The Time is Right Now
Many including this author, believe that forward-thinking companies will integrate sustainability goals into their business models and will use their visions of sustainability to help define revenue-generating strategies. Certainly the recent implosion of financial markets around the world offers a clear and disturbing picture of what happens when people lose faith in the long-term viability of businesses and business models.
As globalization continues the expectation from suppliers and customers around the world will continue to drive market expectations. Despite the gains over many decades, anyone who advocates that business has “done enough” or “come far enough” is fundamentally arguing against keeping abreast of and meeting changing customer expectations, an argument that is at its core anti-capitalism. The principle that the “customer is always right” means that businesses must respond (and meet) what customers want and expect.
It may be idealistic but perhaps one day the majority of customers will recognize that it matters when they “vote with their purchases” by patronizing companies that make commitments to the planet, people, ethics and the like and then the successful companies will be those who have invested today to be in business tomorrow. Rather than spending on media campaigns and political contributions, consumers will reward companies that engage in ethical practices, treat employees with dignity and respect, and serve as stewards of our finite natural resources. Governments can set the tone, offering things like tax incentives to encourage these investments but cannot substitute or compensate if the markets do not drive change.
Companies that have a genuine commitment to sustainability can implement their programs in ways that add value and more clearly demonstrate their commitments. They can do so by making sustainability issues part of their business strategies through the five keys outlined in this series.
Bertrand Collomb, the chairman of Lafarge when I worked there who went on to head the World Business Council on Sustainable Development (WBCSD) wrote in Global Agenda back in 2003 that he believed that European-based companies have a natural advantage based on that continent’s more socially-conscious culture. He goes on to postulate that it may be easier to become a capitalistic moralist than a moral capitalist but concedes that the cultural advantage of American companies - bold innovation, responsiveness to changing market conditions and expectations and an entrepreneurial spirit - may give the advantage to USA-based companies.
There is quite some evidence that this shift is already taking place. Many corporations have realized that they cannot regain the lost public trust through traditional public relations techniques such as glossy brochures, and slick video news releases. McKinsey Quarterly reported in 2006 that fully half (50 percent) of business leaders say companies frequently handle social and political challenges through the media and public relations, but 65 percent consider this to be an ineffective strategy. Three out of four (75 percent) report that their business lobbies government and regulators in response to challenges but 48 percent regard this tactic as ineffective. The vast majority (84 percent) favors a business strategy that combines high returns to shareholders with "contributions to the broader public good.”
In addition, the public is becoming more cynical and less believing of corporate (and government) messages.
One third of Americans, for example, believe that the U.S. government is covering up aspects of the 9/11 attacks and questions the manner in which the World Trade Center buildings collapsed. Movies such as Independence Day included realistic scenes of the destructions of landmark buildings such as the White House, clearly demonstrating the ability of moviemakers to simulate such events. As a result, news footage of that day is met with genuine skepticism, around the world. In contrast, few question the reality behind the blurry, handheld videos from the Arab Spring uprisings. We have lost credibility as we have gained the ability to fake it so well.
Companies should take note as well, because the same phenomenon applies. In 2007, PSB Green Brands research found that eight out of every ten Americas believe that it is important to buy from ‘green’ companies. But Ipsos Reid research the same year reveals that seven out of ten either ‘strongly’ or ‘somewhat’ agree that when companies describe a product as “green” it is really a nothing more than a marketing tactic. Clearly, a company that can demonstrate the sincerity of its commitment would have a strategic advantage, with eight out of ten buyers.
As a result of changing expectations of stakeholders, traditional public relations functions are being redefined – away from “spin” and toward “transparency,” with companies being more open about their aspirations and their efforts to achieve them; including acknowledging their shortcomings.
And that is The New PR.
For more information, including worksheets on how to implement the five keys, contact John Friedman (JTFKRF@aol.com) or download The New PR. http://www.amazon.com/The-New-PR-ebook/dp/B005Y5VM44
To read more posts from this series, click here.
John Friedman, is an award-winning communications professional and recognized sustainability expert with more than 20 years of experience.
Friedman has served as both an external and internal sustainability leader, helping companies, ranging from small companies to leading global enterprises, turn their values into successful business models by integrating their environmental, social, and economic aspirations into their cultures and business practices.
His insights on sustainability issues and strategy are a regular feature on Huffington Post.
Friedman authored the e-publication The New PR which outlines how companies must modify the way they communicate to meet stakeholders' changing expectations through five proven keys for developing programs that replace "spin" with transparency and unlock the full potential of a sustainability program to build reputational capital. Friedman is currently working on a new book Your Backyard Is My Front Yard.