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May 11, 2010 in Corporate Social Responsibility Programs | Tags: "Good for Business", British Petroleum, conscious corporation, corporate social responsibility, four cornerstones, leadership, Toyota, Wal-Mart | Leave a comment
In this era of Toyota and British Petroleum, it’s clear that a corporation’s brand name and legacy rest on far more than its products or services.
In fact, you can produce the greatest widget this side of the Atlantic, but if you fall short of the consumer’s expectations in terms of customer service, product safety, environmental stewardship, social responsibility and/or employee respect, your commercial success will eventually suffer.
Today’s consumer is more conscientious than ever and expects the companies they patronize to be conscientious, too. According to a 2008 survey by Euro RSCG Worldwide, consumers base their purchasing habits on how well a business aligns its values with theirs:
(Click graph to enlarge.)
Consumers hold corporations accountable not only for what their brands promise, but in addressing societal and environmental concerns. Why? According to the same study, respondents agreed that corporations have benefited substantially in their business dealings, but have largely failed to “pay back” the consumers and communities that supported their growth.
“Good for Business: The Rise of the Conscious Corporation” (2009, Palgrave Macmillan) sets out to teach companies what they should know and do in order to be in the good graces of consumers – that is, take on a more engaged social role, which would potentially spur optimal growth and greater success. Co-authored by Andrew Benett, Cavas Cobhai, Ann O’Reilly and Greg Welch, “Good for Business” spells out four principal undertakings that form the cornerstones of a conscious corporation:
- Have a purpose beyond profit. According to the authors, those companies that align themselves with a social role or cause will not only benefit those helped by the cause, but will enhance their corporate brand. More than simply stating a position, companies should clearly define their social mission and objectives, and carry them out by partnering with charitable organizations. Support can include a donation of a portion of its annual profits, corporate volunteerism and ways for customers to share in helping the cause.
- Treat people well. Businesses must not be driven by laws of compliance or threat of exposure, but instead should be proactive in choosing to do what’s in the best interest of the customer. And in an era where the ratio of CEO pay to that of the average worker is 364:1 (up from 10:1 just two decades ago), many corporations have a long way to go in respecting employees’ interests and needs. Greater consideration for vendors, community members, board members and even competitors is critical in forming a more conscientious corporate profile.
- Champion sustainability. Most large corporations have grown past the point of debating environmental sustainability and now actively seek ways to make it happen. Many are also finding cost savings through greater energy efficiency and less waste. As with socially responsible programs, businesses need to communicate what they are doing in the environmental arena – and why. By educating consumers, businesses will find greater buy-in and program success. (See Wal-Mart’s Love,Earth® line of sustainable jewelry.)
- Respect consumers’ power. Conscious corporations are those that enter into a two-way conversation with their markets, acknowledging the more powerful role today’s consumer plays in defining and promoting the brand. This may involve greater use of website interaction, social media and blogs, especially in industries that are dogged by customer-service complaints. Even in the area of social responsibility, corporations can invite customers to weigh in on preferences for charitable causes.
Becoming a conscious corporation requires a passionate commitment from the top on down. Whether you are a member of the C-suite of a large company or are the sole proprietor of a start-up, consider how critical your responsible leadership is in ensuring your company prospers while making a positive impact on the community.
- LuAnne Speeter