How to sell your values - not just your products

This column was published this morning in The Daily Record.

By Henry Fawell
Special to The Daily Record
Friday, June 12, 2009

The ocean liner that is corporate America has taken on plenty of water in the past two years. Yet this month, with business leaders arduously bailing water from below deck, two shots were delivered across the corporate bow that deal directly with the state of corporate reputations.

The warnings come from the latest editions of the Harvard Business Review and McKinsey Quarterly, and they should prompt business leaders in Baltimore and beyond to recognize that in today’s economy it’s not enough to sell our products and services (though that’s awfully important). Now more than ever, we must sell our values.

In an HBR article entitled “Regaining Trust,” authors James O’Toole and Warren Bennis diagnose the tattered reputations of today’s corporate community and what it will take to rebuild them. “We won’t be able to rebuild trust in institutions,” they argue, “until leaders learn how to communicate honestly — and create organizations where that’s the norm.”

The solution? It’s more than simply delivering profits, they write. It’s also whether executives choose to lead organizations that are “are economically, ethically, and socially sustainable.”

The second shot across the bow comes from a new McKinsey Quarterly survey, which shows that 85 percent of senior executives around the globe say that public trust in business has deteriorated.

So, what’s a company to do? How can Baltimore’s corporate community strengthen its reputation with a weary public hungry for change? Here’s how three U.S. companies in controversial industries – insurance, financial services, and energy - are attempting to write a new values-oriented narrative to improve their reputations with stakeholders.

The task is not easy. The skeptics have plenty of ammunition. Yet these companies are setting a standard for values-oriented corporate communications that we’d all be wise to consider.

Liberty Mutual: The Boston-based insurance giant launched what it calls the Responsibility Project at a time when one could safely conclude corporate and personal financial responsibility were lacking. Liberty’s campaign highlights individuals and organizations that “do the right thing,” whether practicing financial discipline or helping a lost stranger with driving directions. What started as a popular television ad years ago has evolved into multifaceted communications effort, complete with website and blog, stressing personal and corporate responsibility. The Responsibility Project encourages individuals to post their own stories about doing the right thing and the “responsibility dilemmas” they face in everyday life.

JP Morgan: The 200 year-old financial services firm has launched the Way Forward campaign, which stresses the company’s commitment to - you guessed it – “doing the right thing.” The campaign seeks to drive public dialogue past the financial industry’s recent history and toward JP Morgan’s plan to help grow business. JP Morgan has peppered newspapers and magazines with advertisements outlining the firm’s investments in Main Street businesses, clean energy projects, and credit counseling programs. The firm launched a Way Forward website complete with testimonials from entrepreneurs and homeowners lauding the firm’s commitment to responsible lending.

Chevron: Like most oil and gas giants, Chevron has earned its share of scrutiny over carbon emissions and its environmental footprint. But Chevron turned this threat to its reputation into an opportunity. It created an energy efficiency campaign centered on the question, “will you join us?” The campaign – built around the site http://www.willyoujoinus.com/ – encourages personal energy conservation and outlines Chevron’s commitment to reducing oil and gas use while alternative energies grow to scale. Like Liberty Mutual, Chevron’s strategy encourages public participation in the campaign, not just in energy conservation practices but also with a lively conversation on the company’s blog.

Yes, the skeptics could ask plenty of loaded questions. Why should consumers take advice on responsibility from anyone in the insurance industry? Do we really want Wall Street charting “the way forward” in America? Since when did oil companies earn the right to lecture us on energy conservation? This skepticism confirms the tenuous state of corporate reputations and validates the argument that if you’re not changing how you communicate, you’re losing.

Forward-thinking companies would be wise to start dialogues with the public about what it takes to be both profitable and values-oriented. In my view, the sooner we embrace this new reality, the better off corporate reputations will be.

McKinsey study highlights erosion of corporate reputations

A new report in McKinsey Quarterly (subscription required) should prompt a fundamental reconsideration of communications strategies in many corporate headquarters.

According to the study, eighty-five percent of senior executives said that public trust in businesses had deteriorated in 2009. To read the full report, click here. Here's a sobering excerpt:

"The breadth and depth of today’s reputational challenge is a consequence not just of the speed, severity, and unexpectedness of recent economic events but also of underlying shifts in the reputation environment that have been under way for some time. Those changes include the growing importance of Web-based participatory media, the increasing significance of nongovernmental organizations (NGOs) and other third parties, and declining trust in advertising. Together, these forces are promoting wider, faster scrutiny of companies and rendering traditional public-relations tools less effective in addressing reputational challenges...Many companies, though, rely primarily on small, central corporate-affairs departments that can’t monitor or examine diverse reputational threats with sufficient sophistication. "

How should companies respond to these challenges? Here are some thoughts:

1. Words must be backed by deeds. No amount of communicating can rebuild a reputation if a company's deeds don't match it words. Communities are increasingly interested in what a company stands for - not just what it produces. Liberty Mutual, for instance, is creatively engaging the public in dialogue while projecting one of its core values - doing the right thing - with its Responsibility Project.

2. Advocates matter. With trust in businesses so low, companies cannot expect to influence public opinion on their own. They must increasingly cultivate credible third parties - yes, even bloggers - who are willing to advocate on their behalf.

3. Listen. Whether communities gather online, at shareholder meetings, or at the local townhall, they expect a two-way dialogue. The companies that offer one, like Chevron, have a stronger chance of understanding public sentiment and building trust on specific issues, if not the entire brand.

The tectonic shifts underway in the economy, public sentiment, and how the world communicates are crowding out the old rules of reputation management. What has your company done to adjust?

Monday's quick reads: Chevron, 60 Minutes, and Twitter

1.) When Chevron hires ex-reporter to investigate pollution, Chevron looks good (New York Times) -- What did Chevron do when it learned that “60 Minutes” was preparing a potentially damaging report about oil company contamination of the Amazon in Ecuador? It hired a former journalist to produce a mirror image of the report, from the corporation’s point of view.

2.) What's the right corporate policy for Twitter, Facebook, and blogs? (Business Week) -- Check out how Business Week journalists approach engaging their readers online.

3.) Gifts for reporters? Don't bother. (Ragan) -- If you think chocolate and flowers are the way to a reporter's heart, think again.

4.) CEOs who use Twitter (Business Week) -- In August 2008 Business Week reported on 18 chief executives who use the microblogging application Twitter to clue customers in on new services, help them with questions about their products, and generally get a little bit personal with customers, business associates, and the public.Not even a year later, Business Week bring you nearly 50 CEOs who find tweeting a personal and professional delight.