitable ways to demonstrate your company’s commitment. This is how we shift perceptions of CSR beyond “BDF” (babies, dolphins, and forests) and create sustainable, meaningful change.
6. Before committing to a cause-related direction, be sure to understand whether your brand has any credibility among your stakeholders. If the answer is no, figure out exactly what actions you need to take in order to gain credibility, and create an evolution strategy to get there. Or switch to a cause that is more believable for your organization.
7. Understand the customer touchpoints that drive purchase and loyalty, and find ways to ensure that your customers fully experience your social commitment. While you’re at it, look for ways that your customer experience might be sending mixed signals and contradicting your public rhetoric.
8. Don’t demand from suppliers what you’re not willing to do yourself. If you want suppliers to adhere to codes of conduct, create one for your own company that ensures realistic expectations and outlines ways to collaborate rather than dictate. Nike is setting a good example here.
9. Establish metrics across the business, not only for internal initiatives like carbon footprint but also for customer perceptions and attitudes. How are you closing the gaps between customer expectations and their beliefs about your brand? (And do you even know what those gaps are?)
10. Collaborate with customers. The more you engage them in honest and transparent dialogue, the more trust can be built. You can even solicit their feedback on what metrics they’d like to see instead of unilaterally deciding what to measure.

What are the roadblocks within your company to building a socially good brand? Or, what has really worked within your company to make this happen?

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