The Four Cornerstones of the Conscious Corporation

200+ Years of Corporate Ascendancy… U.S. population in 1776: 2,500,000 # of people employed by Wal-Mart in 2008: approx. 2,100,000 Corporations have grown so large that 51 of the world’s largest economies are now businesses, not countries Corporate power has become so concentrated that sales of the 200 largest corporations represented more than 1/4 of total world economic activity in 2000

…Leading to Scandals and Abuses of Power…

…and Loss of Trust Lowest in history of Gallup Poll Globally, 62% of consumers (77% in U.S.) had less trust in big business in early 2009 compared with a year earlier [Edelman’s Trust Barometer]

But There’s a Yang to That Yin Even as people have grown more wary of corporations, they have also come to want and expect more from them Why? – Government has historically fallen short (tattered safety nets, inability to solve complex global problems) – Consumers live closer to business today (strong emotional connections to brands, deeper awareness of corporate activities) – Empowered public demands payback (acutely aware of disconnect between what corporations rake in and what they give back) 64% 74% 56% I have become more Businesses bear as much Corporations have become a interested in corporations’ responsibility as government more important part of our conduct and brand image for driving positive social culture over the past few years change Source: The Future of the Corporate Brand, Euro RSCG Worldwide

But There’s a Yang to That Yin Even as people have grown more wary of corporations, they have also come to want and expect more from them Why? What once was the view of a leftist fringe Government has historically fallen short (tattered safety nets, inability to solve complex global problems) is now mainstream thinking Consumers live closer to business today (strong emotional connections to brands, deeper awareness of corporate activities) The empowered public demands payback (acutely aware of disconnect between what corporations rake in and what they give back) 64% 74% 59% I have become more Businesses bear as much Corporations have become interested in corporations’ responsibility as government better positioned over the conduct and brand image for driving positive social past 5 years to create over the past few years change positive social change

And Corporate Leaders Are Stepping Up to the Plate $25MM to 1st person or organization to come up with a viable way to remove greenhouse gases from atmosphere Comprising nearly 1/3 of total value of U.S. stock market and employing 10MM+ workers, member cos have resources and clout to get things done quickly In 2008, Bill & Melinda Disaster response task force has around- Gates Foundation the-clock phone link to Department of dispersed $2.8BN in grant Homeland Security and maintains “swat payments to health and teams” capable of flying into any disaster development programs site within 24 hours, assessing what’s (annual budget of UN needed, and reporting back to both gov’t World Health and corporate leaders Organization: $4BN) MORE POWER MORE RESPONSIBILITY

An Opportunity: Reimagining the Corporation of the Future Is Imbued with Human Values – Augmenting business skills with vital social skills, including the ability to 82% listen, communicate, and empathize To be successful, Builds Emotional Connections corporations of the future will need to show – Creating and maintaining a genuine a more “human” face brand personality that draws the (e.g., by caring about consumer in—making him or her want people—employees, to engage with the company customers, suppliers— and taking a more active Inspires Trust role in community and – Earning trust over time by consistently social causes) meeting obligations and fulfilling promises This Conscious Corporation of tomorrow will be built on 4 cornerstones… Source: The Future of Value, Euro RSCG Worldwide

THE FOUR CORNERSTONES OF THE CONSCIOUS CORPORATION 1. A Purpose Beyond Profit 2. A People-Centered Culture 3. Champions Sustainability 4. Respects Consumers’ Power

Cornerstone #1: A Purpose Beyond Profit With the correlation between reputation and profit proved, as many as 9 in 10 Fortune 500 companies have dedicated initiatives focused on corporate social responsibility The most valuable reputation riches accrue to those companies with a clearly stated—and understood—purpose beyond profit 85% 59% 50% It is important that Over the past five years, I buy or refuse to buy companies stand for corporations have become products based on a something other than better positioned to create company’s expressed values profitability positive social change and political/social activities Source: The Future of the Corporate Brand and The Future of Shopping studies, Euro RSCG Worldwide

In the space of a decade, Google went from a college research project to a publicly traded company with a brand value estimated at $86BN+, all while seeking to live by its credos of “Don’t be evil” and “Work should be challenging, and the challenge should be fun”

Whole Foods became the world’s fastest-growing retailer by building its business on a core philosophy of “Whole Foods. Whole People. Whole Planet.”

Green Mountain Coffee Roasters grew from a single café in 1981 to >7,000 customer accounts in 2008 with a holistic approach to business that is encapsulated in its motto: “Brewing a Better World”

Target has risen to #2 discount retailer in U.S. while donating $3MM+ each week to the communities it serves

Cornerstone #2: A People-Centered Culture The Conscious Corporation treats people well, including employees, suppliers, and customers 60% 58% 49% Big corporations do not I avoid shopping at stores Companies are not doing share enough profits with all that don’t treat their enough in terms of employees employees fairly respecting the rights and needs of employees Source: The Future of the Corporate Brand, Euro RSCG Worldwide

Zappos.com grew from $1.6MM in sales in 2000 to more than $1BN in 2008 (and was just purchased by Amazon for $850MM), achieved through a relentless focus on customer service and a corporate culture centered on 10 core values; living up to the core values is 50% of every performance review

Since its founding in 1978, the Container Store has seen average annual growth of 20% It has made Fortune’s annual list of “100 Best Companies to Work For” for the past 10 years in a row

At Whole Foods, team cohesion is considered of such importance that teams are empowered to do their own hiring. After a trial period, any new employee that doesn’t receive the approval of at least 2/3 of the team is let go.

U.K.–based Tesco has grown into world’s #3 grocery retailer and #1 online supermarket In 2009, 52,000+ employees shared in a £126MM payout from Save As You Earn investment program, reaping returns of 45%–88% over 3– 5 years while economy was tanking

Cornerstone #3: Champions Sustainability 73% The most successful and profitable businesses in the future will be those that practice sustainability 50% Companies are not doing enough in terms of making environmental impact a core factor in corporate decisions Source: The Future of the Corporate Brand, Euro RSCG Worldwide

Since 2005, Wal-Mart has sold 145MM+ CFL light bulbs, saving customers $4BN over life of bulbs and eliminating need for 3 coal- fired power plants Working with suppliers to make products 25% more energy efficient within 3 years; by 2010, every air conditioner sold will be Energy Star rated and all flat- panel TVs will be 30% more energy efficient (energy savings on TVs alone will be enough to power 53,000+ single-family homes for a yr.)

As part of Plan A sustainability initiative, Britain’s Marks & Spencer has significantly reduced use of plastic bags by giving customers bags “for life” (if a bag wears out, M&S will replace it for free) Industry surveys (e.g., Chatsworth FTSE 100 Green Survey and Covalence Ethical Ranking) show Plan A is having a positive effect on how people regard M&S—retaining loyalty of existing customers and winning new business

Burt’s Bees has committed itself to delivering zero waste to landfills and being fully powered by renewable energy by 2020

Cornerstone #4: Respects Consumers’ Power The Conscious Corporation respects consumers’ increased power by working with them in a more egalitarian, collaborative way—and by offering opportunities for them to be part of the business and brand 82% 86% 76% As a consumer, I have a Businesses need to open a I search for customer responsibility to censure dialogue with their reviews online while making unethical companies by customers purchase decisions avoiding their products 74% 51% 57% Businesses must be I write online product or I have made a purchase completely open and retail reviews decision based on a transparent company’s conduct Source: The Future of the Corporate Brand, Euro RSCG Worldwide

GE has made keeping the public informed a central tenet of its ecomagination initiative; it accomplishes this through an annual ecomagination report, a dedicated website (ecomagination.com), global conferences and events, and advertising

In just 10 years, Innocent Drinks has managed to gain a 72% share of U.K.’s smoothie market; each year, invites 100 customers to attend Annual General Meeting, giving them an inside view of company’s business and a chance to vote on upcoming initiatives

In 2008, despite global downturn, Nike’s net income soared 26%, to $1.9BN, while earnings per share grew 28% Success is partly attributable to Nike’s ability to foster a sense of connection and community among its customers—e.g., Nikeplus.com (offering info, support, and opportunities to interact on- and offline with fellow enthusiasts) 25-city Nike1 Human Race: biggest one-day running event in history, raised some $3MM for charity

A more conscious approach to business drives growth and profitability

The Rewards of Reputation Reputation has been shown to affect how a company is perceived both internally and externally, and to influence such factors as: – Employee retention and hiring – Product and service pricing – Investor preference – Vulnerability (a sterling reputation can serve as a protective barrier in times of crisis) – Credibility and trust – Relationships with journalists, regulators, and NGOs – Market cap (reputation has been found to account for as much as 75% of the gap between a company’s book value and market cap, according to Risk Management)

“ecomagination is not meant to revamp the brand at all; it’s about good business sense. It’s not an advertising ploy or marketing gimmick, GE wants to do this because it is right, but also we plan to make money while we do so.” —Jeffery Immelt, CEO

“Put simply corporate social responsibility helps us to attract shoppers to our stores, recruit and retain the best people, form better partnerships with our suppliers and create greater value for our shareholders.” —Paul Myners, Chairman, Marks & Spencer

Early Response to Good for Business

“Good for Business is an excellent guide that shows how transparency and engagement can positively impact a company’s reputation. Readers can immediately employ the lessons revealed in the book.” Steve Fludder, Vice President, ecomagination, GE

“With their ‘Four Cornerstones of the Conscious Corporation’ framework, the authors have laid out a clear and compelling vision of a new, more effective way of doing business. Corporate leaders who hope to own the future will heed their advice.” Justin B. Smith, President, The Atlantic

“Good for Business blazes a trail for corporate executives who want to succeed in the new economy. The authors offer a big-picture vision about the need for a more holistic and ‘humanized’ view of the corporation, and they provide specific suggestions on how to adapt to a world of empowered consumers, heightened transparency, and changed requirements for leaders. A must read for everyone in the C-suite and all who aspire to get there!” Dan Esty, Yale University and author of Green to Gold

“In the emerging world of extreme transparency, customers and employees will trust companies that are truly making a difference in their lives. Being good will trump looking good. This book clearly outlines winning brand values and the behaviors that lead to that most precious bond: trust.” Stephen Quinn, Executive Vice President and Chief Marketing Officer, Wal-Mart

Click here to order Good for Business on Amazon

ALSO BY THE AUTHORS

Consumed: Rethinking Business in the Era of Mindful Spending Based on the Euro RSCG Worldwide New Consumer study and written by two executives within Havas Andrew Benett, Ann O’Reilly, CEO, Arnold Content Director, Worldwide and Knowledge CSO, Havas Exchange, Euro Worldwide RSCG Worldwide Available in Bookstores July 2010 39

Advance Praise for Consumed “People are getting serious about making smarter, more “Benett and O’Reilly offer insight mindful choices and are looking and guidance about how best to for companies that give them communicate with and build what they want. Consumed acts relationships with today’s more as a navigational aid, thoughtful consumer. It is empowering business leaders to essential reading for anyone anticipate and meet these newly seeking to win the in the post- emerging needs.” recession marketplace.” —Becky Saeger, EVP and CMO, —Mike O’Driscoll, Managing Charles Schwab Corporation Director, Jaguar Cars

Advance Praise for Consumed “This is an important book for executives because the world is clearly “A permanent shift has taken place among changing. Business consumers. They are far more engaged in every leaders need to aspect of marketing and manufacturing, and brands understand the trends that want to win and retain their loyalty will need to highlighted in Consumed listen better, react faster, and be more nimble in and think deeply about the everything they do. This book offers a fresh and vital implications for their perspective on those actions that will be most brand.” essential to future growth.” —Tim Calkins, author of —Christian McMahan, CMO, Heineken USA Breakthrough Marketing Plans

Click here to order Consumed: Rethinking Business in the Era of Mindful Spending on Amazon

Media Inquiries For inquiries regarding Euro RSCG Worldwide’s New Consumer study, please contact: Eric Edge Global Chief Communications Officer Euro RSCG Worldwide T +1 312.640.4747 (Chicago) T +1 212.886.2012 (New York) E eric.edge@eurorscg.com For inquiries regarding Good for Business or Consumed, please contact: Eric Robertson SVP, Global Corporate Communications Director Arnold Worldwide 110 Fifth Avenue, 9th Floor New York, NY 10011 (ph) 212-463-1201 (m) 646-465-3793 e-mail: erobertson@arn.com

Also Available on SlideShare Click here to access The New Consumer in the Era of Mindful Spending on SlideShare.net

Stay Up to Date on the New Consumer For more information on the New Consumer, visit www.TheNewConsumer.com. Please join us on Facebook (www.facebook.com/EuroRSCGNewConsumer?ref=ts) and Twitter (ERWWNewConsumer) for daily insights and updates.

http://www.slideshare.net	480
http://thinkseedodifferently.blogspot.com	216
http://feeds.feedburner.com	6
http://www.thinkseedodifferently.blogspot.com	6
http://translate.googleusercontent.com	3
http://thinkseedodifferently.blogspot.co.nz	3
http://zip.dev.zicht.nl	2
http://thinkseedodifferently.blogspot.ca	2
http://moondaesa.tistory.com	1
http://thinkseedodifferently.blogspot.in	1

The Four Cornerstones of the Conscious Corporation

by Euro RSCG Worldwide on Aug 09, 2010

Accessibility

Categories

Tags

Upload Details

Usage Rights

10 Embeds 720

Statistics

The Four Cornerstones of the Conscious Corporation — Presentation Transcript