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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

Technology reveals cause marketing truths

CauseWorld is a new iphone app that combines the cutting edge of location-based marketing with the power of cause marketing. Its newest initiative reveals the degree to which consumers want to be engaged and the importance that smart companies are placing on brand reputation.

Using GPS technology, CauseWorld provides you with a list of nearby participating retailers. By visiting the retailer and “checking-in,” users earn “karmas” that they can eventually direct to one of 15 causes. Companies like Citi, Kraft and Proctor & Gamble provide the funds that turn karmas into dollars for the causes. In exchange for their support, the companies are provided with opportunities for advertising and branded statements.

CauseWorld’s newest initiative allows users to earn karmas by scanning the bar code on consumer products like detergent, deodorant and mayonnaise. And that’s the part that is so incredibly revealing.

First, it demonstrates the degree to which consumers want to be engaged. The app requires the user to go out of their way to check in to a retailer or to scan the bar code on a product that they may or may not be buying. And to date over 300,000 people have downloaded the app and hundreds of thousands of dollars have been directed to the charities involved. The fact that users can direct their support to the cause of their choice obviously heightens the appeal but its still fascinating that so many people are prepared to go out of their way to do good.

Secondly, the companies involved clearly see the tremendous brand enhancement that is derived from participating in the program. Think about it. Kraft will donate money because someone picked up a jar of Miracle Whip and scanned its bar code whether or not it results in a purchase. But don’t for a moment underestimate the importance of the advertising and branded message opportunities that are part of the program.

While it would be easy to dismiss this as a world in which only hip iphone users and huge consumer goods companies get to play, any business would be smart to carefully consider what this means to the importance of CSR initiatives.

So, what can you be doing? Here are some Passion Points:

  • Develop ways in which customers or prospective customers can be engaged in CSR efforts. Allow them to choose causes to be supported. Provide opportunities for customers to have specially guided visits of participating organizations. Provide customers with login access to special sections of the causes’ websites.
  • Recognize how vital the brand enhancement derived from cause marketing can be to the competitive position of any business. More and more studies indicate that consumers make buying decisions based on their perception of a brand’s CSR efforts. At the same, ensure that your involvement in any cause marketing initiatives provide abundant opportunities for advertising, pr and media exposure. CSR efforts can be a key driver to improved business results but only if consumers know about them.

Doing Good Without Spending More

People are still reeling from the impact of the recession and businesses are cutting staff, production and corners. It is challenging to factor philanthropy and corporate giving into the equation when resources are limited and times are tough. And yet, there is increasing pressure on businesses to give back and participate in their communities in meaningful ways. As customer loyalties wane and people become increasingly leery of ‘big business’, now seems to be the time to develop a corporate social responsibility platform that is strategic and broad based. So, as a business executive, how do you reconcile these two opposing forces; how can you help your company to ‘do good’ on the cheap?

There are a lot of things that companies can do to give back to their communities that do not require an allocation of significant resources or funds. In fact, businesses can adopt corporate social responsibility initiatives that run the gamut – ranging from employee engagement programs to cause alignment campaigns. Below are some easy programs that any company can initiate very easily, and at little cost. In fact, if done properly and with a bit more planning and sophistication, these programs might actually result in increased revenues!

Passion Points

  • Partner with a charity to match interested employees to volunteering opportunities. Employer supported volunteer programs can increase retention of top performers and even improve job performance.
  • Develop a point of sale campaign or a customer fundraising drive with proceeds directed to a high profile cause. Leverage the charity’s media contacts to your best advantage so that you can reap the ‘halo’ benefit of doing good.
  • Define your own internal corporate social responsibility standards and post them publicly on your website. Consider things like environmental practices, ethical standards and donations policies, and share your high standards with all of your stakeholder groups.

What Matters

More and more, companies are aligning with community causes, certainly because they’re interested in making a difference, but also because it’s proven to be good for business.  In fact, a poll of more than 25,000 citizens across 23 countries on six continents revealed that public perceptions of companies are shaped more by corporate citizenship than either product quality or business fundamentals (Reputation Institute, 2007).

So how do companies decide what matters most?  With hundreds of thousands of charitable enterprises, and an infinite number of causes to support, how does Joe CEO decide where he’s going to direct his company’s charitable efforts?

There are essentially two approaches to take.  One would reflect the more personal and intimate community priorities of the business’s leadership.  What do Board members care about?  Are there causes that have personally touched the CEO or other senior executives?  What causes are meaningful to employees?  This approach would ensure that a company’s community investment would be sincere, passionate, and borne from a true sense of caring.

The second approach really puts business interests first.  What does the company stand for?  What are its target markets, and what do people in those markets care about?  What kind of reputation does the company have, and how could a cause alignment be leveraged to enhance that reputation.  It’s no small coincidence that tobacco companies often publicly support programs that teach youngsters about the dangers of smoking.

In a best case scenario what matters to a company marries both of these two approaches.  A strong cause alignment is sincere and heartfelt; it engages employees and executives in a meaningful way; it enhances a company’s reputation and resonates with customers, and it drives bottom line business interests.

Passion Points

  • Identify a cause that genuinely resonates with your target markets, your leadership and your stakeholders.
  • Align with that cause strategically so that it aligns with your core business interests.
  • Use your cause alignment to your best advantage – to engage employees, drive sales, enhance reputation and develop consumer loyalty.