Archive for the ‘Leadership’ Category
Communicating Corporate Responsibility
Since public trust in the private sector has hit historic lows, demonstrating corporate responsibility has become even more important for today’s corporate leaders. Effective corporate responsibility – meeting (or exceeding) stakeholder expectations for financial, social and environmental performance -restores trust and credibility. Unfortunately, when companies attempt to talk about corporate responsibility, they often do more harm than good, causing even more damage to the company’s reputation. Common pitfalls are communicating instead of improving performance; ignoring reasonable critics; and reporting only what is required.
How can companies talk about corporate responsibility without shooting themselves in the foot? In my experience, companies that communicate corporate responsibility effectively follow seven rules.
1) Demonstrate, don’t assert.
Resist the temptation to demonstrate corporate responsibility via press release. Whenever a company talks about corporate responsibility, communication should follow action. Many skeptical audiences assume that corporate statements, if not misleading, will be self-serving and provide only a limited perspective. Assertions of corporate responsibility without the appropriate due diligence, policies, and actions backing them up will quickly prompt critics to highlight inconsistencies between word and deed. Just last week at the annual Business for Social Responsibility Conference, eBay CEO John Donahoe put it this way, “You can’t tackle your reputation until you tackle your actions.”
2) Get the facts.
Responsibility begins with accurate information. Without a clear understanding of conditions on the ground, companies cannot improve corporate responsibility performance. Accurate information, collected through due diligence tools like human rights impact assessments, not only informs smart business decisions, it minimizes the risks of communicating. Companies that provide policymakers with reliable information can reduce pressure for regulation. Companies that audit their operations can reduce the risk of legal liability. Accurate information is just as important for advocates who seek to improve corporate performance. A common set of facts provides a basis for engagement and collaboration among stakeholders.
3) Engage critics.
Most companies are exceedingly cautious and reluctant to engage critics. While a company may not agree with or ultimately adopt the recommendations of a critic, engaging critical external stakeholders in honest dialogue can earn credibility and demonstrate a corporate commitment to addressing the issues at stake. After Amnesty International released a 2003 report criticizing the human rights impact of a BP pipeline project, BP engaged Amnesty in dialogue, and sought to address the concerns by incorporating international human rights standards in the legal agreements governing the project. Engaging its main critic and taking stakeholder concerns seriously earned the company credibility. Engaging reasonable critics can also provide a company with valuable information and expertise, and set the stage for collaboration or partnership.
4) Be transparent.
Demands for greater corporate transparency are common in the wake of the financial crisis. Transparency has always been a hallmark of effective corporate responsibility. Communicating accurate information that is complete, relevant and measurable allows stakeholders to make their own assessments of corporate performance. As a rule of thumb, more information is better than less. High levels of transparency earn credibility with stakeholders and critics, create incentives for continuous improvement, and encourage the adoption of best practices. While companies that embrace full disclosure risk criticism, choosing to report as little as possible is a short-sighted strategy. For years, apparel companies resisted calls by advocates for full disclosure of factory locations. Despite its experience as a target of criticism, in 2005, Nike reversed the company’s longstanding position. By unilaterally disclosing all of its contract factory locations, Nike earned credibility while leveling the playing field among apparel brands and competitors. Nike’s principal rival, Adidas, ultimately disclosed its factory locations three years later. Companies must overcome cultural biases against public disclosure and seek levels of transparency sufficient to establish facts, demonstrate performance and earn credibility among stakeholders.
5) Define the company’s “sphere of influence.”
No company can, or should, assume responsibility for all the issues of concern to its stakeholders. Companies fall into the trap of accepting too much responsibility when other entities – governments, for example – must act to achieve lasting improvements. Conversely, companies that define their influence and responsibilities too narrowly risk a stakeholder backlash. A clear definition of a company’s sphere of influence, consistent with a company’s business, can go a long way toward meeting the expectations of stakeholders. The multi-stakeholder Global Network Initiative, for example, calls on its member companies to “prioritize circumstances where it has the greatest influence and/or where the risk to freedom of expression and privacy is at its greatest.” Leading companies evaluate and prioritize the corporate responsibility issues they face and allocate resources accordingly.
6) Earn credibility.
Third parties are the most powerful corporate responsibility communicators. The opinions of credible experts and independent stakeholders almost always carry greater weight than corporate assertions, especially in an atmosphere of mistrust of corporate motives. Independent monitoring was one of the first expectations of stakeholders when companies began to adopt voluntary codes of conduct. A single statement of support from a respected former critic can do more for a company’s reputation than years of corporate communication. But you have to earn that credibility. Ways companies have earned credibility include adopting widely accepted external standards, partnering with stakeholders, and acknowledging problems. The best corporate responsibility reports, for example, are notable for the candor with which they acknowledge failures and address performance obstacles.
7) Connect corporate responsibility to business strategy.
Stakeholders who value information on social and environmental performance look for evidence that a company’s corporate responsibility initiatives reflect an ongoing organizational commitment rather than an ad hoc response to an isolated issue. Are corporate responsibility efforts integrated, well-understood and rewarded at all levels of an organization, from the boardroom to the factory floor? Is every corporate function able to make the business case for corporate responsibility? The most effective communications demonstrate how a company’s corporate responsibility efforts advance key business objectives.
By adopting these best practices for communicating corporate responsibility, corporate leaders can avoid common pitfalls and focus on improving financial, social and environmental performance.
Humility Update: Humility is Strength. Obama Wins Nobel Peace Prize
The Paradox of American Power
Between the 9/11 attacks and the US invasion of Iraq in 2003, the foreign policy establishment focused on the difference between “soft power” and “hard power.”
The concepts were elaborated in a 2002 book by Joseph S. Nye, Jr., then dean and now University Distinguished Service Professor at the Kennedy School of Government at Harvard University. Nye is consistently ranked one of the most influential US scholars on foreign policy.
His book, The Paradox of American Power: Why the World’s Only Superpower Can’t Go it Alone, was remarkably prescient. (more…)
Worth Reading: “Strategic Communication: Getting Back to Basics” by Admiral Michael G. Mullen, Chairman, Joint Chiefs of Staff, Joint Force Quarterly
Taking Strategic Communication Seriously
The United States government is finally taking strategic communication seriously.
This week President Obama used all the instruments of diplomacy to advance the US foreign policy agenda, including getting Russia, France, and Britain to stand with the US against continued nuclear development by Iran.
President Obama’s wins at the UN and in the G-20 summit in Pittsburgh this week are just the latest indication of a more mature and intentional foreign policy that aims at influencing world leaders and the world community in ways that increase the security of the United States.
An important element of this new approach is a renewed emphasis on effective public diplomacy.
Effective Public Diplomacy =
Influencing, not Bullying
Last year I wrote a post about US public diplomacy, and how much of it missed the mark.
I noted that effective communication isn’t about pushing messages to audiences, but rather about provoking a desired reaction from those audiences.
I also quoted Dr. Amy Zalman, who wrote an East-West Institute concept paper, Countering Violent Extremism, that included this observation:
“Good communicators reveal, in speech and action, that they understand the motivations and aspirations of their audiences—and it is via this understanding that they gain their sympathies.”
Dr. Zalman then reviewed US public diplomacy directed toward the Muslim world, and concluded:
“A review of U.S. official rhetoric shows an all too persistent absence of this understanding, an oversight which in turn can fan rather than dampen extremist sentiment.”
The Future of Corporate Human Rights Accountability
Many corporate counsel and human rights advocates will view last month’s $15.5 million settlement of Wiwa v. Shell, correctly, as further evidence that the Alien Tort Statute (ATS) is a viable tool for corporate human rights accountability. The future of corporate human rights accountability, however, is more likely to focus on human rights due diligence and reporting than human rights litigation. Companies and human rights organizations that hope to influence the business and human rights debate should devote resources to improving corporate human rights due diligence and to shaping human rights reporting requirements under national law.
Potential legal liability for corporate complicity in the worst forms of human rights abuse is now a permanent feature of doing business for most transnational companies. Some form of legal jurisdiction over the extra-territorial activities of home companies is increasingly common in OECD countries. For transnational companies doing business in the United States, the ATS provides foreign victims of the worst forms of human rights abuse a tool for holding corporations accountable for their actions abroad. (more…)
Worth reading: Booz & Company CEO Succession Survey, “Stability in the Storm” by Per-Ola Karlsson and Gary L. Neilson
A Leadership Test
Leaders are judged on how they deal with their most significant challenges.
As American Express CEO Ken Chenault said on the cover of the November, 2007 Fortune, “We have to remember that reputations are won or lost in a crisis.”
Each year the consulting firm Booz & Company studies CEO turnover among the 2,500 largest public companies in the world. Their report, published in Booz’ online magazine Strategy+Business, is worth reading, and provides not merely statistical data and trends, but also insights into the particular leadership challenges facing CEOs today.
The 2008 CEO Succession Survey, published this month, concludes that the financial and economic meltdown that began in the last third of last year is still causing CEO turmoil. Forced CEO turnover remained high in 2008, but those CEOs who kept their jobs aren’t out of the woods yet: (more…)
Yahoo!’s Human Rights Turnaround
Just like any other global company, Yahoo! must ensure that its local country sites . . . operate within the laws, regulations and customs of the country in which they are based.
– Yahoo! Spokesperson, September 2005
Human rights trump doing business. . . . Internet companies must learn when not to hide behind the notion that we are corporations so it is our number one obligation just to do business. It isn’t our number one obligation. Our number one obligation is to be good world citizens.
– Carol Bartz, Yahoo! CEO, Yahoo! Business & Human Rights Summit, May 2009
What a difference media attention, a lawsuit, Congressional hearings, and ousting the CEO makes. Like earlier corporate responsibility poster children under intense pressure from stakeholders (see Nike), Yahoo is transforming itself from a laggard to a leader.
Rebuilding Trust
Worth Reading: Harvard Business Review, June, 2009, special section: Rebuilding Trust
I’ve been teaching ethics in graduate business and communication programs at New York University for more than 20 years, and every semester we lament the decline of trust.
But this year seems to be worse than most. Trust in US corporations is at an all-time low, 38 percent, according to the 2009 Edelman Trust Barometer. And most other measures of trust in institutions also point to continuing declines.
The June issue of Harvard Business Review takes on the issue of trust with a 25-page special report, Rebuilding Trust. It’s worth reading. The package includes a forceful critique of business school curricula, a 100-year timeline of highlights and lowlights in the public’s trust of business, and a counter-intuitive piece on how despite recent events people may still be trusting too much.
But the real payoff is the first piece in the package, by James O’Toole and Warren Bennis. O’Toole is the Daniels Distinguished Professor of Business Ethics at the University of Denver’s Daniels College of Business, and Bennis is University Professor at the University of Southern California. The two are co-authors (with Daniel Goleman and Patricia Ward Biederman) of Transparency: How Leaders Create a Culture of Candor (Jossey-Bass, 2008).
The special report opens with O’Toole’s and Bennis’ conclusion:
“We won’t be able to rebuild trust in institutions until leaders learn how to communicate honestly — and create organizations where that’s the norm.”
Apology Update: Compare and Contrast
A public apology is a good way to express remorse and offer reconciliation to an affected party. But the very act of apologizing can be daunting.
If delivered effectively, an apology can mend relationships and restore trust between two or more parties.
If delivered effectively, an apology can help maintain company’s competitive advantage, reduce litigation costs and minimize business disruptions.
If delivered effectively, an apology can create a perception of genuine regret on behalf of the offender and mend his or her reputation.
But here is a question:
Can an effective delivery distract the audience from an insufficient apology?
And,
Can a weak delivery diminish a powerful message of a genuine apology?
I invite you to look at three recent apologies and share your opinion about the effectiveness of each apology is in terms of its message and its presentation.
Humility Update: President Obama on the World Stage
Humility is strength.
More than a year ago I began a series on this blog about humility as a leadership attribute. I noted that
A dollop of humility tempers other attributes, and makes a leader even stronger. Humility helps a leader to recognize that maybe – just maybe – he or she might be wrong; that there may be other valid perspectives; that he or she doesn’t have to be the smartest person in every room, at every meeting.
Humility also helps leaders to connect with others up, down, and across the chain of command; to build organizations and cultures that more likely thrive; to understand the perspectives of other stakeholders.
Yesterday at the close of the G-20 Summit in London, President Obama put his leadership in full focus as he demonstrated both confidence and humility on the world stage. It worked.
He gained the confidence of world leaders, including those who had previously been America’s adversaries or who had predicted that the Summit would fail. He even got a rousing ovation from an otherwise skeptical world press corps.
In a press conference closing the Summit, President Obama demonstrated a tone that was a stark contrast to that of his predecessor, and that rallied other world leaders to seek to cooperate with the United States rather than to resist us.
President Obama set the tone before a single question was asked: (more…)
Crisis Management Spotlight: US Airways’ Hudson River Landing
Leadership in a Crisis
A hearty salute to Captain Chesley B. Sullenberger, III, the US Airways pilot whose cool and decisive handling of a breaking crisis prevented a plane crash from becoming a tragedy.
Captain Sullenberger, a former US Air Force fighter pilot, a pilot union safety official, and a sometime plane crash investigator with the National Transportation Safety Board (NTSB), exhibited exceptional leadership skills when his Airbus 320 aircraft hit a flock of geese when taking off from LaGuardia airport yesterday afternoon.
The geese took out both of his plane’s engines at approximately 3,200 feet as the plane was making a left turn over the Bronx. With no power in his engines, Captain Sullenberger had a choice to make, and very little time to make it. (more…)