And the winners are...

Congratulations to all the winners and finalists from yesterday’s PR News CSR awards. For readers of this blog, Frank Mantero, Director of Corporate Citizenship Programs at GE and a guest blogger for CSRPerspective last year, won Executive of the Year – Public Relations. Congratulations Frank!

I was honored to give the keynote at the event yesterday. The main theme of my address was that to gain trust, we have to establish authenticity. Authenticity will be established by the consistent application of our values. So we have to take the values declared in our corporate responsibility and in particular in our community investment activities and apply them in our core business. (I will be posting a video of the keynote shortly.)

A few people approached me with comments and in addition I facilitated a discussion immediately after the event to discuss the points I had raised. Chatham House rules applied.

I was interested in the focus of the comments;

No one challenged my main theme but neither did they jump forward to reinforce it. When asked specifically, there seemed to be support, but I had anticipated stronger reactions either for or against. I had thought some would tell me I was an idealist – no one has yet!

Commentators were more taken with my:

• use of movies to illustrate public perception of corporations;
• criticism of the terminology of ‘giving back’ as implying we are somehow taking away. A number of people approached me to express support for my raising that issue. I wrote about this last year too; and
• pitch for social media as a tool to bridge the gap between individuals in the company and external stakeholders.

Social media attracted more attention than anything else. I received a lot of support (from users of social media of course). But there was also significant and well founded skepticism about whether a corporate blog can be truly authentic (I think the obligation is on bloggers to demonstrate that this is possible). Also a comment that I do sometimes worry about myself, suggesting there is a self sustaining community of bloggers and tweeters all conversing voraciously with each other and then, there is everyone else.

Authenticity is the key to Rebuilding Trust

I am honored to be the keynote presenter today at the PR News 2009 CSR Awards at the National Press Club in DC. The awards program has been running since 2005 with an ever broadening range of awards categories. It is much broader than the PR News title might lead you to expect.

In my keynote I am addressing how we can rebuild trust in business. All the trust surveys aside, I find it most notable that three of this year’s Oscar best picture nominations, Avatar, District 9 and Up in the Air have large corporations as their main protagonists. Each of these corporations is portrayed as distant and as societally and environmentally oblivious. If this represents the public perception of corporations, and I think it does, we have a long way to go.

Authenticity is key to trust. We judge whether a person is authentic by the consistency with which they apply their values. I imagine people judge corporations in the same way.

So if we express our values through our community investment, then to substantiate our authenticity, we need to be consistent in applying those values to our core business; our products, our employees, our customers and our public voice as expressed in our brands, advertising and lobbying. My challenge is to the CR practitioner, myself included, is to increase the proportion of time spent in the core business.

I also see a key role for community investment, not just as an end in itself but as a means to increasing sensitivity and awareness amongst our employees that they can take back and incorporate into their jobs. Volunteering is especially important from this perspective. But beware, community investment can undermine authenticity if we do not follow through and apply the same values in our core business.

Lastly, I see a role for social networking to bridge that perceived distance between the company and the stakeholders. Frank and engaging exchanges with corporate executives, as demonstrated by Bill Marriott of Marriott and by Tom Glocer of Thomson Reuters, and with our employees, can be one of the best ways to demonstrate authenticity and to bridge the perceived distance between the stakeholder and the corporation.

Please let me know what you think of these ideas.

Some Thoughts on Climate Change

There have been some significant back-currents recently in the wave of progress on climate change; the outcome from Copenhagen that was short of many people’s expectations; some climate change scientists and some involved in the IPCC pursued poorly conceived public statements, exchanged particularly unscientific emails or exaggerated the strength of their findings; recently three significant members of USCAP have left that group. Skeptics have appropriately highlighted these issues.

To put things back in perspective, I enjoyed reading Frank Robert’s economic view on balance of risks in the New York Times on Sunday. Of course, we need to be careful not to be overly reliant on fear as the motivating factor. ‘Just in case’ is not a strong argument for action. The balance of risks has to be compelling.

The scientists have a dilemma. Not long ago I recall the scientific community was being criticized for not being forceful enough in its message. I recall comments that it was too mild in its language, too many caveats, too academic in its articulation of the outcomes. Now it seems we have our just desserts and much of the criticism has reversed. Of course balance is everything and perhaps one lesson is the importance of being true to ones core values.

I think many companies are at a bit of a loss as to how to respond to these back-currents and as a result have gone quiet on the topic or reverted to energy efficiency and energy security as the reasons for reducing energy usage. But for those who are convinced by the scientific evidence of anthropogenic global warming this is not the time to do that. This is the time to stick to principles. Regaining the momentum later will be much harder than the effort to maintain it now.

I do think companies need to get better at articulating why we hold the positions we do. We owe it to our stakeholders to be able to do this and if we can define clearly what evidence underpins our positions, it easier to define if and how we should respond to a particular change.

More than ever, I don’t think we can ignore those who are skeptical. We need to engage them with the same respect and sense of inquiry and open debate that we do those who are supporters.

Which Stakeholder Hat are you Wearing Right Now?

Different stakeholder groups have different standards when it comes to CR.

Members of civil society have the most demanding standards for how a company should discharge its corporate responsibility obligations. They are easily riled about a corporate misdeed in the paper. Of course they may have little invested.

A customer, wanting to buy a product, has slightly more invested in the company, and a lower threshold for what is acceptable. Much lower I suspect if they really want the product!

Shareholders have the lowest thresholds and give little or no thought to the corporate responsibility of the companies in which they invest. Perhaps they put a small proportion of their holdings into socially responsible investing (SRI) to ease their conscience. But for the most part shareholders look at quarterly returns, and trying to outperform the index.

What about employees? At times of strong employment when the potential employee has the stronger hand, reputational issues count for something in choosing an employer. Once in a company and committed though, employees can be defensive of their employer almost to a fault.

What is interesting to me is that the same individual can have multiple stakeholder relationships with a single company on the same day. And apply different values to that one company, depending on the moment.

I can envisage someone reading the morning papers as a member of civil society and feeling angry about a corporate misdeed by a particular oil company. But that same person will visit that company’s gas station on their way to work because it is on the right side of the road rather than go through the hassle of crossing oncoming traffic to the competitor’s station. And I would bet they don’t even consider reviewing their mutual fund or share holdings to weed out the company whose actions offended them so that morning.

What does it mean to us as CR practitioners that our stakeholders can change their spots so readily? Ideally we would hold our companies to the highest standards – that of the member of civil society. But if the invested stakeholders (customers and investors) don’t support us, we are left at a competitive disadvantage.

Perhaps CR practitioners could make more progress if individuals applied their values more consistently whichever stakeholder hat they were wearing at that moment. If investors and customers would put their money where their civil society values sit we would have stronger business cases for taking action.

Awareness is the first step in change. If we could help stakeholders to see the inconsistencies in their own value judgments we would be making a start at closing that gap.

Are You Happy?

I have noticed more reports than usual about happiness and wellbeing in recent months. Carol Graham’s excellent piece in the Washington Post in January basically concludes that happiness is linked to stable relationships, stable health and enough (but not too much) income.

Gallup’s Happiness poll identified that “Americans' happiest days of 2009 were on or close to holidays, consistent with previous mood index scores showing that days with more-than-normal time dedicated to socializing with family and friends enhance people's happiness and enjoyment.”

The recently published 59 Seconds by Richard Wiseman concludes that fundamental ‘circumstantial changes’ (moving house, getting a pay rise), result in only short term happiness as we quickly adapt to the new lifestyle, whereas ‘intentional change’, in which he includes what seem to me to be less significant activities, such as joining a new club or starting a new hobby, results in prolonged happiness. He also identifies that acquiring new things does not generally equate with increased happiness.

It is well recognized that two of the key challenges for sustainability are consumerism and the requirements for continual and short term growth in financial markets. But if these things do not lead to happiness, why do we strive for them to such a great extent?

I can think of a couple of reasons. One is that economic growth is very measurable and we all like things that are measurable. Another (perhaps related) is that GDP is such a prevalent metric for development. In fact at BT we have linked our Climate Stabilization Intensity Target for carbon reduction to our contribution to GDP to allow for both economic development and carbon reduction.

Graham’s article in the post takes the concept further and talks about the ‘economics of happiness’ identifying how governments are starting to look for metrics much broader than GDP to measure development. It is worth a read.

As a nation dedicated to the pursuit of happiness I think it would be well worth looking closer at the findings of these and other studies and understanding what really makes people (amongst them employees, customers and shareholders) happy. I suspect the findings could change some of the basic principles on which we measure success and allow us to build new foundations that better support sustainability.

Spending Money to Solve Systemic Problems

In Speaking of Faith on NPR this past weekend, Jacqueline Novogratz, talked about a third way for development, somewhere in between charity and business. She pointed out that despite having the largest population of NGOs per capita, Haiti has made limited advances. Traditional quarterly returns driven capitalism doesn’t help much either in the poorest economies.

Novogratz describes the market as one of the best listening devices we have on the planet. As she puts it, “if I give you a gift you would be highly unlikely to tell me what is wrong with it – when I come visit, you might put it on the mantelpiece to show me how much you like it. The same happens with charity. But if I ask you to buy something from me you suddenly become a customer with a big attitude as to what’s right about it and what’s wrong with it. Suddenly that conversation that we are having becomes much more real. The market is one of the best listening devices we have on the planet “

Novogratz talks about Patient Capitalism, a form of social entrepreneurship that she addresses through the Acumen Fund.

From a CR perspective I like to think in terms of finding a source of funding within companies that is ring-fenced. It would be dedicated to funding ventures with commercial potential and social/economic benefit, but that carry levels of risk, or timescales, that put them below the threshold for investment on a ‘business as usual’ basis. Maybe this could be a proportion of community investment or foundation money, maybe it comes from the business, or maybe this is a new category of spend.

Either way it presents an opportunity to combine the motivational and ‘survival of the best’ characteristics of capitalism with the patience and risk tolerance that we see in the non-profit world. If we could get it right this might be part of the solution to how we give money to solve systemic problems.

Haiti: Raising Money to Solve Systemic Problems

I have been thinking about a statement I read in a blog from Davos last week by one of BT’s thought leaders - J.P. Rangaswami. J.P. said “the key elements that kept repeating themselves [in Munich and in Davos] were these: that Haiti was an economic and social and political disaster more than anything else; Dominica, the other half of the island of Hispaniola, would have suffered far less even if the epicenter was in that half of the island.”

Governments, companies, employees and the general public have risen to the challenge of this disaster with great generosity, but are our efforts as effective as it could have been? Would it have been better had we used the same amount of money to support the development of Haiti well before the disaster, rather than to dig out of it now?

In the case of Haiti it is a moot point. The disaster has happened, the situation is what it is and we need to help. But the point applies to future events and giving.

If we collectively donated the same amount of money for infrastructure development before the disaster occurred, perhaps we could have reduced suffering even more in which case it would have been money better spent. However, I this feels like a cold and calculating way of determining approaches to giving.

There are two challenges facing corporate responsibility practitioners; raising money to solve systemic problems and spending money to solve systemic problems.

Let me put aside for now the question of how that money would have to be spent to achieve the necessary improvements. I will try and consider that in a future post.

As I have written before, it is easier to raise money to feed a homeless person than to support a drug and alcohol dependency program or a job training program for the same person. It is easier to raise money to fund a crew to pull a child from a building than to raise money to pay for more resilient concrete in the first place.

It is an emotional reaction, to which I am subject as much as the next person, that leads us to more readily respond to a person in immediate need than prevent them getting into need in the first place.

Compounding this, disaster response is somewhat measurable and time-bound. How much did companies donate in the first day, first week, first month after a disaster. This is much easier than reporting on and comparing long term activities that improve underlying infrastructure and effect change in society. And companies are drawn to deliverables that are measurable and time-bound.

Somehow we need to look for ways to motivate ourselves, our companies and our stakeholders to be increasingly sustainable in our approach to philanthropy and community investment. Maybe the disproportionately bad impact of the earthquake on the population of Haiti can be a jumping off point for that.

Of course, we will still need to provide support in disasters, but hopefully less will be needed.