Blog

Turns out being good is making money for successful brands

2012-05-29T18:09:33Z

Out for drinks recently with a friend who’s working at a multinational ad agency, I had been going on a bit about CSR (Corporate Social Responsibility) and startups. When he asked if CSR programs actually had any bottom line impact for companies, I couldn’t come up with a better answer than, “Well yes, it builds brand equity.”

I went to two leading studies tracking the legacy of CSR to the financial impact on companies globally. Interbrand has been measuring leading brands since 1984 so I looked at their report, Best Global Green Brands 2011 (which actually measures the wider impact of CSR, not just Green initiatives) and KPMG’s 2011 CSR report.

Companies are not only doing ‘good’, they’re saving money

KPMG found that many leading brands increasingly see CSR as bringing financial value through direct cost savings as well as enhanced reputation. The effects of sustainability can include saved energy and resources benefitting the bottom line. And the effects of enhanced reputation to investors and consumers offers growth on brand value.

The U.S. multinational 3M reported that it successfully tied environmental performance to monetary and non-monetary performance for its employees. By identifying and using renewable materials to replace petroleum-based polymers and monomers in their products, the company showed double bottom line ROI with increased environmental impact and financial growth.

And while they’re making the world a better place, they’re making money too

Both reports uncovered that the companies that are integrating CSR through their structure understand that it builds long-term growth.

Toyota is a great example of the kind of company where there’s a high level of literacy in sustainability with engagement and responsibility at every level. CSR is part of the workplace culture and everyday business. The company has focused on decreasing its environmental footprint through the supply chain while supporting employees and producing better cars that are more efficient. The effects have been better performance and sales with increased profitability and improved brand presence for the company. Earnings are reinvested to continue the innovation cycle. The company sees it as a ‘virtuous circle,’ feeding sustainable growth.

There's a new type of company where CSR is part of the brand, and they're REALLY doing well

Even more evolved are hyper-focused new companies formed around a purpose, with the social or environmental plan tied together intrinsically to the business model, its people and activities. These companies don’t talk about CSR, they talk about impact... and they’re healthy and growing. There's an overseeing body in the U.S., B Corporations, offering certification based on purpose, accountability and transparency. Their goal is to blend the best of public service and private enterprise to create successful for-profit purpose-based businesses. It’s meant to separate ‘good’ companies from those with good marketing. Patagonia and Method are two of the more recognizable brands that have become certified.

Revolutions Foods is one of the new B Corp companies that’s got social responsibility built into its DNA. Since 2006, they’ve been making healthy, good tasting meals for kids in low-income schools and families in California, Colorado and Washington D.C.

Founder, Kristin Richmond, talks about what motivated her. “It was education reform, building better schools, creating access for students and primarily underserved communities—and then it was also food.” In Inc. magazine, she tells how the company created a business model that worked for them. Since partnering with a Whole Foods store in the Bay area to launch a pilot program in 2006, the company now employs 750+, feeds more than 120,000 kids each day and is projecting to close this year with $30 million in revenue.

The future in new business models

Now that big brands have proven that CSR is profitable, it’s easier for early-stage ventures to get funding for new business models that answer questions such as, How can we get good food to kids at school? These new companies are making money by funneling their passion into creating new business models that are built for success, fully integrating CSR with financial sustainability.

Strong brands

2012-05-18T14:39:09Z

9 Of The Tastiest, Craziest American Fast Food Exports shows how strong a brand needs to be when you start adding brand extensions or messing around with it. This shows some of the interesting menu items developed for other countries as these American fast food brands went international.

Though they're all moving away from the core offerings on the menu, they still fit within that envelope of what the brand stands for because the brand was strong enough to stretch out for other markets.

I'm not a fast food person but except for the frightening cheeseburger pizza in Dubai, I actually think a lot of these look pretty good.

CSR works because it has to

2012-05-13T14:40:16Z

People interested in CSR might want to read this globalization study from Remapping the Debate looking at how German auto makers – who have managed to be highly profitable in Germany, a highly regulated country that means more unions with higher wages, more spent on CSR etc – adapt to the US when they open plants there.

As a policy analysis it seemed to want to make the point that all that Euro-kind of regulation is good for business and for people too, yet the finding seems to be much less promising altruistically, that the corporate world is just highly adaptive and will give no more than required.

KPMG's International Corporate Responsibility Reporting Survey 2011 supports this. in making a case for CSR (or Corporate Responsiblity, as they call it), the survey notes a strong corelation of national legislation to the amount leading companies in any country are investing in CSR initiaives. So countries that are highly regulated, such as Germany, have a high level of CSR compliance integrated into their workflow. In order for companies to be competitive, they have to make the activities feed the bottom line.

The Shower Principle

2012-04-01T13:59:50Z

Saw this episode of 30 Rock when I was trying to solve something, looking for my 'Aha' moment. Jack Doneghy described the Shower Principle to Liz as he was wasting time putting in his office. He explains it's the term scientists use to describe moments of inspiration that happen when your mind is distracted from the problem at hand.

Apparently, "if the cerebral cortex is distracted by showering or putting then anther part fo the brain, the anterior superior temporal gyrus is activated. This is the site of sudden cognitive inspiration."

I'm not a neuroscientist so I did a little Wiki search on the anterior superior part of the brain he's describing and found it's actually responsible for the perception of emotions in facial stimuli but whatev. Use a bunch of words to make it sound like you've got science/numbers behind your concept.

The scientific part is made up too but my point is that this gets at where the brilliant spark for creativity comes from. The inspiration happens by thinking a lot about something then stopping thinking about it. Why did that sound like Jenna.

Adaptability

2012-03-27T18:55:41Z

Sitting in a client meeting a few months ago, I saw a challenge divide the group into two into those where adaptable and those who weren't. Someone in the not-so-adaptable camp was holding on to his experience of 20+years in the business to tell us how it's done while others just looked at the situation and said well here's what we've got to do in a limited amount of time with limited resources and how can we make it work?

The adaptable people on the project were more positive about navigating the problems and developing new solutions. It was like Darwin for organizations.

Brand engagement

2012-03-06T19:06:36Z

It's what companies of any size want to do. They want to be interesting; they want to be able to connect with people. They don't want to be pushing out a message that's just noise.

Brand engagement is all about building an authentic story that can be supported through marketing, advertising, social media content, media relations. All channels and platforms; everywhere. It's about building presence and changing behaviour by changing perceptions.

It's about watching emerging trends and behaviours and knowing what action is going to cause a reaction. Especially in an always-on time where consumers can find you through a simple search, brand engagement is developing because advertising, social media and communications have become amorphous overlapping spaces rather than narrowly-defined parallel paths.

India's 2% Solution

2012-02-27T15:51:10Z

A friend I worked with in advertising and I were chatting on Facebook. She's working on a couple of projects in India, one of them is an incubator for social innovation that she's been trying to launch. She was telling me she's a little closer because of a new bill enforcing CSR.

Every country has their own distinct culture of corporate responsiblity and philanthropy that generally has its roots in government policy and regulation. India has had a policy of companies investing 2% of their profits into CSR. In February, it moved from a suggestion to a bill.

Some quick online research into Indian sources revealed:

That the move is seen with distrust by the corporate world of government intervention. J.J. Irani, the former director of Tata Sons, says, “People will find ways to skirt anything that is mandated.”
Companies don't want to be made to give their profits "to charity."
A philanthropic organization described it as "mandated corporate social responsibility."

It could be seen as a buisiness opportunity, rather than a punishment. From the government's interest, it's a sustainable way of supporting the social structure of a country that's in an economic boom. For corporate interests, it opens up opportunities for companies experienced in CSR, with proven results of corporate responsibility building brand reputation and bottom line growth, to demonstrate success and lead by example. I expect that the companies in India who have global presence will be the first to know how to build engaged CR strategies that will bring value to both the community and the company.

2012-02-25T17:00:00Z

While I've been playing around with Pinterest to see if it works for me, I've been watching how others are using it. I came across this great presentation on Slideshare. Unsurprisingly, in the U.S., the audience is mostly women using it to post images of design, craft and other visual content; but in the UK, it's mostly men who are using it. For business.

I love a surprise.

Corporate responsibility engagement

2012-02-23T15:56:35Z

KPMG's International Corporate Responsibility Reporting Survey published in late 2011 tracks 3,400 leading companies from 34 countries, looking at trends that are happening worldwide. It found that reporting had increased worldwide, as brands realize that corporate responsibility "drives innovation and promotes learning, which helps companies grow their business and increase their organization’s value."

What they found was that corporate responsibility (also referred to as CSR and sustainability) reporting uncovers new opportunities for business improvement and brings enhanced financial value to companies, though there's still room for improvement. Data shows that charting countries by level of process maturity and quality of communications, Europe leads in overall engagement, while Asia generally underperforms in both process and communications. Canada and the U.S. showed to over-communicate on their corporate responsiblity to their actual process maturity.

Reading through the report focusing on building business through brand building and engagement, shows that North American companies need to engage with corporate responsiblity as part of how they operate, being clear that it's not about feeling good about something or using it as a marketing message but creating impact that drives business goals.

Social media can help develop engagement for companies who have corporate resonsibility agendas, but have a tough time making them relevant. Social media brings the kind of transparency and engagement that makes brands more responsive and responsible. It can encourage employee engagement, which has been found to be key to making any CR program effective. It can be effective for showcasing thought leadership in companies, allowing employees as well as the public to see what a company's doing.

Corporate responsiblity used to be shown in annual reports and stand alone reports. While that reporting is still relevant to shareholders, regulators and other corporate stakeholders, companies are finding they need to do more to build reputation and enhance their brands. Social media offers a genuine and responsive message that can complement press releases and marketing. Social media can bring the C-suite and thought leaders within companies closer to the public, offering the kind of transparency and presence that builds trust and has a positive impact on a brand.

Because of social media's impact, companies that blend corporate responsibility strategies with brand and social media/communications strategies can result in more effective engagement internally and outside the company.

Avoiding a site hijack

2012-01-13T21:48:01Z

My perspective is as a consultant and advisor who works with tech startups, helping them get to market. I watch what's going on from an outside, more objective point of view. Once I saw a trend of tech hijacks, where non-tech founders get sidelined or held up by their dev team at key points, I started talking to the experts in my network for practical advice to help startups prevent a website or product hijack.

• Hire a CTO if one of the founders isn't from a tech background. This, everyone is agreed on.

• Understand that when it happens, it's rarely malicious. Be generous in trying to resolve an impasse; if there's a personality clash, consider asking someone else to negotiate on your behalf.

• Don't let your files reside on a server under someone's desk. Instead, move everything to a cloud server that's solid, secure and leaves you in the drivers seat.

• Hire design and development work as needed, so that projects aren't open-ended, and you're hiring people with specific skillsets. This makes it much easier on the team.

• Get advisory help to clarify what you need next; I often hear about clients asking for functionality and stuff they don't actually need.

• Take advantage of all the incubators, accelerators and startup collaboration and support groups there are out there. They're great communities that love to share knowledge and networks.

These seem to be pretty universal and can apply to startups involved in technology in any sector. It's not a definitive prescription.