The dialogue on whether corporations carry responsibilities to more than just their shareholders has been going on for decades, and for the most part, the question is still open. While many share the opinion of Nobel laureate Milton Friedman that corporate social responsibility is a self-defeating enterprise, many businesses have begun to swing the other way, and a new generation of corporate leaders seems to agree. One survey conducted in 2012 by Net Impact showed that nearly two-thirds of MBA holders inquired wanted to make an environmental or social impact through their work, and thousands of businesses have joined the effort to improve human rights and environmental protections the world over.
Those who have the drive will inevitably turn that drive toward their products, but harnessing that urge to change the world for the better can be hard, and such a gesture can harm a brand if aimed poorly. Starbucks faced criticism – and at least one Saturday Night Live skit – for its recent “Race Together” campaign, which encouraged customers to open up a discussion of the current state of racial issues in America. While Starbucks came out of the campaign with a record high stock price, not all companies are so lucky when taking an approach to these serious issues.
Why Do It?
From a business perspective, taking a social stance can seem like a rocky proposition. A business wants the largest potential pool of customers possible, and picking a side on an issue that affects people can alienate potential members of that customer pool. It seems at first glance that the answer is one of basic math: stick to selling widgets, don’t make the customer pool smaller, and ultimately reap higher profits.
Unfortunately, it’s not that simple. Increasingly, companies draw attention to themselves by taking these sorts of risky moves and participating openly in the political conversation. Customers who previously may not have had a business on their radar see these bold statements and sometimes take the time to look more deeply into a company’s products. Government organizations, too, take notice of such companies: a corporation that resolves to stop doing business in a politically hostile region can sometimes find itself courted by other states, eager to draw in new business.
How to Do It
The first step many companies take on these issues is philanthropic, and typically includes giving to charities or making efforts to hire those in disadvantaged groups. This provides a clear, straightforward narrative for prospective customers to follow, in which the company positions itself as a hero and rescuer in whichever field of endeavor. While this is simple and easy to justify, customers don’t always buy into it, and some view these maneuvers with a more cynical eye.
Make a clear stand. Take some time to look at your target demographic and what it values, and if you consider those to be consistent with the values of your company, consider how to speak up without making the conversation solely about your company’s heroic role. Rather than inviting customers to watch while your company saves the world, invite them to stand alongside you.
How to Implement It
When taking a stand on a social issue, consider how best to indicate the position to your customers. Press releases often won’t be sufficient, unless they come with clear actions that illustrate the commitment of your company to this ideal. Incorporating it into advertisements in a sincere, heartfelt manner, indicating not only a position but a clear understanding of the issues surrounding that position, can also help.
Even successful campaigns have drawn some attention for poor implementation. The recent Starbucks campaign, for example, encountered difficulties not just due to the stance itself, but due to the difficulty employees would have in starting a meaningful discussion about racial issues within the scope of the server-customer interaction. Even when your intent is honest and forthright, consider how effective a given socially-minded initiative will be at actually reaching the customer.
What About You?
Have you been part of a socially-minded branding effort? What do you think of some of the recent efforts that have been made to place corporations in the public sphere? Tell us your opinions in the comments.
More reading on social responsibility:
- Corporate Social Responsibility as Risk Management: A Model for Multinationals, Beth Kytle and John Gerard Ruggie, 2005
- The Case Against Corporate Social Responsibility, working paper by Robert B. Reich, 2008