Something has been bugging me for a while now. It’s not a new issue but something that has been slapping me on the head daily for the last few months more than it has done in the past. Maybe it is the continued economic struggles the world is going through. Maybe it is the Occupy movement. Or maybe it is just me in desperate need of a vacation on my dream island of Kauai. Whatever the reason might be… The question I ask myself is whether we working in sustainability/CSR/Shared Value (or whatever you call it) are dealing with the fundamental challenges the world face today or are we just working on some of the symptoms and applying band-aid to a sickness that needs much more than what we have to offer?
I don’t question that we are doing the right thing for the right reason. We are trying to make this world a little bit more sustainable. We are trying to make companies be more responsible as good citizens of this world. We are trying to prove that good business can be done by doing good. That capitalism with a heart is possible. That money can be made by sharing value with society. That business has a social purpose that it should embrace. Yes, we are doing good work and we are making a difference. But is it enough?
The world is consuming at levels that are unsustainable. We cannot consume the way we have in the past and expect everything to be okay. But the economic system that we live and survive on is based on more consumption. Consumption of products. Consumption of credit. Consumption of energy. More and more of each and everything.
We’ve seen where this has got us so far. The rich are getting richer and the poor are getting poorer. It’s been like a frog being boiled. It’s been a slow squeeze on the middle class and the working class over decades. When the system started running into problems we the people adapted and everyone started to work to pay the bills and buy those things we need – and those things we want. But income didn’t keep up. And slowly the world got into more debt to stay afloat. And then the bubble when kaboom.
The same is true of the environment. We consume so much more crap food, in the West especially, that farming had to change from providing us with food to providing us with GM foods, hormone injected meat, fields of corn for sugar and cereal and everything you can think of, and so much more crap. All because we wanted more and more of this crap food to feed our greed and insecurities. And we manufactured in ways and drove our cars without knowing that slowly but surely we are choking the world and messing with the climate.
And so it goes on. We know how we got here. We got here because we believed we needed things when we really just wanted it. And lines got blurred more and more between need and want. Between necessity and luxury. We consumed and we consumed and we consumed. It worked for a long time. It fed us and made us wealthy – or some of us. And we got addicted to it. Growth, growth, growth. The bigger the better – in what we have and how we looked. We consumed ourselves to a standstill.
But the “system” cannot live any other way. How do we get out of the economic slump? We’re told by consuming more. A key moment for me was when then President Bush said right after 9/11 that people should go and shop and go on with their daily lives as if nothing happened. Well, something did happen. The same is going on right now. The world is suffering on a societal and environmental perspective. The world is a very different place from 3 or 4 years ago. But we’re told we need to consumer more to get us out this slump.
I always tell my kids and my clients that we can’t expect different outcomes by doing the same thing. The same is so true for us right now. We can’t go on the way we have and expect the outcome to be different. We cannot consume the way we have and expect a different outcome. We cannot do business the way we have and expect a different outcome. We as humans know this when we hit our heads against a wall – we stop doing it and go around the corner. We’re not stupid. Or are we?
So what does this have to do with sustainability? Well, we’re still telling people to consume. Yes, we are telling them “buy this product because it is so much more sustainable”. Energy? We’re not asking people to cut down on their use but rather to use renewable energy. Okay, sometimes we ask them to use less energy but not really to buy less energy using products. Do you really need so many televisions? Do you really need 2-4 cars? Do you really need a house that large? Do you really need spend so much money during Black Friday? No one is advertising asking people to please not buy so much of their products this coming festive season. Very nice of Patagonia to say they want people to buy less but we know they aren’t really saying that they need to grow a little bit less. Or not at all. They still want to grow but hoping that people will buy the slightly more expensive and sustainable product or buy the Patagonia product instead of buying from a competitor.
We in sustainability and CSR are making the world a better place. I don’t doubt that for a moment. If every company does what we in sustainability and CSR want them to do then we will be in a much, much better place. But are we dealing with the underlying weakness of the system or are we delaying the hurt to the next slump? Put it this way. Would the world be in a better economic place if every single product is made in the most responsible way possible? I don’t know - but I think we would’ve been heading to the same problem if we didn’t address the underlying addiction to consumption and growth.
That is really the 3 pillars of sustainability – product, profits and purchase.
Product – how the product is made. Make it as sustainable as possible. Make it by using renewable energy, sustainable sourcing, manufacturing without exploitation etc. Make it the best we can. And make the impact on society and the environment as light as possible.
Profits – do your business to make a profit. No business can live without it. It is at the heart of business. But don’t confuse profits with growth. We’ve become addicted to growth because of the shift in investors from long-term to micr0-term. Not even short-term anymore. That would require a day or a week or two. The majority of investors of today don’t give a damn about the company and what it makes – only about the return they can get in the next 5 minutes, or seconds. And they are holding businesses ransom. We saw this during this recession. Profitable companies laid off workers. How is that for commitment? They didn’t say “we’re struggling on the growth front but still profitable – so we’re going to knuckle down and work, work, work to get out if it but won’t let our people go as long as we are profitable.” No, they let people go because the micro-term investor demanded it. Puh-lease don’t talk to me again about your employees being your greatest asset. Your don’t sell the crown jewels with the first sign of a bit of a struggle.
Purchase – people need to buy your stuff for you to be profitable. But the reality is that we also need to get people to buy less stuff. This is at the heart of the challenge to business. How do you make stuff and sell stuff but make sure people buy less stuff. Guess what… I don’t know.
There is another “P’s” we have to address within the system as well to make the world truly sustainable. Parity…
Parity – we can’t live in a world where so few has so much and so many has so little. It is not sustainable. It. Is. Not. Sustainable. Get it? The gap between the highest earners and the lowest earners are just too wide. The gap between the 1% and the 99% is unacceptable. The gap between the pay of the executive and the lowest paid workers is not good for the company or society. No one is asking for 100% equality in pay. But the gap is just too damn wide. It is greed and nothing more. Any reason given is just snake oil. It is not just and not right. And more importantly, it is not good for business and it is not good for capitalism.
But it goes further than that. The West cannot consume the way they have and allow the rest of the world to slowly die. We live in a global world. The West is the 1% and Africa is the 99%. It is not sustainable. It is capitalism gone bad. It is the dark underbelly of greed. It must stop.
So until then we in sustainability are using band-aid to deal with a much more serious disease - unless we start seriously dealing with all 4 of these P’s – Product, Profits, Purchase and Parity. The challenge is we can’t do this on our own. We need to widen our circle because this means we need to forge new partnerships outside of business to get this right. But that discussion is for another day.
Now I need to get to Kauai to consume some sun.
Posted in activism, Africa, business, business realism, business strategy, capitalism, cars, climate change, co-responsibility, community, companies, compensation, consumers, consumption, corporate citizenship, Corporate Sustainability, cost, CSR, CSV, culture, earnings, emissions, energy, environment, ethics, global, global warming, leadership, manufacturing, money, mutual responsibility, poverty, products, profits, public responsibility, purpose, realism, recession, responsibility, revenues, Shared Value, shareholders, society, sustainability, Uncategorized, value, values | Tagged capitalism, consumption, CSR, environment, parity, products, profits, purchase, shared value, society, sustainability, system | 4 Comments »
I wasn’t planning on writing a blog today but this piece in my favorite newspaper, The Guardian (yes, I am the typical lefty reader), made me roll my eyes. The piece is very well intended and generally pretty good advice for charities – Charity funding: How to approach business for help.
I agree that charities or NGOs should be more strategic in their approach to businesses for help. But when I read about the need for NGOs to have more “business realism” in their approach I couldn’t but help think of the need for business to have some “activist realism” in their thinking. It’s easy to ask the other side to be more like you but how about you being a little bit more like the other side too? Like any relationship, it’s about give and take – not just take.
Too often business think that charities should support them more and be more of their “voice”. Sorry, that’s not how it works. It’s a partnership. If you want NGOs to be more of a voice then you need to be more of a voice as well. No more hiding behind industry associations to do your dirty work or hide you from criticism on key challenges. If you want Greenpeace to slap you on the back instead of on the head then you need to speak up against other businesses who don’t act responsibly. You can’t expect a progressive NGO to support you if you also back regressive policies via another NGO or a business association or lobby group. Or if you keep quiet while other businesses lobby and push for, and argue against, positions held dearly by NGOs - climate change, clean energy, waste, pollution, labour conditions, conflict etc. NGOs expect you to share their world view and not only on one specific issue. This is the “activist realism” they live and work in. This is their “business”.
And how about business in general showing more social conscious? It’s fine to ask NGOs to be more business like but for some reason too many businesses argue that their focus is on the “business bottom line” only and that their only responsibility is towards shareholders. Bah to other stakeholders and society in general. Sounds like double standards to me.
Business needs “activist realism” to realise that their responsibility lies not only with shareholder but to this world they live and operate in. If you see your value as purely making more money for shareholders then you should expect flack from those who are not shareholders. They receive no benefit in their relationship with you except for some products they might or might not really need – so why should they care about your “realism”? Your “realism” might be in direct conflict with their real world. You pollute and they breathe it in. You accelerate climate change and they fry or freeze. You waste and they drown in the plastic bags. You pay peanuts to farmers and they get products that are second rated. You get the picture.
Some “activist realism” will hopefully make companies realize that they have a role to play as citizens of this world. That they have a responsibility towards others through their actions and words. That this responsibility is directly tied to their own long-term sustainability. You kill this world and you kill your business. Easy economics. “Activism realism” will make you sit up and say “no more”. Say it and do it because it is good for your business. Be an “activist” because your company needs to stand up for its own future – one that is tied to the well-being of society. Don’t huddle with those businesses and associations who do not share your world view. Do not care about shareholders who do not care about your business. Shareholder who only care about the next quarter and maximum profits come hell or high water do not care about your business. Only about how your business can line their pockets. They’ll drop you like a hot potato if a better offer comes up.
They are like a bad relationship. They promise you the world but they’ll drop you if someone with more money shows them some shiny object and promise them a better date. Would you take that from a date? Sucker if you will…
Show some “activist realism” by caring about your company’s future. Show some “activist realism” by speaking out against those who threaten your business in hard and soft ways. Show some “activism realist” by being serious about serious investors. Show some “activism realist” when you engage with your stakeholders. Show some “activist realism” when you give us a reason to believe in your worth to society.
Until then – you really don’t have much of a leg to stand on by asking NGOs to show more “business realism”. As my mom used to say, “What’s good for the goose is good for the gander.”
That’s my “activist realism”. A world where business care about business as part of society and contributing to society. That’s the “business realism” I want to live in.
Posted in activism, activist realism, activists, business, business associations, charity, co-responsibility, communications, community, companies, consumers, corporate citizenship, Corporate Sustainability, engagement, ethics, green, leadership, messaging, mutual responsibility, NGOs, nonprofit, partnerships, philanthropy, profits, realism, responsibility, society, stakeholder engagement, sustainability | Tagged activist realism, business, business realism, CSR, NGOs, shareholders, stakeholders, sustainability | Leave a Comment »
Everything seems to be turning green. And there is nothing wrong with that – companies creating new, innovative products and services that are good for them and good for the environment. But consumers haven’t completely bought into this yet. A number of green products aren’t flying off the shelves the way companies anticipated. Why is it that the green revolution has taken companies by storm, but not consumers? With the environment at the forefront of consumer concerns, it makes one wonder, why consumers aren’t dropping the bad stuff and buying the good stuff. We build it, but they just won’t come.Why?
Some products are a big hit with consumers – the Prius and CFL light bulbs are taking off in a big way. So why aren’t they buying green shoes, food, computers, etc.?
There are many reasons why people buy certain products and not others – price, functionality, “coolness,” brand loyalty, etc. One often overlooked factor is: how do the environmental aspects of the product help the consumer?
Let’s first look at why the Prius and the CFL light bulb are so popular. They allow consumers to feel better about themselves when they use these products. A person starts their Prius and immediately feels “greener” than their neighbor with the gas-guzzling SUV. They feel better and more environmentally responsible with every mile they drive. It is the action of driving that makes them “green.” The same goes for a CFL light bulb. They feel better about themselves each and every time they turn on the lights. The simple action of switching on the light enables them to feel like an environmental “activist” – that they are making a difference.
You said you wanted a green car…
The environmental benefit doesn’t come from the company making the Prius or the CFL light bulb. The “goodness” comes from the consumer using the product instead of an alternative product. A Prius isn’t a car – it is an environmental tool for the consumer. The CFL light bulb doesn’t just provide light – it provides the consumer with an opportunity to make a difference through the simple action of flipping the switch.
The success of these “green” products lies in enabling the consumer to take action. The act of making a difference through using these products makes them successful. So many green failures can be traced back to lacking this fundamental element – allowing consumers to feel “green” each time they use a product. When all the “goodness” is in the making of the product and not in the using of the product, no other action is expected from the consumer. The only action the consumer needs to take is buying the product. But the act of buying is not perceived as an act of environmental activism. This doesn’t allow the consumer to feel that they are taking environmental action.
Buying a green product, that’s green qualities are all in the production phase, leaves the consumer with a very basic question: what about me?
You want to sell a green product? Then let your consumer be part of the “greenness.” Give them something that they can do apart from just buying the product. Give them a way to take action. Let it be easy – like starting a Prius or flipping a light switch. Give consumers simple actions that make them feel like they are making a difference each and every time they use your product. Let them be part of the change.
But what about those products that can’t make consumers feel that they are part of the green actions – that don’t turn them into “green activists” purely through the use of the product? Here companies need to be a little more subtle in their approach…
David Connor made me think of the role between a company and its consumers. David is one of a handful of people I admire for their thinking and pushing Sustainability/CSR forward. A true leader in the field. It helps that he is a fellow Liverpool supporter as well… You must follow him on Twitter (@davidcoethica) and bookmark his blog for regular reading – David Coethica’s Blog. Great guy and great CSR/Sustainability strategist.
In a recent blog he explores the relationship between a company and the consumer. What role should the company play in promoting sustainable products to consumers? Should a company put sustainability at the front and center of their communications to consumers? Should companies educate consumers about their impact and sustainability?
Well, if you are selling a Prius or a CFL lightbulb it might help. But even then you have to be very, very careful. The Prius struggled initially to get a foothold in the UK market. Why? Because they tried to sell it as the environmental car. So a few environmentalist bought the car but not too many others. They changed tactics and sold the car as a cool car for the younger crowd with some fuel efficiency thrown in to seal the deal. Bang – they were up and running. See the difference? They didn’t try to sell a green car as the primary reason the second time around.
Once you move away from the Prius example it gets even more complicated.
David argues that companies should do more to provide consumers with more information and education. The problem is that most consumers are very specific about what they want, why they want it and when they want it. Now remember, neither David or I are the average consumer. We work in sustainability and tend to be more sensitive to these issues. The average consumer shows no or little interest. They’ll tell us they will buy a green product and they may pay a premium. The truth is more complicated than that. We just don’t see them flocking in huge numbers to buy green products. (More on this in a future blog – consumer behaviour and movement towards sustainable products are evolutionary and not revolutionary. They move slow but steady in that direction in most cases.)
But the average consumer want their coffee when they go to Starbucks, boots when they go to Timberland etc. They don’t want you to complicate their need and want by telling them about all the “other stuff” when their need and want is clear. That’s the quickest way to alienate the average consumer.
Let me show you a funnel I created to try to make the point:
When you talk to the group on the left you can be as detailed as you want. They know the stuff and they are interested in it. However, when talking to the group on the far right you need to know that the majority of people fall in this area and are not interested in the “added baggage” of sustainability. They just want their “stuff”.
Companies must be careful to balance their engagement with consumers to both the topic that is relevant and the place where it is relevant. This is at the heart of “shared value” (there, I said it!) – don’t preach and don’t oversell, rather empower subtly. Companies must remember to keep the “act” part of what they do separate from the “talking” part. Do what you have to do as a company to be sustainable and have it embedded in the business – but don’t confuse that with what you talk about when engaging consumers. They don’t care about all the detail – only “what can I do and keep it simple”. And… “Give me my stuff!”
The easiest and most effective way to empower consumers is to not actually tell them they are being more sustainable. Be so subtle that they don’t even know they are becoming more sustainable. You can tell them later and give them a nice surprise. Draw them down the funnel from “I just want my stuff” on the right to “what’s your sustainability strategy” on the left.
This way the company can focus on their sustainability as it benefits the company and society (and the environment) – the doing part – and help consumers become more sustainable without them knowing it. An example – Starbucks can tell the consumer about where they get their coffee and how they source it all they want but the average consumer just want their cup of Starbucks. So Starbucks have great sourcing practices but sell the consumer their coffee and sometimes tell them subtly that it’s a damn fine cup of coffee on more than just taste level. It confirms the purchasing decision already made instead of driving new sales. It builds customer loyalty instead of new customers. That’s how most consumers think and act.
Keeping with the Starbucks example – what consumer do care about is the place where they share an impact with Starbucks. In their case it is the cup. They don’t really care how the coffee was sourced or if the building is LEED certified or not. They care about what to do about the cup once they’ve had their coffee. So Starbucks helps them recycle and encourages them to use tumblers. They can try to educate the consumer about sustainability and how the consumer can be more sustainable but the reaction from the majority of consumers will be, “What are you on about, dude? Just give me my damn coffee!”
The lesson from this is for companies to focus on that area where they have a “shared value” with the consumer. Where they have a mutual responsibility or an impact they share. For the electronics industry this is about “what the heck do I do with my old stuff?” This is especially true in a world where electronics are becoming another commodity for consumers to replace and dispose with ease. The “shared value” (said it again!) is companies empowering the consumer to dispose of the product in an easy way at the point of purchase. Their key consumer focus should therefore be about making recycling as easy as possible.
Recycling might not be the sexiest sustainability topic but it is, in most cases, still the most relevant one from a consumer experience perspective. Boring for those on the left of the funnel but actionable and empowering for those on the right of the funnel. It’s one of few places where you share an impact and a responsibility with the consumer.
The next step is helping consumers make the right choice. There are so many gadgets out there today – how do you choose the right one? By going to a store and asking the person behind the counter what is the best choice for them. What product fit their specific need. This can’t be done online as there are just too many factors and too many different products. Trying it online will alienate the consumer quickly. Even those companies who have sustainability as part of their brand knows that you can’t do it online. The rule of online commerce is “keep the clicks to a minimum”. Comapnies such as Timberland, Starbucks, M&S etc keep the purchasing easy and uncomplicated. It’s a different ballgame when they are in your store nthough. By empowering your employees you can help the consumer become more sustainable by matching their need with the right product. How is this more sustainable? By helping them make the right choice you ensure that they won’t replace it as easilyor quickly because the product match their need. You don’t sell them a car if they really only wanted a t-shirt…
Note, in neither of these cases do we even need to mention the word sustainability or CSR. “Hey Mr Consumer, let me help you pick the right product to match your need.” It’s sustainability disguised as good customer service! Don’t “educate” your consumer. This feels like preaching to them and they smell through the bull pretty easy. Or they will get alienated by the overload of information when all they wanted was their “stuff”. Educating consumers about sustainability is overrated in my eyes. (So much is going on in educating the consumer that we’re in danger of creating white noise where no one hears anything anymore.) Focus on the relationship you have with them and focus on your mutual responsibility. Don’t use big word. Make it easy. Once they are in the habit of expecting these then you can tell them what you two just did jointly and pull them down the funnel into a new world of sustainable opportunities.
In conclusion – the most effective way to share sustainability with the average consumer is by making it easy for them and not always telling them (or preaching to them) that they are involved in any form of sustainability. It should just become part of their daily purchasing actions without them even knowing it. That’s the one side of the funnel – the consumer side. When talking to people on the other side – the influencers – then it is okay to show how these play out and how the company thinks. But influencers (me included) are not the average consumer and need a different approach.
This is not what David fear – “Am I the only person that is scared that far too many retailers are waiting for consumers to dictate the sustainability revolution?” It is being smart in how you pull them into sustainability. It’s talking their language, understanding their purchasing habit and making sustainability part of their decisions without knocking them over the head with it. It’s subtle but effective. It changes habits and expectations without them knowing it. It’s like teaching a baby to speak or walk. They can’t remember who did helped them and no one said “walk or talk” to them. We taught them these new skills without them knowing we were doing it. And they haven’t dropped these taught behaviours and actions – it becamse part of their lives. And they will teach others to do the same one day.
I don’t think David will necessarily disagree with me. But I think we need to be very careful when we talk to consumers about sustainability. The last thing you want is them to say you are greenwashing or alienate them because of the overload of information. Remember why they come to you in the first place – to get their “stuff”. Help them pick the right stuff to fit their needs and help them dispose of it responsibly. And they don’t even need to know you are doing it to be sustainable or help them be more sustainable. It changes the way they act without them even knowing it. They will become more sustainable without even knowing it. Now that is sustainability.
Posted in activists, brands, business, climate change, co-responsibility, communications, companies, consumers, corporate citizenship, CSR, CSV, environment, global warming, green, marketing, messaging, products, responsibility, Shared Value, sustainability | Tagged communications, consumers, CSR, environment, green, sustainability | 3 Comments »
This post of mine was originally posted on the goodpurpose blog.
Once again, I realized that a conclusion that I drew one year ago on Corpprate Social Reality still holds true: there are a myriad of factors influencing consumers’ purchasing decisions, and purpose can be a point of differentiation for brands.
The goodpurpose study validates my claims. The most recent study found that when choosing between two brands of equal quality and price, consumers worldwide value social purpose as the deciding factor over design, innovation and brand loyalty. We’ve re-posted the old blog below, and hope you’ll take a look for insights into consumer behavior that should inform your business’ decisions today.
So, consumers don’t care?
I was reading an old blog giving 4 reasons why most consumers don’t care about corporate ethics. It was an interesting read, and I will respond in more detail on the other issues at a later stage. But one issue stood out again – consumers just aren’t willing to pay the price. This typical excuse simply argues that people won’t do something as opposed to delving deeper into why people buy products.
If price is the only issue then Nike would not sell one shoe nor would Starbucks [disclosure: Edelman client] sell one cup of coffee. Okay, so quality has something to do with it, so (some) consumers will consider price and quality when buying a product.
So why do people in the US still buy American cars? A few years back, American cars were generally more expensive and of lower quality. But people bought them, because they were American-made. Okay so price, quality AND origin can all be part of consumer decision making criteria.
So why do some people buy from Home Depot instead of Lowe’s? They are equal in price, quality and origin. Well, maybe because the types and quality of services they provide cater to specific consumers. So consumer decision-making is about price, quality, origin and service.
And so on, and so on, and so on. There are always many reasons why people buy certain products and not others. We must realize that consumers are not a single robot or unit, but that everyone has their own criteria which they use to when making a decision to buy something. For some, quality ranks highest (that is why people are still paying $200+ for DVD players). For others, environmental impact or health attributes are most important.
Brand value is complex. And going beyond price and quality to include environmental or social issues in the brand positioning helps companies further differentiate their products from competitors. By going forward with corporate social responsibility messages, those issues become part of a range of brand elements.
Also, ethically-sourced products don’t necessarily have to cost more–although this is a common misconception. Some products might be more expensive, but corporate social responsibility (CSR) can also reduce costs and create opportunities. CSR is about doing business better – all around. If you are working with your suppliers to make them more efficient, you gain. If paying staff a decent wage can make them more efficient, you gain. If looking after the environment ensures you still have a product to sell tomorrow, you gain. As each consumer is different, so is each company. We need to acknowledge this and build the ‘corporate social responsibility solution’ around what makes business sense for each individual company and product or brand.
Posted in brands, cause, cause marketing, consumers, corporate citizenship, CSR, marketing, products, purpose, responsibility, society, sustainability, value, values | Tagged consumer behaviour, consumers, CSR, purpose, sustainability | 2 Comments »