The Four Cornerstones of the Conscious Corporation - Presentation

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The Four Cornerstones of the Conscious Corporation - Presentation

  1. 1. The FourCornerstonesof theConsciousCorporation
  2. 2. 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
  3. 3. …Leading to Scandals and Abuses of Power…
  4. 4. …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]
  5. 5. 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
  6. 6. 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 What once was the view of a leftist fringe Why? Government has historically fallen short (tattered safety nets, is now mainstream thinking inability to solve complex global problems) 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
  7. 7. 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 Gates Foundation Disaster response task force has around- dispersed $2.8BN in grant the-clock phone link to Department of payments to health and Homeland Security and maintains “swat development programs teams” capable of flying into any disaster (annual budget of UN site within 24 hours, assessing what’s World Health needed, and reporting back to both gov’t Organization: $4BN) and corporate leaders MORE POWER MORE RESPONSIBILITY
  8. 8. 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
  9. 9. THE FOUR CORNERSTONES OF THECONSCIOUS CORPORATION1. A Purpose Beyond Profit2. A People-Centered Culture3. Champions Sustainability4. Respects Consumers’ Power
  10. 10. 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 Sources: The Future of the Corporate Brand and The Future of Shopping studies, Euro RSCG Worldwide
  11. 11. In the space of a decade, Google went from a college research project to apublicly traded company with a brand value estimated at $86BN+, all whileseeking to live by its credos of “Don’t be evil” and “Work should bechallenging, and the challenge should be fun”
  12. 12. Whole Foods became the world’s fastest-growing retailer by buildingits business on a core philosophy of “Whole Foods. Whole People.Whole Planet.”
  13. 13. Green Mountain Coffee Roasters grew from a single café in 1981 to>7,000 customer accounts in 2008 with a holistic approach to businessthat is encapsulated in its motto: “Brewing a Better World”
  14. 14. Target has risen to #2 discount retailer in U.S. while donating $3MM+ eachweek to the communities it serves
  15. 15. 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 doingshare 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
  16. 16. Zappos.com grew from $1.6MM in sales in 2000 to more than $1BN in 2008 (and was justpurchased by Amazon for $850MM), achieved through a relentless focus on customer serviceand a corporate culture centered on 10 core values; living up to the core values is 50% ofevery performance review
  17. 17. Since its founding in1978, the ContainerStore has seen averageannual growth of 20%It has made Fortune’sannual list of “100 BestCompanies to WorkFor” for the past 10years in a row
  18. 18. At Whole Foods, teamcohesion is consideredof such importance thatteams are empoweredto do their own hiring.After a trial period, anynew employee thatdoesn’t receive theapproval of at least 2/3of the team is let go.
  19. 19. U.K.–based Tesco hasgrown into world’s #3grocery retailer and #1online supermarketIn 2009, 52,000+ employeesshared in a £126MM payoutfrom Save As You Earninvestment program, reapingreturns of 45%–88% over 3–5 years while economy wastanking
  20. 20. 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
  21. 21. Since 2005, Wal-Mart hassold 145MM+ CFL lightbulbs, saving customers$4BN over life of bulbs andeliminating need for 3 coal-fired power plantsWorking with suppliers tomake products 25% moreenergy efficient within 3years; by 2010, every airconditioner sold will beEnergy Star rated and all flat-panel TVs will be 30% moreenergy efficient (energysavings on TVs alone will beenough to power 53,000+single-family homes for a yr.)
  22. 22. As part of Plan Asustainability initiative,Britain’s Marks & Spencerhas significantly reduced useof plastic bags by givingcustomers bags “for life” (ifa bag wears out, M&S willreplace it for free)Industry surveys (e.g.,Chatsworth FTSE 100 GreenSurvey and CovalenceEthical Ranking) show PlanA is having a positive effecton how people regard M&S—retaining loyalty of existingcustomers and winning newbusiness
  23. 23. Burt’s Bees hascommitted itself todelivering zero wasteto landfills and beingfully powered byrenewable energy by2020
  24. 24. 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
  25. 25. 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
  26. 26. In just 10 years, Innocent Drinks has managed to gain a 72% share of U.K.’s smoothiemarket; each year, invites 100 customers to attend Annual General Meeting, giving theman inside view of company’s business and a chance to vote on upcoming initiatives
  27. 27. In 2008, despite globaldownturn, Nike’s net incomesoared 26%, to $1.9BN, whileearnings per share grew 28%Success is partly attributableto Nike’s ability to foster asense of connection andcommunity among itscustomers—e.g.,Nikeplus.com (offering info,support, and opportunities tointeract on- and offline withfellow enthusiasts)25-city Nike1 Human Race:biggest one-day runningevent in history, raised some$3MM for charity
  28. 28. A more conscious approach to business drives growth and profitability
  29. 29. 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)
  30. 30. “ecomagination is not meant to revamp thebrand at all; it’s about good business sense.It’s not an advertising ploy or marketinggimmick, GE wants to do this because it isright, but also we plan to make money while we do so.” —Jeffery Immelt, CEO
  31. 31. “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
  32. 32. Early Response toGood for Business
  33. 33. “Good for Business isan excellent guide thatshows howtransparency andengagement canpositively impact acompany’s reputation.Readers canimmediately employ thelessons revealed in thebook.”Steve Fludder, Vice President,ecomagination, GE
  34. 34. “With their ‘Four Cornerstones of the ConsciousCorporation’ framework, the authors have laidout a clear and compelling vision of a new, moreeffective way of doing business. Corporateleaders who hope to own the future will heedtheir advice.”Justin B. Smith, President, The Atlantic
  35. 35. “Good for Business blazes a trail forcorporate executives who want tosucceed in the new economy. Theauthors offer a big-picture visionabout the need for a more holistic and‘humanized’ view of the corporation,and they provide specific suggestionson how to adapt to a world ofempowered consumers, heightenedtransparency, and changedrequirements for leaders. A must readfor everyone in the C-suite and all whoaspire to get there!”Dan Esty, Yale University and author ofGreen to Gold
  36. 36. “In the emerging world ofextreme transparency,customers and employees willtrust companies that are trulymaking a difference in theirlives. Being good will trumplooking good. This book clearlyoutlines winning brand valuesand the behaviors that lead tothat most precious bond: trust.”Stephen Quinn, Executive Vice Presidentand Chief Marketing Officer, Wal-Mart
  37. 37. Click here toorder Good forBusiness onAmazon
  38. 38. ALSO BY THE AUTHORS
  39. 39. Consumed: Rethinking Business in theEra 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 39
  40. 40. 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
  41. 41. Advance Praise for Consumed “This is an important book for executives because the world is clearly“A permanent shift has taken place among changing. Businessconsumers. They are far more engaged in every leaders need toaspect of marketing and manufacturing, and brands understand the trendsthat want to win and retain their loyalty will need to highlighted in Consumedlisten better, react faster, and be more nimble in and think deeply about theeverything they do. This book offers a fresh and vital implications for theirperspective on those actions that will be most brand.”essential to future growth.” —Tim Calkins, author of —Christian McMahan, CMO, Heineken USA Breakthrough Marketing Plans
  42. 42. Click here toorderConsumed:RethinkingBusiness in theEra of MindfulSpending onAmazon
  43. 43. Media Inquiries For inquiries regarding Euro RSCG Worldwide’s studies, please contact: Lisa Gruber Global Communications Manager Euro RSCG Worldwide T +1 212.886.2018 E lisa.gruber@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
  44. 44. For more insights from Euro RSCG research, visit www.prosumer-report.comAnd follow us on Twitter (@prosumer_report)

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