The Overconfidence Obstacle

A few months ago, we wrote about “The Humility Hurdle”, which addressed the reluctance of some CEO’s and companies to herald their CSR and philanthropic practices publicly, as a result of corporate ‘modesty’.  On the other end of the spectrum, we find a certain sense of bravado amongst CEO’s who cannot wait to toot their own horns and aggressively advance their company’s community interests, often without any thoughtful or strategic consideration of the full impact of their pursuits.

Case in point, Marc Zuckerberg, Facebook’s wonderboy, who announced last month that he was donating $100 million to the Newark public school system.  But the announcement was not made casually; it was done on the Oprah Winfrey show, with much hype and just days before the controversial Facebook expose “The Social Network” was released.  The merits or motives of this strategy notwithstanding, its hard to dispute that bringing the announcement to the Oprah show is about as bold a move as you can get.  It takes nerve, and Zuckerberg had to be feeling very confident about his plan.

And just weeks later, the plan seems to have hit a roadblock and skeptics argue about whether or not it is even legally viable.  Granted, the donation came from Zuckerberg, not from Facebook per se.  But this raises an even more pointed question – to what extent must CEO’s reflect their company’s CSR interests when it comes to their personal giving?  If they are not strategic and thoughtful in their own philanthropic efforts, are they undermining their company’s CSR progress?  Facebook has launched its own ‘causes’ platform that encourages users to “make a difference…on Facebook”.  Does this align strategically with Zuckerberg’s $100 million gift?  Should it?

Just as a CEO (and particularly one with public profile) has to consider the impact of his behavior outside of the office, so too must he think before he writes a cheque to the local charity.  Charity should not be flaunted flagrantly – and while Zuckerberg’s generosity may serve as an example to other Executives thinking of doing good, the apparent lack of strategy behind the donation may just come back to bite him….and by extension, Facebook.

And the flip side of the same equation is the notion that if CEO’s are philanthropically inclined, they are missing an important CSR opportunity if they do not integrate their personal giving experiences with their corporate interests.  Philanthropy can help to enhance corporate brand and community investment can generate opportunities for employee engagement.  These resources need to be considered and leveraged.  Perhaps Marc Zuckerberg should have thought through his $100 million donation more strategically before he jumped in full steam ahead.

Passion Points:

• Consider that executives may be held to the same standard’s that their company’s CSR platform espouses
• Try to integrate the personal giving of your employees and top executives with the community priorities being heralded by your company
• Have a plan for your personal giving – think it through from start to finish before any donations are publicly announced.  Make sure that you can deliver on your promises

CSR is no longer a bandwagon. It’s a standard.

The recently released Cone Cause Evolution Study makes it clear that in the eyes of consumers there can be absolutely no doubt about the importance of CSR. In fact, the data would seem to indicate that on many issues, positive attitudes to CSR have reached a natural zenith.

In the 2010 study, 85% of those surveyed said they have a more positive image of a product or company when it supports a cause they care about. That represents no change from a 2008 study that asked the same question but in a 2007 Cone study, 92% agreed with the statement.

Likewise in 2010, 80% said they would switch from one brand to another if the other brand is associated with a good cause. But in 2007, that number was 87% and in 2008 it was 79%.

Cone’s headline to the 2010 study was that Moms and Millennials are leading the way in CSR attitudes. In reality, millennial attitudes showed very little movement over time. In a 2006 Cone study on Millennials, 89% agreed with the “brand switching for a good cause” statement from above. In 2008, that number had dropped to 88% and in 2010 it rose to 93%. Once you factor in statistical probabilities, the numbers are close to identical.

One could try and make arguments to explain the rises and dips in these numbers but it seems to me that once the measured agreement with certain statements reaches particular levels, the movement in numbers is irrelevant. Whether its 85%, 89% or 92%, it is very clear that buying decisions are indisputably being made on the basis of the CSR profiles of products and companies. Would 95% be that much more impressive than 92% for example?

There is (at least) one sobering statistic that emerges from the Cone study. Only 19% of people said they would buy a more expensive brand because of its cause profile. So, while CSR is firmly a part of consumer thought, it may not yet be translating into action. But that number is likely on the rise and increasingly we will see CSR investment translating into revenue.

In our firm’s interaction with numerous companies and prospective clients, we find many that wonder about “that CSR thing” and whether there’s just a fad factor  – a bandwagon effect. The answer – that successful owners and managers have already discovered – is that the bandwagon has passed. A strategic CSR program is now a business standard and a necessity to effectively compete in the marketplace.

Passion Points:

• CSR is not a passing fad. If your business doesn’t have a strategic CSR program, is time to develop one.
• Those who have implemented CSR programs should be evaluating and improving. As CSR increasingly becomes part of buying decisions, the quality of CSR programs will have to keep suit.

To compost or not to compost

So, I was going to write an article about Frito-Lay/SunChips’ new biodegradable bag (which I purchased for the first time last week), and to initiate a discussion about whether or not, from a cause marketing point of view, the company has done a strategic job of leveraging their CSR efforts to their best business advantage.  But when I sat down to read up about SunChips’ marketing process, I learned that the biodegradable bag had been yanked due to noise levels!

Indeed, I noticed right away that the bag was noisy.  Like a freight train actually.  But as an environmentally concerned consumer, I felt good knowing that I could put the bag in my green bin. In fact – I wasn’t much of a SunChips enthusiast before the bag hit the shelves.  I bought the chips because of the bag.  And I suppose that was part of the company’s motivation for introducing a compost-able bag in the first place.  Again, as an environmentally concerned consumer, I was shocked that feedback over the bag’s noise level would have been enough to prompt an overhaul of SunChips’ heavily hyped and costly compost-able bag rollout. 

So what exactly is going on here?  Why all of the corporate flip-flopping around a fairly compelling and cutting-edge green packaging initiative?  My best guess is that Frito-Lay determined (after an assessment of focus groups and initial reactions) that the bottom line business gain resulting from their CSR efforts (after all, lots of folks like me would have probably continued buying the chips in spite of the noise) was going to be eclipsed by the broader public’s reaction to the bag’s noise level.  In other words, good business sense trumped the company’s interest in doing good. 

Frito-Lay is going to reintroduce a quieter version of their biodegradable bag soon enough, so they haven’t abandoned ship altogether.  But there is a fundamental lesson to be learned – that is, CSR efforts must be strategic.  They have to integrate with the bigger business picture.  They have to consider the needs and interests of target markets and corporate stakeholders.  In other words, while they have to be authentic, they ultimately have to help drive business (and certainly not undermine it). 

Sounds like basic stuff.  Also sounds like Frito-Lay learned the hard way.

Passion Points:

• When considering a CSR or sustainability strategy, don’t lose sight of the business bigger picture
• Consider the demographic of your key stakeholder groups – what are their priorities and interests, how will they react to your CSR platform?

Authenticity and Transparency in Celebrity Cause Alignment

Celebrities are amongst the savviest social responsibility activists.  And if celebrity is seen as a corporate enterprise, the rationale for cause alignment and CSR in Hollywood makes a lot of sense.  It can enhance reputation, drive sales, establish stakeholder loyalty and offer the opportunity to give back and make a difference in the world.  And scores of celebrities are seizing the opportunity to do just that; in fact, for some, like Bono, George Clooney, Angelina Jolie and Audrey Hepburn, their community work has become a critical part of their public persona.

But just as is the case in the corporate world, celebrities have to be careful about the authenticity of their philanthropic and community work.  We have written a great deal about the importance of transparency and genuineness when companies begin to develop strategic corporate social responsibility platforms, and when this piece is missing in the celebrity world, the results can be catastrophic.

Take, for instance, Lindsay Lohan.  In the past, Lohan has partnered with Angelwear in support of the Make-A-Wish Foundation and she has been involved with Save the Children.    Today, Lohan just completed a jail sentence after she violated the terms of her probation in a 2007 drug case.  Clearly, she herself is troubled, and while her instincts about the charities that she supported may have been genuine, from a corporate PR point of view, the cause associations probably no longer pack the same punch.

On the heels of Al Gore’s green expose, An Inconvenient Truth, the former Vice President was heralded as a hypocrite, given his own unimpressive carbon footprint.  He responded with a redoubling of his commitment to carbon neutrality (along with several ‘explanations’ for his ridiculous rate of energy consumption and use of private jets).  Today this sense of disingenuousness still plagues Gore’s reputation.

Australian singer and actress Sophie Monk has been an outspoken PETA activist and has posed naked for the organization on a poster that urges people to “Spice up your life….go vegetarian”.  Several months later, Monk was photographed with a very non-vegetarian box of KFC in hand (picture below).  It is a bit of a leap to accept that her cause alignment was truly from the heart.

Sophie Monk Enjoying KFC

Which brings this discussion full circle, since it was only a few months ago that KFC’s partnership with Susan B. Komen was characterized as insincere.  Celebrities and companies should look to one another for best practice examples of authentic, sincere and genuine cause partnerships.

The Humility Hurdle

Here’s a situation we’ve encountered a number of times. A business owner is very socially conscious and has actively brought that sensibility into the company. It has resulted in philanthropy or sustainability programs that are well developed and in some cases examples of best practice. Because of the owner’s personal ethos, there are many other aspects of the operation that in fact reflect exemplary CSR principles. These include promoting diversity, the support of charitable causes and ethical business practice.

However, when faced with a proposal to develop a more integrated and strategic CSR plan, the answer is a resounding no. Why? Because it will inevitably result in greater recognition for their socially responsible efforts – and she or he is uncomfortable with undue credit for what is considered to be “just doing the right thing.” In an age of seemingly unbridled corporate egotism, this is almost unbelievable but their enviable humility may be resulting in a disservice to their company and the community.

Perhaps the owner would relent if presented with some of the following benefits that could accrue if a CSR program was well built and strategically articulated.

The company’s employees would be better engaged. They would feel proud of working for a company that stands out, and they might share those feelings with prospective employees. They would be motivated to be a part of CSR efforts. Productivity, retention and the ability to attract top talent would grow.

Other companies will be encouraged to adopt similar practices. This would especially be true of supply chain partners.

There would be greater social outcomes. More organizations would benefit from more support – whether in money or time. In turn, this could result in more people being helped, fed or housed; in more treatment or even cures for those that are sick; or in greater advocacy, awareness and support for causes and communities.

The company could become more profitable. Consumer willingness to support brands that are more socially responsible has been well established. Even in B2B enterprises, buying decisions are increasingly influenced by CSR profiles.

While a CSR program will focus on the company’s efforts, it’s inevitable that some of the spotlight may be cast on the owner. Perhaps the solution lies in convincing him or her that overcoming the humility hurdle may ultimately be for the greater good.

Passion Principles

1. CSR reporting should focus on the company or employee groups but not individuals.
2. Consider the collateral benefits of establishing a CSR program
3. Don’t underestimate the extent to which a well executed CSR program will drive business results.

The CSR Moral of the Story is ……

Aesop’s 650 fables remain a popular choice for lessons in moral education.  In fact, last week I shared The Ant & the Grasshopper with my five year old son, in an effort to teach him the value of hard work and perseverance and it got me thinking – does the world of Corporate Social Responsibility (CSR), so steeped in matters of moral and ethical significance, have anything to learn from Aesop?

I think it does.

Take, for instance, The Boy who Cried Wolf.  We all know the story – the attention-seeking lad who contrives a scenario of danger to elicit concern.  After many bogus cries for help, the boy finds that he is indeed in jeopardy, and when he cries, nobody comes.  This story is all about authenticity and trustworthiness, the cornerstone of any effective CSR strategy.  If a company is heralding CSR or sustainability as a priority, but its claims ring hollow, nobody will pay attention if and when there is a genuine shift in business practices.  KFC may encounter this very problem should it decide to adopt a new CSR or cause alignment platform in the future.

Aesop’s story about the North Wind and the Sun also offers an important CSR message.  In a competition to determine who is stronger, each element must cause a passer-by to remove his coat, and whoever does it first wins.  The North Wind blows and blows and with each gust, the passing man pulls his coat tighter to protect himself.  The sun, however, just shines brightly until finally, the man removes his coat from the heat.  The lesson, of course, is that persuasion is better than force, a lesson that Timberland might well be learning in the wake of their recent smoking ban (http://blogs.forbes.com/csr/2010/06/03/timberlands-smoking-ban-good-corporate-citizenship-or-overkill/).  CSR overkill can be counterproductive.

Perhaps the Aesop fable with the most important message for anyone interested in CSR is that of The Lion and the Mouse. In a gesture of goodwill, the Lion takes pity on the lowly mouse, granting him life and freedom.  The grateful mouse promises to repay this benevolent gesture, but the lion is altogether cynical of the tiny mouse’s capacity to help him.  Sure enough, the scales tip and the mouse saves the day by freeing the lion from captors.  The lesson, you ask?  While business may have more muscle than community causes – while the corporate world wields more power – there is much to be gained from a relationship with those in need.

Aesop may well have been the world’s first CSR consultant!

Passion Points:

• Don’t cry wolf.  Make sure your CSR practices are genuine and legitimate.
• No need to force people into compliance.  A softer approach, laid out strategically over time may have bigger impact.
• Don’t underestimate the value of CSR.  Even the strongest, wealthiest companies have much to gain through strategic partnerships with those in need.

Communication bridges the CSR Words vs Actions gap

Communications may be the key to understanding and developing the relationship between companies and consumers when it comes to CSR.

The Cone Shared Responsibility Survey that was released a few weeks ago presents some interesting data. To varying degrees, 65% of Americans believe that companies should be active regarding environmental and social issues. And in large numbers, consumers hold companies responsible for a wide range of issues including everything from alleviating poverty to ensuring that products are produced safely and in an environmentally responsible manner. So, it’s clear that at least as a matter of principle, consumers care about CSR.

But what about the practice? Well, here it’s not so clear. Consumers did indicate that if a company incorporated their ideas (presumably about social/environmental responsibility), over 50% of them would recommend the company, 54% would be more loyal toward it and 61% would be more likely to buy its products and services. But when asked what initiatives they would adopt to influence corporate social/environmental practices, less than half (44%) said they would buy or boycott a company’s product or services.

There seems to be a great divide between words and actions here. The truth is that while there is abundant data on consumers’ buying intentions relative to a company’s CSR platform, we don’t know that much about whether that translates into action

Recent reports from the American south might provide an answer. Local news stories are indicating that some BP stations are selling 500 fewer gallons per day. That’s certainly a result of the Gulf oil spill and consumers’ perception about the company’s environmental irresponsibility. But that may just be an extreme example based on a sensational event.

The Cone study may provide some insight. While consumers indicate they want to be informed about companies’ CSR performance and can even suggest the ways in which they would like that to be done (advertising, in-store, social media), they are, at best, confused by the messages they are receiving. And, in fact, they are very cynical. Fully 87% of respondents said that companies share positive information about their efforts but withhold negative information. 67% said they are confused about the messages companies use to talk about their social and environmental efforts.

It seems reasonable to me that if consumers don’t feel they can trust the information they have regarding companies’ CSR activity, they aren’t going to take action. Let’s not doubt whether CSR is a source of competitive advantage. Let’s do a better job of communicating.

Passion Points:

• Ensure that your company’s social and environmental activities are effectively communicated through a variety of channels
• Use social media tools to monitor what consumers are saying about your company
• Be consistent. Ensure that what you say about your CSR activity is the same across all channels
• Be transparent. Tell consumers about what you have done but also about what is yet to be done.

CSR Harmony

Loblaw Companies Limited recently released its third annual Corporate Social Responsibility report titled “The Way We Do Business”, and true to form, the company continues to blaze trails in this arena. According to Galen Weston, Executive Chairman, Loblaw’s goal is to, “to meet the needs of today while preparing to address the social impacts facing Canada in the future.”

Loblaw’s CSR platform defines the nature of business which fuels a symbiosis that is exemplary.  “Doing Good” and “Doing Business” are enmeshed priorities that function as complements to one another.

Five pillars establish a corporate culture against which all business operations are measured: Respect the Environment; Source with Integrity; Make a Positive Difference in Our Community; Reflect Our Nation’s Diversity; and Be a Great Place to Work.

Clark Turner writes about the dangers of Greenwashing and counsels businesses on how to develop sustainability practices that are authentic and genuine.  And in fact all CSR initiatives (employee engagement programs, environmental projects, cause branding campaigns) should be rooted in genuine core corporate values.

If a company starts with a strong sense of its corporate identity – what it stands for, what its stakeholders care about, it’s vision for the future of the community it serves – than it is more likely that an authentic CSR effort will follow.  Too often, companies explore CSR and Sustainability practices as a knee-jerk reaction to stakeholder pressure, churning out programs that are ad hoc, and in no way a meaningful reflection of true corporate values.  We are seeing the implications of that process with BP and the oil spill.

Loblaw figured this out early on their process and they continue to reap the benefits on all fronts.

Passion Points

• Let your corporate identity lead the way
• Be true to your values
• Practice what you preach
• Make sure that your CSR practices reciprocally support your business model

Green and Generosity – 2 New Envy Trends

There are significant CSR implications in Statusphere, the latest offering from trendwatcher.com – one of the world’s leading consumer trends firms. Based on the premise that “consumers are finding increasingly diverse ways to get their status fix,” it identifies five new areas in which consumers are vying for bragging rights.

One of them is Generosity. Perhaps as a reaction to the impact of greed on the latest economic meltdown, giving now trumps owing as a mark of prestige. Not only are consumers feeling a need to express their more altruistic side, they want to share the experience with others. Giving circles, crowdsourced giving and collaborative giving models abound. Online initiatives that allow individuals to choose the beneficiaries of corporate philanthropy are becoming increasingly common.

As it relates to CSR, many companies are recognizing that corporate philanthropy alone isn’t enough. A more strategic approach dictates a path of stakeholder engagement where customers are an integral part of the giving program – helping to make making decisions and given an opportunity to share experiences. (See Pepsi’s Refresh Project)

Another area identified is “Green Credentials and Unconsumption.” Increasingly consumers are anxious to demonstrate their “eco-credentials” to their peers. The latest ecological symbols and obviously eco-friendly products are taking on the status previously reserved for labels like D&G, Coach and others. And ecologically friendly services (from landscaping to roofing to banking) are taking on the same appeal. Just as in the case of Generosity, consumers are seeking the forums to tell the world they are truly green with envy. The days of the gas guzzling SUV as a badge of accomplishment are gone. Hybrid is the new hot auto label as consumers try to outdo their peers by consuming less.

Most companies have recognized that the green plank is essential to any CSR platform. The truly enlightened players are providing stakeholders with products and services that can express both the company’s and the individual’s eco-interests. Moreover, they are providing ways for stakeholders to share the experience by becoming actively involved and expressing their opinions. (See TD Friends of the Environment)

Passion Points:

• Meaningfully involve employees and customers in your company’s philanthropic efforts.
• Make sure your communications plan trumpets their successes and provides the forums for them to share their experiences
• Ensure that your company’s eco-initiatives are well publicized and well-known by employees.
• Wherever possible include a respected eco-certification with your green products and services
• Provide employees and consumers with ways to be active partners in your ecological or sustainability efforts.

Baggin’ CSR

I am a shameless handbag addict. It’s a silly vice, really. But handbags make me happy. And considering their functionality, I think that my addiction is perfectly acceptable.

In addition to all of the CSR and sustainability blogs that I read every day, I also allow myself 20 minutes each morning to indulge in The Purse Blog. And the recent post about Botkier’s generous move to donate 50% of revenues from the sale of their Joy Satchel to charity got me thinking. Can the world of CSR learn something from handbag manufacturers?

Botkier’s move notwithstanding, handbag designers have made some bold CSR decisions as of late. Louis Vuitton, arguably the world’s most iconic handbag designer, announced a few weeks ago that it had signed a five year agreement with SOS Children’s Villages to create a program called “Partnership for Children’s Futures”.  The partnership will help children who are orphaned, abandoned or whose families are unable to care for them.

Though it’s a generous move, I can’t help but find the alignment a bit strange – coming from a luxury mega-brand that charges upwards of $2,000 for some of their more basic designs. (think orphaned children in remote villages juxtaposed against the LV patchwork tribute bag – that retailed for $45,000). Perhaps LV identified mothers as a priority market, and mothers naturally care about children. In that sense, it’s a smart partnership.

Beyonce with a $45,000 LV Tribute Patchwork Tote

Handbag designer Mat & Nat offers a collection of design-centric, eco-friendly, vegan handbags and their entire business model is built on a very solid and creative foundation of social responsibility. The linings of their current designs are all made from recycled water bottles, for instance.

So I think that my handbag indulgence has taught me valuable lessons that can be transferred to the professional world of CSR.

Passion Points:

• Giving back is a universal notion that has become a baseline standard even in luxury markets

• Think about causes that will resonate with your customers and target markets

• In a best case scenario, establish a business model that aligns seamlessly with a CSR mandate