Category: CSR


How many graduating university/college seniors in communications disciplines (i.e., public relations, marketing, investor relations, public affairs etc.) will utter the  worn-out cliché to hiring managers in the coming weeks and months: “I really work well with people”?

Gag!workwell

What precisely is the return-on-investment (ROI) for someone who allegedly works well with people?

How does one measure how effectively a candidate interacts with other humans?

Come to think of it if one was pursuing a career in anything and everything communications, wouldn’t working well with people be a given?

Tell me something – anything – that I don’t already know.

There are precisely 1.490 billion results when one Google’s, “I Really Work Well With People.” Surprised there are so few web instances devoted to this NOT thinking outside of the box phrase.

Almost DailyBrett will declare now, and will say it forever:

Telling a hiring manager you work well with people: 1.) Makes the hiring manager roll her or his eyes; 2.) Brings into question whether you have any creativity; 3.) Does not differentiate you from your tenacious competition for the legal tender; and 4.) Makes one wonder whether your brain has flat-lined.workwell1

Strong opinion to follow.

Tell Me/Us About Yourself?

At this point in the interview process, the hiring manager is transitioning from the requisite small talk to getting serious.

The above question, which surely will follow with “Why do you want to work for us?” is more than an ice-breaker. It is an opportunity for a candidate to systematically demonstrate ROI based upon experience, results, digital and analog skill sets and education.

Think of it this way: A dollar is a friend (same applies for pounds, euros, yen …).

An agency, corporation, non-profit, governmental agency has to spend a certain amount “friends” in the form of income statement SG&A salary, benefits, time-off and maybe even stock options to hire you as opposed to someone else or no one at all.

Why should they make this investment in your particular personality, talents and skills? Aren’t your type a dime a dozen?

Instead of the throw-away line about working well with people, how about talking about how you collaborate in teams and what you and your teammates accomplished? Everything should be first-person plural: We, Us and Our.

Teaching digitally oriented public relations, advertising, integrated marketing communications (IMC), blogging/social media, corporate communications and investor relations now at Central Washington University and before at the University of Oregon, our students were always required to work together as teams to reach assigned goals for their clients.

This experiential learning approach does not require each student to love or be loved by their teammates, which is asking too much. Instead, a hands-on collaborator needs to respect and be respected, which is the essence of being a good team player.

Instead of tired verbal Pablum, how about demonstrating with concrete examples how you teamed/collaborated with others to cure cancer, climb Mt. Everest, achieve world peace and break political gridlock in Washington, D.C.?

The candidate with real-time results, which can be quantified and verified, and who didn’t take all the credit but collaborated effectively with others, has a better chance – a much better opportunity – of being hired.

The Stark Difference Between Anxious and Interested

Let’s be generous for a second:

In most cases, the candidate who feels compelled to blurt out how well he or she works well with people (or others … a distinction without a difference) runs the real risk of coming across as hungry and anxious.workwell2

Hiring managers are not welfare agencies. They are not there to feed the hungry or heal the sick. They are there to recruit the best and the brightest to solve problems and perform miracles.

Some candidates feel compelled to incorporate “objectives” right at the top of their resumes, declaring they are seeking a position in a given field.

Well, duh!

Didn’t you already make that point in your cover letter?

The smart applicants start with a “profile,” detailing their individual value, accomplishments and what she or he is bringing to the party. These wise contenders immediately demonstrate through concrete examples their ROI.

They also speak in the language of the company, the agency, the non-profit, and the public sector agency.

Instead of “you know,” “you guys,” “me and my team,’ and Almost DailyBrett’s favorite, “stuff,” the prepared applicant talks about driving the top and bottom lines, fiduciary and corporate social responsibility, and enhancing SEO and SEM.

In short, they speak the language and signal it will not take long to become totally fluent in whatever serves as the Raison d’ etat for the entity doing the hiring.

Yes, the wise candidate understands very clearly how the hiring manager’s company makes money, which even applies to non-profits.

As you will note, this is not the first time your author has written about this subject. Just like cock roaches this offending phrase instead of going away is actually multiplying.

It’s time … not it’s past time … deep-six this horrific, “I really work well with people,” before another hiring manager has to excuse herself or himself from the table.

https://www.google.com/?gws_rd=ssl#q=I+Really+Work+Well+with+People

https://www.livecareer.com/interview-questions/how-well-you-work-people-you-prefer-working-alone

http://jobsearch.about.com/od/interview-you/qt/working-with-people.htm

http://www.forbes.com/sites/jacquelynsmith/2013/11/15/the-20-people-skills-you-need-to-succeed-at-work/#74d85a6264b5

https://almostdailybrett.wordpress.com/2015/07/18/online-college-not-good-enough-for-pr/

https://almostdailybrett.wordpress.com/2014/06/08/i-really-work-well-with-people/

 

 

 

Well, I’ve got news for the bullies of Wall Street. The presidency is not a crown to be passed back and forth by you between two royal families.” – Former Maryland Governor Martin O’Malley

Let us wage a moral and political war against the billionaires and corporate leaders, on Wall Street and elsewhere, whose policies and greed are destroying the middle class of America.”Vermont Senator Bernie Sanders

“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” – Former British Prime Minister Winston Churchill

Are the phrases “economic populism” and “social justice” not-so-clever disguises for a full-fledged War on Wall Street?occupy1

Is this another round of the disorganized/nearly forgotten desultory Occupy Wall Street movement now showered, deodorized and all dressed up to make it seem more palatable to the American public?

As we head into the 2016 presidential cycle, one needs to ask:

Is it sound politics, particularly for a general election, to directly take aim on a system in which 52 percent of Americans build their hard-earned wealth through the investment in stocks, bonds and mutual funds for an active retirement, their children’s college education, a second career or something grand on the “bucket list?”

Granted this slightly more than half figure is down significantly from the 65 percent of Americans owning stocks, bonds and mutual funds in the beginning of 2007, but that year was the beginning of the recession, downturn and economic malaise.

Some are questioning what happened to the middle class, but many are forgetting America’s burgeoning “investor class.” And with 52 percent of the public participating, it obviously applies to far more than just 1 percent of the American population. The more than half of all Americans owning stocks, bonds and mutual funds in 2013 could be even higher now because of the bull market.gender6

These are the people who invest in IRAs mainly with retail brokers in person or online (i.e., Schwab, Scottrade, TD Ameritrade, eTrade, Edward Jones) or designate a percentage of their pre-tax income in 401Ks with a percentage matching from their employer with taxes being deferred until retirement.

According to Gallup, they are for the most part college graduates as 73 percent of those with undergraduate degrees and 83 percent with graduate degrees invest in markets … that would be publicly traded companies on Wall Street.

Money Under the Mattress?

And why would they do that? Consider the alternatives:

How about under the mattress. How about no rate of return?

How about banks? How about 0.02 percent interest rates?

How about real estate? How about the prospect of underwater mortgages?

And you wonder why smart upper, upper-middle and middle class Americans with some disposable income invest in publicly traded American companies listed on the NYSE and NASDAQ, even though people can lose a portion or all of their investment? The answer is that Wall Street is the best game in town, and with knowledge, diversification, perseverance and a cast-iron stomach, literally millions of people build wealth by investing in our markets and our country.

“Unequal sharing of blessings” 

And what is the raison d’etre of these Wall Street companies? According to ERISA or the Employee Retirement Income Security Act of 1974, passed by a Democratic Congress, publicly traded corporations are legally and morally mandated to drive the bottom line (doing well) for the benefit of their shareholders.

Guess that means they hire hundreds of thousands of Americans and make the products that people around the world want and need. That even includes the upscale coffee, tablets, earphones, cameras, laptops, mobile phones, social media software and operating systems used by Occupy Wall Street and made by (gasp) companies publicly traded on Wall Street.occupy2

Almost DailyBrett senses a disconnect, but does it matter in a party primary when the empty vessels making the most noise have near zero chance of winning the nomination?

Looking down the road to the fall of 2016 would a presidential nominee really want to be saddled with a platform that takes “issue” with major employers of tens of thousands, providing wonderful products and the prospects of solid rates of return for investors? That doesn’t sound like a winning prescription.

It may make the union bosses happy. It may re-energize those with the need to demonstrate just like they did in 1968, but does it make any political sense to attack, demonize and vilify the proverbial goose that lays the golden egg?

Does Wall Street in the wake of Enron, Arthur Andersen, Bear Stearns, Global Crossing, Martha Stewart, $6,000 shower curtains, “Race Together,” Bernie Madoff, GM and Chrysler bailouts, BP Deepwater Horizon, excessive executive compensation have major real and perceived public relations problems? Does Wall Street need better reputation management? Absolutely.

At the same time, let’s not lose sight of Corporate Social Responsibility (doing good) and the literally thousands of companies that work to protect the environment (e.g., Starbucks and Conservation International), address climate change (e.g., Tesla), help rebuild communities (e.g., Home Depot and Habitat for Humanity), combat cancer (e.g., Nike founder Phil Knight and Oregon Health and Sciences University) assist low-income children with difficult medical conditions (e.g., Southwest Airlines and Ronald McDonald House) … ehh … wouldn’t that be McDonald’s as well?

For those attacking Wall Street indiscriminately under the banner of “economic populism” aren’t they guilty of throwing out the baby with the bath water.

Maybe they should be drinking their own bath water instead.

http://www.washingtonpost.com/opinions/hillary-clintons-guilt-by-association/2015/06/04/bd836dc4-0b13-11e5-a7ad-b430fc1d3f5c_story.html?wpisrc=nl_opinions&wpmm=1

http://www.cbsnews.com/news/poll-who-can-get-ahead-in-the-u-s/

http://www.brainyquote.com/quotes/authors/b/bernie_sanders.html

http://www.brainyquote.com/quotes/quotes/w/winstonchu101776.html

http://www.gallup.com/poll/147206/stock-market-investments-lowest-1999.aspx

http://money.cnn.com/2013/05/09/investing/american-stock-ownership/

 

 

 

 

 

 

“Bulls make money, bears make money, pigs get slaughtered.” – CNBC Mad Money host Jim Cramercramerpigs

Which decision requires more mental gymnastics?

When to buy?

When to sell?

The author of Almost DailyBrett humbly opines that when to sell is the tougher call.

Why?

There are two kinds of remorse: ‘Darn it the stock kept going up after I sold’; and the worse one, ‘I could have sold when the stock was up, but I was a pig … and oh fiddlesticks, now I am selling when the stock is down.’

Yep, there are a lot of potential could-of, would-of, should-of when it comes to selling.

So what should you do in the view of this humble retail investor (read: Charles Schwab account)?

Don’t Fall in Love

“…Sometimes the most obvious question really is the question. In Enron’s case: How do you make money? – Bethany McLean, Fortune Magazine

Preparing to teach Corporate Public Relations/Investor Relations to Central Washington University seniors and a few juniors starting this coming Wednesday, yours truly will pose the same simple question that Fortune’s McLean posed to Enron’s Jeffrey Skilling: “How do you (Enron) make money?”

Communicators need to have elevator pitches at their ready when asked this very same straightforward question about their own employer. The same is true for investors: How does a company make money? If the answer is clear; you like the company; you understand the business strategy; you have done your homework including consulting with your financial advisor, then it may be time to purchase shares of the company stock.bullandbear

This particular company’s stock is now part of your diversified portfolio, which in turn represents a portion of your retirement savings, a child’s college education, that dream vacation etc.

All is good, but when does it make sense to sell?

Buy and hold is a sure loser. Why? At some point, stocks will stop growing. Your invested company certainly will change, and not necessarily for the better. Circumstances may shift and a wave of caca may hit a company or an industry.

Remember the Internet bubble two decades ago? It burst.

Remember the housing bubble a decade ago. It burst.

Don’t fall in love with your securities. Follow your instinct and your plan. When it is time to pull the trigger and unload the stock, then sell the shares.

Have a Plan

“I love the company. I hate the stock.” – Jim Cramer on Tesla (NASDAQ: TSLA)

Okay, it’s time to confess: I fell in love with the Elon Musk Ion-Lithium Battery/Electric Car story at Tesla. Yes, I bought the stock and road it up and down (pardon the pun) and eventually got tired of the downward roller coaster.muskcar

Before I weighed selling, I considered at what average price point did I buy the stock and how low would it have to go before I would sell the stock? It hit that point, and it was time to sell.

Maybe at some future time, it will be low enough to once again purchase the stock, but only when one is convinced the company has a realistic plan for long-term profitability.

The same is true when selling a stock that is going up. Social media stock LinkedIn (NYSE: LNKD) recorded a blow-out quarter and the stock exceeded my prearranged sell price point. As Joseph Kennedy reportedly said: “Never apologize when taking a profit.”

And we should never worry about paying taxes on our profits; profits are taxable.

The point here is to follow your game plan and sell when it’s time. That’s a good thing, really.

What are some other signs that it is time to sell a stock?

  • The Music Stopped: Once upon a time, Intel (e.g., microprocessors), Microsoft (e.g., software operating systems) and Cisco (e.g., Internet routers and switches) were literally rocking and rolling. We couldn’t get enough of these stocks until … the music stopped. The PC is yesterday’s news. The 1990s came and went. It became time to sell and move on.
  • Commoditization: Just like Intel’s microprocessors became a commodity to serve as the brains of social, mobile and cloud, the same is true for all other semiconductors and those that build semiconductor manufacturing equipment and electronic design automation (EDA) software. Intel’s rumored takeover of Altera, similar to Avago’s absorption of LSI Corporation, are more signs of industry consolidation. If you have not sold already, it’s past time.
  • High Volatility: Sometimes an investor can benefit from a highly volatile stock. A perfect example is Salesforce.com (NYSE: CRM). Lost track of how many times, yours truly has bought, sold, bought, sold, bought … this stock. As long as the trend line is consistently up, it’s okay to let go of the shares now and then, only to become reacquainted at a later date.
  • New Management: Tim Cook is proving that there is life at Apple following the ultimate demise of Steve Jobs, but that is the exception not the rule. Companies change. Business plans shift. Circumstances change. Markets explode or implode. Almost DailyBrett has always followed the mantra that if the old boss or new boss is a bosshole, it’s time to pass on the stock or sell the stock. Translated: Stay away from Larry Ellison and Oracle (NASDAQ: ORCL)
  • No Balance Between Fiduciary and Corporate Social Responsibility: The best run publicly traded companies do NOT see “doing well” and “doing good” as being mutually exclusive. Publicly traded companies with their brands under a digital 21st. Century microscope must appreciate their respective brands are trading in the cloud 24/7/365. Worshipping exclusively at the altar of fiduciary responsibility will no longer cut it. If so, it’s time to sell.
  • Caca Happens: Planes land at the wrong airports (e.g., Southwest). Companies name shoes (e.g., Umbro) after the cyanide gas used in Nazi concentration camps. The CEO falls dead in the backseat of a car (e.g., Texas Instruments). Oil wells explode and gush on global video for three months (e.g., BP). Guano hits the fan. This is precisely the reason not to fall in love with any stock.

Sometimes, it is time to say goodbye.

Breaking up is hard to do.

http://www.thestreet.com/story/10292084/1/bulls-bears-make-money-pigs-get-slaughtered.html

http://en.wikipedia.org/wiki/Joseph_P._Kennedy,_Sr.

https://almostdailybrett.wordpress.com/2011/07/21/what-happens-when-the-music-stops/

https://almostdailybrett.wordpress.com/2013/10/06/how-does-a-company-make-money-2/

https://almostdailybrett.wordpress.com/2014/07/18/donate-to-united-way-or-invest-in-tesla/

http://finance.yahoo.com/video/cramers-stop-trading-tesla-motors-135400997.html

https://almostdailybrett.wordpress.com/2014/01/02/farewell-lsi-logic/

https://almostdailybrett.wordpress.com/2011/12/13/fiduciary-responsibility-vs-corporate-social-responsibility/

 

 

 

 

 

 

After nearly three decades in the political, association, corporate and agency trenches of professional public relations, and the last four years intensely studying an increasingly complex industry from academic settings, Almost DailyBrett is ready to take a stab at the 17 essential qualities of the consummate PR practitioner.

Please note the list is not meant to be exhaustive and undoubtedly some vital characteristics will be missing. If that is the case, please let this humble blog know your thoughts. For better or for worse, here are the Top 17 attributes of the super-star public relations professionals in alphabetical order:

1. Attuned to the World 

Even though it is impossible to capture everything that is happening on this quickly changing planet, the best PR professionals are well versed even in cases in which their knowledge is one-mile wide and one-inch deep. They don’t know everything; they are not afraid and their ego will allow them to simply state: “I don’t know.” Having said that, they are good at getting to the bottom of an issue quickly, and then presenting the answer in the best interest of their employer/client. 

atlas2.“Be Quick, But Don’t Hurry”

The famous John Wooden quote definitely applies to super PR practitioners. Sometimes it is best to buy time. You may suspect you have the right answer, but your instinct guides you to seek out more. This is especially true in crisis situations. A great PR pro is quick, but never hasty. She or he instinctively knows that a rushed answer or editing of a vital document may result in a wrong response. The best counsel may be to quietly recite: “One Mississippi, Two Mississippi,” before offering a response. That little extra time can make all the difference in the world. 

3. Communications Choreography 

Similar to a producer or director of a Broadway play, the 21st Century PR star knows how to ensure that all the dancers, actors, actresses are in the right place, the lines are perfectly delivered and the music is on key. In the case of public relations, the research has been completed; the messages are composed; the communications are ready to be delivered, and the follow-up evaluation is set to be undertaken. It is without a doubt: Message-Candidate-Campaign in that order.

4. Confident Presentation Skills 

Glossophobia (e.g., fear of public speaking) is not in the vocabulary of the effective public relations professional. She or he responds with a smile, while deep down inside sneering at reportedly the number one fear of most people, public speaking. The great pro doesn’t seek out the stage, but doesn’t shy away for it either. Once there, the message is confidently delivered and questions are coolly answered.

janis

5. Constructive Listening 

Two of the most effective public relations professionals the author of Almost DailyBrett ever had the privilege to meet, are two of the best when it comes to constructive listening: Janis MacKenzie of MacKenzie Communications in San Francisco, and Bruce Entin of Silicon Valley Communication Partners. For both of them, the issues and concerns of you the client or you the subordinate are the only topics on their minds, even though in reality there are always many competing demands for their mental bandwidth. The point is they made time for you. They care. They are ready to help.

Entin

6. Cool Under Pressure

Did someone mention the word, “cool?” We are not talking about being smooth. Instead, we are focusing on a skilled communicator that stays composed when others are losing their heads. Is the company stock down five points? Does a product need to be recalled? Is the CEO being terminated? At least the Bay Bridge is not in the water (remember being told, just that). The sun will come up in the morning. The birds will chirp. The bees will buzz. Life will go on. 

7. Doberman, Not A Cocker Spaniel 

A Cocker Spaniel PR practitioner is simply proficient in providing necessary information to the conventional and digital media. A Doberman PR pro is just as knowledgeable, but even more to the point is also an impassioned advocate and will fiercely guard and protect the reputation and brand of the client/employer. If getting into a fight with a reporter/editor/analyst is deemed necessary, then that is what the job requires. The cheap-shot stops here.

8. Expansive Vocabulary 

A winning public relations professional is a well-read/versed professional. This practitioner is skilled in the use of English, the lingua franca of international business. Knowledge of a second or third language is highly desirable in our digitally flattened global village. It is not just a matter of knowing the words and the meanings behind them, but the right words at the right time in the right settings.

9. Fiduciary Responsibility & CSR 

It has become de rigueur for a public relations professional to advocate corporate social responsibility (CSR) or “doing good.” The best PR practitioners balance CSR with fiduciary responsibility or “doing well.” Fiduciary Responsibility and CSR are not mutually exclusive. PR pros, who understand this undeniable truth, have a better chance of being invited to sit at the boardroom table.

10. Great Student/Lifelong Learner 

What is the next killer app? What is the next “destructive technology?” How is social, mobile and cloud driving technology? What is the next driving mantra in global communications (e.g., radical transparency)? How can we best show (e.g., infographics) as well as speak and write? These are all questions that are constantly pondered by the student, lifelong-learner, PR pro.

11. Honest, Ethical, Reliable 

The first two of PRSA’s core values are “responsible advocacy” and “honesty.” Public relations practitioners are not Switzerland. They are not neutral. They are advocates. Some contend that PR pros cannot be persuasive advocates, advancing a well-researched set of arguments, and maintaining the highest standards of integrity at the same time.

Au contraire!

12. Offensive Without Being Offensive 

Being able to passionately debate crucial points and not make it personal with those who differ is a vital skill, not in great supply. Can you be offensive without being offensive? The best PR pros know, the most important public relations are personal public relations, and that includes interactions with work colleagues and teammates.

13. Qualitative and Quantitative

In our increasingly complex digital world, we cannot escape numbers and statistics. As Chris Roush of the University of North Carolina wrote in his Show Me the Money, behind every number is a story. The superb PR pro, particularly those in corporate public relations and investor relations, can build relationships (qualitative skills) with those closely following publicly traded corporations (e.g., investors, analysts, employees, suppliers, distributors). They are just as adept in reading income statements, balance sheets, cash-flow statements and interpreting the psychology of global markets (quantitative skills).

hoar

14. Refined Sense of Humor

One of the legendary public relations professionals in Silicon Valley history (i.e., Apple, Fairchild, Miller/Shandwick Technologies) was also one of the funniest, the late Fred Hoar. As he was fond of telling anybody and everybody, “that’s Fred, spelled F-R-E-D.” Every year, he served as the master of ceremonies for the SIA (Semiconductor Industry Association) Forecast and Award Dinner, and brought down the house each time with his “hick and stick.” Yours truly was charged with determining whether Fred’s humor met the standards for mixed company in a business setting. Guess you win some and lose some. Regardless, Fred was a crack-up and delightful to know.

15. Superior Judgment

The best PR pros instinctively know the difference between being “bright” and being “smart.” They are not the same. The latter is much more valuable than the former. Sometimes rocket scientists are best being left on the launching pad or maybe just at their workstations. Some are good at stakeholder relationships; some are not. That is why smart PR pros, who can provide sage counsel to those of infinite wisdom, are the best and the brightest in our profession.

16. Tech Savvy 

The 21st Century public relations practitioner is digital, not analog. As Thomas Friedman wrote in The World is Flat, the planet has been made measures of magnitude smaller by the ones-and-zeroes of binary code. All brands and reputations are in 24/7/365 play as a result of instantaneous digital publishing. The Genie is not going back into the lantern. Forward-looking PR professionals embrace new technology communications tools, and are always looking to the horizon for the next destructive technology force. During the course of my career, no PR pro was better in studying engineering and technology than Howard High of Intel, now with life sciences company, Fluidigm Corporation.howardhigh

17. Thought Leader 

Not only do the best PR pros advocate thought leadership by clients, who have proved standing on critical issues of public interest, they also use digital (i.e., blogging, social media, infographics) and conventional tools (i.e., presentations, commentaries, contributed articles etc.). They are always learning and as a result, they have wisdom to share and sage counsel to provide … particularly as it applies to instantaneous world of communications.

Editor’s Note: As the former SIA director of Communications, Janis and her firm served as our PR counselor. Fred was everyone’s friend, and the “Valley” is not the same without him. Howard was the chair of the SIA Communications Committee and provided invaluable counsel as the industry was finally able to open the Japan market. Bruce was my first superior during my decade at LSI Logic. He was the best boss in my career, and now is an even better friend. Naturally these are not the only PR super-stars on the planet, but they are fine examples of the species.

http://www.prsa.org/aboutprsa/ethics/codeenglish/#.VI4DuZU5BCo

http://www.mackenziesf.com/about/janis-mackenzie/

http://siliconvalleycom.com/Bruce_Entin.html

http://www.sfgate.com/bayarea/article/Frederick-Hoar-Silicon-Valley-master-of-PR-2831416.php

https://www.linkedin.com/pub/howard-high/12/aa6/b06

Snap. Crackle. Pop.

Silicon Valley and other mass communicators are enamored when it comes to threes.

CNBC’s investment guru Jim Cramer talks about the three moving forces in technology: Social, Mobile and Cloud.

socialmobilecloud

Threes are easy to remember, fours or fives, not so much.

At LSI Logic, we were fond of talking about our three C’s: Communications, Computer and Consumer.

These were our three strategic markets. The three C’s were easy for customers, employees and owners (e.g., investors) or the acronym, C.E.O., (another three) to remember.

In this spirit, let’s talk about the Almost DailyBrett Communication Big Three.

These are an absolutely essential trio of communications skills, most in demand in the marketplace, and which need to be taught by our colleges and universities.

Drum roll: Persuasive Writing; Financial Communications; and Social Media.

Think of it this way: The first two are analog in nature and the latter is digital.

Compelling Writing Skills

Writing goes back to the first publicity campaign on behalf of the all-powerful Pharaoh, the Rosetta Stone. He was awesome, and if you need proof just check out the hieroglyphics on the smoothed surface.rosetta

Johannes Gutenberg speeded up the process with his Mainz, Germany printing press in the 14th Century, and now the acceleration is at warp speed with wireless communication devices.

Despite the unprecedented ability to communicate in nanoseconds to virtually any spot on the globe at any time, the old-fashioned skills of developing compelling, credible and accurate copy under deadline pressure has never been greater. For some, writing is a natural gift that comes easy. For others, it is a laborious process that can be perfected with practice.

Starting this fall, your Almost DailyBrett author is teaching Introduction to Public Relations Writing at Central Washington University. My 20 students are going to be asked to produce the following:

  • Curriculum Vitae or resume, emphasizing the student’s professional and academic accomplishments with quantifiable measurements
  • Twitter-style cover letter applying for an entry-level public relations position and emphasizing the student’s personal ROI or Return on Investment
  • Complete LinkedIn profile including the same elements of the resume, plus a professional mug shot, three references and at least 30 connections
  • News advisory targeting legacy and/or digital native media informing and/or inviting them to attend and cover an upcoming event
  • News release providing information about a breaking news story, employing the inverted pyramid and using the five W’s – What, When, Where, Who, Why – and the one H – How
  • Pitch to a selected reporter, editor, correspondent, blogger or news aggregator about a newsworthy story and offering assistance
  • Copy for a 30-second radio or television PSA or Public Service Announcement on behalf of a non-profit agency
  • Chief executive officer strategy letter to investors, analysts and employees outlining your selected company’s business strategy and future prospects
  • CSR or Corporate Social Responsibility letter to company employees about efforts your chosen corporation is making to safeguard employees, protect the environment and serve the communities in which the company does business
  • Crisis communications news release – written under deadline pressure – announcing steps a company has taken to address the crisis and pointing to the future
  • Four personal blog posts, emphasizing public relations skills and commenting on breaking news events
  • Two-page executive memo with bullets and subheads introducing a subject, examining the factors, and recommending a course of action

The philosophy behind these assignments is the only way to really become effective at persuasive writing is to Just Do It!

Financial Communications

Many right-brain types, the very people who opt for Journalism school, avoid figures at all costs. And yet, the numbers will find them.

We now live in a world of “big data,” particularly those companies that are publicly traded. Chairman Mao is probably rolling over in his grave as PRC-based Alibaba takes its predominate Mainland China digital retail play public this Friday with shares expected to be initially priced between $66 and $68.

alibaba

Right-brain students need to figure out how to make peace with numbers. UNC Professor Chris Roush (Show Me The Money) states ex-cathedra: “Behind every number is a story.”

Hmmm … that means there are stories to be told about these numbers. In addition, the Securities Exchange Commission (SEC) requires these stories to be told to all investors, if they are “material.” Translated: If a company has “material” information that would prompt an investor to buy, sell or hold company stock, then the company is mandated to disclose under Regulation FD (Fair Disclosure).

What this means is that each and every of the more than 5,000 publicly traded companies (NYSE or NASDAQ) in this country must issue news releases. The writers are not expected to produce the figures (there are oodles of accountants, auditors, controllers …), but they instead must tell the story behind these numbers.

That means that college and university communications graduates should know the difference between the income statement top line (revenues), the bottom line (net income or net loss) and everything in between (e.g., COGS, Gross Margin, SG&A, R&D, Operating Income, Taxes, Amortized Expenses …).

Sure wish someone had been kind enough to teach me these skills, including how to read a balance sheet, back in college.

Social Media

The world has already shifted from Web 1.0 (accessing websites) to Web 2.0 (wired and wireless devices talking to each other) and soon Web 3.0 (semantic web).

The Economist reported this week that nearly one-quarter ($120 billion) of the world’s $500 billion advertising business is coming from digital ads, increasingly being delivered to mobile devices. Yes there is no doubt that digital media is being monetized through search engine optimization (SEO) and other techniques, and that Genie is not going back in the bottle.

Facebook (friends), Twitter (140-character tweets), LinkedIn (connections), YouTube (videos), Flickr (photos), Pinterest (online scrapbooks), WordPress (Almost DailyBrett) all enjoy first-mover advantages in their respective social media spaces. There are challengers now and more competitors to come. The bottom line is that digital publishing through binary code is here to stay.

Companies and international public relations agencies are expecting that digital natives instinctively understand social media. This all circles back to the ability to write clear, concise, credible and compelling copy for an audience that is increasingly overwhelmed by information.

digitalnatives

And much of this data comes in the way of numbers, the ones with a story behind them. And increasingly, these stories no longer involve a gate-keeper but are transmitted though “owned” media (e.g., websites, blogs, social media sites).

Stating that compelling writing, financial communications and social media are the Big Three of Communications may entice the crisis communications, marketing, branding, reputation management, employee communications, public affairs and other dedicated professionals to take umbrage.

Fret not. Almost DailyBrett loves you too, and says to each of you that you need (or soon will need) graduates who can tell the story, and tell it well, through effective writing, numerical literacy and of course, proficiency with digital tools.

http://smallbusiness.chron.com/importance-writing-skills-business-845.html

http://www.unc.edu/~croush/CV.htm

https://almostdailybrett.wordpress.com/2014/05/29/owned-media-an-answer-to-digital-change/

http://www.economist.com/news/special-report/21615869-technology-radically-changing-advertising-business-profound-consequences

 

 

 

 

 

 

Executives are hired to maximize profits; that is their responsibility to their company’s shareholders. Even if executives wanted to forgo some profit to benefit society, they could expect to lose their jobs if they tried—and be replaced by managers who would restore profit as the top priority,” — Arneel Karnani, University of Michigan associate professor of strategy, Wall Street Journal, August 23, 2010.

“…It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest.” – Adam Smith, author of The Wealth of Nations.

Right now, the public is more likely to view greed as a deadly sin than an engine of economic growth,” Edward Glaeser, Harvard Economist, New York Times, January 6, 2009.

When push comes to shove, are corporate executives (especially at the C-level) more inclined to worship at the altar of fiduciary responsibility as opposed to corporate social responsibility (CSR)?

And conversely are public relations practitioners more inclined to counsel corporate social responsibility over fiduciary responsibility to these very same executives? And if so, is there a disconnect to the detriment of the corporate communicator? Is this a primary reason there are not more seats at corporate boardroom tables for PR pros?

The debate between fiduciary responsibility (maximizing profitability for investing shareholders) vs. corporate social responsibility (doing good deeds benefitting stakeholders in places where a company does business) is not new.

Nobel Prize winning American economist and academic Milton Friedman (1912-2006) took a Kantian stance (categorical imperative) toward a publicly traded company maintaining its fiduciary responsibility to its shareholders in his oft-quoted New York Times Magazine piece in 1970. Friedman said: “…A corporate executive is an employee of the owners of the business. He has direct re­sponsibility to his employers. That responsi­bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con­forming to the basic rules of the society.”

Echoing these sentiments is Harvard professor and former Treasury Secretary Lawrence Summers who stated: “It is hard in this world to do well. It is hard to do good. When I hear a claim that an institution is going to do both, I reach for my wallet. You should too.”

Summers

Besides the Friedman Doctrine, there is the matter of law that is directly applicable when it comes to striving for profitability. The federal Employee Retirement Income Security Act (ERISA) of 1974 was passed to protect the retirement assets of Americans.

Specifically, the law defines a “fiduciary as anyone who exercises discretionary authority or control over a plan’s management or assets, including anyone who provides investment advice to the plan. Fiduciaries who do not follow the principles of conduct may be held responsible for restoring losses to the plan.” Considering that the overwhelming majority of securities are owned by institutional investors (buy-side and sell-side analysts purchasing stocks for retirement funds and big-ticket clients among others), the implied threat of regulatory action and/or liability to plaintiff strike suits aimed at deep pockets is obvious.

Also coming into play is the Nexus of Contracts Theory that posits that corporations are essentially a series of contractual obligations with stakeholders, such as the shareholders who provide capital (market capitalization or market value) to publicly traded companies in return for a potential monetary gain. Kenneth Ayotte and Henry Hansmann in their 2011 A Nexus of Contracts Theory and Legal Entities contend that a firm’s most valuable rights are its contractual assets. The question is whether a company can ethically risk running afoul of these contractual obligations in the pursuit of a higher public good?

Arneel Karnani, University of Michigan associate professor of strategy, is more aligned with Friedman than the growing movement toward CSR, particularly among the practitioners in the public relations community.  In his 2010 Wall Street Journal commentary, The Case Against Social Responsibility, Karnani states categorically that when push comes to shove executives with regularity will come down on the side of fiduciary responsibility for their shareholders and equity-holding employees. To do so otherwise, potentially impacts executive compensation, invites the eventual removal of the chief executive officer and chief lieutenants, prompts ERISA enforcement, and spurs almost certain litigation by the plaintiff’s bar on behalf of alleged aggrieved shareholders.

Fiduciary, imperative “must;” CSR, subjunctive, “should?”

The specter of these very real risks does not mean that CSR is not a factor in today’s boardrooms, even though Karnani uses the categorical words, “irrelevant or ineffective.” Karnani does acknowledge that the prospect of imposed additional costs—regulatory mandates, taxes, punitive fines, public embarrassment—on socially unacceptable behavior (see  2010 BP “Deepwater Horizon” debacle) can drive corporate executives to be at least mindful of CSR.

Karnani cites the global movement toward more fuel-efficient vehicles or healthier fast foods as being driven more out of consideration for profits (e.g. Toyota and McDonald’s respectively)  than a desire to reduce energy consumption and promote healthy diets. J.D. Margolis et al in their 2007 Does It Pay to Be Good? uses the anecdote of Home Depot building playgrounds as more of an effort to stimulate “Corporate Financial Performance” (CFP) as to demonstrate “Corporate Social Performance” (CSP).

According to these authors, all of these CSR activities are direct offshoots of the quest for profits and the maximization of shareholder value.  For example, Karnani said that pleas for corporate social responsibility will only be accepted by executives smart enough to realize that doing the right thing directly coincides with the pursuit of profit. “Pleas for corporate social responsibility will be truly embraced only by those executives who are smart enough to see that doing the right thing is a byproduct of their pursuit of profit,” Karnani wrote.

There is no argument about the mandated fiduciary obligation of publicly traded companies to maximize profits within the context of applicable laws and regulations for the benefit of their investing shareholders. Having said that, just blindly adopting Friedman’s deontological approach in rejecting CSR or Karnani’s skepticism ignore significant global trends in favor of Corporate Social Responsibility.

The Tide Turns?

Professor Charles W.L. Hill in his 2011 seventh edition of Global Business Today defined CSR as the idea that business executives should carefully consider the social consequences of economic actions when making business decisions. CSR advocates contend that businesses, particularly large multi-national enterprises (MNEs), need to recognize their noblesse oblige (Hill’s emphasis) and actually give back to the societies that make their economic success possible. Is this an Utilitarian approach, if shareholders do not receive the ultimate maximum financial return as a result of an increased emphasis on CSR?

Henry Mintzberg et al in their 2002 essay Beyond Selfishness argued that the terrorist attacks on Sept. 11, 2001 (at least for a short-period of time) changed the prevailing thinking of Wall Street denizens to actually consider engaging with society. Before the hijacked planes struck the World Trade Center towers and the Pentagon, the overwhelming focus was on the Internet bubble of the 1990s and the Enron-era rapid acquisition (“irrational exuberance” in the words of Alan Greenspan) of capital. “A society devoid of selfishness is certainly difficult to imagine. But a society that glorifies selfishness can be imagined only as base.”

One very clear trend in favor of CSR is the growing global respect for non-governmental organizations (increasingly seen as independent third-parties). Public esteem and trust for these NGOs has steadily increased. For example, the 2011 Edelman Trust Barometer revealed that not only are NGOs the most trusted in society, but their level of popular support is growing from 57 percent in 2010 to 61 percent in 2011. Certainly, the increasing public trust in these NGOs has prompted companies (e.g.Starbucks) to enter into “synergistic” relationships with these non-profits, such as Conservation International and the Environmental Defense Fund.

ci

The Edelman Trust Barometer reported that trust in business as measured by a quantitative survey of more than 5,000 “informed publics” grew marginally worldwide from 54-to-56 percent between 2010 and 2011, but actually declined in the US from 54- to-46 percent, and in the UK from 49-to-44 percent. Business trails NGOs in trust, but still leads the media, which only saw its trust score rise from 45-to-49 percent between 2010 and 2011.

The Edelman survey illustrated the stark difference when it comes to public benefit of the doubt between a company that is seen as trustworthy and one that is not. If a company is distrusted then it only takes on average only one-or-two negative Internet mentions for 57 percent to believe a particular item of negative information about a company. Conversely, if a company is trusted then it takes on average only one-or-two positive mentions for 51 percent to believe a particular item of positive information about a company. Edelman concluded that it was good business to align profit and purpose for social benefit.

Another reason for companies collaborating with environmental non-profits is to inoculate a firm against public attacks by more fundamentalist organizations that opt for confrontation rather than cooperation with corporations. For example, Global Exchange launched a protest at Starbuck’s annual meeting and demanded that the company sell more fair trade coffee. The company also was subjected to repeated instances of antagonism from Seattle Audubon and others.

Commenting earlier this year on the net effect of Starbucks CSR activities, Rick Cohen of the Non-Profit Quarterly wrote: “Whether one likes or dislikes Starbucks or its philanthropy, the Starbucks CSR model looks like a recipe that many corporations recognize as a solid formula for social responsibility.

And what is the present-day view of company employees if their employer is perceived to be only concerned with enriching its shareholders? This question was posed by Harvard Economist Edward L. Glaeser in his 2009 Can Business Do Well and Do Good?  He offered that the tide is turning against the Friedman Doctrine as business giants, such as Bill Gates and Warren Buffett, are increasingly arguing the value of CSR.

glaeser

This question was the focus of a MIT Sloan Management essay by C.B. Bhattacharya et al (2008) Using Corporate Social Responsibility to Win the War for Talent, which calls upon employers under pressure to attract-and-retain the best-and-the-brightest employees. Bhattacharya advocates that corporations use internal marketing to champion a company’s CSR efforts as part of a portfolio of “job products” offered to valuable employees. The results of this additional motivation can contribute to job satisfaction, retention and higher productivity.

However, companies must learn to engage in CSR and communicate the news about these activities to its vital internal audience. Many times a company makes only cursory management statements along the lines of “we support recycling” or buries a one-paragraph mention of CSR activities as a throw-away in the text of a chief executive officer’s annual report letter (SEC filing 10K).

Bhattacharya et al state that CSR can serve as a “reputation shield” to parry negative thrusts by NGOs about a company’s impact on society. Knowledge of and employee participation in these CSR activities can also “energize” employees, stimulating them to work harder, be more productive and to focus more on quality. The latter can also contribute to fiduciary responsibility as Harvard Business Professor Michael Porter has argued that quality-driven differentiation along with lower costs are the two basic strategies for creating value for customers.

A corporation’s “reputation shield” has become even more tenuous in this age of 24/7/365 digital self-publishing. As a result, a company’s accumulated brand equity and carefully nurtured reputation are effectively traded every minute of every day online, just like a NYSE or NASDAQ security. And some of these traders are competitors or others that do not have a company’s best interests in mind. Building up goodwill through being perceived as a solid corporate citizen may help mitigate broadsides by those who harbor different agendas.  The recent web disclosure that Burson Marsteller was secretly reaching out to bloggers to chastise Google on privacy concerns without disclosing its client, rival Facebook, turned out to be a black mark on the reputation and brand of both Burson Marsteller and Facebook.

A Balanced Approach?

The debate between the fiduciary responsibility adherents on one side and the devotees of corporate responsibility on the other is not new. In at least one case, the debate was longitudinally conducted by the same organization.

In 1981, the Business Roundtable concluded: “Balancing the shareholder’s expectations of maximum return against other priorities is one of the fundamental problems confronting corporate management. The shareholder must receive a good return, but the legitimate concerns of other constituencies (customers, employees, communities, suppliers, and society at large) also must have the appropriate attention…(Lead managers) believe that by giving enlightened consideration to balancing the legitimate claims of all its constituents, a corporation will best serve its shareholders.”

Sixteen-years later, the Business Roundtable completely reversed its field stating that a corporate board of directors cannot pit its shareholders against other stakeholders. The Business Roundtable said that imposing conflicting demands on corporate boards is unworkable and when push comes to shove between customers, employees and shareholders, a board must down on the side of shareholders.

Even though the debate is not new, the growing trend in favor of corporate social responsibility over merely adherence to fiduciary duties is gaining speed. For example, David Bach and David Bruce Allen in their 2010 What Every CEO Needs to Know About Nonmarket Strategy offer that non-market strategy recognizes that corporations are social and political entities, not just economic agents.

Glaeser wrote that company employees are becoming less enamored with the notion of working their entire lives only to pad the wallets of anonymous shareholders. Even though he agrees with Friedman’s doctrine that corporations “overriding moral obligation” is the fulfillment of fiduciary responsibilities and the maximization of shareholder wealth, he is also a fan of the notion of “Creative Capitalism.”

Michael Kinsley and Conor Clarke wrote the book Creative Capitalism, gathering the contributions of dozens of participants on the issue of corporate social responsibility, including Microsoft billionaire Bill Gates and Berkshire Hathaway billionaire Warren E. Buffett. Both offer counterpoints to the sentiments expressed by Milton Friedman, Larry Summers and others.

In particular, Gates has called for “market-based social change” and for doing the essential work that addresses the world’s inequities. “This kind of creative capitalism matches business expertise with needs in the developing world to find markets that are already there, but are untapped,” Gates said. “Sometimes market forces fail to make an impact in developing countries not because there’s no demand, or even because money is lacking, but because we don’t spend enough time studying the needs and requirements of that market.” The Bill and Melinda Gates Foundation has given $26.1 billion cumulatively, mainly for health and productivity improvements in the developing world.

gatesbuffett

A Seat at the Table?

Regardless of the ultimate outcome of the fiduciary duty vs. corporate social responsibility debate, public relations practitioners — internal and external — are coming down reflexively on the side of Corporate Social Responsibility. The question is whether this is a wise personal public relations strategy, when PR practitioners have long complained about not being given a seat at the corporate board room table.

To gain a coveted seat, a budding corporate executive must command respect and exude gravitas. Certainly there is plenty of evidence in support of the growing trend toward CSR including the Edelman Trust Barometer, the notion of “Creative Capitalism” and increasing number of prominent executives who champion CSR. The danger lies in being seen as single mindedly arguing CSR, creating the dangerous perception of being oblivious to a publicly traded company’s fiduciary duties.

Karnani in his commentary issues the following warning: “In circumstances in which profits and social welfare are in direct opposition, an appeal to corporate social responsibility will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests.”

Public relations practitioners cannot exclusively sing the siren song of Corporate Social Responsibility without acknowledging and implementing the moral obligation of fiduciary responsibility to shareholders, equity-participation employees and to those who are genuinely interested in effective corporate governance (see Sarbanes-Oxley).

Fiduciary duties are legal-and-moral requirements for publicly traded corporations. Diversified shareholders are investing a portion of their future in the projected success of a company. Management is obligated to effectively respond to these investors.

At the same time, they are not the only stakeholders in society. That is where corporate social responsibility comes into the equation. A company doing business in a community does have an ethical responsibility to give back to society and to apply pressure to its supply chain to do the same.

Fiduciary and CSR are not mutually exclusive ethical requirements. Public relations practitioners need to worship at both altars. If not, corporate executives may stop listening before the public relations pros stop talking.

“Pleas for corporate social responsibility will be truly embraced only by those executives who are smart enough to see that doing the right thing is a byproduct of their pursuit of profit.” – Arneel Karnani, University of Michigan associate professor of strategy, Wall Street Journal, August 23, 2010.

“Whether one likes or dislikes Starbucks or its philanthropy, the Starbucks CSR model looks like a recipe that many corporations recognize as a solid formula for social responsibility,” – Rick Cohen, The Non-Profit Quarterly, April 20,2011

starbuckscoffeecup

Celebrating its 40th year in business, Starbucks Corp (NASDAQ: SBUX) is a profitable $11.7 billion roaster/retailer of specialty coffees with operations in 50 countries around the world. Last year, the world’s leader in the sale of upscale coffee (e.g. mochas, lattes, cappuccinos and whole/ground beans) reported a net profit of $1.24 billion and recorded $33 billion in market capitalization.

Throughout its history, the company has made a commitment to fiduciary responsibility, generating profits and returns to its shareholders, while embracing a company culture that includes a focus on corporate social responsibility (CSR). Early forays into this latter field included support for the anti-poverty organization, CARE, and for the environmental non-government organization (NGO), The Environmental Defense Fund.

Starbucks’ first CSR efforts began in 1994 as an activity incorporated in its Environmental Affairs Department with a modest budget of $50,000. Five years later, a separate-and-distinct Environmental Affairs Department was established, focusing on five areas: business practices, environmental, community affairs, corporate giving and the Starbucks Foundation. By 2002, the 14-member department was working with a budget of $6 million.

Starbucks chief executive officer and president Orin Smith drew a linkage between shareholders and stakeholders, which include customers, suppliers, partners and coffee growers. “It’s (CSR) an integral part of the new business strategy,” said Smith.

Worldwide concern about the plight of the Amazon rain forests and sensitive species has put a public magnifying glass on the production of coffee in the tropics, including the mild arabica beans used by Starbucks to serve its global customer base. The majority of the coffee crop (the world’s second largest commodity) is grown on small-and-medium sized farms, many in areas of significant environmental impact containing a wide variety of fragile species. The plight of these regions has been the mission of environmental NGOs, including Conservation International.

At the same time, the public esteem and trust for these NGOs has steadily increased. For example, the 2011 Edelman Trust Barometer revealed that not-only are NGOs (seen as responsible third-parties) the most trusted in society, but their level of popular support is growing from  57 percent in 2010 to 61 percent in 2011.

Starbucks collaborated with one of these more trusted NGOs, entering into a strategic alliance with the professionally oriented Environmental Defense Fund (EDF), to develop a more environmentally friendly coffee cup. The question facing the company was how could it enhance its reputation as an environmentally conscious corporate citizen without compromising the quality of its supply of mild arabica beans?

Could the company grow revenues and profitability and promote shareholder value (fiduciary responsibility), while being seen as a good steward for the environment and to improve the standard-of-living for its suppliers, the medium-and-small farmers (corporate social responsibility)? Enter biodiversity NGO, Conservation International (CI).

ci

The first uneasy meeting between Starbucks and Conservation International representatives took place in 1997. Starbucks expressed its concern about the quality of the coffee that it was buying for its discerning customer base. Conservation International was focused on the impact of hundreds of medium-and-small coffee farms in the hills of the environmentally sensitive region of Chiapas, Mexico. Concurrent with this meeting were the letters and cards coming from the customer base asking Starbucks whether it is actually buying shade-grown coffee and about protecting the forests where coffee is grown.

Conservation International saw that Starbucks could exert considerable influence as a major purchaser on the company’s supply chain (includes the coffee farmers) to protect the environment. So why did the strategic alliance between a major, publicly traded, for-profit corporation, Starbucks, and an influential, non-profit, environmental NGO, Conservation International, work for the benefit of not only both parties, but the overall environment as well?

Due diligence was definitely one factor. Accumulated trust eventually became a second factor. Both entities took the time-and-effort to comprehend and appreciate the position of the respective parties. Starbucks as a publicly traded company has a fiduciary responsibility to grow the top-and-bottom lines and to generate superior value for its shareholders. The top line increased from $1.68 billion in 1999 to $2.64 billion just two years later. Gross profit margin expanded slightly in the course of these three years even though COGS expenses grew by $742 million. Total net income increased from $101 million in 1999 (6.1 percent) to $181.2 million (6.8 percent). These revenue and profitability enhancements were recorded after Starbucks signed a memorandum of understanding (MOU) with Conservation International (not implying a direct effect of the strategic alliance on company financials).

Starbucks impressed upon Conservation International that it was not going to serve its customer base by purchasing politically correct, shade-grown coffee beans that are substandard from a quality standpoint. Conservation International responded by teaming with Starbucks, finding common ground, even playing a direct role on coffee farmer quality control. Was Conservation International in effect helping Starbucks maintain its fiduciary responsibility, while exerting pressure on the corporation for CSR?

Starbucks CEO Smith even extolled the “synergies” between Starbucks and Conservation International with the former focusing on quality coffee and the latter on the environment. Typically, the word “synergy” is reserved for evaluation of mergers and acquisitions. Smith was a member of the Conservation International Board of Directors as of October 31, 2001.

Eventually, the Chiapas project led to signed agreements between Conservation International and certain Mexican coffee producers and their respective cooperatives. Upon meeting Starbucks quality standards, producers could sell an increasing percentage of their crop to Starbucks for premium prices (Especially important considering the drop in prices for mild-arabica and rustica coffee prices worldwide). Starbucks eventually became comfortable guaranteeing low-interest loans to these small farmers, providing them with needed capital.

chiapas

In exchange, these farmers agreed to not harvest trees on producer farms or the Chiapas Biosphere Reserve, a wide variety of shade trees would be planted, and no coffee pulp could be thrown into local rivers.

Starbucks’ “synergistic” and cooperative strategic alliance with Conservation International followed the company’s professional and managerial relationship with the Environmental Defense Fund. Does that mean that Starbucks enjoys the same relationship with all environmental NGOs? Unfortunately, the answer is “no.”

While the relationship with EDF was professional and the interchange with Conservation International was synergistic, Starbucks’ was subjected to a wave of confrontational tactics undertaken by other environmental NGOs. For example, Global Exchange launched a protest at the company’s annual meeting and demanded that Starbucks sell fair trade coffee.

After a series of discussions, Starbucks entered into an agreement with TransFair USA, which provides certification for all Fair Trade Coffee in the United States. Starbucks offered a similar approach, comparable to its relationship with Conservation International to TransFair. The aim was to improve coffee quality, provide financial assistance to farmers and raise public awareness of biodiversity issues in the tropics. TransFair rejected Starbucks’ advance, stating that is only sells certification seals and would only deal with Starbucks in that fashion.

Ultimately, Starbucks did sign an agreement with TransFair to purchase Fair Trade-certified coffee, providing that it met the company’s quality standards that were needed to respond to consumer demand. Starbucks even paid 10-cents per pound licensing fee to TransFair. Even with this agreement Global Exchange and TransFair were badgering Starbucks to buy even more Fair Trade-certified coffee.

Contrary to the actions of Conservation International, TransFair had no interest on improving quality among its registered farmers. TransFair said this was simply not its mission.

Starbucks chief executive officer Smith acknowledged, NGOs are critical influencers. And there are some (e.g. EDF, Conservation International) that are willing-and-able to work with a multi-national company for their mutual advantage. Alas, there are others (e.g.TransFair) that are at best cordial, if not antagonistic and downright confrontational with multinational enterprises (e.g. Global Exchange, Seattle Audubon).

For Starbucks and other publicly traded companies, there will always be fiduciary responsibility (buy low, sell high). And to an increasing extent, there is also corporate social responsibility, including exerting pressure through the management of the supply chain to demand greater adherence to environmental stewardship. There is also the question of building brand equity.

A proactive, collaborative working relationship with a NGO, such as Conservation International, can directly benefit fiduciary responsibility and corporate social responsibility. They are not mutually exclusive terms of art.  These strategic alliances can also help inoculate or at least mitigate a MNE against outright hostility by certain NGOs that deliberately choose corporate antagonism as their modus operandi.

(Editor’s Note: The following analysis was made based on a May 1, 2004 Harvard Business School case presented by James E. Austin, Harvard professor, emeritus and Cate Reavis, senior researcher from the Global Research Group. To learn more about Austin’s impressive publication and research record, please visit http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=pub&facId=6413).

oxymoron  (ˌɒksɪˈmɔːrɒn)
 
n  , pl -mora
  rhetoric  an epigrammatic effect, by which contradictory terms are used in conjunction: living death ; fiend angelical
 
[C17: via New Latin from Greek oxumōron,  from oxus  sharp + mōros  stupid]

 A colleague recently approached me asking for my humble opinion about a newly created senior manager of Corporate Affairs position for a publicly traded company in the data storage space. In short order while reading the position description, my cerebral alarm bells were going off.

The main responsibility of the anointed senior manager of Corporate Affairs would be to “execute the company’s Corporate Social Responsibility (CSR) responsibilities.” Hmmm …

I was left wondering how long it would take the company to “execute” the senior manager of Corporate Affairs responsible for CSR in the face of the next inevitable technology industry downturn. This position has all the sounds of classic SG&A (selling, general and administrative) or a corporate expense, which Finance departments will curtail if not outright eliminate.

Just as widely extolled video news releases (VNRs) of the 1990s made shameless PR firms gobs of cash while being round-filed or cut-up for “B-roll” by television station producers, the virtues of CSR are now part of every pitch made in agency reviews or RFP response cattle calls.

But is CSR in its purest form really an oxymoron? Do the words, “corporate” and “social responsibility” really belong in the same sentence? Please don’t giggle.

aneelkarnani

As Aneel Karnani of the University of Michigan Business School wrote in the Wall Street Journal www.wsj.com there are cases in which companies have done good things for society and the environment, including serving healthier foods at fast-food restaurants and offering more fuel-efficient cars. Yes, companies can be green while chasing green. http://www.bus.umich.edu/FacultyBios/FacultyBio.asp?id=000119664

But let’s keep in mind that the pursuit of profits and delivering shareholder value are the core missions of the executives in corporate boardrooms, not saving the world. In all due respect, Mother Teresa never had to lead quarterly earnings report conference calls or answer questions at annual meetings of shareholders. http://en.wikipedia.org/wiki/Mother_Teresa

“Very simply, in cases where private profits and public interests are aligned, the idea of corporate social responsibility is irrelevant: Companies that simply do everything they can to boost profits will end up increasing social welfare,” Karnani wrote. “In circumstances in which profits and social welfare are in direct opposition, an appeal to corporate social responsibility will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests.”

And speaking about shareholder interests, there is this little notion called, fiduciary responsibility, that trumps corporate social responsibility each and every time. And that may not be such a bad thing.

“The movement for corporate social responsibility is in direct opposition, in such cases, to the movement for better corporate governance, which demands that managers fulfill their fiduciary duty to act in the shareholders’ interest or be relieved of their responsibilities,” said Karnani. “That’s one reason so many companies talk a great deal about social responsibility but do nothing—a tactic known as ‘greenwashing.’”

Certainly companies that act irresponsibly and end up hurting society and the environment (e.g. British Petroleum or BP “Deepwater Horizon oil spill) will be punished by vote-seeking politicians, marauding plaintiff’s attorneys, consumers, shareholders…just to name a few. It is good business to maintain a positive reputation and a strong brand…and that means also protecting that brand. http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill

oilspillbird

Having said that, expecting companies to worship exclusively at the altar of Corporate Social Responsibility in the face of a potential double dip recession where mere survival maybe job #1 just simply doesn’t jive with reality. As the late Ann Richards once said: “That dog don’t hunt.” http://en.wikipedia.org/wiki/Ann_Richards

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