FOUR POINTS: Will CSR Become Just Another Marketing Fad?

LEADER: Ben Gaddis
Location: Austin, Texas




Three months into the debacle that is BP/Deepwater Horizon and many questions still remain. Will this latest oil well cap succeed in keeping a lid on the spill? Will this event be the catalyst for a change in US energy policies? Have we fallen so far that Kevin Costner is our only hope for saving the Gulf Coast? I saw "Waterworld" and "The Postman". God help us. But as a marketer, what interests me most are the implications this disaster will have on marketing efforts going forward.

In this issue of FOUR POINTS we ask: Will the BP disaster cause companies to genuinely become more socially responsible, or will we see more short-term 'greenwashing' efforts?
Here's my take:

American consumers have a short memory. Marketers know that and will act accordingly. I predict that we will see most brands partake in somewhat half-hearted 'social responsibility' efforts over the next year, then shift their focus to the issue of the day. Why? Because American consumers are also fickle and the things that motivate their purchase decisions change faster than Joe Barton recanting his apology to Tony Hayward.

Here's an example. I live in Texas, and while the notion that everyone rides horses to work is far from the truth, everyone does drive a pickup truck. Everyone. Yet in the summer of 2008, as gas prices topped $3 a gallon, watching the evening news would lead you to believe that every rancher was trading his F-250 for a Prius hybrid. The media fuelled the flames and marketers followed. Every automotive advertisement focused on increased gas mileage, grocery stores gave away free gas cards, the travel industry panicked.

Then something odd happened. In the midst of the oncoming recession, the price of oil dropped drastically. All of a sudden, the media switched its focus from oil prices to jobless claims and sub-prime mortgages. And slowly but surely, those ads for trucks started to re-appear. Miles per gallon claims were replaced with the "Hyundai Assurance". Consumers had shifted their focus, and marketers followed.

Now this is far different from greenwashing. Those automotive advertisements were responding to a consumer backlash against price and not environmental issues. Or were they? The average consumer who switched from a truck to a hybrid stood to save a whopping total of ... $500 - $700 a year. That doesn't take into account the fact that a hybrid typically costs 15%-20% more than a standard vehicle. In fact, many of those consumers were reacting to their surroundings and what was being portrayed on the evening news. The media had essentially taken an issue that needed to be addressed -- sustainable energy -- and blown it out of proportion. They attributed the backlash against gas guzzlers not to price sensitivity, but to a concern about global warming and our dependence on foreign oil. A year later those problems still exist and yet we don't hear nearly as much from the media, and even less from marketers, about them. I believe we will see much the same scenario come from the BP event.

Over the next 6-12 months, consumers will face a deluge of advertising from companies touting their 'commitment' to social responsibility, and it will be effective ... for a while. The Dial commercial with the man in the white coat cleaning off an oil-soaked pelican will sell more soap. Oil companies, led by BP, will remind us that they are more focused than ever on preserving the environment and providing cleaner energy. Then the next big event will come along and consumers will shift their focus ... and most marketers will follow.

Most companies will take advantage of the short-term benefit associated with being 'socially responsible'; but few will truly embrace the idea. I believe those that do will reap the benefits for years to come.







POINT: Joy abdullah
Location: Kuala Lumpur


Given the controversy and online mileage generated for BP, the question that's begging an answer is, will most companies talke advantage of the short-term benefit of being socially responsible, or will they approach it from a longer-term, truly socially beneficial point of view?

A rise in global consciousness about our earth has come about. Just see the human chains of linked hands across global cities for the recent Earth Hour initiative, as cities around the world in diffferent timezones switched off their electrical apliances for an hour. This is the power of social connectivity.

So to the point of my post: What are the Islamic-based organizations, in spite of having an in-built shariah system of ethics and values, doing with regards to social responsibility? Given the prime importance of Shariah in Islamic finance, social responsibility is a commitment to moral standards as well as social norms. In essence, this means that Islamic financial institutions have a greater purpose than merely having Shariah-compliant products. Instead IFIs should be engaging in a higher proportion of productive profit and loss-sharing investments, and attempt to rebalance wealth distribution by investing in projects and countries with the greatest social and economic need.

The question still remains: Like their conventional counterparts, would they view social responsibility as a strategic growth driver, or would it just be part of being a 'greenwash'?








POINT: Hilton BarbourLocation: London






To my mind, the worst label that any marketer can be branded with, is the one of superficiality. Where our efforts are so blatantly without brand authenticity that they become nothing more than lipstick on a pig.

While many in the UK have jumped to BP's defence in some misguided nationalistic fervour, some punters have pointed out that merely truncating your name from British Petroleum, liberally using the colour green in your logo, and splashing out on potted plants in your reception area, doesn't make you an environmenatlly conscious organization. Espcially when the company commitment to exploring alternate energy sources has never been financed beyond a pitiful 4% of annual expenditure. Kinda makes a mockery of the "Beyond Petroleum" tagline doesn't it? It lacks, ahhh, what's the word? ... oh yes, authenticity.

But enough about BP. Five months ago we were all haranguing Toyota for their pathetic safety record. A decade ago it was the financial toomfoolery of Enron and WorldCom. Let's admit it, the pursuit of profit will always provide incentive for companies to cut corners. That's not cynicism, that's just human nature.

But as marketers, where does our accountability begin and end? Would you counsel your C-suite colleagues to run a bunch of quality-focused TV ads like Toyota has started doing in the UK? Or would you refuse to do that until the quality control issues that landed you in hot water to begin with, had been addressed and those changes had been independently verified? Tough call with an annual bonus hanging over your head, isn't it?

Mark Ritson recently wrote a fantastic article, and follow-up, in the UK magazine Marketing Week on the differences between repositioning and branding. His point being that brands should concentrate on brand revitalization instead. A sage point. Look for the core elements of the brand (its history, its secret ingredients, its customer service) and find ways to contemporarize them. That, to my mind, has credibility. That shows authenticity.

In the UK, retailer Tesco is the most oft-cited example of a company genuinely committed to going green. This 2008 article from CEO Sir Tim Leahy unravels the motivation behind a total restructuring of the company's operating principles. Point being that marketing isn't leading this charge with some ads and PR releases, it is happening across all parts of the organization.

Therefore, unfortunately I have zero expectations that the BP debacle will lead to any genuine long-term environment CSR initiatives. Not without legislation, not unless the ultimate cost of the clean-up causes BP to collapse, and the potential for similar collapse causes real rumination amongst the Fortune 500. The reality I fear most is that most corporations will merely let out a sigh of relief, and thank their lucky stars it didn't happen to tem. Or, more pitifully, start running advertising campaigns lauding their CSR commitments.

However, I do have a more modest wish.

That is for marketers to see the BP rebranding exercise for the total BS it evidently is. And to ask themselves, when confronted by the desire to launch the next 'green', 'quality is our priority', 'we care for the future', 'we recycle because we care' or any other trendy new positioning, is it authentic? Is it true to the way our company actually operates, or is it just papering over the cracks?

If the answer if a resounding NO, I would hope they put the lipstick down, step away from the sty ... and make a stand for authenticity.





POINT: David Shaw
Location: Singapore





It's a strange world.

As recently as 10 years ago, you'd have been hard-pressed to find a green company operating profitably anywhere in this part of the world. When home is an island-nation with absolutely zero natural resources, you quickly grow a pragmatic perspective. I recall once wanting to print a brochure in bulk using recycled paper; when my boss realized it would add 50% to the printing costs, he nixed the plan. Tree-huggers were a foreign species back then. Business in Singapore was based on a 'deal' mentality. Capitalism was the order of the day.

Today the pendulum has apparently swung. Movies like 2012, Al Gore's An Inconvenient Truth and assorted angst over global warming have all served to raise the awareness of our fragile planet to tipping-point levels. Singaporean companies are much more inclined to wrap their brand and their product in a green sheen. You could easily be lulled into thinking it's St. Patrick's Day.

But peel away the patina, and you'll find few companies tracking sustainability metrics to purposefully position themselves for the future. Beyond token attempts to impose emission controls or measure a corporation's carbon footprint, there are precious few efforts to reduce the energy content of its products or raw material consumption; no investment in more fuel-efficient company vehicles; little reduction in energy consumption using motion-sensitive lighting in warehouses, solar lighting in lots and yards, and so on.

Yet a corporation's commitment to creating a sustainable workplace is probably the best indicator of its sincere effort to 'go green'. (While vehicles get the most attention, buildings actually use more energy -- and contribute more to global warming -- than cars, trucks and buses combined.) Make no mistake: Singaporean consumers want corporations to do the right thing -- it's just that, right now, they don't want to pay for it. Deep down, Singapore hasn't really changed that much. We're still the little red dot, striving hard to survive.

Will BP's oil slick lubricate any lasting mindset shift? At the risk of sounding callous, I suspect not. BP, its sub-contractors, federal and state governments, environmental activists, injured businesses and their insurers will all spend decades suing one another. The US Supreme Court, after all, took almost 20 years to settle the punitive damages arising from the Exxon Valdez spill off Alaska in 1989. But Exxon's stock price quickly recovered from that accident. (You didn't stop filling your gas tank at Esso now, did you?)

Countries, like traffic lights, turn green when it's time. You just can't rush these things.

Brands are Defined by What They Won't Do

The world's leading car-maker Toyota continues to reel from the largest product recall in its history. The company had already shed US$31 billion in market value since late January when it stopped production and sales of eight vehicle models to fix problems with sticky accelerator pedals and loose floor mats. Yesterday its pain intensifed with the recall of 437,000 hybrid cars including the Prius, the company's green 'halo car' for a new era.

But my post today isn't about the besieged brand in the spotlight. It's about the vulture brands circling around it.

GM and Ford have announced specific incentives targeted at unnerved Toyota owners in the US. "We want to make sure whoever's out there driving ... has a high-quality vehicle that's safe," a GM spokesperson told reporters during their announcement. Ouch.

Volkswagen, on the other hand, has written to its dealers requesting them not to employ "predatory price cuts" to lure Toyota customers in the US away from the brand. The Chief Operating Officer of VW's North American unit stated that Toyota "faces unfortunate circumstances in the marketplace. We will remain an aggressive competitor without targeting any one manufacturer."

In the jungle out there, marketshare cannot be achieved without mindshare. Putting aside Toyota, which is currently top of mind for all the wrong reasons, one brand has suddenly catapulted into the place of high awareness, high esteem. Volkswagen instinctively understands that values trumps results. Values mean doing the right thing when no one is looking and even when the consequences are difficult. Authentic brands earn respect by delivering on their brand promise and behaving the way they want others to behave towards them.

Volkswagen's actions reveal a brand strategy that articulates not just what it will do, but also defines what it will not do.

And what it didn't do this week, will generate results for a long time to come.

The Disciplined Brand

Today, let's talk dolphins.

If you set out to develop a dolphin attraction, what would you do to build a brand and your business? You'd put up a slick show, and train your dolphins to do fancy tricks, right? You'd let your customers feed them, swim with them, pet them. You'd provide lifevests, snorkelling gear, and towels. You'd engineer lots of photo opportunities -- heck, even deploy a staff photographer and flog huge colour blow-ups that cost an arm and a leg.

Discovery Cove in Orlando, USA (http://www.discoverycove.com/) does almost all of this -- and puts together an amazing customer experience. My family visited a few years ago, and I gladly (well, kinda) paid more than $1,000 for the privilege. I didn't think I'd ever find another dolphin interaction experience to match it.

I was wrong.

Monkey Mia (http://www.monkeymia.com.au/site/) is the best-known attraction within the Shark Bay World Heritage Area in Western Australia and a 10-hour drive from Perth. Wild Indo-Pacific bottlenose dolphins have visited the beach there since the 1960s when Alice Watts first began feeding them from her boat, encouraging them to take fish from her hand. Later on Wilf Mason and his family lived at Monkey Mia for many years, enduring the hardships of a remote coastal lifestyle while managing a humble caravan and camping area which has developed into the Dolphin Resort of today.

Unlike commercial dolphin attractions the world over, Monkey Mia has a vigorously observed policy of "no touching the dolphins". (A dolphin's head contains a highly developed organ called the melon which is the source of its acute sense of echo-location. Imagine the magnified sensation of a hundred strangers' hands pawing your private parts every day, and you'll understand why this rule was instituted.) Visitors are allowed to stand no deeper than shin-deep in the water and wait for the dolphins to approach. No sunscreen is allowed on legs because it can irritate the dolphins' eyes. And when it's time for their feed, everyone is asked to move out of the water except for volunteers selected at random and supervised by Department of Conservation (DEC) officers.

Remember, these are wild, untrained dolphins. There's nothing to coerce them to come to the shallows of the beach at Monkey Mia. But come they do, of their own free will -- because a dedicated team has, over the years, worked hard to earn and keep their trust. (Brand stewards, take note: What are you doing to collaborate with your internal constituents to present an aligned brand story?) Four adult female dolphins and their offspring, spanning three generations, are fed up to three times each morning to lunchtime, with no more than 1/3 their daily intake of fish (this is to prevent them becoming dependent on handouts, and encourage them to continue hunting for their own food).

The dolphins' visits are amazingly reliable -- their attendance record is 99.6% over the past 10 years. Talk about a consistently delivered brand experience.

I was at Monkey Mia two weeks ago, and came away with a new-found respect for these intelligent animals -- not to mention heaps of admiration for the way the guardians of this amazing attraction have taken the firm and narrow contrarian path to develop their brand with tremendous discipline, working tirelessly every day of the year to care for the dolphins and convert visitors to brand ambassadors.

Two different business models on opposite sides of the globe. One a slick, well-run but commercialised customer experience. The other a more basic, more restricted yet more authentic interaction with dolphins. Each has its admirers. But the smaller attraction, I believe, is in sync with the global trends of simplicity and sustainability. The stewards of Monkey Mia instinctively understand that human beings tacitly seek to be part of something larger than ourselves. Interacting with dolphins in this way allows us to achieve a little of that.

Monkey Mia 1, Discovery Cove 0.

Carly for California?

Big brands tell a never-ending story. Earlier this month, a brand from my past resurfaced with a new chapter, when Carly Fiorina announced she was running for the US Senate. Now anyone who's been around IT or lived in Silicon Valley recently will recall the high-profile celebrity CEO of Hewlett-Packard whose tenure from 1999 to 2005 was exhilarating and yes, excruciating at times, for HP employees of that era. I vividly recall her story; I am one of the survivors.

Carly oversaw arguably the most audacious merger in business history to that point in time, when HP acquired Compaq over a long-drawn campaign in 2002. The merger was approved at a watershed EGM by the narrowest of margins (less than a percentage point, if I recall correctly); and the company spent the next 3 years fighting to prove the wisdom of the strategy.

Sadly our progress wasn't quite enough or fast enough for Wall Street; so in 2005 Carly was given the boot. In
the intervening years, Mark Hurd has come in and
delivered what Carly could not -- operational efficiency and subsequent marketplace success. Carly, for her part, has had to contend with an even larger, more personal battle -- with cancer. She has reportedly come through it, and is now ready to represent the people of California.

It isn't going to be smooth sailing. The reception to Carly over the past few weeks has been, well, frosty and skeptical. Some more vocal bloggers & commentators have hauled her over the coals with seeming relish. (By the way, notice how that's the way with many high-profile brands? They are not shy of -- and indeed polarize -- public opinion. You either love them or loathe them: think about Microsoft or Nike of a few years back.) Yes, she made some gaffes when announcing her intentions and in follow-on interviews. And yes, her campaign website, http://www.carlyforcalifornia.com/, gives a little too much credit to herself for HP's current standing and not enough to Mark Hurd. But I wouldn't be too quick to write her off as an unworthy candidate.

This is the CEO who inspired a whole generation of HP employees to believe, to give of their best, and who came along with her on that incredible journey to preserve the best and reinvent the rest of the proud HP legacy. (She made it easy for me to conduct brandjams across the Asia-Pacific by providing an inspiring keynote that rallied our troops around the cause -- first time I've seen an intelligent audience give a videotape a standing ovation.) While history has shown -- through Mark Hurd's success -- that Carly was probably not equipped with enough operational savvy to execute her grand plan ... it is clear to me that Mr Hurd (with due respect) would probably not have been able to get the merger approved in the first place. It needed someone with the personal charisma and communication skills of Carly to seal the deal. In summary, Carly was the right leader for HP then; as Mark Hurd is absolutely right for HP today.

So. What are the chances of Carly bringing some change to California? I'd say, let's give her a bit of room to flex and engage. Good leadership is hard to come by. My only caveat, is this: That government doesn't go out of business -- whereas employees in private companies realize their jobs depend on executing the leader's strategy flawlessly. Civil servants, speaking bluntly, have a more iron-clad ricebowl. They may be unwilling to accept the need for change.

Carly may yet find this hill even harder to climb than HP.