Can Big Business Save America?

We seem to be in a crisis of confidence. Public faith in many institutions –  organized religion, Congress, and the news media — has eroded over four decades. According to Gallup, only the U.S. military has enjoyed a fairly consistent upswing in public confidence since the 1970s. The change seems particularly acute lately in our politically polarized environment.

But there is some good news. Corporate America is stepping up. This comes as a happy sign for public relations professionals who preach corporate responsibility or even strategic activism to clients. Yet the need here is not mere public relations messaging, but leadership and action.

Business Must Serve Stakeholders

This is not to say that business will solve every ill. And Big Tech, especially Facebook, has accepted responsibility in fits and starts, and only after a public and regulatory backlash. But a time of relative prosperity, when talent is scarce, a handful of business leaders are uniquely positioned to bridge the “trust gap.”

Increasingly, Americans expect companies to act on those issues they can impact. According to Fleishman Hilliard’s Authenticity Report, consumers care most about issues like affordable healthcare and education. Yet they don’t expect business to solve those matters; rather, they want them to attack problems they create or can change, like the environment, skills development, and wages.

It’s not just Big Business, but medium-sized guys who are taking action. Dick’s Sporting Goods comes to mind. It moved to drop sales of assault-style rifles after the Marjorie Stoneman Douglas shooting and has stuck to its guns, despite pushback. Publix, one of the largest grocery chains in the country, followed Walmart, Walgreens, CVS, Wegmans, and Kroger in asking customers not to openly carry weapons in stores. Most actions came in response to steady public pressure. It’s a small step, but a significant one at a time when public support for gun safety is rising, but Congress is gridlocked.

Even more businesses are galvanized by the existential threat of climate change. Where individual governments have failed, some companies have taken action. The September UN Climate Action Summit failed to generate commitments by global leaders. Yet 20-plus multinational corporations pledged to use renewable energy for 100 percent of their electricity. According to Andrew Steer of World Resources Institute commented, “In many cases, the private sector and subnational actors are moving faster than national governments.”

2020 Brings A Leadership Test

The corporate responsibility trend peaked this year when 200 major companies signed on to the Business Roundtable statement supporting “stakeholder value.” CEOs from Apple to JPMorgan Chase agreed to invest in employees and customers as well as shareholders.

It’s easy to dismiss the Business Roundtable pledge as toothless. There were critics on both sides — those convinced that shareholder interest should remain the only corporate priority, and those who dismiss the whole thing as an empty PR exercise.

Yet it’s not about just optics. For most businesses, the motive is enlightened self-interest. When it comes to climate and energy, these companies are living in the real world. They know the price of inaction. They’re also answering to a customer base and workforce that want sensible steps to protect communities. At a more basic level, they’re looking to the private sector for consistent leadership, positive social impact, and stability.

That’s precisely why the intentions of corporate America may be sincere. Because they are self-serving. Businesses can serve their own interests as well as those of stakeholders and shareholders by stepping up in the coming year and beyond. It’s not about philanthropy, activism, or even social responsibility. It’s leadership – which is what is sadly lacking in many of our institutions. Leadership is hard to define, except when it’s absent. Here’s hoping corporate America can bridge the gap in the decade to come.

The Boldest PR Moves of 2018

The first half of 2018 has seen some remarkable corporate PR maneuvers. In many cases, well-known companies have come up with creative ways to take a stand or respond to a public challenge. Some of the moves are arguable, but all were bold, even risky. Some brands spoke out in response to crises, while others may have created crises by speaking out. Only time will tell if these maneuvers are true PR wins or losses, but here’s our take.

The boldest PR moves of 2018 — so far

WeWork: virtue signaling or corporate activism?

Two weeks ago office coworking company WeWork announced that, for environmental reasons, it will not serve meat inside its facilities, nor will employees be allowed to expense client dinners that include meat. Many have lauded WeWork’s green initiative. But some media have responded with charges of “tribalism,” “virtue signaling,” and “imposing a worldview” on employees. The WeWork move can be compared to Starbucks’ recent banning of plastic straws, but it’s attention-grabbing because it’s more extreme.

If publicity was the goal, then WeWork certainly accomplished it. The announcement generated scores of articles and lots of discussion on social media. (Some critics, like the Texas meat processors who spoke out against the measure, may not even have been aware of WeWork’s existence until recently.) Not all coverage was positive, but there’s an advantage to being top-of-mind, even if the move was driven as much by PR as by its values. As one journalist cynically put it, WeWork is “a real estate business trying to look like a tech startup.” In that case, the meat ban was probably smart branding.
Image result for ambien response to roseanne

Ambien is woke

Ambien’s parent company Sanofi seized the opportunity to react after the brand was mentioned by Roseanne Barr as an excuse for a repugnant tweet that resulted in her show’s cancellation. Barr tried to blame her racist posts on “ambien tweeting,” but the brand fired back that “racism is not a known side effect of any Sanofi medication.” The witty clapback won plaudits, possibly because it was a measured response. Ignoring the post would open the brand to questions about the drug’s effects, or its attitude toward Barr’s tweet, while a formal press statement would have been heavy-handed. Instead, the agile response expressed corporate values without much risk. Ambien scored a big bang-for-your-buck PR win by listening and reacting with authority and humor. See the earlier post for more on the best reactive PR opportunities.

Delta sticks to its guns

Delta made some high-stakes enemies when it announced it would discontinue its policy of NRA member discounts after the Parkland shootings in February. Once again the substance behind the communications was minimal (only a few NRA members were actually affected), but the message spoke about Delta’s corporate values. Third-party influencers on both sides lined up and duked it out.
Despite losing a major $40 million tax break in Georgia, Delta stood its ground in the face of significant blowback. Delta’s sincerity here can’t really be questioned, given that it knew there would likely be political static in its home state. The value of the reputation boost from its decisive social activism may offset other financial losses. Delta scored a PR win with its strong and sincere social stand. See this earlier post for more on the Delta-NRA episode.

Philip Morris throws flames

In a fascinating and daring PR move, last week tobacco giant Philip Morris sent a letter to the head of England’s national healthcare organization, the NHS (National Health risky PR moves of 2018Service), offering to partner on an initiative to help NHS staff quit smoking by offering smoke-free products like e-cigarettes. The NHS, of course, is not open to a partnership with a tobacco company, but its indignant reaction probably gave Philip Morris exactly what it hoped — more publicity.
Its trolling of the NHS was probably a tactic in support of its larger “smoke free” PR blitz launched in early 2018. Beginning with its new year’s “We’re trying to give up cigarettes” full-page ads, PMI is revamping its portfolio and its positioning. The negative publicity about its arguably outrageous offer to the NHS had the effect of spreading the word widely about the new campaign.

NFL’s position doesn’t stand

In May the NFL chose a side on the divisive issue of player protests during the national anthem – or at least, it thought so. The league announced it would require players to stand if they are on the field during the anthem, giving them the option of remaining in the locker room. The policy would fine team for players who stand or kneel during the anthem, essentially leaving it up to the teams to pass on the fines to players or absorb them. The announcement reignited the NFL anthem protest controversy, drawing verbal fire from all sides. Worse, last week it became moot after a Miami Dolphins “discipline document” was leaked to the press. The document states that players could be suspended up to four games for an anthem protest, and it quickly created a PR nightmare for the team and the NFL.

Maybe the league was hoping to control the conversation and stir public sentiment against the players. But had the NFL held off on the May policy announcement, it might have nudged its reputation in a more positive zone as the story died down. Instead, the league has consistently elected to go the PR path of most resistance, reinforcing an image of a dysfunctional organization lacking leadership.

How PR Measures Corporate Reputation

Most public relations professionals know that a company’s reputation can be big factor in its long-term success. A positive public perception helps inspire employees, recruit new talent, protect a brand from negative PR, and differentiate its offering from that of the competition. When it comes to government relations and regulatory issues, a stellar reputation can complement an organization’s lobbying effort. It can even help a product or service command a higher price.

However, a PR pro trying to explain the inherent value of reputation to shareholders, bosses, clients, or investors cannot simply rely on her charisma. The idea of placing a dollar value on abstract drivers like brand attachment, image, trust, and admiration may seem improbable upon first glance. So we took a close look at the four major annual reputation reports to see how it’s done.

Measuring Corporate Reputation: Perception or Performance?

Both the Harris Poll Reputation Quotient (RQ) and the Reputation Institute’s Reptrak survey the general public, while the U.S. Reputation Dividend Report and Fortune’s World’s Most Admired Companies list survey corporate executives and financial analysts. Perhaps not coincidentally, those that survey the public weigh brand perception over financial performance. A pivotal part of Harris Poll and Reptrak’s research centers on measuring the “pulse” or “emotional appeal” of a given brand.
Both the Harris Poll RQ and the latest Reptrak placed Walt Disney Corporation at #5.  But they diverge on Apple and Google. Harris Poll ranks Google at #29 and Apple at #28, while Reptrak has Google at #3 and Apple at only #58! The only real difference in the two reports’ dimensions of reputation are that Reptrak considers “governance” as a driver of reputation while Harris Poll prioritizes “emotional appeal.”
measures corporate reputation
Meanwhile, the U.S. Reputation Dividend Report and Fortune’s World’s Most Admired Companies measure corporate reputation by surveying executives and directors from large companies as well as securities analysts.

Since both rely on a formula that takes financial performance into account, we see very different brands hovering near the top. Both reports rank Walt Disney, Apple, Alphabet, Microsoft, and Starbucks in their top ten. But what do these rankings mean for a company’s balance sheet? Reputation Dividend’s formula links reputation to market value.

“Understanding how changing investor interests play out at the company-specific level provides the critical framework necessary to make decisions about communications strategy.” 2017 US Reputation Dividend Report

The $$ Value of Reputation

The 2017 U.S. Reputation Dividend Report offers perhaps the clearest link between reputation and value to shareholders. The Report uses data from financial variables plus its nine drivers of reputation. It states that in 2017, $1 out every $5 of market capitalization in the S&P 500 comes from “confidence underpinned by company’s reputation.” And there’s another tidbit that offers insight into its value. While 20% of a company’s value comes from its reputation, on average, the highest-ranked corporations derive more than 40% of their market capitalization from reputation. The Walt Disney Corporation finished in the top spot here, earning an estimated 52.5% of its value from its widely recognized reputation, or the equivalent of over $90 billion.

So what does it all mean for reputation stewards at other, smaller organizations? While startups may not derive half their revenue based on corporate reputation, they should proactively build a culture-based reputation that grows along with the business. Early-stage companies may not be able to adopt this type of in-depth research, but the reputation drivers used are relevant to almost any business. They can be used to help inform brand values and external messaging, supported by specific “proof points” for each.

Whether the value of reputation is measured by charting perception, performance, or both, a brand of any size or sector can benefit by treating it as a critical business asset.

Are CEOs Ready To Embrace Social Activism?

For years, public relations and reputation experts have promoted CEO activism and corporate social responsibility, preaching its benefits and warning of limits and pitfalls. But for many corporate communicators, the position was lonely.

For some companies, the embrace of social change programming was little more than lip service — maybe a dignified corporate social responsibility report on environmental stewardship, or a donation-with-purchase campaign to benefit a nonprofit. Others waded into politically charged waters, but retreated when they hit the inevitable backlash.

But things are changing rapidly on the corporate activism front. As the Harvard Business Review has discovered, “PR firms are now building entire practices around CEO activism.” Imagine! But if you haven’t noticed the trend, you haven’t been paying attention.

BlackRock lays down a challenge

In the past three years, CEOs in sectors from technology to banking have spoken out on controversial or even divisive issues like immigration, marriage equality or climate change. And on Tuesday, the stakes for corporate activism grew. Laurence Fink, founder and CEO of powerful investment firm BlackRock, basically gave top business leaders their marching orders in a public letter. Every company must not only deliver on financial performance, wrote Fink, but “also show how it makes a positive contribution to society.” Fink essentially told corporate America that if it wants the support of BlackRock, the largest investor in the world at $6 trillion in assets, it must do well by doing good.

That kind of call to action is one thing coming from longtime activist corporate leaders like Seventh Generation’s David Bronner, or a renegade technology entrepreneur like Elon Musk. But when the hard-nosed leader of the largest investor in the world lays down the law on social activism to big business, corporate activism has gone mainstream.

What has tipped us over into this new era? An improving economic picture certainly helps. Corporations are likely to be risk-averse in a declining economy but gain confidence in a stronger and more competitive marketplace. More importantly, as we approach full employment, recruiting and retention become even greater business imperatives. With millennials in particular, a strong reputation is a key asset in the battle to attract top talent. And increasingly that means an authentic embrace of social activism.

The public looks to the private sector

Then, too, after a year of chaos and controversy under the Trump administration, more Americans are looking to the private sector for stability, leadership, and even positive social change. In the wake of the most significant corporate tax cut in decades, Fink reminds CEOs that “stakeholders are demanding that companies exercise leadership on a broader range of issues,” citing the impact of automation and resulting infrastructure and worker retraining needs.

Social media drives opinion

Finally, there’s the role of social media in shaping corporate brand reputation. What takes years to build can be undermined in a series of tweets, rumors spread like pernicious flu, and customers expect a level of engagement and participation from brands. As Aaron Chatterji and Michael Toffel write in “The New CEO Activists, “In the Twitter age, silence is more conspicuous – and more consequential.”

Now is the time for corporate communicators, PR partners, and the C-suite to collaborate on social programs that are brand-relevant, meaningful, and long-lived. As a starting point, here are some guidelines for developing campaigns around hot-button issues. For corporate leaders, the stakes will only get higher.

How To Engage Millennials In Corporate Social Responsiblity

When it comes to philanthropy, Americans are a generous bunch. A natural disaster tends to create its own PR appeals, and in 2017, millions responded. We opened our wallets to help victims of floods, fires, and other catastrophes, and the giving season has only just begun. The sixth annual #givingTuesday on November 28 will probably smash 2016’s record-breaking haul of $168 million in charitable donations and thousands of hours donated to those in need.

Whether you’re a nonprofit targeting donors or a corporation trying to build customer and employee engagement through a giving program, there is one group of consumers who stand out — millennials.

According to the the Millennial Impact Report, the millennial generation became more engaged in philanthropic causes in 2017 than in prior years.  Most Americans say they’ll buy a product because a company advocates for an issue important to them, but millennials are more likely to actively research a company’s positions, and to exclude brands that don’t pass muster. As their approach exerts more and more influence on charitable giving, millennials are even changing the way philanthropy operates. According to an insightful piece in The New York Times, “Millennials expect transparency, sophisticated storytelling and technical savvy from their charitable organizations.”

The millennial generation has led the way in online and mobile giving, and many will leverage their personal and professional social networks to support causes that inspire them.
Enlightened companies are well aware of the giving power of millennials. Many are adopting new CSR (Corporate Social Responsibility) programs or changing existing campaigns programs to ensure greater relevance to rising generations of customers and partners. Here are some ways for savvy organizations to develop CSR campaigns that appeal to the all-important millennial demographic.

Focus on impacts and outcomes

A good story and compelling content are vital, but in the digital age, many of us are saturated with information and demands on our time and attention. There’s an increased emphasis on the impact of donated cash and volunteer time. Charity Navigator sees philanthropic organizations investing in relevant data “to prove their accountability, transparency, and overall health.” So, too, should the businesses and brands that support social-impact programs. This approach fits with the values-driven approach of many millennials and their mistrust of patently commercial or overly branded campaigns.

Make it authentic

Authenticity means more than just sincerity of purpose. Millennials are more trust-sensitive than other segments, and they are quick to spot a shallow commitment or a giving program adopted for PR purposes. Brands that get behind a CSR program must ensure that the cause is strategic, relevant, and bulletproof. The millennial skepticism also has implications for how a program should be run. It means frequent progress updates in socially shareable news bites, third-party validation for all charitable partners, and social proof of goals met.

Be consistent

Even the most inspiring CSR campaign may not break through in its first year or season. The best approach is the five-year-window commitment. CSR programs must be created to scale over a period of years, with clear goals and refreshers along the way.  The trick to keeping a program fresh is to vary the PR tactics, like tapping a new media spokesperson, increasing fundraising or volunteerism goals each year, or localizing the story in key markets. But the best campaigns are consistent and drive the brand association over time.

Drive engagement year-round

The most effective giving campaigns use social and digital communications to keep socially aware loyalists engaged, report progress, and promote success stories. Social media, digital video, email, and PR that generates earned media all play a role here. Millennials tend to be peer-driven and quick to share commitments, so a call-to-action for supporters to share key statistics and stories is likely to bear fruit. In many cases, they’ve already built the social networks, so brands must incentivize them to use those networks to share and engage others.

Keep it simple

A complicated giving program, or one that asks too much of participants may be short-lived. If in doubt, start local and expand as time and resources allow. And consider campaigns that don’t constantly ask for donations from cause-fatigued consumers. True engagement can be achieved through simple communications as well as commitments of time spent in volunteer hours, evangelizing with friends and peers, and social media support.

Make it horizontal

Brand-supported CSR programs should be developed with involvement from the company’s stakeholders, particularly employees. And it shouldn’t reside only in the PR or marketing department. A true CSR commitment offers a wealth of internal programming and engagement, typically led by HR. There should also be participation opportunities for distributors and partners, and support in some fashion from every corporate department. Corporate support and individual participation by employees have grown as philanthropy has become not just a PR and marketing function but a strategic business priority.
An earlier version of this post was published 11/9/2017 on the AMA Executive Circle blog.

Five Ways To Create The Right CSR PR Plan

Corporate or brand reputation is often at the heart of a sound public relations strategy. And the companies who enjoy the best corporate reputations are typically those who make a commitment to social responsibility. The reasons are many: a strong reputation can help an organization differentiate its products and services, attract talent, and even mitigate risk.

A study by Reputation Institute found that 40% of our willingness to buy, recommend, or work for a given company is based on our perception of its products, while 60% is influenced by perception of the company itself. RI ranked major organizations by their reputations for behaving as responsible corporate citizens in 2013, and four companies  – Microsoft, The Walt Disney Company, Google and BMW– tied for the top spot.

Great CSR can work for smaller companies, too

But what about a more typical organization? How do corporations who aren’t necessarily globally recognized brands with deep pockets adopt CSR principles and make them work on a smaller scale? Here are some guidelines to developing the right CSR strategy for an enterprise that’s not on the Fortune 100 list.

Look for the right strategic fit. Sometimes a company chief executive has a pet project or charity and it morphs into the corporate philanthropic or community service campaign. But this isn’t always the most strategic way to approach CSR. The best social responsibility campaigns are intuitive to the companies or groups who undertake them. It’s best to start with a review of corporate values and focus in on what meshes. Stonyfield Yogurt promoting organic farming through its “Have A Cow” makes intuitive sense. KFC supporting the Komen Foundation? Maybe not.

Make it ownable.  You can grow into the ownership, but the ideal CSR program isn’t a cookie-cutter commitment that just about any other company could embrace. That’s why relationships of large multifaceted not-for-profits like United Way or American Red Cross usually need to carve out a specific component, like disaster assistance for homeless families, or support for budget-strapped public schools.

Get horizontal buy-in. A CSR program will be more enduring and more potent if it resides throughout the organization, not just in the corporate communications division. Beyond PR and marketing, Human Resources should own a piece of the action. Microsoft describes its social responsibility commitment as a “horizontal” one instead of a series of siloed activities. In fact, Microsoft’s Dan Bross explains that it has the added benefits of helping to break down walls inside the company.

Start small. A CSR campaign can die from ambition. It’s often a good idea to pilot a program in a local market or to negotiate a smaller sponsorship with a not-for-profit partner that can grow over time before rolling out a fully national campaign.

Focus on the long term. It typically takes years for a social or community commitment to fully penetrate key constituencies and become linked with the corporation in the customer or stakeholder’s mind, so a flavor-of-the-week strategy is usually not very successful. The strongest campaigns unfold naturally and organically, but with some help from good PR practices.

Secrets of a Successful CSR Campaign

It’s no surprise that public trust in corporations, along with government and faith institutions, seems to be at an all-time low. According to the Reputation Institute’s 2012 Corporate Social Responsibility RepTrak 100 Study, only 17% of respondents trust what companies promise in their marketing. What’s more, a mere 6% perceive the top 100 companies as good corporate citizens. That’s one reason why so many major companies make reputation management and Corporate Social Responsibility a priority.

Microsoft has the best reputation for CSR in the world, according to the study, followed by Google, The Walt Disney Co., BMW, Apple, Daimler, VW, SONY, LEGO and Colgate-Palmolive. But what about a more typical company? How do corporations who do not happen to be globally recognized brands make CSR work for them?

Look for a strategic fit. The best CSR campaigns are intuitive to the companies or groups who underwrite them. Often a corporate CEO or other executive has a personal or pet project and somehow it snowballs into a CSR commitment. But it’s far better to analyze your corporate values and focus in on a strategic bullseye. Tide sending a mobile fleet of washers and dryers to disaster-hit areas makes perfect sense. KFC supporting the Komen Foundation? Maybe not.

Get buy-in at the top. A successful CSR program usually needs more strategic heft than an executive hobby or pet project, but it stands a far greater chance of surviving if the C-suite champions it. Buy-in should start there, and be vigorously reinforced. Look at Starbucks CEO Howard Schulz, who personally gets behind its corporate social programs.

Make it horizontal. Any corporate social responsibility campaign will be longer lived and more powerful if it transcends corporate communications. Take a cue from Microsoft, which describes its CSR commitment as a horizontal function, not a series of vertical tasks. In fact, Microsoft’s Dan Bross explains that it has the added benefits of breaking down silos.

Start small. A new CSR campaign can die from ambition. It’s far better to start with a manageable program, say, in a local market, or even a pilot effort, before rolling out a larger campaign.

Take the long view. Many companies, by design or due to corporate executive changes, alter their programming in a CSR flavor-of-the-month strategy. That’s a mistake. It typically takes years for a social commitment to fully penetrate key constituencies and become linked with your brand. Let it happen naturally and organically, but with some help from good PR practices.