Do Good

Embracing Brand Citizenship to Fuel Both Purpose and Profit

Anne Bahr Thompson

• Publisher: AMACOM
• Year: 2017
• eBook ISBN: 9780814438404
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

Increasingly today, in every age group, consumers are committing to brands that show good citizenship--from fair employment practices, to social responsibility, to charitable giving. In fact, support of these generous and socially aware companies is so high that good works and charitable giving are necessary for companies that aspire for financial success.

Do Good documents the sea of change that has impacted the twenty-first-century marketplace more than even the most optimistic of business forecasters, including examples such as:

• Toms grew into a $600 million company by giving away 35 million pair of shoes.
• Patagonia’s profits have climbed year after year even as it funnels heavy investments into sustainability.
• CVS’s strategic decision to start destocking cigarettes in all stores.

Customers have shown with their wallets the types of businesses they will support and that they will quickly call out negligence. Buyers today demand more than half-hearted pledges from companies who are clearly just trying to show less profits and decrease their taxes.

By implementing the five-step model for the new rules of business laid out in Do Good--Trust, Enrichment, Responsibility, Community, and Contribution--companies can take the necessary steps to embed social consciousness into their DNA, in turn capturing both markets and hearts.

PART I

IT’S A BRAVE NEW WORLD

CHAPTER 1

THE NEW DEMAND THAT BRANDS MAKE A DIFFERENCE

In our personal lives, sometimes change comes slowly after we spend weeks, months, or years thinking about how we can be happier, more successful, or more fulfilled. Other times, change is not a choice. It is something that pursues us: We’re fired from a job, a natural disaster strikes, our spouse calls it quits, or our child is diagnosed with a potentially terminal disease. Whether by choice or necessity, as we set out to do something differently or adapt to something unexpected, we quickly discover that changing takes time, is full of competing demands, and is far from easy—even when it’s a proactive choice.

The process of change is no different for a business, particularly now, because the model that’s guided business for the last several decades must change. What was an optional path for companies before the millennium has become mandatory. The global economy, technology, climate change, generational shifts, and an evolving cultural landscape are dramatically altering how business is conducted and the ways in which people consume, engage, and even abandon the brands in their lives. Over the past twenty-five years as a researcher studying consumers’ and employees’ relationships with brands, I’ve seen the signs of this coming revolution and watched their numbers increase at an exponential rate. If you’ve been paying attention, you’ve probably noticed some of these changes, too.

A NEW MILLENNIUM AND A CHANGING LANDSCAPE

It’s hard to remember a time before mobile phones, wireless technology, and the ubiquity of social media. However, it really wasn’t all that long ago: The first wireless Palm VII and BlackBerry were released in 1999, Facebook launched in 2004, and Twitter went live in 2006. In 1999 and 2000, as head of the consulting businesses at Interbrand, one of the world’s largest brand consultancies with its finger on the consumer pulse in twenty-eight countries, I saw firsthand how technology was transforming our lives and relationships with brands. Through comprehensive discussions with people ranging from CEOs and CIOs to sixteen-year-olds who knew nothing other than living in a digitally connected world, four concepts emerged that captured the ways in which technology was altering our lives: mobility, connectivity, freedom, and humanity.

Today, these concepts may seem like givens, yet the impact they have had and continue to have on us as individuals and as a society is profound. Behavioral psychologists, economists, and marketers alike all look to make sense of how technology is altering our brain patterns and impacting the commercial pact that exists between companies and their customers, employees, and other stakeholders. In other words, between businesses and people.

In 1999, people were seeing the benefits and challenges of this new existence:

We were gaining true mobility through the opportunity to plug ourselves in from anywhere to do almost anything—work, shop, make travel plans, and more. . . .

And we were connected to the expansive world of the Internet, as well as to our coworkers, families, and friends through email—anytime, anywhere.

Because of mobility and connectivity, we cherished the freedom and control to turn our environments on or off with the flip of a switch.

Yet many people reported they were missing the more personal aspects of communications; they were looking for reassurance that they would maintain human connections as technology interlaced itself more and more into our daily living.

As our lives became more integrated with machines, the nine-to-five workday was quietly disappearing. As people were expected to be connected anywhere at any time through a growing number of devices, an inherent tension was building: Employers were pressuring workers to be in touch constantly. This existed alongside a growing desire by individuals to use their newly acquired tech tools to stay in frequent contact with colleagues, family, and friends while on the go. Suddenly, we were bringing our communication network with us in our cars, on our travels, and during what used to be our downtime. The ability to turn a device off and escape was an increasingly difficult choice, accompanied by a fear of missing out when doing so. So, did these new mobile communications truly make us free?

At the same time we were becoming wired, we craved the intangible and untethered things that made us human. Our intimate ties to technology had changed our social needs and emotions. With a force equal to that of the technological revolution, which was quickly integrating itself into the fabric of our daily lives, an equal energy began to spring up in reaction: a quest for emotional connections and deeper human relationships and experiences.

As Marc Gobé so aptly wrote in his book Emotional Branding, “People love brands but brands don’t love people back—this results in so many missed opportunities to connect.” In response, brand consultants and marketers sought to humanize brands and create more meaningful experiences for connecting companies and their customers, for community building, and for ethical behavior. Sustainability and green consciousness—things more traditionally linked with corporate reputation—started creeping into brand image.

Over the past fifteen years, the research I’ve conducted on my own and on behalf of my clients has demonstrated that we are developing a deeper connection with the brands we interact with. Brands, especially the ones we’re loyal to, represent more than things and services. They signify an ethos, the character of a culture or a group—either one that mirrors our existing values or one that we aspire to. And as more people grow concerned with equality and sustainability, more of us want to feel that our “relationship” with a brand links us to some kind of larger purpose designed to help shape a future that will both sustain the planet and enrich our modern lives.

Since branding became a focus for business in the late 1990s, businesses have looked to nurture consumers who will advocate on behalf of their brands—people who not only buy products or services themselves but who also recommend them to friends, “like” them online, and positively tweet or post about their experiences using them. Today, the tides are turning, and customers and employees alike are looking for the brands they buy and companies they work for to advocate on their behalf, as well as on behalf of those who are disadvantaged and for the planet.

Companies are no longer just companies. We imbue them with the characteristics of friends and family—and even enemies. So it’s no surprise that people now demand businesses and their brands to do more than just make a profit. They expect brands to behave like active citizens and partner with customers, employees, and other stakeholders to co-create a better future.

OUR CHANGING ATTITUDE TOWARD BUSINESS

If you’re a CEO, marketer, advertiser, entrepreneur, consultant, or other business executive, you’re aware of the following movement: Each year, more brands that stand for good principles or causes are surfacing. While they are still in the minority among business enterprises overall, the impact they are having on our collective psyche and expectations for all companies is growing.

Increasingly, politicians, scientists, economists, and the general public are recognizing that our current approach to business needs to change. More and more business leaders are seeking models to guide them through shifting marketplace dynamics. Increasingly, customers and employees are letting companies know that they are no longer willing to accept business as usual, with the attendant human, environmental, and community costs of prioritizing earnings above everything else. Ultimately, people want businesses to do more than just earn a profit. They want the brands they buy to go beyond being only bottom line–driven to doing good on their behalf, as their customers.

DOING GOOD REDEFINED

Doing good. For most people this phrase conjures up images of kindness and self-sacrifice: A young Boy Scout helping an old woman to cross the street. A Peace Corps volunteer teaching a Nepalese man to build a smokeless stove. An aid worker in Haiti rescuing a young child from the rubble. Habitat for Humanity, the American Red Cross, Doctors Without Borders, CARE, and other nonprofit organizations come readily to mind. When we hear the phrase doing good, few of us think of a business of any kind—whether it’s a bank, a fast-food chain, an oil and gas producer, or even a retailer. And if we do, we likely think of “hippy” brands like Tom’s of Maine, philanthropic businesses like Newman’s Own, social enterprises like TOMS or Warby Parker that apply commercial strategies to maximize social impact alongside profits for external shareholders, or our favorite brand of certified-organic chocolate bars we buy from stores like Whole Foods Market.

Yet today many businesses across industries are doing good and adding social value. According to philanthropic tracking and rating sites, Giving USA and Charity Navigator, U.S. corporations gave $18.45 billion to charities in 2015.^1,2

By the World Bank’s 2015 statistics, that’s more than the GDP of Iceland ($16.59 billion), Jamaica ($14.26 billion), the Bahamas ($8.85 billion), and many other countries.³ It’s interesting to note that Giving USA’s figures don’t include the ways companies are directly contributing to the general good via, for example, initiatives such as employee-volunteer programs, using only ethically sourced materials, recycling waste, and reducing water usage in manufacturing production. If the impact of these and similar efforts were added to charitable donations, the number clearly would be much higher.

So why don’t we think of business when we hear the phrase doing good? One argument that continues to gain momentum is this: Even though the number itself is large, corporate giving represents a very small percentage of corporate profits. Less than 1.2 percent of the Fortune 500’s combined $1.5 trillion in profits is donated to causes and communities around the world.⁴

With an average total compensation of U.S. chief executives of the 350 largest publicly traded corporations estimated at $16.32 million per CEO, or approximately a combined $5.7 billion in 2014, when considered alongside executive compensation, the dollar value that 1.2 percent represents seems tiny.⁵ However, the issue runs even deeper. Our Western cultural narrative associates doing good with idealism and altruism—two concepts we typically don’t associate with corporations.

HOW TECHNOLOGY IS REWRITING OUR CULTURAL NARRATIVE

As technological advances and the digital era are altering our lives overall, and the way we accomplish daily tasks, communicate, produce, and consume media, they are simultaneously changing our cultural narrative. Think about the impact of cutting and pasting, for example. The fact that we can digitally cut two seemingly different images and place them side by side has dramatically changed the way we see things fitting together. The act of mixing disparate elements—how we dress, what we read, what we listen to, what we watch—to create our own individual lifestyles has become practically second nature. This is especially true for Millennials—the generation born between 1980 and 1995—and Gen Z—the generation born between 1996 and 2010—who are far more comfortable with mashups of paradoxical things living side by side than their parents, teachers, and older coworkers have ever been.

We don’t need to pick between H&M and Chanel, flip-flops and a suit, Beyoncé and Jimi Hendrix, or ...

Table of contents

• Cover
• Half title
• Title
• Acknowledgments
• Contents
• Introduction
• Part I: It’s a Brave New World
• Part II: The Path of Brand Citizenship
• Part III: Choosing Change
• Endnotes
• Index
• Copyright