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Many companies are turning to Corporate Social Responsibility as a strategy to win back the trust of their stakeholders and customers. It won’t work. Why? Because you don’t become trustworthy by asking people to trust you even more.
Corporate social responsibility requires trust.
There is an old maxim among sales people, “You don’t sell the steak, you sell the sizzle.” Undoubtedly, you’ve heard this pithy little saying and for the most part it rings true. The idea is that when people make a purchase, it is not so much about the car, or house, or widget, but rather the presentation and the presenter. Are we buying a car, or are we buying into a brand? According to the maxim, it is the latter.
These days, there is a whole lot of steak….and not much sizzle.
Given recent events, like say, oh I don’t know, the global economic collapse, consumers and investors are viewing corporations with greater scrutiny and even downright skepticism. As we saw in the first part of this series ‘ Trust: Why Business Lost It, and How To Win It Back’, many companies have responded by embracing Corporate Social Responsibility strategies in an effort to establish themselves as good and ethical corporate citizens. CSR is not some newly devised strategy. What is new however, is an economic crises which was caused by the gross excess and multiple fumbles of the financial sector. Now, for better or for worse, we are left with an ideal environment for people to demand and receive change. For business, this change is found in CSR. The effect is wholesale. Harvard Business School has even officially pronounced CSR victorious over all detractors.
Jeff Swartz, CEO of Timberland believes brands with a strong sustainability message are well-positioned for this present crisis. Timberland has been a leader for years in CSR including issues such as: sustainability, responsible supply chains, and “green.” What used to look like a distraction from core business, now appears downright prescient.
(Read more about Timberlands sustainability efforts here.)
(Want to interact with Timberland directly? Visit them on JustMeans.com, a site dedicated to corporate transparency and Corporate Responsibility.)
While CSR may be a wildly popular strategy, is it really a solution to the growing problem of trust? Many companies have taken on sweeping CSR strategies and expended vast sums to institutionalize the practices. Yet, they remain nefarious in the public eye. In fact, CSR activities sometimes heighten suspicion rather than engender trust. But why?
The answer is found in the rather messy concept known as Social Capital.
Trust, the currency of Social Capital
There is no easy definition for social capital. A concept born out of sociology, it is now used by multiple disciplines (economics, organizational behaviour, political science, public health) with numerous interpretations. In simple terms, social capital is the value that accumulates in actual human relationships. There are vast amounts of information, skills, and networks to be found in most relationships. This value is accessed every time individuals or groups gather to ‘do something’ for the greater good by making contributions of skills, information, and connections. Habitat for Humanity generates and spends the equivalent of billions of dollars in social capital every year. The health of a society may be measured in the generation and use of social capital.
CSR is an amazing avenue for companies looking to utilize social capital. When these companies pursue a CSR strategy, they can leverage the networks that will form out of shared social concerns. If they add their their resources, skills and broader connections, they will generate solutions and fundamentally contribute to the value and health of communities in which they operate. Social capital generates from the opportunity, motivation and ability to act. The shape it takes is determined by the networks which exist between the actors, the norms of what is and is not acceptable, and finally, by trust. Trust is the bond that keeps all of these actions and dimensions intact. Without trust, everything grinds to a halt.
So, is CSR the solution – or not? If you are lacking trust (like most business today) it is impossible to employ a tool that requires trust in order to gain trust. That would be like claiming that the solution to getting a chicken is to lay an egg. First, just find a chicken to lay the egg. Wait…what?
The real question is not whether CSR will generate trust in your brand. It will. And it won’t. If you are trusted then yes, CSR will create more trust. If you’re not trusted, CSR will probably only make it worse.
In her article “Where’s the Love”, Christine Arena elaborates:
For example, Halliburton says: “[our] every action is guided by our vision to be welcomed as a good corporate neighbor,” but The Wall Street Journal reports that it is “the company with the worst corporate reputation.” Monsanto promises: “integrity is the foundation for everything we do,” yet Amnesty International and the Organic Consumers Association consider it a “global corporate terrorist.” Allstate Insurance claims that its customers are “in good hands,” while the FBIC counts it as one of the Nation’s “top three worst insurers.” Exxon Mobile insists that it is effectively “taking on the world’s toughest energy challenges,” but Harris Interactive rates it as one of the world’s “least trusted.”
(Read the full article on Apeshpere.com)
So how do you get a chicken if you don’t have any eggs? Simple. Borrow some.
Companies don’t own trust, brands do. A friend of mine, Dennis Bruce, Creative Minds, explained it this way: “A Brand is the real estate a company owns in the minds of it’s stakeholders and customers.” This is why Royal Bank’s brand is only worth 5.4 billion compared to RIM’s (the makers of Blackberry) 13.7 billion. We think a lot more about Blackberries in Canada than we do banks.
However, an established brand does not automatically generate trust. Exxon is an easy example of this. Exxon may own real estate in my mind, but they are bankrupt in social capital. I guess that’s kind of like being house-poor. Some people can afford to buy a house, but not to furnish it, maintain it – essentially, make it a home. Businesses don’t want vacant houses in your mind – they want homes.
We’re left with quite a dilemma. Business lacks trust, CSR creates trust, but not without social capital. Yeah….the outlook seems a bit dire. Thankfully, social capital, is actually within easy reach – and there’s more of it than most businesses know what to do with.
Where? Well, within your very own workplace, of course. The best avenue to social capital is through the communities of your employees. Accessing it can present a bit of a challenge, but not one for which I don’t have an answer.
Next time we’ll look at how to access social capital through employees and borrow eggs to furnish your home…or…..maybe I used one too many metaphors in this blog?
© 2009, cjarvis. All rights reserved. Do not republish.
Author: cjarvis (6 Articles)
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